Believers in the capitalistic model are not likely to have a great deal of sympathy for those individuals who want to live off the labor of others, while believers in the socialistic model make provisions even for those individuals. I suspect, however, that if you took one hundred people and placed them in a capitalistic society for several months, you would find most of them gainfully employed a year later. If you took that same one hundred people and placed them in a socialistic society for several months, I suspect that a year later you would find a large number of them “on the dole.” People tend to do what they need to do to survive and are unlikely to expend extra effort when it is unnecessary. This is the primary reason why traditionally socialistic societies are not highly productive.
HOW THEN SHALL WE LIVE?
There is no one-size-fits-all type of government, and much to the horror of some people, it is a fact that our own government is a blend of both capitalism and socialism. The issue, then, of how to handle able-bodied individuals who simply do not want to work in a society with mixed government, such as in the United States, remains very sticky. The issue can be demagogued endlessly by both sides without arriving at a solution. Approaching the issue logically, however, there are three practical solutions:
Tell those who don’t work that they are on their own.
Take from those who have something and redistribute it to the individuals who aren’t working.
Borrow from a third party in order to take care of the nonworking individuals and leave the debt to future generations.
Logically, with solution 1, the individual who isn’t working clearly either starves or finds a job. What about solution 2? In this case, those who are forcibly constrained to support the individuals who aren’t working eventually lose interest in working themselves, since the fruits of their labors are being confiscated. This, in turn, leads to even more individuals who aren’t working. What about solution 3? The other party buys our treasury notes in great quantities, thereby acquiring ownership of a significant portion of our nation. But these investors are unlikely to extend credit indefinitely, nor will future generations continue to remain ignorant of this downward spiral forever. At some point, they will realize that their future is being compromised, and they will refuse to go along with the program. Thus solution 1 is the only one that stands the test of logic and is the one upon which we should concentrate.
Necessity is the mother of invention, and right now it is necessary for us to create jobs while providing incentives to entrepreneurs and CEOs to keep coming up with new innovations and products. We must realize that excessive pay for executives is demoralizing to workers who don’t feel that someone else in the same organization is worth well over three hundred times more than they are.1 Fortunately “say on pay” arrangements have entered corporate America recently, which allows shareholders to have a voice in compensation for top executives and makes boards of directors more careful in determining organizational compensation.
Is it possible to implement solution 1 in a compassionate fashion? Of course it is when compromise is introduced into the equation. Instead of immediately kicking individuals off the dole, they could be weaned off over the course of several months, giving them the opportunity to make necessary adjustments in their lives. Again I should point out that we are only talking about able-bodied individuals who are capable of working but simply refuse to do so. I doubt that anyone in America would raise serious objections to taking care of individuals who simply are not capable of caring for themselves. Unemployment benefits certainly can be a stopgap measure for those truly seeking employment, but temporarily out of work. They are, however, not a favor to many who are not truly seeking work, because the longer an unemployed individual is not working, the less employable he or she becomes. Such benefits should be linked to work that needs to be done in the community, such as Roosevelt’s New Deal,2 in which government programs were created to provide jobs and stimulate growth in industry, transportation, banking, housing, agriculture, and many other areas.
WHO DECIDES WHOSE HOUSE IT IS?
So what is the role of government when it comes to taking care of the poor? We can probably answer this question more easily if we leave off labels such as capitalism and socialism, and instead focus on principles. Government is invested with power by the people, who are governed because it is much easier and more orderly to have a central authority than for each person to serve as an authority unto himself. Natural law dictates that people have a right to protect their lives and their property, and this is a concept with which there is general societal agreement across all types of governmental systems throughout the history of the world.
As an example, we live in a large country estate about thirty miles outside the city of Baltimore. Our kids are grown and have their own homes, and Candy and I are very content. We have no neighbors within shouting distance, and the drive from our front door to the public road is three quarters of a mile. If someone who lived nearby presented himself on our doorstep and demanded that we trade houses with him because he has a large family with many children and they need the space, whereas we have very few people and an extremely large house, I could refuse or I could voluntarily comply. If I refused and he became belligerent and attempted to forcibly evict us, I could attempt to protect my property, which could have some very unpleasant results, or I could call the police, which is an appropriate arm of our government, whose duty includes the protection of my property and my life. This is exactly what the founding fathers envisioned as one of our governmental functions. If, on the other hand, our government officials decided my house was too big and the neighbor’s house too small for his large family, and that they should confiscate my house and give it to my neighbor — or at the very least tax me at a high enough rate that they could redistribute money to my neighbor, who could then buy a bigger house — that kind of intrusive government would exemplify the very thing our founding fathers tried to avoid.
Not only did Benjamin Franklin, Samuel Adams, and several of the other founding fathers speak out against government redistribution of property, but in 1795 the Supreme Court of the United States declared, “No man would become a member of a community in which he could not enjoy the fruits of his honest labor and industry. The preservation of property, then, is a primary object of the social compact…. The legislature, therefore, has no authority to make an act divesting one citizen of his freehold, and vesting it in another, without a just compensation. It is inconsistent with the principles of reason, justice and moral rectitude; it is incompatible with the comfort, peace and happiness of mankind; it is contrary to the principles of social alliance and every free government; and lastly, it is contrary to the letter and spirit of the Constitution.”
In our attempt to be kind to the poor, we have deviated substantially from the principles involved in the founding of our nation. The United States is, in fact, historically and currently the most philanthropic nation in the history of the world. But our founders fully realized that prolonged government-sponsored charity would destroy the values of hard work, self-reliance, and compassion.
I am involved with a number of charitable organizations that are dedicated to improving the lives of the many unfortunate people who live among us. One of those organizations is the Curtis D. Robinson Men’s Health Institute at St. Francis Hospital and Medical Center in Hartford, Connecticut. The driving force behind this organization — which screens hundreds of men without medical insurance for prostate cancer, and offers free treatment when cancer is found — is my friend Curtis D. Robinson, who traveled from Alabama to Connecticut when he was sixteen years old and penniless. He was very industrious, worked extremely hard, became CEO and owner of various businesses, and is now a multimillionaire. He has given away seven-figure amounts, receiving nothing in return except the satisfaction of knowing that lives that would have been lost are being saved. Many physicians, administrators, and caring citizens have joined Curtis in his efforts, as have I. It is very difficul
t to travel to any community in our nation and not find charitable organizations specifically created to aid the indigent citizens of that community.
Our government used to fully understand the role of private-sector charitable organizations in ameliorating the plight of the poor. This is why the government offered tax deductions and exemptions for churches and other charitable organizations. Today the government actually competes with many of these private-sector charities while still offering them tax deductions. How does this wasteful duplication benefit government or us, its citizens? Certainly by creating huge government entitlement programs, the size and power of the government increases dramatically. Before long, people generally depend on government for everything from food and shelter, to health care and education, to a comfortable retirement, instead of looking to government for the basic protection of life and property, as well as providing public roads and public safety.
I believe Benjamin Franklin was one of the wisest men to ever walk the face of the Earth. Was he a womanizer who enjoyed partying a bit too much? Probably! But he was a first-rate scholar, scientist, inventor, writer, and diplomat who was instrumental in the formation of our nation. He warned against inappropriate compassion, such as giving a drunk the wherewithal to buy liquor or smothering the human instinct to strive and excel by providing all basic necessities. I don’t think you can say that he was selfish and simply wanted to preserve his wealth, because the same Benjamin Franklin offered to pay the British from his own bank account for their losses during the Boston Tea Party in order to spare the colonists severe retribution by the King.3 Statements by Franklin and many of the other founders make it very clear that they were extremely opposed to the concept of wealth redistribution, which is a basic tenet of socialism.4
At an even more fundamental level, they were very much opposed to the concept of a large, intrusive central government, which they felt was really no different than the European monarchies they were trying to escape. Consider the United States’ rapid acceleration to pinnacle status by means of a system rewarding hard work and vigorously protecting individual assets while encouraging compassion and charity — why would we want to change unless there is historical proof that another system will work better?
In a socialist society, the government has the right to tax whomever it wishes for whatever amount it deems necessary, whenever it wants. This leads to abusive, unchecked power that can eventually deprive many of the people of their rights — as our Declaration of Independence states — to enjoy life, liberty, and the pursuit of happiness. The insidious nature of socialism, cloaked in a façade of compassion, makes it very dangerous to an uneducated and trusting populace. And as socialism creates dependency, it is well on its way to eliminating freedom of choice and incentives for high productivity and innovation.
UNIONS: STRANGLING THE GOOSE THAT
LAID THE GOLDEN EGG
Stealth socialism has the ability to stay under the radar while co-opting legitimate entities such as unions, changing them into something that is barely recognizable. I have been a union member myself, and having grown up in Detroit, I am of course very familiar with the positive aspects of union representation.5 In the early days of the Industrial Age, the advent of unions brought about the kind of collective bargaining that resulted in fair wages and reasonable working conditions. Benefits derived through unions helped create the most prolific middle class the world has ever seen. Unfortunately, with time, many of the union bosses began to concern themselves with power and influence, and used union dues (which had grown to become huge pots of money) to change the outcome of elections and to wreak havoc in many areas where money equaled power. By threatening strikes to further their causes, they were able to exact excessive wages and benefits from companies such as General Motors, Ford, and Chrysler, in the long run crippling these companies and rendering them noncompetitive. The union leaders, their lawyers, accountants, and administrators were not dumb people, and they were well aware of the position they were putting these companies in. Essentially they were strangling the goose that laid the golden egg. The blame for the recent downfall of Detroit’s auto industry, however, does not rest solely on the shoulders of the union bosses. Top management in the auto industry negotiated deals that they knew were fiscally irresponsible and would be harmful to the company’s future. They also knew that they would receive their golden parachutes — complete with multimillion-dollar severance packages for their irresponsibility — and be long gone when the day of reckoning arrived.
One of the themes you may have begun to notice is that those entities that are bad for our nation tend to want what they want now, without thought to how it will affect future generations. If you use that principle as a measuring stick, in most cases you can easily determine which unions and other entities are good and which are deleterious to the prosperity of our nation.
As this book is being written, massive protests are going on in the state of Wisconsin, where teachers’ unions and state workers’ unions are disgruntled about the governor’s plan to bring the wildly out-of-control state budget back under control. One of the components of his plan involves having those workers make larger contributions to their own benefit packages rather than saddling taxpayers with that responsibility. Even with the increased amount of contribution, these workers will still be getting a much better and cheaper benefits package than their counterparts in the private sector. They realize this, and are therefore capitulating to that requirement. However, they are not willing to relent on the issue of decreased collective-bargaining rights. They feel that if they give on this point, the union will be weakened forever, and they will be at a significant disadvantage when negotiating for future benefits and rights. They do not want to be at a disadvantage when it comes to issues such as class size, tenure, and evaluation of teacher competency. Of course, none of these come under the traditional banner of collective bargaining. The union leaders are focused solely on what they want, and refuse to believe that the huge budget deficit is real. They believe the whole issue has been fabricated by the governor and his cronies in order to bring down the unions, but the accounting is fairly straightforward — Wisconsin is but one of many states in dire straits, facing enormous deficits in revenue. It is almost incomprehensible to me how selfish one must be to demand benefits today without consideration for what happens to our children tomorrow. Nevertheless, I do not see those who disagree with me as enemies, and I am happy to engage them in conversations about our future and how to ensure success for our children.
CAPITALISM VS. SOCIALISM: CAN WE INCORPORATE THE BEST OF BOTH WORLDS?
The security provided by socialistic governments can be addicting to the point that citizens are willing to give up many of their individual rights. Although you have the right to accumulate wealth, there is not much incentive to do so if it can be confiscated by the government at will. Although you have the right to work many years beyond the traditional age of retirement, many who are addicted to the socialist system retire as early as possible. In many European countries, citizens often take advantage of this while they are in their fifties. As a result, those societies lose some of their most experienced and effective workers (and potential mentors), who do not want to miss out on overly generous retirement benefits guaranteed to them by a bloated government. When government interferes too much in the private lives of its citizens, the losses can become widespread.
In the previous chapter, we examined the enormous benefits to our country and to the world of an economic system (capitalism) that encourages innovation, hard work, and entrepreneurship. Now, after examining the pros and cons of socialism, we have seen mostly negative effects, even in terms of its lauded compassionate components, which seem good at first glance, but reveal disincentives to work and fiscal irresponsibility in the long run. Because we live in a free and open society, those who advocate socialism are free to do so, but for the well-read individual, it is easy to discern the agenda of the socialists and how they are impleme
nting that agenda in an attempt to bring fundamental change to America.6 The agenda? Total government control. For jobs, income, you name it. Anytime you give to government the responsibility and authority to provide government-made jobs, old-age financial security, “free” health care, and “free” education and indoctrination of children, it will control the lives of the people who live under its jurisdiction, and individual liberty and freedom of choice are sacrificed.
Sure, there are several different brands of socialism — at least as many types as there are would-be people-planners who wish to impose their plans to control the moral and economic lives of other people. But are you willing to surrender your precious liberties to a socialist state which promises “security” for everyone and government-enforced equality? Isn’t this what Hitler and other socialists promised the German people in his Nazi (national socialist) platform — a country in which government guarantees security and “equality” in exchange for giving up individual freedom? Will Americans fall for the same scam?
Since Americans are by nature individualistic and entrepreneurial, by definition, then, the socialist program is anti-American, to say nothing of totalitarian.
Socialism is an old dream. Some dreams are nightmares when put into practice.
It is possible, however, to extract socialism’s positive aspects and actually implement them within capitalism. For example, providing basic health care for every citizen can be done quite easily without increasing our national debt one penny. If we address our inefficient and wasteful billing and collections procedures, move to a national electronic medical record, provide people with incentives to use clinics instead of emergency rooms for primary care, and engage in meaningful tort reform to limit costly lawsuits, we would have plenty of money to provide basic health care to all citizens of this country. We could also realize significant revenue by combating fraud in government entitlements such as Medicare and Medicaid. And in our free society, individuals wanting to purchase additional health-care insurance could certainly do so without negatively impacting anyone else.
America the Beautiful: Rediscovering What Made This Nation Great Page 11