Socialism: who wants TYRANNY?

The Lie of Socialism

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The promoters of socialism hold out the scenario that their plan levels the playing field when it fact all opportunity for freedom is lost and the ability  to advance ones status is surrendered, giving an elite group ultimate power over the rest. 

Evil men use lies to promote

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Anyone who promotes socialism has some ulterior motive. Mostly it is the ability to restrict the promotion of beliefs that they want to deny exist. Truly it comes down to the denial of basic principles of the universe that would hold them responsible for their actions. Socialism is a very basic denial of the existence of God!

It's about Money?

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Look at Venezuela it has gone full socialist which is communism. Denmark and other Scandinavian countries had adopted incremental steps toward socialism and found a death trap for their economies. Socialism is tyranny telling the very minute details of what you can and cannot do!

Documentation on Socialism

Documentation on the foibles of Socialism there are no positive ones for socialism as socialism has failed every time!

these 3 countries tried socialism.

Here's What Happened.

 

Socialists are fond of saying that socialism has never failed because  it has never been tried. But in truth, socialism has failed in every  country in which it has been tried, from the Soviet Union beginning a  century ago to three modern countries that tried but ultimately rejected  socialism—Israel, India, and the United Kingdom.

While there were major political differences between the totalitarian rule of the Soviets and the democratic politics of Israel, India, and the U.K., all three of the latter countries adhered to socialist principles, nationalizing their major industries and placing economic decision-making in the hands of the government.

The Soviet failure has been well documented by historians. In 1985, General Secretary Mikhail Gorbachev took command of a bankrupt disintegrating empire. After 70 years of Marxism, Soviet farms were unable to feed the people, factories failed to meet their quotas, people lined up for blocks in Moscow and other cities to buy bread and other necessities, and a war in Afghanistan dragged on with no end in sight of the body bags of young Soviet soldiers.

The economies of the Communist nations behind the Iron Curtain were  similarly enfeebled because they functioned in large measure as colonies  of the Soviet Union. 

With no incentives to compete or modernize, the industrial sector of  Eastern and Central Europe became a monument to bureaucratic  inefficiency and waste, a “museum of the early industrial age.” As  The New York Times pointed out at the time, Singapore, an Asian  city-state of only 2 million people, exported 20% more machinery to the  West in 1987 than all of Eastern Europe.

And yet, socialism still beguiled leading intellectuals and  politicians of the West. They could not resist its siren song, of a  world without strife because it was a world without private property.  They were convinced that a bureaucracy could make more-informed  decisions about the welfare of a people than the people themselves  could. They believed, with John Maynard Keynes, that “the state is wise  and the market is stupid.”

Israel, India, and the United Kingdom all adopted socialism as an  economic model following World War II. The preamble to India’s  constitution, for example, begins, “We, the People of India, having  solemnly resolved to constitute India into a Sovereign Socialist Secular  Democratic Republic … ” The original settlers of Israel were East  European Jews of the left who sought and built a socialist society. As  soon as the guns of World War II fell silent, Britain’s Labour Party  nationalized every major industry and acceded to every socialist demand  of the unions.

At first, socialism seemed to work in these vastly dissimilar  countries. For the first two decades of its existence, Israel’s economy  grew at an annual rate of more than 10%, leading many to term Israel an  “economic miracle.” The average gross domestic product growth rate of  India from its founding in 1947 into the 1970s was 3.5%, placing India  among the more prosperous developing nations. GDP growth in Great  Britain averaged 3% from 1950 to 1965, along with a 40% rise in average  real wages, enabling Britain to become one of the world’s more affluent  countries.

But the government planners were unable to keep pace with increasing  population and overseas competition. After decades of ever-declining  economic growth and ever-rising unemployment, all three countries  abandoned socialism and turned toward capitalism and the free market. 

The resulting prosperity in Israel, India, and the U.K. vindicated  free-marketers who had predicted that socialism would inevitably fail to  deliver the goods. As British Prime Minister Margaret Thatcher  observed, “the problem with socialism is that you eventually run out of  other people’s money.”

1. Israel

Israel is unique, the only nation where socialism was successful—for a  while. The original settlers, according to Israeli professor Avi Kay,  “sought to create an economy in which market forces were controlled for  the benefit of the whole society.” 

Driven by a desire to leave behind their history as victims of penury  and prejudice, they sought an egalitarian, labor-oriented socialist  society. The initial, homogeneous population of less than 1 million drew  up centralized plans to convert the desert into green pastures and  build efficient state-run companies.

Most early settlers, American Enterprise Institute scholar Joseph  Light pointed out, worked either on collective farms called kibbutzim or  in state-guaranteed jobs. 

The kibbutzim were small farming communities in which people did  chores in exchange for food and money to live on and pay their bills.  There was no private property, people ate in common, and children under  18 lived together and not with their parents. Any money earned on the  outside was given to the kibbutz.

A key player in the socialization of Israel was the Histadrut, the  General Federation of Labor, subscribers to the socialist dogma that  capital exploits labor and that the only way to prevent such “robbery”  is to grant control of the means of production to the state. 

As it proceeded to unionize almost all workers, the Histadrut gained  control of nearly every economic and social sector, including the  kibbutzim, housing, transportation, banks, social welfare, health care,  and education. The federation’s political instrument was the Labor  party, which effectively ruled Israel from the founding of Israel in  1948 until 1973 and the Yom Kippur War. In the early years, few asked  whether any limits should be placed on the role of government.

Israel’s economic performance seemed to confirm Keynes’ judgment.  Real GDP growth from 1955 to 1975 was an astounding 12.6%, putting  Israel among the fastest-growing economies in the world, with one of the  lowest income differentials. However, this rapid growth was accompanied  by rising levels of private consumption and, over time, increasing  income inequality. 

There was an increasing demand for economic reform to free the  economy from the government’s centralized decision-making. In 1961,  supporters of economic liberalization formed the Liberal party — the  first political movement committed to a market economy.

The Israeli “economic miracle” evaporated in 1965 when the country  suffered its first major recession. Economic growth halted and  unemployment rose threefold from 1965 to 1967. Before the government  could attempt corrective action, the Six-Day War erupted, altering  Israel’s economic and political map. 

Paradoxically, the war brought short-lived prosperity to Israel,  owing to increased military spending and a major influx of workers from  new territories. But government-led economic growth was accompanied by  accelerating inflation, reaching an annual rate of 17% from 1971 to  1973.

For the first time, there was a public debate between supporters of  free-enterprise economics and supporters of traditional socialist  arrangements. Leading the way for the free market was the future Nobel  Prize winner Milton Friedman, who urged Israeli policymakers to “set  your people free” and liberalize the economy. 

The 1973 war and its economic impacts reinforced the feelings of many  Israelis that the Labor party’s socialist model could not handle the  country’s growing economic challenges. The 1977 elections resulted in  the victory of the Likud party, with its staunch pro-free-market  philosophy. The Likud took as one of its coalition partners the Liberal  party.

Because socialism’s roots in Israel were so deep, real reform  proceeded slowly. Friedman was asked to draw up a program that would  move Israel from socialism toward a free-market economy. His major  reforms included fewer government programs and reduced government  spending; less government intervention in fiscal, trade, and labor  policies; income tax cuts; and privatization. A great debate ensued  between government officials seeking reform and special interests that  preferred the status quo.

Meanwhile, the government kept borrowing and spending and driving up  inflation, which averaged 77% for 1978-79 and reached a peak of 450% in  1984–85. The government’s share of the economy grew to 76%, while fiscal  deficits and national debt skyrocketed. The government printed money  through loans from the Bank of Israel, which contributed to the  inflation by churning out money.

Finally, in January 1983, the bubble burst, and thousands of private  citizens and businesses as well as government-run enterprises faced  bankruptcy. Israel was close to collapse. 

At this critical moment, a sympathetic U.S. president, Ronald Reagan,  and his secretary of state, George Shultz, came to the rescue. They  offered a grant of $1.5 billion if the Israeli government agreed to  abandon its socialist rulebook and adopt some form of U.S.-style  capitalism, using American-trained professionals.

The Histadrut strongly resisted, unwilling to give up their  decades-old power and to concede that socialism was responsible for  Israel’s economic troubles. However, the people had had enough of  soaring inflation and nonexistent growth and rejected the Histadrut’s  policy of resistance. Still, the Israeli government hesitated, unwilling  to spend political capital on economic reform. 

An exasperated Shultz informed Israel that if it did not begin  freeing up the economy, the U.S. would freeze “all monetary transfers”  to the country. The threat worked. The Israeli government officially  adopted most of the free-market “recommendations.”

The impact of a basic shift in Israeli economic policy was immediate  and pervasive. Within a year, inflation tumbled from 450% to just 20%, a  budget deficit of 15% of GDP shrank to zero, the Histadrut’s economic  and business empire disappeared along with its political domination, and  the Israeli economy was opened to imports. 

Of particular importance was the Israeli high-tech revolution, which  led to a 600% increase in investment in Israel, transforming the country  into a major player in the high-tech world.

There were troubling side effects such as social gaps, poverty, and  concerns about social justice, but the socialist rhetoric and ideology,  according to Glenn Frankel, The Washington Post’s correspondent in  Israel, “has been permanently retired.” 

The socialist Labor party endorsed privatization and the divestment  of many publicly held companies that had become corrupted by  featherbedding, rigid work rules, phony bookkeeping, favoritism, and  incompetent managers.

After modest expansion in the 1990s, Israel’s economic growth topped  the charts in the developing world in the 2000s, propelled by low  inflation and a reduction in the size of government. Unemployment was  still too high and taxes took up 40% of GDP, much of it caused by the  need for a large military. 

However, political parties are agreed that there is no turning back  to the economic policies of the early years—the debate is about the rate  of further market reform. “The world’s most successful experiment in  socialism,” Light wrote, “appears to have resolutely embraced  capitalism.”

2. India

Acceptance of socialism was strong in India long before independence,  spurred by widespread resentment against British colonialism and the  land-owning princely class (the zamindars) and by the efforts of the  Communist Party of India, established in 1921. 

Jawaharlal Nehru adopted socialism as the ruling ideology when he  became India’s first prime minister after independence in 1947.

For nearly 30 years, the Indian government adhered to a socialist line, restricting imports, prohibiting foreign direct investment, protecting small companies from competition from large corporations, and maintaining price controls on a wide variety of industries including steel, cement, fertilizers, petroleum, and pharmaceuticals. Any producer who exceeded their licensed capacity faced possible imprisonment.

As the Indian economist Swaminathan S. Anklesaria Aiyar wrote, “India  was perhaps the only country in the world where improving productivity …  was a crime.” It was a strict application of the socialist principle  that the market cannot be trusted to produce good economic or social  outcomes. Economic inequality was regulated through taxes—the top  personal income tax rate hit a stifling 97.75%.

Some 14 public banks were nationalized in 1969; six more banks were  taken over by the government in 1980. Driven by the principle of  “self-reliance,” almost anything that could be produced domestically  could not be imported regardless of the cost. It was the “zenith” of  Indian socialism, which still failed to satisfy the basic needs of an  ever-expanding population. In 1977-78, more than half of India was  living below the poverty line.

At the same time, notes Indian-American economist Arvind Panagariya, a  series of external shocks shook the country, including a war with  Pakistan in 1965, which came on the heels of a war with China in 1962;  another war with Pakistan in 1971; consecutive droughts in 1971-72 and  1972-73, and the oil price crisis of October 1973, which contributed to a  40% deterioration in India’s foreign trade.

Economic performance from 1965 to 1981 was worse than than at any  other time of the post-independence period. As in Israel, economic  reform became an imperative. Prime Minister Indira Gandhi had pushed her  policy agenda as far to the left as possible. 

In 1980, the Congress party won a two-thirds majority in the  Parliament, and Gandhi adopted, at last, a more pragmatic,  non-ideological course. But as with everything else in India, economic  reform proceeded slowly.

An industrial-policy statement continued the piecemeal retreat from  socialism that had begun in 1975, allowing companies to expand their  capacity, encouraging investment in a wide variety of industries, and  introducing private-sector participation in telecommunications. 

Further liberalization received a major boost under Rajiv Gandhi, who  succeeded his mother in 1984 following her assassination. As a result,  GDP growth reached an encouraging 5.5%.

Economics continued to trump ideology under Rajiv Gandhi, who was  free of the socialist baggage carried by an earlier generation. His  successor, P. V. Narasimha Rao, put an end to licensing except in  selected sectors and opened the door to much wider foreign investment.  Finance minister Manmohan Singh cut the tariff rates from an  astronomical 355% to 65%. 

According to Arvind Panagariya, “the government had introduced enough  liberalizing measures to set the economy on the course to sustaining  approximately 6 percent growth on a long-term basis.” In fact, India’s  GDP growth reached a peak of over 9% in 2005-08, followed by a dip to  just under 7% in 2017-18.

A major development of the economic reforms was the remarkable  expansion of India’s middle class. The Economist estimates there are 78  million Indians in the middle-middle and upper-middle-class category. 

By including the lower-middle class, Indian economists Krishnan and  Hatekar figure that India’s new middle class grew from 304.2 million in  2004-05 to an amazing 606.3 million in 2011-12, almost one-half of the  entire Indian population. The daily income of the three middle classes  are lower middle, $2-$4; middle middle, $4-$6; upper middle, $6-$10.

While this is extremely low by U.S. standards, a dollar goes a long  way in India, where the annual per capita income is approximately  $6,500. If only half of the lower-middle class makes the transition to  upper-class or middle income, that would mean an Indian middle class of  about 350 million Indians—a mid-point between The Economist and Krishnan  and Hatekar estimates. 

Such an enormous middle class confirms the judgment of The Heritage Foundation, in its Index of Economic Freedom, that India is developing into an “open-market economy.”

In 2017, India overtook Germany to become the fourth-largest auto  market in the world, and it is expected to displace Japan in 2020. That  same year, India overtook the U.S. in smartphone sales to become the  second-largest smartphone market in the world. 

Usually described as an agricultural country, India is today 31%  urbanized. With an annual GDP of $8.7 trillion, India ranks fifth in the  world, behind the United States, China, Japan, and Great Britain. Never  before in recorded history, Indian economist Gurcharan Das has noted,  have so many people risen so quickly.

All this has been accomplished because the political leaders of India  sought and adopted a better economic system—free enterprise—after some  four decades of fitful progress and unequal prosperity under socialism.

3. United Kingdom

Widely described as “the sick man of Europe” after three decades of  socialism, the United Kingdom underwent an economic revolution in the  1970s and 1980s because of one remarkable person—Prime Minister Margaret  Thatcher. Some skeptics doubted that she could pull it off—the U.K. was  then a mere shadow of its once prosperous free-market self.

The government owned the largest manufacturing firms in such  industries as autos and steel. The top individual tax rates were 83% on  “earned income” and a crushing 98% on income from capital. Much of the  housing was government-owned. 

For decades, the U.K. had grown more slowly than economies on the  continent. Great Britain was no longer “great” and seemed headed for the  economic dust bin.

The major hindrance to economic reform was the powerful trade unions,  which since 1913 had been allowed to spend union funds on political  objectives, such as controlling the Labour Party. Unions inhibited  productivity and discouraged investment. 

From 1950 to 1975, the U.K.’s investment and productivity record was  the worst of any major industrial country. Trade union demands increased  the size of the public sector and public expenditures to 59% of GDP.  Wage and benefits demands by organized labor led to continual strikes  that paralyzed transportation and production.

In 1978, Labour Prime Minister James Callaghan decided that, rather  than hold an election, he would “soldier on” to the following spring. It  was a fatal mistake. His government encountered the legendary “winter  of discontent” in the first months of 1979. Public-sector workers went  on strike for weeks. Mountains of uncollected rubbish piled high in  cities. Bodies remained unburied and rats ran in the streets.

Newly elected Conservative Prime Minister Margaret Thatcher, the  United Kingdom’s first female PM, took on what she considered her main  opponent—the unions. 

Flying pickets, the ground troops of industrial conflict who would  travel to support workers on strike at another site, were banned and  could no longer blockade factories or ports. Strike ballots were made  compulsory. The closed shop, which forced workers to join a union to get  a job, was outlawed. Union membership plummeted from a peak of 12  million in the late 1970s to half that by the late 1980s. 

“It’s now or never for [our] economic policies,” Thatcher declared, “let’s stick to our guns.” 

The top rate of personal income tax was cut in half, to 45%, and exchange controls were abolished.

Privatization was a core Thatcher reform. Not only was it fundamental  to the improvement of the economy, it was “one of the central means of  reversing the corrosive and corrupting effects of socialism,” she wrote  in her memoirs. 

Through privatization that leads to the widest possible ownership by  members of the public, “the state’s power is reduced and the power of  the people enhanced.” Privatization “is at the center of any programme  of reclaiming territory for freedom.” 

She was as good as her word, selling off government-owned airlines, airports, utilities, and phone, steel, and oil companies.

In the 1980s, Britain’s economy grew faster than that of any other  European economy except Spain. U.K. business investment grew faster than  in any other country except Japan. Productivity grew faster than in any  other industrial economy. 

Some 3.3 million new jobs were created between March 1983 and March  1990. Inflation fell from a high of 27% in 1975 to 2.5% in 1986. From  1981 to 1989, under a Conservative government, real GDP growth averaged  3.2%.

By the time Thatcher left government, the state-owned sector of  industry had been reduced by some 60%. As she recounted in her memoirs,  about 1 in 4 Britons owned shares in the market. Over 600,000 jobs had  passed from the public to the private sector. The U.K. had “set a  worldwide trend in privatization in countries as different as  Czechoslovakia and New Zealand.” 

Turning decisively away from Keynesian management, the once sick man  of Europe now bloomed with robust economic health. No succeeding British  government, Labour or Conservative, has tried to renationalize what  Margaret Thatcher denationalized.

The Lesson of China

How then to explain the impressive economic success of a fourth major  economy, China, with annual GDP growth of 8 to 10% from the 1980s  almost to the present? 

From 1949 to 1976, under Mao Zedong, China was an economic basket  case, owing to Mao’s personal mismanagement of the economy. In his avid  pursuit of Soviet-style socialism, Mao brought about the Great Leap  Forward of 1958-60, which resulted in the deaths of at least 30 million  and perhaps as many as 50 million Chinese, and the Cultural Revolution  of 1966-76, in which an additional 3 million to 5 million died. Mao left China backward and deeply divided.

Mao’s successor, Deng Xiaoping, turned China in a different direction, seeking to create a mixed economy in which capitalism and socialism would coexist with the Communist Party monitoring and constantly adjusting the proper mix. For the past four decades, China has been the economic marvel of the world for the following reasons:

It began its economic ascent almost from ground zero because of Mao’s  ideological stubbornness. It has engaged in the calculated theft of  intellectual property, especially from the U.S., for decades. It has  taken full advantage of globalism and its membership in the World Trade  Organization, while ignoring the prescribed rules against such practices  as intellectual property theft. It has used tariffs and other  protectionist measures to gain trade advantages with the U.S. and other  competitors.

It created a middle class of some 300 million people, who enjoy a decent living and at the same time constitute a sizable domestic market for goods and services. It continues to use the forced labor of the laogai to make cheap consumer goods that are sold in Walmart and other Western stores. It allows an enormous black market to exist because Party members profit from its sales.

It permits foreign investors to buy into Chinese companies, but the  government—i.e., the Communist Party—always retains a majority interest.  It operates an estimated 150,000 state-owned enterprises that guarantee  jobs for tens of millions of Chinese. It depends on the energy and  experience of the most entrepreneurial people in the world, second only  to Americans.

Lee Edwards is the distinguished fellow in conservative thought at The Heritage Foundation.

Lee Edwards is the distinguished fellow in conservative thought at The Heritage Foundation.