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Socialism vs. Regulation

Its better to pay more in taxes than to allow the government to walk all over you.

by James Leroy Wilson
May 3, 2007

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Socialism vs. Regulation
The right to exist, the right to survive, the right to self-defense - these are different ways of saying the right to "life." This right not only entitles one to defend oneself from aggression, but also to engage in labor and/or trade one deems necessary to exist in a satisfactory condition. It also means one has the right to make one's own decisions regarding health and safety, because transferring that judgment to someone else is to allow them to take away one's very right to life.
 
Social problems have at their foundation economic problems, namely the problem of scarce resources. What one person takes something from nature, is that much less of it for anyone else to take. Many resulting conflicts can be resolved peacefully through institutions of law, in which impartial third parties can decide who has the rightful claim. In addition, many people believe that some goods that everybody needs can not be reliably attained through voluntary trade, and that a government is needed to provide these services. Through compulsory taxation, government can provide public goods and services, such as roads and courts.
 
If we accept the necessity of compulsory taxation for our survival and benefit, we must still acknowledge that public policy must otherwise respect our individual rights to life and liberty. The compulsory tax is a violation of our rights, but it is paid to so that our rights may be protected, our conflicts resolved, and our needs met.; it is not paid so that the government can engage in further violation of those same rights.
 
The process of turning what was a private and voluntary good into something public and compulsory is inherently socialist, because government is inherently socialist. To insist that government provide free medical care for all is to believe in socialized medicine. In some countries the government supports a particular religious denomination. That is socialized religion. In many countries, the oil fields or other natural resources are socialized. Where the government provides gas, electricity and water, those are socialized utilities. The public schools are a form of socialized education. The Postal Service is socialized mail delivery. Publicly operated libraries, museums, symphonies, and parks are forms of socialized leisure. State highways are socialized roads. Our legall system is socialized law. The military is a form of socialized defense, the police a form of socialized security. Gambling bans and anti-porn censorship are forms of socialized morals. To allow only one, government-controlled currency is to socialize money.
 
Some people claim that government must be limited to a few limited functions - such as providing courts, defense, and the currency. I, too, am certain we would all be better off if we went in that direction, and beyond. Even then, however, there isn't a compelling economic argument that favors socialized law, socialized defense, and socialized money. If socialism works in these areas, why not others?
 
The answer is, socialism does not work, not even in law, defense, and banking. Who seriously thinks our legal system - from plea-bargaining to mandatory minimums to windfall jury awards in civil suits - advances the interest of justice? In a country surrounded by oceans and militarily weak neighbors, whose liberty and independence have not been seriously threatened since 1812, why have we fought war after war since then? Does this not suggest that socialized defense - i.e., a standing army and permanent military-industrial complex - is perhaps worse than useless? And Americans are drowning in debt in no small part due to inflation of the government's federal reserve notes: real wages haven't increased in 35 years. Who thinks the government is managing our money properly?
 
That said, we are in many ways stuck with socialized institutions, because too many people disagree with me and believe that they do work. In this environment, some forms of socialism are worse than others. For instance, after seeing one convoluted proposal after another to improve our nation's health care system, I've come to the conclusion that a socialized system (called "single-payer") is preferable to solutions that would "fix" health care through more welfare and greater regulation of employers and insurance companies.
 
A completely de-regulated, free-market system would deliver health care more efficiently and inexpensively to more people, but socializing health care is a lesser evil than our absurd system of employer-provided health care. To advocate employer-provided health care is to view the world from the perspective of the plantation, where the masters were responsible for the health care of their slaves. How many people have been stuck at the same job, or with the same company, only because they fear losing their health insurance? Why should the two be related? In a rational market, workers are paid for services rendered, but they are not "cared for" by their employers.
 
Between a candidate who believes in free-market reforms and one who believes in socialized medicine, I'd prefer the former. But I wouldn't automatically disqualify the latter, if his opponent endorses "middle way" reforms that increase costs on everyone and hurt small businesses and entrepreneurs who can't afford to provide health insurance.
 
Simply put, taxation is a lesser evil than regulation.. It is better to know you're going to be robbed at a certain time of year, and know how much you will lose, than be subject to random break-ins and muggings throughout the year. Similarly, it saves money and time in the long run to pay a lot in taxes, than to spend money on compliance costs, legal fees, and fines from regulatory enforcement and paperwork. Better to pay a lot for a "free" health care system, than pay a lot for an excessively regulated "private" system. In other industrialized countries that have socialized systems, health care costs per capita are substantially lower, while life expectancy is higher.
 
But I should qualify my position and say that private alternatives should always be available. For instance, to have a public library should not mean we must prohibit private libraries. We can have public schools, but also allow private schools and home schools. We can have federal postal delivery, yet still allow private firms who believe they can do it better to try. If a city runs a bus service, that shouldn't prevent a private company to also run one. The existence of a police force shouldn't preclude private security firms or private gun ownership. Private arbitration and even trials with mutually-agreed-to judges should be allowed, even though we also have federal and state courts.
 
And if we are to socialize medicine, private care must also be allowed. If people want to pay for additional health care aside from what they've already paid for in taxes, they should be free to do so, and medical professionals should be free to serve them. The private market in health care could then be totally unregulated, because if one doesn't trust it, they can always use the public system.
 
If we decide that the government is to provide something, we should pay for it in taxes and have the government do it, as long as we also allow the private sector to also provide it, unregulated. This would be less worse than regulating the private sector, because while the individual would pay a large chunk in taxes, he would otherwise remain free to do whatever he wants. The alternative - the system we have now - may mean slightly lower taxes, but it also means increased compliance costs and liberty lost. It's better to pay a lot for a government that leaves you alone than to pay slightly less and allow the government to walk all over you.

Comments (2)


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Rosalie Krup from Elgin IL 60124 writes:
May 5, 2007
I couldn't agree with your article more (Socialism vs. Regulation).

Tony Jaramillo from China writes:
April 5, 2008
Take it easy on me here, I'm a newcomer.

For one, isn't currency a universalized commodity, not 'socialized money'. I mean, once you have money, you already have socialism. You can't have an unregulated currency.

My argument or my question is this: Are these dichotomies valid? Is the (smart or dumb) regulation of private enterprise the necessary outcome of a lack of socialism, or is it rather the lack of (smart) centrally administered regulation.

You seem to prefer a smarter form of governmental involvement, but would also like to see more efficiency from that sector, so you propose socialized medicine and private insurance. It's Darwinian economics and I agree with you, the best companies will have been proven in competition for survival.

However, it seems to me that taxation only reinforces the a government's tendency to view regulation as a favorable course of action. I don't think that excessive taxation will provide the corrective to the bureaucracy being created by 'symptomatic' regulation. In this system, politicians will keep putting legalistic bandaids on gaping wounds, when what we need are new institutions to provide services for a people no longer living in the times that these institutions were created.

If you give a kid five bucks and tell him to buy a burger, he's going to Mc Donalds. You know how he's going to spend it and why. It's the only institution catering specifically to his purse and purchasing inclinations.

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