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Tuesday, May 29, 2012

Corruption: The Natural State of Socialism

Liberals complain that no one has done socialism right. It’s really a great system, we’re told, but because the wrong people tried it, it just hasn’t worked yet. But, they assure us, this time it will really work. Why should we have any confidence that it will work this time? What will be different this time around? Who are these right people that will make socialism work this time? Who are these people who have reached the necessary “ethical ideal” that progressive/liberal founder Richard T. Ely believed was necessary to create a better society?

The entire presumption that socialism will work this time is based on the belief of Ely and other liberal/progressives that certain men and women have evolved ethically and morally above everyone else in society. It is this belief that liberals had achieved an “ethical ideal” above the average man that early progressives like Ely and Woodrow Wilson relied upon to justify the re-segregation of the South and to enact Jim Crow laws. Other early progressives like Margaret Sanger rationalized the morality of eugenics (manipulating the genetic pool of the population through abortion and sterilization) as a means of elevating the ethical level of society.

The foundation of the belief that socialism will work this time is based on a faulty presumption—that men and women, at least certain men and women are evolving morally and ethically. This false presumption leads to false conclusions. The truth is that there are no right people, if liberals mean people who have reached the necessary “ethical ideal” as progressive/liberal founder Richard T. Ely put it. Or, to put a more precise point on it, there are no individuals, conservative or liberal, old or young, educated or uneducated, who are more moral, or more ethical than others. All are cursed by the fall of Adam. There are no exceptions. To believe that there are exceptions is a request that we deny the reality of the world around us. The 20th century was the most bloodthirsty in the history of the world, but the corruption of man is not limited to tyrants. Highly educated people like Paul Krugman (a Nobel Prize winner in economics), who writes for the New York Times online edition regularly slanders people he disagrees with. Slander is, of course a form of bearing false witness. He has also stretched the truth (lying), and exhibited envy and jealousy (coveting). But I don’t mean to pick on Paul Krugman. I’m as guilty as he is, you are too. Which one of us truly believes that he is truly morally and ethically superior to anyone else? It is only by God’s grace and forgiveness that we are empowered to do good works. As far as believing that you are ethically better than anyone else, that’s just human pride, the same pride that comes before a fall. A person would have to be in total denial to believe that he or she is somehow ethically superior to everyone around them. Only when we understand our failings and humbly ask God for forgiveness and his grace are we in a position to do good.

The fatal flaw of socialism, as it is with big government, kings, monarchs, rulers, dictators, leaders, potentates, etc., is imperfection, or as a pastor or priest might say it, sin. Lord Acton said, “Power corrupts and absolute power corrupts absolutely.” Corrupt humans simply can’t handle power or authority. Their ego and their pride get in the way of doing good, working hard, seeking justice, and putting the interests of others before themselves. Power is seductive and not even King David could resist the temptation to use power for his own self-aggrandizement.

Liberals may be able to argue that they are, on the basis of IQ, smarter than everyone else. Maybe. But even if that is true, intelligence should not be confused with wisdom. Who do you want as President of the United States—someone who is extremely intelligent or someone who is very wise? Do you want someone who is grounded in wisdom, or someone who relies on their own intellect to make decisions that affect your life? Just because someone is more intelligent does not make that person wiser. Who is the source of wisdom? Wisdom doesn’t just exist in a vacuum, it has to have a source and that source is God, the source of all wisdom. Science progresses, but wisdom is a constant.

The Hawaiian parties of the GSA employees and the extravagant excursions of federal judges is not some sort of anomaly. Corruption is the natural state of socialism and any other concentration of government. Flawed man can corrupt any sphere of society—business, church, or government, but of the three, government is inherently the easiest to corrupt. The church strives to adhere to higher standards, but even it is sometimes stricken with scandals like the Catholic priest abuse of young men and the Jim Bakker scandal. In spite of the restrictions the marketplace naturally imposes on participants, businessmen still endeavor to cut corners and corrupt the process, especially when aided by government. Scams still occur in the business world. As long as people are involved there will be corruption.

The fact is that government naturally trends toward corruption and the corruption increases as the size, scope, and power of government increase. And unlike the marketplace, there are no natural mechanisms that work against corruption in government. The bigger government becomes, the more corrupt it will become. Pay to play scandals like Solyndra will be peanuts compared to the vast and universal nature of corruption under any new socialist scheme such as Obamacare. The history of government is laden with corruption. Politicians invented ear marks not to benefit their constituents, but to bribe constituents to re-elect them. It is not unusual to hear a Senator or Representative brag that they bring home the bacon to their state or district. During his first campaign for Congress, Gerry Connolly (D-VA) bragged that he would be the “biggest snout in the trough” bringing home the bacon for his district.

In 1963 I got a summer job with the engineering department of the City of Saint Joseph, Missouri. I was a sophomore in college at the time, studying to be an engineer and had passed a civil engineering course on surveying. My short time with the engineering department of St. Joseph was an eye-opening experience. Although I arrived at work each day on time, the survey crew (of which I was a member) did not leave until an hour or two later. Our first stop was breakfast at a local restaurant and then we might “run the gun” (do some surveying) for an hour or so. Each survey crew member was then dropped off at their house for lunch. A couple of hours later, I’d be picked up again and after a few personal errands by the leader of the crew, we might work for another hour or so and then knock off. This happened day after day all summer long, except for Fridays. On Friday we got paid. On those days we would hang around the engineering office during the morning until we received our pay checks and then we had lunch and knocked off at noon. I eventually got demoted from the survey crew after I told my boss that I now understood why socialism doesn’t work.

If it is that bad in local city government, imagine how bad it is in a state or in the federal government? The big, expensive bash in Hawaii by the GSA folks is almost certainly just the tip of the iceberg. Remember, the further away government is from the people, the less responsive and less efficient, productive and honest it is. I saw socialism first hand and it does not work. But the failure of socialism to work or to avoid corruption is understood by anyone who has been involved with it. In fact, the lawyers and politicians who design government programs and agencies understand the natural tendency government toward corruption. They write tens of thousands of pages of regulations and create hundreds of new bureaus, panels and bureaucrats to police the corruption. Yet every one of the new bureaucrats will be under great pressure to compromise their ethics and participate in the corruption. It is estimated that Medicare fraud alone exceeds $25 billion dollars per year and yet no one can do anything about it. That $25 billion will be a pittance compared to what can be expected under Obamacare. No one has ever be able to suppress fraud and corruption in government. But isn’t the free market equally corrupt?

Of course businessmen and women are just as subject to corruption as are those in government. They have the same human weaknesses that everyone else has. However the fact is that it is difficult if not impossible to be dishonest and corrupt and still stay in business and be profitable. In business, as in government, the larger the enterprise, the greater opportunity is for corruption. But there is a severe penalty for corruption as was shown in the case of Enron. When you cook the books, as Enron did, the ultimate penalty is financial collapse. When that happens management is exposed as incompetent and dishonest and officers face criminal and civil penalties. In such cases stockholders are punished for not exercising necessary oversight of management, seeing the value of their stock holdings evaporate. It’s not a pretty picture, but it is the reality of living in an imperfect world populated by imperfect people.

The fact is that the marketplace itself wages war against corrupt participants. Conspiracies are not sustainable—there is no honor among thieves. Businessmen love to create monopolies so they can be more powerful and become more wealthy, but monopolies can only exist if abetted by government. In the free market attempts at monopolies always fail. There are no exceptions. If someone tries to corner the market on crude oil, someone else will find a new oil source or find a substitute means of energy. All attempts at creating a monopoly without government aid always collapse like a house of cards. Because the free market will not sustain a monopoly what do corrupt businessmen do? They try to use government to make it harder for competitors to enter into the marketplace using licensing, costly registration, regulations, and fees to keep out competition. Government is their essential partner in corruption. Government is the reason that the airlines were composed of cartels that kept prices higher. Prices of airfares did not decline to market levels until the airlines were deregulated. Government was the reason for the high price of long distance calls (over land lines) because it allowed AT&T to have a monopoly. Until the monopoly was eliminated by a US Supreme Court ruling, calls were more expensive. Moreover the AT&T monopoly served to restrain scientific advancement in the area of communications.

While businesses run by men are just as susceptible to corruption as those in government, the fact is that businessmen who want to cheat find it difficult to do so. The marketplace revolts against corruption and fraud. If a business cuts corners on the quality of their products, buyers will find another provider. If a business charges too much, the customer will seek out a less expensive vendor. A marketplace free of government intervention in the form of subsidies or punitive taxes on certain products or services will always provide the best services and products at the lowest possible prices to the widest possible number of customers. Subsidies corrupt the marketplace and hurt the consumer in four ways. First, they result in higher taxes to the consumer, and second they promote non-marketplace solutions that are inefficient and impractical. Third, they hurt businesses offering true marketplace solutions because they cannot compete with government subsidized competitors, and fourth, such subsidies delay and impede the development of new products, solutions, and inventions. Ultimately government subsidies distort the marketplace, kill jobs, slow down new product development and lower the standard of living of all Americans.

But the problem with big government is not just subsidies. Suppose that government has a monopoly on providing health services, oil production, farming, or any major enterprise. Where will you go if the prices are too high, the service is bad and the quality is awful (the three hallmarks of government run enterprises like the US Postal Service)? You will be left with no choice but mediocrity. I like to say that the difference between the free market and socialism can be seen clearly by the difference between the dreadful Trabant automobile of Communist East Germany and the Volkswagen automobile of West Germany. West and East Germany are no longer divided thanks to Ronald Reagan, but the contrast between these two automobiles is still valid. As you may remember, East Germany was the economic showcase of communism! Yet when East and West Germany were still divided the people of West Germany had access to better automobiles that everyone could afford to own. They didn’t just have the option of buing a Volkswagen, but also could choose an Audi, a BMW or even a Mercedes. Most families owned multiple cars. However, in socialist East Germany only the privileged few had access to automobiles. And the only automobile you could buy was the Trabant—that had an outdated and inefficient two-stroke engine that belched smoke and was expensive and hard to get. The difference between the Trabant and the VW is the difference between free enterprise and socialism. One meets the needs of people and the other doesn’t.

Worse yet, government is an easily corruptible enterprise. Corruption was rampant in East Germany and throughout the old Soviet Union. While customers and sellers freely exchange dollars for services and goods in a free market, elected officials and bureaucrats are always susceptible to corruption. At the local level, city councilmen often take bribes to secure liquor licenses and zoning permits. There is no marketplace restraint on politicians or politicians in terms of wages or performance. Once your congressman is elected, he or she is a free agent. What elected official cares if an irate citizen calls if the caller is not a member of a constituency that is necessary for re-election? It takes just 51% of the votes of a legislature to pass a bill that subsidizes one company or punishes another company. By contrast, no company has any power over a citizen. No one is forced to buy a product or service from any company unless the government has granted that enterprise a monopoly. No company has power over your life or mine. No one fears Coca Cola, Ford, IBM, Apple or Microsoft because these companies hold no power to diminish your individual freedom. But anyone with common sense rightly fears government.

How will Obamacare work? The answer is that it won’t work. And if allowed to continue as law, politicians will see that those who do not support them receive less medical care. No socialistic scheme ever works. Politics always prevails. Socialized medicine not only destroys incentives for improvement in care and for extra effort in providing services, it increases the cost dramatically through the vast bureaucracy created to ration health care. Instead of the marketplace allowing free citizens to decide how much they want to spend on health care, bureaucrats will decide under Obamacare who will receive care. So what recourse will someone have who is older and needs immediate care, but that care is denied? He or she will either bribe the medical services provider with cash payments or will be forced to suffer or die. That’s the only way socialized medicine and socialism works. Take the socialized medicine program of Poland for example. A young man in Gdansk, Poland told me that if he becomes ill and needs a doctor the typical wait is six months. If he then needs a specialist, it is another six to nine months. I asked him how health care is for Poles who are 65 years of age and older. His answer was, “They don’t receive any healthcare.” In England socialized medicine is a disaster, especially for older people. If you are 60 years of age or older in England and need dialysis you will be refused. If you need an MRI in the United States you can get one quickly, but in Canada the waiting time is more than six months. There are today more MRI machines in Fairfax County, Virginia than there are in the entire nation of Canada. That is the way socialized medicine has worked (or not worked) from the beginning. No matter what part of the economy is controlled or owned by government, the pattern repeats itself.

The irony is that the marketplace always works, even in a socialist nation. Just as dammed up water works to find an alternate route, the free market finds a way to work. The so-called black market in countries like Italy is simply the marketplace finding a way to provide the goods and services that socialism afails to provide. In Soviet Russia less than 10% of the farm land was owned by private citizens, yet that 10% of the land produced more farm products than the 90% of the farm land under control of the collective farms. Socialism is neither productive, or efficient, or fair. And on top of that, it is always corrupt.

In a socialist country any service provided by the government is rationed—cars, gasoline, automobiles, refrigerators, health care. The only way to get to the head of the line is through bribery. My American friend who lives in Moscow explained to me that getting approval to keep your car in Russia means that you must drive outside the border of Russia and stay there at least one 24 hour period every six months. If you do that at great expense, inconvenience, and at some danger, you can get your auto permit renewed. However almost no one ever does that. Instead they pay a small bribe to the worker who issues the renewal papers and it is taken care of. This is multiplied ten thousand times ten thousand in all bureaucratic, socialistic states. It is the inevitable consequence of big, all-powerful government. I know that liberals honestly believe that this time it will be different. Everyone who advocated bigger and bigger government before them promised the same thing, but the outcome was always the same—more and more corruption. Worse yet, a society that accepts bribery and other forms of corruption as a natural way of life—think Italy, France, England, Mexico, etc.—will sink toward accepting all other forms of corruption as natural. Socialism is not only corrupt, it is corrupting of the human soul. When government legalizes theft and takes honestly earned wealth from one individual and gives it to another, it is engaging in immoral behavior that will in turn corrupt the entire population.

Such corruption is the natural state of big government. And thus corruption is the natural state of socialism. Liberals condemn Stalin for his failure to create true socialism, but Stalin gets a bad rap. The corrupt nature of the Soviet state was the natural and inevitable outcome of centralized power and socialist government. Socialism is inefficient, dehumanizing, and always corrupt. There are simply no enforceable restraints on those who serve as the powerful bureaucrats who decide life and death issues for their citizens. Powerful bureaucrats running any socialized medicine scheme, whether called Obamacare or socialized medicine by any other name, become potentates who can and will manipulate your life, treating you as the peasant you will have become. It’s the inherent nature of all-powerful government.

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