Sunday, November 18, 2012

Note the Similarities to Today

Janet Daley has the piece at the Telegraph, a United Kingdom newspaper, entitled We're Heading for Economic Dictatorship. It is perhaps the best explanation of what will necessarily happen in the future if present trends continue. The Communist block collapsed in beginning in 1989, 23 years ago. Even before that, though, communism had been soft pedalled by the media and academia, so that few people understood life behind the iron curtain. A movie like Michael Moore's Sicko could have reasonably been made then, and people might have had an excuse to believe it. Since then, not so much.

Daley writes:

Now there are some people for whom this will not sound like bad news. Many on the Left will finally have got the economy of their dreams – or, rather, the one they have always believed in. At last, we will be living with that fixed, unchanging pie which must be divided up “fairly” if social justice is to be achieved. Instead of a dynamic, growing pot of wealth and ever-increasing resources, which can enable larger and larger proportions of the population to become prosperous without taking anything away from any other group, there will indeed be an absolute limit on the amount of capital circulating within the society.
As Daley makes clear in her piece though, once the economy stagnates to a stand still, the value left in it will degrade every year that the economy doesn't grow. Soon, we will not have anything to trade that others want. We know this because of the experience of the Soviet block, where the Ruble and other currencies were worthless outside their closed system. But, this can also be predicted by simply applying a little business acumen to the problem. Businesses must make a profit in order to stay in business. Capital goods such as machinery for production, rolling stock for transportation, and so on must be replaced as it wears out, and as techological advances make it obsolete. But if the wealth of businesses is redistributed to others, those others will consume it, and there will be none left to recapitalize the business. Each year, some equipment breaks down, and the only thing the business can do to keep operating is to cannibalize the broken equipment to keep the other equipment operating. Eventually, there is nothing left to cannibalize, but by then the business has stopped running. This, along with gross mismanagement that would have had any CEO in the West drawn and quartered by the board of directors is what happened in every socialist economy where it has been tried.

As the value of the economy goes down, there is a greater and greater temptation to use ever more totalitarian methods to maintain the illusion that things are being "fairly" distributed to everyone.  The government has to continually find scape goats to point to in order to deflect the people's righteous anger.  Thus, in today's world, the leaders in Iran must constantly point to America as the source of their troubles.  Who will Iran point to when we are obviously not the problem?

Read the whole piece to see where we are heading.  If you wonder why I have been trying so hard to get you to see the horrors of Marxist Socialism, Fascism, and Communism, Ms. Daley has laid it out as clearly as anyone.  The Soviet Union had, and has abundant resources, more than the United States, but these resources went unexploited to maintain a criminal gang of thugs in power and keep the everyday man in desperate poverty.  Does any of that sound familiar?

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