My article “The Education of the Modern Socialist” should have a follow-up. The first part showed that a change has happened in the meaning of “socialism”– a necessary change in view of the failures of this ideology throughout the last century. Socialism today is based on the ideology of “statism”– the conviction that the state must play a fundamental function in society. Ludwig von Mises’s broader meaning of socialism as state intervention indicates a modern-day social state that is associated with a lot of if not all of the activities of society, whether industrial or not.
Unlike under traditional socialism, according to this brand-new definition, really few people are not socialists. There are no political parties, then, that are not socialist, although lots of would never accept that label. This prevalent statism largely describes much of the problem that Western Europe has been going through– a mainly self-inflicted political, financial, and social duration of stagnation.
Therefore, prior to attending to potential negative impacts of globalization on regional communities, it is necessary to acknowledge the social effects of the introduction of the modern state. Education in the ideas of liberalism, as in the post kept in mind above, need to therefore consider this strong support that modern-day socialism delights in today.
In truth, socialism as statism is probably a much better meaning than the conventional one, according to which all methods of production come from the state. This latter historic socialism is so contrary to human nature, regardless of the existence of the former Soviet Union, that it might only be at most a momentary episode in a developed capitalist society.
Where historic socialism advocated an Orwellian society in which equality of result would be best among people, today’s socialism desires perfect equality of opportunity. However both kinds of equality imply severe violations of private flexibility. Modern socialism is more insidious; it does not restrict personal property and does not strangle the economy completely, but it frequently severely restricts the economy’s development.
Today’s socialism is aptly called due to the fact that it means– and presupposes–“socializing.” But this socializing is artificial; indeed, statism is a system of forced socializing over and above the natural social relationships that exist in a totally free society. At the private economic level, this forced socializing can be progressive (earnings taxes), regressive (value-added taxes), or normally redistributive.
Societal Stress Due to Socialism
When a significant part of wealth is redistributed, polarization of society is inevitable, even in contemporary societies that extensively support modern socialism. By soaking up and reallocating much of the wealth produced by the market, the state and its dependent monetary system develop social stress. This disputes with the “economic consistencies” of the free enterprise which Frédéric Bastiat described.
These stress are connected to the fundamental oppression of redistribution and the apparent obstacles to wealth development under a statist regime. These tensions are also connected to the unjustified growth of a privileged however underperforming class of civil servants, which impedes the economic sector and denies it of human resources.
However the financial and financial effects of contemporary socialism go much further. This forced socialization changes the natural social relations that are inherent in each society. Statism creates a new social truth when compared to the organically evolving totally free society. In The Ethics of Money Production, Professor Jörg Guido Hülsmann explained the harmful cultural and social effects of state money production (i.e., inflation), which is another, hidden, form of confiscation of private property.
Mindsets toward conserving are changed by the devaluation of cash in a fiat money system with fractional reserve banking, forcing members of society to invest more and spend it faster than they would in a complimentary society. Such a socialist policy modifications time preferences, which form the natural rate of interest in a free enterprise. Society under the yoke of statism thus ends up being more present oriented and less future oriented, as Teacher Hans-Hermann Hoppe explained in his major work, Democracy: The God That Stopped working.
Inflation (i.e., money development) escalates tensions in society through the regressive nature of the Cantillon effect. The synthetically inflationary financial policy of modern states has actually allowed wars as devastating as they are expensive, destabilizing and harming many societies around the world.
This increased value of the present, combined with strong fiscal and regulative pressures, prevents both business financial investment and individual motivation. The state is accountable for synthetic unemployment and hence contributes two times as to the general sensation of stagnation. The idea of a “generous” well-being state also drives immigration, generating challenges around cultural integration and social division.
Hence, statism coerces society into a vicious cycle of forced socialization, in which the numerous financial and social failures enhance each other, to the point where a rupture or crisis ends up being inescapable. This is the current situation in numerous Western countries, as should be obvious to any eager observer of existing affairs. The service is libertarianism, which lets society take advantage of the virtuous circle of real capitalism– fully free markets where financial investment and development continuously improve quality of life.
The current political, economic, and cultural decrease in the West is mainly described by the phenomena explained above. Till Western populations begin understanding the benefits of flexibility, not so much for Western countries when it comes to each individual, it is not possible to hope for a turnabout. Education around political and financial liberty must therefore continue.