You're a clear supporter of the free-market system and, not surprisingly, you oppose socialism. Since most of what was at one time considered the “Free World” seems to be headed in a socialistic direction, what do you think would be necessary to reverse that trend?
I'm sorry to say that I don't think that it can be done. The rot has set in. The average person thinks that socialism is a good idea. I should clarify that by saying that not all those who are socialists consider themselves to be socialists. They simply believe that their government should have the role of seeing to it that the average guy receives his “fair share,” i.e., to take your wealth and redistribute it.
Do you see socialism as an inherently invalid system or do you think it can succeed in some situations?
Actually, I think that socialism generally succeeds. But to make sense of that statement, I'd have to say that I don't believe that the purpose of socialism is to “free the downtrodden” as is always purported to be the case by those who promote it. Its true purpose has always been otherwise. Socialism, like its cousins communism and fascism, is a modern-day version of serfdom. Its purpose is to subjugate the population of a country – to control them and seize their wealth, with the power and wealth to fall into the hands of a very few.
If we look at the historical leaders of socialistic states, it's always the same. The Hitlers and Stalins of the world become omnipotent in their countries, ruling by fear and oppression. Yet that was not the original promise they made to their people. They promised to save the people from the greedy rich. In Russia, the greedy rich were the aristocrats, in Germany the greedy rich were the Jews. It doesn't matter who gets targeted as the evildoers. The object is to create a demon in the minds of the people in order to justify aggression.
But if this is always the way it plays out, if the great majority of people living under these systems are worse off than they had been when they lived under a free-market system, why does socialism keep returning as a viable concept?
The true intent is never revealed at the beginning. It's interesting that, no matter how many countries fail as a result of socialism, we almost never see anyone looking back in hindsight and saying, “This is how it began. If we remember this, we can avoid a reoccurrence in the future.” This is surprising to me, as the sales pitch for socialism is invariably the same. It's quite easy to spot.
It works like this:
- In any society, we will have some go-getters and some who just bump along from day to day. The latter group are always in the majority. That's simply human nature.
- Those in the former group get their paycheques then live frugally, putting their money away, investing it, starting businesses, and so on. The latter group tend to fritter their disposable income away. The members of the latter group often laugh at those in the former group for not enjoying life now.
- A few years later, those in the former group have prospered and are moving past their neighbours in the latter group. This is distressing to the latter group. They tend to look upon the former group with jealousy and envy.
But, if they see the former group doing well, all the latter group have to do is to adjust the way they live, to, in a sense, grow up and start acting responsibly.
Yes, that's exactly right, and some, in fact, do. But the majority of people in any population are not willing to become much more responsible. Again, it's human nature. The majority will always want to take the easy road if possible. And the jealousy and envy that they feel makes them ripe for a sales job by political hopefuls. Jealousy and envy are the drivers of socialism. They make the socialist con job possible.
Let's say that I'm in the latter group. I resent the fact that my neighbour is advancing his life beyond mine, but I don't wish to face the fact that I have been the cause of my lack of advancement. So, I listen to politicians who say my neighbour is greedy and needs to be taken down a peg. I agree because I'm jealous and envious of my neighbour and want him punished for making me question my wastefulness. This theme of punishment is seen time and again amongst liberal pundits and politicians.
Since the majority of people, in any country, tend to be short-sighted, it is only logical that, once the politicians figure this out, they can appeal to the jealousy and envy of the majority by presenting the former group as “evil” and offering to stand as the saviours of the latter group. In any country where the majority rules, the latter group will eventually vote for those who promise to punish those who prosper. There's no need to actually use the word “socialism;” the politicians just need to preach a “fair distribution of wealth.” In some cases, like the UK and the US, the transformation may take many years, with the deterioration into socialism being incremental. In others, like Russia or Germany, it can be achieved quickly, sometimes by revolution.
But you must admit that it seems ludicrous that so many people would accept the degradation of their economic and social lives just because they want to see successful people brought to their knees.
Yes, that's true. But, remember, one of the basic tenets of what I've stated is that the majority of people are short-sighted. In his frustration with his lot in life, the average man is easily targeted by politicians – easily preyed upon. In any free-market society, there will be “haves” and “have-nots.” The frustration of the have-nots will always be present, but it is only galvanized when clever politicians say, “Are you fed up with the fact that the haves always seem to have more than you?” Of course, the answer is always, “Yes.” “Well, then, vote for me and I'll see to it that their wealth is taken away and 'redistributed'.”
This is a great sales tool. Not only do I (the have-not) get to avoid questioning my wasteful practices, I get to see myself as a victim – that the guy with the goodies got those goodies through greed. When a politician tells me that this guy ought to be punished, I'm all for it. Then, the icing on the cake is when the politician tells me the goodies should be redistributed. That suggests that I might get some of those goodies. I love this politician. He's pressing all my buttons.
Do you see the same drivers of jealousy and envy as being universal? Would the same drivers exist in any country, regardless of the existing ethic?
Yes. And the more examples you examine, the clearer it becomes. In my neighbourhood, the Caribbean, the process has played itself out many times. I've had the opportunity to see several countries, such as Trinidad and Jamaica, go down the socialist road, always beginning with a feeling of liberation amongst the have-nots and always ending with the entire population taking a nose-dive economically and socially. The first development, of course is a brain-drain and a money-drain. In short order, many of the well-educated, entrepreneurial types leave, and there is also a flight of capital. This has happened in Cuba, the Bahamas, Jamaica, and so on. If the population realise they have made a mistake, they could conceivably reverse their policies, but it can take decades to get the money to return. This always proves to be true.
At what point does the population figure out that they've been had?
Actually, many of them don't. I've seen so many people who began life with humble beginnings vote for socialism in the hope that it will bring them a better life, then find that they simply sank to a lower level. But they have the satisfaction of knowing that the Mercedes crowd has also been pulled down a notch, and, in some countries, that serves as a pacifier. After all, the have-nots may want to have more goodies, but that doesn't mean that they want to invest or cease to be wasteful.
One thing entrepreneurs often fail to realise is that the majority actually don't want to own a business. They will never be go-getters. It's not a question of lack of opportunity, but lack of willingness to make the requisite sacrifice. But they still resent those who do open businesses and become successful.
That suggests that the socialist/capitalist dispute is perennial. Do you see the two as a cycle in which a free-market system flourishes in a country to the point that the middle class grows and eventually becomes spoiled, leading to a desire for ever-increasing entitlements and an eventual move to socialism?
That's certainly the European model and the US model. But there are others, like the Cuban model or the Russian model, in which the majority of people really were very poor, and they rose up in revolution. But the con job was the same – selling the people the illusion of “equal prosperity for all,” but delivering dictatorship. But other than that, yes, it is cyclical.
At some point, you have a government that says, as Jamaica's did, “Okay, our attempt to adopt socialism and be independent of capitalist countries didn't exactly work. It turns out that it was cheaper to buy clothes hangers from the US than it proved to be to have our people hand-making them out of aluminium wire in their homes. And we never did succeed at making corn flakes like Kellogg's does, so you can now import hangers and corn flakes again.” The idea that the government could inspire Jamaicans to start their own refrigerator industry by disallowing the importation of refrigerators from the US was a clear failure from the start.
But again, most people have a short attention span. A socialist country can return to a system that is more capitalistic, but that doesn't mean that a major lesson has been learned. After another period of years, there is a new generation that resents the guy who succeeded in the import business when the importation of coat hangers became legal again.
Another example is the Bahamas, where the English bankers were kicked out of Bay Street in the late sixties. The Bahamian financial industry took an immediate nose dive. All the money left. But, years later, the demand to rebuild the industry resulted in an invitation to a new generation of people, many educated in England, to come and work in Nassau. To their credit, the Bahamas have done a rather good job of rebuilding its financial industry. The downside is that it took twenty years to get the money to return. We might expect that a lesson would have been learned; yet, we don't see the average Bahamian saying, “Aha, so this is why socialism doesn't really work. Let's remember this.”
So, if the cycles will occur in any case, is it worth attempting to educate people in free-market concepts, or is it a waste of time?
Well, yes, it is worth it. First of all, it's best to be optimistic and assume that you might succeed in delaying the inevitable. After all, a country doesn't always dive into socialism; it's often a process of erosion that may take generations. But I do believe that it's best to recognise that human nature will prevail, that each country has a shelf-life of sorts. The real solution is to make the effort to continually examine the state of the country in which you live and to also examine how other countries are doing. By doing so, you can keep from becoming complacent.
Look at the hundreds of millions of people in the First World right now, watching their system collapsing before their eyes. Many of these folks are individual thinkers and entrepreneurs; yet, so many of them cannot seem to come to grips with the fact that the party is over. It's time to make a move to a destination that not only tolerates free-enterprise, but encourages it. At any time in history, there are always countries that are on their way up and countries that are on their way down. If we are prepared to vote with our feet, there's plenty of opportunity out there in the world – not only in terms of prosperity, but in terms of a much finer quality of life.
Just imagine a world in which the movers and shakers had the ability to pick up stakes on any given day if the opportunity in another jurisdiction were more favourable. We'd see a constant flow to those jurisdictions that were the most welcoming to entrepreneurs. Then, as the governments of those jurisdictions inevitably became increasingly avaricious and sought to grab more from the entrepreneurs they had attracted, as they resorted to increased confiscation and regulation, the movers and shakers would then move to the next best place. If this were to occur, we'd soon see jurisdictions competing to become the most attractive place in which to live and do business. The world would become a very vital, competitive place.
I'm afraid I can't really see that happening. I don't think it's in the nature of leaders in any country to create such a worldwide system.
(Laughs.) Yes, I'm sorry to say that I agree. It's an unreachable ideal. The trouble is that politicians tend to be from the latter group – the ones who want things handed to them that they have not earned. That assures that entrepreneurs will always be swimming against the tide.
The interesting point is that, at any given time in history, there are some destinations in the world that are genuinely doing their best to attract new people and are writing laws and regulations to make their countries attractive. I am fortunate that my own country is a jurisdiction that, to a great extent, does recognise that productive people need to be wooed. So, it's easy for me to see the forest for the trees regarding declining jurisdictions, whilst having the undeniable luxury of being buoyant about my own.
In my estimation, those who have it the hardest are those who live in what was at one time a great country. When it all starts going down the drain, it's extremely hard to accept that your life is becoming a dead end and you have to start over – that you will have to move to a destination where there is no Harrods or Starbucks, or where you will need to learn Spanish or Mandarin. It's quite a difficult hurdle to accept and, during this period, whilst many will depart the former “Free World,” there will be far more who can't bring themselves to overcome their own lethargy and who, to a greater or lesser extent, get swallowed up by deteriorating systems.
The alternative to all of this would be a One World Government, which would provide uniform serfdom for all. But, as negative as I sometimes can be, I truly don't believe that this is likely to be attainable. I don't believe that the massive egos behind such a construct can ever agree for long. Even if an elite group can take control and, say, two hundred people rule the world, egos will dictate that no one will want to be number 200, or even number 100. “Mario” will prefer to be number one in his own domain than to accept that “Klaus” is the number one ruler over all. Klaus may then seek to play the heavy with Mario, but will discover that “Sven,” “Pablo,” and “Ravi” have similar ambitions to Mario's.
Historically, there is always relative freedom in some parts of the world at the same time as there are chaos and oppression in others. The best we can do is choose the location where we will have the greatest freedom for the foreseeable future.
Sign-up here to join the International Man community for free and get the IM Communiqué delivered to your inbox.
International Man delivers the most important news and top resources on the internet regarding the world's last frontiers, internationalizing your assets, and diversifying your political risk, for new and experienced freedom-seekers, investors, adventurers, speculators and expatriates.
Tags: austrian economics,