Thursday, May 21, 2009

Time to get Over the "S" Word

Recently, a very good friend of mine and nationally known economist (and frequent guest on the Price of Business Show) told an interviewer on Fox News that he liked to "avoid the 'S' word." This economist is one of the most passionate and best informed advocates of freedom that I personally know. His credentials in the cause of liberty are without question. With that, I find it hard to believe that he and other free market economists have a problem with the "S" word. It is time to get over the word, and focus on its consequences.

Let's begin by demystifying the word "socialism." If you recall back in your basic economics class, we are told that socialism is "government control or ownership of the means of production." Let's break this already basic definition into even more simple terms. We largely know that the phrases "Government control" and "ownership" are self explanatory. It doesn't have to be both, simply one or the other. The other part is the "means of production." This can simply mean people, businesses, machines and any thing else that adds to the economy.

So is the United States becoming a socialist country or is it already there? Who would believe we would have the President of the United States firing the CEO of an American automobile company? Who would imagine the United States government becoming the major stock holder of untold numbers of American companies? Who would think that the United States would arbitrarily and retroactively break contract law with companies (e.g., the government's taking of bonuses of AIG executives, when they clearly originally agreed to such).

The US didn't have an election in November and then wake up to a socialist regime in January. As Fredrich Hayek pointed out in his The Road to Serfdom, these processes do not have to happen over night. Our road has been, arguably one that has taken over a century (maybe longer), but we are reaching that point where socialism will soon be the commonly accepted worldview. A few years ago politicians shunned in fear the "liberal label," now politicians coolly dismiss comparisons of our countries with European socialism. In fact, they almost appear to be saying, "That is a problem?"

This "road to serfdom" for our country could be a rather lengthy book, but I'm going to only give a few examples:

  • Our Founding Fathers originally prohibited income tax because they believed that the federal government had no business knowing how much people made or even how they made it. Furthermore, income taxes are a tax on wealth creation, which is the type of tax that makes economies weaker. Why would any government want to do that?
  • The Constitutional Convention was made up of representatives of the thirteen states. Their over riding objective was to protect those states from a federal government that could grow out of control. Most Americans don't even realize that the US Senate was comprised of individuals chosen by the state governments to represent their interests. This was the practice until the 20th century. Furthermore, our US Constitution could not get ratified by the states without the first ten amendments. These Bill of Rights that are now claimed by the federal government as a tool for its protection, were designed to protect the states and the American people.
  • In the 1930s there was a complete perversion of the role of government from one of an umpire (making sure that everyone was judged by the same rules) to a parent (attempting to "create" equality in results), which is a contrary to both the letter and spirit of the Constitution.

The very first step in dealing with any addiction or disease is to own it, so you can battle it. The first step on the road to get the US back where it belongs is to recognize the "socialist" label so we can find a path to liberty.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. Eric Bolling of Fox News and Fox Business says that Price’s Blog “is very influential and moves the blogosphere.” Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

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