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Totalitarianism

Our Patrick Henry Moment is Here

Patrick Henry

Obama’s election was supposed to transform America, at least in his mind.

This country’s first Socialist President strode into office confident he would remake this country. Unfortunately for him and fortunately for the country, the timing of his election was twenty if not fifty years too late. Socialism failed in its pure form wherever it was tried. Now it has failed in its modified form. While much of the world realizes this, President Obama is either ignorant or has more sinister plans for the country.

In the 1920s Ludwig von Mises demonstrated via economic reasoning why socialism could not work. His argument was that without market prices, there was no way to properly allocate resources. About 10 years later Friedrich Hayek supported Mises’ conclusion from a different angle. He approached it as a “knowledge problem” and argued that no central authority, regardless of how intelligent, could possess enough information to make proper and efficient decisions for tens of millions of people and businesses.

History validated the theory of the two Austrian economists. Russia, China, Eastern Europe, Cuba and North Korea produced the misery, poverty and brutality that were inevitable. The two countries that continue the system are amongst the poorest countries in the world, held together only by totalitarian rule and outside economic support.

With the recognition that socialism did not work, “do-gooders” changed their efforts to a system that would be part capitalism and part socialism. They believed that capitalism could be used for resource allocation while the “caring nature” of socialism could ensure equitable distribution of wealth. President Clinton expressed interest in what was then referred to as a “third-way.” Western Europe had adopted this approach decades earlier.

Interestingly, Mises argued that a “third way” could not work either. In the 1940s, Mises demonstrated that one intervention begets additional interventions. A so-called mixed system is nothing more than capitalism with interventionism imposed. Mises showed that any such system eventually degenerates into full-fledged socialism. In a collection of essays entitled “Planning for Freedom,” Mises concluded:

There is no other alternative to totalitarian slavery than liberty. There is no other planning for freedom and general welfare than to let the market system work. There is no other means to attain full employment, rising real wage rates and a high standard of living for the common man than private initiative and free enterprise.

The countries of Western Europe have, as Mises predicted, deteriorated into social welfare states likely never imagined or intended at their inceptions. As full-blown socialism approached, these countries became insolvent. Soon all will be forced to either dismantle their welfare states or incur sovereign defaults.  The U.S., while never formally adopting either socialism, drifted into the mixed system by gradually adopting many socialist programs. As a result, the U.S. faces the same future of insolvency as its European counterparts.

In terms of history, the mixed system dates back only to Bismark in the 1880s. It was initiated in a few countries in the first quarter of the Twentieth Century. Its wide-spread acceptance occurred after World War II when several countries chose not to return to the decentralized economies that existed prior to the war. England was the prime example. Industries nationalized for the war effort remained nationalized after the war. England rapidly devolved

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