Socialism and the delusion of rich people as your enemy

By —— Bio and Archives--February 22, 2016

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You might have seen Dan’s piece on Friday about the food crisis in Venezuela, or earlier in the week about the fact that young Bernie Sanders supporters demonstrate in polls that they have no idea what socialism actually is.

We’ve talked a lot about this both on The Herman Cain Show and here on the web site, and obviously a large part of the problem is that young voters enthusiastic for socialism don’t remember real-life consequences of socialism like, say, the poverty and hopelessness that endured behind the Iron Curtain for 44 years.


Or they’re convinced for some reason that this time it really would be different. Given the horrendous history of socialism I have no idea why anyone would believe that, but it’s not uncommon for a young generation to think they can be the first ones to do successfully what all their predecessors failed at.

When we get to do socialism, we’ll do it right!

But there’s a more fundamental misunderstanding about economics where many of these younger voters are concerned, and it explains a lot about why they’re attracted to Bernie Sanders and his socialist ideas. That is the notion, very popular on the left, that the entire economy is “rigged” in favor of the super-rich, such that it leaves everyone else on the outside looking in, with no access to opportunity.

That is simply not how free-market capitalism works, although there are time in which people rig certain situations – but only if they can harness the power of government to do it. The case of Martin Shkreli is a perfect example. Everyone heard about how Shkreli and his company cornered the market on a crucial drug, and jacked its price up to $750 a dose. Many on the left saw Shkreli as the poster-boy for capitalism run amok. But here’s what they didn’t know: Shkreli and his company, Turing Pharmaceuticals, were only able to corner the market because they knew all competitors would have to go through a protracted FDA approval process – likely as long as four years – before they could introduce market competition.

In other words, Shkreli was only able to do what he did because of the regulatory state. And any time something is “rigged” in economics, it’s going to require some force of government. Dodd-Frank, for example, is advertised as protecting consumers from evil, reckless banks. In fact, it protects big banks by making it next to impossible for smaller community banks to compete with them.

Sanders supporters have no idea how much of what they think is runaway capitalism is actually caused by government policy championed by Democrats.

And that takes us to an even more fundamental misunderstanding – the notion embraced by left-leaning young people that rich people are their enemies. They’re not. No one gets rich by causing another person to be poor. You get rich by producing goods and services people want at prices they’re willing to pay. You get rich when you offer people a proposition they find agreeable.

And if you’re a young person who wants to ascend the economic ladder, I’ll tell you exactly what you should do: Identify a rich person who might get even richer as a result of something you could do for him or her, and then propose to do it. And if that person says no, go to another one. And then another. And then another.

You become rich by working well with other rich people, and helping them to offer quality goods and services to the public at reasonable prices. Now, of course, this will require a lot of you. You’ll need to work very hard, show up on time consistently, perform at a very high level and probably get more out of yourself than you ever thought you were capable of.

But I’m telling you right now, this is how those who get rich do it. And those who have already done it represent opportunity for you.

Or you could get behind Bernie Sanders, who wants to tear rich people down and take away what they’ve earned, then apportion to you – well, whatever he decides to give you, I guess. That doesn’t sound like a pathway to prosperity if you ask me, but then again, if you have no concept of what prosperity means or how to achieve it, maybe you too will be taken in by such notions and the people who espouse them.


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