On the thirty-eighth anniversary of the Bolshevik revolution, Mr. Lazar M. Kagonovich, spokesman for the Soviet regime, declared that “the twentieth century is the century of triumph of socialism and communism.” The gentleman implied, as a true Marxist should, that by the year 2000 A.D. the star of Moscow will direct the pattern of life all over the world. That prediction we can discount offhand. It is historically and politically untenable; even Rome could not contain the ambitions of its satraps on the perimeter of the empire, and one can hardly imagine a marionette dictator in Washington; the proud Americans would want one of their own, completely constitutional.

However, if you consider the ethos of our time, the wave of the present, you are inclined to say that Mr. K. was not talking entirely through his hat. The way things are going, and assuming that they will continue along the same lines, it is possible that the pall of “communism and socialism” will embrace human existence within the next 45 years. In fact, it looks very much as if the mass of men want it, and what the mass of men want they usually get.

The gist of Mr. K’s prediction was that socialism (we can omit the “communism” as a rhetorical tautology) need not be imported into a country, that it can be endemic, and that it cannot be kept out by means of “visas and fingerprints.” (He was referring to our efforts to protect ourselves against socialism by scrutinizing foreign visitors.) To see how near right he was in his forecast one must dig out of the verbiage of socialism its essential characteristic, and assess the trend of events by this characteristic.

Socialism is the denial of private-property—nothing else. It is not the repression of religion, nor the regulation of the economy, nor the suppression of thought through control of media of expression, nor the management of life by political means. All such things may follow, and in the end must follow, from the violation of the right of the individual to keep and enjoy the fruits of his labors. To be more exact, socialism is the forcible transference of control of property from the producer to the political establishment. (Force is necessary because the individual is so constituted that he will not voluntarily give up his property.)

The means employed by a sagacious political establishment to acquire control of property is taxation. The more taxation, the more socialism. The excuse for taxation is the use of property for “social purposes”—which, in reality, means anything the appropriators of the property may decide to do with it, including the making of war. It is the transference of control over property that is the essence of socialism, for with this control goes the freedom of the individual to pattern his own life.

In this country, more than a third of all the people produce is now confiscated by the State. To that extent, then, this is a socialistic country. This accumulation of property in the hands of the State makes it the biggest single buyer of goods, the biggest employer, the biggest dispenser of alms, the biggest factor in the economic life of the community. Either through direct employment by the State, or indirect employment by its contractors, or by virtue of its dispensation of subsidies or doles, we are all dependent on the State for all or part of our sustenance. Even what it permits us to keep out of our earnings is a matter of benevolence, not a right.

Inurement to this condition of existence induces its enlargement into an ideal. We learn to worship the State. It becomes our Baal, and Baalism is our religion. And that is what gives the prediction of the Soviet speaker such force. There is no question about the growing ardor of Americans for State regulation, control and management of the economy, and an equal apathy toward the consequent State intervention in our personal affairs. Within 45 years, by a mere increase in the amount of taxation, the concepts of freedom upon which this republic was founded, even though the words remain in our language, can be obliterated from our consciousness. And then Americanism will consist of the rites and practices of socialism, perhaps not exactly like those obtaining in the USSR, but not different in kind. It will be native grown, not imported.

That is the prospect for the year 2000 A.D., as Mr. K. predicted. The phenomenon is strange indeed, when one puts the twentieth century against the background of human history. In all the centuries that preceded it, the power of the State was looked upon as a curse and a scourge, as something to get rid of. Always when men sought freedom, and they always did, they thought of limiting and shackling political power; freedom never meant anything else. The miracle of the twentieth century is the complete reversal of this historic pattern, and the identifying of freedom with subservience to the State. The explanation of this miracle will engage the best brains of the future.

Uncle Sam, Baseball Magnate

For a short while, “we, the people,” were in the baseball business. That is to say, the government acquired title to a bush league team; and since “we are the government” (as some persons put it), every one of us was part owner of some baseball paraphernalia, a franchise and a parcel of so-called ball players.

The last item is most important. It explains how we happened to become baseball magnates. The most valuable asset of any baseball team is the skill of the chattels under contract, for if they are of superior caliber the fans will flock to see them and the turnstiles will show a profit. In this particular case the players must have been mediocre performers, for they did not attract enough customers to pay the inevitable taxes. It was through a tax lien that “we” became baseball owners.

Fortunately, “we” got rid of these bushers at an auction sale, at a few cents on the dollar. It is horrendous to think of our plight if nobody had put in a bid for “our” property. “We” would have had to become 160 million baseball presidents and, as baseball fans rooting for our favorite teams, we would have been in constant opposition to ourselves. The whole thing is most confusing.

The incident suggests another idea. Suppose a depression hit the country, and all the grocery stores and steel mills would find themselves short of enough cash to pay their back taxes. Would “we” exercise our claims by foreclosing on the delinquent taxpayers’ property? What would “we” do with all these grocery stores and steel mills? It would be most difficult to auction them off, for during a depression buyers are very scarce. “We” might be forced to operate these businesses, in an attempt to get enough taxes to keep them going, if for no other reason. That would mean nationalization of the tax-delinquent industries.

This is a thought worth considering.

Socialism the Antidote for Socialism

A news item starts a train of thought. This story, date-lined London, tells of the disillusionment of Norman N. Dodd, Labor member of Parliament for the last ten years, and one of the architects of British socialism.

Having received a number of complaints from his constituents about the inefficiency of electric repair men (he had been instrumental in nationalizing the electric company), he decided to investigate for himself. He sat at the front window of his residence and watched a repair crew make some line changes. He watched for a whole week. Then he remarked, quite sadly, according to the report, that the “workmen had averaged one-hour’s work per day.” The rest of the time they loafed.

Mr. Dodd had learned a fact of economic life and found it inconsistent with his preconceived notions. Men work, he learned, to satisfy their desires, and if their desires can be satisfied without working, they give up work. They have no interest in toil per se. In the welfare state, which undertakes to satisfy desires, whether or not the recipient has paid out an equivalent in effort, the tendency is to take what is given and be parsimonious with effort. This is not a theory, it is a fact that is riveted in the human make-up.

Mr. Dodd learned this from watching one end of the production line. If he had investigated the entrepreneurial end, he would have found the same human trait at work. The promoter, just like the most marginal worker, puts out effort only because he is interested in returns; and if the promise is negligible, he limits his output of effort accordingly. Thus, in the welfare or socialistic state, which undertakes to tax productive effort in order to dispense welfare, the worker does not work because he gets what he wants without working, while the enterpriser loses interest in taking risks because the government takes (for welfare) so much of the expected returns that little is left him for his satisfactions.

The net result of welfarism, then, is a diminution of production. Or, to put it in the stock phrase of economics, socialism produces an economy of scarcity. And the reason for this is simply that socialism refuses to recognize the fact that men work only to satisfy their desires, that they will not work if their desires are satisfied without it or if the work yields no satisfaction. That’s how the human animal operates and there is nothing socialism can do about it.

Were The Russians Told?

John Strohm does a fine piece of reporting in his story in this issue—“Russia’s Farmers Pay Us A Visit” (p. 1). It is factual and well told. We can take it for granted that the Russian visitors learned much about farming in the United States and, for the sake of the people of the USSR, we hope they profited from this knowledge.

And yet, THE FREEMAN reader will probably ask whether they learned anything about the economics of our farming system, about the effect of subventions on farm production, about the higher prices the consumer must pay for his food despite the increased supply. The visitors undoubtedly were impressed by the abundance of food produced by 12 per cent of our population as compared with the output of 50 per cent of their own population engaged in agriculture. And it was only natural for them to ascribe this higher production per farm hand to greater mechanization, better fertilizers, improved seeds, and so on.

Were they told that behind all this was a political farm policy that fixed the price of farm products above the normal market price?

Were they told that marginal farms and farmers were thus kept in business, while farmers who exceeded quotas were punished?

Were they told that a good part of the farm yield was bought up with tax money and stored away to rot and decay, so as to create a scarcity?

Were they told that the consumer, besides being compelled to pay the subventions, did not get the benefit of this abundance?

Were they told of the vast and expensive bureaucracy that this system imposed on the taxpayer?

The chances are that they were not. And they could not learn about our farm policy by examining the soil of Iowa nor by watching Wyoming ranch hands rope calves. Its secrets are in Washington, D. C., where the only crop is taxes. []

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We cannot increase government outlays in particular and reduce them in general . . . .

If people want easier taxes they can have them, but they will have to pay the price of forbearing to urge more spending programs on a federal government already overburdened with debt and responsibilities. They must learn to see that the money they get from Washington is the money they sent to Washington, less freight charges both ways.

—First National City Bank Monthly Letter, November 1955