Economic Theory

As we all know, socialism, the sister of communism (and, I might add, the transition phase into communism), does not work. This does not come as a surprise to those who understand economic theory and the human spirit.

Economic theory, for those of you who attended a government-run school, states that all social phenomena emerge from the actions and interactions of individuals who are choosing in response to expected benefits and costs to themselves. When people interact with other people to gain those expected benefits, they begin a process of continuing mutual adjustment to the changing net advantages their actions generate.

That is a profound statement. Simply put, people decide what they will do. When they chose to do something, they interact with other people to accomplish that choice. When people are interacting together, they adjust their actions so that people will be able to attain their goals.

You are probably saying that people do not change their ways to help someone meet a goal, or people do not always have to interact with others to attain a goal. Study economics and you will see that that is indeed always the case.

People choose how they wish to do something. This statement is the difference between a capitalist (free-market) and a socialist (nationalized industry/communistic) economy.

Capitalists believe people can make the best decisions for themselves. Capitalists believe people know how to spend their money wisely, to earn their money the most efficient way, and to live their lives the best way for themselves.

Socialists believe people do not know how to handle their lives and money. Therefore, the socialist believes that the government should make a person’s decisions for the person.

You can see by way of the economic theory, who is right and who is wrong in this picture. If individuals make the best choices for themselves, then the socialist is attacking the fabric of economics by taking that choice away.

For instance, if someone can go to Wal-Mart, Target, or K-Mart, they have a choice and will make the best choice to fulfill their goal. Since these three stores are competing for customers, they lower prices, increase service, etc., to attract customers. Therefore, the individual will choose which store will serve that individual’s needs the best. However, if the socialist has his way and nationalizes the retail industry, there will only be one choice, Marx-Mart (a government-run outfit). Marx-Mart has no competition; it does not have to have lower prices or good service. The end result – Marx Mart has low quality items with poor service.

While many of you may think this is hard to believe that nationalized industries would not produce quality, just look around. The United States Post Office is an example. Are they ever on time? AmTrak. That (basically) government-run operation is physically (yes, physically) falling apart. Is the United States government ever user-friendly? The public schools are, on average, the worst performing educational option out there.

And yet people still believe socialism is the answer. They still believe the government can make our decisions for us. That is why socialism never works. The Soviet Union collapsed, North Korea (for the people that is) is a miserable place to live, China is fighting the free market that is improving its stance in the world, Social Security is collapsing, Canada’s and Britain’s health care systems are in dire need of reform, on and on and on.

So the next time someone tells you that the government should regulate more of our industries, just remind them that Marx’s theories have never and will never work. People (and companies) know how to attain their goals better than the government does. The economic theory and real life examples prove this without a doubt.

Your favorite 17 year old political guru who is actually more of an economic fan than political fan,
Caleb