The New Socialism's Rise and What You Can Do About It

I. THE STARTING CONDITIONS

In this post, I'd want to show how, right in front of our eyes, a rapid departure from the free market system (or what's left of it today) is taking place, and how this is a trend that jeopardizes not just wealth but also the peaceful coexistence of people throughout the world.

I'm going to start my lecture with the starting circumstances to explain this to you and to discover a solution to the problem.

The economy are still reeling from the restrictions imposed by the government. Consistent production outages, delivery delays, rising products costs, and even bare grocery shelves all point to the reality that worldwide manufacturing and logistics systems have been severely harmed. One might now expect that these interruptions will be rectified sooner or later, and that the global supply and demand structure will return to normal. Unfortunately, the continuous economic and societal paradigm change that is occurring clouds this optimism. The politically and ideologically motivated rejection of the free market system (or what is left of it now) is going happening right in front of our eyes. What is happening is designed to pave the way for a command and control economic paradigm, which does not bode well for global wealth and peace.

When you consider how and how successfully the free market system works, it becomes evident why abandoning it is troublesome, if not deadly.

2. WHAT THE FREE MARKET SYSTEM CAN DO

Economically and socially, the free market economy has enormous potential. Consumers are free to demand things they wish to buy in a free market economy. Suppliers also have the ability to provide things that they feel will be freely purchased by customers.

People take advantage of the division of labor in a free market. This boosts work productivity, allowing for the production of more and better items. Companies are formed with the goal of producing and selling the goods and services that consumers desire.The firms will be rewarded with a profit if they are successful. Profit enables them to grow their output in the best interests of their customers. If an entrepreneur loses money, his money is put into better hands, i.e., entrepreneurs who are comparably better at meeting market desires. The profit-and-loss concept guarantees that industrial output corresponds to consumer needs.

In a free market economy, the creation of the price of commodities is extremely essential. When the price of an item rises, it means that the good is in short supply (relative to the supply of other goods). On the one hand, users are encouraged to use the product more sparingly. Companies, on the other hand, receive the signal to increase output. The higher manufacturing volume of the article offsets the price rise and improves the consumer's supply position. The same may be said about a reduction in the cost of a product. It denotes that the commodity is widely accessible, and that businesses should focus on increasing production of other commodities with higher pricing than the cheaper one. The pricing mechanism guarantees that scarce resources are directed to uses that provide the greatest benefit to consumers. Property is a defining characteristic of a free market system: the means of production are privately held. The entrepreneur can keep the earnings from his business, but he is responsible for the costs of what he accomplishes.

In a free market, the desire to maintain or acquire additional property motivates the entrepreneur to continually align his production output with the desires of the customer. He employs his resources to create items that serve the needs of others rather than his own. As a result, he dedicates himself and his property to the consumer. And it is the consumers' decision to purchase that determines whether the entrepreneur will succeed or fail; this is referred to as consumer sovereignty.

The issue of the environment can also be brought under control in a system of truly free markets. If there were a system of free markets, all resources—such as land, roads, forests, lakes, rivers, seas, oceans—would be privately owned—either by individuals or by groups of people. Overuse and waste of resources would be prevented because the owners would manage their property; that is, they would try to maximize the capital value of the resources.

Owners who see their property rights damaged by, for example, noise, air, or climate change, would have the option of taking the wrongdoer to court. They would do so by presenting proof of third-party injury, and courts would then rule on the case, issue injunctions, determine compensation, or dismiss the claim if there was insufficient evidence.

Another feature of the free market economy is mass manufacturing, which refers to the manufacture of commodities for widespread consumption. This is accompanied by a trend toward continuous improvement in the average standard of life for the general population, i.e., a gradual improvement in the majority of the people's living conditions. One may also argue (and the Marxist-socialists are unlikely to agree) that the free market economy deproletarianizes ordinary people, eventually raising them to middle-class status (a.k.a. bourgeois).

As stated in the introduction, a free market economy leads to a growing, more finely split division of labor, both domestically and globally. Because the division of labor promotes work efficiency, it encourages individuals to manufacture items that are relatively inexpensive. The division of labor not only enables for more commodities to be produced with a given work force, but it also allows for the creation of things that would not otherwise be possible. People's prosperity improves in unimaginable ways when there is a permanent division of work. The free market system establishes a work-sharing link between individuals all over the world, bringing them together in a cooperative and productive network that benefits everyone. In that sense, the free market is a peace program for the world.

The Western world's economic success, with its vast supply of goods and high technological development, is based on a system of free markets—which, while never truly free, made it possible to promote people's prosperity within the constraints imposed by governments: entrepreneurs clearly had sufficient freedom to expand their production output; price signals were sufficiently reliable to lead investments to success. But, owing to the development of interventionism, the successes of the free market system (or what is left of it now) are progressively being questioned, damaged, and destroyed.

3. THE RISE OF INTERVENTIONISM

There hasn't been a free market system in its purest form in the Western economies in decades. Interventionism was and continues to be the dominant economic model.

The means of production are technically privately held in interventionism. The state, on the other hand, limits the owners' ability to dispose of their property by laws and regulations, taxation, and other means, and it also prescribes what they can and cannot do with it. The difficulty with interventionism is that the things you seek to attain with it are either impossible to achieve or only possible with unfavorable and severe side consequences.

 

Let me give you an example: the government wants to reduce rent in order to make housing more affordable. It does this by establishing a rent ceiling. The demand for rental space exceeds the availability if the rent ceiling is lower than the market rent. The limited supply of space must therefore be apportioned in some way, i.e. rationed. Queues, corruption, nepotism, and other undesirable outcomes are all possible outcomes. A rent cap will also deter investors from investing in new apartment building. This also applies to investments in maintenance and refurbishment.

As a result, renters' living circumstances worsen. As a result, a rent cap decreases not just the amount of accessible living space but also the quality of housing available to tenants.

Interventionism regularly triggers a spiral of intervention: because it did not achieve its goal or has caused undesirable side effects, the state intervenes further. And as the state intervenes more and more in the system of (originally) free markets, it infiltrates and destroys it. If we do not turn away from interventionism, we cannot end the interventionism spiral and we end up with a command and planned economy in which the state determines who produces what, where, and in what quantities and who is allowed to consume what, where, and in what quantities. If you don’t stop it, interventionism leads to bondage, to a command economy that will seriously reduce people’s prosperity and bring coercion and violence.

4. INTERVENTIONISM AS A TROJAN HORSE

Interventionism has become a widely accepted concept in recent years, with many people believing that the government should and must intervene in the market system to accomplish politically desired goals. It is lauded by well-intentioned individuals who believe that interventionism may mitigate or eradicate the negative repercussions of free markets, such as financial and economic crises, a widening wealth disparity, poverty among the elderly, and so on. However, this conviction stems from a flawed root cause analysis, because interventionism, not the free market, is to blame for today's ills, and it is self-evident that interventionism cannot solve the problems it generates.

Some supporters of interventionism, on the other hand, believe that with its aid, the free market system (or what's left of it) may be discreetly and discretely eliminated or destroyed. They propose that the government interfere in the economy and society to obtain ostensibly better results, using carefully phrased recommendations. As a result, the state infiltrates education (kindergarten, school, university), transportation, media, health, retirement planning, money, credit, and the environment, becoming the dominant player everywhere—undermining the remaining elements of the free market system until it is reduced to a hollow shell.

Interventionism serves as a Trojan horse for Marxist-socialist movements in particular. Far-reaching state involvement in economic and social life—unprecedented in times of peace—appear to be legitimized thanks to its assistance, for example, with climate change and the coronavirus. When many people hear: National economies are no longer permitted to create and consume as they once did; otherwise, the earth would become uninhabitable, and only the state can save us, it sounds nice and proper. As a result, it should seize power and restructure production and consumption by decree. Furthermore, the spread of a virus necessitates the state's management of people's health in accordance with its policies.

5. THE AGENDA OF THE POLITICAL GLOBALISTS

In recent years, a particularly aggressive branch of interventionists has emerged: fanatics who seek to convert and reconstruct the economy and society according to political requirements, both locally and globally. Political globalists is a good description for them. What they have in common is the belief that in a world of free markets, people should not and should not be permitted to conduct their lives autonomously, but rather should be governed by a central authority. Who should be in charge of this central authority? If the political globalists have their way, this power should be placed in the hands of a cartel of states, ideally a kind of world government, an interest group of high-ranking politicians and bureaucrats, central bank councils, representatives of large companies—i.e., those who are commonly referred to as the Davos Elite or the establishment. The path taken by political globalism boils down to establishing a command and planned economy on this planet, a world command economy.

It would be a precursor to socialism, an expression of the belief that the national economy's production might be decided by a central authority in order to build a better, fairer, and more ecologically friendly international economy. This should be accomplished not only through direct stipulations (i.e., how and what is to be produced when, where, and under what conditions), but also, in particular, through state influence on market prices—through taxes, but also by establishing price ceilings (for scarce goods) and/or price floors (for abundant goods)—that make the production and consumption of certain goods economically impossible. However, this is a route that will inevitably end to tragedy, since it would destroy what remains of the free market economy.

Interventionism's failings, from rising prices and empty grocery shelves to starvation and misery, do not persuade them that interventionism is ineffective. Rather, they blame their failure to meet their objectives on the fact that the interventions were not broad enough or forceful enough, and that with better and more brave interventions in the future, they will accomplish their objectives. As a result, intervention after intervention is made, and the free market's residual parts are gradually overruled and eliminated. Owners' rights to dispose of their property are steadily eroded until they are effectively no longer owners.

One of the interventionists' objectives is to standardize policies across the globe, for example, by harmonizing tax rates and labor market laws, coordinating fiscal and monetary policies, and so on. Above all, interventionist political globalists are relentlessly promoting the relativization and discreditation of the free market system (or what's left of it). For example, they promote the idea that businesses should no longer pursue capitalist profit maximization, but rather follow stakeholder capitalism's guidelines, in which their activities are not solely defined by the interests of the owners, but are also aligned with the goals of customers, lenders, suppliers, employees, and local communities. This reeducation of thinking is often touted as rethinking capitalism.

Political globalization, in particular, begins with capital collecting institutions such as insurance corporations, pension plans, and mutual funds. The theory is well-known, and it has long been applied to government bonds. The government gives its debts special treatment. For government bonds, for example, banks are not required to keep equity capital. Furthermore, the central bank gives government bonds preferential treatment by approving them for open market activities. This makes government bonds more appealing to investors, and they allow states to borrow money on conditions that would be impossible to achieve without the advantages that the state bestows on its own loans. This is how the government obtains a significant quantity of private capital.

As a result, the state not only grows in size and authority, but it also gains great financial power, which it can use to guide the economy—for example, by financially subsidizing some industries but not others. A very comparable capital management, which amounts to an industry policy, now takes place through the state determining which investments are sustainable and which are not, as well as which firms earn the seal of approval for environmental, social, and corporate governance and which do not. A corporation must behave in line with economic, ecological, and social standards that the state may considerably influence and extend as it pleases to be recognized as a sustainable business model. The business purpose and value creation come into the political crosshairs just as much as the relationships with all stakeholders (shareholders, employees, business partners, etc.), and issues such as tax equity are also taken into account. Industry control by the state is thereby expanded and outsourced to private investors.

6. OLD SOCIALISM AND NEOSOCIALISM

Political globalism has collectivist-socialist roots and is the forerunner of neosocialism in the history of ideas. Neosocialism, on the other hand, has a more darker, malevolent driving concept than traditional socialism. The purpose of old socialism, at least on paper, was to improve the material conditions of the working class and raise their standard of life. (Unfortunately, the methods it employed to attain its objectives were ineffective.) Neosocialism, on the other hand, is distinct. It sees man as a destroyer of the planet whose self-indulgence must be fought, rather than God's creation. Whose resource use has to be cut? Also, one or two political globalists may wish to limit or reduce global population in order to prevent the earth from becoming uninhabitable.

Neosocialism's advocated scarcity and renunciation have huge explosive potential. Because economic growth, or the rise in accessible products through time, raises people's living standards. It also shows to be a tool for preventing conflict: if the pie expands in size overall, everyone benefits, even if their part of the pie remains same. However, if the cake decreases, there is suddenly less for everyone, and the distribution battles will unavoidably get more difficult. Neosocialism, by aiming to reduce demand for commodities, supply of products, and resource use, invariably pits people against one another, both domestically and globally, increasing the possibility of violent conflict.

If political globalization is not blocked, neosocialism will emerge, wiping out the last vestiges of the free market. The all-too-well-known problem of impracticability of socialism and its variants would present itself repeatedly. As a result, the population, and mankind, would be impoverished. The politically induced rise in energy prices already foreshadows what is to come: the dramatic increase in energy prices, which occurred in a relatively short period of time, threatens to overturn the world's existing production and employment structure, resulting in corporate bankruptcies and mass unemployment. As a result, demands for government assistance will increase. The state acts as a rescuer, providing large-scale jobless compensation and subsidies, as well as ensuring expenditure initiatives.

7. NEOSOCIALISM AND UNBACKED PAPER MONEY

This is accomplished by issuing new national debt, which is purchased by central banks and repaid with newly created money. Declining economic clout, but more importantly, the increasing sums of money issued by central banks, are driving up goods prices. Life is growing more expensive, and the general population's level of life is deteriorating. If individuals do not identify what is causing their material position to deteriorate, the state will become a permanent problem fixer. It takes steps to combat rising food prices, rents, insurance premiums, and other costs, such as setting price caps and floors (for example, for food and transportation) (for example, for wages). This inhibits the national economy, production suffers, the supply situation for the people deteriorates.

The (increasing) price inflation is completely consistent with the neoliberal agenda. It not only slows economic growth, but it also converts substantial segments of the population into dependent people who (have to) rely on the government for assistance. The state has a rising following, which has a crucial interest in a large and financially powerful state, thanks to the devaluation of money and monetary savings provided by price inflation. As a result, it's not unexpected that central banks are currently adopting monetary policies that push price inflation over 2%. As long as price inflation remains hidden from the eyes of the general public, inflation does its evil job: devaluation, destruction of savings, redistribution. But if price inflation gets too high, the scam threatens to be exposed.

People may even forsake money as a result of this: they strive to get rid of their money by swapping it for actual assets (stocks, houses, art, etc.). If people lose faith in unbacked money, massive inflation, if not hyperinflation, is on the way—unless central banks intervene and restrain price inflation by boosting interest rates and reducing the increase of the money supply. The debt pyramid, which has been built up in the Western world for decades, would then collapse, along with the production and employment structures, as well as the entire neosocialism scheme. So it is understandable why the central banks are doing everything in their power to convince the population that they, the central banks, are indispensable, are the guarantors of good money, the fighters against inflation. The distortion of truth couldn’t be greater.

The success of the neosocialist megaproject depends on the unbacked paper, or fiat money, system. It is theoretically conceivable, if properly dosed, to conceal the entire magnitude of the expenditures incurred by the "Great Reset" from public view. So, if the central bank councils can keep people's faith in fiat money, the neo-socialist takeover will be successful. On the other side, a loss of faith in fiat money—caused, for example, by substantial price inflation as a result of an excessive rise in the supply of money—can derail the neoliberal mission. Seen in this light, the current surge in goods and asset prices—as painful as it is for most earners—at least holds a chance that the fiat money fraud will be debunked and the neosocialists will literally run out of money.

8. THE FIGHT OF IDEAS

Human history is not the outcome of social development rules that inexorably lead to socialism-Marxism, as Karl Marx whispered to the masses. Rather, it is shaped by the ideas that motivate individuals. If you believe that socialism is the only system that can save you, you will do all in your ability to make it a reality. So, the only way to stop and reverse what is presently happening throughout the world—the state's progress and suppression of the free market system—is to join the struggle for better ideas, to debunk the bad ideas, and to aid the good ideas—the concepts of the free market system—to break through.

From an economic standpoint, the war is long over: it is simple to demonstrate that socialism and all its variants are bound to fail, that its failure is not an accident, but can be traced back to the operation of economic laws. However, because this understanding is not widespread, we must teach our fellow citizens about the perils of socialism in all of its forms. We also need to emphasize that what is being promoted as green policies, as a great reset, is a repackaging of well-known socialist principles in a new form, and comes right from the socialist witch's kitchen.

We may educate our fellow men by emailing libertarian intellectuals' articles, podcasts, and videos, or by donating their books to family members, friends, and coworkers. And we must always demonstrate the positive alternative that property preservation, individual liberty, and free markets provide—and how their adoption allows for a long-term, peaceful, and productive cohabitation of people in this planet.

Joining the intellectual war, expressing better economic concepts, explaining and advocating the superiority of free market principles is one method to halt the spread of neosocialism, and it is an opportunity that must not be overlooked.

Either by becoming involved and being active yourself, or by boldly supporting others who are fighting for them intellectually, such as the Mises Institute and other freedom- and libertarian-minded think tanks.