Iowa Caucus

A few days ago, the Iowa Caucus produced rather astonishing results.  Ted Cruz handily beat Donald Trump with record turnout and Bernie Sanders rose up to tie with Clinton.  Granted this is merely the beginning of an election cycle with many more primaries to come, but useful extrapolations and conclusion can be made.  Trump no surprisingly lost to Cruz likely because of Iowa demographics: evangelicals fueled Cruz’s success.  In future primaries besting Trump will prove much more difficult. However, the most interesting–and scary–results come from the Democratic side. In a neck and neck tie about half of all Democrats voted for an avowed socialist as their candidate.  A truly shocking scenario displaying the changing nature of the electorate, the presidential election will ultimately be a referendum between socialism and the very foundational principles of liberty itself.

Sanders’ support largely comes from the millennials, the younger generation that will inherit the country as the Boomers and the Gen Xers die off.  In situations with higher voter turnout, which comes from the flock of newer and younger voters, Sanders benefits to Hillary’s detriment.  Regardless of who the Republicans field, the general election will very likely showcase a semi-free market Republican against a deeply-convicted socialist.  Free of the legal and moral scandals of Clinton and openly honest about his beliefs, Sanders has a good chance to defeat Hillary and become the Democratic nominee for president.  This election is the ultimate battle of ideas in American history: the tenets of socialism against the shadowy remains of American capitalism.

What millennials fail to understand is that rather than radical change, Sanders promises current principles merely executed to stronger degree: Higher taxes, more welfare, more government spending, and more centralization of power. The Democrats pursued similar policies for decades; Sanders only promises to accelerate their implementation.  The democratic socialism Sanders promises to deliver will only continue down the path of financial insolvency and extraordinary coercive state power. Convinced on a moralistic level, millennials support Sanders largely because of his open condemnation of vice in the political process. Agree or disagree, he stands for something.  Firmness in principles and values guide him, refreshing for younger voters to see.  While libertarians could agree with some of his foreign policy decisions, the motivations for his economic beliefs are all wrong.

There is only one way the goals of abject economic equality, redistribution of wealth, and free public services (healthcare, education, infrastructure) can be achieved: the state.  Compulsion from coercive state power is necessary to redirect existing economic desires conflicting with the common good of the collective.  The desires of the electoral majority, sometimes totally arbitrary and irrational, supersede the economic liberties of the individual.  The state, through outright force or the threat of force, arbitrarily determines where resources, and how much of them, are used. A politician in a socialist society makes political decisions managing the state bureaucracy, not productive economic decisions.  Supporters of socialism, especially millennials, must realize that the core of Sanders’ philosophy relies on the violent authority of state power, not peaceful consent of the governed, to force compliance.

Aside from a culture of violence and coercion, socialism is an economically irrational philosophy, thoroughly discredited in human history with a track record of total failure.  The failure of socialism stems from the rejection of objective reality and human desires.  While one may question whether Bernie Sanders can feasibly achieve outright state ownership and control of national industries, at the very least he aims to highly regulate them, effectively reducing economic sectors to wards of the state.  Why is this bad?  Aside from the immorality of herding resources around through the initiation of state force, government provision of goods and services cannot ever work.

To succeed in the marketplace, private businesses must conform to basic economic realities.  Whatever they produce–either goods, services, or a combination of the two–businesses willingly and freely contract directly with the consumer.  The success of industry is directly related to the degree of satisfaction of their customers.  The lack of threats or physical violence empowers the consumer to direct their resources to whichever entrepreneur delivers the best product at the best price.  High prices and low quality will ultimately lead to financial ruin as consumers shift their resources to product substitutes or competitors within the same market.  Divorced from corrupt political manipulation of market forces, a rich business by definition delivers the highest value to consumer preferences.

The peaceful satisfaction of voluntary transactions between producer and consumer maximizes resource efficiency.  Producers must efficiently allocate resources and carefully price their product in order to generate profits.  The relationship among profits, price, and competition is extremely intimate.  Such a relationship strictly encourages high quality and low prices, as consumers will flock to whichever company delivers the best balance. Such a unique relationship is severely hampered under socialism or entirely absent.  The state, the ultimate monopoly, retains the exclusive authority to legally initiate force and to tax. Unlike a business that can only generate revenue through producing value and voluntarily satisfying customers, the state generates revenue simply for existing.  Because of this, the state is isolated from market price signals and the critically related information of profit and loss.  Government bureaucrats have no idea what consumers want or do not want. Whether the state produces value or waste, taxation funds public programs regardless of performance.  Enjoying its monopoly privilege of taxation, the state is also isolated from competition and essentially lacks any economic incentive to treat citizens as customers.

Bernie Sanders, if elected president, will plunge the United States into economic decay.  The wasteful allocation of resources, high prices and low product quality, and distortion of crucial market signals inherent in socialism will fail.  A nation already $20 trillion in debt, Sanders can only keep his promises with more deficit spending, proposing himself to increase taxes and government spending jointly.  Such a measure will only transfer resources into unproductive state initiatives where little to no market structures force efficiency and quality at ever decreasing prices.

 

 

 

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