Free Markets vs. Socialism (posted 8/15/22)

This has been a busy week for me.  It’s the lead-up to the start of a new school year, and for me that means a lot of frenzied activity to turn over our two college rental houses.  I’m fully over the covid, and thus grateful for the chance to get out there and get some work done.

This year is a little more calm, since Rosewood – our Victorian that I wrote about recently — partially burned in August, and is now in the process of restoration.  (I’ve put up a folder with a few of the burned pics at Martinsimpsonwriting.com, and will soon be posting more as the house makes its transition back to life.)

My other college rental is a 1922 Craftsman right next to campus.   There was a bit of deferred maintenance to deal with there, so I’ve been earning my landlord money this week: cleaning, painting, caulking, trash hauling, installing new smoke detectors, etc.  A couple of handymen and a team of cleaners helped a lot. 

Being a landlord has given me a deeper appreciation for a free market economy than I’d ever have gotten if I’d only done my day job as an English professor. 

I came out of grad school with pretty conventional leftist prejudices about economics, made possible mostly because I’d had remarkably little contact with the actual economy!   I “knew” that capitalism was exploitative, that the rich got that way by shady dealing or inheritance, that the poor were poor because they were victims of forces largely beyond their control, etc.

In the words of Ronald Reagan (peace be upon him), I “knew” a lot of things that just weren’t so!

On the other hand, even in my educated ignorance, I had enough walking-around sense to know that the socialism that my profs and peers touted did not work.  I’d paid enough attention to notice that the leftist utopias that took shape after the Soviets got things started in 1917 tended to be terrible.

I also noticed that no West Germans were risking their lives to get over the wall into East Berlin, and no Floridians were braving shark-infested waters on inner-tubes to get to Fidel’s Edenic Cuba.

So I started reading a lot of economics and history, and in my early 30s I took my first-ever entrepreneurial risk, and bought a tiny rental house in such terrible shape that it had scared off any rational investors.   

It was the start of an education in the way that economics really works.  Along the way, I was able to come to an appreciation of the moral aspects of a free market, along with the financial ones.

My Christian upbringing and education provided me with a lot of knowledge in varied areas, but economics wasn’t one of them.  I mistook the many warnings about the temptations and moral danger associated with wealth – all of which still make total sense to me today — to mean that financial success was in itself immoral. 

As I write this, I realize I’m starting on a topic that threatens to blow up into a book, and I’m very much aware that the most frequent complaint about my columns is that they are too long.  (By the way, how dare you!)

So I’ll try to summarize one main point: a great moral strength of free markets is that they generally work to turn a fundamental human flaw (greed) to good ends, while a great moral failing of leftism/socialism is that it exacerbates an equally fundamental human flaw (envy).

All of us are prone to greed and to envy.  At some level we all know that both are wrong, but they are nigh-unto irresistible, even to the enlightened denizens of CO Nation. 

Human nature being what it is, free markets cannot re-make the crooked timber of humanity.  People will still try to cheat each other, to take advantage of others’ weakness or desperation, and to con people.   Especially if they can use the power of government, they will rent-seek, destroy their competition and bid-rig.

But generally, the most reliable way to succeed financially in a free-market system is to please as many of your fellow citizens as you can, such that they voluntarily exchange their money for the good or service you are offering.

That system works well for people who want to be honest.  Conscientious mechanics, carpenters, and restauranteurs provide their customers with good service at reasonable prices, and their customers spread the word.  Cheaters and con men can victimize people sometimes, but word of mouth will thwart their desire for long-term success, just as it helps the trustworthy businesspeople.

More importantly, that system also does the best job possible of keeping people honest, even when they’d very much like NOT to be.   Vendors who want to cut corners are always tempted, but they know the word of mouth will kill them.  Those who want to price gouge know that competitors will eat their lunch if they try it.   

A car dealer can screw a customer on a sale and make a short-term profit.  But that customer will never buy from him again, and neither will any of that customer’s family or social network. 

Here’s a historical example.  Everyone remembers Rosa Parks kicking off the anti-segregation movement that eventually overturned the entire rotten edifice of segregation laws in the South.   But fewer people stop to think of why all of those racist laws existed in the first place.

With a racist white power structure in total control of the south, why did they need to pass laws to ENFORCE anti-black discrimination?  (Is it churlish of me to remind everyone that the political party behind all of those segregationist laws was the Democrat party?  Tough – I’m churlin’ it up, baby!)    

Wasn’t there enough racial prejudice around to ensure that blacks would be treated as second class citizens? 

In fact, there wasn’t.  I mean sure, most businessmen in those communities would have treated blacks badly.   But without a law – without the coercive power of government – the free market would have required businessmen to treat blacks better.

Because absent government coercion, if there were 3 bus companies in a city with many thousands of black riders, and they all treated blacks badly (forcing them to sit in the back, etc.) one smart guy would have started a bus company without segregated seating. 

Many white Democrats—er, customers – would have spurned that bus company.

But every black bus rider in the city would have patronized it, and the other 3 companies would have been forced to drop their prejudiced policies, or gone out of business. 

(Yes, this example pre-supposes another core conservative requirement: the rule of law.  Many white thugs would likely try to vandalize or harass the new bus company and their riders.  But if the government didn’t stop them, that would be a failure of the government, not the free market.) 

This process would happen, regardless of the intentions of the bus company owners and employees.  If they were not bigots, they’d happily steal their competition’s customers. 

But even if they were bigots, the free market would mitigate their bigotry, and maybe even slowly train them out of it.  Even if it didn’t, the market would incentivize even bigots to treat blacks better, and punish them for treating them badly.

At first one restaurant would de-segregate their lunch counters, and soon all would either follow suit, or go bankrupt.  The same with theaters, buses, water fountains and the rest. 

THAT’s why the Democrats running the show had to use the government to enforce their bigotry.  Because if they had to rely on the free market, they would’ve had their klan hoods handed to them.

Socialism is the opposite: it takes the equally ubiquitous sin of envy and makes it much, much worse.

Just as with greed, most of our consciences tell us that envy is wrong, and that we should be ashamed of it.  Envying people who have more success, money or advantages is as natural as the sunrise, but it makes us sour and hateful, and it sabotages our ability to learn from our limitations, our own bad choices and the good one of others, and to eventually become successful ourselves.

Envy seduces people into adopting an external locus of control, which then ensures that they’ll always fail.   The successes of others prove that they have privilege.  You’re a victim, and nothing you can do will improve your situation.

Why work harder, or delay gratification?  The system is rigged, and your only hope is to vote for someone to rig the game for you, or to take to the streets and burn it all down yourself.  

Males have an unfair advantage if you’re female, whites if you’re black, attractive people if you’re ugly, the tall if you’re short.

Then along comes socialism, and makes things even worse.  Rich people are evil; they get rich by unearned inheritance, or by screwing the little people.  In a fair world, your grievance study degree would earn you more than some lowly plumber or electrician.

Ultimately, leftism weaponizes envy.  It takes away the shame and guilt that you should feel when you’re being envious, and replaces it with a furious conviction of your moral superiority.  It makes you proud of your flaws, and turns a human failing into a noxious political platform.     

And through that act of self-deception, it primes you to fall for all kinds of lies and delusions.

Is it any wonder that the philosophy that teaches that men can be women, babies are not babies, a recession isn’t a recession, inflation isn’t inflation, and Liz Warren is a Comanche warrior (#wemustneverstopmockingher), also teaches that a mortal sin is actually a cardinal virtue?

Now if you’ll excuse me, I’ve got to put the finishing touches on a rental house that some college students will be excited to move into, and voluntarily throw fistfuls of cash at me, which I can then turn into a tithe, and jewelry for my wife, rawhide treats for my Wonder Dog, and Gator tickets for the whole family. 

It’s been a long 17 years of Biden, but November is coming!

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