“Wealth is the product of man’s capacity to think.” – Ayn Rand
The United States of America declared its independence from the Kingdom of Great Britain in 1776 to create a new republic that was free from the tyranny of a monarchy. Prior to this, the economic system in the colonies was a capitalistic one and America has incorporated that system to this day. It is surprising to see a self-proclaimed socialist, Bernie Sanders, picking up steam as a potential Democratic Presidential candidate. What is more surprising is the millennial generation that seems to be the basis of his promotion. I have watched countless late night television shows interviewing these very same people who support Bernie Sanders and say we should embrace socialism because they love the idea of freebies- free education, free healthcare, free savings accounts, a higher living wage and an entitlement mentality. They don’t understand the ramifications of socialism, so I will explain why this is not possible in application in America today.
Alexis de Tocqueville said, “Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.” In simple terms, there has to be a balance between liberty and equality. Once the psychological mindset swings to everyone being equal and getting everything for free, the pendulum has swung to a socialism mentality. In this case, personal liberties are diminished, which means the key ingredients that drive innovation and success are non-existent. People run on incentives and if that is removed, everything falls apart.
When people work, they expect to be rewarded for their skill and effort. Capitalism, at its core, provides a monetary reward that actually motivates people to perform better and work harder. Socialism actually does quite the opposite. It acts to discourage people because the hard work and effort they put in becomes part of a collective. This means no matter how hard you work or how highly educated you are, you will be rewarded the same as someone not half as qualified or educated as you. Even worse, workers tend to become less productive. If you are working twice as hard as another employee yet receiving the same pay, why would you want to work so hard or produce so much? They will put out the minimum effort to get the job done because they will not be rewarded for stellar performance. In a capitalistic model, however, the lazy and less productive employee would be fired and the most productive ones would receive a monetary remuneration. It is this incentive provided in a capitalistic system that leads to hard work, innovation and creativity because there is a monetary incentive for stellar performance.
Socialistic mentality craves self-indulgence versus self-reliance. It doesn’t matter if you ever learn certain skills or attend an elite University because you will never have to depend on yourself if the going gets tough. There is always a nanny state to pick you up, dust you off and provide you with a living wage. The socialistic system rewards bad judgement, laziness and irresponsibility. It also creates a demand for instant gratification versus delayed gratification, meaning why work hard and sacrifice today because there is no reward in the future, so take and use everything right now.
Colleges are commonly grouped into four tiers, with tier one being the most desirable and the most competitive. Students have to jump through many more hoops and have the highest GPA’s and standardized test scores to get into these elite institutions. But an astounding number of students work harder and apply for one reason: they believe their future success is ensured by attending an elite school. Only the students who have certain ability and have shown they can take a rigorous course load are selected. It is a fact that there are certain exclusive law firms that only hire from the top three law schools in the country and the monetary rewards exceed offers fourfold for the third or fourth tier law schools. The resources are also much better at elite schools because their endowments are so much higher than the rest. That implies that the graduates of these institutions have become highly successful and can afford to bestow large monetary gifts to their alma maters. The National Institute of Health (NIH), which provides funding for medical research, grants huge awards to the top medical schools in the country. Interestingly, the greatest awards are given to the tier one medical schools almost exclusively. The NIH recognizes the greatest research comes out of these institutions. If you now lived in a socialistic world, your eventual salary would be the same no matter where you attended, so why not slack off a little in high school and go to a non-competitive college, because in the end, it will make no monetary difference. The effects of this are chilling. If innovation, creativity and discovery are not incentivized, life changing ideas and things like medical technologies & innovations, cures for diseases, the iPhone, electric cars, music and my favorite play, “Hamilton”, may not exist.
Socialism inevitably leads to homogeneity. Imagine an America where the government dictated your personal liberties and everyone’s house looked the same and was the same size, where everyone drove the same car, shopped at one store, wore the same type of clothing or accessories and watched the same governmentally run television station. It is unfathomable! Americans relish in the freedom of expression and have done so since the beginning of our independence. It is that independent nature that makes us unique, innovative and successful. It is the grit and determination to see something we aspire to and achieve and even exceed that goal. That is possible in America and why so many immigrants flock to our shores. Talent and skill are rewarded via prosperity and the sky is the limit; socialism caps that limit. I say, take off the caps, throw them to the wind and aspire and achieve. The possibilities are endless because this is an American capitalistic society.