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We Are (Mostly) All Socialists Now

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There is a popular conception among some libertarians that the reason that we live under a massive welfare-warfare state is because government has a natural propensity to grow. The notion is a popular one among libertarians who promote anarchism, i.e., the total absence of government. The argument goes like this: The Constitution, which was supposed to keep government reined in, has proven to be a worthless document because government is a cancerous blob that inevitably grows of its own accord, rendering constitutional restraints meaningless.

The cancerous blob argument, however, is fallacious. In fact, it is really just a way to avoid confronting a discomforting reality: that the reason that we live under a massive welfare-warfare state is not because government is a cancerous blob but rather because Americans of our time have chosen socialism. Unfortunately, that includes some libertarians.

Consider the first 100 years or so of American history. From the late 1700s through the early 1900s, Americans lived under a political-economic system that had no income taxation, IRS, Federal Reserve, immigration controls, drug laws, Social Security, Medicare, farm subsidies, welfare, minimum-wage laws, paper (i.e., fiat) money, Pentagon, CIA, NSA, FBI, and most of the federal departments and agencies that exist today.

If government was a cancerous blob that grew of its own accord, then we would have expected it to have a minor income tax and a small IRS and a small welfare state within the first 10 or 20 years of the nation’s existence, which would then have progressively grown and grown into a massive welfare-warfare state by the late 1800s.

But that’s not what happened. Sure, there was the Civil War when the Lincoln administration enacted an income tax and legal-tender laws. But those things went out of existence once the war was over. With the conclusion of the war, Americans continued living income-tax free and with gold coins and silver coins as their official money until the early part of the 20th century.

More than a hundred years without all those welfare-warfare state programs is a very long time. That phenomenon exposes the fallacy of the cancerous blob theory.

In 1989 the New York Times published an article entitled “We Have Socialism, Q.E.D,” by the libertarian Nobel Prize winning economist Milton Friedman. In the article, Friedman pointed out the large extent to which the United States had become socialist. Friedman wrote:

All means of production in the United States — people, land, machines, buildings, etc. — produce our national income. Spending by government currently amounts to about 45 percent of national income. By that test, government owns 45 percent of the means of production that produce the national income. The U.S. is now 45 percent socialist.

Referring to such things as government mail delivery, drug prohibition, prescription laws, minimum-wage laws, labor regulations, public schooling, and rent control, Friedman wrote:

I do not know how to express the importance of such controls as a percentage of national income, but clearly they are important and their existence means that 45 percent understates the degree of socialism in the U.S., perhaps appreciably.

Friedman also pointed out something that undoubtedly shocked a lot of people who read his op-ed: that the military is a socialist enterprise as well, which goes a long way to explain its manifest and expensive inefficiencies.

Friedman’s major premise: “Socialism is a failure. Even lifelong Communists now accept this proposition. Wherever socialism has been tried, it has proved unable to deliver the goods, either in the material form of a high standard of living or in the immaterial form of human freedom.”

The conclusion drawn by the American people, according to Friedman: The U.S. needs more socialism.

And there is the problem — not some cancerous blob that grows of its own accord but rather free will and free choice. Like the rest of the world in the early part of the 20th century, American generations living at that time fell in love with socialism. And American generations living today are still in love with socialism. That’s why we live under a massive welfare-warfare state — because the vast majority of Americans want it that way.

In a purely socialist society, the state owns everything and everyone works for the state. But as Friedman points out, there are variations and degrees of socialism. One variation is what is known as the welfare state, a system whereby everyone’s income is subject to being seized in order to give it to another person. In other words, mandatory charity.

The crown jewels of America’s welfare state are Social Security and Medicare. They form the core of America’s socialist system. The idea for these two programs originated among a socialist clique in Germany and were then imported to the United States.

Suppose every non-libertarian in the United States were asked whether he would favor the immediate repeal of Social Security and Medicare. My bet is that at least 99 percent would say no.

That means that the only real hope for ridding America of socialism lies with libertarians, who, generally speaking, are ardently opposed to socialism and who stand squarely in favor of free markets.

But here’s the rub. Suppose every libertarian in America were asked whether he would favor the immediate repeal of Social Security and Medicare. My hunch is that many libertarians would say no, especially libertarian seniors. They would say that people have a right to “get their money back” because they supposedly “contributed to the system” during their work lives. At most, they would call for some sort of Social Security or Medicare reform. In other words, they favor the continuation of Social Security socialism and Medicare socialism in one form or another.

Don’t believe me? Just go do a search for the websites of free-market organizations, both conservative and libertarian, and check for yourself.  See if they call for reform of Social Security and Medicare rather than repeal.

It’s the same with other socialist programs. Consider immigration controls. They are a form of socialist central planning. A government board plans and directs the movements of millions of people, assigning arbitrary quotas to foreign countries and establishing qualifications for entry, all enforced by brutal police state actions. The result has been a decades-long, ongoing, never-ending immigration crisis. That shouldn’t surprise anyone. That’s what socialist central planning always does. The libertarian economist Ludwig von Mises called it “planned chaos.”

Again, at least 99 percent of American non-libertarians favor this socialist program. But so do many libertarians.

Consider public schooling. Again, I’d estimate that 99 percent of Americans, including homeschoolers, would oppose the separation of school and state—i.e., the end of all governmental involvement in education. But then again, many libertarians have settled for supporting vouchers, which leave the public schooling system in place and impose what amounts to a voucher socialist program on top of it.

In my series “Why I Favor Limited Government,” I pointed out that the Constitution is like a sea wall. The purpose of a sea wall is to protect against high tides, not against tsunamis. Thus, if a tsunami hits, it would be inappropriate to say that the sea wall has failed, given that that wasn’t its purpose.

By the same token, when 99 percent of society favors socialism, it is inappropriate to say that the Constitution has failed, given that it was designed only to protect against high tides of public opinion, not tsunamis of public opinion.

Why do so many people, including libertarians, support these socialist programs and oppose their immediate repeal? Because like so many others in history, they want the security that such programs purportedly promise and are willing to forgo liberty to get it.

Friedman once mockingly pointed out, “We are all Keynesians now.” He could also have said, “We are all socialists now.” Okay, not all, but certainly most.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.