Earlier today, I hosted a Fox Nation special about the totalitarian dangers of socialism and why this system always fails and instead made the case for free market capitalism and free economy As the surest path to prosperity. Free market capitalism is a victory for human power. Socialism is a disaster of state or government power.
The problem with socialism and state central planning is that it never delivers the goods, in the literal sense of the word. Show me a socialist economy like the old Soviet Union or today’s China, Venezuela, Cuba, Iran, North Korea, etc., and I’ll show you a poor and sinking economy. Even China, which thrived under market reforms between 1980 and 2000, has in recent decades returned to more and more state control, and its economy has certainly faltered badly in recent years.
Milton Friedman argued in his famous book “Capitalism and Freedom” that “a society that puts equality before freedom will get neither.” Thomas Sowell tells us that “Socialism is a wonderful idea. It has been disastrous only as a fact.” Hayek argues that if socialists understood economics, they would not be socialists.
Margaret Thatcher asserted years ago that the problem with socialism was that people eventually ran out of money, and my former boss Ronald Reagan said the most terrifying words in the English language were “I’m from the government and I’m here to help.”
We have all learned throughout history how the evils of totalitarian socialism destroy freedom and prosperity. The idea that governments can set prices and wages is what Hayek called the “knowledge excuse”.
We just learned that Duty Free A free exchange between buyers and sellers has the ability to discover prices. It is the free market that is by far the most effective mechanism for allocating resources to the workers, producers, investors and entrepreneurs who operate within a free economy.
This is why free market capitalism has generated the most prosperous economic conditions for all classes of individuals. Duty free markets are colour-blind, gender-blind, blind to religion and race. Healthy free market economies keep tax rates low, reduce regulatory burdens and limit government power by restricting federal spending.
The free market model provides incentives and motives for work, production and investment. The dignity of work is the heart and soul of a successful free economy. The state cannot tell us where to work, how to work, how much you charge or what the state dictates to you, and central planning.
A free economy, linked to the rule of law in a free society, is perhaps the greatest theory that has emerged in all of history. Her success in lifting people out of poverty and allowing them to climb the ladder of opportunity has changed the world.
But lately, America has been drifting toward socialism, in the words of economist Kevin Hassett. Nowadays, socialism no longer tries to follow Joseph Stalin’s old approach to taking over the means of production such as government ownership of steel mills, factories, farms, or even financial companies.
Instead, borrowing from Steve Forbes’ construction, modern socialists today seek to control the economy through the regulatory state of central planning. A good example of this is President Joe Biden’s war against fossil fuels. Radical climate change planners are using extreme and unproven environmental standards to stop drilling, fracking and pipelines and to build new LNG plants or gasoline refineries.
This is modern socialism. This is dictatorial central planning or, look at the government’s response to COVID, closing schools, businesses, cities and entire countries without any scientific evidence.
Another problem: Modern Marxism has moved us toward the totalitarian habits of the old Soviet system — through the media and universities, keeping Hunter Biden’s laptop out of the news, canceling speeches, ruthlessly attacking former President Trump, or rewriting Americans of the extreme left. History – until families break up – but there is a way out, an optimistic look.
People everywhere must fight for freedom, free markets, capitalism, and the prosperity that these values bring. We must preserve our Jewish and Christian culture. The future of this great nation is at stake and in case you missed our summit earlier, it is now broadcast on Fox Nation and will air Friday at 8pm on Fox Business.
Speaking of the evils of central planning, let’s move on to today’s Fed and Jay Powell announcements. They raised the target 75 basis points and say they will go to another 125 basis points in the last two meetings in November and December. Somehow, they think they will leave the final price end point at 4.6% next year. Good luck with that.
Then they say they expect to cut interest rates three times in 2024. Good luck with that. It certainly doesn’t look like Jay Powell’s new hair on his chest, in the spirit of Paul Volcker and they think the unemployment rate will peak next year at 4.4%. Good luck with that and somehow, miraculously, like mana from heaven, inflation will hit 2% in 2025. Good luck with that.
This article is excerpted from Larry Kudlow’s opening comment on the September 21, 2022 edition of Kudlow.