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America, Socialism, and the World

Robert Dimuro

Posted on August 4, 2019 17:00

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The question isn't whether or not America can afford to become more socialist; rather, it's at what point does socialism weaken American incentive and innovation to the detriment of the world and the global economy?

Although the United States is arguably the most capitalist nation on Earth, the specter of socialism has become the main talking point employed by Trump and the Republican Party to warn Americans of the danger of electing a Democrat to the White House. On the flip side, left-wing leaders, such as Sanders and AOC, talk glowingly about the opportunity to enact socialist programs into law.

In last week’s article, I explained the true meaning of socialism and how it relates to economic success. Here, I will outline the effects that socialism could have and currently has on American institutions and the global economy.

Firstly, it’s necessary to educate Conservatives on the fact that America already embraces socialism in a basic sense. Our roads, public parks, law enforcement, military, and border security are managed and owned by the state for the common good of all Americans. Although certain fringe groups, including some Libertarians and Objectivists, want all of these privatized, almost nobody in America has qualms with the fact that taxation funds basic public services and institutions.

Widen the scope a bit more, and you get to the amount of socialism that exists currently. Most Conservatives accept and embrace socialist programs such as Social Security and Medicare - look at the scorn Chris Christie received during the Republican primaries for supporting the phasing-out of Social Security in an attempt to balance our budget.

It seems to me that the question isn’t whether or not America can afford to become more socialist - Americans have gotten used to incremental doses of socialism for the past century. The question really is: "At what point does socialism weaken American incentive and innovation to the detriment of the world and the global economy?"

As the world leader of technological innovation in many industries, the United States shoulders much of the burden of improving global economic growth and standard of living. Since European nations outsource innovation and military defense to the United States, they can experiment with socialism without bearing the full consequences of its implementation. 

Expecting the United States to continue shouldering these burdens while also living up to the Scandinavian example is unrealistic. European nations could never fund their massive entitlement states without America’s indirect financial support. 

The reason why capitalism creates more innovation and economic growth is because it creates incentive. Therefore, one can view socialism as the amount of incentive that’s extracted from society in order to provide guaranteed services. For example, Social Security limits incentive to save for retirement; heavy taxation limits incentive to be charitable; universal healthcare limits incentives that encourage choice of treatment options and improvements upon treatments.

This is not to say that social programs can’t be beneficial. However, one must consider what could happen to the world if America ceased to lead the way in innovation and began to stagnate because we delved too far into the realm of socialism. Eventually, the world would run out of capital to fund its socialist initiatives.

Robert Dimuro

Posted on August 4, 2019 17:00

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Source: NYT
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