Today I hosted a Fox Nation special on the totalitarian dangers of socialism and why that system always fails and instead I supported free market capitalism and a free economy as the surest way to prosperity. Free market capitalism is a triumph of human power. Socialism is a catastrophe of state power or government.
The problem with socialism and state central planning is that it never delivers the goods, literally. Show me a socialist economy like the old Soviet Union or China, Venezuela, Cuba, Iran, North Korea and others of today and I’ll show you an impoverished and sinking economy. China, which thrived on market reforms between 1980 and 2000, has also fallen back into ever-increasing state control in recent decades and, certainly, its economy has severely faltered in recent years.
Milton Friedman in his famous book “Capitalism and Freedom” stated that “a society that puts equality before freedom will have neither one”. Thomas Sowell tells us that “socialism is a wonderful idea. It is only as a reality that it has been disastrous.” Hayek argues that if socialists understood economics, they would not be socialists.
Margaret Thatcher argued years ago that the problem with socialism is that other people’s money eventually runs out and my former boss Ronald Reagan famously said that the most terrifying words in the English language are “I am from the government and I am here to help.”
We have all learned throughout history how the totalitarian evils of socialism destroy freedom and prosperity. The idea that governments can set prices and wages is what Hayek called “the fiction of knowledge”.
FINANCIAL EXPERT: GOVERNMENT-FUELED INFLATION KILLS PENSION
We just learned that free markets and the free exchange between buyers and sellers have the opportunity to find out the prices. It is the free market that is by far the most efficient mechanism for allocating resources to workers, producers, investors and entrepreneurs operating within a free economy.
This is why free market capitalism has generated the most prosperous economic conditions for all classes of individuals. The free market is color blind, color blind, blind to religion and ethnicity. Healthy free-market economies keep tax rates low, minimize regulatory burdens, and limit government power by limiting federal spending.
The free market model provides incentives and motivations for work, production and investment. The dignity of work itself is the heart and soul of a free and successful economy. The state cannot tell us where to work, how to work, how much you get paid or other statesmen, central planning dictates.
Free economy, bound by the rule of law in a free society, is probably the greatest theory to emerge in all of history. Its success in bringing people out of poverty and allowing them to climb the ladder of opportunity has changed the world.
Lately, however, America has drifted towards socialism, to use the phrase of economist Kevin Hassett. Nowadays, socialism no longer attempts Joseph Stalin’s old approach of taking over the means of production such as government ownership of steel mills, factories, farms or even finance companies.
Instead, to borrow from the Steve Forbes construct, modern socialists today seek to control the economy through the regulatory state of central planning. A perfect example is President Joe Biden’s war on fossil fuels. Radical climate change planners use extreme, unproven environmental standards to stop drilling, fracking, piping and build new LNG terminals or gasoline refineries.
This is modern socialism. This is dictatorial central planning or, look at the government’s response to COVID, literally shutting down schools, businesses and entire cities and states without any scientific proof.
Another problem: Modern Marxism is pushing us towards the totalitarian habits of the old Soviet system, through the media, universities, keeping Hunter Biden’s laptop out of the news, deleting speeches, mercilessly attacking former President Trump or rewriting far left American history – even the breakdown of families – but there is a way out, an optimistic view.
People everywhere must fight for the freedom, free market, capitalism and prosperity that these values bring. We must keep our Judeo-Christian culture. The future of this great nation is at stake and in case you missed our summit earlier, it’s streaming right now on Fox Nation and airing Friday at 8pm on Fox Business.
CLICK HERE TO GET THE FOX NEWS APP
Speaking of the evils of central planning, let’s move on today to the announcements from the Federal Reserve and Jay Powell. They raised the target by 75 basis points and say they will go by another 125 basis points in the last two meetings in November and December. Somehow, they believe they will leave the terminal velocity endpoint at 4.6% next year. Good luck with that.
Then they say they expect three rate cuts in 2024. Good luck. It sure doesn’t sound like Jay Powell’s new chest hair in the spirit of Paul Volcker and they think the unemployment rate will peak next year at 4.4%. Good luck on this and somehow, miraculously, like mana from heaven, the inflation rate will hit 2% in 2025. Good luck on that.
This article is adapted from Larry Kudlow’s opening commentary on the September 21, 2022 edition of “Kudlow”.