Socialism Isn’t about Creating Economies. It Is about Amassing Political Power

Ludwig von Mises wrote Socialism: An Economic and Sociological Analysis, a small book published in 1922, which demonstrated that economic calculation in a socialist commonwealth is impossible. Of course, Mises assumed that the purpose of an economy, even a socialist one, was supposed to produce goods and services, which determined its success or failure.

Alain Besançon wasn’t an Austrian or a Misesian, but he wrote Anatomie d’un spectre: l’Économie politique du socialisme réel, also a small book the size of Mises’s own Socialism, in which he also observed that the Soviet economy couldn’t perform economic calculation; thus, the Soviet economy performed poorly, very poorly by Western standards.

The Soviet economy was wasteful and chaotic. Besançon believed that economic planning induced irrationality in the system. Terrified managers couldn’t report failing the plan, and consequently any subsequent economic planning would be even more divorced from reality than previous planning had been.

Both Besançon and Mises knew that socialism could not discover market prices. Both knew that this would lead to widespread corruption. However, Besançon realized that the state not only tolerated but also used the black market for price discovery in economic sectors critical to the regime, like defense and certain prestigious cultural and sport endeavors (Bolshoi Theatre, gymnastics, eventually hockey, etc.).

However, there is a critical difference between Mises and Besançon. While Mises believed that the goal of the Soviet economy was to produce usable goods and services, Besançon believed otherwise. The Soviet economy, he posited, was never about producing goods and services for consumers, but rather had other goals.

The Soviet economy existed to keep the Communist Party in power, and that was the sole criteria party leaders used to evaluate its performance. The “production” of political power was supreme, and anything else was secondary, subordinated to the main goal for the Soviet economy.

Soviet political leaders did not want an economy thar produced goods abundantly because abundance separates the citizen from the state. The state would lose its power over its subjects if they became wealthier. Homo sovieticus—the Soviet man—had to be dependent on the state, barely living from one day to the next on state-issued ration cards.

Despite absurd planning orders and a lack of market prices, if a Soviet manager managed by some miracle to produce well-being, he might well have been punished for failing to produce what he really needed to produce: state power over simple people. Abundance and well-being always were and still are the true enemies of socialism; people cannot be able to ignore or to forget the power of the state.

While the Soviet economy is not something people wish to revisit, nonetheless, influential elites are calling for governments to assert power over individuals to restrict consumer choice to achieve political goals benefitting those in power. For example, the World Economic Forum declares that people should start eating insects in the name of “sustainability.” Likewise, in the name of fighting climate change, progressive elites in government and business are attempting to force people to buy electric cars despite their serious drawbacks. While social media outlets like Facebook and Twitter are private companies, they have done the bidding of governments in the name of “fighting disinformation” or trying to preserve a narrative that reflects the governmental message, something especially seen during the government-imposed Covid restrictions by restricting online speech.

For decades Western governments have been spending more than 45 percent of the gross domestic product. Rothbard warned us that every government-owned entity is an island of calculational chaos in the economy. In countries like Finland, France, Germany, Austria, and Belgium the government represents the majority of the economy. In the United States, government spending is nearly 40 percent of GDP and in 2020, it was almost half of GDP.

Hence, we cannot any longer speak of islands of calculational chaos induced by the government. In our day the rule of Western economies is chaos, the exception being the continued existence of market prices. The presence and influence of the ESG movement in US corporations and especially financial and capital markets enables socialists to have a huge influence over the US economy, and ordinary people are helpless to stop it. Many economic sectors are enabling socialists to gain political power, and the production of real goods and services has become secondary to the promotion of leftist ideology.

Alain Besançon was right about the real goals of socialists, and while both he and Mises understood the inherent dysfunctionality of a socialist economy, Besancon went one step further in realizing that the chaos the socialism produces worked to the advantage of those in power. The goal of socialists is not a better economy through socialism, but rather the full establishment of socialist power.

The Fear of Mass Unemployment due to Artificial Intelligence and Robotics Is Unfounded

People are arguing over whether artificial intelligence (AI) and robotics will eliminate human employment. People seem to have an all-or-nothing belief that either the use of technology in the workplace will destroy human employment and purpose or it won’t affect it at all. The replacement of human jobs with robotics and AI is known as “technological unemployment.”

Although robotics can turn materials into economic goods in a fraction of the time it would take a human, in some cases using minimal human energy, some claim that AI and robotics will actually bring about increasing human employment. According to a 2020 Forbes projection, AI and robotics will be a strong creator of jobs and work for people across the globe in the near future. However, also in 2020, Daron Acemoglu and Pascual Restrepo published a study that projected negative job growth when AI and robotics replace human jobs, predicting significant job loss each time a robot replaces a human in the workplace. But two years later, an article in The Economist showed that many economists have backtracked on their projection of a high unemployment rate due to AI and robotics in the workplace. According to the 2022 Economist article, “Fears of a prolonged period of high unemployment did not come to pass. . . . The gloomy narrative, which says that an invasion of job-killing robots is just around the corner, has for decades had an extraordinary hold on the popular imagination.” So which scenario is correct?

Contrary to popular belief, no industrialized nation has ever completely replaced human energy with technology in the workplace. For instance, the steam shovel never put construction workers out of work; whether people want to work in construction is a different question. And bicycles did not become obsolete because of vehicle manufacturing: “Consumer spending on bicycles and accessories peaked at $8.3 billion in 2021,” according to an article from the World Economic Forum.

Do people generally think AI and robotics can run an economy without human involvement, energy, ingenuity, and cooperation? While AI and robotics have boosted economies, they cannot plan or run an economy or create technological unemployment worldwide. “Some countries are in better shape to join the AI competition than others,” according to the Carnegie Endowment for International Peace. Although an accurate statement, it misses the fact that productive economies adapt to technological changes better than nonproductive economies. Put another way, productive people are even more effective when they use technology. Firms using AI and robotics can lower production costs, lower prices, and stimulate demand; hence, employment grows if demand and therefore production increase. In the unlikely event that AI or robotic productive technology does not lower a firm’s prices and production costs, employment opportunities will decline in that industry, but employment will shift elsewhere, potentially expanding another industry’s capacity. This industry may then increase its use of AI and robotics, creating more employment opportunities there.

In the not-so-distant past, office administrators did not know how to use computers, but when the computer entered the workplace, it did not eliminate administrative employment as was initially predicted. Now here we are, walking around with minicomputers in our pants pockets. The introduction of the desktop computer did not eliminate human administrative workers—on the contrary, the computer has provided more employment since its introduction in the workplace. Employees and business owners, sometimes separated by time and space, use all sorts of technological devices, communicate with one another across vast networks, and can be increasingly productive.

I remember attending a retirement party held by a company where I worked decades ago. The retiring employee told us all a story about when the company brought in its first computer back in the late ’60s. The retiree recalled, “The boss said we were going to use computers instead of typewriters and paper to handle administrative tasks. The next day, her department went from a staff of thirty to a staff of five.” The day after the department installed computers, twenty-five people left the company to seek jobs elsewhere so they would not “have to learn and deal with them darn computers.”

People often become afraid of losing their jobs when firms introduce new technology, particularly technology that is able to replicate human tasks. However, mass unemployment due to technological innovation has never happened in any industrialized nation. The notion that AI will disemploy humans in the marketplace is unfounded. Mike Thomas noted in his article “Robots and AI Taking Over Jobs: What to Know about the Future of Jobs” that “artificial intelligence is poised to eliminate millions of current jobs—and create millions of new ones.” The social angst about the future of AI and robotics is reminiscent of the early nineteenth-century Luddites of England and their fear of replacement technology. Luddites, heavily employed in the textile industry, feared the weaving machine would take their jobs. They traveled throughout England breaking and vandalizing machines and new manufacturing technology because of their fear of technological unemployment. However, as the textile industry there became capitalized, employment in that industry actually grew. History tells us that technology drives the increase of work and jobs for humans, not the opposite.

We should look forward to unskilled and semiskilled workers’ upgrading from monotonous work because of AI and robotics. Of course, AI and robotics will have varying effects on different sectors; but as a whole, they are enablers and amplifiers of human work. As noted, the steam shovel did not disemploy construction workers. The taxi industry was not eliminated because of Uber’s technology; if anything, Uber’s new AI technology lowered the barriers of entry to the taxi industry. Musicians were not eliminated when music was digitized; instead, this innovation gave musicians larger platforms and audiences, allowing them to reach millions of people with the swipe of a screen. And dating apps running on AI have helped millions of people fall in love and live happily ever after.

The Attack of the Subversive Elites

It is tempting, as Naomi Wolf has done recently, to ascribe the breakdown of Western civilization to the debasing of “Judeo-Christian” ethics and the reemergence 0f malignant supernatural forces. Witnessing the many assaults on the infrastructure and social order of the United States of late, I wouldn’t rule out metaphysical causality either. But to blame the pagan gods, or, in specifically Christian terms, to blame Satan, is to take comfort in an obscured perspective on the current global arrangement. To lay culpability strictly on gaseous, unknowable forces is to let the global elite off the hook.

As I write in The Great Reset and the Struggle for Liberty, the Western world is in the grips and under the control of “subversive elites.” With inordinate power and influence, these people aren’t naturally superior but have as their object the undermining of Western civilization.

They can be found in such globalist “Round Table” organizations as the Royal Institute for International Affairs (Chatham House), the Council on Foreign Relations, the Bilderberg Group, the Club of Rome, and the World Economic Forum (WEF); in their main international intergovernmental counterpart, the United Nations (UN); and in the monetary organizations that fund the globalist regime, the International Monetary Fund and the World Bank. All these organizations have had as their objective the undermining of nation states, the destruction of the free market, and the control of the world economic system by a globalist elite. These objectives are now being conducted under the rubric of “stakeholder capitalism,” with the WEF running interference for and coordinating the “public-private partnerships” that are ushering in stakeholder capitalism, supposedly to combat “climate change.”

In the economic sphere, stakeholder capitalism is a cartel scheme that benefits the compliant and destroys the noncompliant. And the economics of stakeholder capitalism spill into a governance and geopoliti­cal model: states and favored corporations in “pub­lic-private partnerships” in control of governance. The configuration yields a corporate-state hybrid largely unaccountable to the constituents of national governments. As Kurt Nimmo writes:

According to the Transnational Institute in the Netherlands, this “initiative” proposes a transition away from intergovernmental decision-making towards a system of multi-stakeholder governance. In other words, by stealth, they are marginalising a recognised model where we vote in governments who then negotiate treaties which are then ratified by our elected representatives with a model where a self-selected group of “stakeholders” make decisions on our behalf. (emphasis added)

The cozy relationship between multinational corporations and governments has even aroused the scorn of a few leftist academics. Some note that the UN-WEF partnership and the governance model of the WEF represent at least the privatization of the UN’s Agenda 2030, with the WEF bringing corporate partners, money, and supposed expertise on the Fourth Industrial Revolution (4-IR) to the table. And the WEF’s governance model extends well beyond the UN, affecting the constitution and behavior of governments worldwide. This usurpation has led political scientist Ivan Wecke to call the WEF’s governmental redesign of the world system “a corporate takeover of global governance.”

This is true, but the WEF model also represents the governmentalization of private industry. Un­der Schwab’s stakeholder capitalism and the mul­tistakeholder governance model, governance is not only increasingly privatized, but also and more im­portantly, corporations are deputized as major addi­tions to governments and intergovernmental bodies. The state is thereby extended, enhanced, and aug­mented by the addition of enormous corporate as­sets. These include funding directed at “sustainable development” to the exclusion of the noncompliant as well as the use of Big Data, artificial intelligence, and 5G to monitor and control citizens.

But first the conditions for global government must be established and these conditions include the breakdown of national sovereignty, the abrogation of natural rights, and the reduction of the standard of living of the vast majority. “Affluence,” writes Sam Fleming for the WEF, “is the biggest threat to our world. . . . True sustainability will only be achieved through drastic lifestyle changes.”

Thus, these elites are not only subversive but also destructive. It is difficult to conclude that the many recent assaults on the infrastructure of the US are anything but part of a coordinated campaign to destroy productive capacities and terrorize the population. Consider the use of vaccine mandates to choke supply chains, the multiple train derailments and chemical bombs, the undetonated bombs on railroad tracks, the mysterious explosions at metals plants and oil facilities, the “coincidental” fires at food processing facilities and chicken egg farms, the hazardous materials explosions in public transportation facilities, the shutdown of a major baby formula production lab, etc.

Consider these in connection with the operations of cultural, social, and political demoralization—the covid lockdowns and vaccine mandates, the quasi-endorsed Black Lives Matter–Antifa riots, the election legerdemain, the January 6 show trials, the unfettered immigration, the foisting of the transgender movement and critical race theory on elementary school students, the differential treatment of crime along political lines (with the apparent rewarding of criminals carrying out subversive acts and the imprisonment of those who merely protest the regime)—and the effect is a politicized anarcho-tyranny unleashed on the populace. Do not all these phenomena have the common effect of producing social and economic insecurity and learned helplessness, while cowing any political opposition into submission?

Yet it is essentially impossible to prove that a coordinated campaign by subversive elites is afoot. As internal Twitter documents made available to the public in December reveal, one of the most powerful communications and ideological apparatuses on earth had gone to great lengths to snuff out and filter the visibility of any story that might provide a window into the coordination of the new world order.

If, however, as Pareto suggested, a governing elite is inevitable, then, as Jeff Deist has argued, we are certainly under the wrong elites. Whether a circulation of elites can be completed in time to save the world economic system from ruin and the majority from destitution and veritable slavery is a question of no little urgency.

The Price-Gouging State

Friends and family are talking, on Facebook, about the rapid rise in the price of eggs. Their posts also report that there are plenty of eggs in the dairy sections of local grocery stores. A few people, along with some reporters, blame this rapid increase in the price of eggs on price-gouging corporations.

State governments take price gouging seriously. Section 396-R of New York’s General Business law defines price gouging as “unconscionably excessive pricing of essential goods and services during any abnormal disruption of the market, such as severe weather, power outages, strikes, or national or local emergencies.” This law also prohibits price gouging “by all parties in the chain of distribution, including retailers, manufacturers, wholesalers, suppliers and distributors.”

Price gouging in a free, open market is a myth concocted by people who benefit from state interventions. When demand for a good suddenly jumps, for whatever reason, the price and quantity sold increase. If the supply of a good suddenly falls, the price rises as the good becomes scarce. Prices increase even more if rising demand and scarcity occur simultaneously. In all of these scenarios, there will be plenty of eggs in the dairy section of grocery stores provided markets are allowed to adjust. Adjustments, however, will result in higher prices, which encourage consumers to economize or seek substitutes.

Could rapidly rising prices be the result of firms colluding or merging to become the sole supplier of a product? Yes, but only over a short period when there are no substitutes. A sole supplier, in either form, does this by restricting output, which pushes the price up, results in above-normal profits, and attracts entrepreneurs who see a potential entry point. If entrepreneurs are free to innovate and profit from their efforts, they will jump into this market.

A fascinating example of this is Phil and Jenn Tompkins’s business. It rents egg-laying chickens to consumers. Its sales are booming. Consumers save money by gathering freshly hatched eggs from the rented hens in their backyards rather than buying expensive eggs from grocery stores.

Since price gouging cannot occur in free markets, even when firms collude or merge with their competitors, it follows that government intervention must be the cause of rising prices.

If a price increase is substantial, some voters will demand their representatives act. Legislators that blame corporations call for taxes on the “windfall profits,” consumer subsidies to offset higher expenses, or capping prices at previous lower levels. None of these proposals would lower prices. A windfall tax pushes prices even higher by reducing supply. A consumer subsidy does the same by boosting demand. A price cap would result in a shortage—no eggs in the dairy section—as consumers would demand more than firms can supply at a level that generates a minimal return on investment.

Despite these realities, legislators intervene in markets by creating product and service scarcities on one side of transactions and excessive money growth on the other.

In late 2008, legislators gave the Fed the authority to pay interest on reserves (IOR). The IOR rate serves as a price floor, resulting in trillions of dollars in unemployed reserves. It allows the Fed to print trillions of additional dollars to paper over the multi-trillion-dollar budget deficits of the Trump and Biden administrations. To keep unemployed reserves bottled up in the banking system and prevent excessive inflation, the Fed simply lifts IOR rates when reserve outflows become excessive. This, however, is not foolproof. Reserves leak out to prime borrowers in an arbitrage facilitated by big banks, which borrow from the Fed at the IOR rate and lend to these borrowers at the prime rate.

Progressive income taxation punishes those who are most productive and innovative. Low interest rates and corporate subsidies extend the lives of malinvestments and the zombie firms owned and operated by well-connected, powerful individuals. And antipoverty programs pay people to work less than they otherwise would. These interventions result in a national output that is lower than what would have prevailed in their absence. These policies thus create an artificial scarcity that pushes prices upward.

As mentioned above, firms that collude to act as, or merge to become, the sole supplier of a product require a neomercantilist economy and cannot occur in a free market. The state has been and continues to be the creator of monopolies. For example, kings and queens gave producers of ships and textiles the sole right to supply their kingdoms with these products in exchange for collecting taxes.

Today, monopoly-making mechanisms work in similar ways. The state restricts entry via licensing, patents, subsidies, and convenience of necessity (CON) laws. Republic Services and Waste Management, for example, both spent five hundred dollars to purchase a “competitor’s veto” to block a young entrepreneur from providing trash delivery services to homebuilders in Montana. Likewise, intensive care unit beds were in short supply during the pandemic because CON laws allowed incumbent hospitals to block competitors from entering the market.

The World Economic Forum (WEF), no matter what rhetoric it uses to hide its agenda, is a cartel of corporatists who use government allies throughout the world to create rules and restrictions on trade and production. These restrictions are sold to us as a means of saving the planet, when in reality, they save corporatists from present and future competitors. Because their policies create shortages and cause mass protests, like in Sri Lanka and the Netherlands, the WEF understands that they need to label opinions and conversations that hinder their efforts as misinformation and make this misinformation illegal.

The utopia Western governmental elites, top universities, corporate media, and the WEF’s desire will be an Orwellian dystopia for us. Its foundation has been laid. We voluntarily walk around with its telescreens in our hands. These devices, which are occasionally used to make phone calls, track our movements and thoughts and subject us to the Two Minutes Hate of Nineteen Eighty-Four through perpetual and outrageous social media. The agents of these institutions change the meaning of words and send history down the memory hole.

Price gouging is not a result of firms competing in a free and open marketplace. It is the result of governments creating artificial scarcities via taxes, subsidies, regulations, and licensing, and it will only get worse if the WEF gets its way.

It’s Never Too Late to Begin Protesting against the Proposed Central Bank Digital Currency

Whether you like it or not, central bank digital currencies (CBDCs) are coming. That’s the message in a recent tech column in the Wall Street Journal. A similar tone can be found coming from organizations like the World Economic Forum, the International Monetary Fund, and the Atlantic Council.

Reading these sources could lead you to conflate so-called CBDCs with autonomous trucks or artificial intelligence (AI) writers—technology that meets the needs of consumers so well that it’s hopeless to resist. But that isn’t true. CBDCs are not a groundbreaking new development in financial technology. They’re the next step in the government’s corruption of money and a severe threat to liberty.

Money evolved organically on the free market. People working toward their own ends, constrained by scarcity and economic law, settled on different commodities to help them transcend barter and engage in indirect exchange. Cattle, cowrie shells, leather, and bronze were all early forms of money. But as the nations dotting the world’s surface began to interact and trade, precious metals like gold and silver arose as the dominant form of money.

Private mints began shaping the metals into coins, staking their reputations on their ability to accurately label a coin’s weight and fineness—attributes important to traders. Later, merchants figured out they could avoid the hassle of lugging heavy coins around by storing their money and trading with the deposit receipts.

Money developed without a central authority, but as with law and language, the political class hijacked this stateless institution to serve its own ends. State control represented a turning point for money from bottom-up evolution to top-down corruption. It started with state-run mints and legal tender laws, which allowed governments to debase coins.

Next came central banking, a partnership between the government and banks to inflate the number of deposit receipts beyond the supply of money they’re meant to represent. With that, money was further decayed until governments severed the tie between banknotes and actual money by suspending the gold standard. That happened in most of the Western world in the 1930s and the US in 1971. Doing so ushered in the era of money by government decree, or fiat money, that we live under today.

So how do central bank digital currencies fit into this story? They would represent the next stage of monetary decay. So far, governments have slowly granted themselves direct control over the money supply. CBDCs would go even further and give the government control over the distribution and circulation of money. The setup would bypass the banking system and require Americans to hold digital dollars in an account with the Federal Reserve.

The fact that politically connected banks would be abolished with the adoption of retail CBDCs is probably the biggest barrier facing the program. The CBDCs being tested today are wholesale CBDCs, or digital reserves for banks to deposit at the Fed. The rollout of retail CBDCs straight to individuals would most likely occur during a national banking collapse when Washington could drop the nation’s banks without fear of reprisal.

But notice the difference between the economic evolution and political corruption of money. One is chosen, and the other is imposed. And if something is imposed, it can be resisted. There is nothing natural or inevitable about CBDCs, despite what some tech columnists say. If enough people stood up and said “no,” there would be no CBDCs. Just look at what happened to President Joe Biden’s Occupational Safety and Health Administration (OSHA) vaccine mandate.

People of all political persuasions should oppose CBDCs. This new nationalized banking system would allow the federal government to add or remove digital dollars from people’s bank accounts and trace where these dollars go. Stimulus checks could be deposited and monitored, perhaps even given a time limit. Sanction-happy Washington could make foreign boycotts mandatory. The federal government could freeze anyone’s money anytime for reasons ranging from suspected crime to political dissent. There’s no shortage of concerning implications. And even if some seem far-fetched, it’s naïve to hand the government total control over money and then just hope they’ll refrain from using all that power for their own benefit.

Like any government program, the time to quash CBDCs would be before they are implemented. Another argument for retail CBDCs is that they will help the unbanked access the global financial system. There are plenty of ways to solve that problem without violating anyone’s rights. But if CBDCs are used, those who rely on these currencies will be used to vilify anyone trying to roll back the program. “Take away our control over money, and the poor will be cut off from the economy” will be the implicit threat used by the political class, cloaked in compassionate language.

Central bank digital currencies are not a new, innovative financial technology. They represent the next stage in the corruption of money brought about by governments. But if enough people are made aware of the dangers posed by a nationalized banking system, the retail CBDC program may never get off the ground. As it’s much harder to roll back a government program than it is to stop the implementation of one, the time to loudly and assertively berate the government for even daring to consider such a blatant power grab is now.