John Phipps: The Socialism Misunderstanding in the U.S.
US Farm Report 04/03/21 Customer Support
From Jonathan Harnish in Lake Oswego, Oregon.
“The report this morning about the “math” of taxing the wealthy totally missed the point. The conclusion was the solution is not political but one of math. That conclusion totally ignored the bigger problem of what to do with and who does what with the tax money. If the money is disproportionately taken from the “wealthy” and misdirected, wasted or spent mostly on government, unions and those who do not want to be productive members of society, then the plan not only does not work, but also it makes the misdistribution of wealth much worse. This type of socialist presentation has no place on the Farm Report!”
Thanks for your feedback. You are right. When I talked about whom to tax, there simply wasn’t enough time to address how taxes are spent. I do want to highlight something more important – how socialism and socialist have become popular but uncertain buzzwords.
The classical definition of socialism is “a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.”
Nations may be thought of as being on a scale between socialist and market economies with none at the pure form. Nations are all a mix of the two systems. Calculations of the percent of GDP generated by the private sector, one good measure, gives a range of 23% private in Cuba to 89% in the US. Most western nations are between 85-90%. China’s economy is 60% private sector, so even though the government owns factories and all the farmland, it is still mostly a market economy. In fact, capitalism has become the overwhelmingly dominant economic system in the world today.
However, even market economies have some socialistic policies – free health care in Britain, free university education in Denmark, and state-owned financial institutions in many countries, including ours. Our agricultural policy is clearly socialistic with 40% of net farm income from public money. That’s right - the same ratio as China’s economy. As a result, it is impossible for us to talk about farm economics without discussing programs many label socialism.
Regardless, invoking the s-word reminds me of how we used to call people pinkos and commies back in my youth. Maybe it’s effective as an insult to some who don’t understand modern economies, but it conveys no useful information nor does it further understanding.
