IWF Reads: The Case Against Socialism

A handful of high-profile Democrats are openly promoting socialism as the best way forward for America. Yet socialism in any form would come at great costs. Ultimately, socialism proposes putting power in the hands of bureaucrats and stripping citizens of their personal freedoms and private ownership rights.

In his new book, The Case Against Socialism, Senator Rand Paul analyzes how socialism has failed in the past and exposes socialism’s false promises. He also addresses and debunks many of the misperceptions surrounding socialism, including the claim that socialism would create more equality and that the economies of Nordic countries are socialist. 

Here are the five key arguments against socialism in Senator Paul’s book that stuck out the most for me:

1. Hitler, Stalin and Mao were all considered Socialists

Many would be surprised to learn that Hitler, Stalin and Mao were all considered Socialists during their time, but they were. As Senator Paul points out, national socialism was a critical part of Nazism from the beginning. In his platform, Hitler called for “THE GOOD OF THE COMMUNITY BEFORE THE GOOD OF THE INDIVIDUAL,” which sounds pretty familiar to the collectivist rhetoric of many of today’s socialists. Similarly, Mao’s and Stalin’s rise to power were also fueled by socialism’s promises. 

2. Socialism always leads to utter destruction.

Historically, socialism has never worked in any society, regardless of how it materializes. Socialism has resulted in shortages of basic goods, poverty, and tyranny. That’s because government-controlled industries will always be less productive and the citizens are the ones who suffer the most. Venezuela, for example, has been plagued with food shortages due to its socialist policies, causing citizens to lose on average almost twenty pounds. It is so bad that some Venezuelans have had no choice but to eat their own pets to survive.

3. Scandinavia is not Socialist.

The economies of Denmark, Sweden, and Norway all score very highly on economic indicators like the Global Competitiveness Report as well as the World Bank Doing Business indicator. They also regularly come out on top in the World Happiness Report. Present-day socialists often point to these as examples of successful socialism. 

However, the truth is that while these countries may have robust welfare programs, none of their economies qualify as socialist. According to the 2019 Index of Freedom Report, which measures how economically free countries are, Sweden is ranked 15thin the world, Norway is 23rd, and Denmark ranks 10th. Even Denmark’s own Prime Minister, Lars Lokke Rasumssen, said, "Denmark is far from a socialist planned economy. Denmark is a market economy."

4. Socialism doesn’t create equality. 

Socialism’s focus on equal outcomes is problematic for many reasons. First, humans are not robots. We all have different talents and strengths which means we are not and never will be uniform. We also have varying perspectives and goals, so one person’s version of happiness is not identical to another’s. In order to achieve the best possible outcomes for everyone, the focus should be on ensuring that everyone enjoys access to equal opportunities rather than trying to find a way to enforce government-mandated equality. 

Measures of equality tell us little about a population’s living conditions, access to economic opportunity, and overall health. Historically, socialism has led to poverty, hunger, and suffering for everyone except the elites who are in charge. As Winston Churchill famously put it, “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.”

5. Socialism is a form of cronyism

Some of socialism’s supporters treat free market capitalism and crony capitalism as if they are interchangeable. It’s true that cronyism exists, and historically, some capitalist economies have given preferential treatment to certain private businesses at the expense of others. We should all reject cronyism in any form. However, a free-market capitalist economy, or an opportunity economy, is the opposite of cronyism. In fact, an opportunity economy is the only way to ensure individuals are afforded the greatest degree of freedom over their enterprises and earnings.

Interestingly, Senator Paul points out that cronyism is actually inherent in socialism:

Socialism grants privileges to a new class of elites: government planners…History teaches that, due to socialism’s centralized nature, there is no place more replete with cronyism than one practicing socialism.

…As long as socialists continue to promote the will of the collective over the rights of the individual, it remains a danger that the determiners of the “collective will” may determine to carry out policies for their own self-interest, their own power, or even their own petty prejudices.

The Case Against Socialism is a valuable book for all Americans, particularly those who are on the fence about socialism and are interested in learning more about its history.

The findings of a recent Gallup poll raise serious concerns about socialism’s rising popularity in the U.S. When asked if socialism would be a good or a bad thing for the country, about four in ten respondents said it would be a good thing, an 18 percent increase since 1942. Socialism is most appealing to Millennials and Generation Z, half of whom say they would prefer living in a socialist country.

Socialism may sound nice until you have to live through it. It’s completely understandable that some Americans, particularly those are struggling to make ends meet, would be drawn to the promises of socialism. But while its proponents promise fairness, compassion, and equality for all, the reality is that socialism in any form would deliver less freedom and prosperity for everyone. In contrast, an opportunity economy is the most effective way to achieve better outcomes for everyone, especially those with lower incomes.