The battle between socialism and capitalism is playing out across the country.
Some states, mostly run by Democrats, are going forward with a socialist agenda. The Republican states have elected a capitalist approach. Who will win? It depends on whose assumptions the voters favor.
Socialists believe that the universe of resources is finite. If one person gets something, then, by definition, another person is denied it. On the other hand, capitalists believe that the universe is expanding. If someone gets something, another person can still get that and more. Our future lifestyles depend on which mindset becomes the American consensus.
For instance, socialists assume that there is a set amount of medical care. And they remind us that it is not distributed evenly. Poor people get sick and suffer while waiting hours in crowded emergency rooms. Often they go bankrupt when the hospital sends them the bill. But capitalists demur. They say that we can build new hospitals and medical schools. We can double or triple the number of doctors available. Competition among these new resources will spark both innovation and surplus. Indeed, whether it pertains to medical care or any other commodity, the only sure way to lower prices is to increase supply.
New York state is the latest battleground between socialists and capitalists. There, the socialists appear to be winning. A new rental housing overhaul just passed through the legislative swamp in Albany. Assuming that the supply of housing is finite, Democrats authorized New York City-style rent control ordinances elsewhere in the state. Rent increases will be limited. Major building repair costs will not be totally offset by rent. Therefore, landlords may take a loss.
The law will work wonders for those who already have a place to stay. But it will discourage the building of new apartments. It may even stall the fixing of old ones. If even a portion of this year’s 1 million illegal aliens and 1 million legal immigrants try to settle in New York state, they will find apartment prices reasonable but apartments unavailable. The result will be greater homelessness.
Last week The New York Times asked if the new law created a “tenant paradise” or signaled a return to “Bronx is Burning.”
New York could have chosen capitalism. It could have encouraged the building of new apartments. By dropping unnecessary regulations, new housing could have been built relatively cheaply. This expanding universe of housing would have created a housing surplus and made housing more affordable. By pushing housing costs downward, homelessness would have been substantially curtailed. More poor children would do their homework from the shelter of a living room rather than from a shelter provided by the Salvation Army.
Now, the socialist mindset surely comes from the best intentions. It is based upon a special sympathy. Socialists are rightly upset that wealth is distributed unevenly. When the rich waste food, socialists contend that the poor go hungry. So, who could argue against expanding our SNAP (food stamp program) to ensure the poor get a small “piece of the pie”? Capitalists do. They want fewer regulations on pie baking. They want more pies with resulting lower prices so that even a minimum wage worker can buy his own food.
The problem with socialism is the law of supply and demand. That natural law, more powerful than any legislative act, has doomed every socialist experiment from the Utopian communities of the 19th century to today’s Venezuela. Scarcity must always raise prices. And the people hurt most are the poor, the same poor people whom socialists intend to help.
In spite of our laws, “your tired, your poor, your huddled masses” will continue to brave death to “breathe free.” Capitalism is freedom. It brings immigrants here to earn a part of our ever expanding wealth. Migrants do believe that to get rich, your neighbor does not have to become poor. But socialists are lecturing immigrants much more differently.
Socialists tell new arrivals that their poverty is due to finite wealth hoarded by the rich. Once here, socialists want immigrants to chase the welfare state and abandon the “American dream.” Ironically, socialists may thereby inadvertently cure America’s immigration and homeless crisis. After all, no one wants to immigrate to Venezuela. Venezuelans’ homes are vacant. Their residents moved to Colombia and Brazil.