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.

 

(5) comments

Mark Hayes

This country offers opportunity to all that take advantage. Socialist idealism is a disease, not a cure.

Lowell Simon

Bob - sorry but you get a D in economics. Socialists do NOT believe that resources are finite, they believe that it takes a system of people to expand resources, therefore one individual or one corporation does not succeed in a vacuum. Those that built the interent or the roads or the police and firefighters all helped in the success of any particular business. They should not be left out of the benefits of capitalist success. You talk about Supply and Demand theory but you keep leaving out demand. In healthcare the problem is not too little supply, it's too great demand. As Americans age and we continue to find cures for cancer, AIDS, diabetes, etc. and we allow drug costs to skyrocket into the tens of thousands of dollars per month demand only increases. Supply is actually increasing (except in rural areas - a different issue), but because demand is increasing at a greater rate, prices rise. Your story about housing in NY also assumes that supply is finite, why? Rent controls will only reduce supply if demand doesn't exceed it. Are you suggesting that rent control in NYC kept developers out? If only that were true - we might not have a Trump Presidency. You go on to assume that reduced regulation would cause supply to exceed demand (surplus) and therefore prices would go down. Only misguided and poorly implemented Capitalism creates surplus (and shortage). Smart Capitalists try to keep supply just behind demand. When you say that the law of supply and demand dooms every socialist experiment you miss the fact that the true visionaries of the Constitution (Jefferson, Madison, Hamilton, Paine and even Washington and Adams) took pains to not only protect individual rights but to ensure that "The People" were the real bosses. What "socialists" are telling immigrants (like my dad) is that you are worthy of a piece of the pie.

ken leary

Yet another person demonstrating total ignorance on a subject they choose to discuss. Neoclassic/neoliberal capitalism has three goals: invest capital to enhance profit; defend the ability to collect that profit (constant war, militarized police, for profit prisons and internment camps for children, ); and remove all regulations which infringe on profit . Experience demonstrates that these goals are incompatible with the overall health and welfare of societies. And in spite of all uninformed talk by people who are too lazy to research a subject they shoot their mouths off about, the world is closing in on us. The financial terrorists need a place to invest their money and they are privatizing, with the help of their bought politicians, any and everything which should be publicly owned and operated so that we, the people, can pay rent to the one percent. Once again, three people own as much wealth as the bottom fifty percent of all U.S. citizens. Ten percent of USA citizens own eighty-four percent of all stocks. There are more empty apartments in NYC than there are homeless people. We are at “war” in seven countries now and looking to expand. We, the USA, are less than five percent of the world population and we are at war with anybody who challenges our control of their resources. Capitalism, the way the USA is organized, is over. The sooner you dinosaurs acknowledge this fact the fewer people we will have to destroy in the pursuit of “profit.” Of course fascism is always an option, and actually seems to be the current plan, but it will only succeed if the sheep follow the unjustified authority rather than think for themselves.

Kent Misegades

Just like many of the phony leaders of the Vietnam War protests, those espousing supposed virtues of socialism already have their nest egg secured. I’d bet the vast majority work for the government or enjoy a fat government pension, providing them the luxury to criticize the Capitalists whose toil provide their many comforts. The final pages of Atlas Shrugged predict how this ends.

Lowell Simon

Not me Kent - I was a small business owner for 25 years and became a public school teacher for 10 years after that.

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