Socialism vs. Welfare Statism: Why These Terms Matter

I originally posted a version of this essay about 8 years ago. But after reposting my updated version of Criminal Socialism vs. a Free Society, and given the recent surge in interest and support for Democratic Socialism in the United States of America, I see it necessary to repost an updated version of Socialism vs. Welfare Statism: Why These Terms Matter. Why? Because Socialists are pointing to America’s welfare programs as Socialism, and arguing for more of the same. But the welfare state, more accurately called Welfare Capitalism, is not Socialism. Socialism and welfare statism of fundamentally different social systems. The Democratic Socialists are trying to pull off a dangerous bait-and-switch, and if America falls for it, we will end up an enslaved country.

Venezuela is a prime example, among many prime examples, of Socialism fully and properly instituted. But Socialists point to welfare states as examples of Socialism in action. But Germany, England, the Scandinavian countries, Canada, et al are NOT socialist. Socialism is the political implementation of the principle that the interests of “society” as represented by the government take precedence over individual interests. Therefore, socialism denies individual rights, including rights to property and free trade: The “people,” as a number of individuals, exist to serve the interests of society as determined by the state. Socialism, to be socialism, has to deny individual choice (individual rights), because Capitalistic rights directly conflict with it’s principles. As the Socialist Robert Heilbroner observed:

The rights of individuals to their Millian liberties [are] directly opposed to the basic social commitment to a deliberately embraced collective moral goal…

Dissents, disagreements, and departures from norms then assume a far more threatening aspect than under bourgeois [i.e., Capitalist] society, for they hold out the possibility of destroying the very commitment to a moral consensus by which socialist society differs from capitalist.

Nor can we wriggle off this hook by asserting that, among its moral commitments, socialism will choose to include the rights of individuals to their Millian liberties. For that celebration of individualism is directly opposed to the basic socialist commitment to a deliberately embraced collective moral goal. [my emphasis]

These European countries are not socialist (although Germany WAS once socialist, under National Socialist [NAZI] rule). They, like America, are mixed economy welfare states. Unlike totalitarian socialism, Western welfare states still have a healthy degree of private enterprise and free market Capitalism, and thus a still-healthy recognition and protection for individual rights, including rights to property and free trade. Because of this, welfare states’ Capitalist-oriented, hampered market economies can still generate continued prosperity and rising living standards even while carrying the burden of financing the welfare state, differing only in the balance between the two. 

It’s important to get this understanding right, because most Democrats now view socialism more positively than capitalism, according to Gallup.* Welfare statism is different in crucial respects from democratic socialism. It is true that the limited socialistic aspects—mainly redistribution of wealth—of the welfare state requires the limited use of the same statist powers as does full socialism. But its goal, in theory, is a “safety net” for capitalism, not a replacement--i.e., a mixed economy; that is, a mixture, albeit a tense one, between statist income redistribution and Capitalism. Under the Western style welfare state, individual rights and free enterprise are still fundamental, and socialism is limited in scope so much freedom remains. Democratic Socialism implies no limits. The distinction is important. No longer content with the limits of the welfare state, and driven by hatred of freedom, capitalism, and achievement, the Democrats are now in the process of “graduating” to full blown totalitarian socialism, including massive central control and strict economic regimentation. It won’t be easy to bring about in America. But once we start down this road, the result will be the same as it always is--loss of economic, political, and intellectual freedom, growing economic paralysis and eventual collapse, massive human suffering, and the total state. What else can one expect when the individual is subordinated to the collective? Of what importance are hordes of suffering individuals next to whatever grand utopian collectivist ideal the state happens to want to impose “for the good of society?” 

No doubt, Trump has an authoritarian streak--his antitrust threats against Amazon for Bezos’s WAPO editorial criticisms; his regulatory threats against Google for alleged search engine “bias”; his tax bullying of U.S. multinational corporations; his threat of stronger libel laws against reporters; his communistic taking of equity stakes in dozens of private companies; his nation-over-individual rights of Americans’ justification for unConstitutional tariffs. But this is penny-ante statism next to democratic socialism. Totalitarian? Based on

what ideology? Trump doesn’t even have one! Next to democratic socialism, Trump is a schoolyard bully. Democratic socialism is the Al Capone crime organization, rising out of the underworld to rule a nation. Democratic socialism is across the board a criminal enterprise, but with law as protector rather than adversary. It makes the real Al Capones of history look like pickpockets.

If you like Germany, then stick with what Germany actually is, a Western-style mixed economy welfare state. We can at least debate the relative balance between capitalism and socialism. Freedom and prosperity, at least, has a chance. But be aware of what you’re advocating if you declare your allegiance to socialism, democratic or otherwise--the total subordination of the individual to the state.

As theory and history has unequivocally demonstrated, there is no essential difference between Socialism and totalitarianism. A government that owns and regulates the means of production, exchange, and distribution; that can distribute all of a country’s money equally; in which government rather than individual people owns or controls all industry, is a government with total control over the economy. Since economics is the field of human activity by which people support their lives, a government that totally controls the economy has total control over people’s means of survival. A government with total control over people's means of survival is a government that has every individual by the throat. Such a government can enforce its will in every area of life  and liberty through economic sanctions. What freedom, what opposition, is possible under such conditions? Does it matter whether the political leaders are elected or not? A government, of whatever kind, that has every individual by the throat IS a totalitarian state. Logic confirms this truth. History has proven this time and again.

To summarize, the welfare state—more accurately labeled Welfare Capitalism—is a Capitalist-oriented, individualistic, free market system with a government-imposed “social safety net” but with strong though not fully consistent protections for individual rights to life, liberty, and property. Capitalistic freedom is the foundation and the financial support for the welfare state. Socialism is a collectivist other-oriented system that prioritizes the group over the individual, in which the state tolerates individual existence only to the extent that it furthers the goals of the state as the determinant of the collective will. Of necessity, Socialism is totalitarian, because it owns or controls all economic activity—“the means of production”—and thus exerts control over all aspects of people’s lives because the economy is the area of activity in which people work and trade to support their lives. Poverty is the unavoidable result because the market freedom that supports the welfare state is erased under Socialism.

The welfare state is to Socialism what CATO’s Paul Meany and Marian Tupy describe as “the crucial difference between government assistance and government control,” or what more crudely (but I think more succinctly) describe as the difference between the pick-pocket is to the murderer. In the Declaration of Independence it is written,

That whenever any Form of Government becomes destructive of these ends [to secure individual rights], it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

But,

Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.

Clearly, the evils of our current welfare statism are “sufferable”—i.e. tolerable. Capitalism, hampered, diluted, and violated as it is in today’s America—still functions strongly enough to carry the welfare burden and still drive prosperity and growth forward. No remnants of  Capitalism in America, as in Venezuela, could ever survive Socialism. That is why the terms Socialism and Welfare Statism matter. Americans must think twice and think deeply about even considering, let alone choosing, Socialism over Capitalism. It’s literally a matter of life and death.

Related Viewing:

Is the US Already Quasi-Socialist? By CATO

Related Reading:

Socialism's Totalitarian Nature Cannot Be Obscured by 'Democratic Socialism'

Criminal Socialism vs. a Free Society

We Need a Deeper Understanding of Socialism

Why Nazism Was Socialism and Why Socialism Is Totalitarian--George Reisman

The Myth of Scandinavian Socialism

Elizabeth Warren’s Plan — We’ve Seen This Before--Stephen Hicks

Fascism: Back Door to Socialism that Obama and the Left Well Understand

A is A, and Socialism by any Other Name...

QUORA: ‘Is it possible to be both a Communist and a Fascist?’

Why do fascism and communism often go hand in hand when they are philosophically polar opposites?

Is fascism a form of capitalism?’

Bill Maher’s Category Error on Socialism: There’s a big difference between government assistance and government control. By Marian L. Tupy

Thanksgiving Message 2024

My special thanks this year go to business, both large and small. Business is the mainstay of the free Capitalist economy. What amazes me is how innovative and productive business continues to be given how much the Capitalist—i.e. free—portion of the economy has shrunk under the weight of the massive, and still growing, regulatory welfare state. Add to that that business, especially the most successful, is the most persecuted minority in America today. It is under attack, not for its vices, but for its virtues. By whom? By egalitarians, who label their money-earning success as "greed." With all of the Woke claptrap about “oppressed” groups, business is somehow not among them. Yet business gets blamed for every societal ill, even as it manages to keep us all alive and somehow moving forward under the meager remnants of Capitalistic economic freedom—and still make a profit. So, here’s a shout out to American business: THANK YOU for your profit-seeking service. 

RELATED:

ARI: TURN #GIVINGTUESDAY INTO TRADING TUESDAY

ON THIS HOLIDAY, GIVE THANKS TO THE PRODUCERS

You Can’t be Pro-Rights and Anti-Rights Simultaneously

Alyssa Rosenberg has an interesting opinion piece in the Washington Post—interesting, but not in the way she means it. 

I’m pro-choice, but I’m grateful for what pro-life groups did this week, Rosenberg opines. Why?

In today’s fractious political world, it’s important to extend credit where it’s due. And so, as a pro-choice liberal, I want to thank a group of pro-life organizations that spoke up this week in support of a congressional deal to improve the child tax credit. Antiabortion Americans United for Life hailed the bill, which will primarily help lower-income families and families with a larger number of children, as “a core part of an American pro-life and pro-family future.” Pro-choice Center for American Progress President Patrick Gaspard described the legislation as “an unmissable opportunity to reduce poverty among low-income children and families.”

Why is Rosenberg grateful?

The often-justified liberal criticism of pro-life conservatives has long been that they elevate the lives of unborn babies over the lives of mothers, and that they’re eager to prioritize children in the womb but not in the world. [true] After birth, it becomes more important to refuse “attempts to expand the welfare state” [true] than to feed poor children when school is out during the summer [which means, to feed poor children at taxpayer expense]; more vital to enforce a traditional heterosexual nuclear family where women stay home than to make sure children have access to safe, quality day care [“access” here means access to other people’s wallets to pay for the day care]; more essential to reject federal help than to make sure children have health insurance [again, meaning at taxpayer expense].

The contradictions in the stances of liberals and conservatives becomes obvious here, though the contradictions are flipped. Both the welfare state and abortion bans are rights-violating. The welfare state, which is based on forced redistribution of wealth, violates the individual right to decide how, when, and if to use one’s own money for charitable purposes. Abortion bans violate the individual right of women to control one's own body and doctor’s right to perform abortions if the doctor so chooses.

Now, as far as welfare statism goes, the tax credit is one of the least bad options, because it allows the parent or guardian to keep more of what they earn. True, sometimes the tax “credit” is not a credit at all, but becomes “refund”—i.e. a handout—at taxpayer expense if the parent’s tax liability is less than the allowable credit. But at least the tax credit idea requires the parent to file a tax return, which means to be working.

But the broader point here is a moral one: To be a principled individual rights advocate (individual rights properly understood), one must be against the welfare state and in favor of legalization of abortion. 

Note what is going on here. Both conservatives and liberal are supportive of rights violations in their own spheres of interest. But it is the conservatives who are caving, and moving toward the liberals’ pro-welfare state principles. The liberals, the most consistent violator of individual rights, is winning, thus validating the truth of Ayn Rand’s observation that “In any conflict between two men (or two groups) who hold the same basic principles, it is the more consistent one who wins [italics in original].” 

Related Reading:

Biden’s Concept of Freedom is the Path to Slavery

A Right to Pursue versus a ‘Right’ to Provision: The Declaration and its Reactionaries

My Challenge To the GOP: A Philosophical Contract With America

The U.S. Constitution is About Individual, Not ‘Human’, Rights

Collectivized Rights—Ayn Rand

Moral Rights and Political Freedom—Tara Smith

Ayn Rand’s Theory of Rights: The Moral Foundation of a Free Society—Craig Biddle for The Objective Standard

A Terribly Unjust ‘Solution’ to the Entitlements Insolvency ‘Conundrum’

Donald Trump has been hammering Ron DeSantos over his prior stands on the big so-called “middle class entitlements,” Social Security and Medicare. “Don’t touch them” is Trump’s mantra, despite their well-known solvency problems. Washington Post columnist Henry Olsen has some advice for DeSantos. In Here’s a solution to DeSantis’s Social Security and Medicare conundrum, Olson advises:

Former president Donald Trump has been hammering Ron DeSantis over his past votes to significantly change Social Security and Medicare. The Florida governor and former congressman has attempted to wave away the attacks, but there’s a better way to counter Trump’s charges: Appeal to both GOP conservatives and populists by targeting entitlement benefits to those in need.

Social Security and Medicare both have a dirty secret: They spend tens of billions of dollars each year subsidizing well-to-do seniors who don’t need, or can pay more for, their benefits. 

That “well-to-do seniors who don’t need it” can collect benefits that they paid for and were promised is not “dirty,” secret or not. It is what makes Social Security and Medicare among the fairest welfare state programs in existence. The fact that personal financial health is not a factor is what gives these fundamentally immoral programs at least an element of justice.   

Social Security benefits are not means-tested; billionaire Elon Musk can collect Social Security when he retires. Similarly, Medicare’s hospital benefits (Part A) go to everyone on the same terms regardless of their finances. Premiums for Medicare’s outpatient and drug benefits (Parts B and D) are also only partially means-tested. The result is that millions of people who can pay full freight for their Medicare benefits don’t, and millions more use their Social Security benefits to top off their substantial private savings.

Whenever you hear the rich being targeted, you’ve encountered a hidden attack on the middle class. If you think cutting off the tiny handful of multi-billionaires would be enough to save Social Security and Medicare, you’re delusional. Elon Musk is window dressing. The real target is any responsible, frugal long-term planner who has earned a private pension, built up retirement savings like a 401k or IRA, or accumulated “substantial private savings,” whatever that means.

“Means testing” is short-hand for screwing the successful. It would destroy that element of justice. It would put everyone at the mercy of government authorities who would judge your “need,” and thus your worthiness to collect these benefits—and deny you if you are flagged by some statistical formula. You paid in hundreds of thousands of dollars over your working life, without your consent, depriving you of your right to use your own money as you judge best? Too bad. We’re going to deprive you of your promised benefits. Olsen suggests $100,000 of “non-Social-Security income” as the cutoff, after which your benefits would begin to be reduced and your premiums rise. But why not $75, 000, or $50,000? Pick your number. That Elon Musk’s benefits are treated the same as everyone else is a moral positive, not a program vice. Once you’ve cut off the Elon Musks of the country from their rightful benefits, you’ve opened the door to attacks on all retirees with savings. Olsen admits as much: “Millions of people who can pay full freight for their Medicare benefits don’t,” he writes, “and millions more use their Social Security benefits to top off their substantial private savings.” 

Millions! Don’t delude yourself into believing that you are not one of those millions. The best protection for your earned and paid for promised benefits is to leave Elon Musk’s benefits alone.

Social Security and Medicare are in deep trouble. They should be reformed. I’d start with personal accounts as a step on the way to elimination. But any reforms must be fair, and not include more draconian means-testing in addition to the limited means-testing already in the programs. It’s a matter of justice.

Related Reading:

The “Personal Account” Path to Ending Social Security

Your 401(k) - Obama’s Next Target

QUORA : Do the pro-capitalists here honestly think that the system is fair? How are people at the bottom of the food chain, realistically speaking, expected to break the poverty cycle without government intervention?

 QUORA : Do the pro-capitalists here honestly think that the system is fair? How are people at the bottom of the food chain, realistically speaking, expected to break the poverty cycle without government intervention?

I posted this answer:

It is actually government intervention that creates a poverty cycle. When the welfare state subsidizes the poor, then removes the subsidies if their incomes rise, it disincentivizes work and upward mobility and incentivizes the breakup-up of families, leading to a low-income trap of handouts, stagnation, and/or idleness—the poverty cycle. 

In a fully free—that is, Capitalist—society, there is no “poverty cycle.” Poverty is the natural state of man. Nothing man requires to live, survive, and thrive is provided by nature. Everything must be created by the productive work of individuals, together with teamwork and trade—but always starting with the efforts of individual initiative. 

How does anyone rise from poverty? Through self-responsibility and self-respect, she takes it upon herself to become productive. The great fairness of capitalism is that it leaves people free to work, trade, and earn property, and then protects the rights of people to keep and use the product of their work as they judge best. Capitalism clears the political way for and protects people who rise from poverty by their own efforts. It is the Enlightenment values of individualism, freedom, and limited rights-protecting government that capitalism embodies. The result; after thousands of years of grinding, stagnant poverty, the impediments on the common individual were swept away. They’re rights to act secured, upward mobility became the watchword, clearing the way for anyone willing to try. The resulting industrial/technological/economic explosion—The Great Enrichment—in turn opened up vast new opportunities for each new generation to rise farther and farther above poverty, thus establishing a cycle of prosperity based on “You can’t stop progress.” 

And the fountainhead of this enrichment is individual initiative, enabled by liberty and the universal practice of individual rights, and motivated by the pursuit of personal happiness.

There are basically only two ways to achieve a life up from poverty. The first and honorable way up is to take responsibility for one’s own life and work one’s way up. Not everyone is willing to try, though. These are the people who choose the path of taking control of productive people’s lives and to seize the product of their labor. The question above can only be asked by the second type of person—the parasite who believes the world owes him a living, and thus turns to government intervention into the economy—and their political cronies who champion the myth that “the poor” are too lazy and incompetent to make it on their own effort in a social setting of voluntarism and trade. 

It is sad to say that the anti-freedom policies of the socialist/regulatory welfare state interventionists are slowly reestablishing the lid on upward mobility that capitalism abolished, eroding the cycle of prosperity. But to the extent we have capitalism, there is no one to stop, or disincentivize, any poor person from rising as far as his own efforts will carry him. People starting out in life do not need to shackle people who have already made something of their lives. If they’re willing to try for success, they only need the government’s non-discriminatory, universal protection of their individual rights to freedom of production and trade and property rights. They don’t need government impediments placed on others. We need government, not government intervention. That’s what defines a fair system.

Related Reading:

A "Liberal" Newspaper Acknowledges the Welfare State Dilemma

Pre-Medicaid ‘System’ Points to the Moral Alternative to Medicaid: A Free Market Safety Net

America Before the Entitlement State—Yaron Brook and Don Watkin

The Moral—and Ultimately Real—Chains of the Welfare State

On ‘Rugged Individualism’ and the Welfare State

From Middle Class to Welfare Class

A New Textbook of Americanism — edited by Jonathan Hoenig

Need-Based Morality Penalizes NJ’s Self-Supporting

Back when New Jersey Governor Phil Murphy was pushing for a so-called “millionaires tax” to help fund his Progressivist state budget, a NJ Guest Columnist, Rob Duffey, argued in defense of Murphy on 3/27/19, Don’t worry about the rich; N.J. needs millionaires tax. Need I elaborate? The title says it all.

In response, another guest columnist, Philip Perinelli, explained This is why I’m leaving New Jersey:

I have contemplated writing a letter to the state government of New Jersey, including the Governor, Senate President, Assembly Speaker, and all members of the legislature. The article by Rob Duffey that appeared in the March 27 Star Ledger, titled “Don’t worry about the rich; N.J. needs the millionaires tax” prompted me to write.

Much has been said about a millionaire’s tax. Some say tax them and they will leave. And they well may. Of course, as Mr. Duffey points out, they may not. The fact is that the truly rich can decide to stay or leave. They can afford to do either. Mr. Duffey also points out that the state needs the money. I am not a millionaire. And that is why, while there is much to love about living in this town and this state, my wife and I plan to leave New Jersey in the next several years.

Perinelli is heading for Pennsylvania, where taxes are lower, including on retirees. But he demonstrates something else: It’s not just “the rich” who can be victimized by Progressivism. 

I posted these comments:

“New Jersey needs the revenue,” so we’ll just seize it from those who earned it, at gunpoint. If you don’t like it, you can uproot your life, and leave. 

What can “justify” such an unjust “political argument” as “credible policy?” The morality of altruism, which holds that one person’s need is an automatic claim on others’ wealth. When need is the moral standard, need becomes a political license to steal.

Need is the natural state of life, including human life. Wild animals satisfy their needs by seizing whatever they need. Primitive humans did basically the same, hunting and gathering as needed. The rise of civilization gave rise to wealth production, changing the equation to require justice. 

Altruism is a carryover from primitive man, manifested in “progressivist” politics. It’s not just about millionaires, unfair as a “millionaires tax” is. Gary Sudol asked in a recent letter* why he cannot opt out of the Family Leave Act, which recently quadrupled the payroll tax on workers (4/13/19). Answer; because other people need it, even if Sudol doesn’t.

There are basically two ways for people to satisfy their needs--earn it yourself or prey on others. Progressivism sides with the predator. Do not confuse altruism with generosity, charity, or compassion. There is nothing generous, charitable, or compassionate about Progressivists’ policies, which forcibly redistribute from people who earned it to people who didn’t. They are barbaric and unjust. 

I sympathize with Mr. Perinelli. We can’t escape Progressivism. But we can escape the most unjust states, like NJ. We won’t have completely achieved a fully just and civil society until we make our government protect each individual’s right to what he has earned, rather than some “right” to other people’s earnings.

* [Since I cannot link to the letter because the Star-Ledger no longer publishes its letters-to-the-editor online, I post it here:

Family-leave payroll deductions are unfair--letter 4/13/19

Once again the workers of New Jersey will take another hit. This time we face a big increase in contributions to expand the family-leave program. Some people will see their payments increase fourfold. I have worked over 40 years, have never used this program and will never want to. I would like to know why I don’t have the option to opt out of this program. There are many companies that do offer family-leave programs. If someone wants this benefit, they are free to secure a job with one of these companies. This expanded program is one more step in making New Jersey a bad place for business and taxpayers. I’m looking forward to the day when I will vacate this tax-happy state and relocate to a more taxpayer-friendly state.

Gary Sudol West Orange

The new law greatly increases the payroll tax, while making it more “progressive”--hitting middle and high income workers. It also makes it illegal for a company to replace a worker who takes advantage of the 12-week leave. And proving once again that socialist programs, once enacted, and no matter how small, will inevitably grow like a cancer. This new law expands on a previous law, because the original law was “woefully underutilized.,” with only “The overall participation rate among eligible workers in 2015 [being] less than 1 percent.”

If a program is “underutilized”—meaning, few people  want it—why not eliminate it? Instead, the injustice is expanded, and taxpayers like Gary Sudol are left picking up the tab against their will. Once we accepted the malignancy of forced redistribution of wealth, the cancer aggressively grows. Why? Because someone “needs” the loot. This has been termed The Tyranny of Need. 

Related Reading:

QUORA *: ‘Is Ayn Rand wrong about altruism?’

Reply Responses to QUORA *: ‘Is Ayn Rand wrong about altruism?’

People Don’t Want ‘Paid Family Leave’ in NJ, So Let’s Expand It [?]

End, Don’t Expand, NJ’s Paid Family Leave Coercion

Family Leave Insurance No “Success” for Those Who Don’t Want It

“The Decline of American Liberalism”—Six Decades Later By Lance Lamberton

Excerpts from this review:

The most disappointing aspect of The Decline is that it offered no reason for why it took place other than to agree with Jefferson’s observation that “[t]he natural progress of things is for liberty to yield and government to gain ground.”

I would argue that the Founders’ acceptance of the morality of altruism, where self-interest is regarded as immoral and self-sacrifice is the highest moral ideal, was the root cause for the decline of American liberalism. Until classical liberalism embraces rational self-interest as the highest moral ideal and can build a society upon that foundation, then further decline will become the order of the day until, indeed, the well of freedom becomes almost completely dry.

QUORA: ‘Did Ayn Rand support the idea of giving to charity or donating your own money to help other people?’

QUORA: What does Ayn Rand think about vitrues [sic] such as charity, selflessness, and friendship?