You’re Probably Not a Socialist

Social media provides a lot of good in the world - probably more than a lot of new tech.  It connects families and friends, gives us hilarious memes, and empowers people who previously had no access to this amount of information, and no voice with which to share it.

But social media has also fostered an era of misinformation.  Because social media, as a whole, is a public forum, anyone can contribute.  Those who are given a larger following are those who have the most interesting content for one group of people or another.  And for many reasons, this content tends to be the most divisive.

The new political dividedness in the United States is ubiquitous on social media.  There are two main groups facing off in this divide.  From an objective perspective, one can label it as the classic American tale of Republicans vs. Democrats - although each side has their own choice language to describe the other (see: white men vs. everyone else; racists vs. good people; the silent majority vs. snowflakes).  Whatever you call it, we all know what it is.

There’s another framework that it’s known by: capitalists vs. socialists.  This is what we’re going to address today.

The term “socialist” has been around for quite a while.  As noted by The Stanford Encyclopedia, scholars have discovered over 40 definitions of socialism, and each one can be expanded into a thousand-page manifesto.  Humans are incredible, aren’t they?

The problem arises when a simplification of those definitions becomes the popular use of the term.  At no other point in history has this been more tangible than right now.

What People Think Socialism Is

We can probably blame the Democrats for the initial confusion, although everyone is guilty of perpetuating it.  I believe it started when the Democratic Party began using the term socialist to describe their more radical members.

Regardless of whose fault it is, the idea is becoming more popular by the day.  The modern American socialist is someone who wants to divert money to things such as healthcare and education in order to provide those things for free to less-fortunate members of our society.

The most important financial concept to keep in mind here is the contrast between cash flow and equity.

The modern American "socialist" only wants to divert cash flow.  This is completely different from every accurate description of a socialism.  Diverting cash flow is something that the United States does more than a lot of other countries.  It’s called taxes.  True socialism is far different, and almost no one truly wants it.

What Socialism Actually Is

One of the most commonly cited examples of a successful use of socialism is Sweden.  With subsidized housing, free healthcare, and free education, it seems like a socialist paradise.

However, Sweden is even further from true socialism than the United States.

True socialism doesn’t just distribute cash flow.  It distributes equity.  This is a small difference, but it’s extremely important.

Sweden is a capitalist country.  More capitalist than The States.  The private citizens have more freedom to control the means of production (freedom of equity, in the context of private firms), than citizens in the United States.

This dedication to capitalism has created a wealth in Sweden that, in turn, allows for higher taxes and, by extension, more free stuff.  Of course, the free stuff has a bunch of problems, but that’s for another article.

True socialism involves either seizing equity in private firms (for example, the nationalization of oil companies in Venezuela), or creating a state-owned entity from the ground-up (for example, the media in North Korea).  The idea behind true socialism is that equity is owned by everyone and controlled by a democratic process.  Ideally, this would happen without a state or government - but of course, that's not possible without an eventual conversion to Marxism.  Believe me, Marxism will be covered in-depth in future articles.

Throughout history, true socialism has been tried many times on a national scale.   It has never, ever, EVER worked.

Language conveys ideas.  When words become manipulated by time or people, so do the ideas behind them.  

Left-siders:  Choose your language carefully!  You’re not a socialist, and you shouldn’t want to be.

Right-siders:  Relax!  The Democrats aren’t going to force you to be a coal miner.

Let’s all take a deep breath...