The millennial generation seems to have missed some of their history lessons. Fewer than half of them recognize that democracy is the economic system that powers the greatness of America. The rest of them either do not understand democracy or think that socialism is wonderful. Are the millenniums too dumb to learn? Have their instructors failed to teach them correct information? Is there a sinister reason for this lack of knowledge?
A basic understanding of economic systems is necessary in order to appreciate why the free market system, often known as democracy, is the most successful system in the world. There are three strategies or systems for economies: traditional, command, and market.
A traditional economy is founded around personal relationships, such as family, friends, and neighbors, and is the type of economy that most hunting and gathering societies used. This type of system was being used by the natives when the first Europeans reached the shores of America and can be used for generations in a closed society. This system works best in stable economic situations.
The command economy is based on some authority that gives commands as to what is produced and consumed by the society. A command economy can accomplish more than an individual or a family can do, such as building roads, bridges, and schools, because it requisitions the funds and labor from the members of the society. This type of economy is the type that was used in the Soviet Union under Stalin and China under Mao. One strength of this type of system is its ability to adjust to changing social and economic situations. One weakness is that it greatly limits freedom of choice in the marketplace.
Democracy is known as the free market system because it depends on the free exchange of goods and services. It also relies on the laws of supply and demand to determine what is produced and in what quantities. This system allows people to choose what they want to produce and what they want to consume, but they have to accept the consequences of those choices. They are successful if they make the right choice, but they pay the price if they choose the wrong one. The freedoms enjoyed in the market system allow people do develop honesty and integrity or to become greedy or corrupt. Another problem that comes as a result of the freedoms in this system is the unequal distribution of wealth. Those who work the hardest, are the brightest, or who are simply “in the right place at the right time” make money, and then they use their money to make more money. It seems that the people who have money are also the people who have power in the society. Thus, the gap between the “haves” and the “have nots” grows wider.
The dishonesty, corruption, and unequal distribution of wealth and power are what bothered Karl Marx (1818-1883). He was born into an upper middle-class family and had the opportunity to study at the university. He studied about the economic problems in the world and how industrialization revolutionized the production of food and goods. He also saw the unequal distribution of wealth and power. He developed a different economic plan known as Marxism or “socialism.”
Socialism is a system where all the property is publicly owned by the people or the state. Instead of production and consumption being determined by the laws of supply and demand, they are determined by someone in authority. The profits all go to the collective. Socialism is similar to the command economy, but Marx developed it specifically in response to the weaknesses of democracy. Socialism’s main strength is that there is a collective effort to solve a collective problem, and its main weakness is that there is motivation to work hard if one cannot improve their life by doing so.
With this basic lesson on the three strategies involved in economics, one can readily understand why Walter Williams, an economist, is questioning why the millennial generation is choosing socialism. In an article titled “Our Ignorance of Socialism Is Dangerous” Williams
reviews a survey that finds 51 percent of American millennials prefer socialism, while only 42 percent of them prefer capitalism.
Williams share some awful statistics from nations that fell into the control of socialism. He quotes Professor Rudolph Rummel’s research that says that 262 million people lost their lives to their own governments during the 20th century. This figure includes 45 million Chinese people during the reign of communist Mao Zedong, 62 million people at the hands of Josef Stalin in the Soviet Union, and 20 million people under the direction of Adolf Hitler. It is almost comical to hear millennials compare George W. Bush or Donald Trump to Hitler or Stalin! Pointing out that “America’s communists, socialists, and Marxists have little knowledge of socialist history,” Williams blames the K-12 teachers and college professors for the failure.
When the tragedies of socialist regimes – such as those in Venezuela, the USSR, China, Cuba, and many others – are pointed out to America’s leftists, they hold up Sweden as their socialist role model. But they are absolutely wrong about Sweden.
Johan Norberg points this out in his documentary “Sweden: Lessons for America?” Americans might be surprised to learn that Sweden’s experiment with socialism was a relatively brief flirtation, lasting about 20 years and ending in disillusionment and reform.
Reason magazine reports: Sweden began rolling back government in the early 1990s, recapturing the entrepreneurial spirit that made it a wealthy country to begin with. High taxation and a generous array of government benefits are still around. But now it’s also a nation of school vouchers, free trade, open immigration, light business regulation, and no minimum wage laws.
The fact that Sweden now uses school vouchers, free trade, light business regulation, and no minimum wage laws says that Swedes realized that socialism was not all that it was claimed to be. They were smart enough to come to this realization in only twenty years. When they did, they adopted many ways from the free market system and regained their wealth.
Williams ends his article with some good questions: “Are Americans who admire the world’s most brutal regimes miseducated, or stupid? Or do they have some kind of devious agenda?” This writer believes that America, if smart, will figure out the answers to these questions before the free market system is lost.