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Marc Roby: We are continuing our break from studying theology to look at some current topics of great importance from a Christian perspective. We finished our background on Marxism and neo-Marxist ideologies last time. Dr. Spencer, what do you want to examine today?

Dr. Spencer: I want to take a look at capitalism and, along the way, contrast it with socialism. But in order to explain why we, as Christians, should be concerned about this topic at all, and since the economic system of a country is a part of the form of government, I first want to remember a couple of things we have said about governments and the relationship Christians have to them.

In 1 Timothy 2:1-4 the apostle Paul wrote that “I urge, then, first of all, that requests, prayers, intercession and thanksgiving be made for everyone—for kings and all those in authority, that we may live peaceful and quiet lives in all godliness and holiness. This is good, and pleases God our Savior, who wants all men to be saved and to come to a knowledge of the truth.”[1]

Marc Roby: That passage does a good job of illustrating what we have said before is the main purpose for which God ordained earthly governments; namely, to safeguard personal liberty. In other words, our ability to, as Paul wrote, “live peaceful and quiet lives in all godliness and holiness.”

Dr. Spencer: And the purpose for our being able to do that is to shine the light of God’s gospel into this dark world so that people will be saved. As Paul wrote, God “wants all men to be saved and to come to a knowledge of the truth.” And that happens as a result of the witness of Christians. When we began this special series, in Session 161, I noted that God gives us our purpose, place and priorities in life. Our purpose is to glorify God.

Marc Roby: Which mirrors God’s own purpose. We have noted a number of times that his purpose in creation is the manifestation of his own glory.

Dr. Spencer: And we glorify God by doing the work he has given us to do; first and foremost, the work of sharing the gospel. In doing that we must know our place. Which means, first, that we are creatures and, second, that we are under authority.

Marc Roby: And we have noted several times that there are three God-given spheres of authority: the family, the church and the state.

Dr. Spencer: And we, as Christians, have different roles and responsibilities in each of these spheres, and our roles change over the course of our lifetime as well. And in all of our roles, God sets the priorities. We are his adopted children. We read in Philippians 3:20 that “our citizenship is in heaven. And we eagerly await a Savior from there, the Lord Jesus Christ”. We are, first and foremost, citizens of heaven. God alone is the ultimate King and we owe him our absolute unquestioning obedience. All earthly authorities are delegated authorities and have limited spheres of authority and limited scope of authority.

And one of the things that falls within the scope of authority of civil government is the economy. So with all that review in mind, I want to discuss capitalism. As Christians, we must evaluate any economic system by how well it supports God’s priorities for his creatures.

Marc Roby: Very well. Perhaps it would be good to start with a clear definition of what we mean by capitalism. According to Webster’s dictionary, capitalism is “an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.”[2]

Dr. Spencer: That’s a good definition. And we see right away that it is a system that is, at the very least, consistent with Christian principles. It affirms two important biblical principles. First, the right to private property. The definition speaks about private ownership of property, either individually or collectively through a corporation.

Marc Roby: And, as we noted before, the Bible consistently assumes and confirms the right to personal property. For example, by giving us the eighth commandment, “You shall not steal.”[3]

Dr. Spencer: Right. We aren’t to steal the property of others, but as Christians we are also required to remember that God owns everything, we are really just stewards. We will talk about the implications of that in our next session. Secondly, the definition affirms human responsibility in making private decisions about what to invest in, about what to buy, and we could add that making free decisions about what we as individuals do for a living is also included. The right to make personal choices for which we can be justly held accountable is, again, a fundamental biblical principle.

Marc Roby: Yes, I recall that we quoted Deuteronomy 30:19 before, where, after going over God’s commands and his blessings for obedience and curses for disobedience, Moses told the people, “I have set before you life and death, blessings and curses. Now choose life, so that you and your children may live”.

Dr. Spencer: Yes, we quoted that verse in Session 165. If we disobey, we can be subject to punishment at times in any of the three spheres of authority, the home, church or state. But ultimately, as Paul tells us in 2 Corinthians 5:10, “we must all appear before the judgment seat of Christ, that each one may receive what is due him for the things done while in the body, whether good or bad.” There are many sins for which none of these three earthly spheres of authority can hold us accountable. But God is able to judge “the thoughts and attitudes of the heart” as we learn from Hebrews 4:12. He can hold us accountable for example, for unkind and selfish thoughts and attitudes, for ungratefulness, greed and jealousy.

Marc Roby: All of which are things earthly authorities can only infer from outward words and actions.

Dr. Spencer: That’s true. Now remember that Marx viewed the possession of personal property as the fundamental problem plaguing mankind. But that is simply wrong. Property itself isn’t the problem, sin is the problem. It is the fact that human beings are sometimes greedy, jealous, covetous and cruel, to name just a few sins. People are willing to steal and kill to gain the property of others. People are willing to take advantage of others in all sorts of ways. They cheat with dishonest scales for example.

Marc Roby: Which is something the Bible speaks against in many places. For example, we read in Deuteronomy 25:15 “You must have accurate and honest weights and measures, so that you may live long in the land the LORD your God is giving you.”

Dr. Spencer: Yes. God will not be pleased if a merchant has one weight to use when buying something and another weight to use when selling.

Marc Roby: Like the proverbial butcher’s thumb on the scale!

Dr. Spencer: That’s true. So, the problem with capitalism is sin, not the right to own private property. And as we saw in Session 167, sin shows up in socialist systems as well. In that case it often shows up in bribery and other types of corruption, which people use to get ahead.

Marc Roby: Well, people are always tempted to do what is best for them individually.

Dr. Spencer: They are. And if you build a system that only works when everyone is completely selfless and dedicated to working their hardest for the benefit of others, even if they get nothing in return, you are building a system that is bound to fail. You are ignoring human sin. Humans do sometimes act in selfless and generous ways, but they will not always do so.

One of the reasons that capitalism has been so successful is the incentives that it establishes. When a business or individual does what is best for the business, that is also in general what is best for the overall economy, which means it is best for the prosperity of society as a whole. Let me give just one short example.

Marc Roby: Please do.

Dr. Spencer: This is taken from Thomas Sowell’s excellent book Basic Economics. He tells of a delegation of American farmers who visited the old Soviet Union. He wrote, “They were appalled at the way various agricultural produce was shipped, carelessly packed and with spoiled fruit or vegetables left to spread the spoilage to other fruits and vegetables … American farmers had no experience with such gross carelessness and waste, which would have caused somebody to lose much money needlessly in the United States, and perhaps go bankrupt.”[4]

Marc Roby: It sounds like they needed someone to monitor what was going on.

Dr. Spencer: Well, Sowell considers that and points out that monitoring is not free, it wastes resources. In addition, the monitors would have incentive to accept bribes, so you introduce more corruption. In the end, having the farmer in charge of packing his own produce makes a much better system. His own self interest is to see that his fruit handled properly in order to maximize his own profit, but this also maximizes his output and the efficiency of the whole system, so everyone benefits.

Marc Roby: There is always the possibility of the farming going out of business though.

Dr. Spencer: Oh, that’s true. The prospect of failure, either partial loss or completely going out of business, is an important part of a capitalist system. If you have the freedom to succeed, you also necessarily have the freedom to fail. And, as a result, there will be people who need help. Their failure may or may not have been their own fault. But a capitalist society will always need some safety net.

But socialism can’t prevent crop failures due to floods, droughts, storms or whatever either. The real question we need to consider is, “Which system provides the greatest overall economic output and provides individuals with incentives to do what is right?” And the answer is that capitalism wins hands down. At each step along the line from production to purchase, the individual business has an incentive to do the job as well as possible and as efficiently as possible. The net result is much higher overall output and employment.

Marc Roby: That’s a valid point. And that explains why, for example, Communist China abandoned true socialism many years ago.

Dr. Spencer: And Sowell uses that example, among others. Mao died in 1976 and China moved away from socialism soon after that. Sowell notes that “the subsequent freeing up of prices in the marketplace led to an astonishing economic growth rate of 9 percent per year between 1978 and 1995.”[5] And he also notes that “In China, the number of people living on a dollar a day or less fell from 374 million – one third of the country’s population in 1990 – to 128 million by 2004, now just 10 percent of a growing population.”[6]

Marc Roby: That is astonishing.

Dr. Spencer: It truly is. And he gives many more examples in his book of countries like India, Ghana and the Ivory Coast, where creating or doing away with free markets have produced dramatic results; always in favor of free markets.

In addition to the lack of proper incentives, there is another very serious problem with socialism, and one of the many reasons it simply doesn’t work; we don’t all want the same things. We each buy different kinds of food, clothing, cars, houses and so on.

Marc Roby: I can’t imagine anything that could be more obvious. All you have to do is look around to see the vast differences in what people want to buy.

Dr. Spencer: And yet, in a socialist economy, choice is often done away with in the interests of efficiency. There may be only one kind of bread available. Or only one kind of TV, or car, or whatever. Because the state decides what is needed, not a free market. And history has taught us very clearly that the state often gets it wrong. In fact, given the complexity of a large economy in terms of the sheer number of items produced and all of the resources that go into producing them, it is simply beyond reason to think that central planning can work. Allowing supply and demand and free-market pricing to work solves the problem without central planning. Sowell again uses the old Soviet Union as an example and quotes from some Soviet economists to make his point. But I’ll let interested listeners check the reference for that.[7]

And there is a second aspect of this same problem. Not only can central planners not determine how much of each commodity will be needed, but central planning of the economy removes individual choice in lifestyle. We don’t all value the same things. Let me illustrate that with one of my former graduate students.

Marc Roby: Alright. Please do.

Dr. Spencer: I had many graduate students who were extremely driven and competitive. They were very driven to do research that would be highly regarded and valued, finish their PhD degrees and then go to work for companies that were well known for their high-pressure, long hours, but concomitant high pay. These students liked the technical challenge, the prestige and, yes, being able to drive a really nice car and so on. There is nothing inherently wrong with that. But I had others who made different choices. One in particular, who was very good and could certainly have taken the route I just described had he wanted to, chose not to go on for a PhD, but instead to graduate with a Masters degree and go to work in a manufacturing firm where he worked 8 to 5 Monday through Friday and even punched a time clock. His job was not nearly as technically demanding, he wasn’t going to a bunch of publish papers and become well known, and it didn’t pay nearly as much. But he didn’t want to work 60- to 70-hour work weeks. He wanted to have his evenings and weekends free to pursue other activities and to live in a place he thought was nice to live. His choice was just as valid as the others, but different. That kind of freedom is not available in socialist countries with planned economies.

Marc Roby: Yes, I see your point. But what about all of the evils people often associate with capitalism? For example, the income gap. Some people make a great deal more money than others do, and some of them make way more money than any one person could possibly need.

Dr. Spencer: Well, that is certainly true. And before I address this issue directly, let me note that the Bible often speaks about the poor and commands us to be generous and to help those who are in need. God will hold the rich accountable for how they use their wealth. They may think the money is theirs because they worked hard to develop their knowledge and skills and then worked hard to use them and earn the money, but the reality is that God gave them their skills and opportunities. Now, it’s commendable if they did work hard and made good use of them, but ultimately, their riches come from God.

Marc Roby: As one of many examples we could quote, Proverbs 21:13 says that “If a man shuts his ears to the cry of the poor, he too will cry out and not be answered.”

Dr. Spencer: Yes, that’s a good verse. And, as you said, there are many more.

There is no doubt that we should help those who are poor. But there is also an issue of personal responsibility here. In Paul’s second letter to the church in Thessalonica he wrote, in 2 Thessalonians 3:10, that “when we were with you, we gave you this rule: ‘If a man will not work, he shall not eat.’” The poor should be helped locally, not by a distant federal government who has no idea why they are poor. They should be helped with education, medical care, food, shelter and other needs, but always with an eye to getting them to be self-sufficient. And capitalism has proven itself time and time again to be the very best system for creating an economy where a person can improve him or herself by working hard.

Marc Roby: But not everyone has the ability or opportunity to be a PhD student in Electrical Engineering. So, going back to your example, not everyone has the choice your students had.

Dr. Spencer: Well, that is absolutely true. And not every one of those PhD students had the ability or opportunity to start his own company and become exceptionally wealthy either. But we have to ask, “Is there something inherently wrong with that?” I never had the ability to play professional sports or to be a professional musician either, so is it wrong that others do have that ability and make much more money than I ever did? And is there somebody who’s at fault?

There is a fundamental issue here. Call it ingratitude, or jealousy, or whatever, but if I am not happy with my lot in life, even after allowing for the ways in which I may have failed to properly make use of the abilities and opportunities I have been given, then I am, ultimately, unhappy with God. God decides what gifts and opportunities to give to each individual person. In Acts 17:26 the apostle Paul was speaking to the Athenians and said that God “made every nation of men, that they should inhabit the whole earth; and he determined the times set for them and the exact places where they should live.”

Marc Roby: I see your point. We can’t all be the best no matter what system we have. People are not all equal in ability or how hard they work.

Dr. Spencer: That’s right, capitalism is not the problem. In fact, as we noted in Session 164, and as Sowell makes very clear in the book I quoted from earlier, capitalism has been the most successful economic system in history for bringing prosperity and freedom to the greatest number of people.

But free markets are competitive places and that competition is precisely the mechanism that makes them work so well. If I have a company, I can’t sell my products or services for more than people are willing to pay. And if I look for a job, I can’t sell my services as an employee for more than my abilities and experience will justify. An employer won’t stay in business very long if he pays me more than my labor is worth, nor will he stay in business very long if pays people too little, he won’t be able to find employees. In both cases, the selling of a product and the selling of labor, a free market says that the price will be set by supply and demand.

Marc Roby: In other words, any time there is a supply of some commodity that is larger than the demand, the price will drop. And, conversely, whenever the supply is less than the demand, that price will go up.

Dr. Spencer: Exactly. And that feedback loop works extremely well to regulate the markets; both for goods and for labor. Whenever governments try to control these things the net result is virtually always a poorer economy, which means that everyone suffers.

Marc Roby: Of course, in this kind of competitive system, there will always be winners and losers.

Dr. Spencer: But when someone “wins” in capitalism we all get a better product or service for a lower price or in some other way society as a whole gains.

Marc Roby: Yes, that’s an important point.

Dr. Spencer: And, in addition, the “losers” aren’t punished or required to stay down. And those who start at the bottom don’t have to stay there. If, for example, I am only capable of menial labor, then there are a lot of people who can do the same work, so the supply is large and for any given demand the wages I can get will be lower. But I always have the opportunity to work hard, learn, gain experience and move up to a higher-paying job. It requires that I have the right attitude and depends on my effort. The employer is not my enemy. He isn’t trying to oppress me and get rich off of my labor, he’s also governed by supply and demand. If he pays too much, then his products will be too expensive, he won’t sell many of them, and he will go out of business and I will lose my job altogether. Sowell points out that the real minimum wage is always zero.

Marc Roby: That’s an interesting and obviously true way to look at it. But, of course, there have been situations where employers have taken advantage of employees.

Dr. Spencer: Well, of course there have. People are sinners. And so some degree of government regulation is not necessarily wrong; but it must be done very carefully and sparingly.

Marc Roby: Now I want to get back to the income gap. Isn’t that a real problem?

Dr. Spencer: Well, let me give a three-part answer to that. First, in Session 164 I gave an example of how a company can do very well and the owner, employees and customers all benefit even though the owner may benefit proportionally more. There is nothing fundamentally wrong with that and, in fact, it provides an incentive for people to pursue excellence, from which we all benefit. And their motivation doesn’t have to be pure greed, it can simply be wanting to do something very well and the money is then, as a friend of mine once put it, like the grade you receive in a class. The more you make, the better you did. Now that may not be the most noble motivation in the world, but it isn’t inherently sinful either.

Marc Roby: Alright, what is the second part of your answer?

Dr. Spencer: When people talk about the income gap, the implication always is that the poor are worse off than they used to be. But in Session 166 I gave a number of statistics to show that simply isn’t the case. There are still truly poor people in this country and in other free-market nations as well of course, but capitalism has done far more to alleviate real poverty than any other economic system in history. You have to be careful how you define poverty. In general, the “poor” today are better off in many ways than the middle class was 60 years ago, and they are certainly better off than the average person was 150 years ago.

Marc Roby: Very well. What is the third part to your answer?

Dr. Spencer: That it is easy to tell a lie using statistics. All you have to do is use the wrong statistic. Sowell points this out in his book. He notes that “it is a widely publicized fact that census data show the percentage of the national income going to those in the bottom 20 percent bracket has been declining over the years, while the percentage going to those in the top 20 percent has been increasing”[8]. But you cannot conclude from that data that the rich are getting richer and the poor are getting poorer!

Marc Roby: Now, why is that conclusion invalid?

Dr. Spencer: Because people don’t stay in the same brackets. A young person may start his career in the lower 20% bracket, but then move up during his career. And a person may be in a high bracket during the peak of his career and then come down. What you need to look at is what happens to specific individuals over time, and when you do that you find the exact opposite result.

Sowell writes, “A University of Michigan study found that, among working Americans who were in the bottom 20 percent in income in 1975, approximately 95 percent had risen out of that bracket by 1991 … The largest absolute amount of increase in income between 1975 and 1991 was among those people who were initially in the bottom [20 percent] in 1975 and the least absolute increase in income was among those who were initially in the top [20 percent] in 1975.”[9]

Marc Roby: That is exactly the opposite of what you usually hear.

Dr. Spencer: And it isn’t just one study. The IRS also did a study and found similar results as did another study in Canada. Sowell also noted that “Among those Americans who were in the bottom 20 percent in 1975, 98 percent had higher real incomes in 1991 – and two-thirds had higher real incomes in 1991 than the average American had back in 1975”[10]. The bottom line is that while poverty is still a real problem, the statistics you hear about it are often wrong and capitalism is not the fundamental cause of the problem.

So, to conclude for today, capitalism is the best economic system ever developed for allowing human freedom and for providing prosperity to the largest number of people. It has built-in incentives that encourage people to do what is good, rather than what is corrupt. The problems we see with it are caused by human sin, not capitalism.

Marc Roby: That has been very enlightening. I look forward to continuing our discussion about societal issues next time, for now, let me remind our listeners that they can email their questions and comments to info@whatdoesthewordsay.org. We would love to hear from you.

[1] All scripture quotations, unless otherwise indicated, are taken from the Holy Bible, New International Version®, NIV® (1984 version). Copyright © 1973, 1978, 1984, 2011 by Biblica, Inc.™ Used by permission of Zondervan. All rights reserved worldwide. www.zondervan.com The “NIV” and “New International Version” are trademarks registered in the United States Patent and Trademark Office by Biblica, Inc.™.

[2] Webster’s New Collegiate Dictionary, G. & C. Merriam Comp., 1979

[3] Exodus 20:15

[4] Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy, 5th Ed., Basic Books, 2015, pg. 400

[5] Ibid, pg. 25

[6] Ibid, pg. 6

[7] Ibid, pp 16-17

[8] Ibid, pg. 204

[9] Ibid, pg. 205

[10] Ibid, pg. 204

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Marc Roby: We are continuing our break from studying theology to look at some current topics of great importance from a Christian perspective. In our previous session we noted that history has proven Marx’s theory to be wrong; capitalism did not cause societies to fail and then convert to socialism. We also looked at the idea of voluntary socialism, where a group of people get together to form a socialist community, and we discovered that these also have all failed. We ended by noting that socialist countries have not done any better than voluntary communities. Dr. Spencer, how do you want to pursue this topic further today?

Dr. Spencer: Well, we need a little more background about the failure of Marx’s theory in order to understand how people tried to implement socialism at the level of a country, rather than a small voluntary community. The background we need is to note that by the end of the 1800’s, which was about 50 years after the publication of Marx’s ideas, it was already evident even to one of his key disciples that the theory was wrong.

Marc Roby: Who was that disciple?

Dr. Spencer: Eduard Bernstein. To be accurate, he was more a disciple of Engels than Marx, but that is a distinction without a difference. In fact, to show how close he was it is useful to note that he was one of only four people, including Engels, who scattered Marx’s ashes at sea as Marx had specified in his will.[1]

In any event, Bernstein, who was German, was living in exile in England and what he observed happening in England in the latter half of the nineteenth century did not agree with Marx’s theory. So he began to publish a series of articles in 1896 entitled “Problems of Socialism”.[2]

Marc Roby: I’m sure that didn’t endear him to Engels or other followers of Marx.

Dr. Spencer: No, it didn’t. Bernstein pointed out that trade unions had made a large difference and had, along with other means, made capitalism more tolerable. Quoting from Joshua Muravchik’s outstanding book Heaven on Earth, “What Bernstein was suggesting was that it was possible to fight for the well-being of workers … without envisioning a new society.”[3]

Marc Roby: And that suggestion certainly made him an enemy of Engels and many other Marxists who believed in violent revolution as we noted in our last session.

Dr. Spencer: Exactly. But Bernstein was reacting intelligently to the evidence he saw in England. To quote Muravchik again, “More than fifty years had passed since Marx and Engels formulated their sociological forecast that the rich would become fewer, the poor poorer and the middle classes negligible. Bernstein observed that something nearly opposite had occurred: the rich were more numerous, as were the middle classes, and the poor were better off.”[4]

Marc Roby: That is certainly an inconvenient truth for Marxists to deal with. Facts can be really annoying when they don’t agree with your theory. And capitalism has produced great progress for the poor in this country as well, even during my lifetime.

Dr. Spencer: Yes, it has. Independent of the constant protestations of the progressives that our system only works for the very wealthy, the poor in this country are way better off than they were 50 years ago, and immensely better off than they were 100 or 150 years ago. The comparison is often relative to the steadily increasing standard of living, rather than to any meaningful standard of real poverty. In fact, one study performed in 2011 and based on government surveys, shows that “As a rule of thumb, poor households [as defined by the Census Bureau] tend to obtain modern conveniences [that is, things like computers, cell phones, big-screen TV’s and so on] about a dozen years after the middle class.”[5]

Marc Roby: I suspect that most people think of poor as meaning that a person has a hard time providing food, clothing, transportation, housing and health care for their family, not big-screen TV’s.

Dr. Spencer: I’m quite sure you’re right about that. And 150 years ago it was certainly true that poor people were concerned about the bare necessities of life, not luxuries. But the way the Census Bureau defines poverty, it ignores all government subsidies and focuses purely on income, not on living conditions. And yet, in 2014 it was reported that the average poor family spent $2.40 for every $1.00 of reported income, so the subsidies are very significant[6]. As a result, the same 2011 study I noted before found that “Some 70 percent of poor households report that during the course of the past year, they were able to meet ‘all essential expenses,’ including mortgage, rent, utility bills, and important medical care.”[7]

Marc Roby: In other words, 70 percent of the supposedly poor households were not truly poor in the sense most people understand that term.

Dr. Spencer: That’s a fair statement. And if you read the report, even the other 30% are mostly not wanting for the basic necessities either.  Most of the “poor,” for example, live in reasonable dwellings that are in reasonable condition and the average “poor” family in America has considerably more living space than the average family in Europe – not the average poor family in Europe, the average family.[8]

Marc Roby: That’s eye opening.

Dr. Spencer: It is. But we must, of course, say that this is not universally true. No one is claiming that we don’t have people in this country living in terrible conditions. But that is not true of most of those who are called poor by the Census Bureau, which is, of course, the number always used by politicians and left-leaning news sources pushing when they are pushing for more social programs. According to the Census Bureau, the percentage of people in our country who are poor has fluctuated between about 12% and 15% of the population since around 1970. But the number of people struggling to put food on the table is a small fraction of those, over 92% of those listed as poor said that they never had trouble getting enough food in the past year.[9] That means that just over 1% of the population, which is still too many, had at least occasional trouble putting enough food on the table. But the bottom line is that capitalism has been extremely successful in raising the standard of living for almost all Americans.

Marc Roby: And for many other people as well we might add.

Dr. Spencer: That’s very true, but now I want to get back to Marx and in light of the fact that capitalism has been immensely successful in helping the poor, as noted by Bernstein and the data we just quickly reviewed, I want to look at what has happened when Marx’s ideas were implemented at the level of a country, rather than a small voluntary community.

The truth is that, because, as Bernstein noted, the problems with capitalism can be fixed without a complete change in society, the only way socialism can be implemented on a grand scale is either by agreement, or by revolution.

Marc Roby: And, of course, socialism, or at least partial socialism if I can use that phrase, has been tried voluntarily at the country level. For example, in England after world war two.

Dr. Spencer: Yes, the English experiment is very important. It wasn’t full-blown socialism, but they did nationalize a number of industries and services and it was, by all accounts, a massive failure. The system was in place from 1945, when Clement Attlee became Prime Minister, until 1979 when Margaret Thatcher became Prime Minister. Thatcher said that “No theory of government was ever given a fairer test or a more prolonged experiment in a democratic country than democratic socialism received in Britain. Far from reversing the … decline of Britain … it accelerated it.”[10]

I don’t think it is worth our while to discuss the British experiment further, Muravchik discusses it in his book for those who are interested. The important thing is that it failed badly enough that the country voluntarily went back to capitalism.

Marc Roby: Alright, but there are other examples of democratic socialism that are frequently cited, most commonly Sweden.

Dr. Spencer: Yes, Sweden is often cited, but there are two problems with that example. First, Sweden is not really socialist, their economy is market-based capitalism. And, I might add, has a much lower corporate tax rate, 20.6%, than we had in the United States prior to 2017 when President Trump lowered the rate from 35% to 21%.[11]

Sweden is a welfare state. They have huge taxes on everyone, including the middle class and lower income, and then they offer a wide range of generous government-funded social programs. But their taxes on middle- and lower-income people are much higher than here in the US. For example, there is a value-added tax of 25% on most products in Sweden, that’s like having a 25% national sales tax! In order to compare taxes, we must remember that gross-domestic-product, or GDP, is a measure of a countries total production. The overall tax-to-GDP ratio in Sweden is 43.9%, compared to 24.3% in the United States.[12] And the other Scandinavian countries are all similar.

Marc Roby: That’s a lot of tax. You noted two problems with using Sweden as an example, what is the other one?

Dr. Spencer: That they are demographically very different than the United States. There is a much greater degree of homogeneity in Sweden and in the other Scandinavian countries than we have.  Gert Tinggaard, a professor of political science at Denmark’s Aarhus University explained that “The Nordic welfare state works due to trust. You have to trust that people work and pay taxes when they are able to do so. The second condition is that you also have to trust the politicians. You get a bang for your buck.”[13] Now I don’t think that kind of trust exists in this country, and I don’t see it happening anytime soon. And even Sweden is having a lot of trouble with it now since they have more immigrants than before.

Therefore, this kind of welfare state simply won’t work here. Not to mention the fact that the politicians in this country who promote the Scandinavian model ignore the incredible price tag. They pretend it can be paid by just taxing the rich, which is, first, simply not possible and, secondly, I would argue, not moral either. But we’ll get to that in a later podcast.

Marc Roby: Well, I certainly agree that the trust this professor spoke of does not exist in this country. There is too much diversity and, at this point in time, too much animosity.

Dr. Spencer: And that animosity, as we will also see in a later podcast, is made dramatically worse by neo-Marxist ideologies. But let’s get back to socialist countries. For true socialism, in other words, not including the welfare state, or partial solutions like England tried, the only way to achieve it is by violent revolution.

Marc Roby: Now, why do you say that?

Dr. Spencer: Because there will always to be a sizable number of people who are not willing to voluntarily give up all of their property to the government. And to have true socialism, the government must own everything.

Marc Roby: I certainly can’t imagine that happening here in the United States without a massive use of force.

Dr. Spencer: Nor can I. I don’t think it can happen anywhere peacefully. That is why it has been brought about by force in the countries that have tried some form of full-blown socialism. Muravchik goes through a number of examples in his book. For today, I just want to discuss the Union of Soviet Socialist Republics, or USSR, or often just called the Soviet Union. It was the first truly Socialist country.

Marc Roby: Which, of course, no longer exists.

Dr. Spencer: And the reason it doesn’t is that socialism was a massive failure. The history is long and sordid and we aren’t going to go through it in any detail, that would take way too long. But let’s take a quick look at it and let’s begin by looking at a man named Vladimir Ilyich Ulyanov, better known as Lenin. He was born to a reasonably well-to-do Russian family in 1870. When he was 17, his beloved older brother, Alexander, was hanged for his involvement in a plot to kill the tsar.

Alexander had been strongly influenced by a novel called What is to be Done? And after his death, Lenin also read the novel and said that it “completely transformed my outlook.”[14]

Marc Roby: Now that’s a strong statement. What was this novel about?

Dr. Spencer: Well, the author of the novel had been influenced by Owen, whose utopian experiment we discussed in our session last week, and the novel presented a utopian vision. Let me quote from Muravchik, he says that “The heroes of What Is to Be Done? Were a class of ‘New Men.’ This was an unmistakable euphemism for ‘revolutionaries,’ coined, as were many code words of the time, to dodge the censor. The New Men are ‘courageous, unwavering, unyielding’ and utterly devoted to the ‘common cause.’ Their destiny is to rescue society.”[15]

Marc Roby: You can see how such a grand idea – to rescue society – might capture the imagination of a young man, especially one whose older brother had been hanged for attempting to murder the leader of the government.

Dr. Spencer: It is understandable to a degree, but I don’t want to get into speculating about motives. Let’s just say that many of the things Lenin went on to do are completely indefensible in terms of any reasonable code of moral conduct. His revolution was far different from the American revolution.  But let me get back to the story.

Marc Roby: OK. Please do.

Dr. Spencer: Lenin got involved in some insurrectionist activities and was jailed and then exiled to southern Siberia. The conditions of his exile were not harsh however, he was even allowed to live with his girlfriend, although the authorities made them get married, which they were opposed to, but they agreed so they could be together.

During his exile, Lenin became aware of the work of Bernstein and the effect it was having on some Russian socialists who were turning away from the idea of revolution and were thinking that the workers could peacefully push for better wages and conditions.[16]

Marc Roby: There goes that fickle proletariat again. As we saw with Marx last time, they simply don’t always appreciate what these revolutionaries want to do for them.

Dr. Spencer: In fact, Lenin said that “not a single Marxist has understood Marx!”[17] He was speaking about Marx’s single-minded devotion to revolution. Muravchik wrote, “For neither Lenin nor Marx was the revolution the answer to the question: what can be done for the proletariat? Rather the proletariat was the answer to the question: what can be done for the revolution?”[18]

Marc Roby: That’s an interesting observation. And it certainly tempts one to speculate about the motives of these men, and others like them.

Dr. Spencer: But we will resist that temptation and move on. This idea that the proletariat is prone to be satisfied with reforms that make their lives comfortable is a consistent theme. Lenin wrote, “The history of all countries shows that the working class, exclusively by its own effort, is able to develop only trade union consciousness.”[19] Which he clearly meant in a derogatory way. Lenin went on to say, thinking of Marx and Engels, that “The theory of socialism … grew out of the philosophic, historical, and economic theories elaborated by educated representatives of the propertied classes, by intellectuals.”[20]

Marc Roby: OK, Lenin obviously held the proletariat in utter contempt. It is hypocritical for someone who claimed to want a classless society to so obviously think that a higher class of people are needed to tell the working class what they need.

Dr. Spencer: It is hypocritical, and it is also common among Marxists. They often think they are superior to the people they claim to want to help. And they are almost never working-class people themselves.

Marc Roby: Yes, an interesting observation, but one that I have found to be true in my reading as well.

Dr. Spencer: And it’s because it is almost universally true. Marx, for example, never supported himself or his family. He mooched off of his parents and, when they stopped providing for him, he was supported by friends, mostly Engels. But, getting back to Lenin, who also never worked for a living in a normal sense, the revolution he masterminded in Russia is notable for its absolute brutality and criminality.

Marc Roby: Can you give us some examples?

Dr. Spencer: Absolutely. Starting around 1906 Lenin’s organization used armed robbery, sometimes including murder, to fund their operations. Stalin was good at this type of criminal activity, which is how he first came to Lenin’s attention.[21]

The second example I would give is how Lenin seized power in the first place. World War I broke out in 1914 and Lenin welcomed it because he thought, correctly as it turns out, that it would help his cause. Then during the war, in 1917, there was a revolution in Russia, which led to the abdication of Tsar Nicholas II. This led to the creation of a provisional government, which then subsequently fell to the Bolsheviks, which was Lenin’s party, in the October revolution in 1917. There was then a period of civil war prior to the formation of the USSR in 1922.

Marc Roby: It is certainly a very messy period in Russian history.

Dr. Spencer: Messy in more ways than one. Lenin was absolutely ruthless. He killed virtually anyone who stood in his way. He self-consciously modeled his efforts after the reign of terror in the French Revolution.[22] He used force of arms to overrule election results[23] and he violently oppressed even the peasants he claimed to want to help. The ones who were at all successful and who didn’t want to voluntarily give up all of their possessions he called kulaks. They were treated mercilessly as enemies of the state both under Lenin and, later, under Stalin. They were murdered and their property taken.

Muravchick notes that “Russia’s autocracy had long been notorious in Europe for its cruelty, but no tsar had ever shed blood so freely. Then again, no tsar ever had such lofty aims. ‘How could they … act otherwise,’ asked former Yugoslav Communist leader Milovan Djilas of the Bolsheviks, ‘when they ha[d] been named by … history to establish the Kingdom of Heaven in this sinful world?’”[24]

Marc Roby: That’s incredible. In other words, the Bolsheviks, led by Lenin, actually believed that the end justified the means.

Dr. Spencer: That is absolutely true. And notice the end, this is nothing less than their view of heaven on earth. This was Marx’s vision as well, although he didn’t use that language. Remember from Session 163 that he thought the final state of society was communism, where each person would contribute according to his ability and consume only according to his needs.

Marc Roby: If we’re not careful in our thinking, we could imagine that this is what the Bible teaches.

Dr. Spencer: Yes, but the problem is that a true state of bliss requires a change in human nature. It requires the eradication of sin. And only God can do that. In Isaiah 45:22 God tells us, “Turn to me and be saved, all you ends of the earth; for I am God, and there is no other.” [25] The failure of socialism is, fundamentally, that it is trying to play God. It is using the state to try and create, by force, a situation that men have decided is best. I’d rather wait for heaven.

Marc Roby: And so would I. And I very much look forward to continuing this discussion, but we are out of time for today, so I’d like to remind our listeners that they can email their questions and comments to info@whatdoesthewordsay.org. We would love to hear from you.

[1] J. Muravchik, Heaven on Earth, the Rise, Fall, and Afterlife of Socialism, Encounter Books, 2019, pg. 95

[2] Ibid, pg. 102

[3] Ibid

[4] Ibid, pg. 106

[5] Robert Rector and Rachel Sheffield, Air Conditioning, Cable TV, and an Xbox: What Is Poverty in the United States Today?, Backgrounder 2575, The Heritage Foundation, July 18, 2011, see footnote 8 for a list of the surveys (available at: http://thf_media.s3.amazonaws.com/2011/pdf/bg2575.pdf)

[6] Robert Rector and Rachel Sheffield, The War on Poverty after 50 Years, Backgrounder 2955, The Heritage Foundation, September 15, 2014, (available at: http://thf_media.s3.amazonaws.com/2014/pdf/BG2955.pdf)

[7] Air Conditioning, Cable TV, and an Xbox, op. cit.

[8] Ibid

[9] Ibid

[10] Muravchik, op. cit., pg. 317

[11] For Sweden see https://home.kpmg/xx/en/home/insights/2018/06/european-tax-sweden-country-profile.html, for the US see https://www.taxpolicycenter.org/briefing-book/how-does-corporate-income-tax-work

[12] See https://taxfoundation.org/bernie-sanders-scandinavian-countries-taxes/

[13] Alister Doyle and Simon Johnson, Not in my backyard? Mainstream Scandinavia warily eyes record immigration, Reuters, February 15, 2016, available at https://uk.reuters.com/article/us-europe-migrants-nordics-insight/not-in-my-backyard-mainstream-scandinavia-warily-eyes-record-immigration-idUKKCN0VP0IX

[14] Muravchik, op. cit., pg. 112

[15] Ibid

[16] Ibid, pg. 108

[17] Ibid, pg. 115

[18] Ibid

[19] Ibid, pg. 117

[20] Ibid

[21] Ibid, pg. 129

[22] Ibid, pg. 139

[23] Ibid, pg. 137

[24] Ibid, pg. 136

[25] All scripture quotations, unless otherwise indicated, are taken from the Holy Bible, New International Version®, NIV® (1984 version). Copyright © 1973, 1978, 1984, 2011 by Biblica, Inc.™ Used by permission of Zondervan. All rights reserved worldwide. www.zondervan.com The “NIV” and “New International Version” are trademarks registered in the United States Patent and Trademark Office by Biblica, Inc.™.

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