Socialism

Socialism is not the great evil that many Christians claim, but it is not the solution either, because it relies on the fickle and corrupt power of the state. We have had socialism in my country for more than fifty years, and although many people have been helped, in some areas is now worse than ever.

The gospel includes the solution, including giving away unrighteous wealth and deacons training the poor how to live as described in Caring for the Poor. Caring for the Poor. Unfortunately, the church has never really taken this role seriously. Until it does, socialism is a more compassionate option than raw capitalism, but it is not God’s solution.

Weak and Strong

People are different. Some are weak and others are strong. In a free-market economy, some people make it and others don’t. The people that made it cannot say to the people who didn’t, “I made it, so you have too”. People are different.

Socialism (8) American Corporatism

Claiming that the economic system that operates in the United States is superior to socialism is misleading. Most American corporatism’s big businesses collude with the government to protect their patch. They cluster in Washington DC, looking for subsidies and bailouts, and press for laws that protect them from real competition. American corporatism is socialism for big business.

Claims that corporate socialism is superior to ordinary socialism will not work. Under corporatism, government money and power flow to the benefit of big corporates and then on to their wealthy owners. The classic example is the government generosity to the big businesses that caused the Global Financial Crisis in 2008. Those who criticise socialism, but remain silent about follows wealth, money and power to the benefit of big business are being dishonest.

Neither corporatism or socialism are ideal economic systems. Both have serious flaws. The ideal economic system is God’s Economy under the Government of God.

Socialism (7) My Experience

On a holiday-weekend last July, I developed severe abdominal pain. I have never had a urinary tract infection, so I wondered if that was the cause. I went to the after-hours health clinic and was examined by a doctor. They did some blood tests, and he prescribed an antibiotic, because the physical examination indicated that could have a bladder infection. Over the next couple of days, the pain went away.

On the following Tuesday, I got a phone call from my own GP (general practitioner doctor) who had received the results of my blood test electronically. He said that the tests indicated something more serious and that he wanted me to have a CT Scan to check it out. Strangely enough, by then, the pain had gone. The same afternoon, I received a phone call from Pacific Radiology with an appointment for a scan later that day.

When the scan was complete, the radiographer suggested that I needed to go back to my GP that night. I phoned his reception and she said that he would see me after his last appointment at 5pm. The radiographer said that he would have the electronic results of my scan would be available for the doctor to see by then.

I called to see my GP on the way home from the radiology service and he explained that my scan showed that I had severe diverticulitis, which is normal for someone my age, but that diverticular on the lower part of the bowel was seriously infected. He said that I needed to be admitted to hospital to receive Intravenous Antibiotics. He told me I should go home and pack a bag and go up to Christchurch Public Hospital and I would be admitted.

I was admitted to hospital at 8pm, was examined by a doctor and received my first antibiotics within about half an hour. This all happened within a half a day of my doctor receiving the results of my blood tests.

I stayed in the hospital for five nights, receiving IV antibiotics three times a day. The hospital staff were great. The meals were basic but good. The nurses were kind and thoughtful. The surgical registrar who visited every morning was very skilled at explaining the nature of my problem and what they were doing to treat it. She said that they would organise a colonoscopy in a few months’ time, when the inflammation in my colon had cleared. After five days my blood test had returned within the normal limit, so I was sent home with oral antibiotics for another week. Six months have passed now and I have no more problems with my bowel.

Two other things happened. The original scan identified two other incidental unrelated problems that needed to be checked out. The first incidental item was a narrowing of the duct coming out of my left kidney. A month later, I received an appointment for a CT Urogram to check this. After injecting a marker, they electronically monitored the impact on my kidney while my bladder was emptying. A week later I saw a urologist. He explained that my case had been discussed at a meeting of specialists. They had reviewed my results and decided that because I was asymptomatic, and an intervention to correct the problem is quite risky, they would take no further action, but continue to monitor how it developed.

The second incidental problem that was identified on the original scan was a cyst on my pancreas. Within about six weeks, I had a received an endoscopic ultrasound scan of my pancreas in which they put a tube down my throat and took a picture and biopsy of the cyst. When I met with a general surgeon a few weeks later, he explained that because the cyst was small and benign, they would prefer not to intervene, but would wait and check it again in six month’s time. His decision had been discussed with other specialists. He explained that it grew larger or became malignant, then it would be relatively easy to remove by surgical intervention.

The outcome was reassuring. Overall, I am really healthy for someone of my age. I am praying for the conditions to be healed.

My main point for recording this here is that I received this medical care from a socialistic health system. The only cost was a payment of $NZ50 for my original consultation at the after-hours medical centre. Everything else was covered by the health system. The urgent medical condition was treated urgently. I received a scan and was put on antibiotics on the day the problem was diagnosed. I received specialised scans and follow-up appointments for the two incidental issues within a couple of months of diagnosis.

All the decisions about my treatment were made by clinicians after discussion with other specialists, not by insurance administrators or blind application of rules. Some of the specialists that looked at my results engaged in ground-breaking research with collaborators in the UK and US.
I realise that the cost of this service was paid for out of my taxes. However, my taxes over the years, and have not been much greater than would have been paid if I lived in the United States.

So, people who say that socialist health care does not work simply do not know what they are talking about. Morality is a different issue.

Socialism (6) Effective Medical System

New Zealand has a socialist health care system. Most health care is funded by the government, ie it is a single-payer system. District Health Boards receive grants from the government and are required to provide health care for the people living in their district. The government specifies the quality and quantity of the service that they must provide.

People are free to have medical insurance if they choose. Medical insurance is mostly taken out by people who are quite well off. The benefit is that they can get elective surgery, for knee and hip replacements quicker. However, most acute surgery is provided by the public system. Treatment of chronic sickness cancer is mostly provided by the public system, even for people with medical insurance. The difference is that people with medical insurance can sometimes get new extremely expensive cancer drugs that are not yet available through the public system.

A government entity called Pharmac purchases all prescription drugs and medicines. The big pharmaceutical companies hate it, but being the single buyer for the entire nations enables it to get better purchase prices by pitting them against each other. This limits brand choice a little, but the lower costs mostly outweigh this disadvantage.

My impression is that the NZ healthcare systems functions much better than the United States insurance-based system, yet it costs much less. New Zealand spends about 10 percent of GDP on health care, whereas the United States spends nearly 20 percent (of a much larger GDP). We don’t have people going bankrupt because their medical insurance has introduced unexpected charges. We do not have people who cannot get treatment, because the insurance has failed. Life expectancy is increasing and infant morbidity is declining, unlike the Unites States where the opposite is happening.

The US health care is not free market. It is an uneasy collusion between big insurance, big pharma, big health care providers and the government. This is corporatism, and it does not serve people well.

People who say that socialist health care does now work do not know what they are talking back. Socialist health care does not always work, if the government undermines it by providing insufficient funds, as has happened with the UK system or if the managers of the system are foolish or corrupt, but that happens in insurance-based systems too.

Many American tourists visiting New Zealand who find themselves needing emergency surgery receive it without hesitation. If they are having health insurance, a claim is made on their insurance. Those without health insurance cover still receive surgery. They are given an account when they leave hospital, which they are supposed to pay. Unfortunately, many don’t. Once they leave the country, they just forget about paying for the service they have received. The legal costs for pursuing them are too great, so their debts eventually have to be written off. I find it ironic that people who believe in free markets, who can afford international travel, are quite happy to rip off a system that they think is inferior.

Saying that socialism never works is a bad argument, because there are plenty of situation and examples where it works well. If Christians wish to argue against socialism, they need to do it on moral grounds on pragmatic grounds. Arguments that one system works better than the other will usually fail.

Socialism (5) Management

If sufficient resources are available, and there is clear demand for the output, the difference between a successful project and a failure is the quality of the managers. This is true whether the project is free-market or socialist. Some socialist projects attract really good managers. That is the situation with the health care system in my city. It was true of the government department of works that built the hydro-electric schemes in the South Island.

Many projects end up with poor management teams. That happens for many socialist projects, but it happens just as often for free-market projects. Identifying good managers is not easy and the owners of a business often get it wrong. Fonterra is a large dairy cooperative owned by New Zealand dairy farmers that processes much of the milk produced in New Zealand. In the last few years, it has been managed really badly and had to write off several large investments, because the CEO was not up to the task, despite being recruited from overseas with free-market experience and paid a huge salary.

Another example is the large Australian construction company, which has messed up the construction of a new hospital in Christchurch.

Good management is not as common as we would hope, and bad management is ubiquitous. That happens regardless of whether the project is free market or socialist.

Socialism (4) Democratic or Autocratic

Another common confusion is that socialism always leads to authoritarian government. Many Christian believe that socialism is the first step toward a Nazi government.

Socialism is a system of economic organisation in which the government plays a very significant role. A socialist economic system can exist in a country with a democratic government. However, it can also exist under an authoritarian government. The Soviet Union is an example of latter. However, there are plenty of governments that operate a socialist economic system under a democratic government without falling into authoritarianism.

New Zealand has a very strong system of democracy. I would say it operates more effectively than the system that Americans are so proud of. Socialist policies have been implemented in New Zealand for many years, without any threat to democracy. Because democracy has delivered what people want, some socialist policies have actually strengthened democracy.

On the other hand, many of the governments in nations where the US has established its brand of capitalism turned out to be autocratic and dangerous. Chile is an example.

Socialism does not inevitably lead to an authoritarian/totalitarian government.

Socialism (3) Success and Failure

I commonly see the following comment on blogs and Facebook, as if it solves everything.

Socialism always fails.

Unfortunately, this statement proves nothing.

Socialism often does fail. That is not surprising. Humans are fallen, fallible beings, living in a world where a spiritual battle is going on. So much of what we do fails.

But there have been enough socialistic successes to prove the comment above is wrong. NASA’s project to put a man on the moon was a successful socialist project. The US efforts to build ships, tanks and trucks during World War 2 was another socialist project that succeeded.
New Zealand has always been a fairly socialist country. I have observed many failures, but there are sufficient successes to prevent me from saying that socialism always fails. The socialistic health system that operates in the city where I live is an example of successful socialistic activity. I will write about it in a future post.

Another example is the socialist hydroelectricity system that was built in New Zealand during the last half of the last century. The Department of Works built a network of power stations on the large rivers in the South Island. This department was run by some clever engineers, who built an efficient system that still provides a significant share of our nation’s electricity needs. They built on international standard rowing course on the side.

The same applies to free-market activities. There have been plenty of free-market failures. The United States banking system failed numerous times throughout its history. It failed hugely during the 2008 GFC, and would have collapsed, were it not for an enormous socialistic rescue by the government.

Some churches, maybe under a Calvinistic influence, think that markets work all things for good. That is not true. Only God can do that.
Socialism fails most frequently due to misallocation of resources. People with political power are frequently tempted to build white elephant projects or vanity projects that fail. Free markets activities also fail due to misallocation of resources. If all the nations entrepreneurs are dull, they often sit on their property and use their capital unwisely, causing their nation to suffer.

Comparing companies does not prove much, because these days all countries operate under a mixture of socialism and free markets. There is far more socialism in the United States than most Christians realise. Americans appear happy enough with a wide range of socialist institutions in the United States, including public schools, defence forces, public parks, social security, public radio, unemployment insurance, public universities, Medicare, public libraries and space exploration.

And Corporatism is stronger in the United States than anywhere in the world, so the United States is not a free-market economy. In terms of numbers, there are a large number of self-employed people and small companies that have to operate on a free-market basis. But in terms of GDP, the US economy is dominated by a relatively few large corporates, which collude with the government to protect their privilege and position. Many of the large corporates get a big chunk of their revenue from the government, especially military equipment manufacturers.

The only argument in favour of free markets over socialism is the moral one. If John works hard for his income, other people do not have the right to take some of it from him and spend it. If Janet has started a business, and operates morally and legally, then other people do not have the right to take her profits for themselves. Nothing is changed, if it is governments that are taking the income or profit. It is still stealing something that belongs to someone else.

We should stick to the moral argument when arguing against socialism.

Of course, the morally superior option does not always give the best financial rewards. Sometimes people who do good suffer. Plenty of people operate a business that would benefit people, but due to the vagaries of the free market, they have failed. However, it is better to do what is right, than to become rich.

Socialism (2) Necessary

A nation that does not acknowledge Jesus as Lord and is not based on Kingdom Communities will need some form of socialism to prevent it becoming harsh and cruel. In any free market system, some people will fail and suffer. Unless there is a compassionate Christian community to sustain them, they will drop through the cracks. A government-based safety net will be necessary.

Being Christians is not enough. Here is what is happening in the United States. The drastic increase in inequality of wealth in America is described by Deutsche Bank, in their January 2018 study “U.S. Income and Wealth Inequality”.

The U.S. is comparable to Chile, Israel, Mexico, Portugal, and Turkey, as being at the top of the nations studied, in “inequality in household disposable income.”

A record high 30% of households have no wealth in the United States (p6).

All-time high median net worth in constant dollars was 2007, at $119,000, declined to $67,000 in 2010, and rose to $78,000 by 2016 (p.7).

U.S.: The top 0.1% in the US owns as many assets as the bottom 90% (p.8).

U.S. has higher income-inequality than any other OECD nation (p.10).

Income-inequality is rising faster in U.S. than any other OECD nation (p.11).

The socialist option is always second best, and rarely truly effective, but it is better than this ugly alternative. The best option is always Kingdom Communities based on loving one another and serving Jesus as Lord.

Socialism (1) Choice

Many opinion polls are reporting that young Americans would welcome socialism. This disturbs many Christians, but I am not surprised by this preference.

Young Americans are not rejecting free market-capitalism. They are waking up that the government-supported corporatism that dominates the US economy is not nice, although it is often called free-market capitalism. They are rejecting a system that they don’t like, not a system that they don’t know. The US economic system is so far from textbook free-market capitalism that they learned in their civics classes that they do not know what it would look like if it existed.

Young people look at their existing economic system, and they do not like it. They dislike the way that rich people are getting much richer and they hate the way that the weak are being impoverished and realise something is wrong. They have been taught that the American economic system is free-market capitalism, even though it is not, so they reject it and start looking for something better.

The American system is actually a combination of corporatism and oligarchy, but because they have been told it is free-market capitalism, they naturally oppose the latter. They have also been taught that the only alternative to free-market capitalism is socialism, so it is natural that they prefer socialism, because it cannot be worse than the dreadful system they have now.

Young Americans don’t know what free-market capitalism looks like, because they have not seen it. All they know is they do not like the dreadful system that has emerged in its place in America. They want something better, but they assume that the only option is socialism.

I am not surprised that young Americans feel an inclination towards socialism, because the system that is currently called a free-market system is an ugly misrepresentation of it. It is just an expression of dislike for the existing system. They want something much better, and socialism is the only option that offers that.

Capitalism and Socialism

Capitalism is system that allows people to pool their resources to be more productive and earn more income. People are free to use that income as they choose. They can choose to give it to others.

Socialism is system of distribution, in which political power is used to compulsorily take the stuff that one group of people have produced and give to others. That does not sound like the gospel to me.