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How Have Heavy Taxation and Regulation Shaped Modern Socialism?

¿Cómo los grandes impuestos y regulaciones han dado forma al socialismo moderno?

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[Leer en español]

To dominate a nation without resistance it suffices with suppressing its economic freedoms. Once the state manages the wealth of its citizens, there is no opposition when it tries to crush you.

Socialism is not only when the tyrant of the moment expropriates companies supposedly in the name of the “common good”, nor when the members of the governing party shout that we must take from the rich to “give to the poor.” Socialism today is any effort by the state to intervene in private activity with the purpose of manipulating and managing the resources of a nation at will to “redistribute” the wealth.

Like any deadly virus, socialism is always in constant evolution to achieve its goals: to enter the host body, destroy its defenses and kill the carrier. Marxist ideology has been changing since its initial conception to survive the advance of time, and in that sense, despite the antibodies generated against the lies emanating from its promoters, the virus has managed to recompose itself again and again to mutate and become increasingly efficient in its destructive purpose.

The historical postulates of Marx, that in which the state should seize the means of production to achieve the utopian perfect and egalitarian society have been twisted, since the constant failures have demanded innovation to be able to stand on its feet. Today, traditional Marxism doesn’t promote state’s monopoly of means of production, but it does something more effective: it adheres to the economic principles of fascism and national socialism according to which the means of production must serve the state, it would no longer be necessary to own them.

The reason behind this change of perspective can be explained by reading a couple of history books that are not contaminated or manipulated by leftist academia; the famines unleashed in the communist paradises and the hundreds of millions of dead produced by the collectivist states were the drivers of the new premises; with high tributes and high regulations, governments have the power to continue controlling the economic power of nations, to tie down individual liberties, and to have more efficient companies than those controlled exclusively by politicians; for all this it is necessary to explain how the new socialism acts and what its ends are.

Marxists call for fighting capitalism and providing free education by expropriating property (Image: Flickr)

Modern interventionist socialism

Nowadays when you try to talk to an average American Bernie Sanders supporter, or even to any uninformed Democrat about the attempts by the latest actors to destroy freedoms in the United States, it is common to find the typical empty and uninformed argument of the supposed Nordic socialism, the one that millions of Americans drool over today, and immediately when those of us who have escaped from true socialist systems show the Venezuela or Cuba card we are met with three prefabricated answers installed in their ignorant brains:

  1. That is actually communism.
  2. That isn’t true socialism.
  3. The problem is corruption and authoritarianism, not socialism.

Now, it is true, the Nordic countries have flirted for years with social democratic models, however, every time they have considerably increased the presence of the state and taxes, their economic indexes plummet, then they free the economy again, and after recovering, they stupidly perform the same procedure.

However, despite the high taxation the Nordic economies are the freest in the world, and they are also the nations with the greatest ease of doing business, that is, there are few regulations and state intervention, for all this despite the range of social programs still have an efficient productive apparatus. In short, if you don’t believe me that the Nordic countries are not socialist, perhaps you can believe the Prime Minister of Denmark who said it so emphatically.

Another aspect to take into account with respect to the Nordic economies is that their nations are made up of approximately 5 million inhabitants, immigration is almost nonexistent, their population is mostly local, and education, purchasing power, as well as productive power itself is quite balanced. In that sense, it is not the same to apply a governmental public health program for 5 million inhabitants, than for more than 300 million in a nation that also receives hundreds of thousands of migrants of different origins, cultures and educational levels every year. To be more emphatic about this, the state of Florida alone has four times more population than all of Norway or Denmark.

Socialist Senator Bernie Sanders (Image: Flickr)

Taxes and regulations as a mechanism of social control

Let us return to the matter at hand, taxes and regulations. It is still mistakenly believed in many parts of the world that socialism is only when the tyrant of the day shouts “expropriate”, and nothing could be more wrong than this. In fact, nowadays there are few collectivist systems that openly advocate expropriations and even nationalizations. Generally, nowadays leftist governments use the two elements mentioned above to subjugate corporate power to the designs of the State.

Why? Well, it is no secret to anyone that public enterprises are a complete disaster, when there are no incentives to improve the production or effectiveness of a work group, and losses do not concern anyone, results take a back seat, thus the move towards not owning the means of production, but dominating them.

Beyond the famous exprópiese of Hugo Chávez in Venezuela and the absolute inefficiency with which PDVSA -the Venezuelan state-owned oil company- was managed, other major causes of the economic catastrophe in the country were the regulations imposed on the private sector, and little is said about this inside and outside the country.

The American socialist party supports Venezuela’s tyranny, which has expelled more than five million people from its territory, and caused the worst economic crisis in its history (Image: Flickr)

For example, Chavismo modified the labor laws and created a legal system that made it impossible for the employer to fire an employee regardless of the faults he/she had committed. The whole legal framework was set up to “defend” the worker and left the employer in a vulnerable situation since he/she had no way of demanding greater productivity from the employee, could not fire him/her, and could not change any employees who were not performing; this, in addition to expropriations and corruption, was another blow to the economy and productivity in the country.

The unions in Venezuela also generated great damage to the productive apparatus, protected by the State, it became mandatory in the construction industry to have a percentage of unionized employees in every construction site, otherwise it was not possible to work. These unionized employees could not be fired either, otherwise the work would not progress; then investors and employers were forced to keep these people on the construction sites, paying them high salaries and often without working, while also paying the other workers who were the ones who really took the project forward. Under these conditions, executing efficient and profitable projects is mission impossible.

Statism always harms private activity and destroys individual rights

What we’ve just mentioned about Venezuela are just a couple of concrete examples of thousands of things that the socialists did “right” in order to destroy and dominate the country. But this is not only a Venezuelan phenomenon, nowadays many countries in the world such as Argentina, Spain and even the United States have implemented taxes and regulations that make economic growth impossible and promote the absolute dependence of citizens in favor of the state.

Tax rates in Argentina are designed to starve the population, as absurd and unrealistic as it may seem, for every 100 dollars an Argentine businessman earns he must pay 106 to the state, this destroys the private productive apparatus, discourages investment, and also wipes out all possible sources of employment. What alternative is left for Argentines then? Simple: just as in Venezuela, to depend on state handouts.

The new Democratic administration in the United States wants to dramatically increase taxes in the country, while at the same time it is printing tons of money as if it were monopoly bills. This has generated an inflationary wave in the country that has not been seen since the economic crisis of 2008; with this, American citizens are losing the value of their money and savings, but what is more worrisome is that a large majority applauds it, because evidently they have no understanding of what is happening.

President Biden’s shutdown of the Pipeline XL pipeline caused the loss of more than 11,000 jobs, and in turn also generated large economic losses; these measures along with other economic variables have caused the price of gasoline to skyrocket in the country.

U.S. President Joe Biden (Image: EFE)

We could really spend hours, days, months, years writing and talking about how state intervention in the economy hinders productivity, and how statist – socialist – measures are designed, not to help the population, but on the contrary, to harm it and submit it to the absolute control of the hierarchs and bureaucrats on duty, however I consider that the point has been made clear.

It is important to internalize and understand the evolution of socialism in order to fight against its totalitarian promoters in a more efficient way; the “redistribution of wealth” or the hindering of private productivity has many variants, not only expropriations deteriorate the economy, but also high taxes, regulations, and the enormous bureaucracy damage nations enormously with the purpose of subjugating citizens.

When a Sanders fan comes to talk to you about the goodness of the Nordic system, reply that you agree that the American economy should move that way, which means eliminating excessive government regulations, improving the ease of doing business, lowering corporate taxes – for they are currently higher in the United States – and ultimately embracing the tenets of the free market.

Modern socialism has many masks, forms, lies and pre-established narratives to penetrate nations and destroy them, I invite you to inform yourself to fight it efficiently and preserve not only our individual freedoms, but also our lives.

Emmanuel Rincón is a lawyer, writer, novelist and essayist. He has won several international literary awards. He is Editor-at-large at El American // Emmanuel Rincón es abogado, escritor, novelista y ensayista. Ganador de diversos premios literarios internacionales. Es editor-at-large en El American

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