I am tired of telling people why redistributive or “socialist” economic policies are wrong. But let me start from the beginning once more and come at it from a different angle—or, really, three different angles.
Socialism is bad because it is condescending, inefficient, and immoral.
Webster defines “socialism” as:
…any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.
The idea under socialism is that everyone pays taxes and the government, in an equitable way, provides its citizens with the things that they need. While it appeals to many people, socialism is wrong.
As famed French economist Frederic Bastiat put it:
The [socialist] state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.
1. Socialism is bad because it is condescending.
When people work and produce they have the means to buy what they wish—monetary payments for work are merely a means of exchange for people to trade goods and services. If you provide a good or service that few people value, you are paid less. Conversely, people who provide goods and services that are highly valued are paid more. The more that one produces the more they are naturally entitled to the production of others.
In this process, as people spend their earnings, they automatically buy what they want the most first. How does socialism fit in? Let’s look at it.
Pretend someone wishes to spend their earnings on food, clothing, shelter, music, and alcohol—from highest order to lowest. Under a socialist regime, this may be impossible. After taxes, the individual may only be able to afford food, clothing, and shelter—while being provided with government transportation, health-care, and a public park—all of which they may or may not care about.
Simply put, socialism takes away the liberty to decide how you wish to spend your money; it presupposes you are not smart enough to decide what you need. Your income was yours to spend as you wish. Now it is the government’s, and it will provide for you what it thinks you need.
This fact is really common sense (thanks to economist Ludwig von Mises). With a central government owning all (or any) means of production and distribution there can be no competition, profits, losses, market prices—or market, for that matter.
However, profits, losses, and prices serve to guide scarce resources to their most highly valued means. The fact that socialism is inefficient compared to free-market capitalism can be seen as the answer to an empirical question. Clearly, history has answered this question. Nations such as the former USSR, Vietnam, Cuba, and North Korea are great examples (these nations were not communist—communism, by its own definition, has never completely existed).
3. Socialism is bad because it is immoral.
Others can make this point better than I can. Frederic Bastiat said it best (cited from here and here):
It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder. … But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.
Here, Bastiat points out how the law becomes inconsistent. If done in a group an act can be lawful; if done by an individual, it is suddenly a crime. In the end, this amounts to nothing more than “tyranny of the majority” and compulsory servitude.
Economist Walter Williams takes it a step further:
Can a moral case be made for taking the rightful property of one American and giving it to another to whom it does not belong? I think not. That’s why socialism is evil. It uses evil means (coercion) to achieve what are seen as good ends (helping people). We might also note that an act that is inherently evil does not become moral simply because there’s a majority consensus.
I wish I had said that.