Sunday, June 05, 2005


Thoughts on socialism

My own belief is that coercion and violence are inherent in socialism to a much higher degree than they are in any other economic system. Here are my reasons why I hold this belief.

For any country to function people must work. To manufacture anything, to grow anything work is an absolute necessity. There are really only 3 ways that people will work:

1. Voluntarily because of their personal beliefs.
2. By being paid.
3. By coercion.

Socialism in theory tries to get people to do the necessary work to run the country voluntarily out of the goodness of their hearts. In the real world very few people work like this, they prefer to do nothing and hope that others will take up the slack. In a socialist economy the profit motive is utterly disparaged, so this tends to leave coercion as being the only means of operating the country. The more systematically socialist a country becomes the more coercive it needs to be to merely survive. When the coercion is eased the country collapses. The Stasi, the Securitate, the Great Leap Forward, the Cultural Revolution, show trials and the like are not just examples of the bad outworking of a good idea, they are inherent in the idea itself.

Capitalism permits the profit motive, so it does not need the same level of state coercion to function. Capitalism's main problem is that its economic system provides no check on individual greed and selfishness.

This is not, however, as big a flaw as it first appears. Why, after all, should we be looking to economics to provide us with morality at all? Starting from a utopian vision of the economy and then working back to derive rules for our behaviour from that is bound to fail because the economy is just too big and difficult for us to comprehend.

To use a different analogy, everyone wants a theft free society. If we imagine how such a society would operate we would realise that it would have no need for locks. If we derived our societal rules from this utopian vision we could easily conclude that locks and anti-theft devices should be banned, after all they would be unnecessary in our theft free utopia. In our efforts to create a theft free society we would create a theives' paradise.

The true corrective to the forces of unrestrained capitalism is not to be found in any economic doctrine. Instead it is to be found in our Judaeo-Christian moral tradition. The restrictions that our moral senses have placed on individual behaviour are of considerably greater worth and value that the ever changing prescriptions of economists.


We need a Northern Irish Thatcher...

The UK as a whole spends about 40% of its GDP in the public sector. In the worst pre-Thatcher days of the mid 1970s the UK figure for public spending was roughly 50% of GDP. Northern Ireland on the other hand spends 67% of its GDP in the public sector. We are extremely subsidised. In the mid 1970s the British economy was on a downward spiral, due in part to the high levels of public spending.

Northern Ireland public spending fortunately does not come from Northern Ireland raised taxes, but is given by large scale transfers from the rest of the UK. We are one of the most highly subsidised regions on the planet. While some government subsidies may be necessary and they are occasionally even beneficial, the level of subsidy that our economy receives is so utterely enormous that we must devise ways of reducing it.

The people of Northern Ireland are too addicted to a socialist dependency mentality that thinks that the rest of the world owes us a living. It doesn't. We need to learn to stand on our own two feet. This can only happen through massive reductions in public sector spending.
Remember that only private sector business actually generates any wealth in the economy. Public sector employment spends wealth rather than generating it. This is why business is in many ways more crucial than anything else because wealth creation is necessary for a healthy economy. Redistributing wealth means nothing if there is no wealth to redistribute, as the USSR discovered to its cost in the late 1980s.

We need to encourage people into the private sector. Most people in NI work either directly or indirectly for the public sector. People will not be encouraged to go into the private sector when they can get a much better paid and vastly more secure job in the public sector. So long as the large public sector spending continues at its current level we are locked in a cycle of dependency on a continuing British government subsidy, which may or may not continue. Under this system we will never become self-supporting.

The only way that I can see to break out of this cycle is to reduce public spending drastically. We can see from the Thatcher years that this will be an unpopular policy, but it is still a necessary one. The only constant thing in life is change, we need a more flexible and slimmed down set of fiscal policies to be able to cope with change rather than closing our eyes, putting our fingers in our ears and hoping that the subsidies will come over from Westminster for ever.

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