The Sinister Roots of Socialism

Almost every manner of government intervention or policy has an official justification. This ideological cover serves to to pacify the population and defend what would otherwise be considered outright predation by the ruling class. Once an ideological cover is formulated, it is spread in every possible manner – the mainstream media, the court academics, the history textbooks. Entire episodes of history can be re-written or simply omitted to create a narrative that would cause people to support a policy that actually harms them.

Take for example the social safety net. The story goes roughly like this: as societies underwent the industrial revolution and capitalism kicked in, millions of vulnerable workers were left to fend for themselves. While they could work, everything went decently well, but if anything happened, nobody would take care of them. It wasn’t until the benevolent politicians came in with their charitable efforts, that the welfare State was established, and people were finally taken care of. There was a horrific case of market failure, but the government intervened and saved the day!

The actual story is very different. Since at least the 17th century in England, people banded together into so-called Friendly Societies. These may have been organized on any number of different lines – commonly professional or ethnic. The people within them would contribute when they could, and when they couldn’t they would be taken care of. Pretty much everything was covered, from maternity leave and accident insurance, to pensions and health insurance.

In fact, these free market, voluntary societies were so successful that they often beat out their commercial insurance competitors. As it always is in crony capitalism, the incumbent firms (friendly societies) lobbied the government to create new barriers to entry and fixed costs. The purpose was to cement the advantage of the incumbent firms, and make things more difficult for new upstarts in the market.

The legislation backfired, and “commercial insurance companies gradually absorbed the friendlies, leaving consumers with fewer choices.”

That you’ve almost certainly never heard of these Friendly Societies, and that such an important aspect of the economy as successful voluntary social security is almost entirely redacted from the history textbooks, is quite telling of just how far-reaching socialism’s disinformation spreads.

After government legislation destroyed the free market social safety net, a few decades later the government came in with its own social security schemes, in this case organized exactly the way a Ponzi scheme works. The history of friendly societies was redacted from history books, and the initial narrative above was formed.

But there is one nagging question that remains: if the government is filled with sociopathic politicians who don’t care about people, and if they’re willing to destroy voluntary social security, why would they later introduce and create the welfare state? Was it really to take care of people?

There are a number of reasons, the most obvious of which is that politicians like to have their pet projects. They like to have budgets, and a workforce. The more taxpayer money they wield, the greater their ability to bribe and buy more votes from the people they “help”.

But there is another reason, and here we need to delve a little into the history of socialism.

The Conservative Roots of Socialism

Just like with the social security narrative, contrary to what you’ve likely been told, socialism did not originate as a revolutionary idea to salvage the proletariat from the clutches of evil capitalists.

First, notice that the word “revolution” actually means the rotation of an object around a point. As a result, far from yielding some new society, the purpose of a “revolution” is to return to a former state of affairs. Even the word re-form, means to recreate something that existed before.

It is no accident that everywhere a socialistic revolution has taken place, the result was a dictatorial regime (Stalin, Hitler, Mao, etc.) that enslaved the entire population. Created was a very primitive and early form of government, one preceding even monarchy, and so the economic capabilities of such a society were greatly reduced, the people lived in great poverty, starvation was widespread, and the death toll was unprecedented.

As George Watson writes in The Lost Literature of Socialism, socialism actually began as a reactionary conservative and regressive attitude towards capitalism and progress.

Bertolt Brecht, a socialist, remarked that “Communism is not radical; Capitalism is radical.”

Sounds strange? Let me elaborate. Prior to the advent of capitalism, private property, and some semblance of freedom, the world was ruled largely by landed aristocracies, while power and wealth was transmitted through blood and inheritance.

Under such a system, it was exceedingly simple for the ruling class to preserve their power over many centuries, and keep the rest of the population oppressed, either in outright slavery and serfdom, or through a legal system that prevented any kind of social mobility.

During the agricultural revolution, entrepreneurs created new labor savings devices which allowed for an ever decreasing population of farmers to feed people who no longer had to work the land, and the result was the creation of vast unemployment. The unemployed went to cities in search for work, and this influx of labor temporarily reduced their wage sufficiently for the industrial revolution to take hold. The cities could only grow when the farms could feed them.

These events were deeply disconcerting to the landed aristocracy, because on the one hand they could no longer keep their serfs tied to the land, and on the other, these new “capitalists” were coming out of nowhere and earning vast sums of money. Soon, some of these capitalist upstarts would amass enough wealth to rival the landed aristocracy. They dismantled the old Status Quo, and for this they were labeled “evil”.

The landed aristocracy attempted all manner of legislation, such as the Corn Laws in the United Kingdom, but there was no turning back the tide. While previously politics had proceeded largely along Machiavellian lines, and few really bothered to create ideological justification for their actions, now it became necessary to use “Socialism”.

In a sinister twist, the landed aristocracy, through their intellectual whores, persuaded vast numbers of workers that their newfound freedom was in fact oppression, and that the best way to improve their lot in life was to turn against the very capitalists who were busy uprooting society and creating untold social mobility, and make life very difficult for those evil entrepreneurs.

In an utter perversion of the truth, and the ongoing battle to muddle and destroy morality, voluntarily working for a wage was called slavery.

The True Purpose of the Welfare State

Back to social security. If you were to look at a graph of the poverty rate in the United States, it is clear as day that from 1959 and onwards (when the data set begins), the poverty rate steadily falls by about 1% per year. At this rate, it should have been eradicated by about 1980.

Credit: Nima at economicsjunkie

To reverse this dangerous trend, to justify their own existence, and to ensure that there is always a supply of poor people who will reliably vote for their oppressors in government, from who soldiers can be obtained, and who will commit crimes to scare everyone else into accepting a growing police State, the U.S. government began to expand the welfare state. From its humble beginnings of just $23 billion in 1959, all the way to its modern-day leviathan-like budget of $2,353 billion in 2012, the government expanded its welfare programs by more than 100 fold.

The growth of the welfare state.
The growth of the welfare state

Remember, when the government administers some kind of welfare program, about 2/3 of it is lost in overhead and administrative costs. i.e. the bureaucrats and politicians pass on only a third to the people they claim to help, keeping the rest for themselves.

It is a great myth that the purpose of wealth redistribution is to hurt the rich and help the poor. The purpose is to hurt the poor, help the rich, and most importantly enable the government to pocket an enormous amount along the way.

This mass theft was coupled with a number of new legislative efforts called “The Great Society”.

The result? The poverty rate stops decreasing, rises a few times, but never again falls below 11%.

Income inequality (measured by the Gini coefficient), after declining precipitously from the mid 1930’s, also begins its steady rise in the late 1960’s, pretty much in step with the rise of the welfare state. Why would the government intervene during a downward trend, both in poverty and income inequality? Why would both rise dramatically as the welfare state expands?

gini coefficient US

The reason the welfare state exists is the same reason legislation that favors corporations exist. Wake up people – sociopathic politicians aren’t here to help you. How could they? Sociopaths have no empathy.

When you subsidize poverty, you get more of it, and it becomes more entrenched.

When you bail out big business and create a legal framework that limits the liability of large corporations, you entrench the wealthy and powerful.

Nowadays, it’s the large corporations who are threatened by nimble competitors, and not the landed aristocracy, but these are just details. It’s still the rich using the government to oppress and brainwash everyone else.

One of the primary purposes of the government is to keep the poor from moving up, and to keep the rich from moving down. That’s why incumbent firms lobby for more barriers to entry. That’s why sociopaths pretend they want to help people. The failure of socialism to improve the life of the poor is not an accident. It is designed that way.

Remember this – when a policy fails in its stated objective but continues, it must be fulfilling its unstated objective.

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