Freedom
or Control?
When candidates talk about economics, what do they mean when they use terms like “socialism” and “the free-market”? What can it tell us about how they will govern?
Economic systems exist on a spectrum from free-market economies to socialism and government-controlled, communist systems. As candidates make their case, remind yourself of the difference between these opposite systems . . . and how that difference would impact your daily life and livelihood if their policies become the law that governs you.
Free Markets Make Use of Human Nature
A free-market, or capitalist, economy is driven and directed by supply and demand rather than by redistribution of income.
In a free-market system, you have the liberty to work, reap the fruits of your labor, and give, invest, or spend your earnings as you choose in a manner consistent with the law. Prices are determined by supply and demand, and producers compete with each other for business.
A unique feature of free market economies—pointed out by Scottish philosopher and economist Adam Smith—is that it works with, not against, human nature, using self-interest to benefit society. For example, the restaurant owner who provides me with a refreshing Diet Coke is simply looking out for his own interest—staying in business. But that self-interest benefits both of us. And as this is repeated millions of times a day, it uplifts an entire economy!
A market economy doesn’t rely on humans being selfless in order to produce opportunity and prosperity. This system works well in a world full of fallen sinners.
A free market economy also tends to make good use of individuals’ God-given gifts, abilities, and skills. In a free market economy, people can better pursue these abilities and be rewarded by both employers and customers.
To give you one example, for years I worked in the communication technology sector. I was skilled at it, got paid for it, and my service helped bless others. No “big brother” government ordered me to choose that career; I was guided by the market to find and use my God-given abilities.
Socialism Presumes to “Know Better”
A socialist economy is driven and directed by “public ownership.” In the utopian dream, that means that all citizens reorganize and redistribute wealth so that everything is communally owned. In reality, the government steps in . . . owning and controlling both the means of production and the distribution of goods.
Those who favor socialism presume that others know what is best for you and society: what you should own, what you should pay and what you should get paid. They also assume that everyone is motivated by the common goal of meeting the needs of those less fortunate. In reality, with no competition to guide people, someone must set the “prices” and “wages” for everyone . . . again opening the door for government control at best, and despotism at worst.
Marx’s formula was, “From each according to his ability, to each according to his needs.” Socialists seem to assume human nature is so good that people will be motivated to do their best out of pure altruism. But this assumption has been proven wrong time and again, from the Pilgrims’ experiment with socialism to modern day North Korea.
I’ve often heard the belief that wealthy Scandinavian countries like Denmark, Sweden, and Finland have socialist economies. In reality, these countries have extensive welfare systems, but this system is supported not by socialism, but by the free market—through extremely high taxes.
In a completely socialist economy, there would be no private sector. But in practice, even extremely socialist countries like Cuba allow a private sector out of necessity, although it is very limited. Remember how a free market leverages self-interest to motivate people to produce the things that we need? Socialism is not able to accomplish this. It relies on the fact that the agents overseeing the economy will be selfless—an unstable foundation, given what the Bible says about our sinful human nature.
Socialism can exist in varying degrees, from government ownership of everything to only certain industries like healthcare or education. I’ve noticed that political candidates, too, vary in how much they believe the government should own and control.
The attraction of socialism is that it promises free goods and services. However, it only seems free. In reality, you are paying for it through higher taxes. But remember that socialism costs more than just money. It costs you in freedom, options, and often, quality. And where socialism has been aggressively implemented, like the former USSR, it has cost millions of lives.
Economics at the Ballot Box
We must pay careful attention, therefore, to our candidates’ principles. The debate between freedom and government control in economics is ultimately a debate between freedom and government control in other areas of life. As Ronald Reagan put it, “A government can't control the economy without controlling people.”
This debate is very active in America today. Would you have guessed that in 2020, 101 members of the Democratic Socialists of America (DSA)—a socialist political movement—held offices at the national, state and local level? This doesn’t count officeholders, like socialist U.S. Senator Bernie Sanders, who aren’t members of the DSA but still believe in socialist principles.
Even candidates who claim to believe in the free market deserve a voter’s scrutiny. Nearly every free-market proponent believes the government should exercise some oversight to maintain order. If government interference in the free market becomes out of control, however, it can have similar effects as socialism—a stunted economy, less freedom, and less opportunity.
Preserving the principles of freedom and our quality of life depend in large part on the economic policies our elected officials enact. This November and next year, iVoterGuide will continue to reveal where your candidates stand so millions of voters like yourself can be discerning and choose wisely!
