Socialism means government ownership or control of the means of production and distribution. Government regulations and subsidies do not constitute socialism. In fact, free enterprise will not function without a powerful “referee” to ensure a fair marketplace. For example, courts enforce contracts and regulators prevent unsafe or unfair practices.
Without strong government regulatory and legal systems, nations which began with free enterprise have devolved into oligopolies controlled by a few individuals under a corrupt government. Several countries in Latin America, such as Bolivia, are currently experiencing unrest due to this process. Others, such as Venezuela, took a socialist path to the same end. In both cases, the failing governments were not impartial arbitrators of economic disputes and did not fairly allocate societal resources.
Fair and transparent government is a prerequisite for free enterprise and a prosperous society. Government control over natural monopolies, such as electrical transmission, is a necessary part of a strong economy. For example, the city of Elizabeth City owns the electrical transmission system in the city. Without an affordable, reliable electrical system, businesses in the city wouldn’t be able to survive.
However, some pundits are trying to soft-peddle socialism by calling government subsides “socialism.” This is an attempt to persuade people to accept socialism by dishonestly equating popular subsidies, regulations and government programs with socialism.
For example, renewable energy is subsidized by a 30 percent federal income tax credit — which begins to phase out next year — and an 80 percent exemption from property taxes in North Carolina. Buyers of electric vehicles — mostly wealthy individuals — qualify for a federal income tax credit up to $7,500 per vehicle. But this is not socialism. It is an attempt to jumpstart new industries to benefit society as a whole, but the government is not forcing people to buy a certain vehicle or making people install solar panels on their homes (unless you live in California).
Farmers are subsidized because food is an essential commodity. For some reason, people like to eat, and groceries make up a significant portion of family budgets. In addition, farm products comprise about 10 percent of exports from America. But farmers have to buy seed, fertilizer, and machinery from large multinational corporations, and sell to other huge corporations. They are like a mouse caught between two cats. The government has to act as a referee to maintain a fair marketplace to ensure the steady supply of affordable food.
Critics are not labeling Democrats as socialists; Democrats are calling themselves socialists. Some candidates running in the Democratic presidential primary are self-described socialists, and others advocate the same socialist policies. So don’t blame others for calling them socialists because they willingly took on the label.
Other candidates support free enterprise. The same is true in local and state races in which some candidates advocate socialist policies of higher taxes and more government control of the economy. Others understand that the free marketplace is the best distributor of societal resources, and support lower taxes and less government control. The trick is to strike a happy medium with just enough government regulation and spending for the economy to thrive.
Ultimately it will be up to voters to decide between socialism and free enterprise. The electorate should reject those who would take over industries such as health care and take away the private health insurance provided by employers.