Power mad, ladder climbing, narcissistic leaders often use socialism as a tactic to buy votes, gain power and retain power. Policies typically involve:
- giving away free money
- increasing minimum wage
- increasing government spending and government debt
- making the system fairer through more government intervention
Giving away free money causes inflation. There is an increase in the money supply without any increase in productive output. Inflation favours rich people by increasing the value of their assets, such as the corporations, shares and properties that they own. Inflation harms poor people, since their purchasing power is degraded and they don’t own assets. Their ability to own assets in the future deteriorates as the assets continually become more expensive. Over time assets tend to be owned by fewer and fewer increasingly wealthy people.
Increasing minimum wage causes inflation. There is an increase in cost without any increase in productive output. The increase in cost is passed onto consumers. Inflation is a benefit to wealthy people who can easily afford the increase in consumer prices whilst enjoying an increase in the value of the assets they own. Poor people suffer.
Increasing government spending and government debt causes inflation. There is an increase in the money supply without an adequate increase in productive output. Inflation is a benefit to wealthy people who own assets and is a disadvantage to poor people.
More government intervention yields more regulatory burden and more administrative and compliance costs. This causes inflation. Size and cost of government increases in order to regulate and enforce the increased government intervention. Individuals and businesses pay more tax. Administrative and compliance costs for businesses escalate whilst, at the same time, productive output reduces due to government disruption of market efficiency. More cost and less output fuels inflation, which benefits wealthy asset holders whilst reducing the standard of living of poor people. Government services in areas such as education and health deteriorate, sacrificed in order to focus on regulation and enforcement of the market. Additionally, higher administrative and compliance costs favour large corporations who are able to spread the extra costs over more sales, more revenue, more volume. Small businesses suffer. More government intervention also raises the barrier to entry, leading to fewer startups, less risk taking and less competition whilst favouring established, large corporations. The market becomes dominated by a few large corporations. The owners benefit from ever increasing wealth, economic power and political influence.
Although not inherently socialist, high migration is often coupled with socialist policies to mask the reduction in living standards that socialist policies produce. High migration bolsters the nominal GDP whilst GDP per capita adjusted for inflation decreases. High migration also favours large corporations who benefit from cheap labour and increased demand for their services whilst disadvantaging poor people who are denied opportunities that migrants take. High migration also favours property owners – more population fuels demand for properties which causes property prices to grow and rents to rise.
These policies increase the gap between rich and poor. As the wealth gap spreads it justifies more inflationary measures and more government control. Confused citizens demand these measures to address the deteriorating living standards that they suffer from. Bitter, resentful activists support these measures to sabotage those who have been successful. Wealthy people and political leaders support these measures so they can pretend to combat the wealth gap whilst accumulating more power and wealth for themselves. If left unchecked, this feedback loop leads to complete economic destruction of the poor and middle class, with a small number of extremely rich and powerful people who own and control everything and everyone else living in poverty, with no way out.
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See also:
The Voice: Why You Should Vote YES
XXXX Gold – The Great Mystery of the Top End
Engine Power and Driver Satisfaction
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