Every government intervention into the economy may not besocialism, but it is a step toward socialism.
Interventionists claim to advocate for a ‘third way’ of economic organization, one that preserves the productive nature of capitalism, while merely reining in some of its destructive excesses.
For instance, Sen. Elizabeth Warren last year described herself as a “capitalist to the bone,” even declaring “I believe in markets and the benefits they can produce when they work.”
However, she added the caveat that it is “markets with rules” that can create value and insisted “markets worked better” during the timeframe of 1935 to 1980 in large part due to “more aggressive regulation of markets.”
But is there a reasonable “third way”?
The defining difference between socialism and capitalism, as described by Ludwig von Mises in his 1950 essay “ Middle of the Road Policy Leads to Socialism,” is “the substitution of public control of the means of production for private control.”
More properly understood, socialism would eliminate the private ownership of the means of production by capitalists.
So efforts to impose “more aggressive regulation of markets” – which typically amount to more confiscatory taxes and stricter government regulations – may fall short of actual socialism, but erode the defining characteristic of capitalism, namely private ownership over the means of production.
It is important here to note that ownership implies the right to utilize, trade or otherwise dispose of property as the owner sees fit, as long as his actions don’t infringe on the rights of others.
Any restrictions on the owner’s use, therefore, represents an erosion of private property rights over the means of production, and a step in the direction of centralized, or public, control over those means.
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