Why Increased Socialism Leads to Increased Prices

One of the major arguments put forward by socialists is that the cost of living is always rising but wages don't increase at the same rate, which is why we need more socialists initiatives to redistribute the wealth. What they usually don't mention though is why prices increase, and it's because of inflation, because the government is constantly creating more money in order to spend. So the more a government spends beyond their means, the more they have to "borrow" from the central bank, causing the price of everything to increase as a result. Then all the blame is put on the "corrupt capitalist system" because they don't constantly pay people more to account for inflation.

There are also many other direct and indirect reasons why increased social spending leads to increased prices. In order to increase spending they either need to increase taxes or print more money, it has to come out of someones pocket. In the case of increased taxes there is a similar effect to inflation because businesses will increase costs to cover the loss of increased taxes, offsetting the cost of the tax onto consumers. If they try to tax something like carbon to appear forward thinking it will have an even greater effect because it will effect the cost of nearly all products, from the manufacturing process to the fuel burned during the transportation process.

Socialism and wealth redistribution is so often touted as the solution to wealth inequality but in reality is has completely the opposite effect, which is why free market economies with stream lined regulations and minimal taxes almost always thrive and the average standard of living is exceptionally high. You just have to stop thinking emotionally and start thinking logically to realize this fact. Yes some degree of socialism is often necessary and helpful, but history quite clearly demonstrates that the more socialized a nation becomes, the higher prices become in the process, and we should always remain skeptical of those who promise utopia through big government.

Socialist politicians like The Bern, and Occasional Cortex always neglect to state the truth... Socialism ONLY works for the wealthy political class. Look into their finances... follow the money.

EDIT TO ADD: I bet Nick Maduro has electricity tonight. For all of you budding socialists out there... Venezuela is a picture perfect model of socialist policy. Keep electing zombie morons like AOC... and we too, can starve as well.

You hit the nail on the head.

Standard of living is the bottom line, irrespective of any percieved inequality, or what economic system is employed.

Capitalism has its flaws. It is the worst system, except for all the others humans have tried.

Capitalism=efficiency. Government beurocrocy=waste.

Take healthcare for example.

I hate that there is profiteering of insurance companies, and big pharma associated with suffering, but inefficiency of government would cost more than what those entities take in the long run.

a reply to: ChaoticOrder

Maybe if we took coal and oil, and all "too big to fail" industries and corporations off of welfare and abate the billions of dollars they're given in tax breaks, there would me more public money available for roads, schools and our social safety net.

a reply to: ChaoticOrder

In this essay, I’m going to challenge (wait, I mean smash) the funny, foolish, backwards myth that “socialism is too expensive!!” — which no one should believe.

[...]

Americans face a situation of eudaimonic hyperinflation. I put in pompous italic because I want to make a point. In Venezuela, prices have risen by thousands or millions of percent, for consumer goods. And Americans — especially fringe conservatives — make fun of those dirty, foolish Venezuelans, and blame socialism for letting it happen.

Yet in America, the prices of all the basics of a good life — “eudaimonia” — have risen by hundreds or thousands of percent. Perhaps you think I exaggerate. Very, well, let’s review the evidence. Healthcare has risen by two thousand percent. The price of education has gone up by 1000%. Food, 300%. Rent and house prices, 400%. Childcare, 500%. Those are all conservative estimate, too, from what I reckon. You can add to that list as you see fit. [...]

If You Think Socialism’s Unaffordable, You Don’t Understand Capitalism

[...]
No matter how the taxes are redistributed to the individuals composing a given society, no matter, for instance, to what extent monetary income is equalized, since these individuals can and do lead different lifestyles and since they allocate different portions of the monetary income assigned to them to consumption or to the formation of nonproductively used private wealth, sooner or later significant differences between people will again emerge, if not with respect to their monetary income, then with respect to private wealth. And not surprisingly, these differences will steadily become more pronounced if a purely contractual inheritance law exists. Hence, social-democratic socialism, motivated as it is by egalitarian zeal, includes private wealth in its policy schemes and imposes a tax on it, too, and in particular imposes an inheritance tax in order to satisfy the popular outcry over “unearned riches” falling upon heirs.[...]

Social Democracy - Mises Institute


Pick up a book and stop bullsh!tting the kids?

originally posted by: ChaoticOrder
One of the major arguments put forward by socialists is that the cost of living is always rising but wages don't increase at the same rate, which is why we need more socialists initiatives to redistribute the wealth. What they usually don't mention though is why prices increase, and it's because of inflation, because the government is constantly creating more money in order to spend. So the more a government spends beyond their means, the more they have to "borrow" from the central bank, causing the price of everything to increase as a result. Then all the blame is put on the "corrupt capitalist system" because they don't constantly pay people more to account for inflation.

There are also many other direct and indirect reasons why increased social spending leads to increased prices. In order to increase spending they either need to increase taxes or print more money, it has to come out of someones pocket. In the case of increased taxes there is a similar effect to inflation because businesses will increase costs to cover the loss of increased taxes, offsetting the cost of the tax onto consumers. If they try to tax something like carbon to appear forward thinking it will have an even greater effect because it will effect the cost of nearly all products, from the manufacturing process to the fuel burned during the transportation process.

Socialism and wealth redistribution is so often touted as the solution to wealth inequality but in reality is has completely the opposite effect, which is why free market economies with stream lined regulations and minimal taxes almost always thrive and the average standard of living is exceptionally high. You just have to stop thinking emotionally and start thinking logically to realize this fact. Yes some degree of socialism is often necessary and helpful, but history quite clearly demonstrates that the more socialized a nation becomes, the higher prices become in the process, and we should always remain skeptical of those who promise utopia through big government.

It’s very endearing that right off the bat you paint yourself as being the rational, and anyone who disagrees as being emotional. So first off, we don’t have inflation in the us.... inflation is increase in costs because of rise in wages or material scarcity. We have increase in costs because of artificial scarcity, price fixing, and profiteering. And you think of this as efficient. Cute. What are capitalists efficient at? Extracting all surplus into the hands of the few is what they are efficient at. Maximizing profits is what they are efficient at. Too bad this sometimes means the opposite of what’s good for the nation and the world. Because they realized that ways to maximize profits includes planned obsolescence. It includes wasting 1/3 of the food we produce. It includes limiting wages. It includes doing the barest minimum for safety measures. It includes charging $96k for a cure for hep c that everyone else in the world gets for $500.

So, that all aside, I’m wondering what your brilliant, rational plan is to do about the current pattern we are following, whereby our masters of capital will soon own all the surplus wealth, while everyone else will work for bare subsistence, as that is the path we are going.

I’m not really wondering, it was rhetorical. Because just like your op, if I wanted to know your answer I’m sure I can turn on the news, or read some newspaper and see all the same spoonfed tropes, as people seem unable to have original ideas today, and why bother when there are so many clever memes and party lines to regurgitate?

a reply to: ChaoticOrder

With the 2020 presidential election already underway, 57 percent of registered voters said they would definitely vote against President Donald Trump, according to the latest poll from the PBS NewsHour, NPR and Marist.

In a Washington Post/ABC News survey, respondents were asked if they would definitely vote for the president, consider voting for him or definitely not vote for him — and 56 percent said they would definitely not vote for him. Morning Consult posed a slightly different form of this question, asking voters if they’d definitely or probably vote for Trump, or if they’d definitely or probably vote for someone else. Eight percent said they would probably vote for someone else, but 47 percent said they would definitely vote for someone else. In total, that’s 55 percent of respondents who seemed unlikely to vote for Trump.

a reply to: KellyKill


Do you think that its possible that is because the people that get their "news" from those organizations are also the ppl that hate Trump just because?

I bet if you polled people that watch Fox news regularly there would be a different outcome.

Did you learn nothing about polls from the 2016 election?

Post a link to the poll. I would be interested in the fine print.

a reply to: Mach2

A study published during the 2016 race found that “reminding white Americans high in ethnic identification that non-white racial groups will outnumber whites in the United States by 2042 caused them to become more concerned about the declining status and influence of white Americans as a group ... and caused them to report increased support for Trump and anti-immigrant policies, as well as greater opposition to political correctness."

Getting concerned yet?

a reply to: KellyKill

Nope. If anything DT has gained support of blacks, and Hispanics over his tenure.

The leftist socialist types are driving moderates, jews, union workers, etc away in droves.

If you are tying your hopes to polls, and studies, put out by self serving leftist organizations, good luck.

Trumps not going to win again. Sorry. Just like the Obama fans who had no clue how destructive his policies were, and still think he did great to this day..... that’s what you guys are for trump. He’s a moron, with no actual plans, ideologies or morals who literally makes everything up as he goes along. I assure you he’s not getting a second term.

a reply to: Sookiechacha

Maybe if we took coal and oil, and all "too big to fail" industries and corporations off of welfare and abate the billions of dollars they're given in tax breaks, there would me more public money available for roads, schools and our social safety net.

I completely agree they shouldn't get any welfare, but in what form exactly are they given special treatment or tax breaks larger than any other industry? In socialist nations they get the very worst end of the stick, they have to pay carbon taxes, and several nations are trying to go completely green by forcing coal plants to close. In the process of doing this they very predictably cause the price of electricity to sky rocket.

originally posted by: pexx421
Trumps not going to win again. Sorry. Just like the Obama fans who had no clue how destructive his policies were, and still think he did great to this day..... that’s what you guys are for trump. He’s a moron, with no actual plans, ideologies or morals who literally makes everything up as he goes along. I assure you he’s not getting a second term.

Everybody assured us he wasn't going to get a first term.

I can assure you that unless the democratic party pulls a rabbit out of their hat they don't stand a chance.

originally posted by: KellyKill
a reply to: ChaoticOrder

With the 2020 presidential election already underway, 57 percent of registered voters said they would definitely vote against President Donald Trump, according to the latest poll from the PBS NewsHour, NPR and Marist.

So you’re saying he’s got a MUCH HIGHER chance of winning than he had in 2016

‘You don’t say’

originally posted by: pexx421

So first off, we don’t have inflation in the us.... inflation is increase in costs because of rise in wages or material scarcity. We have increase in costs because of artificial scarcity, price fixing, and profiteering.

This is just completely incorrect. Raising wages leads to increased costs? How does that work exactly? The primary factor driving inflation in the U.S. and pretty much all nations on Earth is the creation of new money through debt monetization processes such as quantitative easing. Several years back I wrote quite an in depth series on how our debt based money system works and how inflation acts as a hidden tax. See the "Money" link in my signature. In reality growth in GDP should directly translate into a stronger dollar and if wages stayed the same that would mean a lower cost of living. But because they inject billions of new dollars into circulation every year to cover their expenses, they effectively steal that extra value, and they create so much not only does the value of the dollar stop increasing, it starts to decrease.

So, that all aside, I’m wondering what your brilliant, rational plan is to do about the current pattern we are following, whereby our masters of capital will soon own all the surplus wealth, while everyone else will work for bare subsistence, as that is the path we are going.

Well I look at the world and the places which are the most advanced and have the most respect for liberty, and I see they are based on principles of free market capitalism, and that tells me it's not this purely evil system some believe it to be. We all have a better standard of living now than a few decades ago, the are less murders every decade, less deaths, less crime, less war, less terror attacks, etc. So I don't subscribe to this surface level analysis that capitalism produces wealth inequality. Obviously capitalism isn't perfect but again it's inflation which allows the elite to accumulate so much wealth, they'd be forced to inject a lot of that wealth back into the economy if it wasn't for the government constantly creating more money and distributing it to people who then give it straight back to the rich, I also cover this issue in my money series.

a reply to: PublicOpinion

I find that "essay" so entirely ironic... for a start the U.S. basically the lowest prices in the world for most consumer items. Look at this list of countries by average wage and sort the list so it's adjusted for living expenses purchasing power parity. Like I've said many times before, if you think the cost of living in the U.S. is bad now you really have no idea. The line where he says America is the "world’s first poor rich country" is laughable, and it shows exactly why this line of thinking is so dangerous and easy to fall into. They really don't understand how excessive government spending forces them to create new money and produces inflation as a result, and they have no grasp what so ever on why the cost of living has been rising all around the world and more so in nations where the government spends more on social programs.

He then proceeds so say "What caused eudaimonic hyperinflation in America? Capitalism did." but provides absolutely no explanation for why this is the case. It's plainly not the case, capitalism has nothing to do with inflation, let alone this imaginary hyper-inflation the author cites as occurring. Businesses don't print billions of dollars out of thin air to cover their expenses, they cannot control the value of the dollar. Business activity actually creates GDP growth and as I've already explained that should help with purchasing power. Also I plan to post a thread some time in the next few weeks showing how high some of the living expenses in Australia are right compared to the U.S., trust me it will blow your mind and you might just think twice before constantly complaining about how high prices are in the U.S.

And for those trying to argue to expanding the money supply some how doesn't cause inflation, see this chart from my True Money thread:

Currently, the quantity theory of money is widely accepted as an accurate model of inflation in the long run. Consequently, there is now broad agreement among economists that in the long run, the inflation rate is essentially dependent on the growth rate of money supply relative to the growth of the economy.
-
If economic growth matches the growth of the money supply, inflation should not occur when all else is equal.

causes of Inflation

originally posted by: ChaoticOrder

originally posted by: pexx421

So first off, we don’t have inflation in the us.... inflation is increase in costs because of rise in wages or material scarcity. We have increase in costs because of artificial scarcity, price fixing, and profiteering.

This is just completely incorrect. Raising wages leads to increased costs? How does that work exactly? The primary factor driving inflation in the U.S. and pretty much all nations on Earth is the creation of new money through debt monetization processes such as quantitative easing. Several years back I wrote quite an in depth series on how our debt based money system works and how inflation acts as a hidden tax. See the "Money" link in my signature. In reality growth in GDP should directly translate into a stronger dollar and if wages stayed the same that would mean a lower cost of living. But because they inject billions of new dollars into circulation every year to cover their expenses, they effectively steal that extra value, and they create so much not only does the value of the dollar stop increasing, it starts to decrease.

So, that all aside, I’m wondering what your brilliant, rational plan is to do about the current pattern we are following, whereby our masters of capital will soon own all the surplus wealth, while everyone else will work for bare subsistence, as that is the path we are going.

Well I look at the world and the places which are the most advanced and have the most respect for liberty, and I see they are based on principles of free market capitalism, and that tells me it's not this purely evil system some believe it to be. We all have a better standard of living now than a few decades ago, the are less murders every decade, less deaths, less crime, less war, less terror attacks, etc. So I don't subscribe to this surface level analysis that capitalism produces wealth inequality. Obviously capitalism isn't perfect but again it's inflation which allows the elite to accumulate so much wealth, they'd be forced to inject a lot of that wealth back into the economy if it wasn't for the government constantly creating more money and distributing it to people who then give it straight back to the rich, I also cover this issue in my money series.

Yeah I’m going to have to disagree. Venezuela under Chavez was doing quite well for the people until the us started their economic destabilizing and coup attempts. It was at one point the most rapidly improving nation in South America. Same for Libya, taken from the poorest nation in the world to the wealthiest nation in africa with living standards equal to Brazil. Then we had to bomb them back to insolvency too. China has had the greatest economic growth of the last decade, far greater than anywhere else in the world, and they are far from the ideologies you espouse.

As to free market, that exists nowhere, and American leaders don’t want it anymore than they want socialism for the workers. Our market is controlled from the bottom up, it’s a pay to play market, and works solely for those on top and this stacked, fraudulent market controls the whole world. There is not a single piece of freedom in this supposedly “free” market. It’s a ruse set up by robber barons, monopolists and banksters to Keep their own families deep in money and power for all time while fleecing the rest of the world.

And if you don’t even understand how rising wages of labor can lead to increased costs then I’m not sure what you’re doing writing a “money” series. Banks create money every day, and they get to make a profit from it. The thing is, money is supposed to “redistribute “. That’s called circulation, and without it the economy fails. Progressive taxation worked as a circulation mechanism for wealth, so that money was used to increase the economy, create infrastructure, provide jobs etc during the new deal era, rather than sitting in accounts where it accomplishes nothing. Now, in our economy, money is no longer used to create, form new business, expand industry. Instead most of the growth of our GDP is not growth at all. It’s extractive.

Finance is one of the 2 only growth sectors since 08, and it’s where the majority of gdp growth has come from other than the alphabets. And while it’s counted towards gdp, finance is actually money taken AWAY from other people, not created. When banks report how much money they’ve “earned” what they are really reporting is how much they’ve taken from actual workers, in fees, interest, penalties, etc. These are not PRODUCTS they are actually economic rent, which add nothing fluid or useful to economic growth and are actually a negative burden on the economy. I’m sure you get the point.