The Socialist Lie of Public Ownership

There was a time when calling someone a socialist was an insult. When the term “socialism” was so at odds with the American ethos that no one would openly admit to supporting socialism.  But today Americans – especially young Americans – are increasingly comfortable with the term. Many even embrace it.

So what is socialism?

Merriam Webster defines socialism as:

1. Any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
2. A system of society or group living in which there is no private property. or, A system or condition of society in which the means of production are owned and controlled by the state

3. A stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done

So let’s look at that first definition: “Any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.” Or, as Britannica more simply puts it, “social and economic doctrine that calls for public rather than private ownership or control of property and natural resources.”

Okay, so the public owns all property and natural resources. Got it. But what does that mean in practice?

Well, first it means that you and I would no longer own property. My car, my money, my house – none of these things actually belong to me. They belong to “the public.” So what if I have a piece of pie, and you want to eat some of it. Can you do that? I mean, it belongs to you, right? But it also belongs to me. So who decides which of us gets to eat the pie?

And therein lies the first big lie of socialism. It claims to place the resources in the hands of the people, but in reality, the resources go straight to the government, to reallocate to the people however it sees fit.

Ironically, under socialism, the people own property even less than under capitalism. Under socialism, everyone “owns” everything, and as such, effectively no one owns anything. However, under capitalism, we each have a right to our own property, and the government is bound to protect those rights. So you have no right to my pie, and I have no right to yours. Now, let’s say I don’t have enough pie. Under capitalism, I am free to work hard, be enterprising, and buy some of your pie. You’re even free to give me some of your pie if you wish, or help me make my own. But under socialism, your pie also belongs to me. Under socialism, if I don’t have enough pie, the government can take some of your pie away to give to me.

So now we both have pie. What’s the problem?

What happens when you have just enough pie for you and your family, but I have none? The government takes some of your pie to give to me, but now neither of us have enough. So maybe you go make more pie. But again, you have more pie than me, and technically, that pie belongs to both of us, even though you made it. So the government takes some of your pie, and gives it to me. (And the dirty little secret is that they keep some of that money for themselves as well.) Pretty soon, you’re going to get frustrated that every time you make pie, the government takes it away. So while I’m not making any pie, I get yours, and you don’t get to see the fruits of your labor. Maybe you would have liked to give some of your pie to someone else, but because I have a “right” to your pie under socialism, you are not even free to donate your pie as you choose.

If you project this out on a large scale, what ends up happening is that there is not enough pie to go around. And every time someone makes more pie, it’s distributed so widely that you don’t even see a bit of it. Eventually, you are so hungry that you can’t keep making pie. When everyone gets an equal slice of the pie, regardless of ability, work ethic, or ingenuity, there is simply not enough pie. And unlike under capitalism, where anyone, regardless of class, can make more pie, the growth of the pie size stagnates under socialism.

We often hear that socialism is “public ownership of production.” But really, it’s just government ownership of production. Don’t be taken in by nice-sounding slogans. It’s noble to want to fight poverty, but fundamentally, socialism has the opposite effect.

To read more about how to actually reduce poverty, check out our post Lifting People Out of Poverty Through the Free Market.