As World War II wound down, socialists throughout Europe looked to use the crisis to create a new economic order. Britain's Labour party combined with socialists around the continent planned to implement large scale changes in health care, employment rights, and power granted to labor unions.
Friedrich A. Hayek wrote The Road to Serfdom as a warning to the democratic world that embracing socialist economics means sending one's country down a path of diminishing freedoms. His theme is that socialists may be people of goodwill, but their policies lay the foundation of totalitarianism. Nazism and fascism are not the opposite of socialism, but the next logical step. The mania for planning embraced by leftists on every level will "unwittingly produce the very opposite of what we have been striving for."
When the economy is planned, it removes freedom from the hands of individuals and concentrates it into the hands of government officials. Whereas power was previously diffused among different and opposing elements in society, thus keeping a balance of interests, it now makes the government the overriding interest. Concentrated power threatens most basically the right to private property, identified by our Founding Fathers and their inspirations as the most basic guarantee of freedom.
Planning reduces and eventually eliminates from the system the element of competition. Competition ensures that the strongest and most efficient survive. Competition encourages advances in technology and methods, creating savings that benefit society. Competition is the only method that does not require coercive or arbitrary intervention of authority. It merely needs a referee to call fouls.
Socialist planning my begin in the legislature in communities, states, and countries that fall for the sales pitch of leftism. However, by its very nature, democratically elected assemblies cannot plan. Elected officials reflect their constituencies. Therefore the next step lies in the creation of planning boards that have no accountability to the people. They gain more and more power over time and never answer to voters. This lack of accountability means that they may defy the people's interest with impunity.
In a free market capitalist system, the government has very little direct interest or stake in the economy and can therefore act impartially. When planning and intervention take over, the government becomes an actor with overwhelming coercive power. Since the government must defend its interest, all in the name of society, it attacks free market institutions. This subverts one of our most cherished rights, rule of law, in favor of arbitrary government action.
Here is the problem. Plans always fail. You cannot succeed with a planned economy. Either you must revert to free markets, or face the possibility of disaster. When that disaster comes, according to Hayek, the people demand a strongman to lead them out of the mess.
To me, Obama's policies have not been coherent enough to successfully advance socialism. What we have seen is the reintroduction of mercantilism. This was the British economic system of intervention, preferences, and prejudices that led freedom loving Americans to rebel. This sort of response would also bring forth the strong man Hayek described.
Either way, the gain of government power directly causes a loss of individual freedom. How far this goes is up to the American voter. A Republican Congress is necessary to roll back the bizarre and half witted measures advanced by the Obama Administration.
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