Mises Institute: Rand Paul Is Right about the Nazis and Socialism

Rand Paul recently pointed out that the Nazis were socialists in a book released last year. I mean, it’s in the name (National Socialists – Nationalsozialist), but then they’d be leftists, right? Some have taken Rand Paul to task for pointing this out. In this article from Mises Institute, David Gordon says Rand Paul Is Right about the Nazis and Socialism.

In “No, the Nazis Were Not Socialists,” which appeared online in Jacobin, the philosopher Scott Sehon makes a surprising claim. In the course of criticizing some remarks by Senator Rand Paul, Sehon says,

Paul seems to quote the mid-century economist Ludwig von Mises:

Under national socialism there was, as Mises put it, “a superficial system of private ownership…[sic] but the Nazis exerted unlimited, central control of all economic decisions.” With profit and production dictated by the state, industry worked the same as if the government had confiscated all the means of production, making economic prediction and calculation impossible.…

It turns out that Paul’s most clear assertion about Nazi control of the economy was, apparently, just something that the senator made up and falsely attributed to Ludwig von Mises. (blockquote ellipses and brackets in Sehon)

Had Sehon looked into Mises’s views more carefully, he would have found that Mises did indeed believe that Nazism was a form of socialism, marked by state direction of the economy rather than collective ownership. In Omnipotent Government (p. 56), Mises says,

The German and the Russian systems of socialism have in common the fact that the government has full control of the means of production. It decides what shall be produced and how. It allots to each individual a share of consumer’s goods for his consumption….The German pattern differs from the Russian one in that it (seemingly and nominally) maintains private ownership of the means of production and keeps the appearance of ordinary prices, wages, and markets. There are, however, no longer entrepreneurs but only shop managers (Betriebsführer)….The government, not the consumers, directs production. This is socialism in the outward guise of capitalism. Some labels of capitalistic market economy are retained but they mean something entirely different from what they mean in a genuine market economy.

Sehon says that this view is false and cites an article I have not yet been able to gain access to that argues that business under the Nazis retained a large degree of autonomy. But in his well-received book The Wages of Destruction (2007), the historian Adam Tooze says this: “The German economy, like any modern economy, could not do without imports of food and raw materials. To pay for these it needed to export. And if this flow of goods was obstructed by protectionism and beggar-my-neighbour devaluations, this left Germany no option but to resort to ever greater state control of imports and exports, which in turn necessitated a range of other interventions” (p. 113). This is exactly Mises’s point. Interventionist measures in the free market such as price control fail to achieve their purpose. This leads the government to add more interventionist measures in an effort to remedy the situation, and continuing this process can quickly lead to socialism.

This is what happened under the Nazis. Businesses that were reluctant to follow the plans of the new order had to be forced into line. One law allowed the government to impose compulsory cartels. By 1936, the Four Year Plan, headed by Hermann Goering, had changed the nature of the German economy. “On 18 October [1936] Goering was given Hitler’s formal authorization as general plenipotentiary for the Four Year Plan. On the following days he presented decrees empowering him to take responsibility for virtually every aspect of economic policy, including control of the business media” (Tooze 2007, pp. 223–24).

Sehon says that there were socialists in the Nazi party, principally Gregor Strasser and his brother Otto, but that their influence ended when Hitler purged this wing of the party in the Night of the Long Knives in 1934. (By the way, Otto was more of a socialist than his brother Gregor, and the latter repudiated his brother’s views as too radical.) This is not entirely accurate. What it ignores is that Josef Goebbels, the influential minister of propaganda, held strongly socialist views despite his personal enmity for Strasser.

According to George Watson,

On 16 June 1941, five days before Hitler attacked the Soviet Union, Goebbels exulted, in the privacy of his diary, in the victory over Bolshevism that he believed would quickly follow. There would be no restoration of the tsars, he remarked to himself, after Russia had been conquered. But Jewish Bolshevism would be uprooted in Russia and “real socialism” planted in its place – “Der echte Sozialismus“. Goebbels was a liar, to be sure, but no one can explain why he would lie to his diaries. And to the end of his days he believed that socialism was what National Socialism was about.

In his article, Sehon criticizes Watson extensively for relying on a book by Otto Wagener, a Nazi who was removed from his position of authority in 1932, but he does not mention Watson’s quotation from Goebbels’s diary.

Goebbels was by no means alone among the Nazis holding power in his radical opinions. Ferdinand Zimmerman, who worked as an important economic planner for the Nazis, had been before their rise to power a contributor under the pen name Ferdinand Fried to the journal Die Tat, edited by Hans Zehrer, and a leading member of a group of nationalist intellectuals known as the Tatkreis. Fried strongly opposed capitalism, analyzing it in almost Marxist terms.

Wilhelm Roepke wrote a devastating contemporary criticism of Fried, now available in translation in his Against the Tide (Regnery, 1969). One of the best scholarly accounts of Fried’s views, which includes some discussion of his activities under the Nazi regime, is in Walter Struve’s Elites against Democracy: Leadership Ideals in Bourgeois Political Thought in Germany, 1890–1933  (Princeton University Press, 1973).

Sehon makes another misleading point in his article. He says,

Paul’s argument here goes from the undeniable premise that the Nazis had “socialist” as part of their name to the conclusion that the Nazis were, in fact, socialists. For that inference to work, Paul needs an intermediate premise like the following: If an organization has an adjective in their name, then the organization is correctly described by that adjective.

But if Senator Paul really believed this, then he would be forced to conclude that communist East Germany and present-day North Korea count as democracies, for the German Democratic Republic and the Democratic People’s Republic of North Korea both have the adjective “Democratic” as part of their name.

Sehon is right that the word “socialist” does not by itself tell us much, but unfortunately it does not occur to him to investigate what the Nazis meant by this word and why they used it.

Wilder, Wealthy, and Wise: Yuri Bezmenov’s 1980’s Prediction of 2020

From Wilder, Wealthy, and Wise comes Yuri Bezmenov’s 1980’s Prediction of 2020

“Mommy, why are you making civilization collapse?” – Futurama

BEZMEN

Video games never made me want to hurt people.  Working with people did that.

Yuri Bezmenov was a KGB agent who defected to the West in the 1970’s.  Bezmenov told everything he knew to the CIA, and was set up in Canada.  He did several interviews which are available on YouTube®, which I’ll link to in a bit.  Most recently, Call of Duty®:  Black Ops Cold War™ brought Bezmenov back into the public consciousness by cutting in clips of his interviews in.

You can watch it below.  It’s only a minute or so.

During interviews, Bezmenov made the quote that only 15% of the KGB’s activity was tied to James Bond® stuff.  Their primary goal wasn’t to find out which parts of an F-15E jet fighter were made out of titanium and which parts were made out of paper-mâché.

Matching the United States in weapons systems was important, but it wasn’t number one.  Besides, the KGB generally had a spy class of ideological communists built into numerous classified projects.  Bezmenov said that 85% of the KGB’s efforts were spent in destroying culture in the West.

Why fight an actual war, if you can get your enemy to become you?

Bezmenov even set out the mechanisms that they were in the process of using.  It wasn’t a complicated process, and it was just four steps.  They called this process, “active measures” and it was nothing less than subverting the ideology that made America great.

The first step was Demoralization.

Demoralization is based around removing the moral framework of the country you’re attacking.  The easiest way to do this is to co-opt the education system.  Bezmenov said that this took 15-20 years, but his number was low.  First, the educational institutions needed to be captured.  The people who train the teachers, the people who are the “guiding lights” in educational theory must buy into Marxism.

I don’t have a direct measure of the ratio of Leftist to Rightist in those that teach education, but I’d imagine it’s no less than journalism, which is at 20:1.  It may exceed history, which is 33.5:1.  Regardless, the educational academy is now firmly in the hands of the Left.  This leads to the production of teachers in a Leftist pedagogy (fancy word for teaching), with bad Leftist theory sometimes even enshrined into law.  No Child Left Behind?  Yes, that was bad.  Common Core appears to be worse.  Here’s one example:

Yes, this is really what they tried to teach little kids.  From the Heartland Institute.

I have to wonder if the idea is that such simple things like addition and subtraction can be made so complicated that parents won’t be able to teach them to their children.  In essence, it’s a way to further sever the ties between parent and child, while strengthening the ties between child and state educator.

Certainly, not all educators are Leftists.  Here in Modern Mayberry, there are a few, but I think we likely have a more healthy balance.  But there are those who look at the remote classes from COVID-19® as a potential threat to their attempts to indoctrinate children:

DEMORAL

Is Demoralization 100% complete?  Not as long as we have those pesky parents standing up for the customs, culture, ideas, and values of the West.  Is it complete enough to take over society?

Maybe.

The goal of Demoralization is a lot of what we see now on the streets of Portland or Seattle or any other major Leftist city.  Bezmenov described the end product of Demoralization as:

“They are programmed to think and react to certain stimuli in a certain pattern. You cannot change their mind even if you expose them to authentic information. Even if you prove that white is white and black is black, you still cannot change the basic perception and the logic of behavior.”

In other words?  Leftist robots.

Destabilization is the next step.  This is the destruction of the systems that define the country.  The economy.  Social relations.  Defensive systems.

In the last few months, the economy has been put into the most precarious state within living memory.  The United States is more divided politically, ideologically, linguistically and ethnically than at any time in history.  Naval vessels ram freighters.  Senior officers are fired due to ideology.  Women are brought into combat operations despite proof that their inclusion lowers fitness for mission.

Bezmenov said that Destabilization took two to five years.

Destabilization leads to Crisis.  Crisis in this system is necessary to get people to accept a new government, new systems, and to give up the old system.  There’s been a great deal of experience in creating Crisis by the Left.  Think the Color Revolutions that have taken place all over the world, from Georgia to Ukraine to Lebanon, Kyrgyzstan, Moldova, Tunisia, Egypt, and Libya.

What does Crisis look like in the United States?  How about open violence encouraged by receptive District Attorneys that refuse to prosecute?  Does it look like the dollar losing 7% of its value in three months?

KEN

Crisis leads to promises by the Left.  High minimum wages.  Free healthcare.  Guaranteed basic income from the government.  “Equality” in housing, in education, in policing.

Are the promises real?  Of course not.  The promises are whatever it takes to get enough support for the Left so they can take control.

If we are not in the Crisis, you can certainly see it from here.  Ideally, for the Left, Crisis leads to control, or Normalization.

Normalization is the end game.  It’s consolidating the country under the Leftists.  It’s the creation of new institutions.  In the Soviet Union and in China, it consisted of killing farmers and replacing them with people from the cities and expecting these collective farms will feed the nation.

Of course, all of the Leftists burning Kenosha and Portland think that they’ll be the ones in charge.  In the new Socialist Utopian States they’ll be the ones who will write poetry and conduct gender reeducation camps, right?

This poetry comes from Seattle, I believe.  Plans are now in full view.

No.  The reality is that they’ll be most likely to be put up against the wall and shot or sent to the convenient leisure gulags.  Why?  They will be disillusioned when the actual power structure emerges.  The reality of every communist paradise in history is that the intellectuals are shot first, especially the intellectuals that are communist.  Why?

Dissent is a thing of the past.

Here are Yuri Bezmenov’s ideas, in his own words:

 

Forward Observer: Expanding the Socialist Insurgency

Intelligence analyst Sam Culper of Forward Observer discusses socialist split within the Democratic party in 2021: Expanding the Socialist Insurgency.

One of the more interesting trends we’re watching is the bifurcation of the Democratic Party.

In structure, it’s slightly reminiscent of how the Republican Party broke along the Conservative Inc. establishment and the Tea Party starting in 2009.

Progressive political action committees like Justice Democrats and Courage to Change — the political action committee of Rep. Alexandria Ocasio-Cortez — are running primary candidates against incumbent liberals in a bid not just to unseat the moderates, but to change the political makeup of Congress. There’s a political insurgency being waged within the Democratic Party, pitting establishment moderates against their socialist challengers.

In last week’s livestream, I provided an update on the progress of the Far Left. Justice Democrats candidates, for instance, have won three primaries, lost three, and still have three in upcoming primaries. Jamaal Bowman, endorsed by the Democratic Socialists of America, is one to watch — an AOC clone from New York trying to unseat Rep. Eliot Engel (D-NY).

The failed Bernie Sanders campaign squashed any hope of putting a socialist in the White House next year, and the reaction to Joe Biden has been downright cold. While Sanders has been busy campaigning for socialists in primaries and down ballot elections, Democrats have criticized Sanders for not doing enough to support Biden. Similarly, instead of expending resources to help Biden, socialist outlets have promoted winning locally, too.

By gaining more power at the local and state levels — electing lower court judges and district attorneys, for instance — socialists can do more to form a judicial blockade against what they describe as neo-liberal and fascist policies at the national level.

The argument has proven accurate with regard to the political power exercised by the courts and city councils during the COVID-19 shutdowns and, more recently, the riots and civil unrest. Local politicians can also provide cover for socialist disruption and facilitate the socialist insurgency.

Earlier this month, Kshama Sawant, a member of the Socialist Alternative political party and Seattle city council member, unlocked the doors of City Hall to allow hundreds of protestors inside.

More recently, professor Frances Fox Piven encouraged the socialist movement to not shy away from violence in local activism. Calling for “a revolutionary transformation,” Piven warned socialists not to “fall on this very narrow path of nonviolence,” and argued that “the violent capacity of the crowd is an important way of defending its ability to exercise disruptive power.”

You may have heard the name Piven before. In the 1990s, Piven and another socialist professor, Richard Cloward, pushed a plan to continually expand entitlement benefits and the welfare system until spending morphed into a guaranteed basic income. It’s well-known as the Cloward-Piven strategy, and has been a moderately successful one, given the growing popularity of a universal basic income.

While the socialist movement builds counter-institutions, militant trade unions, local economies, and autonomous zones — and turns grassroots organizing into social power — its political organizations are expanding representation in Congress and injecting socialists into state and local political positions.

This is yet another sign of how the United States is changing, and is another indicator that socialist success has staying power. As they rack up political and social victories, the country’s low intensity conflict will worsen.

 

FFF: America Is and Has Been a Socialist Country

In Socialism in America, author Jacob Hornberger of The Future of Freedom Foundation discusses the idea that America is a preeminent socialist country and has been for some time, but Americans live in denial of this truth. There are no pure socialist countries, though North Korea comes closest, because they are doomed to failure and always require some private enterprise to be allowed in order to be taxed to fund the rest of the socialist enterprise.

Lost in the ongoing debate in America as to whether the United States should embrace socialism is a discomforting fact: America embraced socialism a long time ago. The problem is that many Americans have simply not wanted to accept that fact and instead have preferred living a life of denial.

A complete socialist system would be one in which the state owns everything in society, including businesses and real estate. In a pure socialist society, the government is the sole employer, and everyone is a government employee. No private grocery stores, computer companies, restaurants, movie theaters, or anything else. The government owns and operates everything, and everyone works for the government.

Moreover, in a pure socialist society, all the homes are owned by the state. There are no private houses or apartments for sale or rent because nothing is privately owned. Everyone lives in public housing because the state owns all the dwellings. How do people determine where they are to live? The state assigns everyone his own particular housing unit.

How does the socialist state fund all this? It owns and operates all the businesses and enterprises in the hope of generating revenues to finance its socialist system. One problem, however, is that state-owned enterprises are notorious for inefficiencies and corruption, which means that they inevitably end up losing money rather than making money. Think of Amtrak and the Postal Service. Or state-owned petroleum companies in Latin America. They produce losses, not gains, for the state.

Thus, to fund its socialist enterprises, the socialist state inevitably permits a small number of citizens to engage in private enterprise. Once those people begin making money, the state taxes them and uses the money to fund its operations. The state does its best to
extract as much money as it can from these private-sector enterprises without pushing them out of business.

There are few purely socialist countries. North Korea comes closest to the socialist ideal.

There are countries, however, that adopt programs and policies that are socialist in nature. The United States is a premier example of such countries, even though many Americans are loathe to acknowledge it. They have convinced themselves that America is a “free enterprise” country and that they themselves are “capitalists.” The last thing they want to confront is that they are living a life that embraces socialism.

Let’s examine socialism in America.

Social Security

Contrary to popular opinion, especially as held by seniors, Social Security is not a retirement program. There is no investment fund into which people place their savings for retirement. There are no lock boxes at Fort Knox labeled with each person’s name and containing his “contributions.”

Social Security is a straight socialist program, one that uses the government to take money from people to whom it belongs and gives it to people to whom it does not belong. This process of coercive redistribution of wealth is based on a principle enunciated by Karl Marx: from each according to his ability, to each according to his need. The state takes money from those who have produced it and gives it to people who are said to need it more.

For more than a century after the United States was founded, Americans lived without Social Security. The idea for this particular socialist program originated among German socialists in the late 1800s. The so-called Iron Chancellor of Germany, Otto von Bismarck, adopted it into law in Germany. The program was later imported into the United States and became a legally established program in the 1930s. Today, the U.S. Social Security Administration displays a portrait of Bismarck on its website.

From its inception, Social Security has been a straight socialist, welfare-state program, one that uses the state to forcibly take money from some and give it to others. It
is no different in principle from food stamps, education grants, farm subsidies, or other socialist programs.

Seniors have a valid point when they say that the state plundered and looted them throughout their work lives, which has left them without savings for their retirement years. They say that they are just getting their money back under this program.

But that is simply not the case. Their money is long gone. It was spent in the same year that it was collected, on Social Security payments to people who are now long dead, to fund other welfare-state programs, or to fund the national-security establishment and its vast and ever-growing array of warfare-state programs. The money that is being given to seniors today is coming out of the pockets of their children and grandchildren and their friends in those generations, many of whom are struggling to make ends meet. The problem is only getting worse because seniors are demanding more, which means even more taxes must be imposed on young and middle-aged people who are still working.

Proponents of Social Security say that this socialist program reflects how good, caring, and compassionate Americans are. That’s ridiculous. Social Security is founded on force. Young people are forced to pay Social Security taxes. There is nothing voluntary about paying such taxes. If a young person refuses to pay his Social Security taxes, the authorities will come after him, arrest him, fine him, and send him to jail. If he resists with force, he might well find himself dead at the hands of some trigger-happy cop.

Goodness, care, and compassion can come only through the voluntary choices of people. When a young person chooses to help his parents in their old age with financial assistance or personal care, that’s goodness, care, and compassion. When the IRS takes a young person’s money and gives it to seniors, that’s just political stealing.

There is no way to reconcile Social Security with the principles of a free society. Freedom necessarily entails the right to keep everything you earn and decide for yourself what to do with it…

Click here to continue reading at The Future of Freedom Foundation.

Mises: Four Reasons Inequality Isn’t What You Think It Is

Here is a short article from the Mises Institute, describing why free markets are no enemy of inequality, but rather regulated markets are greater causes of harm – Four Reasons Inequality Isn’t What You Think It Is.

One of the defining characteristics of advocates for socialism is an obsession with equality. According to this line of thinking, inequality is the central problem of the modern world, and it demands a centralized solution. Thus, socialists—and more mild social democrats—push to use the power of the state to force the transfer of wealth from the productive and successful to those who are less so. This is the way to achieve social justice, they contend.

But inequality is not the societal plague that socialists allege it to be.

The Source of Wealth: Consumer Judgment

Contrary to popular belief, the way to make money is not to exploit one’s customers. The reality is the opposite. Wealth is created by identifying the problems that people have and creating products that provide a solution and improve their lives.

In this process, the consumer leads the process by expressing his own preferences in the marketplace. If a consumer feels that a product is overpriced, he will not make an exchange. If a product seems worthwhile, he will buy it willingly. The sum of these individual choices—to purchase or not—make or break a business on the market, and this is the consumers’ prerogative. In order to meet his own needs, a person must produce something that satisfies another’s needs, whether they be labor, industrial machinery, or fine cuff links.

Does Wealth Accrue at the Expense of the Poor?

One of the socialists’ key assumptions is that there is always a losing side in a transaction. They think that wealth is like a pie, and that the rich take the largest slice, leaving workers and customers with almost nothing. In reality the market is always expanding the pie, and voluntary exchanges are always win-win when they are made.

Bill Gates, Jeff Bezos, and all the other “evil capitalists” have managed to create an unprecedented amount of wealth, but not only for themselves. Those working for them have benefited from their jobs, and the people who buy their products and services have benefited from better or cheaper goods (or both). Other benefits include more time to pursue more important things, and in ways that cannot be quantified (i.e., they are measured in psychic profit). The entrepreneurs, in turn, have benefited from the services of their workers—which are well worth paying for. Entrepreneurs also benefit from the voluntary purchases made by their customers.

Profit and Competition Are Not Antithetical to Collaboration

Socialists pit profit and competition against an ideal of sharing and collaboration. But rather than being a wicked, stolen good, profit is a crucial incentive for collaborative human action.

People are always searching for the best and cheapest products in order to satisfy their needs, and their demands raise prices. The prospect of profit quickly pushes entrepreneurs into producing what people want—and what they are willing to pay for. Profits illustrate how much people value an entrepreneur’s services. Consumers only pay if the entrepreneur satisfies their desires.

As long as there are profits to be made, others enter the market. The competition spurs entrepreneurs to make production more efficient and cheaper, because the greater the competition, the more the businessman will have to do to earn the customer’s business. As more goods enter the market, consumers can be more picky about whom to purchase from, and prices drop. It’s their own demand that sets the prices, and once they are satisfied and there’s not as much profit in the business, entrepreneurs shift to making other things that people want.

As many Austrian and non-Austrian economists have figured out, the market is an everyday “voting system” of what needs to be produced. Every penny acts as a vote for how best to use limited resources. Profits point entrepreneurs toward what people want most badly. The resulting production is a form of collaboration rather than exploitation. People can do more, because they don’t have to do everything themselves, and they can focus on what they do best.

Income Inequality Is Heightened by a Restrained Market

The Left makes the mistake of arguing that only the rich have gotten richer and attack capitalism without looking at the facts. The market has made nearly everyone richer, not only in terms of income but also in terms of the overall quality of life and the products that they own.

Leftists also ignore income mobility in market economies, when studies show that in fact most people born to the richest fifth of Americans fall out of that bracket within twenty years while most of those born to the poorest fifth climb to a higher quintile and even to the top.

Though their rhetoric makes it seem surprising, this makes sense. As Ludwig von Mises pointed out in The Anti-Capitalistic Mentality, the businessman owes his wealth to his customers, and this wealth is inevitably lost or diminished when others enter the market who can better satisfy the consumer through lower prices and/or a better quality of goods and services.

The problem with income inequality today is that it isn’t entirely a byproduct of the free market but instead is the result of a market crippled by interventionist policies, such as regulations, expensive licenses, and the most complicated tax system in the history of this country. Such restrictions have limited competition and made wealth creation more difficult, causing the stagnation of the middle and lower classes.

Though leftists contend that these restrictions protect people from the “dangers” of the free market, they actually protect the corporate interests that progressives claim to stand against.

Colossal businesses like Amazon and Walmart in fact favor higher minimum wages and increased regulations. They have the funds to implement them with ease, and such regulations end up acting as a protective barrier, keeping startups and potential competitors from entering the market. With competition blocked, these businesses can grow artificially large and don’t have to work as hard to earn people’s business. Instead they can spend money on lawyers and DC lobbyists to fence small businesses out of the market.

Ironically, efforts to regulate businesses in the name of protecting laborers and consumers harms small businesses and makes everyone less equal than they could be in a free market.

Conclusion

Markets are not the enemy of inequality. Regulated markets are. The income inequality that naturally occurs in the free market as a result of human uniqueness is needlessly amplified by restrictive government policies to the detriment of all.

Voluntary exchanges in capitalism are mutually advantageous. If they weren’t, the exchange would never take place. People who live in countries with more economic and social freedom enjoy greater incomes and a higher standard of living. Free trade has contributed more to the alleviation of poverty than have all the government-run programs. Socialist intervention in the market can only distance man from eradicating poverty and from happiness: only unrestrained competition driven by profit can bring about the expansion of choice, the fall in prices, and the increased satisfaction that make us wealthier.