Chapter Nine Part I: The Communist Economic Trap

Table of Contents


1. State Ownership and Planned Economies: Systems of Slavery
a. State Ownership: A Totalitarian Yoke
b. Economic Planning: Destined to Fail

2. Western Countries: Practicing Communism by Another Name
a. High Taxes and Welfare
b. Aggressive Economic Interventionism in Western Countries
c. How Socialist Economics Leads to Communist Totalitarianism




Communism’s influence is present in every sector of our present economic system. With the trend of ever-expanding government being the norm, virtually every country on earth is moving away from classic free-market principles and gravitating toward communist or socialist economics.

Looking at the countries that abandoned communism or the socialist economic model after the fall of the Soviet bloc, one would think that the communist specter had failed in its goals. But the reality isn’t so simple. The specter’s methods do not follow a rigid pattern. For the sake of a greater objective, it may abandon certain forms while adopting others to suit the historical or social situation. Nowhere is this truer than in the economic sphere.

More than 150 years ago, Karl Marx advocated the abolition of private property and ascendance of state ownership in his book Das Kapital. Totalitarian communist states tried to achieve this objective directly, using terror, violence, and mass murder. But as overt communist doctrine lost its appeal, leftists in democratic countries devised nonviolent forms. The multitudinous strains of socialism and communism they created and introduced throughout the years defy easy classification.

In addition to curtailing basic rights to private property and enterprise, communist economic policy fosters corruption and contributes to the erosion of traditional culture. To preserve their prosperity, way of life, and moral foundations, nations around the world must awaken to communist subversion in the economic realm, and take measures against it.

1. State Ownership and Planned Economies: Systems of Slavery

Heaven created man, endowed him with wisdom and strength, and decreed that in his life he would reap rewards for his labor — and thus be able to obtain enough to secure his life. The Declaration of Independence states, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” [1] Naturally, these rights include the power to possess and allocate property and assets.

In contrast, Marx and Engels stated in The Communist Manifesto, “The theory of the Communists may be summed up in the single sentence: Abolition of private property.” [2] This is a reference to state ownership, which, under a planned economy, is mandatory. In communist planned economies, the means of production are directly controlled by the state. The essence of this system violates Heaven’s principles, runs contrary to human nature, and, ultimately, is a form of slavery.

a. State Ownership: A Totalitarian Yoke

Anti-communist pioneer Fred Schwarz told the following joke in his book You Can Trust the Communists … to Be Communists, about an interviewer who visits first a Soviet automobile plant and then an American one:

“Who owns this factory?”
“We do,” they replied.
“Who owns the land on which it is built?”
“We do.”
“Who owns the products of the factory when they are made?”
“We do.”
Outside in a corner of a large park were three battered jalopies. The visitor asked, “Who owns those cars out there?”
They replied, “We own them, but one of them is used by the factory manager, one is used by the political commissar, and the other is used by the secret police.”
The same investigator came to a factory in America, and said to the workers, “Who owns this factory?”
“Henry Ford,” they replied.
“Who owns the land on which it is built?”
“Henry Ford.”
“Who owns the products of the factory when they are made?”
“Henry Ford.”Outside the factory was a vast park filled with every make and variety of modern American automobile. He said, “Who owns all those cars out there?”
They replied, “Oh, we do.” [3]

This story vividly displays the consequences and differences between systems of private and state ownership. Under the system of state ownership, resources and the gains from labor are nationalized. Gone are the mechanisms that motivate individual enthusiasm, ambition, and innovation, along with the sense of responsibility conveyed by personal property rights. In name, state ownership means that the wealth of a country is shared by all citizens, but in practice, it means that the privileged class monopolizes resources and looks after itself first.

The ultimate factor in economic growth is people. State ownership chokes people’s vitality and motivation to be productive. It undermines morale, promotes inefficiency, and creates oversupply or gross shortages. From Soviet collective farms to the people’s communes in China to failed collectivization in Cambodia and North Korea, the system of state ownership brings starvation wherever it goes. For example, the man-made famine in China killed tens of millions of people between 1959 and 1961.

Both evil and kindness exist in mankind. Private property ownership allows man to develop integrity and encourages labor and thrift. Collective property ownership, however, encourages the evil in human nature, promoting jealousy and laziness.

Austrian economist and philosopher Friedrich Hayek wrote that the growth of civilization relies on social traditions that put private property at the center. Such traditions spawned the modern commercial system and its attendant economic growth. This is an organic, self-generating order that does not require a government to function. Yet communist and socialist movements seek to shape the world according to their wishes — what Hayek called their “fatal conceit.” [4]

If private ownership and freedom are inseparable, then the same principle applies to state ownership, wed as it is to dictatorship and suppression. The system of state ownership nationalizes resources, degrades economic productivity, and turns people into the country’s servants and slaves. All people must obey the commands of the central party, and any ideas and voices inconsistent with the regime can be shut down. People are then powerless against state intervention.

Thus, the elimination of private ownership and the establishment of state ownership inevitably leads to totalitarian outcomes. Collectivism is a yoke affixed on the necks of humans by a totalitarian state. Freedom is stolen — including the freedom to be upright — and everyone is forced to follow the moral commands of the communist regime.

If power is privatized and wealth collectivized, disaster awaits mankind.

b. Economic Planning: Destined to Fail

Under a planned economy, an entire society’s production, allocation of resources, and distribution of products are based on a plan established by the state. This is completely different from supply and demand economics in a free market.

The planned economy has natural and obvious defects. First, it requires the collection of a huge amount of data in order to make reasonable arrangements for production. For any country, especially a modern state with a large population, the amount of required information is unimaginably large and impossible to process. For instance, the former Soviet Union’s commodity pricing bureau had to set prices for twenty-four million different kinds of goods. [5]

The complexity and variability of society and people cannot be solved through a unified planned economy. Even with the use of modern big data and artificial intelligence, human thoughts cannot possibly be inputted as variables, and so the system will always be incomplete.

Economist Ludwig von Mises discussed the relationship between socialism and the market in his article “Economic Calculation in the Socialist Commonwealth.” [6] He notes that without a real market, a socialist society isn’t able to make reasonable economic calculations. Thus, the distribution of resources cannot be rationalized, and the planned economy fails.

Additionally, economic planning requires coercive state control of resources. This ultimately requires absolute power, quotas, and commands. When the requirements of the real world fail to conform to state planning, state power tramples on natural economic trends, thus causing the mass misallocation of capital and all its attendant problems. The planned economy uses the limited power and “wisdom” of government in a doomed attempt to play God.

Moreover, an economics of power is first of all beholden to politics, rather than to the actual needs of the people. Economic planning and authoritarian politics are inseparable. Because national plans are inevitably flawed, when problems arise, the plans will be challenged both inside and outside government. Those in power then feel that their authority is being challenged and will fight back with political pressure and purges. Mao Zedong, for instance, ignored the laws of economics and forced through the Great Leap Forward, resulting in a three-year famine that caused tens of millions of deaths. This led to serious challenges to his leadership position in the Communist Party, which is a key reason he later launched the Cultural Revolution.

The disastrous effects of the planned economy and collective ownership have been fully exhibited in the current conditions of Chinese state-owned enterprises (SOEs). In recent years, a large number of Chinese SOEs have stopped or slowed production, have suffered losses every year, or have become insolvent. They rely on government subsidies and rolling bank credit to maintain operations. They’ve essentially become parasites on the national economy, and many are widely known as “zombie enterprises.” [7] Among the 150,000 state-owned enterprises in China, with the exception of state monopolies in the lucrative sectors of petroleum and telecommunications, other SOEs report minimal profits and suffer serious losses. By the end of 2015, their total assets accounted for 176 percent of GDP, debt accounted for 127 percent, and earnings accounted for only 3.4 percent. [8] Some economists believe that these zombie enterprises have essentially hijacked China’s economy, which for many years has remained dependent on cheap manufacturing made possible by extreme exploitation of low-wage workers and a complete disregard for the environment.

Meanwhile, economic planning deprives people of their freedom and forces the state to look after them. All aspects of people’s lives come under the control of the state, which locks people in an invisible prison, seeks to abolish free will, and alters the parameters of human life established by the divine. The essence of the project is about turning people into slaves and machines. This is yet another manifestation of the communist revolt against the divine and natural law.

2. Western Countries: Practicing Communism by Another Name

For individuals, Marxism’s “abolition of private property” entails the “abolition of bourgeois individuality, bourgeois independence, and bourgeois freedom.” For society, it means that “the proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class.” [9]

Many economic policies or structures may not appear socialist on the surface, yet they play the role of restricting, weakening, or depriving people of the right to private property. Others weaken the mechanics of free enterprise, expand government power, and lead society further down the road toward socialism. The methods used include high taxation, generous social welfare, and aggressive state interventionism.

a. High Taxes and Welfare

High taxation is a covert way to gradually phase out the system of private ownership. The end result of high taxation is the same as the state ownership and “egalitarianism” imposed by communist regimes, with the only difference being whether nationalization is effected before or after production.

In the West, production is controlled privately, but the revenue is converted into state assets via taxes and redistribution schemes. This wealth-taking is achieved legally through democracy and legislation rather than through killing and violence.

An important feature of the communist or socialist economics seen in Western countries is robust social welfare, which is used to gradually erode moral wisdom and freedom. While some government aid is reasonable — such as social security for victims of disasters or accidents — it is easy for welfare to become a convenient instrument of deception. Its positive aspects become the excuse for increasing taxes and government control. In this regard, generous welfare has already achieved the same destructive consequences to people, society, and moral values as do overtly communist economics, without the need for violent revolution.

Social welfare in developed Western countries consumes a large portion of revenue, which comes from taxes transferred from private wealth. All socialized benefits must ultimately be paid for by the people, via taxes or national debt. There is no other method to maintain this level of government largesse. In the United States, more than half of the tax revenue is spent on Social Security and medical care. More than 80 percent of this money comes from personal income taxes and Social Security taxes; 11 percent is from corporate tax. [10] This kind of massive government spending only began in the past century.

In 1895, the US Supreme Court declared income taxes unconstitutional. The decision stood until the 1913 ratification of the 16th Amendment. Data from fifteen countries in the year 1900 show that only seven imposed an income tax, with Italy leading at a rate of 10 percent. Australia, Japan, and New Zealand had income tax rates of about 5 percent.

By 2016, according to data on thirty-five market economies published by the Organization for Economic Cooperation and Development (OECD), twenty-seven countries had an income tax rate higher than 30 percent. The countries with the two highest income taxes, at 54 and 49.4 percent, are both in Europe. [11] On top of this, eating or shopping in Europe usually adds more than 20 percent in sales tax. Corporate and other taxes further add to the overall tax burden.

High taxation burdens not only the wealthy, but also those at the bottom of the tax scale. While the rich often have various legal means of shielding themselves from taxes, the poor’s welfare benefits disappear as their income increases beyond a certain threshold. After taxes, this income is often less than what they received on welfare. People are effectively penalized for working harder and thus incentivized to stay on welfare.

Expansive Welfare

In modern society, vast welfare systems have been expanded to cover unemployment, medical care, pensions, occupational injury, housing, education, child care, and more, far beyond traditional concepts of aid for those in immediate need.

A report from The Heritage Foundation shows that in 2013, more than one hundred million people in the United States, or about a third of the population, received welfare benefits (excluding Social Security and Medicare) worth an average of $9,000 per recipient. [12] According to Census Bureau data from that year, 14.8 percent of the population were classified as living below the poverty line — basically the same rate as in 1967, a few years after President Lyndon B. Johnson declared “unconditional war on poverty in America.” This suggests that greatly expanding welfare benefits — as was done under Johnson’s administration — hasn’t achieved the goal of reducing the percentage of people living below the poverty line.

As of 2014, in the fifty years since Johnson launched his War on Poverty, American taxpayers spent $2.2 trillion on welfare. Yet, as statistics from the US Census Bureau show, the poverty rate has remained steady for the past forty years. [13]

Moreover, poverty is calculated by income and doesn’t factor in the various benefits afforded to welfare recipients, such as food stamps, housing subsidies, and education benefits. Over a century ago, French thinker Alexis de Tocqueville said that by only using poverty thresholds to allocate aid, it is impossible to know whether eligible individuals are actually suffering from circumstances beyond their control or if their misfortune is of their own making. [14]

The deliberate categorization of large numbers of people into the “impoverished” demographic provides ample excuse for the expansion of welfare. Living standards in poverty today are far superior to those in the 1960s. According to a government survey conducted in 1999, 96 percent of parents in impoverished households said that their children had never gone hungry due to inability to buy food. Almost 50 percent of impoverished households lived in detached houses, and 40 percent lived in townhouses. Just 9 percent lived in mobile homes. Eighty percent had air conditioning and two-fifths owned widescreen LCD TVs. Three-quarters of impoverished households owned cars. [15]

Even still, the benefits provided by the US government are below average compared with those of other members of the OECD. Most people living in Nordic countries and other Western European nations enjoy far greater welfare than Americans. In Denmark, for example, even the wealthiest citizens enjoy a cradle-to-grave social safety net that includes free medical care, university education, and other generous benefits. Swedes are entitled to 480 days of paid parental leave when a child is born or adopted. Greeks, prior to their country’s economic collapse, enjoyed an annual fourteen-month-worth salary and retirement at the age of fifty-seven. The country spent 17.5 percent of its GDP on pension payments.

The expansion of welfare from its traditional role of emergency aid to long-term benefits for entire populations is, in fact, part of the goal of imposing a communist economy.

Social Benefits, Corruption, and Class Conflicts

From an economic point of view, the essence of welfare is to take money from some people and transfer its value to others. However, it is the government that is responsible for distributing the wealth, usually without requiring anything in return—thus de-emphasizing the wisdom that one must work in order to gain. The loss of this moral principle is particularly evident in Northern Europe.

Swedish scholar Nima Sanandaji demonstrated this point using data from the World Value Survey. In the early 1980s, 82 percent of Swedes agreed with the statement that “it is wrong to receive government benefits that you do not deserve.” In the 2010–2014 survey, only 55 percent of Swedes agreed with this statement. [16]

Under a generous welfare system, those who work hard receive fewer returns, and those who are less industrious are rewarded with benefits. Over time, this subtly distorts moral traditions, as those who grew up with high government welfare lose the industriousness, independence, responsibility, and diligence of their forefathers. They take the system for granted and consider welfare to be a human right. They have formed a habit of relying on the government and even holding it hostage for continuous aid. Thus, social values are changed almost irreversibly.

Expansive government welfare also squeezes out the role of traditional charities, depriving the donors of the opportunity to do good works and the beneficiaries of the chance to feel gratitude. In traditional society, charity was given by one’s own choice, either by giving aid directly to the less fortunate or by donating to charitable organizations such as churches. There were clear donors and recipients, and being able to receive assistance was a privilege, not a right. Recipients felt gratitude for the donors’ kindness and would be motivated to use the charity to supplement their own efforts to improve their lot. Those who received charity and turned their lives around would be likely to return the favor when others confronted the same challenges they once faced.

Tocqueville noted that charity combined the virtues of generosity and gratitude, which interact mutually to improve society and exert a positive moral influence. Meanwhile, the relationship between givers and receivers functioned to ease conflicts and antagonism between rich and poor, as charitable behavior on the part of individuals connected members of different economic classes. [17]

The bloated system of modern welfare interrupts the relationship between donors and recipients by bureaucratizing the process of charity. The “donors” of today are taxpayers who are forced to give up their wealth, rather than sharing it voluntarily. Meanwhile, recipients of welfare have no connection to their benefactors and feel no gratitude for their sacrifice.
Tocqueville believed that social welfare exacerbated conflicts between the rich and the poor. Having part of their wealth forcibly confiscated, the wealthy would come to resent welfare recipients. Tocqueville said that the poor, too, would feel discontent if they took their economic relief for granted: “One class still views the world with fear and loathing while the other regards its misfortune with despair and envy.” [18]

Bloated welfare also becomes a way for the communist specter to exacerbate jealousy and political conflict. This has been observed in the Greek economic crisis: Among the upper class, tax evasion became a “national sport,” according to Greek officials cited by The Economist. [19] With reduced tax revenue, the Greek government attempted to cut back on social welfare, only to meet with staunch resistance. So as to not upset its constituents, the government relied on taking out loans to offset diminishing tax revenue, while maintaining the same level of welfare found in other European countries. Greece eventually raised taxes on middle- to high-income earners, farmers, and businesses.

In 2009, an empirical study by Martin Halla, Mario Lackner, and Friedrich G. Schneider showed that social welfare disincentivizes hard work in the long term. The three economists concluded that the dynamics of the welfare state are inimical to the health of a nation’s economic base. [20]

The Culture of Poverty

Welfare should be an emergency measure to assist those in genuine need, effective in circumstances such as those involving occupational accidents, epidemics, natural disasters, and so on. It shouldn’t become the default form of subsistence, as it is incapable of resolving the dilemma of poverty.

Expanding the criteria that determines who is entitled to welfare creates an atmosphere of negative reinforcement that encourages the misuse of these benefits. For example, the term “disability” is being continually redefined to extend eligibility to more individuals. The result is economic malaise, which causes a regression in social morality.

In 2012, The New York Times ran an opinion article titled “Profiting From a Child’s Illiteracy,” which discusses the impact of welfare policy on low-income families living in the Appalachian Mountain region in the eastern United States. The article describes how impoverished families stopped sending their children to literacy classes in order to qualify for aid. “Moms and dads fear that if kids learn to read, they are less likely to qualify for a monthly check for having an intellectual disability,” the article states. “Many people in hillside mobile homes here are poor and desperate, and a $698 monthly check per child from the Supplemental Security Income program goes a long way — and those checks continue until the child turns 18.” [21]

The program began about forty years ago with the goal of helping families whose severely physically or mentally challenged children made it difficult for parents to work—about one percent of poor children. By 2012, more than 55 percent of qualifying children were categorized as mentally challenged, but did not have a defined diagnosis. Across the United States, there are now a total of around 1.2 million “mentally challenged” children for whom taxpayers provide $9 billion annually. [22]

Here, welfare and the flaws of human nature feed each other in a downward spiral. While those who advocate and devise welfare policy may do so with good intentions, the effects of these policies are often detrimental, both to individuals and society as a whole.

Welfare abuse doesn’t just tie down public finances; it also affects the futures of children who grow up inside its system. Research conducted in 2009 found that two-thirds of people who received welfare as children continued to receive it into adulthood. [23]

According to American economist William A. Niskanen, the welfare system has spawned a culture of poverty, which in turn has fed a vicious cycle of dependence on government aid, children born out of wedlock, violent crime, unemployment, and abortion.

Niskanen analyzes state data for 1992 and estimates the potential effects of increasing Aid to Families with Dependent Children benefits by 1 percent of the average personal income. He determined that the number of recipients would increase by about 3 percent; the number in poverty would increase by about 0.8 percent; births to single mothers would increase by about 2.1 percent; and unemployment would increase by about 0.5 percent. Abortions and violent crime would both increase by just more than 1 percent each. [24] Niskanen’s findings suggest that a robust welfare system fosters dependence on the system and discourages personal responsibility.

The disintegration of families is a chief ingredient in the culture of poverty. In a study of historical and contemporary poverty among blacks, economist Walter E. Williams found that in 1925 New York City, 85 percent of black families were two-parent. By 2015, black single-parent households had reached nearly 75 percent. The welfare system incentivizes this phenomenon, as it provides considerably more benefits to single mothers than to those who marry. By purposely remaining single, a parent can access more government subsidies, including welfare payments, housing subsidies, food stamps, and medical care. Welfare has been instrumental in pushing single parenthood, which has proven to cause more poverty. Alternatively, Williams found that the poverty rate among black married couples had remained in the single digits since 1994. [25]

The Left’s Use of Welfare Policy to Gain Votes

While welfare has been ever-expanding over the last few decades, the gap between rich and poor has also continuously increased. The average wage, adjusted for inflation, has increased at a snail’s pace, while wealth flows to the most wealthy, resulting in a larger class of working poor. The Left weaponizes these societal issues to push for a bigger government, higher taxation, and more welfare to combat poverty, exacerbating the problems even further.

Leftwing politicians use a variety of election slogans to convince voters of their noble intent, portraying themselves as possessing the moral high ground, despite that they are draining taxpayer money to fund their programs. Their method is to seize the wealth of the upper and middle classes and distribute it among the poor. This system of forced charity conceals the relationship between the donors (taxpayers) and the recipients. Politicians present themselves as the benevolent givers and receive the recipients’ gratitude in the form of votes, while telling the recipients that they should resent the “rich” — the actual donors.

b. Aggressive Economic Interventionism in Western Countries

In Western countries, the state, which traditionally only passed and enforced laws, has now become a leading participant in the economic arena. Like a referee joining a soccer match, the state has become responsible for controlling and regulating capital in what used to be a mostly self-regulating economy.

At present, governments in the free world are already practicing interventionism in their national economic systems. One driver of this trend came out of the Great Depression in the 1930s. Following the crisis, Western society was deeply influenced by the economic theory developed by British economist John Maynard Keynes. Keynesian economics advocates active state intervention and regulation of the economy through finance. In his seminal book, The General Theory of Employment, Interest and Money, Keynes opposes free market self-regulation and instead favors increased government spending and interventions such as bailouts to stabilize the market.

In a healthy society, the government’s role is limited. Only in exceptional situations should the state interfere in the economy, such as during natural disasters or other crises. But today, Keynesian theory has taken root around the world. Governments of virtually all countries are racing to take greater control over their respective economies.

When governments play an active role in the economy, each action creates a massive ripple effect in the markets. New policies and laws can make or break entire industries, forcing many businesses and investors to become overly beholden to government decisions.

Active financial control combined with high-welfare policies has caused many governments to incur huge debt. According to data from the OECD, more than one-third of its member states have government debts higher than 100 percent of GDP. One country’s debt has exceeded 237 percent of its economic output. [26] This presents a major vulnerability for the social and economic futures of many countries.

Nobel Prize-winning economist Ronald Coase wrote multiple research papers on the impact of government intervention. In his work, Coase found that interventionist policy almost always produces negative results. The most probable explanation, he said, is that “the government now operates on such a massive scale that it [has] reached the stage of what economists call negative marginal returns. Anything additional it does, it messes up.” [27]

The Consequences and Reality of Interventionism

There are at least two major consequences of extensive government intervention. First, the power of the state expands in terms of its role and scale. Government officials develop increasing hubris about their ability to interfere with the economy and have the state play the role of savior. After handling a crisis, the government is wont to retain its expanded powers and functions.

Second, interventionism creates more reliance on the government. When the populace encounters challenges, or when the free market cannot provide the desired benefits, the people will lobby in favor of more government intervention to satisfy their demands.

As the power of the state increases, private enterprise weakens and the free market has less space in which to function. People who have benefited from and grown dependent on politicians will increasingly demand that the government take responsibility for allocating wealth, and enact laws to enforce this.

In the West, there is a strong political current pushing society toward the Left. This encompasses followers of the original left wing, including socialists and communists, as well as those not traditionally associated with the Left but who have been co-opted by it. This emboldens leftist politicians to take greater measures to intervene in the economy and interfere with the functioning of private enterprises. This erosion of normal economic activity appears to be caused by various social movements, but in fact, it is the specter of communism that pulls the strings.

Western governments wield their authority under the banner of equality and other political excuses to increase intervention, while enacting laws to give themselves more permanent power. There is no doubt that this behavior deprives market economies of their principal arbiters — the free will of the people.

The state is essentially expanding its authority over the free market to turn it into a command economy. The long-term implications are that all aspects of the economy and popular livelihood will come under state control. Economic means will be used to consolidate political power, enslaving society and its citizens.

c. How Socialist Economics Leads to Communist Totalitarianism

High taxes, high welfare, and widespread state intervention are manifestations of socialism within Western economic systems. As things stand, the only difference between the planned economies of communist countries and heavy state interventionism in the West is the law and some basic aspects of the system are protecting human rights from total government control.

Hayek, the economist and philosopher, cautioned against state-controlled planning and wealth redistribution, saying that it would inevitably tamper with the market and lead to the rise of totalitarianism, regardless of whether the system was democratic or not. Hayek believed that although the socialism practiced in Europe and North America was different from state ownership and planned economies, it would nevertheless arrive at the same outcome — people would still lose their freedom and livelihood, just in a slower and more indirect fashion. [28]

As has been discussed earlier in this book, Marx, Engels, and Lenin all saw communism as the final goal, with socialism a mandatory step on the journey. A train’s destination will not be affected by its stopping at a station along the way — in fact, it might pick up more passengers. Likewise, the specter of communism is the driving force behind a country’s move toward socialism. Once humanity forsakes tradition, whether in the economic sphere or in other areas, and accepts communist ideology, the pace of this development is irrelevant.

The destination at the end of this path is not heaven on earth, but the destruction of humanity. The specter is not concerned with whether “heaven” is realized or not — this promise is merely bait to lure people to their doom.

Chapter Eight (Part II)Chapter Nine (Part II)


1. Thomas Jefferson et al., “United States Declaration of Independence,” July 4, 1776, National Archives, accessed April 20, 2020,

2. Karl Marx and Frederick Engels, “Manifesto of the Communist Party,” in Marx & Engels Selected Works, vol.1, trans. Samuel Moore, ed. Andy Blunden (Moscow: Progress Publishers, 1969), Marxists Internet Archive, accessed April 20, 2020,

3. Fred Schwarz, You Can Trust the Communists … to Be Communists (New Jersey: Prentice-Hall, 1960), 26–27.

4. Friedrich A. Hayek, The Fatal Conceit: The Errors of Socialism, W.W. Bartley III, ed. (Chicago: University of Chicago Press, 1991).

5. Thomas Sowell, Intellectuals and Society, Revised and Expanded Edition (New York: Basic Books, 2012), chap. 2.

6. Ludwig von Mises. “Economic Calculation in the Socialist Commonwealth,” Mises Institute, accessed April 20, 2020,

7. Shi Shan, “Quagmire in the Reform of China’s State-Owned Enterprises,” Radio Free Asia, September 22, 2015 [石山, 中国国企改革的困境, 普通话主页] [In Chinese]

8. Linette Lopez, “Zombie Companies Are Holding China’s Economy Hostage,” Business Insider, May 24, 2016,

9. Marx and Engels, “Manifest.”

10. Max Galka, “The History of US Government Spending, Revenue, and Debt (1790–2015),” Metrocosm, February 16, 2016,

11. Organization for Economic Cooperation and Development, “OECD Tax Rates on Labour Income Continued Decreasing Slowly in 2016,” November 4, 2017,

12. Rachel Sheffield and Robert Rector, “The War on Poverty After 50 Years,” The Heritage Foundation, September 15, 2014,

13. Robert Rector, “The War on Poverty: 50 Years of Failure,” The Heritage Foundation, September 23, 2014,

14. Alexis de Tocqueville, Memoir on Pauperism, trans. Seymour Drescher (London: Civitas, 1997).

15. Sheffield and Rector, “The War on Poverty.”

16. Nima Sanandaji, Scandinavian Unexceptionalism: Culture, Markets, and the Failure of Third-Way Socialism (London: Institute for Economic Affairs, 2015), Kindle edition, 75.

17. Tocqueville, Memoir.

18. Ibid, 31.

19. “A National Sport No More,” The Economist, November 3, 2012,

20. Martin Halla, Mario Lackner, and Friedrich G. Schneider, “An Empirical Analysis of the Dynamics of the Welfare State: The Case of Benefit Morale,” Kyklos 63, no.1 (2010), 55–74, Wiley Online Library, accessed April 20, 2020,

21. Nicholas Kristof, “Profiting From a Child’s Illiteracy,” The New York Times, December 7, 2012,

22. Ibid.

23. Kristof, “Profiting From.”

24. William A. Niskanen, “Welfare and the Culture of Poverty,” The Cato Journal 16, no.1 (1996),

25. Walter E. Williams, “The True Black Tragedy: Illegitimacy Rate of Nearly 75%,”, May 19, 2015,

26. Organization for Economic Cooperation and Development, “General Government Debt (Indicator),” 2019, accessed April 27, 2020,

27. Ronald Coase, as quoted in Thomas W. Hazlett, “Looking for Results: An Interview With Ronald Coase,” Reason, January 1997,

28. Friedrich A. Hayek, The Road to Serfdom (Chicago: University Of Chicago Press, 1944).