5 Quick Reasons Why Socialism Fails

With the rise of Jeremy Corbyn in the UK and Bernie Sanders in the US, it seems that socialism is back and gaining large amounts of support. In my previous article, I was rather kind to Jeremy Corbyn, highlighting the positives that may come from his Labour party leadership. Within the article, the name ‘Corbyn’ could easily be replaced with ‘Sanders’, as they are both similar figures – they both are socialists. Although socialism sounds attractive in theory (who wouldn’t want free stuff, hey?) in reality socialism doesn’t work, hasn’t worked wherever tried and is a philosophy that is doomed for failure time and time again. For those who don’t know, pure socialism is a system in which the means of production are commonly owned, rather than privately owned. Typical features of socialist economies includes a large public sector, substantial welfare programs and high taxes. This article lists five reasons, in order of importance, of why socialism fails. So without further ado, here we go:

5.  High Tax Rates – One of the typical features of a Socialist system is the high levels of taxation that citizens are forced to pay for the provision of the considerable public services. When a large percentage of an individuals income is taken by the state, incentives to work are diminished, particularly when the public services are poor in quality. When socialists are questioned on who pays for the ‘free stuff’, the answer is always the same – “the rich”. In a graduated income tax system, the richest pay a much larger percentage of their income, which seems fair. However, at a certain point these rich people simply leave the country, taking their wealth with them, that would have otherwise been available for the public services. As a result, less money is available for the state to spend and public services suffer. Evidence of this can been seen in France, who adopted a 75% super-tax on the super-wealthy. French President Hollande was eventually forced to drop the tax as the richest either left the country or threatened strike action.

4. Victim Mentality – A problem with the socialist philosophy is that it encourages a victim mentality amongst its followers. Rather than empowering individuals by encouraging ambition and success, socialism instead blames the rich for all the problems of the poor. In life in order to solve problems, attain goals and become successful, traits such as self-awareness, self-discipline and personal responsibility are essential. However, socialism teaches none of these principles, and instead instills toxic characteristics such as envy and jealousy which keeps poor people down, ultimately helping nobody.

3. Subsidises Failure, Punishes Success – In this country, the government gives money to obese people. I don’t need to go into the negative consequences on health that obesity has, we all know. Yet, obesity is rising and the government is spending more and more on benefits to the obese. If, all of a sudden, a person that is obese starts making the right choices, becomes serious about losing weight, starts to eat healthily and begins to exercise, the benefits provided by the government are taken away. This takes away the incentive for an obese person to lose the weight and become healthy. And so, many obese people are simply happy to stay obese, so long as they keep receiving the benefits from the government. This is one example of how welfare programs actually subsidise failure and punish success, and it can be seen in many welfare programs which causes dependency.

2. Economic Calculation Problem – A fundamental flaw within the socialist centrally planned economy is the lack of rational economic calculation that can take place. In a market economy, there is a profit and loss system that provides signals based on consumer satisfaction. If the business is making a profit, we can assume that the consumer is being satisfied. However, if the business is making losses, then the consumer is not being satisfied and the business needs to change their strategy. A centrally planned economy, in which the state owns the means of production, does not have a functioning price mechanism, therefore information about desirability and abundance of a good is unavailable, which can lead to shortages of desired goods, and surpluses of unwanted goods. This ultimately has disastrous economic consequences.

1. Leads to Tyranny – The main reason why socialism fails is because it gives over too much power to the state. Not only is the socialist state substantial in size, having large amounts of control, but it is also coercive and incompatible with freedom. The simple fact is that man is corruptible by power, and power is what the socialist state most certainly has. Socialists commonly argue that the socialism we have seen in the Soviet Union, in Communist China and so on, is not ‘real’ socialism. This maybe true, however the fact is that these ‘not really socialist’ countries certainly set out to be really socialist. At some point somewhere along the line, these socialist regimes where corrupted and became tyrannical, resulting in the deaths of millions and millions of people. It is a pattern that we have seen time and time again almost wherever socialism has been tried. Whenever a state has substantial power, it almost always abuses that power. Which is why true and functioning socialism is simply unattainable.


13 thoughts on “5 Quick Reasons Why Socialism Fails

  1. Socialism’s goal is vote-buying. It is fundamentally corrupt. Socialism’s method of operation is coercion and confiscatory tax levels. Socialism is the enemy of freedom and the dignity of self development.


  2. […] The main reason why socialism fails is because it gives over too much power to the state. Not only is the socialist state substantial in size, having large amounts of control, but it is also coercive and incompatible with freedom. The simple fact is that man is corruptible by power, and power is what the socialist state most certainly has. Socialists commonly argue that the socialism we have seen in the Soviet Union, in Communist China and so on, is not ‘real’ socialism. This maybe true, however the fact is that these ‘not really socialist’ countries certainly set out to be really socialist. ” 5 Quick Reasons Why Socialism Fails […]


  3. Looking at the jobs leaving the United States because of our own uncaring Government Officials ( Democrat, and Republican ) refusing to see what these Free Trade Pacts are doing to our Economy, and Middle Class Citizens. Socialism, is a better option when the other two aren’t working toward a compromise, instead of lining their pockets as is the case now. When the other two Left their Constituates who voted them in, that changed the field of play. When the other two Parties refuse to listen to the wishes of their Constituates then is the time for change.
    Democrat William J.Clinton signed those “Free Trade Agreements” over the wishes of those who voted him in, even though he had trepidation doing so, even though a fellow Democrat On ose Perot told the American Public ” You’ll now hear that sucking sound of jobs leaving America for Cheap Labor after the Uese are signed. Then you had another Democrat, President Barrak Obama on 2/12/16 signed once again another job busting Trade Agreement (Trans Pacific Partnership)(TPP) infact goaded those in the COngress and Senate into passing it (only this time Billions of dollars were paid out to all of them to vote yes for Obama’s signature to pass them
    That kind of Leadership whether Democrat (which really is a form of Socialisim) and Republican, (which has consistently played to the Super Wealthy, and wealthy) when neither will abide by what the majority of their Constituates want then Change is a must, if for no other reason, and that is to save American jobs and the future of those that will change to keep America safe from the real Communists of Countries who despises us.


    • Sounds to me like what you really want is the same thing we all want – government that is responsive to the needs of the people. An outsider socialist candidate like Bernie Sanders may fill that role temporarily. But why would a socialist system, where more is consolidated under the government, not be even more susceptible to corruption in the long run? We would have exponentially more government officials in positions to peddle their offices for favors and personal enrichment. If fact, as socialism displaces more and more of the free market, eliminating legitimate channels for ambitious people to succeed, working one’s way into a government job and then selling out their office becomes one of the only channels for the ambitious. And there will always be ambitious people.

      In the end, I foresee us with a government that is even more corrupt and less responsive to our needs. To keep it responsive to us, our government needs to have limited powers and scope so that public officials are constantly beholden to the public or they are out on the street.


      • Yeah legit free market companies like EA games that break promise after promise and admit that it’s everybody else’s fault for their failures while giving you the middle finger if you have a legit complaint that is easy to take care of on their end.

        Or NewspaperArchive.com a once growing genealogist resource and history buffs a (legit) business of charging 100$ or more of fraud never honoring it when you cancel your account. Nope sorry but you can’t fool me!

        You can fool some of the people some of the time but you can’t fool all of the people all of the time. 🙂

        If it walks like a duck/quacks like a duck…………………………….


  4. I agree that socialism doesn’t work, but would like to post something that is more than just an opinion piece. What would help me here is having sources on which you have come to these views. Would you consider making some reference to these in future posts? I realize footnotes aren’t the norm, at least as far as I’ve seen, in blogging.


  5. If you want an example of bad capitalism look no further then EA games and their lies and violation of state and national laws.

    Look even better at NewsPaperarchives.com which many genealogist’s have gotten ripped off as in 100$ or more kind of ripped off even on canceled/frozen cards.

    I can access it thru free from a library website so no big deal to me but they haven’t updated their site in 5 years at least and all the newspapers are generally stupid areas nobody will find any info from anyways with no way to cross compare.

    The whole idea of electronic genealogy was to make it easier to at least corss compare when using ancestor names or keyword searches for articles if your a history buff.

    Here is what I mean http://www.cluewagon.com/2014/05/want-a-full-refund-on-your-newspaperarchive-com-subscription-just-ask-about-their-charity/

    Look at this comment towards the top.

    Oxa 2 Years Ago
    Oh, just discovered that NewspaperArchive.com has an F rating from the Better Business Bureau:


    Kerry Scott 2 Years Ago
    Wow, that’s a LOT of complaints for a company this size.

    Kerry Scott 2 Years Ago
    Also, I recognize the canned “you’re screwed, you fell for it” response to the folks who were auto-renewed. It’s the same one I got. If you’re going to have a canned “you’re screwed, you fell for it” response for every customer, at least make sure it’s grammatically correct, uses complete sentences, etc.


  6. The incentive argument is the best: positive incentive – desire to succeed and negative incentive – the fear of starvation if one fails to work. However, in unbalanced capitalism, work and effort is not always rewarded by success and failure to work is replaced by conniving. Some government intervention is necessary a la John Maynard Keynes. Also, economic and social infrastructure (such as healthcare) plays a role. Medicare for all would also provide excellent training sources for healthcare workers.

    Also, the theoretical ideal end limit of socialism as stated by its original 19th Century proponents was to create a society similar to ants (each his needs from each his abilities) which would be a very grey and boring society.


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