Is socialism a giant ponzi scheme?

Could it be that socialism is a fraud, a giant ponzi scheme that benefits those at the top?

Glen Reynolds seems to think so:

It is a common misconception that socialism is about helping poor people. Actually, what socialism does is create poor people, and keep them poor. And that’s not by accident.

It is by design and deliberate. Keep people poor so they are grateful for the state “helping them” while those at the top help themselves.

Under capitalism, rich people become powerful. But under socialism, powerful people become rich. When you look at a socialist country like Venezuela, you find that the rulers are fabulously wealthy even as the ordinary citizenry deals with empty supermarket shelves and electricity rationing.

The daughter of Venezuela’s socialist ruler, Hugo Chavez, is the richest individual in Venezuela, worth billions of dollars, according to the Miami-based Diario Las América. In Cuba, Fidel Castro reportedly has lived — pretty much literally — like a king, even as his subjects dwelt in poverty. In the old Union of Soviet Socialist Republics, as Hedrick Smith reported in his The Russians, the Communist Party big shots had lavish country houses and apartments in town stocked with hand-polished fresh fruit, even as the common people stood in line for hours at state-run stores in the hopes of getting staples.

Venezuela is the current, modern case study of the failure of socialism.

George Orwell explained the phenomenon in his Animal Farm many decades ago. But people keep falling for it: Like Ponzi schemes, socialism is an evergreen form of fraud, egged on by suckers eager to believe the lies hucksters tell them.

Which brings me to Bernie Sanders. The Washington Post recently ran a piece originally entitled “Bernie Sanders’ plans have surprisingly small benefits for America’s poorest people.” Among other things, it noted that “in general, though, Sanders’ health care plan would benefit affluent households more than it would poorer ones.”

Likewise, a paper from the left-leaning Brookings Institution notes that the biggest beneficiaries of Bernie’s free-college proposal would be rich kids: “Families from the top half of the income distribution would receive 24% more in dollar value from eliminating tuition than students from the lower half of the income distribution.”

While the left likes to talk about 1984, Animal farm has come true more often that 1984 ever will. Labour seems to be promoting similar policies subsidising the wealthy children ahead of others. University graduates go on to become the wealthiest citizens in the country, and yet Labour wants to subsidise their study.

Socialism never delivers. Someone eventually has to pay the bill.


– USA Today


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  • shykiwibloke

    Paraphrasing Maggie Thatcher:- “If Simon is going to tax Peter to pay Paul a benefit, you had better ensure you have more Peters than Pauls. And watch Simon as he has all the power.

  • sheppy

    Wow, someone finally gets it. Bet this doesn’t make it into the leftest media or blogs.

    • contractor

      Someone said something like
      “Capitalism is the worst system there is except for all the others that have been tried.”
      In construction over the decades it has been common to do very well under Labour govts because they spend up, until the money runs out.

      • pidge

        That’s a paraphrase of a Winston Churchill’s quote “It has been said that democracy is the worst form of government, except all those others that have been tried”

  • Tiger

    Exactly, surely the free market system makes better use of limited resources? To have resources gathered and doled out by a central authority is never going to be efficient. The command vs demand economies. Command economies have never worked – ever. I can be corrected, but no two truly democratic countries have ever been to war with each other.

  • JustAnotherLurker

    Under capitalism, man oppresses his fellow man; while under Socialism, it is the other way around.

  • XCIA

    Pre glasnost, the politburo and the elite hangers on shopped at massive supermarket type stores that stocked every conceivable luxury and from where the proletariat were forbidden. The diplomatic core were permitted to shop at the gastronome, but could only shop with D coupons which could only be purchased with hard currency from the ministry.

  • Annoyed

    This is why they make such a big point of calling it “democratic socialism”. Although, if you have to call something democratic it probably isn’t.
    Kind of like how the Left are constantly calling National undemocratic even though they seek to control the media & schools and shut down anyone that doesn’t share their ideology.

  • Oh Please

    There’s a fabulous joke in The Russians where Brezhnev is supposedly showing off his wealth to his mother – the town and country houses, the limousines, the art collections et al. When his mother shows signs of concern he asks her what is wrong. She replies – “What will you do when the Revolution starts?”

  • rustyjohn58

    Rich people prefer capitalism because they know thats how you get rich. Poor people prefer socialism because they don’t know how to get rich so it seems like the easiest way. All parties want to be rich but only one knows how to do it.

  • Simon

    Of course it is, except for those who are fooled by it where in their minds it only hasn’t worked because their guy wasn’t in charge.

    Fact is though even most “right wing” or what is considered right wing eg National here – they’re still very much socialists.

  • PersonOfColor:WHITE

    There is no ‘oppression’, only fraud. But in the socialist version it is all fraudulent and no wealth creation. Eventually its Venezuela….

  • contractor

    National under Muldoon was socialist with the result that when Labour became govt in 1984 Sir Roger Douglas (yay!) had to act fast and dramatically to save the country because the govt was very close to bankruptcy thanks to Muldoon’s spending.

  • cows4me

    Socialism relies on the worst of human faults, greed. When some stand on the platform of continually taking from others so all can be equal then those doing the promoting are relying on greed.