Pictures Of The “Democratic” Socialist Future

Authored by Mark Jeftovic via BombThrower.com,

This is Happening, This is Really Happening

On New Year’s Day, Zohran Mamdani was sworn in as mayor of the financial capital of the world, with his hand on a copy of the Koran, and in his inauguration speech, he proclaimed:

“I was elected as a democratic socialist and I will govern as a democratic socialist.”

As a guy who normally tunes out political speeches (to this day, I haven’t a single speech by Trump, Trudeau, let alone Carney or Biden), this one got my attention to the point where I downloaded the transcript and read the entire thing.

It gave me some serious Pol Pot “This is Year Zero” vibes…

“Beginning today, we will govern expansively and audaciously… to those who say the era of Big Government is over, hear me when I say this: no longer will city hall hesitate to use its power to improve New Yorker’s lives.”

Most people don’t know who that was. Except maybe the odd Cambodian.

The banger pull quote was this:

“We will replace the frigidity of rugged individualism with the warmth of collectivism.”

…and the crowds, no doubt cheered.

A few years ago, before the pandemic, I re-released a version of the public domain work: Pictures of The Socialistic Future, from my foreword:

This remarkable little novella posits a fictional socialist sweep into power in Germany towards the end of the 19th century, anticipating the Bolshevik and Marxist revolutions of the subsequent decades. It follows the arc of a family as narrated by its patriarch as he initially enthuses over the socialist ascension to the seat of government.

Quickly, however, he progresses through various stages of disenfranchisement that inevitably ensue: first tempering his expectations, then ratcheting them downward, followed by grappling with cognitive dissonance brought about by the internal contradictions of the new system. When those conflicts are inescapable,  he finally spirals into angst and despair as he comes to fully comprehend the horrors of socialism.

I released that around the same time we did the audiobook version of Dr. Kristian Niemietz’s “Socialism, The Failed Idea That Never Dies“, which has obviously not been read by many New Yorkers.

The historical pattern with all collectivist experiments is: honeymoon, underperformance, disenfranchisement, collapse.

NYC has entered the honeymoon phase, Mandami will be celebrated by Western, liberal intellectuals as a trailblazer and and bulwark against “Trumpism”, he plans to release inmates from jails, freeze rents, launch government run grocery stores and eliminate fares for public transit.

It remains to be seen what kind of radical reforms a mayor can make in one American city – where property rights could (theoretically) still be upheld at higher levels, and where those with much to lose have the ability to flee.

Over the weekend, a useful contrast emerged: Venezuela already ran this experiment. After their honeymoon came repeated hyperinflations, food shortages so extreme people were eating zoo animals, and Chávez’s successor turned the place into a dictatorial narco-state.

The nightmare finally ended when Maduro was removed by the U.S. military in a one-shot operation on January 3rd.

“Collectivism” means: the end of economic reality

In Eugen Richter’s parable – which invariably replays in every collectivist adventure, the first order of business is not “compassion.” It’s confiscation.

Mamdani’s platform specifies a new flat 2% income tax on all New Yorkers earning more than a million annually and boosts the corporate tax rate from 7.5% to 11.5%. My prediction is that after six to twelve months of policy failure, he’ll follow that up with a wealth tax. Bet on it.

Mamdani frames collectivism as “warmth,” but the actual content of his program is an expanding universe of guarantee: universal child care, rent freezes, “fast and free” buses, baby baskets. etc.

As a Canadian who’s lived my whole life under the yoke of “free health care,” I know how it actually collectivism works: anything the government gives everyone “for free” comes at a cost. And when it’s imposed through a state monopoly, that cost tends to exceed the returns, by a wide margin. (Which is why Canadians routinely die on waiting lists, or while sitting in the ER waiting for treatment.)

I’m frequently saying “Incentives are everything“, this is what collectivists don’t get…

The economic reality is that when you turn City Hall (or any government) into the allocation engine for entitlements, you turn erstwhile productive citizens into a doom loop of dependancy. Nobody in a collectivist paradise wants use their excess productive capacity only to have it redistributed to everybody else, so they simply won’t produce at anything above subsistence levels. There’s no point in doing so.

At the municipal level what we can expect then, this:

Rent freezes = housing shortages

Saving for an investment property is one of the more accessible avenues for improving one’s lot in life. When governments freeze rents, it squeezes out the small “mom-and-pop” landlord from being able to hold a cashflowing property, they get squeezed out. Developers won’t build or invest, because there’s no point if they can’t sell any units, and there’s no point investing in new units if you can’t at least break even operating them.

The result: fewer homes get built.

City run grocery stores = food shortages

We don’t need to look at Venezuela to see what happens here, this is already being tried in America and it’s a shit-show: empty shelves, rotting food, it’s almost as if when you try to force goods and services to price below their market clearing rates, the system simply breaks down as producers withhold their remaining labour and capital from a money-losing exercise.

Taxing the “wealthy” = capital flight

We’re already seeing the wealthy pull up stakes and leave – the highest earners did so even before the election, and after Mamdani secured victory, the next level: middle and higher-income earners, headed for the exits (most popular destination: Florida).

There is now an influx among low income earners – (defined as “under $200K annually!) headed to NYC, perhaps lured by the promise of free stuff, streets paved with gold, and a collectivist utopia.

We’ll see how long New York’s honeymoon phase with collectivism lasts.

What we’ll inevitably see play out instead is not theory, it’s been borne out in every collectivist experiment over the 20th and 21st centuries.

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