Canada doesn’t pay for Medications and Urges People to become Capitalists in Lieu of Welfare

Posted by PITHOCRATES - June 2nd, 2012

Week in Review

A lot of people think that Canada is this social utopia.  Where health care is all free.  And they put capitalism in its place.  But it’s not quite like that (see Microloans for mental-health patients rolling out across Ontario by Tavia Grant posted 6/1/2012 on The Globe and Mail).

There were times when Ed Middaugh had no home, no job and no money. He floated from couch to couch, in and out of hospitals during what he reluctantly calls “episodes,” unable to buy food because payments for medications consumed his whole monthly budget.

These days, Mr. Middaugh, 34, diagnosed with bipolar disorder at age 19, runs his own general contracting business, where he does home renos, stonework and landscaping. He’s bright, articulate, motivated – and steady, thanks to a better mix of meds.

He’s also the recipient of an $8,500 small-business loan that enabled him to buy a used pickup and power tools – something he never could have imagined landing from a traditional bank due to a sporadic work history.

So many Americans yearn for a Canadian-style national health care system.  Well, the health care may have been free but it appears the prescriptions weren’t.  Not when someone has to choose between food and medications.  Why, that’s the kind of thing they say about the evil private health care system in America.  All the while cursing the evil pharmaceuticals. 

Also, this social utopia that puts people before profits has a unique solution to help those who need help.  Helping them to become small business owners.  Instead of a lifetime on government support they make a single investment to help these people take care of themselves.  By becoming capitalists.  Something many Americans wouldn’t expect from Canada.  But something they can learn from their good neighbors to the north.


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LESSONS LEARNED #68: ” Beware the demagogue, the champion of the poor, for he has dictatorial aspirations.” -Old Pithy

Posted by PITHOCRATES - June 2nd, 2011

Robespierre used the Sans-culottes

A telltale sign of royalty is a really nice pair of pants.  With a perfect, sharp crease.  But that’s today.  Back in the old days, it was a handsome pair of silk knee-breeches.  The wealthy in pre-revolutionary France all wore them.  I say ‘pre-revolutionary’ because it was not the thing to wear during the revolution.  In fact, a group of people who could not afford these fancy breeches took pride in their plain pants.  The poor working class in the cities.  Artisans and small shopkeepers.  The little guys.  Struggling to make a living.

These people did not wear the ‘culottes’ (French for ‘silk knee-breeches’) of the upper classes.  So they went ‘sans’ them (French for ‘without’).  Hence they were the Sans-culottes.  They were the people without silk knee-britches.  And the mob behind the French Revolution

They were Leftist radicals.  Anti-capitalists.  And the far-Left radical Jacques Roux used them for muscle.  Turned them against the bourgeouis (the middle class).  Caused a whole lot of unrest.  Some food riots.  And a massacre or two.  Roux was becoming too powerful so Maximilien Robespierre, a Jacobin, had him arrested.  Then he used the Sans-culottes to consolidate his power.  With the opportune assassination of Jean-Paul Marat (a Jacobin leader), Robespierre became the leader of the Jacobins and of the Revolution.  For awhile.  With the help of the Sans-culottes, he unleashed the Reign of Terror.  Marat’s assassin was a Girondin.  The Girondins were the political rivals of the Jacobins.  So Robespierre put Marat’s assassination to good use and cleaned house.  And by ‘clean house’ I mean killed as many of his political opposition as possible.  It was the time to kill.  If you didn’t like someone all you had to say was that he or she was a counter revolutionary.  And they got a date with the guillotine.  In all some 16,000 (or more) lost their heads during the Reign of Terror.  Including Robespierre himself.  Live by the guillotine.  Die by the guillotine.  And soon thereafter the Sans-culottes became less of a force as the government pulled back from the extreme Leftist radicalism of the Terror to a more conservative one.

Communist Leaders exploited the Proletariat

Marxism arose as a criticism of capitalism.  Which exploits the working class (according to Marxism).  The proletariat.  Who own nothing but their labor.  And are forced to sell it for day-wages to those who own the means of production.  The industrial bourgeoisie.  The proletariat wants to maximize their pay.  The bourgeoisie wants to maximize their profits.  Of course, one can only gain if the other loses.  Ergo, this is a class struggle.  Between the working majority.  And the capital owning minority.  Which is wrong according to Marxism.  And can only end in a proletarian revolution.  After which everyone will live a life of plenty in a classless, stateless, property-less society.  Because everyone will feel the love and work real hard to produce a lot.  Even though they won’t make an extra dime for all their extra work.  It will be a social utopia where society takes from those according to ability and gives to those according to need.  And they’ll sing workers’ songs as they eat and drink and scratch their fat bellies at the end of the work day.

As a social utopia, it’s a pretty nice one.  Especially to the working class who have worked some pretty hard lives.  So they are quick to show a lot of need.  And little ability.  Because those with the most ability have to work the hardest.  Whereas those with the greatest need get more stuff.  Even if they don’t work.  At all.  According to theory, at least.  The working class may be uneducated laborers, but they understood this.  Especially when a leader came along to lead a proletarian revolution.  I get more for working less?  I’m with you, brother.  There have been quite a few such revolutions.  Though there are some degrees of differences, we can call most of these communist revolutions.  Because communist leaders based their philosophy on some form of Marxism.

Many countries had communist revolutions.  Russia was the first.  It became the Soviet Union.  Then China.  It became the People’s Republic of ChinaNorth Korea.  And Cuba.  To name a few.  And how did the proletariat make out in those countries?  Well, suffice it to say it wasn’t quite the utopia they were expecting.  By fighting for the people, Joseph Stalin became one of the greatest mass murderers of all time.  Beating out Adolf Hitler by scores.  There was no utopia in the Soviet Union.  Unless you liked fear and oppression.  And going hungry and lacking the necessities of life.  Ditto in China.  Only their proletariat wasn’t urban workers.  They were rural farmers and peasants.  Forced into collectivized farms.  Where food production plummeted.  Resulting in one of the 20th century’s most horrific famines.  Between famine, fear and oppression, Mao Tse-tung gave Joseph Stalin a run for his money as the greatest mass murderer of all time.  Not sure who won as records are a little sketchy.  But they probably hold first and second place.  Don’t know much about North Korea because it’s such a closed society.  But they suffer some of the greatest famines of modern time.  And spend most of their nights in the dark as they have little energy (seen from space you can tell North Korea from South Korea by the lights).  And the Cubans have more than once tried to escape their social utopia by crossing the Atlantic Ocean in rickety boats and rafts to reach America. 

Life got worse for the working class in general under communism.  But it got pretty good if you were in the communist party.  It was that ‘from those according to ability to those according to need’ thing.  It didn’t work in practice.  Because it turns out people want to benefit from their labors.  Which is the basis of the proletarian revolution in the first place.  And making them work harder for less just wasn’t going to cut it.  Especially when life was better under capitalism.  For it was better when the capitalist bourgeoisie did the exploiting than the communist party.  And it wasn’t just because of the famine, fear and oppression that came with the communists.  Because the capitalists paid you according to the quality of your labor.  Not by the quantity of your need.  So the harder you worked, the more they paid you.  And that’s the kind of thing that’ll get people to work harder.  Incentive.

Peron exploited the Descamisados

Tim Rice is one of the greatest lyricists in musical theater.  Andrew Lloyd Webber‘s greatest works were those he did with Rice.  Joseph and the Amazing Technicolor Dream CoatJesus Christ Superstar.  And Evita.  The story of Eva Perón.  Wife of Juan Perón.  And their rise to power in Argentina.  With the help of their descamisados.  The poor, shirtless workers.  Who loved Eva Perón.  As she loved them.

The musical Evita has a Che Guevara-like narrator named Che who tells the story.  And participates.  He sees the Peróns for who they are.  Sees how they exploit the descamisados for personal gain.  And bankrupts the nation.  Rice does a great job of turning this story into some great songs.  This story of a workers’ revolution is accessible.  And entertaining.  Here are some of the lyrics.  Starting with the workers’ demands.

Nationalization of the industries that the foreigners control
Participation in the profits that we make
Shorter hours
Higher wages
Votes for women
Larger dole
More public spending
A bigger slice of every cake

The hallmarks of any workers’ revolution.  Which of course the leader of the workers’ revolution promises in exchange for their vote.  Even though he would prefer not to have to deal with that pretense.

It’s annoying that we have to fight elections for our cause
The inconvenience–having to get a majority
If normal methods of persuasion fail to win us applause
There are other ways of establishing authority

Then the secret police echo these thoughts.

We have ways of making you vote for us,
or at least of making you abstain

Perón wins the election.  And gives his first speech on the balcony of the Casa Rosada.

Argentinos! Argentinos! We are all shirtless now!
Fighting against our common enemies–
Poverty, social injustice, foreign domination of our industries!
Reaching for our common goals–
Our independence, our dignity, our pride!
Let the world know that our great nation is awakening
and that its heart beats in the humble bodies of Juan Peron
and his wife, the first lady of Argentina,
Eva Duarte de Peron!

Yes, he is just one of them.  Shirtless.  And poor.  Though he says this from the ‘pink’ house.  Which is more palace than house.  Che is in the crowd.  And is not amused.

As a mere observer of this tasteless phenomenon, one has to admire the stage management
There again–perhaps I’m more than a mere observer –
listen to my enthusiasm, gentleman! Peron! Peron! Peron!
Look, if I take off my shirt, will you-

At which point the security police beat him and take him away.  For they don’t like dissenters.  Typical revolutionary stuff.  But in a story told so well.  Thanks to the great lyrics of Rice.  And the music of Webber.  And after Perón gets his power, how does Argentina do?  Does Perón deliver that Promised utopia?  Che explains in a brief but passionate monolog.

What’s new Buenos Aires? Your nation, which a few years ago had the second largest gold reserves in the world, is bankrupt! A country which grew up and grew rich on beef is rationing it! La Prensa, one of the few newspapers which dares to oppose Peronism, has been silenced, and so have all other reasonable voices! I’ll tell you what’s new Buenos Aires!

It’s a story as old as time.  The revolutionary leaders get richer.  The workers get poorer.

(The original Broadway cast recording includes Patti LuPone as Eva and Mandy Patinkin as Che.  Who’ve set the bar for these roles.  You can’t get better.  So buy this recording.  You won’t regret it.)

Famine, Fear and Oppression never take a Holiday

Sans-culottes, proletariats, descamisados or some other poor class of people a revolutionary leader champions, it always ends the same.  The leaders of the revolution always seem to do better.  And the poor class continues to suffer.  Often worse off than they were before.  Some leaders come and go.  But the suffering of the masses usually lingers.  For famine, fear and oppression never take a holiday.  But liberty does.  Sadly.


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LESSONS LEARNED #13: “If you were to live under the socialist maxim ‘from each according to his ability to each according to his need’ you would find yourself surrounded by needy people with no ability.” -Old Pithy

Posted by PITHOCRATES - May 13th, 2010

KEY TO CIVILIZATION growth is the food supply.  Food surpluses in particular.  Before dependable food surpluses, life was short, harsh and miserable.  Especially for women.  When they weren’t working in the fields they were giving birth and raising children.  High infant mortality rates, though, inhibited population growth.  Most of the children women gave birth to didn’t survive to adulthood.  So there was a constant state of child rearing.  But few children survived to help with the business of family life.

Malnutrition and famine were common.  Feudalism provided a precarious balance between life and death.  For centuries the common people (i.e., peasants) eked out survival on their landlord’s manor.  The lord owned the land.  The peasants worked it.  Most of the bounty went to their lord.  But they kept what they grew on a small strip of land for themselves.  Just enough for subsistence.

But England changed all that.  By 1750, her agricultural output was second to none.  Private property.  Free market economy.  Capitalism.  Increased productivity.  Specialization.  These all combined to provide incentive.  Incentive produced food surpluses.  Food surpluses produced profits.  Reinvested profits improved farm yields.  This produced more profit.  And the cycle continued.  In less than a century feudalism would disappear from England.  There, you either worked land you owned or were paid wages to work land owned by others.  People began to live longer and healthier lives. 

The British Empire ruled the civilized world in the 19th century.  Representative government.  Abolition of slavery.  Free trade.  The Industrial Revolution.  These things, and others, gave them wealth, power and moral authority.  A lot of good came from this island kingdom.  Including the United States.  They weren’t perfect.  There was a learning curve.  But the modern capitalistic economy which they gave us liberated the masses.  It let us do what we wanted to do, not just what we had to do.  In particular, women, who could do more than just raise families and work in the fields.  One day, she could even become prime minister of Great Britain.

FOOD SURPLUSES BEGET industrialization.  Food surpluses beget everything, really.  Food surpluses release human capital to do everything else we do besides farming.  England was at the van of this modernization.  Others followed.  In time. 

Russia abolished serfdom (i.e., feudalism) in 1861.  Industrially backwards at the time, this liberty awakened a dormant human capital.  They followed the English model.  In time, with the advent of steamship and rail transportation, Russian grain competed with other European producers.

Joseph Stalin, looking to jump ahead in the industrialization process, implemented collective farming in the late 1920s.  He turned away from the English model.  The government became land owners.  It was feudalism on a grand scale.  Large collective farms would produce vast food surpluses that could feed industrial cities.  And there would still be surpluses left over to export to raise capital to build these industrial cities.  At least, that was the plan.

With less incentive came less productivity.  What land the former serfs had come to own was lost to the state.  The state took so much of the harvest that there was little food left for those who labored to grow it.  And the price the state paid for their crops was less than it was before collectivization.  The ‘free’ serfs were earning less and working more.  They didn’t like it.  And chose not to participate.  Collectivization became forced collectivization. 

Deportations, terror, murder and famine followed.  Perhaps more than 5 million starved to death during the famine of 1931 and 1932.  Others were to follow.

Forced collective farming produced famines elsewhere.  In China, during Mao Zedong’s Great Leap Forward, forced collectivization produced even greater famine deaths.  Historians estimate that 20-30 million, maybe more, starved to death in the famine of 1959–62.  Though hard numbers aren’t available, North Korea suffered a devastating famine in the late 1990s that claimed millions.  But in the West, in the 20th century, famine was unheard of.  When the United States suffered during the great Dust Bowl of the 1930s, there was no corresponding famine despite the loss of productive farmland.

WITH INDIVIDUAL LIBERTY comes incentive.  With incentive comes productivity.  A small island nation of free land owners could produce grain to feed themselves with surplus left over for export.  Nations with great fertile tracts farmed by forced collectivization led to famine.  Slaves have little incentive other than to subsist.  The collective good means little to them when they are starving.  They continue to sacrifice.  And continue to suffer.  Even if they do produce a few more bushels of grain.  So if the suffering is the same, what is the incentive to work harder?

As individual liberty declines, those in power tend to exploit those they rule.  In the name of the state.  Or the common good.  This is easy to see when it results in famine or revolution.  Not easy to hide those things.  But it is a little more difficult to see when the results are more benign.  Longer unemployment benefits, for example.  I mean, those are pretty nice.  Hard to see the downside in them.  As it is in other benefits these rulers give us.  So we are seduced as they whisper these sweet nothings in our ears.  And soon we willingly cede our liberty.  A little at a time.

WITH THE RISE of individual liberty, there was a corresponding decline in the ruling elite thanks to representative government.  Great Britain gave this gift to us and the United States took it to incredible heights.  The oppressed everywhere immigrated to the United States to feed a growing industrial demand.  Being new, we did not know all the affects of industrialization.  When the bad things came to light, we addressed them.  Great Britain, for example, was one of the first to protect women and children from the worse of industrial society.  Still, working conditions could be harsh.  As could life in the industrial cities.  Poverty.  Filth.  Disease.  And it was the wretched state of life in these slums that gave birth to a new school of thought on industrialization. 

In 1844 Friedrich Engels wrote The Condition of the English Working-Class to expose life in these slums.  He would collaborate 4 years later with Karl Marx on a treatise called The Communist Manifesto.  And from this Marxism, Communism, socialism, collectivism, etc., would follow.  As economic systems go, these would all prove to be failures.  But the essence of them lives on.  State planning.

You see, it was capitalism that gave us the industrial slums.  And that was good propaganda for a ruling elite looking to rule again.  So they whispered sweet nothings into our ears.  They talked about a Social Utopia.  From each according to his ability to each according to his need.  Fair taxation (i.e., only the ‘rich’ pay taxes).  Social safety nets (paid for by taxes of the rich).  Shorter workdays.  Longer paid vacations.  More government benefits.  A burgeoning welfare state.  Free stuff for everyone.  Again, paid for by taxing the rich who have exploited the working class.

What evolved was the elimination of the middle class.  You had the evil rich (and the middle class were, for all intents and purposes, rich because they didn’t need government help) whose wealth the government taxed away.  And the poor.  The poor who the government would now take care of.  If elected.  And they were.  They seduced a great many people with their utopian vision.  Even in the West. 

Great Britain and the United States would fall to this seductress, too, thanks to the Great Depression.  It was capitalism that gave us the Great Depression, after all.  The greed of the money people.  And so these great nations declined from greatness.  They became welfare states, too.  They had short respites during the 1980s.  Margaret Thatcher helped rejuvenate Great Britain.  Ronald Reagan, the United States.  But the ruling elite whispered more sweet nothings in our ears and the decline continues.

In 2010, our appetite for state benefits appears to be insatiable.  And we may have run out of wealth to tax away to pay for it.  California is on the brink of bankruptcy.  New Jersey elected a governor who proposed draconian spending cuts to stave off bankruptcy.  Other ‘blue’ states (i.e., states who vote Democrat) are also in trouble.  Underfunded pension obligations.  Demands of teacher unions.  Of government worker unions.  Everyone is there with their hand out.  None of them are willing to sacrifice for the common good.  No, they expect others to do the sacrificing.

THE OBAMA ADMINISTRATION has increased federal spending to such record levels that Communist China is concerned about our fiscal/monetary policies.  As they should be; they hold a lot of our debt.  The federal government has ‘bailed out’ private industry and taken de facto control.  They have created a healthcare entitlement that will cost more than a trillion dollars.  More spending is coming.  And it is all for the greater good.  They are vilifying those who are not poor, taxing away what wealth they can from them and giving it to the poor.  When about half the electorate doesn’t pay any income taxes, there is little opposition to raising taxes on those who do.  For if the ‘rich’ complain, the government vilifies them.

Where will it all end?  It is difficult to say.  How will it end?  Badly.  We can look at Europe who we seem to be emulating.  They’re further down The Road to Serfdom than we are.  With the excessive government spending, there will have to be greater government revenue (i.e., taxes).  Previous methods of taxation may prove insufficient.  Hello value added tax (VAT).  It’s all the rage in Europe.  It’s a multiple tax.  At every stage of production, government is there.  Taxing.  From the raw materials to the final assembly, government is there at every stage.  Taxing.  VATs will increase government revenue.  But they will also make every day life more expensive.  VATs increase the sales price of everything you buy.  And you pay it again at checkout.  It’s everywhere.  Everything will cost more.  From manicures to lattes to toilet paper to tampons.  And this is a tax everyone pays.  Even the poor.  It is a regressive tax.  The rich will pay more, but the poor will feel it more.  This hidden tax will take a larger portion of what little the poor has.

But how bad can it really get?  In 2010, I guess the answer would be to look at Greece to see what happens when a country can no longer sustain her welfare state.  And the people aren’t all that keen on losing the government benefits they’ve grown accustomed to.  It isn’t pretty.  But when you start down that road (from each according to his ability to each according to his need), the taking and giving always get bigger.  It never gets smaller.  And when you reach a critical point, government just can’t sustain it any longer.  And it crashes.  Like in Greece.


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