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Eugene Debs (Bettmann/Corbis/AP)

A century of lessons

In business, social work, education, and even religion, competition beats monocracy

Issue: "2012 Cities Issue," March 10, 2012

The debate we're having about velvet socialism-governmental conformity trumping religious liberty in the name of providing equality-is coming 100 years after overt socialism's greatest political success in the United States.

In 1912 more than 1,000 locally elected officials in 33 states and 160 cities were Socialists. The Socialist Party candidate for president, Eugene Debs, won 6 percent of the national vote and seemed on his way to much more in future elections-but World War I and the Russian Revolution intervened.

Up to then the world had little experience with socialists in power. Debs argued that economic competition was wasteful and governmental monopoly would improve productivity. Others argued that competition in fighting poverty, improving education, or fostering religious belief-"denominationalism"-also was wasteful.

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Five years later, after Vladimir Lenin seized power, we started to see what was truly wasteful. Other revolutions murderous to some and instructive to all included the Nazi (National Socialist) revolution of the 1930s, the Chinese Revolution of the 1940s, and later ones in Vietnam, Korea, Cuba, and Cambodia.

We began learning that government monopoly does not improve productivity: Compare West and East Germany from the 1950s through the 1980s, or South and North Korea now. We learned that economic competition, although it might seem wasteful on paper, creates incentives for creativity and hard work.

The 20th-century revolutions taught us that when socialism struts in, liberty leaves. A socialist monopoly leaves those outside the ruling elite without an economic base for independence. Some always refuse to bow, but many do when told that refusal will leave them poor, or worse.

It takes time for these lessons to sink in. Communism is out these days, but velvet socialists in the White House still have faith. Many others ignore the lessons of competition when told "the experts" say this or that, or when equality becomes our prime goal.

In U.S. poverty fighting, 90 percent of which is under governmental control, we've learned that officials have little incentive to treat the needy as human beings rather than numbers-but the National Association of Social Workers still adores welfare socialism.

In K-12 education, No Child Left Behind has largely failed, and we've learned once again that schools with captive audiences are reluctant to change their ways. Yet the National Education Association still hugs school socialism, with some members shrewd enough to accommodate themselves to the narrow competition that charter schools create.

The Obama administration regularly ignores the 20th century's lesson that competition increases creativity and productivity. Medical care is the leading example, yet bizarrely but consistently, the 2010 Obamacare law includes a section that will kill most private student loans and create a socialist system of government lending to college students.

Monopolies should be fought in all areas. In the late 18th century, Adam Smith understood this in economics. The Constitutional Convention brilliantly institutionalized competition within government by creating a separation-of-powers system. The First Amendment ensured that we would have competition in religion and media.

President Obama seems reluctant to abide by the First Amendment and even to honor the competitive pressure of checks and balances within the federal system. He gleefully issues executive orders not to clarify laws Congress has passed, but to self-legislate when Congress doesn't obey his bidding.

But the devaluing of competition also pops up among theologians-even though historian Rodney Stark has shown that denominational competition led to the churching of America, and to pastors more vigorously serving their flocks. (Compare our situation to Europe's state-supported church monopolies.)

In area after area, whether looking at for-profit organizations or their nonprofit cousins, competition among institutions increases creativity. (The question of individual competition is a subject for another column.) Socialists popularized the word capitalism in the 19th century to make it seem that conservatives idolize capital. We'd be wiser to defend the virtues of competition, which produces the beneficial diversity that is more than skin-deep.

To summarize: The debate about insurance coverage of contraceptives and abortion drugs reminds us that competition is important not just in economic markets but in schools, social services, journalism, music, art, and beyond. Let's call our across-the-board enemy monocracy, which says one size must fit all. A century after overt socialism's peak, the velvet socialism of monocracy is a clear and present danger.

Email molasky@worldmag.com

Marvin Olasky
Marvin Olasky

Marvin is editor in chief of WORLD News Group and the author of more than 20 books, including The Tragedy of American Compassion. Follow Marvin on Twitter @MarvinOlasky.

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