Capitalism-Socialism Debate

At FreedomFest2016 there was a debate about capitalism versus socialism. The debaters were John Mackey for capitalism and John Roemer for socialism. Mackey is the CEO and co-founder of Whole Foods Markets (link). Roemer is a Marxist professor of political science and economics at Yale University (link).

Mackey argued that capitalism offers the profit incentive that motivates entrepreneurs to build businesses and create new products. Roemer argued for redistribution of income from people with high incomes to people with low incomes via taxes, also wealth from rich to poor via inheritance (or estate) taxes. He argued that high taxes would not demotivate high-achieving entrepreneurs, because such people are self-driven to accomplish their goals for reasons beyond only money. He may have given Steve Jobs as an example; I can’t recall. He seemed to approve of having competitive markets -- he has advocated a species of market socialism (link).    

He said nothing about redistribution altering the incentives for other people – most people – who aren’t entrepreneurs, self-driven, and ambitious for other than only money. If they don’t have the need to earn a living, work hard to get a raise or promotion or even keep their jobs, and yet receive a comfortable income regardless of how little they produce, how would that affect the level of production in their society?

He said nothing about redistribution altering opportunities for other people. Money taken by the government as taxes from a profitable business is money the business can’t use to produce more and hire more people.

Professor Roemer probably believes his intentions are glorious, but the road to serfdom and misery is paved with the unintended consequences of ideas like his. Venezuela is a great example.