Eating the Big Apple - The Core of The Problem

New York now has a declared Socialist Mayor. Seattle, too, has fallen to Socialism. Most of us know that Socialism is a losing game, at least on a national scale and long term. It rewards the needy at the expense of the productive and punishes success.

The question now is: can New York and Seattle manage to find enough other people's money to give the appearance that Socialism works?

However, across history there have been local instances where socialism has had a form of success, sometimes over a period of decades. A key factor in these "successes" has been the availability of resources to draw on that support the inherent losses of a socialist system. As Margaret Thatcher said: “The problem with socialism is that you eventually run out of other people's money.” Remember that it took Russia over 70 years for that experiment to run out.

The question now is: can New York and Seattle manage to find enough other people's money to give the appearance that Socialism works? Both cities have a lot of resources to draw on that could be used to support Socialist programs. It could take several years for the well to run dry on them.

The new mayor of New York, Mamdani, has proposed funding his projects through taxes on wealthy inhabitants. His problem is that city taxes must be approved by the State, so he must convince a larger body of people to approve his tax plans. So far, that hasn't happened.

Taxes aren't the only tool available to generate new revenues. Fees for all sorts of services can be imposed without involving the state. Charges for services can be based on formulas that target various businesses and properties as well as a variety of transactions. Business licenses are another source of targeted revenues. Imagine a special administrative fee for Trump properties like Trump Tower.

What if New York were to impose a transaction fee on financial transactions? 

What if the city were to impose a transaction fee on financial transactions? The New York stock exchange conducts roughly $20B in transactions daily. A small fee on each transaction could fund a lot of socialist programs. Similarly, over $1T in goods are passed through the land, sea, and air ports of New York each year. Could the city charge a transfer fee on that? Think of it as a value subtracted fee.

Seattle doesn't have quite the resources of New York city, but is one of the two major access points for Pacific Rim trade. Creative minds could probably find lots of ways to extract enough value from that circumstance to fund lots of socialism. It would be an interesting case of using capitalism to fund socialism.

Both Mamdani and Wilson, Seattle's new mayor, have expressed concern about the high costs of groceries. Mamdani wants to open city-owned grocery stores with lower priced goods, while Wilson simply wants to order existing grocery stores to lower prices and not close. If Mamdani used some city funds to subsidize grocery prices, he could apply the China model where city stores sold quality foodstuffs at prices below for-profit competitors.

These subsidized city stores would not be subject to the same failure modes that have caused the demise of other publicly owned stores in Kansas and elsewhere. Since they would be subsidized they wouldn't have to make a profit. Incidentally, the subsidies would allow a sort of social engineering through how goods were priced. Meats could have high prices, while "healthy" produce was cheap. Eat your vegetables, children.

Wilson's plan has a few problems as she can't make stores bring in goods that they would have to sell at a loss. Yes, she could force empty stores to stay open, but that was essentially the situation that existed in the Soviet Union in the good old days. Wilson needs to spend a bit more time thinking things through unless she plans to rapidly turn Seattle into a classic example of why Socialism doesn't work.

Mamdani has also spoken of greatly reducing the size of the police force and eliminating much of the incarceration capacity of the city. Many believe that such actions would encourage criminal activity in the city. One could make a case, though, that committing a criminal act in a socialist environment was crazy. Crime would then become a mental health issue. Imagine that those guilty of criminal activity would be placed in an asylum along with a variety of other mentally deranged individuals. That might be a strong deterrent against criminal activity, perhaps even greater than simple incarceration.

There is a great danger here that if it can be made to work for New York, the idea will spread to other cities. Large blue cities already dominate the political landscape, and others may see a way to solve their own problems through a similar socialist solution paid for by a broader capitalist economy.

Chicago, Los Angeles, San Francisco, and several other cities come to mind as having dominant Leftist populations and similar economic problems as New York. If New York is "successful", I can imagine others adopting the same approach. Those who expect Mamdani's experiment to fail quickly may be disappointed. One of the few ways I see to discourage such adoptions is to eliminate Federal subsidies to cities and instead start taxing them.

We assume that the virtues of capitalism, free enterprise, individual liberty will be obvious to the next generation

In order to enact such policies would require a certain level of cooperation from city dwellers, lest they vote to retain or even increase subsidies to cities. The majority of the US population is now urban, so the danger is real and the solutions difficult. The one bright spot is that if socialism spreads too far, it will run out of capitalist resources to support it. When a parasite consumes too much, it kills its host. Unfortunately, while the parasite dies, so does the host. We need the social equivalent of ivermectin. Otherwise, forget Orwell's 1984. Think H. G. Well's "Time Machine".

No, I am not giving the Left ideas. There are some bright people on their side who would think of these things anyway, if they haven't already. I want us to think about how we can take the initiative. If we don't, we will always be playing catch-up, reacting to their initiatives, reduced to hoping they fail. Hope is not a reliable plan.

We have far more to offer than the Left, but we cannot be complacent or just assume that the virtues of capitalism, and free enterprise, and individual liberty will be obvious to the next generation. Freedom is never free, and free stuff always has a cost.

"Freedom is never more than one generation away from extinction. We didn’t pass it on to our children in the bloodstream. The only way they can inherit the freedom we have known is if we fight for it, protect it, defend it, and then hand it to them with the well fought lessons of how they in their lifetime must do the same. And if you and I don’t do this, then you and I may well spend our sunset years telling our children and our children’s children what it once was like in America when men were free." – 1961 Ronald Reagan

Support Canada Free Press