Socialism vs. Freedom

August 20, 1962

When some visiting Brazilian students interviewed the President one of them asked what the reaction of the U.S. Government would be “in the event we were to socialize the means of production in our country as a way to more effectively wage the battle against underdevelopment.”

Mr. Kennedy replied: “The decision of your country as to the means of providing progress is your decision, and if by socialization you mean ownership of the means of production or of the basic industries, that is a judgment which you must make. What we are opposed to is a denial of civil liberties, a denial of opportunities for people to assemble, to have their press, to make a free choice of what kind of government they want. . . . We prefer the competitive market economy here. We believe that by free competition we can satisfy the needs of our people best. Every country must make its own choice.”

This reply, though ambiguous in some respects, reveals the ideology behind the Alliance for Progress and our foreign-aid program. A less diplomatic but more instructive reply might have run like this:

WHICH SYSTEM WORKS?

Whatever you do in your country is of course your own business, whether it is voting yourself into socialism or voting yourself into a dictatorship, as the Germans did when they chose Hitler or the Argentinians when they accepted Perón. In either case we do not consider it our business to interfere, with either government economic aid or a “warning.” It is only fair to tell you, however, if you are asking our advice, that you will not accelerate your economic development or growth by socializing the means of production. You will, on the contrary, retard it—as your recent governments have in fact retarded it by all sorts of measures hostile not only to foreign investment but to domestic business.

We ourselves got to be the richest and most prosperous country in the world by following the way of free enterprise, of private ownership of the means of production—in a word, of capitalism. Our rate of economic growth was increased by private investment of foreign—chiefly British—capital here. It was attracted here not only because it could get a higher rate of return than at home, but because it ran no risk of discrimination, oppressive taxation, nationalization, or expropriation. It was welcomed, not feared. In the same way, today, the economic growth of Canada has been greatly accelerated by the investment of private United States capital.

FREEDOM INDIVISIBLE

It is the anti-capitalistic mentality of the so-called underdeveloped countries that has kept them underdeveloped. It has scared away foreign private capital. It has also discouraged domestic investment. What you seem to be asking is whether, if Brazil socialized the means of production, we would be willing to pour in the American taxpayers’ money to help you do it. We would be even more foolish if we did that than you would be to socialize. For socialization would retard and distort your economic development. Our taxpayers would not only lose their money, but would be encouraging you to follow unsound and hurtful economic policies.

The question is not whether we North Americans “like” or “dislike” socialism; the question is whether socialism tends to increase or retard production of the goods consumers really want. Economic aid to a socialistic country is worse than wasted.

And now we come to the question of liberty. Capitalism is merely the name for a system of economic liberty. Under it civil and political liberties flourish and are secure. Under a complete or nearly complete socialism neither economic nor political liberty can exist. Freedom is indivisible. How can there be freedom of press, speech, or assembly when the government owns all the newspapers, presses, and assembly halls? As Leon Trotsky (who knew) wrote in 1937: “In a country where the sole employer is the State, opposition means death by slow starvation: The old principle: Who does not work shall not eat, has been replaced by a new one: Who does not obey shall not eat.”

So if you want to go in for socialism, it’s your funeral. But don’t expect us to subsidize it.