Ladies and Gentlemen,

Welcome to the Citizen Reagan Podcast. We're going to get right into it today, because I have, not one, but two commentaries I'd like to talk about. Along the way, you'll get a little history and a little more commentary.

The first, originally broadcast early on in 1975 is entitled "Capitalism/Socialism" while the second is called "America's Strength." I don't think anyone here will tell me we aren't still having these conversations, 40 years later. When I wanted to introduce a friend to the Reagan Radio Commentaries, these were the first two I sent him, now I'd like to share them with you.

Reagan himself must have felt these two broadcasts were particularly good (or people requested hearing them again) because they were both repeated in 1977. Back then, a radio station couldn't necessarily go back to their audio archives. Reagan actually re-recorded them. I know, I have both versions. In at least two cases, there are 3 versions of the same broadcast.

We'll start with Capitalism/Socialism.

Capitalism is not the most popular thing around these days. In many circles it's a downright nasty the word. It's also what this country's all about. I'll be right back.

There's a worldwide struggle going on for the hearts and minds of mankind. For a time we call that the Cold War, now we talk of detente. Actually the struggle has been going on for a century or more. It's the contest between capitalism and socialism. Those who favor socialism have managed to create an unpleasant image which for too many people can be invoked by simply saying the word capitalism and capitalist, of course, is an outright epithet. Yet capitalism is what America's all about.

Indeed you can't have freedom without capitalism, for capitalism simply means your right as an individual to own things, to do what you will with the money you earn, to buy a piece of land, build a home of your own. Today plagued by a high cost of living we hear more and more voices raised in criticism of our way of life. They talk of utopia where there would be no poverty no unemployment where on all wise government would make all the hard decisions for us and we'd have cradle to grave security. Now the word utopia is from the greek, and it means "nowhere."

We should make the disciples of socialism talk about the somewhere's of socialism because there are some. Sweden, for example, where the income tax is 30% on incomes of only $6000, where workers resort to barter to keep from moving into an even higher tax bracket. In Red China it takes a year's income to buy a wristwatch. Even in those countries which have a mix, some free enterprise and some nationalization of business, the story is the same. In France the telephone system is run by the post office, just the other day France announced the price for putting in a phone was going up from $111 to $244, and even at that price, people have to wait as much as 3 years to get one.

John Kenneth Galbraith, the celebrated economist, came to public notice many years ago with his book, The Affluent Society, which made the point that you and I were rolling in luxury while the so called public sector was starved for funds. His suggestion was that we are the people were foolishly buying all the wrong things and that government should take a greater share of our money from us in taxes, and government did, to buy for us the things we really need and we're too stupid to buy. He has written a new book this when he says private enterprises has failed and socialism is the only answer.

Well now let's get down the cases let's take a good look at a huge nation that had fifty years to put into practice a completely socialist system. The Soviet Union is more territory than the United States, a larger population, two hundred and fifty million capable people, and a great many natural resources. Now you know we could match their socialist utopian; it would take a little doing. We'd have to cut our paychecks by 75 percent, move 60 million workers back to the farm, abandon 2/3 of our steel making capacity, destroy 40 million tv sets, tear up 14 out of every 15 miles of highway, junk 19 out of 20 autos, tear up 2/3 of our railroad track, knock down 70% of our houses and rip out 9/10 of our telephones, then all we'd have to do is find a capitalist country that would sell us wheat on credit to keep us from starving.

This is Ronald Reagan. Thanks for listening.

Before I get to my research and reaction, let's see if I can sell you something:



Let's get back to the podcast.

Obviously, things have changed. The Soviet Union is gone, thanks in part to Reagan's work as President. Red China has made a turn to limited capitalism (or perhaps state-directed capitalism is a better way to phrase it) and France has ended control of their phone system. This occurred in the late 1980s as a European directive came down to introduce competition among public services. Socialism is not gone, though. It remains alive and "well" (I say that with air-quotes) in Venezuela, Cuba, North Korea and a variety of other places, depending on how it is viewed. Most dangerous, however, is a resurgence of socialist attitudes in the United States. Supporters of it over the age of, let's say 40, actually believe in what would traditionally be called a Socialist society. Those under 30 seem to struggle to define it when asked. Many think it's about sharing, not the governmental control of every aspect of your life.

But that is what it is about...government control.

If we look at the dictionary definition of it, Socialism is the government having control of the means of production. To do that, it must own the land that raw materials come from, the means to transport those raw materials, the factories where the materials are turned into goods, and the place to sell the goods that were produced. It becomes a giant, top-down government out of necessity, so it can manage every aspect of manufacturing. In that management, it will find a need for efficiency, which will result in little variety in the goods produced. Guess what that means? One kind of phone. One kind of clothing. One kind of watch. One kind of health care... the VA kind.

But let's look at that new, popular concept of socialism, that "sharing" concept I spoke of a moment ago. Even if Socialism was just about sharing, wouldn't government still need to control every aspect of your life to make sure you shared? This socialism still requires a giant, top-down government. The difference being that it has to manage you directly, instead of manufacturing.

But let's talk about sharing for a moment, is it even still sharing if it is forced or coerced?? Sharing is supposed to be a voluntary and temporary exchange, right? If a thief comes into your home and takes your TV, is it "sharing?" It may be temporary, if the police can recover it, but it wasn't voluntary.

This new socialism is frequently spoken of in conjunction with the Scandinavian countries of Europe: Denmark, Sweden, Finland and Norway. This is not socialism and the politicians and economists from those countries are sick of people calling it that. In 2015, the Danish Prime Minister came to the United States and told us as much:

I know that some people in the US associate the Nordic Model with some sort of socialism. Therefore, I would like to make one thing clear. Denmark is far from a socialist, planned economy. Denmark is a market economy. The Nordic Model is a expanded welfare state that provides a high level of security for its citizens. But it is also a successful market economy, with much freedom to pursue your dreams and live your life as you wish.

They have a capitalist economies combined with a massive welfare state that is funded by high taxes for everyone, not just the ultra rich.

Reagan touches on it, mentioning Sweden's tax system, but all four of the Nordic countries are like this. In Denmark, in 2015, the top marginal tax rate was 60%, but you entered that tax bracket if you earned 20% more than the national average income. If this tax were implemented in the United States, with its average income of $50,000, that would mean you'd have a 60% tax rate if you made more than $60,000 per year. You would keep less than half your money.

While it would be very tempting to go into a diatribe against taxation, I'm going to resist the urge.

Since Reagan talked specifically of Sweden, let me share a quick story that I'm surprised Reagan himself didn't do a broadcast about, so far as I have found. Sweden was more socialist at the time Reagan would have been broadcasting. In March of 1976, Swedish author Astrid Lindgren, best known worldwide for the Pippi Longstocking books, had a short story published in a Stockholm newspaper. It was called Pomperipossa in Monismania. The story was in response to recent tax code changes, which would see the successful Lindgren have an effective 102% tax rate. Famous film director Ingmar Bergman would also suffer under this massive tax burden. In elections later that year, the Swedish Social Democratic Party lost control of the government for the first time in 40 years. Some attribute the loss to Lindgren's story.

If you'd like to learn more about Sweden's economic history, I would recommend going over to the Free to Choose Network and find Johan Norberg's video called "Sweden: Lessons for America?"

Let's get back to Reagan and listen to this second broadcast from 1976...

Every once in a while it's important that we look at the balance sheet so we'll know what it is we're trying to save. I'll be right back.

I know that I've used these broadcasts to criticize those who have lost faith in our system; those who would make fundamental changes on the premise that what we've done in the past is all wrong and those (increasing in number) who think we are over the hill & headed for the dustbin of history.

Therefore it is important every once in a while to remind ourselves of our accomplishments before lest we let someone talk us into throwing out the baby with the bathwater. I intend to go on talking about our problems because in the main they are problems that truly need solving. I'm also going to go on resisting those who would have us believe the problems are the result of, are proof that our system isn't working. Put another way it's time we recognize the system has never let us down—we've let the system down now & then because we're only human.

Compared to the world at large we are politically stable. A few years ago when we had the unprecedented resignation of a President there were no knots of people gathered on street corners, no boarding up of storefronts, no people marching in the streets nor screaming sirens heralding the round up of cabinet officers and officials. Americans just went about their business, took in a ball game and watched their favorite TV shows. And that's why foreign money invested in America has increased about 50% in the last 5 yrs.

Last year in spite of govt, confiscating our earnings at an unprecedented rate for a lot of unproductive go social reforms we managed to raise $217 Bil. to finance new & existing private enterprise projects.

Our productivity is phenomenal. We raise 37% more wheat per acre than the national average. We are 6% of the world's population on only 7% of the world's land but we produce almost half the world's corn, 2/3 of the soybeans, 1/3 or more of the world's paper, electrical power, college graduates and almost 1/3 of the farm machinery. Just to round it off we make more than 2/3 of the computers & 80% of all the passenger aircraft.

We lead the world in advanced technology; in telecommunications, drilling & mining equipment, medical science & agri-science.

All of this is because our system freed the individual genius of man. Released him to fly as high & as far as his own talent & energy would take him. We allocate resources not by govt, decision but by the mil's, of decisions customers make when they go into the mkt. place to buy. If something seems too high priced we buy something else. Thus resources are steered toward those things the people want most at the price they are willing to pay. It may not be a perfect system but it's better than any other that's ever been tried.

Sure we have an unemployment problem—7 1/2 mil. people looking for jobs. If we are going to deal with the problem we should look at it. To start with, only half are people who lost their jobs. The others quit or are looking for their 1st job. Only 2.8 mil. are the heads of families and only 2.4 mil. have been unemployed 15 weeks or longer, meaning the unemployed are an ever changing group not a body of permanent jobless. And since 82 mil. are employed—most in productive, private industry, why don't we see what roadblocks have been thrown in the way of our tried & true system and remove them. This is RR—Thanks for listening.

We've let the system down now and then. I want to let that sink in.

He's saying the system, aka capitalism, hasn't failed, but rather that we have failed to allow the system, aka capitalism, to work. We failed capitalism decades, perhaps even a century or more, ago. Government intervention and protectionism has been picking corporate winners and losers for a long time. Government regulation has limited the way we make decisions, both on a macro and a micro level.

Reagan talks about regulation throughout his radio broadcasts, with the EPA and OSHA frequently being on the receiving end of his wrath. On construction sites, OSHA regulations mandate vehicles have "back-up beepers", but they also mandate that construction workers must wear ear plugs.

How much control does government have? I have something that's been rolling around in my head for a long time, maybe someone can help me with this. This is specifically about farming, but it would not surprise me if it happened in other sectors of the economy as well. Government offers subsidies to farmers, which are designed to allow them to sell their crops for a lower price and not lose money. At the same time, the government has (or had) the Soil Bank, which pays farmers to NOT plant some of their land, which artificially lowers supply and forces prices up. Is it just me or do they seem to have a stranglehold on the price of crops this way? I don't remember much of my college economics classes from 20 years ago, but I do remember those supply and demand curves that come to a natural equilibrium where the two meet. Government intervention upsets that equilibrium.

And in spite of that regulation, people still thrive. Imagine what people of the United States could do if the government would just get out of their way and let them create?