“. . .socialism to me. . .means that you will have whatever you need to live a dignified life and that it is the government’s job to deliver on that. . . .” — Zohran Mamdani, October 1, 2026
“It is the inability to understand the difficult problems of social life which renders ethical socialists so unsophisticated and so certain that they are competent to solve social problems offhand. . . . In every man there is a deeprooted desire for freedom from social ties; this is combined with a longing for conditions which fully satisfy all imaginable wishes and needs.” — Ludwig von Mises, Socialism: An Economic and Sociological Analysis
The Democratic Socialists—or others with similar political-economic views under different titles—to their credit, have identified a key winning issue with the American people: something is wrong, many are struggling economically despite working, the economic system is distorted, and people are concerned with so-called “affordability.” Despite incorrect presuppositions and disastrous conclusions, we should acknowledge that identifying and campaigning on this issue is likely to win support.
It is also worthwhile to note, as many have tirelessly, that this current system—the US “mixed market”—is not capitalism or a free market, or anything close; it is also not socialism. The current system is a public-private hybrid, with a long history of freer markets, that has been heavily regulated, often to the benefit of both big business and big government, and at expense of the consumer and taxpayer, especially since the Progressive era.
This is a system that benefits from a history of great decentralization, production-and-exchange, free exchange, sound money, saving, and capital investment—and the wealth that results from the former—but is severely hampered and distorted by interventionism, cronyism, and transferism via the state. Not only this, but the institution of the state, by its interventions, necessarily creates castes—ultimately, net taxpayers and net tax-consumers—and coercively takes from the needed production of some to transfer it to others. Through mechanisms like bureaucracy, inflationism, transferism, the status quo bias of the recipients from state transfers, and the mental moral hazard that such an environment creates, the state caste can create the illusion that it is not responsible for the diffuse consequences. Further, through mainstream economic theory, the state can even present itself as the indispensable basis of wealth, production, and society.
As these interventions and their consequences intensify, many people—for various reasons—blame a capitalism and a free market that does not exist. Interventionist-minded politicians rush in to join the state caste, accuse their opponents of inaction and laissez-faire, and offer competing interventions that strengthen the state. The existing system, despite not matching the definition, comes to be synonymous with “capitalism.” Anti-market interventionists—from the Left and Right—argue over degrees toward pure socialism or toward a pure free market, but still ultimately champion something in the “middle,” which defaults toward the direction of socialism.
If the current system is dubbed “capitalism,” then it really just becomes an argument between those in favor of the status quo or against the status quo. This is one reason why self-proclaimed socialists like Mamdani have been politically successful recently. All that said, while we can appreciate some of their instincts toward the economic problems with the system and their recognition that voters care about them, Mamdani’s statement also encapsulates some of the most profound and dangerous false assumptions regarding government.
The Socialist Assumption
Revisiting the Mamdani quote from above, he said on Theo Von’s podcast,
. . .socialism to me. . .means that you will have whatever you need to live a dignified life and that it is the government’s job to deliver on that. . . . It’s a belief that you shouldn’t, we shouldn’t, live in a place where all you can do is pick your own leaders. You should also be able to have that power in the rest of your life. . . . People talk about it as the extension of democracy from the ballot box to the rest of your life. What do people mean by the rest of your life? They mean your workplace, your home, things like that. So when people say dignity, I want to be very clear. We’re talking about the things that allow you to take a breath, housing, child care, right? Public transit. No one should be priced out of these things. These are non-negotiables. You need these to live.
Elsewhere, he said,
. . .as a socialist, what I’m fighting for is that nobody is priced out of dignity. And. . .there’s just a comfort right now with living in a country where the market gets to determine everything, not just luxury, but dignity, too. We say, “Oh, I’m sorry. You don’t have enough money to afford a home.” (emphasis added)
And later, he stated,
You just need to walk outside. Look at the world that you live in and ask yourself, is this enough?
While we can appreciate his focus on “affordability” and questioning the status quo, there are several valid criticisms we could also make about his statements. For one, we could point out that socialism means the abolition of private property in the means of production (not personal property). We could also observe the trend among some socialists who celebrate Mao but then argue they only want to imitate Sweden. We could also clarify, as above, that the market does not in fact get to determine everything in this country and that, where there is more market freedom, there is greater specialized abundance (which socialists often despise as excess) and generally lower prices. We could point out that Mises recognized that free markets are a sort of true democracy because the consumers ultimately determine the course of production. But there is a more fundamental critique.
Fundamentally, the socialist answer—represented by Mamdani—is remarkably simple: wish for good things, declare that what the market presently provides is insufficient, restrict voluntary production and exchange, and then expand the state’s power to tax, regulate, subsidize, and redistribute—as though enlarging the mechanism for taking and reallocating wealth were itself a mechanism for producing it.
Howard Zinn exemplifies this infantile mindset in his Marx in Soho: A Play on History,
Give people what they need: food, medicine, clean air, pure water, trees and grass, pleasant homes to live in, some hours of work, more hours of leisure. Don’t ask who deserves it. Every human being deserves it.
Without it being obvious, so much is presupposed in the word give. The abundance of produced goods—ready to consume—are assumed as a given, not only presently but into the future. Also, all that is required for the people in possession of these resources is to simply give them to everyone and keep giving. Since everyone deserves it, it is also a moral imperative to give. Not only can these resources just be given and wants met by less labor and production—“some hours of work”—it seems nearly costless to give them.
What Zinn and many others overlook is that most goods have to be produced first and then exchanged in order to be available to be given, and, most crucially, the state cannot give without taking. Government cannot originate production; it can only coercively rearrange, regulate, and/or prohibit preexisting production.
Ludwig von Mises wrote in Human Action,
As against these popular fallacies there is need to emphasize the truism that a government can spend or invest only what it takes away from its citizens and that its additional spending and investment curtails the citizens’ spending and investment to the full extent of its quantity.
The masterful socialist strategy is to present only the benefits of their policies with no (or almost no) costs, and then assert that the consequences of state intervention are actually the costs of free-market capitalism. Ironically, however, the socialists need the genuine production and exchange from some degree of market capitalism in order to give anything to anyone.
What does not exist or is not possessed cannot be given. Supposedly, all the socialists want is to obtain the power to give, but they must depend on existing and continuing market production and the coercive taking mechanism of the state to do so. As Rothbard put it, “. . .the government cannot spend money until it obtains it as revenue—whether that revenue comes from taxation, inflation, or borrowing from the public.” This ought to be obvious, but in our infantile culture, wherein sound thinking and reality have been badly warped and disincentivized by the state, it is not.
Obviously, Robinson Crusoe—stranded alone on an island—would have appreciated being given everything he needed, but that was not an option, and a state taking from his production could not have provided it. In order to survive and thrive, Crusoe had to produce in order to consume. This is the same in all economies. It would not be enough for him to simply ask himself, “Is this enough?” then decide, if not, that a state should tax him to provide enough. Similarly, Mises identified the key difference between those who embrace the constraints of reality and production and those who attempt to reject them,
The thinking and rationally acting man tries to rid himself of the discomfort of unsatisfied wants by economic action and work; he produces in order to improve his position. The romantic is too weak – too neurasthenic – for work; he imagines the pleasures of success but he does nothing to achieve them. He does not remove the obstacles; he merely removes them in imagination. He has a grudge against reality because it is not like the dream world he has created. He hates work, economy, and reason. (emphasis added)
Mises likewise identified the unrealistic but persistent belief among interventionists and socialists of a seemingly “inexhaustible fund.” He wrote,
An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund, which can be squeezed forever. The whole system of interventionism collapses when this fountain is drained off: The Santa Claus principle liquidates itself.
Romanticism, Infantilization, and the State
Due to its interventions, transfers, bureaucratic nature, and diffusion of policy consequences such that the effects appear unconnected to their causes, the modern democratic state seems to encourage and incentivize unrealistic thinking. Mises warned, “Where reason ceases to function the way to romanticism is open.” He also speaks to the role of unconstrained imagination, “The romantic is a daydreamer; he easily manages in imagination to disregard the laws of logic and of nature.”
This is not intended to simply insult the intelligence of others with whom I disagree, but rather to point out how assuming a key, flawed presupposition—that the state can give without taking, even though the state fundamentally cannot give anything that is not first taken—compounds into many other flawed conclusions. For example, such a presupposition can encourage not only a rejection of reality but a resentment of reality.
Mises makes two key statements that capture the essence of this worldview: 1) “No romantic has perceived the grandeur of capitalist society.”; and, 2) “Romanticism is man’s revolt against reason, as well as against the condition under which nature has compelled him to live.” Based on Mises’s insights, we see key overlapping themes—lack of understanding and appreciation of what made capitalist society possible, a rejection of the constraints of logic and reality in favor of unconstrained imagination and feelings, and a resentment against the limitations imposed by reality. When economic ignorance, unchecked presuppositions, the fruit of capitalist wealth, democratic high time preference, and romanticism combine, one result is that people with infantile worldviews can take power. In such a condition, problems can flippantly be solved by dreams, wishes, and enough power to the coercive state. The problems of production, the nature of the state, logic, and reality can all be disregarded in imagination.
When people become accustomed to a system of state intervention and transferism, it is not unusual for them to leap to the fatal assumption that there exists automatic, abundant, produced goods—ready to distribute and consume—and the continuance of a structure of production to continue providing goods without maintenance. The state is viewed as the producer of what people want to consume or as the redistributor of existing and continuing production; it is the giver. Furthermore, this process—despite its incorrectly-diagnosed consequences—seems ready-made to solve all kinds of problems, if only the taking mechanism of the state is strengthened sufficiently. Not only can such a worldview hamper production, it can lead to destructionism.
Mises reminds us, “Every single performance in this ceaseless pursuit of wealth production is based upon the saving and the preparatory work of earlier generations.” This is easily forgotten as many are either born into or get used to the wealthy modern context, which was enabled by a long, painstaking wealth-building process. This process involved intense sacrifice, low time preference, forward thinking, production, exchange, labor, saving, division of labor, and capital investment. It also enables the state to give more lavishly, leading many to childishly assume that wealth is automatic, therefore, if the state is empowered, more wealth will result. However, Mises also reminds us,
Here [in reality] one must plough and sow if one wishes to reap. The romantic does not choose to admit all this. Obstinate as a child, he refuses to recognize it. He mocks and jeers; he despises and loathes the bourgeois.
