Last week, I began a discussion of how capitalism and socialism differ in producing wealth and poverty in human society. This week, I want to continue that discussion. Socialism is based on a false and destructive understanding of human nature. As I pointed out last week, the Bible reveals the depravity of man.
As Jeremiah 17:9 declares, the “heart is deceitful above all things, and desperately wicked: who can know it?” The verse is declaring that man’s heart is wicked and is deceitful in convincing man that “we aren’t so bad!” To quote Karl Marx, the central tenet of Marxism and socialism is: “From each according to his ability, to each according to his needs.” Every nation in the world that has tried to implement this dictum has resulted in massive economic dislocation and depressed living standards.
Interestingly, 2026 is not only the 250th anniversary of America’s Declaration of Independence issued in 1776. It is also the 250th anniversary of the publication of Adam Smith’s The Wealth of Nations, the 976-page tome, which is credited with spawning the field of economics. Even at such massive length, The Wealth of Nations provides fascinating and insightful knowledge for the modern reader. Smith’s genius is apparent from the beginning.
His essential and invaluable insight into human nature and human society is stated clearly.
Writing for The Wall Street Journal, James Grant noted: “The natural effort of every individual to better his own condition,” as The Wealth of Nations resoundingly asserts, “when suffered to exert itself with freedom and security, is so powerful a principle, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the following of human laws too often incumbers its operations.”