Scarcity versus abundance mindsets. In this episode, we are going to address the
question "What is the difference between socialism and capitalism?"
I'm Doug Andrew. Get ready. I'm going to give you some insights into those
differences and abundance, scarcity. You wouldn't believe how many people sort of
buy into the scarcity mindset. So, I'm Doug Andrew and I've been a financial
strategist for more than 45 years. But in helping people optimize their financial
assets and minimize taxes, I help them understand opportunities that maybe they
didn't know existed before. I write books. I've been fortunate to write 11 thus
far. I'm working on my 12th one. I have a national radio show. We happen to be
right here in my studio where I record a national show every single week that is
broadcast throughout the country on various stations. I love to record videos
this is a a YouTube video on the channel. And I want to address the question of
what is the difference between socialism and capitalism which is a very complex
issue that I find a lot of people really don't understand. But there's some
commonality between people who sort of buy into a scarcity mindset mentality
versus an abundance mindset. But I also want to share with you some quotes that
may help you understand the difference. So, I first heard this quote from Dan
Sullivan, The Strategic Coach. He coaches over 7,000 of the world's top
entrepreneurs. And of course most entrepreneurs believe in capitalism. When
he said this, it really rang true to me. He said that "Socialism insists that the
future pays for the past." Now, if you don't know what
that means, generally speaking, when you hear people that promote a socialism,
it's generally that down the road, future, the taxes that our children and
grandchildren will end up paying will compensate for the money we spend today
to create fairness, to provide things for people to try to create what in their
idea is equality or fairness. The problem is that when you always insist that the
future is going to pay for the past or that you have to repair the past, the
injustices that were created, oft times we get caught in this scarcity spiral.
Now, Margaret Thatcher from the UK, she was Pro-capitalism. She also said the
problem with socialism is that eventually you run out of other people's
money. Because generally, socialism says that in order to provide all of these
social benefits whether it's it's healt- care-for-all or free-college-for-all
and all of this. They say, "Well, how are you going to fund this?" "Well, it's easy.
You take from the people who have the money". So, you take from the rich. Now,
frankly, I've noticed that of my a lot of my clients that are multimillionaires
and even billionaires, they actually pay 97% of all the taxes in
America as it is. Many of them pay more than 40% in tax where the average
American pays less than 5%. And so they're already paying 8 times
what most people pay. But people say, "Well, they can afford that." Well on top of a
40% tax, many of them voluntarily give millions
of dollars to charities. If you look at most capitalist tax returns, they are
giving in charitable contributions to all kinds of causes that they believe in
and they feel like by giving it to the causes that sort of promote independence
and so forth, it's a better use of their social dollars, so to speak than just
rolling over and paying more and more in tax and relying on government to spread
it out and empowering people that you give it to instead of creating maybe a
dull or a handout. In other words, they believe in giving a hand up instead of a
handout. But as Margaret Thatcher said, "Pretty soon when you keep providing free
stuff for so many people, you will run out of other people's money." Snd so,
that's the danger economically of buying into too much socialistic mindsets where
we want to continue to raise, raise, raise taxes to provide equality or
fairness. So, we have to be very careful. See, I'm I'm very much for everybody
having access to healthcare. But I believe that health is a responsibility
not a right. When you begin to argue that you have a right to health care, this
creates a turmoil and chaos with the people maybe that chose healthy
lifestyles when they are forced to pay for the unhealthy people. Because the
unhealthy people made certain choices but when they start saying, "No, I want all
of this assistance in health care. And I want you healthy people... Because it's unfair
you're healthy and I'm not." they don't realize maybe the healthy people paid a
dear price exercising eating right and everything to be healthy. But when you
start getting into that mindset, "Hey, I want what you have. I envy your good
health and so I need help with my health and you're going to pay for that." If you go
too far, this creates all kinds of revolution in any country where that
mindset takes over. So, let me share with you the difference between abundance
mindset versus scarcity mindsets. And maybe you'll understand a little bit
more about the danger of socialism versus capitalism. So, one of my favorite
mentors is Dan Sullivan. And he summarized this in a
white paper that he called the Fairness Doctrine. And he said, "Unfortunately a lot
of people try to promote fairness and they say I want to create fairness or
equality with society. But their hidden agenda is actually to create their own
unfair advantage over other humans." Because many times, the dictators or the
leaders of socialistic Nations or communistic nations,
they are actually exercising authority and the power they want over other
individuals. But they won't admit that. I mean, Hitler
was always saying, "Oh, we're going to create a society. We're going to create
fairness." But it was actually really trying to create his own unfair
advantage over other human beings by creating the superior race. And people
said, "Oh, that sounds wonderful. The ideal. That's the ideal Society." So, it begins
with this scarcity spiral. And that begins with usually envy. Now, envy is
where you want something but it's real dangerous when you want something that
somebody else has and you wish they didn't have it. So, that starts in this
scarcity spiral. Then that goes into this guilt of feeling like, "Well, golly. If I
have more than this person has and I should be feeling guilty about that." And
people say, "Yeah. You ought to feel guilty because life is unfair. How come
you're healthy. How come you don't have problems. How come you have money." They
don't worry about, "Well, wait a minute. What did you do? You took risks that
other people chose not to take." And so you may have failed 20 times before you
finally succeeded. But some people say, "Oh, I don't want to take any of the risk but
I want all the rewards." And so, sometimes that envy leads into the guilt and then
the indignation where, "Oh, I am really upset about the success of other people."
And so, you begin to say, "That is totally unfair that people have success and
not everybody can share in it." When actually if you don't want to take the
risk that Steve Jobs took to build Apple, you buy the products and actually
it's a super deal. I can get an iPad or iPod. I'm very willing to pay several
hundred dollars for an iPhone rather than have that technology cost me
thousands of dollars. But I could have taken some risk and invested in Apple
stock. But when we start saying that's unfair, he didn't build that. We did by
buying his products. Therefore life's unfair. He should give a part of all of
his profits back to everybody who made him successful. It's like, wait, wait, wait a
minute here. Now or maybe going a little bit too far. See, the scarcity mindset if
I were to describe it this way, if I just took an extra breath of air out of this
room here my studio, you may not feel offended that I took an extra breath of
air out of the room because there's plenty of air. Or if you went swimming recently,
"Oh, how many of you did that? Well, did you enjoy the water? Did you use all of it?" No,
because there's an abundance of water. But there are some people who get very
upset if I share a success because then they
feel like I took more than my fair share of the success because it's scarce. It's
limited. If I'm happy, they're unhappy because I took more than my fair share
of happiness. And this is a dangerous scarcity mindset. So, it comes with this
fairness doctrine. Life is unfair. We've got to level the playing field. We got to
make things fair. And so, it's depleting the resources on the planet. And we've
got to keep leveling the playing field and so it comes up with this zero-sum
mentality. We have got to create fairness and they think that comes from taking
from everybody who is succeeding and redistributing the wealth over and over
and over again. And as has been proven, if you took everything away from the
entrepreneurs, pretty soon within 5 years, they would have a lot of resources
again because they learn how to go out and be productive. But every time it's
taken from them too much, because they will voluntarily give, they lose their
incentive. And that's the zero-sum mentality. On the other side is the
abundance mindset or the abundance upward
spiral. So, let me share with you what that is. So, under an abundance mindset, it
starts out with a profound attitude of gratitude. Always appreciate and being
extremely grateful. Then you begin to use creativity because when you have
gratitude, you will begin to become creative. And as you use creativity to
give other people new capability, they will no longer feel powerless. And so, you
actually then begin to cooperate. See, I like Steve Jobs developing the iPad
because I could purchase iPads for 4 or 5 hundred bucks and put my video
library 154 videos as several years ago and one iPad.
And then the the results by cooperating were exponential. That creates
exponential growth. And so by using cooperation, we actually have more
abundance. And abundance breeds abundance. It fosters ingenuity about how to
complement one another. And that creates bigger opportunities. That's what I want
for my children and grandchildren is more opportunities than they possibly
have the capability to seize. That's a nice problem. And it's easy to solve by
filtering which opportunities you're going to seize in life which ones you're
gonna delegate to somebody else in which ones you're gonna walk away from. The key
to this is cooperation. See, capitalism should have been named cooperation. But
it was named capitalism by its enemies, Karl Marx. Socialist. He said "That's
unfair. You're capitalizing on people's needs and wants." Now, if I back at the
time of Christ decided to cooperate with you and I said, "Why don't you make the
tunics?" That's clothing. "Why don't you make the tunics this year and I'll make
them next year." Well, if pretty soon you make the tunics
better cheaper faster better than I do. "Hey, you know what? I like to go fish." So,
you make the clothes and I'll fish. You buy my fish and I'll buy your clothes.
You can charge more than it cost you to do that. I'm okay with you making a
profit. You're okay with me making a profit. Now, we're cooperating. And all of a
sudden this other gentleman, he likes to be in there in the dirt. He likes to grow
corn. So now, we cooperate and we buy his corn. He
buys my fish and we all buy her clothes and now we're cooperating and that is
cooperation. It's not capitalizing on people's needs and wants. If somebody
else comes in and makes clothes cheaper or better quality, I can choose in a free
market to buy from them because the market controls itself when you
capitalize on the opportunities but you're cooperating. You're not
capitalizing on people's needs and wants and creating unfairness. You're actually
creating more fairness. So, really the difference here is ownership. Creating
fairness for all but there is a counter fit to that when people begin to say,
"Nope, we got a level the playing field. We need free this, free that. Let the
government to provide everything for you." Instead of, "No, why don't we be
independent because we declared independence in this country?" And frankly,
I'm concerned because sometimes the younger generation is now being trained
to be more and more dependent on the government taking care of you from the
cradle to the grave. And I think that's going the wrong direction. So, if you want
to learn more about responsibility and accountability, read my book Entitlement
Abolition. I'll buy the book. It's free. You pay $5.95 shipping and
handling. Go to entitlementabolitionbook.com. And I'll send out a free copy
to you. And this book will help you understand this concept maybe a little
bit better. And be able to give you ideas on how to teach your kids your grandkids
how to be responsible and accountable. And how to be captains of their own
souls. Able to handle any curve ball life throws at them. Self-reliant individuals.