Back in 2011, I shared a chart comparing economic growth in Chile, Argentina, and Venezuela between 1980 and 2008.
My simple goal was to show that market-oriented nations enjoy very fast growth compared to nations with “mixed economies or socialist economies.
Over the past dozen years, I’ve repeatedly shared that chart and featured it in the “anti-convergence club.”
Having written yesterday about the ongoing economic misery of Venezuela, it dawned on me that is it probably time to update the numbers.
So I went to the International Monetary Fund’s World Economic Outlook database.
What did I find? As you can see from the chart, everything I wrote back in 2011 is still true. Except Chile looks even better and Venezuela looks even worse.
The obvious takeaway is that the longer a nation follows good policy, the better the results. And the longer a nation is subjected to socialism, the worse the results.
If you want numbers, inflation-adjusted per-capita output has nearly tripled in Chile over the past four decades. Call that a reward for good policy.
By contrast, economic growth in Argentina has been very anemic, just 21 percent in 42 years. Call that the price of bad policy.
But Argentina’s anemia looks great compared to Venezuela, where per-capita GDP has suffered a 70 percent collapse. I’m not sure there’s a word to describe such a cataclysmic decline. For lack of a better alternative, we’ll say that’s the “reward” for socialism.
I always challenge my leftist friends to respond to my never-answered question. Maybe I should simplify things and simply ask if they still think Venezuela is a role model.
P.S. I’m still amazed that the New York Times published a lengthy article on Venezuela’s economic misery and somehow never mentioned socialism.
P.P.S. While Venezuela is the main focus of today’s column, I can’t resist sharing my concerns about Chile. As documented in my six-part series in 2021, Chile elected a socialist president. It is therefore possible that a future version of his chart will show grim news. But hope is not lost. Chilean voters overwhelmingly rejected a proposal for a new constitution based on socialism. And just a few days ago, the legislature rejected a huge, class-warfare tax increase.
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