Back in June, I wrote about the bizarre allure of socialism and said that advocates (who generally don’t even know what socialism really means) were some of the most anti-empirical people in the world.
…even though the real-world evidence against big government is so strong, it’s rather baffling that many young people are drawn to that coercive ideology and disturbing that a non-trivial number of voters favor this failed form of statism. …Socialism has a technical definition involving government ownership of the means of production and central planning of the economy. But most people today think socialism is big government, with business still privately owned but with lots of redistribution and intervention (I’ve argued, for instance, that even Bernie Sanders isn’t a real socialist, and that there are big differences between countries like Sweden, China, and North Korea). For what it’s worth, that’s actually closer to the technical definition of fascism.
Now let’s update that column.
It seems that the cancer of socialism is spreading, at least if this story in The Week is any indication.
Things are looking up for the Democratic Socialists of America. With a membership of 25,000, it is now the largest socialist group in America since the Second World War. And last weekend in Chicago, it held its largest convention, by a considerable margin, in its history. …Membership has more than tripled in a year, gaining a large boost from the candidacy of Bernie Sanders… That sharp surge in new recruits — most of whom are fairly young — has created a fairly stark age bifurcation among members. Somewhat akin to Sanders campaign, there is an old guard of people who have been carrying the left-wing torch for years, and a recent surge of new members…most of the major proposals were adopted with large majorities. Among other things, delegates voted to…endorse the Boycott, Divestment, and Sanctions movement (directed at ending the Israeli occupation of the West Bank and Gaza), …and to endorse Medicare for all as a major priority.
I’m guessing that the bifurcated conference meant a handful of old people who are genuine socialists and a bunch of young people who think socialism is just a bunch of government-coerced redistribution and intervention.
Both groups, however, deserve scorn for favoring a system that elevates the state over individuals. That approach is grossly immoral.
Not to mention that it’s never worked. Nobody has ever provided a good answer to my two-part challenge.
There is no example of a successful socialist nation anywhere in the world. Cuba? No. North Korea? No. The Soviet Empire? Don’t make me laugh. Venezuela? You must be joking.
I could continue, but no sense beating a dead horse.
Let’s close with a bit of humor. A friend in Australia sent me this clever image. I gather it’s a parody of an actual left-wing gathering Down Under. Regardless, I found it rather amusing.
Back in 2014, I wrote a column asking my leftist friends two very serious questions. And I often repeat these questions when debating proponents of bigger government.
Can you name a nation that became rich with statist policies?
Can you name a nation that with interventionism and big government that is out-performing a similar nation with free markets and small government?
I’ve yet to receive a good answer to either question. Many leftists point to certain European welfare states, but I debunk that claim by pointing out that those nations became rich when government was very small (about 10 percent of GDP, about one-half the size of the current Hong Kong and Singapore public sectors).
Others point to rapid growth in China, but that’s rather silly since improvements in that country’s economy are the result of partial liberalization. In any event, it’s not that difficult to have rapid growth rates when starting from a very low level. But even with a couple of decades of good growth, living standards in China are still relatively low.
So my challenge remains. I want a leftist (or anybody) to identify a successful statist nation, but I’m not holding my breath for good answers.
The London-based Institute for Economic Affairs has released a video on the false allure of socialism.
I suppose a caveat might be appropriate at this stage.
Socialism has a technical definition involving government ownership of the means of production and central planning of the economy.
But most people today think socialism is big government, with business still privately owned but with lots of redistribution and intervention (I’ve argued, for instance, that even Bernie Sanders isn’t a real socialist, and that there are big differences between countries like Sweden, China, and North Korea).
For what it’s worth, that’s actually closer to the technical definition of fascism. But I guess I’m being pedantic by wanting more precision in how terms are used.
In any event, the IEA video is spot on. If you like videos debunking socialism, I have other examples here, here, and here.
Last but not least, here’s my favorite visual from the IEA video.
I wrote last year that Venezuela was entering the “fourth circle of statist hell.”
How else, after all, can you describe a government that is so venal and incompetent that it resorts to confiscating toys in an effort to strengthen its hold on power?
But shrugging may soon turn to shrugged. It’s hard to see how Maduro’s despotic regime can hold power much longer. Consider this collection of horrifying stories.
With inflation spiraling out of control, food and medicine supplies dwindling and violent crimes on the rise, women as young as 27 are seeking out surgeons to avoid unwanted pregnancies. A study by PLAFAM, the biggest family planning clinic in the country, estimates that about 23 percent more Venezuelan women are being sterilized today as compared to four years ago, said the clinic’s director, Enrique Abache. “The financial crisis is one of the main causes for this,” he explained. Years of government mismanagement have fueled what is now a full-blown humanitarian crisis in a country where infant mortality has almost doubled in recent years. …mothers often spend whole days searching for milk powder or diapers. Those who can’t find them are simply forced to go without.
How serious is Venezuela’s crisis? Bad enough that, in 2016, Venezuelans became the top US asylum-seekers… Venezuelan asylum claims increased by 150 per cent from 2015 to 2016. Though Venezuela does not publicly circulate emigration information, estimates suggest that between 700,000 and two million Venezuelans have emigrated since 1999. …Sometimes, from here, it can seem as though the entire population – fed up with shortages of medicine and food, with crime and with the political trajectory of the nation – wants to leave.
Julio Noguera…spends his evenings searching through the garbage for food. “I come here looking for food because if I didn’t, I’d starve to death,” Noguera said as he sorted through a pile of moldy potatoes. “With things like they are, no one helps anyone and no one gives away meals.” Across town, unemployed people converge every dusk at a trash heap on a downtown Caracas sidewalk to pick through rotten fruit and vegetables tossed out by nearby shops. They are frequently joined by small business owners, college students and pensioners — people who consider themselves middle class even though their living standards have long ago been pulverized by triple-digit inflation, food shortages and a collapsing currency. …Nearly half of Venezuelans say they can no longer afford to eat three meals a day, according to a recent poll.
cities around the country…have been hit hard by police, national guard troops and the regime’s paramilitary forces as the dictatorship of Nicolás Maduro tries to contain a wildfire of rebellion. …The government is running out of money to buy imports, and since it has crippled domestic production, privation is growing more profound. …Roving bands of government-sponsored militias terrorize civil society as they have for more than a decade. …a 16-year-old girl politely informed Mr. Maduro that students in her school often faint from hunger. …Mr. Maduro was pelted with stones as he left a military rally in Bolívar state… Meanwhile, Mr. Maduro is doubling down on centralized control of a shrinking food supply. …Those who do not support the regime can be cut off.
The thuggery will worsen according to the Washington Free Beacon:
The socialist leader of Venezuela announced in a speech to regime loyalists his plan to arm hundreds of thousands of supporters after a years-long campaign to confiscate civilian-owned guns. …The Venezuelan government justified the gun bans and confiscations by saying they were needed to combat the country’s violent crime and murder epidemic. However, statistics reported by the nonprofit Venezuelan Violence Observatory show the murder rate in Venezuela increased from 73 murders per 100,000 inhabitants the year the gun ban was instituted to 91.8 murders per 100,000 inhabitants in 2016. …As protests and unrest increase in Venezuela, Maduro’s regime has created a landscape where civilians are disarmed but his supporters are not. The latest round of mass demonstrations in the streets of Caracas have already claimed five lives.
Even zoo animals are suffering, as reported by the Miami Herald:
An apparently malnourished African elephant in a Venezuelan zoo — her ribs showing through her sagging skin — has become the latest symbol the deep economic crisis in what was once one of Latin America’s most prosperous nations. …Ruperta is suffering from diarrhea and dehydration after zoo officials only had squash to feed her for several days. According to the newspaper, when neighbors tried to bring food to the elephant over the weekend, the donations were turned away by zoo officials… in a nation where a grinding economic crisis is forcing many to skip meals and go hungry, Ruperta’s fate has touched a nerve. …Román Camacho, a local reporter who broke the story, said a whistle-blower within the park service alerted him that Ruperta had grown so hungry that she collapsed last Thursday. …Also last year, a horse at a local zoo was reportedly butchered by hungry Venezuelans.
Venezuela was once one of Latin America’s economic powerhouses… A growing number of Venezuelans are going hungry in a food shortage, and dying from treatable ailments in squalid, ill-equipped hospitals. …Until political prisoners are released, the prospects for a restoration of democratic rule are very dim. …Inflation has soared to an estimated 700 percent, while people in this oil-rich nation are left digging through piles of trash for scraps of food.
For Venezuelan exiles with money, Madrid has become a home away from home. They are increasingly turning to the Spanish capital as a place to invest as their home country falls further into economic chaos and the political mood turns more sour in U.S. havens such as Miami. The number of Venezuelans arriving in Spain rose more than 50 percent in 2015, according to the Spanish statistics office.
The monetary system is also a disaster reports the New York Times:
President Nicolás Maduro of Venezuela made a baffling announcement…, saying that his government intended to yank the 100 bolívar note from circulation… Venezuelans, who have endured months of chronic food and medicine shortages, mobbed banks and A.T.M.s in a desperate attempt to offload their stacks of the highest denomination bill, which has become so devalued it is now worth roughly 3 cents in American dollars. …the Maduro government…has spent years…imposing arbitrary currency controls that have made a once prosperous economy one of the world’s most dysfunctional. …Venezuela was expelled from the regional trade bloc Mercosur in early December.
The outflow of people is staggering according to Fox:
Along with basic food, medicine and even toilet paper, Venezuela now lacks the materials to meet to the soaring demand for new passports – making it almost impossible for those few Venezuelans with the monetary means of escaping the troubled Latin American nation to do so. While estimates of how many passport requests the socialist government received last year vary from between 1.8 million to 3 million, only 300,000 of the elusive documents were doled out. Everyday, hundreds of people line up outside the passport agency, known as Saime, in the capital of Caracas in the hopes of obtaining one. It’s an ironic, and yet sad situation, for a country that used to be one of Latin America’s wealthiest and one that was used to seeing people flock to, not away from. …Adding to the overall misery are a drastic rise in violent crime – especially in the capital city of Caracas – rolling blackouts and widespread and often times bloody protests against the government. …since Chávez took power in 1999 nearly 2 million Venezuelans have fled the country and hundreds of thousands are marking their time until they obtains the funds and the passport that will allow them to leave.
Government insiders are getting rich, as noted by the New York Post:
Venezuela is no longer a country with a government, institutions and a civil society. It’s a geographic area terrorized by a criminal enterprise that pretends to govern, with a civil society made up of two sets of people: accomplices and victims. More than 30 million of the latter. …The Hugo Chavez-led looting spree began in 2000. …More than $1 trillion has disappeared… Loving parents are putting their children up for adoption because they have nothing to feed them; the elderly are starving; patients with treatable conditions are dying in hospitals that lack basic medicine like insulin and oxygen, where vital equipment has been pilfered and emergency rooms operate without electricity. …Meanwhile, those in power can focus on what they do best: looting the country’s natural-resource wealth and manufacturing and trafficking illegal narcotics. In fact, Maduro just upped his game by appointing Tareck el-Aissami, a drug kingpin, as vice president.
Venezuela only has $10.5 billion in foreign reserves left, according to its most recent central bank data. For rest of the year, Venezuela owes roughly $7.2 billion in outstanding debt payments. In 2011, Venezuela had roughly $30 billion in reserves. In 2015, it had $20 billion. The trend can’t persist much longer, but it’s hard to know exactly when Venezuela will run completely out of cash. …The thinning reserves paint a scary financial picture as the country faces a humanitarian crisis sparked by an economic meltdown. Venezuelans are suffering massive food and medical shortages, as well as skyrocketing grocery prices. Massive government overspending, a crashing currency, mismanagement of the country’s infrastructure and corruption are all factors that have sparked extremely high inflation in Venezuela. Inflation is expected to rise 1,660% this year and 2,880% in 2018, according to the IMF.
Socialist economic policies and government corruption have destroyed a once-thriving economy sitting on the world’s largest oil reserves. …Index of Economic Freedom…looks at the economic freedom of countries throughout the world. In that period of time, Venezuela’s score has declined the most out of any country, going from 59.8 to 27.0 (on a scale of 1-100). It is now in second-to-last place, right behind Cuba and better only than North Korea. …The World Health Organization estimates that there are shortages for 75 percent of necessary medications and medical supplies such as antibiotics, vaccines, and scalpels. Blackouts resulting from a crumbling energy infrastructure are a daily occurrence. The death of newborns has become a common phenomenon… All the while, Venezuelan government officials have been using oil revenues to line their own pockets.
Venezuela, which was once Latin America’s richest country, has become an unwilling test site for how much economic and social stress a modern nation can tolerate before it descends into pure anarchy. …Venezuelans have struggled with mounting shortages of food, medicine and other consumer goods, as well as triple-digit inflation that has rendered the national currency, the bolivar, worthless. … President Nicolás Maduro, an economically illiterate former bus driver, …also closed Venezuela’s borders with Colombia and Brazil, on the theory that traders were hoarding currency in those countries. …the president is doing his best to blame the United States for the fiasco… Venezuelans no longer believe such nonsense. A survey released this month by pollster Alfredo Keller showed that only 1 percent said the United States was to blame for the country’s crisis, while 76 percent blamed Mr. Maduro and the regime founded by Hugo Chávez. …Only 19 percent said they still supported the regime.
Want to lose weight fast? …Just move to Venezuela. There, the new Socialist Diet has caused the population to lose millions of pounds in 12 months. Unwillingly, of course. …A new study of Venezuela’s stunning decline under Hugo Chavez’s socialist model…reports that the average Venezuelan lost 19 pounds in the last year. Today, the 2016 Living Conditions Survey finds, 32.5% of Venezuelans eat only once or twice a day, up from 11.3% just one year ago. And 93.3% of all people don’t earn enough to buy sufficient food. …Bring socialism to your country, and you bring misery. It’s the one thing that socialism produces an abundance of. …formerly middle-class Venezuelans scavenge for food — some even stooping to dumpster diving and eating formerly beloved pets just to stay alive — socialists allied with Maduro have changed nothing. …rule of law has been rejected for the rule of one tyrant. Children aren’t spared; they’re dying by the hundreds from curable diseases, a lack of medicine, electricity outages and no incubators for newborns.
Kevin Lara Lugo…died on his 16th birthday.He spent the day before foraging for food in an empty lot, because there was nothing to eat at home. Then in a hospital because what he found made him gravely ill.Hours later, he was dead on a gurney, which doctors rolled by his mother as she watched helplessly. She said the hospital had lacked the simplest supplies needed to save him on that day last July. … Inflation has driven office workers to abandon the cities and head to illegal pit mines in the jungle, willing to subject themselves to armed gangs and multiple bouts of malaria for the chance to earn a living. Doctors have prepared to operate on bloody tables because they did not have enough water to clean them. Psychiatric patients have had to be tied to chairs in mental hospitals because there was no medication left to treat their delusions. Hunger has driven some people to riot — and others into rickety fishing boats, fleeing Venezuela on reckless journeys by sea. But it was the story of a boy with no food, who had gone searching for wild roots to eat but ended up poisoning himself instead, that seemed to embody everything that had gone wrong in Venezuela.
A fleet of rundown Venezuelan oil tankers carrying some 4 million barrels of oil and other fuels is wallowing in the Caribbean Sea. Not because of bad weather, or mechanical problems, but because Venezuela’s state-owned oil company, Petróleos de Venezuela SA, doesn’t have the cash to get them to their final destinations. …it’s doubly bad news for Venezuela, a country in dire economic straits and full-fledged crisis, with a political impasse, looting, dangerous food and health supply shortages, and massive protests. Venezuela is massively reliant on oil exports to bankroll government services. But the cash-strapped country can’t even find the money to service the vessels that carry its exports. …Venezuela, once Latin America’s most powerful petrostate, is on the brink of collapse after decades of economic mismanagement.
More on insider corruption, exposed by the Washington Post:
Formerly a stable, sophisticated, middle-income country awash in oil wealth, Venezuela has experienced a dizzying downward spiral over the past two years. Today, Venezuela’s is arguably the world’s worst-run economy. Food shortages are pervasive, and food prices are rising fast — a deadly combination that has left millions unable to find enough to eat. …Why doesn’t the army rebel? …we have the genuinely shocking answer: Far from rebelling, Venezuela’s armed forces actively profit from their countrymen’s hunger.This year, President Nicolás Maduro granted the armed forces virtually unlimited authority over the nation’s food imports and distribution. Domestic food production is down sharply in the wake of a botched land reform program, meaning imports now account for most of the nation’s food. But putting the military in charge of this delicate domain has led to an explosion of corruption, as well-connected officers mercilessly prey on every part of the distribution chain, from the initial contracts and the foreign currency needed to fund them to storage, transportation and distribution. …A government that bills itself as radically pro-poor in fact drips with contempt for the poor.
Struggling to feed herself and her seven children, Venezuelan mother Zulay Pulgar asked a neighbor in October to take over care of her six-year-old daughter, a victim of a pummeling economic crisis. …”It’s better that she has another family than go into prostitution, drugs or die of hunger,” the 43-year-old unemployed mother said… With average wages less than the equivalent of $50 a month at black market rates, three local councils and four national welfare groups all confirmed an increase in parents handing children over to the state, charities or friends and family. …the trend highlights Venezuela’s fraying social fabric and the heavy toll that a deep recession and soaring inflation are taking on the country with the world’s largest oil reserves. …most economists pin the responsibility on socialist policies introduced by former president Hugo Chavez, which his successor Nicolas Maduro has doubled down on… Two-thirds of 1,099 households with children in Caracas, ranging across social classes, said they were not eating enough in a survey released last week by children’s’ rights group… In some cases, parents are simply abandoning their kids. Last month, a baby boy was found inside a bag in a relatively wealthy area of Caracas and a malnourished one-year-old boy was found abandoned in a cardboard box in the eastern city of Ciudad Guayana, local media reported. …There are also more cases of children begging or prostituting themselves
…new data capturing the woes of the once well-heeled South American nation is shocking: According to new results from an annual national survey, nearly three-quarters of respondents reported losing an average of 19 pounds between 2015 and 2016. …Shortages of food, medicine, and many basic items abound in what was once the richest country in South America per capita in the 20th century. Malaria is ravaging a country that was the first in the world to eliminate the disease in its populated areas. Now there’s evidence that the economic chaos is translating into a malnutrition crisis… Alejandro Velasco, a scholar of Latin American history at New York University, believes Chávez’s model of socialism…”strangled the already meager productive apparatus of Venezuela,” he explained during an interview in January. …Chávez’s spending regime also left the country acutely vulnerable to emergency. Ricardo Hausmann, director of the Center for International Development at Harvard’s Kennedy School, notes…that Chávez’s government.. “over-spent and quintupled the public foreign debt.”
Every weekday morning, a queue of several dozen forlorn people forms outside the dingy headquarters of SAIME, Venezuela’s passport agency. As shortages and violence have made life in the country less bearable, more people are applying for passports so they can go somewhere else. …As desperation rises, so does the intransigence of Venezuela’s “Bolivarian” regime, whose policies have ruined the economy and sabotaged democracy. The economy shrank by 18.6% last year, according to an estimate by the central bank, leaked this month to Reuters… Inflation was 800%. …In 2001 Venezuela was the richest country in South America; it is now among the poorest.
Venezuela is even begging at the UN according to the Associated Press:
Venezuela’s President Nicolas Maduro has asked the United Nations for “help” boosting medicine supplies as he struggles to combat crippling shortages. …acknowledging that Venezuela needs outside help is a telling sign of how far the nation sitting atop the world’s largest petroleum reserves has fallen under Maduro. …Venezuelans…have been suffering from widespread shortages and triple-digit inflation… OAS Secretary General Luis Almagro is pushing to expel Maduro’s government from the group for breaking the country’s democratic order and violating human rights. Maduro’s government disavowed a landslide loss to the opposition in legislative elections in 2015, and then suspended a recall campaign seeking to force him from office before the 2018 election.
Bloomberg notes that an oil-rich nation even has shortages of gas:
…drivers lined up at filling stations amid a worsening shortage of fuel. While Petroleos de Venezuela SA says the situation is normalizing and blamed the lines on transport delays, the opposition says the company has had to reduce costly fuel imports as it tries to preserve cash to pay its foreign debt. …As the company’s crumbling refineries fail to meet domestic demand, imports have become a financial burden because the country buys fuel abroad at market prices only to sell it for pennies per gallon at home. … “It’s unbelievable that this is happening in an oil producing country.” …The hunt for gasoline is just the latest headache for consumers after years of severe economic contraction and triple-digit inflation have produced shortages of everything from bread to antibiotics.
The Miami Herald reports the government is making it even harder for hungry people to get fed:
Facing a bread shortage that is spawning massive lines and souring the national mood, the Venezuelan government is responding this week by detaining bakers and seizing establishments. In a press release, the National Superintendent for the Defense of Socioeconomic Rights said it had charged four people and temporarily seized two bakeries as the socialist administration accused bakers of being part of a broad “economic war” aimed at destabilizing the country. …The government said bakeries are only allowed to produce French bread and white loaves, or pan canilla, with government-imported flour. …The notion that bread could become an issue in Venezuela is one more indictment of an economic system gone bust. The country boasts the world’s largest oil reserves but it has to import just about everything else. …President Nicolás Maduro launched “Plan 700” against what he called a “bread war,” ordering officials to do spot checks of bakeries nationwide.
And there’s always more bad policy, as Reuters reports:
Venezuela’s socialist President Nicolas Maduro announced on Sunday a 50 percent hike in the minimum wage and pensions, the fifth increase over the last year… “In times of economic war and mafia attacks …we must protect employment and workers’ income,” added Maduro, who has now increased the minimum wage by a cumulative 322 percent since February 2016. …critics say his incompetence, and 17 years of failed socialist policies, are behind Venezuela’s economic mess. They say the constant minimum wage hikes symbolize Maduro’s policy failures… Venezuela’s inflation hit 181 percent in 2015, according to official data, though opponents say the true figure was higher. There is no official data for 2016, but…inflation was more than 500 percent in 2016, while the economy shrank 12 percent.
Venezuelans for the first time led asylum requests to the United States as the country’s middle class fled the crashing, oil-dependent economy. Data from the U.S. government’s Citizenship and Immigration Services show that 18,155 Venezuelans submitted asylum requests last year, a 150 percent increase over 2015 and six times the level seen in 2014. …The vast majority leaving are middle-class Venezuelans who don’t qualify for refugee status reserved for those seeking to escape political persecution, according to Julio Henriquez, director of the Boston-based nonprofit Refugee Freedom Program, which has been drawing attention to the trend. “The pace at which requests are increasing is alarming,” said Henriquez, whose group obtained the still-unpublished data in a Feb. 8 meeting between U.S. officials and immigration lawyers.
And the government is engaged in more looting, MSN reports:
General Motors said it has been forced to stop operating in Venezuela on Wednesday after one of its plants was illegally seized by local authorities. The seizure, in the country’s industrial hub of Valencia, comes amid a deepening economic and political crisis that has sparked weeks of deadly street protests. …The auto giant did not provide any details about its plant being seized, other than saying it “was unexpectedly taken by authorities, preventing normal operations.” It said other assets, “such as vehicles,” had also been stripped from the site. …Venezuela’s car industry has been in freefall, hit by a lack of raw materials stemming from complex currency controls and stagnant local production, and many plants are barely producing at all. Venezuela’s government has taken over factories in the past. In 2014 the government announced the “temporary” takeover of two plants belonging to U.S. cleaning products maker Clorox Co.
Last but not least, here’s a column from the Week:
Venezuela cannot wake up from its socialist nightmare. …across the country, people are starving. Venezuela, a beautiful, oil-rich country, once one of the wealthiest nations in the Southern Hemisphere, is only sinking further into economic devastation and chaotic, corrupt authoritarianism. …Meanwhile, the economy keeps rotting. Venezuela has topped Bloomberg‘s Economic Misery Index, a benchmark whose title is self-explanatory, for three years running. The economy shrank by 18 percent last year, with unemployment at 25 percent, and inflation slated to be 750 percent this year and 2,000 percent the next…there are outbreaks of scabies, a disease easily prevented with basic hygienic practices; hospitals are running out of even basic drugs. Caracas is the murder capital of the world. Corruption has infected the country wholesale even as it has created a new class of kleptocratic oligarchs linked to the security services. …The whole of Venezuelan society is breaking down at a fundamental level. …It is truly heartbreaking. …And I blame socialism. …And now it’s Venezuelans, especially the poorest and more marginal among them, who are paying the price for this madness.
Let’s close with a video on the tragic situation in Venezuela.
I wonder if Bernie Sanders still thinks this is a system worth supporting?
P.S. I have to confess that this huge collection of 28 stories accumulated because I was dating someone who is a fervid supporter of Maduro’s government (a lovely but misguided lass), and I decided that it wouldn’t be very diplomatic for me to write about the mess in that country. Now that the relationship is over, there’s no downside if I vent my spleen on that cesspool of corruptstatism.
I’m tempted to say that statism is sort of like a cult. Proponents of socialism and other big-government ideologies have a dogmatic zeal that blinds them to reality.
For instance, no nation has ever become rich with big government. But that doesn’t stop leftists from advocating in favor of higher taxes and more coercive redistribution.
They are equally capable of rationalizing that economic misery in places such as Greece and Venezuela has nothing to do with bad policy, and you can even find a few zealots willing to defend basket cases such as Cuba and North Korea.
So long as they don’t burn me at the stake for my heretical views, I guess I won’t get too agitated by their bizarre fetish for statism.
But I will periodically mock them. And that’s the purpose of today’s column. We’ll start with this nice comparison between a capitalist grocery store and a socialist grocery store. I have no idea, by the way, if the lower image actually is a supermarket in a socialist country, but let’s not forget that a real-world version of this comparison is one of the reasons there’s no longer an Evil Empire.
But the bad news about socialism is not limited to economic deprivation for the masses.
The system also leads in many cases to totalitarianism (see this article by Marian Tupy, for example).
Which makes this set of images from Reddit‘s libertarian page both funny and sad.
As you might expect, Milton Friedman had some very pointed observations on this topic.
The really good part starts shortly before 2:00. He explains very clearly that socialism is based on force and coercion.
I’ve saved the best for last.
The PotL sent me this collections of risky temptations and it perfectly captures the attitude of many statists. No matter how many times socialism has failed, they never learn the appropriate lesson. It just hasn’t been tried by right people, they tell us. Or been imposed in the right circumstances.
So they want us to give it one more try, just like a person with no willpower will eat one more bite of chocolate.
Which is the same message you find here, here, and here.
Incidentally, this analysis not only applies to socialism, as technically defined, but it also applies to redistributionism. Which is definitely more benign, but nonetheless produces bad results.
All forms of statism are despicable because they’re morally and practically evil.
They’re morally evil since they’re based on coercion. And they’re practically evil since they deliver such awful results for ordinary people.
The good news is that some forms of statism are widely discredited. Outside of universities, you don’t find many people who defend and advocate communism. And other than a few lonely cranks, you don’t find many people who defend and advocate national socialism and other forms of fascism.
But for some inexplicable reason, you still find some folks who harbor positive feelings about socialism.
To be sure, that opens up a bunch of questions, such as whether they even understand that socialism – at least in theory – involves government ownership and operation of the means of production. Such as the United Kingdom in the post-WWII era.
For what it’s worth, the fans of Bernie Sanders probably don’t understand anything about economics (goes without saying, right?) and they probably think that socialism is simply a system with lots of redistribution. Such as modern Denmark (even though that nation is just as market-oriented as the United States).
I’m not sure how we educate these people, and I doubt these three photos will have much impact on them, but I chuckled when this showed up in my inbox.
I guess the top photo might be Detroit. The second photo could be Cuba. And the last photo might be where Al Gore lives.
If that’s the case, the first is actually an image showing the destructive impact of the welfare state and the third is actually an image the benefits of insider cronyism, but let’s not get hung up on details. The real point is that corrupt insiders are the only real beneficiaries of big government.
P.S. Two of the most popular columns I’ve produced involve semi-amusing stories that highlight the failure of socialism, redistributionism, and collectivism. “The Tax System Explained in Beer” and “Does Socialism Work? A Classroom Experiment” succinctly capture why it’s very shortsighted and misguided to have an economic system that punishes success and rewards sloth.
P.P.S. Yes, socialism breeds misery, but it also generates some clever humor. See here, here, here, here, here, and here.
P.P.P.S. And even though self-proclaimed socialists pontificate about sharing and compassion, their ideology actually promotes a bad kind of selfishness.
There was some genuinely good news in 2016, which is more than I can say for 2015 (my “best” development for that year was some polling data, followed by some small-ball tinkering).
Though the good news for 2016 was mostly overseas. Here are the four things from around the world that made me happy this year.
The landslide vote against a government-guaranteed income in Switzerland – I’m rather worried that there’s a growing movement (including some libertarians!) in support of a minimum income provided by taxpayers. So I was gratified that the “Sensible Swiss,” in a referendum this past May, overwhelmingly rejected an initiative to impose such a policy. I even like to think that perhaps I played a (very minor) role in the outcome.
Abolition of the income tax in Antigua and Barbuda – It’s a terrible idea (as we know from America’s experience) to give politicians a new source of revenue. They’ll quickly use the new levy to finance a permanent expansion in the burden of government (which is why I’m willing to go halfway around the world to fight such schemes). With that in mind, the repeal of the income tax in the Caribbean nation of Antigua and Barbuda was a truly joyous development.
And while we didn’t have any major positive developments in the United States, there was a bit of good news. Yes, it’s “small-ball tinkering,” but I’m always glad for any progress.
So those are the noteworthy good things that happened this year. Now let’s look at the other side of the ledger. What was the bad news of 2016?
Well, the good news (so to speak) is that there was not a lot of bad news. At least if we’re focusing on actual policy changes.
But there are three developments that cause me to worry about the future.
Growing support for the value-added tax from Republicans – At the risk of hyperbole, I view the value-added tax as the single-greatest threat to the long-run viability of the United States. Simply stated, our ability to restrain the growth of spending will be terribly weakened if politicians get this new source of revenue. Why would they ever reform entitlements, for instance, if they had the ability boost the VAT rate by a point or two every few years? With that in mind, I’m perplexed and horrified that some otherwise sensible lawmakers (including Rand Paul and Ted Cruz) have embraced this money machine for big government. I don’t care if their plans are theoretically sensible. I worry about what will happen in the real world.
An erosion of the pro-trade consensus – The economic damage caused by higher fiscal burdens since World War II has been offset by lower trade burdens thanks to various agreements to reduce tariffs and other protectionist barriers. So it’s very good news that there’s been a bipartisan consensus for freer trade. Unfortunately, the unexpected appeal of Donald Trump and Bernie Sanders suggests that both parties have voters susceptible to the siren song of protectionism.
Tomorrow I will write about my hopes and fears for 2017.
Let’s close today’s column with a few special categories.
If there was an award for the most disgusting news of 2016, the NAACP would be the clear winner for their decision to sacrifice black children in order to collect blood money from teacher unions.
And if we also had a prize for most moronic leftist in 2016, there would be another easy winner. Trevor Noah inadvertently showed why gun control doesn’t work even though he wanted to make the opposite point.
Last but not least, if there was a category for surprising news in 2016, there’s no question that Paul Krugman would win that prize for writing something sensible about tax policy.
P.S. My most popular post in 2016 (which also set the all-time record) was the very clever image showing that the enemies of liberty are looters, regardless of their economic status.
P.P.S. My most surreal moment in 2016 was getting attacked on the front page of the Washington Post. I must be doing something right.
Let’s now broaden that debate and contemplate the difference between libertarian Christmas and socialist Christmas.
We’ll start with this much-deserved jab at socialists, the people who continue to believe in coerced equality even though such systems always produce misery for ordinary people (though insiders often manage to get rich).
And just in case anyone thinks libertarians don’t get into the Christmas spirit, here’s a new video from Reason TV showing the various gifts you can get for libertarians.
Well, they definitely believe that government should be Santa Claus. Indeed, I’ve shared Christmas-themed cartoons making this point on many occasions (see here and here, for example).
But here’s something from the pro-socialist perspective. The goal is obviously to equate goodness with statism.
I like the Charlie Brown humor. That’s a nice touch. But there’s a too-big-to-ignore problem with the central message of this poster.
None of the examples involve government-coerced redistribution, which is the defining characteristic of the American left. Instead, we have five examples of voluntary goodness, a characteristic that is more commonly found where capitalism flourishes.
Indeed, it’s worth noting that supposedly selfish capitalists in America give far more to charity than supposedly compassionate Europeans. And you won’t be surprised to learn that people is red states are far more generous than people in blue states.
In other words, leftists are Scrooges with their own money who then try to mitigate their guilt by using coercive government to redistribute other people’s money.
I live-tweeted last night’s debate between the Governor Mike Pence and Senator Tim Kaine.
As the debate closed, I summed up my reaction with two tweets, one of which sadly observed that Donald Trump does not share Ronald Reagan’s belief in smaller government and more freedom.
And because I’m fair and balanced, I also reminded people that Hillary Clinton is no Bill Clinton. Indeed, I pointed out that her vote rating in the Senate was almost identical to Bernie Sanders’.
But, in practice, they were almost always on the same side when it came time to cast votes on the floor of the Senate.
In any case, my tweet obviously touched a nerve since there were a bunch of (mostly incoherent) responses. And I also got this reaction from a law professor at the University of Baltimore.
I assume he thinks I was being juvenile to say that Senator Sanders is crazy. Since I actually am juvenile in many ways (particularly my sense of humor), I might be tempted to plead guilty.
But let’s actually contemplate how the Vermont Senator should be labeled.
Sanders is a virulent and dogmatic supporter of coercive statism. Even columnists for the Washington Post have criticized him for being too far to the left.
But he’s not a real socialist (which technically means government ownership of the means of production). And even though his policies are based on coercion, I certainly don’t think he is a totalitarian.
Yet he’s not a rational leftist like you find in the Nordic nations (where they at least compensate for large welfare states by being very market-oriented about trade, regulation, etc).
All this explains why, when categorizing different types of leftists, I put him in the “crazies” group along with the Syriza Party of Greece.
And while “crazies” might be a pejorative bit of shorthand, I do think folks like Bernie Sanders are largely detached from reality.
But I don’t want people to be upset with me, so I’m going to reconsider how Sanders should be categorized.
To help with this chore, let’s consider a few additional bits of information, starting with an item from his Senate office that contains this remarkable passage.
These days, the American dream is more apt to be realized in South America, in places such as Ecuador, Venezuela and Argentina, where incomes are actually more equal today than they are in the land of Horatio Alger. Who’s the banana republic now?
By the way, it’s not clear if this is a column written by Sanders or whether he just endorses the sentiments expressed therein.
Though it doesn’t really matter since – at the very least – he obviously agrees with the message.
So let’s think about what it means that Sanders views Argentina and Venezuela as role models.
Argentina used to be one of the richest nations in the world, ranked in the top 10 at the end of World War II. But then decades of statism, starting with Peron and continuing through Kirchner, wreaked havoc with the nation’s economy and Argentina has plummeted in the rankings.
But let’s add one more straw to the camel’s back. Here are some excerpts from a very depressing story about the human misery being caused by big government in that country.
Klaireth Díaz is a 1st-grade teacher at Elías Toro School… Last year, she says, attendance was painfully low. Every day, of a class of 30 children at least 10 would be absent. “The reason was always lack of food,” she told Fox News Latino. She said she had a student who skipped class every single Thursday and when she asked his mother about it, she explained that Thursday was the day of the week assigned to her family to buy food at government-regulated prices – which involves standing in line starting sometimes as early as 3 a.m.
Food lines?!? That’s what Bernie Sanders thinks is a success story?
Though I guess if everyone has to wait in lines for food, at least they’re all equally poor (though even that’s not true since the ruling-class leftists in Venezuela have plundered the nation’s treasury).
In other words, maybe this image isn’t a joke or satire after all.
But it gets worse. The food lines apparently don’t provide enough food.
Across the country, teachers have said they have seen children faint or fall asleep because they haven’t had enough to eat. …As the school year progressed last year, Diaz said, she noticed more and more kids had stopped bringing lunch. …According to a poll conducted last month by More Consulting among 2,000 respondents in Caracas, in 48 percent of the times children do not attend school, the cause is related to the food. Either they are feeling too weak for lack of nutrition, or their parents rather use the transport money to buy food, or they are in the food lines with their parents. The poll revealed that 36.5 percent of children eat only twice a day and 10.2 percent just once.
So maybe Bernie Sanders isn’t crazy. If he views Venezuela as a role model, maybe he’s morally blind. Or genuinely evil.
But I’m a nice guy, so I’m sticking with crazy since I would hate to think that even a crank like Sanders willfully embraces the monstrous outcomes found in Venezuela.
P.S. I haven’t written about Ecuador, but if forced to choose among Bernie’s various success stories, I guess that would be my pick since it is 142 out of 159 in the rankings from Economic Freedom of the World, which surely is better than being Argentina (156) or Venezuela (dead last at 159).
To be fair to Sanders, at least he didn’t list Cuba, which is such an economic hell-hole that (if reliable numbers were available) it would presumably rank below even Venezuela.
To help illuminate this issue, here’s a four-quadrant matrix. Free markets are on the left and state planning is on the right. And small government is on the top with redistribution is on the bottom.
So it’s a very good idea to be in the top-left quadrant, hopefully close to the corner, sort of like Hong Kong and Singapore. And it’s a big mistake to be in the bottom-right quadrant, sort of like Cuba, North Korea, and Venezuela.
Notice, by the way, that Denmark and Sweden are more free market than the United States (i.e., further to the left), but with much more redistribution (i.e., closer to the bottom). Which is exactly what you see when you look at the underlying data from Economic Freedom of the World.
Let’s augment our four quadrants by adding a couple of historical examples, which are colored red.
I also added the National Socialists from 1930s Germany. Their fascist economic system retained the veneer of private ownership, but state planning was the dominant economic model.
Moreover, it would be very illuminating to have a three-dimensional matrix in order to capture the difference between cronyism/interventionism and socialism/state planning.
Though if a government engages in enough cronyism/interventionism (think Venezuela), the net result looks a lot like socialism/state planning (think North Korea).
Or maybe we should have a four-dimensional matrix so we also can distinguish between systems with nominal private property (such as fascism) and ones where the government owns the “factors of production” (such as socialism and communism).
By the way, one of Hillary Clinton’s advisors, Gene Sperling, was recently asked about the difference between a socialist and a Democrat and was accused of dodging the question just like Hillary (and, I would add, Debbie Wasserman-Schultz).
“I’m not here to do general definitions,” replied Gene Sperling, a Hillary Clinton economic adviser, when asked by MSNBC: ‘What is the difference between a socialist and a Democrat?’ MSNBC’s Chris Matthews stumped Hillary Clinton with the same question several months ago.
Though, if you watch the interview, I think Gene actually gets close to the truth. He said Hillary was a “progressive” (which presumably means lots of redistribution), but nonetheless supports the market economy (as opposed to state planning).
Let’s close with a video on socialism from Dennis Prager, though it applies equally to redistributionism (or any system where people can use the coercive power of government to obtain unearned goodies).
One of the most insightful parts of the video was when Dennis pointed out that excessive government weakens character. Which is just another way of pointing out that statism erodes social capital.
And I fear he’s right that regaining and restoring character is not that easy. Once people have decided that it’s morally acceptable to use the power of government to take what other people have produced, restoring an ethical society is probably like putting toothpaste back in a tube.
Which explains why I am so miserably pessimistic about the future of places such as Greece.
I thought this effort was useful because it shows, for instance, that the United States, France, and Hong Kong are all on the right side, but that there are nonetheless obvious differences in the amount of economic freedom for those three jurisdictions. Likewise, it’s not good to be Mexico, China, or North Korea, but there are degrees of statism and it’s worse to be farther to the left.
Speaking of left, not all advocates of bigger government are the same. So earlier this year I created another spectrum showing that there are various strains of statism, especially among true believers.
The value of this spectrum is that it shows the differences between totalitarians, genuine socialists, and run-of-the-mill hard-core leftists like Bernie Sanders.
And both of these spectrums were implicit in my interview yesterday about Venezuela. I pointed out that Venezuela technically isn’t socialist, but also suggested that doesn’t matter because the country is definitely on the wrong part of the statism spectrum.
And Venezuela definitely is proof that being on the wrong side of the spectrum is a recipe for collapse (or, in the case of North Korea, a recipe for never getting off the ground in the first place).
Since we’re discussing statism, let’s close with some really good news. Matt Yglesias of Vox likes big government. A lot. But he’s also capable of dispassionately analyzing what works and doesn’t work for his side. And he writes that “socialism” is a bad word for those who want to expand the size and scope of government.
Bernie Sanders refers to his ideology — which I would characterize as social democracy or even just welfare state liberalism — as democratic socialism, a politically loaded term that seems to imply policy commitments Sanders hasn’t made to things like government ownership of major industries. …the socialist branding seems to have offered Sanders some upside…earning him enthusiastic support from a number of politically engaged people who seem to really be socialists… Against this, though, one has to weigh the reality that socialism is really unpopular in the United States.
How unpopular? Yglesias shares some new polling data from Gallup.
This is great news. Not only is socialism unpopular, but it ranks below the federal government (which traditionally gets low marks from the American people). And the supposed Sanders revolution hasn’t even translated into a relative improvement. This poisonous ideology is actually slightly more unpopular than it was in 2010 and 2012.
Here’s what Yglesias wrote about these numbers.
Any form of left-of-center politics in the United States, frankly, is going to have a problem with the fact that “the federal government” is viewed so much less favorably than cuddly targets like “small business,” “entrepreneurs,” and “free enterprise.” Even big business does better than the federal government. And both big business and capitalism do far better than socialism.
As I said, this is excellent news.
A few closing thoughts.
First, Yglesias and I don’t agree on very much (he’s referred to me as insaneandirrational), but we both think that a socialist is someone who believes in government ownership of the means of production, not simply someone who believes in bigger government.
Second, the Gallup data reinforces what I wrote back in April about “free enterprise” being a much more appealing term than “capitalism.”
The bottom line is that economic liberty works while left-wing ideologies (all based on coercion) don’t work, so let’s use whatever words are most capable of disseminating this valuable message.
That’s because it’s nice to have proof that Margaret Thatcher was right when she famously warned that the problem with socialism is that you eventually run out of other people’s money.
To be sure, we already had proof from Greece, France, the Soviet Union, Brazil, and many other places. But it’s still nice to have another piece of evidence that big government eventually produces very dire results.
I also confess that I’m enjoyed Venezuela’s economic decay because I get a warm feeling of Schadenfreude when watching leftists try to explain what’s happening in that formerly rich nation.
Even the New York Times feels the need to report on the mayhem in Venezuela.
The courts? Closed most days. The bureau to start a business? Same thing. The public defender’s office? That’s been converted into a food bank for government employees. Step by step, Venezuela has been shutting down. …Venezuela keeps drifting further into uncharted territory. …that is only the start of the country’s woes. Electricity and water are being rationed, and huge areas of the country have spent months with little of either. …the Mexican company that bottles Coke in the country, has even said it was halting production of sugary soft drinks because it was running out of sugar.
And why is the economy in free fall? Is it possible that the left-wing policies the NYT wants for the United States are failing when tried elsewhere?
Not according to the story. It’s the fault of external forces. Or maybe even rich people.
The growing economic crisis — fueled by low prices for oil, the country’s main export; a drought that has crippled Venezuela’s ability to generate hydroelectric power; and a long decline in manufacturing and agricultural production. …Venezuela’s government says the problems are the result of an “economic war” being waged by elites who are hoarding supplies.
Finally, in the 27th paragraph, there’s a mention that maybe, just maybe, some of the blame belongs to government.
…most economists agree that Venezuela is suffering from years of economic mismanagement, including…price controls that led many businesses to stop making products.
Hmmm…, I guess we can safely assume that “most economists” does not include Joseph Stiglitz.
Another story in the New York Times specifically examines how this mess was created. Finally, an opportunity to learn how leftist policies are a recipe for economic failure, right?
Hardly. The report starts by pointing out the obvious. Yes, the economy is a disaster.
Supermarket shelves in Venezuela are chronically bare, and power shortages are so severe that government offices are now open only two days a week. The health care system has collapsed, the crime rate is one of the world’s worst, and inflation is rapidly eroding what remains of the currency’s value.
It then addresses the question of how this happened.
And as you can see, we’re supposed to believe it’s the result of falling oil prices and drought, even though many other oil-producing jurisdictions are avoiding economic chaos and droughts in other nations normally don’t lead to societal collapse.
The price of oil, Venezuela’s only significant export, has plummeted, which means revenue could fall by 40 percent this year. The government’s huge borrowing, partly a legacy of the years when oil prices were far higher, has helped bring the crisis to a head because Venezuela now has far less money to repay its foreign debt, forcing Mr. Maduro to slash imports in order to avoid default. On top of that are the consequences of a drought, which has shriveled the country’s hydropower generation, a critical source of electricity.
Farther down the article, in the seventh paragraph (of a much shorter story), there’s a grudging admission that at least some economists blame statist policies.
…many economists say his policies of state ownership, unfettered spending, subsidies and domestic price controls are at least partly responsible for the crisis today.
Gee, how generous of the NYT to acknowledge that some people have this strange belief that big government doesn’t work.
The column also notes that price controls are causing shortages, which is a nice admission even if there’s no clear conclusion in the article that the policy is bad.
Subsidized food and fuel sold by state-run stores are priced far lower than they are really worth. This has created enormous lines of shoppers for goods that quickly sell out.
While it’s amusing the dissect the verbal gymnastics of the New York Times, it’s even more fun to observe the dour reaction of Comrade Bernie Sanders when asked about the issue.
The folks at Newsbusters have the video, and here’s the relevant transcript if your stomach’s not strong enough to actually watch the Vermont Senator on screen.
Huh, the guy’s been waxing poetic about the glories of socialism and big government his entire life, so much so that he reportedly was kicked out of a Marxist commune for being too much of a blowhard, but now he’s suddenly so “focused” on his campaign that he can’t comment on the biggest story about socialism since the fall of the Berlin Wall?!?
Yeah, right.
Too bad the reporter didn’t ask the logical follow-up question: “So what makes you think the policies that have failed in Venezuela will work in the United States?”
Heck, I would like some journalist to present Sanders with my two-part challenge for leftists and see if he can name a single successful statist jurisdiction.
P.S. Interestingly, the Washington Post does not appear to be as reflexively left wing at the NYT.
At least if these blurbs from an editorial last year are any indication.
…one of the worst crises of governance Latin America has seen in modern times. The country’s collapsing economy, soaring crime… Mr. Maduro…inherited the mess created by the late Hugo Chávez and then greatly worsened it… Venezuelans are furious about endemic shortages, triple-digit inflation and a poverty rate that exceeds that of 1999, when the Chavista movement first came to power. …That Mr. Maduro…threatens violence probably is a reflection…of the regime’s deep-seated criminality. Two of the president’s nephews are being held in New York on drug-trafficking charges, and U.S. authorities are reportedly investigating numerous other senior figures, including the current president of the National Assembly, Diosdado Cabello, who is considered the regime’s second most powerful official.
To be sure, the Post editorial doesn’t explicitly tie the wretched conditions in Venezuela to left-wing policy, but at least there’s no ambiguity about the fact that Maduro is a bad guy.
P.P.S. Since it’s Memorial Day in the United States, let’s close with a feel-good story about an immigrant achieving the American Dream.
As 2nd Lt. Alix Schoelcher Idrache stood at attention during the commencement ceremony at West Point, N.Y., on Saturday, he was overcome with emotion. Tears rolled down both cheeks, but his gloved left hand held firm on his white, gold and black “cover,” the dress headgear that Army cadets wear. The photograph of Idrache, by Army Staff Sgt. Vito T. Bryant, was published Tuesday on the Facebook page of West Point’s U.S. Military Academy, and it almost immediately went viral. …Idrache’s background: He worked his way through one of the nation’s most prestigious military schools after immigrating to the United States from Haiti, earning his citizenship and serving for two years as an enlisted soldier…Idrache wrote Tuesday on Facebook. “I am humbled and shocked at the same time. Thank you for giving me a shot at the American Dream and may God bless America, the greatest country on earth.”
P.P.P.S. And I can’t resist adding a bit of humor about Sen. Sanders and Venezuela.
Yes, socialism breeds misery, but it also generates some clever humor. More examples here, here, here, and here.
But that may not be the best approach when trying to convince someone with no aptitude for economics. So what’s the best way of introducing such concepts to, say, a Bernie Sanders supporter?
You can point to the economic chaos in places such as Greece and Venezuela and explain that Margaret Thatcher was right when she warned that socialists eventually run out of other people’s money.
Here’s a great addition to that collection. It basically shows why redistributionism is doomed to failure because a lot of people inevitably will decide that life is easier when you’re a consumer rather than a producer.
Definitely worth sharing, I hope you’ll agree.
I view this cartoon as being very similar to the second frame of the famous riding-in-the-wagon cartoons I first posted back in 2011.
Which gives me an opportunity to end today’s column with a very serious point. When redistribution programs are first created, politicians generally argue that they make sense because a lot of people will pay very small amounts to help a handful of folks who are genuinely needy.
That sounds compassionate and affordable. And perhaps it is, but there are two reasons why programs that sound reasonable in the beginning eventually morph into modern welfare states.
Politicians figure out they can buy votes by making the wagon more comfortable and attractive (i.e., public choice economics).
A growing number of people figure out that it’s better to ride in the wagon rather than pull the wagon (i.e., erosion of social capital).
And when you combine these two factors with changing demographics, it’s easy to understand why the future is so grim for so many countries.
P.P.S. Since “keep half” was a big part of today’s image, I can’t resist sharing again this satirical lesson about fairness for a supporter of Bernie Sanders.
I don’t care whether it’s called socialism, fascism, or communism, statism is evil and destructive. And going partway down that path with “democratic socialism” may avoid brutality, but the end result is still economic misery.
But my favorite approach, based on decades of experience with one-on-one meetings, public speeches, and private briefings, is to share cross-country comparisons. Such real-world evidence seems to be most persuasive.
So it’s time to add to that collection.
Let’s go back to 2011, when Catherine Rampell was with the New York Times and she wrote a column about a book by World Bank economist Branko Milanovic. She focuses on a powerful visual.
My favorite part of the book was this graph…on the vertical axis, you can see where any given ventile from any country falls when compared to the entire population of the world. …take a look at America. Notice how the entire line for the United States resides in the top portion of the graph? That’s because the entire country is relatively rich. In fact, America’s bottom ventile is still richer than most of the world: That is, the typical person in the bottom 5 percent of the American income distribution is still richer than 68 percent of the world’s inhabitants. …America’s poorest are, as a group, about as rich as India’s richest.
Here’s the graph that grabbed her attention.
I agree with everything Ms. Rampell wrote about that graph, but let me expand the focus by explaining why this is yet another piece of evidence for the proposition that policy makers should focus on growth rather than (in)equality.
From a leftist perspective, the ideal line for such a graph is horizontal because that represents complete income equality. And they naturally think that statist policies are more likely to produce an outcome closer to that redistributionist ideal (hence, their support for politicians such as Obama, Clinton, and Sanders).
But the graph shows why they are so wrong to support ever-larger government.
For instance, ponder the question of which nation produces better outcomes for poor people? Obviously, per-capita output for all income levels is higher in the United States, but the gap is especially huge for those with low incomes.
There doubtlessly are many reasons for the output gap in the chart, but one logical explanation is that the overall burden of government is much lower in the United States (#16 in the economic freedom rankings) than in China (#111), India (#114), and Brazil (#118).
By the way, some people may say it’s unfair to compare the United States with nations from the developing world. But the entire point of this comparison is that these other countries aren’t part of the “first world” in part because their economic policies are characterized by statism rather than capitalism.
But for those who want comparisons among developed nations, I’ve reviewed evidence from the United States and Europe on many occasions and the results always show that the relatively more market-friendly policies in the United States produce higher levels of prosperity than the more statist policies of Europe.
The bottom line is that it’s very difficult to find any evidence to suggest that any group of people enjoys more prosperity in a nation with a larger burden of government.
Which is why I’m still waiting for a leftist to successfully respond to my two-question challenge (and they actually only need to give an answer to one of the questions).
Another good way of determining whether markets work better than statism is to see how fast nations grow over time.
James Pethokoukis of the American Enterprise Institute shares a chart from Max Roser showing long-run changes in per-capita economic output for South Korea and Venezuela.
The amazing takeaway is that Venezuela was about three times richer than South Korea about fifty years ago, but now that ratio is almost reversed.
This is an amazing ratification of the all-important principle that sustained differences in growth have an enormous impact on a nation’s long-run prosperity.
And it shows that nations from the developing world can experience “convergence” and join the first world if they adopt good policies.
P.S. For those wondering about my juvenile title, I probably watched Homeward Bound: The Incredible Journey over 100 times when my kids were young and I’m borrowing a very appropriate line from that film.
P.P.S. For those who want more information about South Korean growth, check out this comparison of that country with its northern neighbor.
P.P.P.S. And for those who want to learn more about Venezuela’s lack of growth, see how that country compares to Chile and Argentina.
The debate over socialism shouldn’t even exist. Everywhere big government has been tried, it has failed.
And we have reams of evidence that free-market economies dramatically out-perform statist economies.
Yet the siren song of socialism still appeals to a subsection of the population, either because of naiveté or an unseemly lust to exercise power over others.
So let’s once again wade into this debate that shouldn’t be happening.
Writing for the Dallas Morning News, former Texas A&M economics professor Svetozar Pejovich explains that adding “democratic” to “socialism” doesn’t change anything. What really matters is that Sanders and his supporters want bigger government. And that never ends well.
Sanders’ policies…are…incompatible with the American tradition of self-responsibility, self-determination and limited government under a rule of law. …putting those premises into practice requires the acceptance of two institutions: the redistribution of income initiated and monitored by federal government, and the attenuation of private property rights.
And these policies don’t lead to good results, something that Professor Pejovich understands very well given that he was born in the former Yugoslavia.
Of course, the lunch is not free. The short-run consequence of redistributive policies is erosion of the link between performance and reward, which, in turn, reduces economic efficiency and the pie available for redistribution. The long-run cost is the transformation of the American culture of self-responsibility and self-determination into the culture of dependence on the state. …Sanders’ democratic socialism bribes people to voluntarily accept the erosion of private property rights…via laws and regulations. Those law and regulations (such as reducing the right of employers to fire workers at will, giving tenants rights at the expense of apartment owners, granting special privileges to some rent seeking groups, etc.) transfer some decision-making rights from owners to public decision makers, or non-owners. …In the end, the attenuation of private property rights impedes the flow of resources to higher-valued uses and reduces economic efficiency of the economy.
Allow me to augment Professor Pejovich’s analysis by elaborating on how these policies hurt the economy. The redistributionism doesn’t lead to immediate disaster, but it inevitably lures a larger share of the population into dependency over time and the higher taxes required to finance the growing welfare burden gradually erode incentives for work, saving, investment, and entrepreneurship. The combination of those factors slowly but surely dampens the economy’s growth. And as I’ve repeatedly explained, even small difference in growth have enormous long-run implications for a nation’s prosperity.
The erosion of property rights has a similar effect, largely by causing a reduction in both the level of investment and the quality of investment. And since every economic theory agrees that capital formation is a key to long-run growth, the net effect of “democratic socialism” it to further weaken potential growth.
What’s especially frustrating is that leftists then point to reduced growth rates as an argument for even bigger government.
I’m not joking. Robert Kuttner of the American Prospect argues that young people are attracted to Sanders because their economic outlook is so grim.
Bernie Sanders has…broad and enthusiastic support, especially among the young…voters who say they are attracted rather than repelled by Sanders’s embrace of socialism. …this is the stunted generation—young adults venturing into a world of work, loaded with student debt, unable to find stable jobs or decent careers.
I basically agree that the economic situation for young people is tepid, but I’m baffled that this is an argument for bigger government since the statist policies of both Bush and Obama deserve much of the blame for today’s sub-par economy.
In other words, we’re seeing Mitchell’s Law in action. Politicians have adopted bad policies that have led to stagnation and now they’re using the resulting economic malaise as an argument for even bigger government. And young people, who are among the biggest victims, are getting seduced.
I’m tempted to simply say young people are too stupid to be allowed to vote, but instead let’s take a serious look at why so many of them are misguided.
Christine Emba of the Washington Post has a column pointing out young people openly embrace socialism.
…it seems that socialism is cool. …socialism does seem to have become the political orientation du jour among voters of a certain (read: young) age. …A January YouGov poll asked respondents whether they had a “favorable or unfavorable” view of socialism and capitalism. While capitalism rated significantly higher overall, those younger than 30 gave socialism higher marks: Forty-three percent viewed it very or somewhat favorably, compared with only 32 percent for capitalism.
The problem is that both Ms. Emba and a lot of young people apparently believe the nonsense spouted by people like Robert Kuttner. They actually blame capitalism for the economic weakness caused by government intervention.
…simple economics have pushed a younger generation of voters to embrace what used to be a dirty word. The past 10 years – for many millennials, the formative years of adulthood – have eroded the credibility of economic [classical] liberalism. The financial crisis and recession weakened youths’ faith in markets… Yet they were also told that the solution to the these problems was more [classical] liberal capitalism. But those solutions haven’t delivered… Underemployment, excessive debt, out-of-reach health care and delayed life goals are young peoples’ defining concerns, and the traditional assumption – that free markets and limited state intervention lead to good outcomes – just doesn’t ring true to them.
What planet is she on? Can she identify one thing that Obama has done that would count as a free-market response to the financial crisis? The fake stimulus? Obamacare? Dodd-Frank?
By the way, she points out that young people presumably have no idea what socialism actually entails. They just want traditional welfare-state redistributionism.
…for many millennials, “socialism” is simply shorthand for “vaguely Scandinavian in the best way” – free health care, free education and subsidized child care, a state that supports its citizens rather than leaving them at the mercy of impersonal corporations bent on profit. …the socialism that most millennials want is simply a return to a more muscular form of traditional liberalism, one that would have felt right at home in the administration of FDR.
Though it’s worth noting (in a very depressing sense) that a lot of young people are embracing more totalitarian versions of socialism. Here are some brief excerpts from a longer article in Vox.
Jacobin has in the past five years become the leading intellectual voice of the American left, the most vibrant and relevant socialist publication in a very long time. …That’s an opportunity that Jacobin is seizing to great effect, even if Sanders isn’t far enough left for their taste. The Sanders campaign “could begin to legitimate the word ‘socialist,’ and spark a conversation around it, even if Sanders’s welfare-state socialism doesn’t go far enough,” Sunkara wrote earlier this year. …Jacobin…now boasts a print circulation of about 20,000 and has gained about 400 more subscribers a week since Bernie started his ascent in November. …even if Bernie fades, there’s still a constituency for socialist ideas — a fact that could turn out to be much more important than the Sanders campaign itself.
And they really, really mean socialism. With all its warts.
“It is unapologetic about its interests in political economy and Marxism…,” Brooklyn College professor Corey Robin, a longtime leftist writer who signed on early and is now a contributing editor at Jacobin, says. …any Jacobin editor would be the first to tell you, Sanders is a normal labor liberal, or at most a social democrat. He doesn’t go far enough. …What we really need, Sunkara insists, is democratic worker control of the means of production. …A number of Jacobin’s contributors are members of the International Socialist Organization (ISO), the largest Trotskyist group in North America. …Sunkara’s allegiances…lie with Democratic Socialists of America (DSA). …Frase recalls working with the Freedom Road Socialist Organization, a post-Maoist group, while in high school.
I’m not sure to be more amazed that some people really believe this evil nonsense or more worried that Jacobin may actually represent the future of the left in America.
Time for some good news.
My Cato colleague Emily Ekins writes that young people are not hopeless idiots, at least not all of them. Though she phrases her argument in a much nicer fashion in a column she wrote for the Washington Post.
She starts with grim polling data.
A national Reason-Rupe survey found that 53 percent of Americans under 30 have a favorable view of socialism compared with less than a third of those over 30. Moreover, Gallup has found that an astounding 69 percent of millennials say they’d be willing to vote for a “socialist” candidate for president — among their parents’ generation, only a third would do so.
But she notes that for the most part they don’t actually believe in real socialism.
…millennials tend to reject the actual definition of socialism — government ownership of the means of production, or government running businesses. Only 32 percent of millennials favor “an economy managed by the government,” while, similar to older generations, 64 percent prefer a free-market economy. …what does socialism actually mean to millennials? Scandinavia. …In contrast with the 1960s and ’70s, college students today are not debating whether we should adopt the Soviet or Maoist command-and-control regimes that devastated economies and killed millions.
In other words, the nutjobs at Jacobin are still a minority on the left.
Best of all, young people are capable of learning lessons from the real world.
…as millennials age and begin to earn more, their socialistic ideals seem to slip away. …millennials become averse to social welfare spending if they foot the bill. As they reach the threshold of earning $40,000 to $60,000 a year, the majority of millennials come to oppose income redistribution, including raising taxes to increase financial assistance to the poor. …When tax rates are not explicit, millennials say they’d prefer larger government offering more services (54 percent) to smaller government offering fewer services (43 percent). However when larger government offering more services is described as requiring high taxes, support flips and 57 percent of millennials opt for smaller government with fewer services and low taxes, while 41 percent prefer large government.
And she explains that previous generations also have shifted away from big government.
In the 1980s, the same share (52 percent) of baby boomers also supported bigger government, and so did Generation Xers (53 percent) in the 1990s. Yet, both baby boomers and Gen Xers grew more skeptical of government over time and by about the same magnitude. Today, only 25 percent of boomers and 37 percent of Gen Xers continue to favor larger government.
To the extent that voters actually think capitalism caused the mess in 2008, they will be susceptible to statist ideologies.
In some sense, this is history repeating itself. The Great Depression largely was caused by misguided policies from Hoover and Roosevelt. Yet the left very cleverly peddled the story that capitalism had failed. As a result, generations of voters were more sympathetic to big government.
By the way, I have lots of material mocking socialism (see here and here), so we can count that as being anti-Sanders humor (even if he’s not even a real socialist).
Now let’s shift to “The Donald.” I don’t know how to classify him from a philosophical perspective (probably because he doesn’t have a coherent set of principles), but he is an entertaining figure.
So let’s atone for that oversight. This World-according-to-Trump map is quite clever (January 15, 2018 update: The previous link no longer works, so I’ve inserted another version).
Very similar to the very amusing how-the-Greeks-see-Europe map I shared back in 2011.
Like communism, Nazism, and other forms of statism, socialism is an evil ideology that is based on the notion that human freedom should be suppressed and restricted.
Modern socialists may not have the totalitarian impulses of their national socialist and international socialist cousins, but their underlying philosophy is based on a near-criminal ignorance of economics and human nature.
That’s why I always ask socialists to identify a single successful socialist jurisdiction. It’s fun to watch them struggle and sputter.
They certainly can’t pick the nations, such as Cuba, Venezuela, and North Korea, that practice real socialism (i.e., government ownership of the means of production).
They generally aren’t stupid enough to pick collapsing and stagnant welfare states in Europe, such as France, Italy, and Greece.
But I’m not interested in a serious discussion about the flaws of socialism. Been there, done that, as the old saying goes.
Instead, I want to share some great satire (h/t: Greg Mankiw)
Hilarious, though one wonders whether a Sanders supporter is even capable of understanding the message that class warfare isn’t that much fun when you’re on the receiving end.
Of the 4,000-plus columns I’ve produced since starting International Liberty in 2009, two of the most popular posts involve semi-amusing stories that highlight the failure of socialism, redistributionism, and collectivism.
“The Tax System Explained in Beer” is the third-most-viewed post of all time, and “Does Socialism Work? A Classroom Experiment” is the fourth-most-viewed post. At the risk of oversimplifying, I think these columns are popular because they succinctly capture why it’s very shortsighted and misguided to have an economic system that punishes success and rewards sloth.
For those who want details, I have dozens of columns about real-world socialist failure, looking at both the totalitarian version in places like Cuba, China, Venezuela, and North Korea, as well as the majoritarian version in nations such as France, Italy, and Greece.
Yet notwithstanding the horrible track record of every version of socialism, we actually have a presidential candidate in America who actually calls himself a socialist. Though, as pointed out by my colleague Marian Tupy in The Atlantic, he’s more of a redistributionist than a socialist.
Socialism was an economic system where the means of production (e.g., factories), capital (i.e., banks), and agricultural land (i.e., farms) were owned by the state. …Sanders is not a typical socialist. Sure, he believes in a highly regulated and heavily taxed private enterprise, but he does not seem to want the state to own banks and make cars. …Senator Sanders is not a proponent of socialism, and that is a good thing, for true socialism, whenever and wherever it has been tried, ended in disaster.
Here’s an article about real socialism by Mark Perry that’s more than 20 years old, but its analysis is just as accurate today as it was in 1995.
Socialism is the Big Lie of the twentieth century. While it promised prosperity, equality, and security, it delivered poverty, misery, and tyranny. Equality was achieved only in the sense that everyone was equal in his or her misery. …Socialism does not work because it is not consistent with fundamental principles of human behavior. …it is a system that ignores incentives. …A centrally planned economy without market prices or profits, where property is owned by the state, is a system without an effective incentive mechanism to direct economic activity. By failing to emphasize incentives, socialism is a theory inconsistent with human nature and is therefore doomed to fail.
Ben Domenech, writing for Commentary, analyzes the current version of socialism, which – particularly in the (feeble) minds of young people – is simply more middle-class entitlements financed by high tax rates on evil rich people.
Sanders holds massive events populated by kids who think what he is preaching is very cool. …When did it become acceptable for Americans to back an avowed socialist? …For Americans today, the visible and unmistakable connection between socialism and totalitarianism has faded dramatically. …For America’s young, socialism’s definition isn’t to be found in the desperate, sad reality of peoples held captive by regimes that proudly declare themselves socialist. It’s more of a vague ideal… This makes it easier for someone like Sanders to say that socialism just means middle-class entitlements… It is…Barack Obama…that we have to thank for socialism’s rise in 2016. Republicans…have been describing President Obama’s domestic program as socialist… The takeaway for today’s younger voters seems to be: If everything Obama is trying to do is socialism, …then perhaps we need to go full socialist to actually get things done.
The final part of the excerpt is very insightful.
Young people have no idea about the real nature of socialism. They don’t know that communism was an ideology of international socialism. They don’t know Nazism was a form of national socialism.
Which is very offensive to people who actually have suffered under socialism. Garry Kasparov, the chess champion turned Russian dissident, doesn’t mince words in his response to the Sanders crowd.
Let’s close with something amusing. Or at least ironic.
And it’s something young people should think about because socialism fails every place it is tried. As Mark Perry explained, it’s grossly inconsistent with human nature.
That’s true whether we’re looking at the totalitarian version of the majoritarian version.
The latter version is preferable, of course, though the end result is still economic misery.
P.S. Here’s a very clever video that asks college kids whether they would like a socialist grading system. Unsurprisingly, they say no. Though the video was put together before Bernie Sanders attracted a cult-like following, so perhaps today’s students would answer differently.
P.P.S. Speaking of videos, I’m guessing this bit of satire won’t be very popular with Bernie’s supporters.
P.P.P.S. There are several rather amusing Obama/socialism cartoons. You can see my favorites here, here, and here.
P.P.P.P.S. You can also use two cows to teach about socialism, as well as other theories.
Which is why it is so discouraging that many of them support big government. Here are some depressing numbers from a Frank Luntz survey, as reported by U.S. News & World Report.
Fifty-eight percent of young people choose socialism over capitalism (33 percent) as the most compassionate system. …A plurality of 28 percent say the most pressing issue facing the country is income inequality – one of Sanders’ top themes.
But that’s hardly a cause for cheer. Even if they simply think socialism is class-warfare taxation and lots of redistribution, it’s still bad news that so many of them have been seduced by the politics of hate and envy.
It’s like they’re totally oblivious to the damage that big government has caused for young people in Europe.
Their views on income inequality are similarly flawed, though perhaps slightly more understandable since millennials have suffered through a very weak economy.
But that’s what makes this polling data so puzzling. Why on earth are young people supportive of statism when they’ve been among the main victims of the weak Obama economy?!?
Writing in the Wall Street Journal, Daniel Arbess ponders the bizarre fact that so many young people support Bernie Sanders.
…voters in the millennial bracket, 18- to 34-year-olds, will for the first time equal the baby-boomer share of the electorate, at 31%. These young voters appear to be falling headlong for the Vermont senator’s plaintive narrative of economic “unfairness.”…throwaway prescriptions for redistributing income and wealth… These young voters seem not to realize that the economic policies they find so resonant are the least likely to promote the growth and the social mobility they desire.
Arbess looks at some of the data about how Obamanomics has been bad for young people.
The millennials can’t be faulted for being anxious about their economic prospects. They are coming of age in the weakest economy in generations. The underemployment rate (measuring those working a job for which they’re overqualified and underpaid) for young adults below age 30 is 60%. The overall employment-to-population ratio of 77.4% for those in the prime-of-working-life 25-54 age bracket translates into 1.5 million jobs below the 20-year average. The college graduate living in his parents’ basement and working a marginal job to service a student loan is by now an archetype of the Obama era.
He then elaborates on the self-destructive instincts of many young voters.
…Why wouldn’t young voters want “free stuff” paid for by the rich, as the Bernie Sanders and Hillary Clinton narrative promises? Because the no-free-lunch axiom is still true: Mr. Sanders’s socialized education, health care and other policies would cost up to $20 trillion, according to analysts, requiring tax collections to increase up to 47%. And have we not at least learned from the collapse and dismantling of socialism over the past quarter century that governments lack the incentives and resources to effectively allocate and manage capital in the microeconomy? …Yet millennials, who would most benefit from a real economic recovery, replacing the false one of the past several years, so far seem intent on voting against their interests.
Given all this evidence, I’m mystified that young people are big supporters of statism.
And it’s not just what we’ve looked at today. I’ve previously shared data indicating that they are clueless on public policy issues.
At the risk of sounding like some old guy who yells “you kids get off my lawn,” maybe the solution is to raise the voting age. Or, better yet, change the rules to that you only get to vote when you have a job and pay taxes!
While his policy ideas are horrifying, Bernie Sanders’ campaign is the source of some amusement.
He claims to represent a different vision, but his voting record according to the National Taxpayers Union is virtually identical to the ratings received by Barack Obama and Hillary Clinton when they were in the Senate.
He’s not even a real socialist, at least if we use the technical definition of this poisonous ideology, which is based on government ownership of the means of production. That being said, Democratic operatives such as Congresswoman Debbie Wasserman Schultz sound like fools on TV because they don’t even know the difference between genuine socialism and big-government redistributionism.
But I will give Sanders credit for his recent challenge to Republicans. He was being badgered about his supposed socialist orientation on a political news show and he turned the question on its head and asked whether Republicans would be willing to identify as being pro-capitalist.
Sen. Bernie Sanders (I-Vt.) says he’s tired of questions about whether he’s a socialist, asking why more people don’t want Republicans to defend themselves as capitalists. “Look, when one of your Republican colleagues gets on the show, do you say, ‘Are you a capitalist?’” the Democratic presidential candidate said on NBC’s “Meet the Press” on Sunday. “Have you ever referred to them as capitalists?”
I think this is a good idea.
I’d like every single GOP candidate to be asked some version of Sanders’ question.
And if any of them displayed the slightest hesitation before offering a loud and unapologetic “yes” in support of capitalism, that would be a very good indication that they shouldn’t be trusted anywhere close to the Oval Office.
Heck, I repeatedly ask my left-wing friends to identify just one big-government success story. I don’t ask for 10 nations that prospered with large governments. I don’t ask for five countries that might be considered successful examples of statist prosperity.
I just plead with them to give me one case study. And the only response is chirping crickets. Why? Because no nation has ever become rich during an era of big government.
So if any Republican candidate showed the slightest hesitation before extolling the glories of free markets, that person should be booed off the stage.
By the way, I can’t resist commenting on one other part of the story in The Hill about Sanders. The Vermont Senator apparently was asked to identify nations that are role models.
Did he list North Korea and Cuba, countries that actually still have genuine socialism?
Nope.
Did he list Venezuela or China, countries that have partial government ownership of the means of production?
The senator said he admires the social programs in nations like Denmark and Sweden, and he thinks “we can look to those countries” for guidance.
Since both those countries still have large welfare states with high tax rates and lots of redistribution, his answer is somewhat understandable.
But what about government ownership of the means of production and control over the allocation of resources? In addition to having big governments, is there a lot of intervention in markets?
So we have two nations that are more free market than America while also having bigger government than America. I’m not sure how to characterize this so-called Nordic Model, but it’s definitely not socialism.
That’s obviously not the agenda of Bernie Sanders, though I hope Republicans will be forced to answer his question and tell us whether they favor capitalism.
Socialism is an economic failure. International socialism didn’t work in the Soviet Union. National socialism didn’t work in Germany. And democratic socialism, while avoiding the horrors of its communist and Nazi cousins, also has been a flop.
Moreover, socialism channels self interest in a destructive direction. In a free market, people get income and improve their lot in life by satisfying and fulfilling the needs of other people. In a socialist system, by contrast, people squabble over the re-slicing of a shrinking pie.
There’s a famous Winston Churchill quote that basically says that the ostensible problem with capitalism is that people aren’t equally rich, whereas the supposed attractiveness of socialism is that people get to be equally poor.
The Princess of the Levant sent me a visual version of Churchill’s quote, and it’s definitely worth sharing.
Both the Churchill quote and the above image are very entertaining. And they effectively make the point that statism is very bad for ordinary people.
That being said, they’re not actually accurate.
Sure, the masses are equally impoverished by socialist systems, but a handful of people escape this fate. You probably won’t be surprised to learn that the government elites have very comfortable lives. And that may be the understatement of the century, as indicated by this report in the U.K.-based Daily Mail. Here are some very relevant passages.
The daughter of Hugo Chavez, the former president who once declared ‘being rich is bad,’ may be the wealthiest woman in Venezuela, according to evidence reportedly in the hands of Venezuelan media outlets. Maria Gabriela Chavez, 35,…holds assets in American and Andorran banks totaling almost $4.2billion… Others close to Chavez managed to build up great personal wealth that was kept outside the petrostate. Alejandro Andrade, who served as Venezuela’s treasury minister from 2007 to 2010 and was reportedly a close associate of Chavez, was discovered to have $11.2billion in his name… During his lifetime, Hugo Chavez denounced wealthy individuals, once railing against the rich for being ‘lazy.’ ‘The rich don’t work, they’re lazy,’ he railed in a speech in 2010. ‘Every day they go drinking whiskey – almost every day – and drugs, cocaine, they travel.’
What a bunch of hypocrites. They denounce successful people who presumably earn money honestly, yet they amass huge fortunes by pilfering their nation.
And what’s been happening in Venezuela is no different, I’m sure, than what happened in the past in Nazi Germany, the Soviet Union, and other socialist regimes.
And I’m sure it’s still happening today in other socialist hell holes such as North Korea and Cuba. The elite enjoy undeserved and unearned wealth while ordinary people live wretched lives of deprivation.
Everyone’s equal, but some are more equal than others.
Let’s close by citing some wise words about the impact of socialism on ordinary people from Kevin Williamson of National Review.
The United Socialist party’s disastrous economic policies have led to acute shortages of everything: rice, beans, flour, oil, eggs, soap, even toilet paper. Venezuela is full of state-run stores that are there to provide the poor with life’s necessities at subsidized prices, but the shelves are empty. …While Venezuela has endured food riots for years, the capital recently has been the scene of protests related to medical care. Venezuela has free universal health care — and a constitutional guarantee of access to it. That means exactly nothing in a country without enough doctors, medicine, or facilities. Chemotherapy is available in only three cities, with patients often traveling hours from the hinterlands to receive treatment. But the treatment has stopped.
Now ask yourself whether you think the party bosses are suffering like other citizens because of a lack of food and health care (or toilet paper!).
And that giant gap between the treatment of the elite vs. the peasantry tells you everything you need to know about socialism, whether it’s the brutal kind practiced in places such as Venezuela or the kinder, gentler (but equally hypocritical) versions found elsewhere.
At the risk of upsetting a certain type of feminist, I’m going to openly admit that I believe in chivalry.
And that means more than just holding open doors for women or giving up my seat on a bus. Because of my old-fashioned values, I also believe in helping out when there’s a damsel in distress.
And Congresswoman Debbie Wasserman Schultz is in distress. The lawmaker (who also serves as Chair of the Democratic National Committee) has now been asked two times to explain the difference between a Democrat and a socialist.
As reported by the Free Beacon, she gets a deer-in-the-headlights look on her face and resorts to empty talking points rather than giving a real answer.
Democratic National Committee chair Debbie Wasserman Schultz (D., Fla.) could not take advantage of a second opportunity Sunday on Meet the Press to explain the difference between Democrats and far-left socialists. Schultz was flustered by MSNBC’s Chris Matthews Thursday when asked the same question during a discussion of the popularity of socialist Sen. Bernie Sanders… Amazingly, despite the clip of her non-answer going viral this week, Schultz gave almost the same answer to host Chuck Todd. He played the clip of her with Matthews and asked her to respond. …Schultz went on to her usual playbook about Republican extremism and that Democrats were the party to help people enter the middle class. Todd, for his part, did not note at the time that Schultz completely failed to answer his direct question.
Here’s the video clip if you want to see Ms. Wasserman Schultz helplessly flounder and she dodges the question.
Painful to watch, right?
And just imagine how much worse it would have been if Todd had been a real journalist and put a stop to her filibuster and actually asked her to answer the question!
So, like Sir Galahad from the Knights of the Round Table, I feel compelled to come to the aid of Ms. Wasserman Schultz. When asked again about the difference between socialists and Democrats, here’s what she should say.
There’s a big difference. As pointed out by my good friend Dan Mitchell, socialists technically believe government should own the means of production, which means government-owned and operated steel mills, car companies, railroads, banks, etc. Democrats, by contrast, believe in nominal private ownership of the means of production, but with lots of subsidies, handouts, redistribution, protectionism, intervention, regulation, and bailouts. The bottom line is that Bernie may call himself a socialist and his rhetoric may be rather heated, but his views – and voting record – make him a conventional Democrat.
See how easy it would be for her to give a good and honest answer. And because of my chivalry, I don’t even expect a $10,000-per-month consulting contract from the DNC.
I offer this advice out of the goodness of my heart (and my belief in honest portrayals of economic policies).
Since almost everybody wants a society that is just, that presumably means we all favor “social justice.”
But in the American political system, the phrase has been adopted by those who favor bigger government and more intervention. Sort of the way “solidarity” and “social” are code words for statism in Europe.
Leftists think that this phrase gives them the moral high ground, but shouldn’t we judge “social justice” by outcomes rather than intentions?
The answers to those questions probably depend on one’s definition of a just society.
For those fixated on equality, it appears that they are willing to accept more deprivation and hardship if everyone is equally poor. Which is the sentiment expressed in this clever image.
Supporters of liberty, by contrast, want less government because they don’t mind if some people get richer faster than other people get richer.
You won’t (or at least shouldn’t) be surprised that John Stossel is in the latter category. Writing for Reason, he debunks the notion that “social justice” is either social or justice. Instead, he explains that it’s just a new term for a defective product.
Protestors demand “social justice.” …But there’s nothing “just” about the leftist protesters’ claimed solution: more big government.
Oliver Stone, Sean Penn and Harry Belafonte praised Venezuela’s Hugo Chavez for his socialist revolution. Chavez then proceeded to destroy much of his country. …Only socialism could take an oil-rich nation and turn it into one where people wait in line for hours for survival rations.
Stossel correctly explains that genuine social justice is achieved with free markets.
Without the free market setting prices and allocating resources, all the cries of “justice” in the world don’t help anyone. You can’t eat justice. You can’t use it as toilet paper. …Socialists say capitalists just want to make a quick buck, but it’s government that can’t plan for the long haul. …Calling it “social justice” doesn’t make it work. …Markets, in which individuals, not just rulers, have property rights, give people options. Businesses have an incentive to serve as many people as possible, regardless of gender or ethnic group. They also have an incentive to be nice—customers are more likely to trade with people who treat them fairly. Everyone gets to choose his own path. That’s what I call justice.
Of course, I’m not holding my breath waiting for statists to agree with me or John Stossel.
That’s because, as Jonah Goldberg explains in this Prager University video, “social justice” is a catch-all term for the left’s agenda. And that agenda means more power for government and less freedom for individuals.
I particularly like how Jonah explains how statists are the ones that want to impose their values on others.
Is it obligatory to take seriously his pose of being…a “socialist”? It gives excitable Democratic activists a frisson of naughtiness to pretend… In olden days, socialism meant something robust — government ownership of the means of production, distribution and exchange. Then, voters and reality being resistant to such socialism, the idea was diluted to mean just government ownership of an economy’s “commanding heights,” principally heavy industries, coal mines, railroads, etc.
But you’d have a hard time finding people who still believe that nonsense, even in the diluted form. In Europe, for instance, Social Democrats have morphed into conventional statists.
Today, “socialism,” at least in Western Europe where the term is still part of the political lexicon, is the thin gruel of “social democracy.” This means three things — heavy government regulation of commercial activities, government provision of a “social safety net” and redistribution of wealth through progressive taxation and entitlement programs. …Sanders, who thinks European social democracies are exemplary, evidently thinks America should be more like Greece.
It’s not often that I disagree with the folks who put together the Wall Street Journal editorial page. For instance, they just published a great editorial on that cesspool of cronyism and corruption that is otherwise known as the Export-Import Bank.
Isn’t it great that the voice of capitalism actually supports genuine free markets!
It’s about the presumably quixotic presidential campaign of Senator Bernie Sanders. These excerpts will give you a flavor of what the WSJ wrote.
Vermont SenatorBernie Sanders,an avowed independent Socialist, has decided to run for the Democratic presidential nomination… He thinks the American economy is fundamentally unfair, and that government must tax and spend even more heavily… He thinks Social Security should increase benefits, no matter that it is heading toward insolvency. Higher taxes can make up the difference. …He wants single-payer health care, though his own state gave up the experiment as too expensive.
So what’s my disagreement?
I realize I’m being a nit-picker, but I don’t like the fact that the WSJ editorial is entitled “An Honest Socialist.”
My gripe is that Sanders isn’t honest. A genuine socialist believes in government ownership of the means of production. In other words, nationalized factories, government-run businesses, and collective farms. If Sanders believes in these policies, he’s remarkably reluctant to share his perspective.
In other words, lots of redistribution and lots of back-door government control of the private sector, but not a lot of People’s Factory #58 or People’s Farm #91.
Though it is true that Sanders wants the government to directly run the healthcare system (akin to the horrifying U.K. approach), but at most that means he’s a “partial socialist” (or, to modify the WSJ‘s title, a “mostly dishonest socialist”).
Moreover, he doesn’t bring anything new to the presidential race, at least from a policy perspective.
There’s only a trivially small difference, for instance, between Hillary Clinton’s lifetime rating of 10.6 from the National Taxpayers Union and Bernie Sanders’ lifetime rating of 9.4. They both earned their failing grades by spending other people’s money with reckless abandon.
Though it’s worth noting that both Clinton and Sanders are “more frugal” than Barack Obama, who earned a lifetime rating of 9.0. I guess this is why the phrase “damning with faint praise” was invented.
The only difference between Hillary, Obama, and Sanders is tone. Here’s some of what Charles Cooke wrote for National Review.
Sanders does not play games with words…he steadfastly refuses to pretend that he represents moderation. …Sanders is to public policy and professional politicking what Joe Biden is to personality. He is open, blunt, unapologetic, compelling, ready to debate.
Which is in stark contrast to Hillary Clinton’s pabulum.
…the Democratic primary is being dominated by a corrupt, controlling, soulless, cynical, entitled, and mostly synthetic avatar named Hillary Clinton, and, in consequence, it is almost entirely devoid of ideas. …Hillary and her team stick to meaningless and saccharine banalities, almost all of which, one presumes, have been poll-tested within a fraction of an inch. …At no time does she stake out a vision. At no time does she adopt a controversial or momentous position. Instead, she hides behind corporately assembled strings of mawkish, semi-literate tosh.
So the difference between Clinton and Sanders is that he’s proud of his statism and she wants to hide her radical agenda.
But it doesn’t matter what they say or what they call themselves, the bottom line is that their policies are destructive, both economically and morally.
P.P.P.P.S. If you like socialism humor, click here, here, and here.
P.P.P.P.P.S. Switching to another topic (and one where there’s zero humor), you may remember that I wrote a few days ago about the horror of so-called civil asset forfeiture.
Check out this interview. It’s about Obama’s new tax-and-spend budget, but pay particular attention at the 5:15 mark of the video and you’ll hear Maher asserting that “socialism” deserves the credit for the development of a thriving middle class in America.
Wow. Maher’s comments are astonishingly illiterate.
As I remarked in the interview, the United States (like other western nations) had a tiny public sector during the period when it transitioned from agricultural poverty to middle-class prosperity.
Federal spending averaged only about 3 percent of economic output, and overall government spending (including state and local governments) was only about 10 percent of GDP.
If that was socialism, then sign me up!
This isn’t to say we have laissez-faire paradise in the 1800s and early 1900s. Some of the so-called Robber Barons were cronyists who used government favoritism to line their pockets. Monetary policy oftentimes was a mess because of government regulation and control of banks. Tariffs were very onerous. And Jim Crow laws were an odious example of government power being used to oppress an entire class of citizens and hamper their ability to participate in the market economy.
But the one thing we didn’t have back then was socialism, whether you use the right definition (government ownership of the means of production) or the sloppy definition (a redistributive welfare state).
So rather than recycle my thoughts, let’s cite comments by two wise observers.
Here’s how Dan Henninger of the Wall Street Journaldescribed the President’s plan.
The president’s annual budget reminds the Beltway tribes of what they do—tax the country, distribute revenues to their allies, and euphemize it as a budget. With his 2015 budget,Barack Obamaat last makes clear his presidency’s reason for being: to establish an empire of taxation. …In six years, the Obama Democrats have abandoned any belief in the idea that the private sector is the primary cause of American prosperity. Instead, they seem to see the private sector as a kind of tax sump-pump, a dumb machine whose only purpose is tax flow. …That is the empire of taxation. It is an isolated system, based in Washington, which allocates what it exacts from the private sector.
And here’s some of what George Will wrote about the poisonous spiral of more government leading to more stagnation leading to more demands for more government.
The progressive project of maximizing the number of people dependent on government is also aided by the acid of insecurity that grows rapidly when the economy does not. Anxious and disappointed people are susceptible to progressives’ blandishments about the political allocation of wealth and opportunity — “free” this and that. By making slow growth normal, iatrogenic government serves the progressive program of defining economic failure down.
I fully agree. Not only the points about the weakness of the Obama “recovery,” but also the concerns about more and more people being lured into government dependency, which sabotages American exceptionalism.
Jerry Holbert has a nice summary of the President’s worldview.
If you’re asking whether he’s a big-spending interventionist, the answer is yes.
But if you’re asking whether the President believes in government ownership of the means of production (which is the defining issue in the socialist economic platform), the answer is no (though the White House surely won’t like how Thomas Sowell describes Obama’s ideology).
But I generally don’t care about these word fights. Big government is bad because it hurts people and relies on coercion, and that’s true whether we’re talking about socialism, communism, Nazism, corporatism, or other forms of statism.
But I do care for historical accuracy and honesty.
Writing for the U.K.-based Telegraph, Dan Hannan of the European Parliament explains that the German National Socialists of the Hitler era were….well, socialists.
Goebbels never doubted that he was a socialist. He understood Nazism to be a better and more plausible form of socialism than that propagated by Lenin. Instead of spreading itself across different nations, it would operate within the unit of the Volk. So total is the cultural victory of the modern Left that the merely to recount this fact is jarring.
Anti-capitalist propaganda from the Nazis
Not that today’s leftists should be surprised. Unless, of course, they’re historically illiterate. After all, the Nazi political vehicle was the National Socialist German Workers Party.
Subsequent generations of Leftists have tried to explain away the awkward nomenclature of the National Socialist German Workers’ Party as either a cynical PR stunt or an embarrassing coincidence. In fact, the name meant what it said. Hitler…boasted, adding that “the whole of National Socialism” was “based on Marx”. Marx’s error, Hitler believed, had been to foster class war instead of national unity – to set workers against industrialists instead of conscripting both groups into a corporatist order. His aim, he told his economic adviser, Otto Wagener, was to “convert the German Volk to socialism without simply killing off the old individualists” – by which he meant the bankers and factory owners who could, he thought, serve socialism better by generating revenue for the state. …authoritarianism was the common feature of socialists of both National and Leninist varieties, who rushed to stick each other in prison camps or before firing squads. Each faction loathed the other as heretical, but both scorned free-market individualists as beyond redemption. Their battle was all the fiercer, as Hayek pointed out in 1944, because it was a battle between brothers.
In other words, Soviet-style socialism and Nazi-style socialism were both evil forms of statism, but one attracted people by fomenting class envy and the other sought recruits by demonizing non-Aryans.
Hannan hastens to add that he doesn’t think that modern self-proclaimed socialists are closet Nazis, but he does object to leftists who try to put National Socialists on the right side of the political spectrum.
The idea that Nazism is a more extreme form of conservatism has insinuated its way into popular culture. …What is it based on, this connection? Little beyond a jejune sense that Left-wing means compassionate and Right-wing means nasty and fascists are nasty. When written down like that, the notion sounds idiotic, but think of the groups around the world that the BBC, for example, calls “Right-wing”: the Taliban, who want communal ownership of goods; the Iranian revolutionaries, who…seized industries and destroyed the middle class; Vladimir Zhirinovsky, who pined for Stalinism. The “Nazis-were-far-Right” shtick is a symptom of the wider notion that “Right-wing” is a synonym for “baddie”.
Citing the comprehensive work of Jonah Goldberg, Hannan’s column then makes a key point about government coercion.
Authoritarianism – or, to give it a less loaded name, the belief that state compulsion is justified in pursuit of a higher goal, such as scientific progress or greater equality – was traditionally a characteristic of the social democrats as much as of the revolutionaries. Jonah Goldberg has chronicled the phenomenon at length in his magnum opus, Liberal Fascism. Lots of people take offence at his title, evidently without reading the book since, in the first few pages, Jonah reveals that the phrase is not his own. He is quoting that impeccable progressive H.G. Wells who, in 1932, told the Young Liberals that they must become “liberal fascists” and “enlightened Nazis”.
To be fair, this doesn’t mean Wells was a horrible person, at least in the sense of embracing Hitlerism. In the early 1930s, the fascist policies of Mussolini and Hitler were simply about government intervention. At that point, few people recognized that racism and anti-Semitism were part of the fascist program.
Anyhow, here’s the quiz, taken verbatim from my inbox.
=====================================
Answer all the questions (no cheating) before looking at the answers.
Who said it?
1) “We’re going to take things away from you on behalf of the common good.”
A. Karl Marx
B. Adolph Hitler
C. Joseph Stalin
D. Barack Obama
E. None of the above
2) “It’s time for a new beginning, for an end to government of the few, by
the few, and for the few……and to replace it with shared responsibility,
for shared prosperity.”
A. Lenin
B. Mussolini
C. Idi Amin
D. Barack Obama
E. None of the above
3) “(We)…..can’t just let business as usual go on, and that means
something has to be taken away from some people.”
A. Nikita Khrushev
B. Josef Goebbels
C. Boris Yeltsin
D. Barack Obama
E. None of the above
4) “We have to build a political consensus and that requires people to give
up a little bit of their own … in order to create this common ground.”
A. Mao Tse Dung
B. Hugo Chavez
C. Kim Jong Il
D. Barack Obama
E. None of the above
5) “I certainly think the free-market has failed.”
A. Karl Marx
B. Lenin
C. Molotov
D. Barack Obama
E. None of the above
6) “I think it’s time to send a clear message to what has become the most
profitable sector in (the) entire economy that they are being watched.”
A. Pinochet
B. Milosevic
C. Saddam Hussein
D. Barack Obama
E. None of the above
Scroll down for the answers
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…
…
…
…
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Answers
(1) E. None of the above. Statement was made by Hillary Clinton – 6/29/2004
(2) E. None of the above. Statement was made by Hillary Clinton – 5/29/2007
(3) E. None of the above. Statement was made by Hillary Clinton – 6/4/2007
(4) E. None of the above. Statement was made by Hillary Clinton – 6/4/2007
(5) E. None of the above. Statement was made by Hillary Clinton – 6/4/2007
(6) E. None of the above. Statement was made by Hillary Clinton – 9/2/2005
=====================================
Actually, this isn’t humor. It’s horror. The last thing America needs is another statist president. Bush and Obama already have done enough damage.
Though many of the quotes are taken out of context in order to make Hillary look radical. For what it’s worth, the leftists at Politifact rate the email quiz as a pants-on-fire lie. I think “significant exaggeration” would be more accurate.
Let’s not forget that she cavalierly dismissed the likely economic damage of her 1993 healthcare scheme, asserting that “”I can’t be responsible for every undercapitalized entrepreneur in America.”
P.S. This quiz is somewhat similar to the infamous Al Gore-Unabomber quiz. For what it’s worth, I flunked that quiz with a score of only 42 percent.
P.P.S. Speaking of Gore, I’m also surprised I have so little humor with him as the target. All I could find was this video and a couple of one-liners from Leno and Conan. He also played a cameo role in this joke featuring Monica Lewinsky.
Regular readers may have noticed that I generally say that advocates of big government are “statists.”
I could call them “liberals,” but I don’t like that using that term since the early advocates of economic and personal liberty were “classical liberals” such as Adam Smith, John Locke, and Jean-Baptiste Say. And proponents of these ideas are still called “liberals” in Europe and Australia.
I could call them “socialists,” but I don’t think that’s technically accurate since the theory is based on government ownership of the means of production. This is why I’ve been in the strange position of defending Obama when some folks have used the S word to describe him.
I could call them “fascists,” which Thomas Sowell explains is the most accurate way of describing the modern left’s economic ideology, but that term also implies racism. But while leftists sometimes support policies that hurt minorities, they’re not motivated by racial animus.
I could call them “corporatists,” and I actually have used that term on occasion, but I think it’s too narrow. It’s not really an ideology, but rather a description of the sleazy alliance of the left and big business, such as we saw for TARP and Wall Street, or Obamacare and Big Pharma.
I’m motivated to write about my favorite way of expressing opprobrium because I just read a very interesting column in the U.K.-based Telegraph by Tim Stanley, an American historian.
He delves into the issue of whether it’s right to call Hitler a socialist.
…the Nazis did call themselves National Socialists. But…labels can be misleading. …Hitler wasn’t a socialist became apparent within weeks of becoming Chancellor of Germany when he started arresting socialists and communists. He did this, claim some, because they were competing brands of socialism. But that doesn’t explain why Hitler defined his politics so absolutely as a war on Bolshevism… Marxism is defined by class war, and socialism is accomplished with the total victory of the Proletariat over the ruling classes. By contrast, Hitler offered an alliance between labour and capital in the form of corporatism… It is true that the economy was socialised in the latter part of the 1930s, but not for the sake of building socialism. It was to prepare for war. Politics came before economics in the fascist state to the degree that it’s hard to conceive of Hitler as a coherent economic thinker at all. …Marxism defines history as a class struggle. Hitler saw it as a racial conflict… he was sometimes prepared to use socialist economics to pursue his agenda.
These all seem to be valid points, but I wonder whether it makes a difference.
Tarantulas, black widows, and brown recluses are all different species of arachnids, but it’s also correct to say that they are all poisonous spiders.
And I sure as heck wouldn’t want any of them to bite me.
Similarly, socialism, Marxism, and fascism may have specific motivations and characteristics, but they’re all forms of statism.
And I definitely don’t want to acquiesce to any of those coercive ideologies.
Which seems to be Tim Stanley’s conclusion as well.
The moral lesson is that power corrupts everyone: Left, Right, men, women, gay, straight, black, white, religious, atheist. The best countries have constitutions that limit the government, cherish the private sphere and largely leave the individual to make their own mistakes.
Now let’s look at a real-world example of a country that is suffering because of statism.
Allister Heath of City A.M. in London explains what is happening in Venezuela.
IF you want to see how to destroy an economy and a society, look no further than Venezuela. …the country is on the verge of total collapse… Food is running out, as are other essentials, even though the country claims the world’s largest oil reserves. There are shortages of toilet paper and soap, empty shelves and massive crowds queuing for hours in front of supermarkets. …The reason? A brain-dead rejection of basic economics, and a hardline, anti-market approach of the worst possible kind. There are maximum prices, other prices controls, profit controls, capital controls, nationalisations, expropriations and every other statist, atavistic policy you can think of. An extreme left wing government has waged war on capitalism and won; and as ever, ordinary people are paying the price. …The lesson from all of that is clear. Socialism doesn’t work. Price controls don’t work. Stealing people’s property doesn’t work. Chasing away foreigners doesn’t work. Destroying the supply-side of an economy doesn’t work. …It is a spectacularly horrible case of what FA Hayek called the Road to Serfdom.
For all intents and purposes, Venezuela is sort of like France, but without the rule of law. Which means bad policies become catastrophic policies.
And Allister is right. It is ordinary people who suffer. Venezuela’s long-term experiment with statism has resulted in stagnation and chaos. Once one of the richest nations in Latin America, it is now falling behind nations that have liberalized.
P.S. One business leader got a lot of heat for observing that Obamanomics was more like fascism than socialism. And another caught a bunch of grief for using an analogy about tax hikes and the Nazi invasion of Poland.
If they used “statism” instead, they would have been more accurate and avoided criticism.
Very few political cartoons make me laugh out loud.
Even when I look back at the all-time favorites that I included in my political cartoonist contest, most of them are on that list because they make a very effective and clever point about public policy.
But I don’t think any of them made me laugh as much as this gem by Scott Stantis.
I don’t even know why it struck me as being so funny.
Yes, I have a peculiar interest in international economic policy, so I’m fully aware that President Hollande of France is a disaster, but I’m not sure that’s enough to make a cartoon amusing.
Anders Breivik…wants the world to know that he’s being treated “worse than an animal” in prison and is considering going on a hunger strike until the “torture”-like living conditions improve. Just how bad are things for the admitted and unrepentant killer? Well, for one, he says he’s being forced to play his video games on an out-of-date Playstation 2 instead of a newer model. …Breivik was deemed sane by a Norwegian court in the summer of 2012 and sentenced to 21 years in prison, the most-severe sentence allowed under the Scandinavian country’s laws… Details of Breivik’s current conditions are a bit unclear, although Norwegian news reports from the time of his sentencing suggested that he was going to be kept in a three-room cell complete with an exercise area and a television.
I guess it’s a good thing I’m not the warden at his prison.
Why? Because I not only would turn down his request, but I also would dump him in a 6X8 call. Moreover, I would station a couple of guards outside his cell and have them play the newest and fanciest version of Playstation 24 hours a day.
If you ask an economist about the difference between capitalism and socialism, you’ll probably get a boring answer about the size of government, the impact on incentives, and the power of the state.
Geesh, looking at that list, I guess I’m guilty of – in the words of Paul Krugman – being part of the “plot against France” by trying to discredit that nation’s economy.
Or maybe I’m just ahead of my time because we’re now seeing articles that almost sound like they could have been written by me appearing in establishment outlets such as Newsweek. Check out some amazing excerpts from an article by Janine di Giovanni, who lives in France and serves as the magazine’s Middle East Editor.
…what is happening today in France is being compared to the revocation of 1685. …the king closed churches and persecuted the Huguenots. As a result, nearly 700,000 of them fled France, seeking asylum in England, Sweden, Switzerland, South Africa and other countries. The Huguenots, nearly a million strong before 1685, were thought of as the worker bees of France. They left without money, but took with them their many and various skills. They left France with a noticeable brain drain.
Since the arrival of Socialist President François Hollande in 2012, income tax and social security contributions in France have skyrocketed. The top tax rate is 75 percent, and a great many pay in excess of 70 percent. As a result, there has been a frantic bolt for the border by the very people who create economic growth – business leaders, innovators, creative thinkers, and top executives. They are all leaving France to develop their talents elsewhere.
It’s an exaggeration to say “they are all leaving,” but France is turning Atlas Shrugged from fiction to reality.
And when the people who have the greatest ability leave, that has an impact on economic performance – and ordinary people are the ones who suffer the most.
…the past two years have seen a steady, noticeable decline in France. There is a grayness that the heavy hand of socialism casts. It is increasingly difficult to start a small business when you cannot fire useless employees and hire fresh new talent. Like the Huguenots, young graduates see no future and plan their escape to London. The official unemployment figure is more than 3 million; unofficially it’s more like 5 million.
The article also gives some details that will help you understand why the tax burden is so stifling. Simply stated, the government is far too big and pays for things that should not be even remotely connected to the public sector.
Part of this is the fault of the suffocating nanny state. …As a new mother, I was surprised at the many state benefits to be had if you filled out all the forms: Diapers were free; nannies were tax-deductible; free nurseries existed in every neighborhood. State social workers arrived at my door to help me “organize my nursery.” …The French state also paid for all new mothers, including me, to see a physical therapist twice a week to get our stomachs toned again.
Government-subsidized “toned” stomachs. Hey, maybe big government isn’t all bad. Sort of reminds me of the taxpayer-financed boob jobs in the United Kingdom (British taxpayers also pay for sex trips to Amsterdam).
More seriously, all the wasteful spending in France erodes the work ethic and creates a perverse form of dependency.
I had friends who belonged to trade unions, which allowed them to take entire summers off and collect 55 percent unemployment pay. From the time he was an able-bodied 30-year-old, a cameraman friend worked five months a year and spent the remaining seven months collecting state subsidies from the comfort of his house in the south of France. Another banker friend spent her three-month paid maternity leave sailing around Guadeloupe – as it is part of France, she continued to receive all the benefits. Yet another banker friend got fired, then took off nearly three years to find a new job, because the state was paying her so long as she had no job. “Why not? I deserve it,” she said when I questioned her. “I paid my benefits into the system.”
So what’s the bottom line? Well, the author sums up the issue quite nicely.
…all this handing out of money left the state bankrupt. …The most brilliant minds of France are escaping to London, Brussels, and New York rather than stultify at home. …“The best thinkers in France have left the country. What is now left is mediocrity.” From a chief legal counsel at a major French company: “France is dying a slow death. Socialism is killing it…”
As the old saying goes, this won’t end well. Maybe France will suffer a Greek-style meltdown, but perhaps it will “merely” suffer long-run stagnation and decline.
But bad government can screw up a country, even if it does have lots of natural advantages.
And that’s exactly what generations of French politicians have done to France. The tax system has become so bad that more than 8,000 French households had to pay more than 100 percent of their income to the government in 2012.
P.P.S. The big puzzle is why the French put up with so much statism. Polling data from both 2010 and 2013 shows strong support for smaller government, and an astounding 52 percent of French citizens said they would consider moving to the United States if they got the opportunity. So why, then, do they elect statists such as Sarkozy and Hollande?!?