Posts Tagged ‘Statism’

Whenever there’s a discussion of the Nordic nations, I feel conflicted.

I don’t like the punitively high tax rates and socially destructive levels of redistribution in nations such as Denmark, but I also admire the very laissez-faire policies those countries have when it comes to regulation, trade, and property rights.

Indeed, on those latter issues, it’s worth noting that Nordic nations are more free market-oriented than the United States according to the experts at the Fraser Institute who put together Economic Freedom of the World.

Take the example of Sweden. That country has robust school choice and a partially privatized social security system.

Moreover, Nordic nations in general have lower business tax burdens and investment tax burdens than the United States. And Denmark and Sweden have both taken some modest steps to restrain government spending, so even in the realm of fiscal policy you can find some admirable developments.

But these countries need more than “modest steps” since the burden of government spending is still enormous. And excessive social-welfare expenditures are a major problem since such outlays depress labor force participation and encourage dependency.

I mention all these good and bad features of Nordic nations because Senator Bernie Sanders has suggested, as part of his presidential campaign, that the United States should become more like Sweden and Denmark.

If I got to pick and choose which policies we copied, I would agree.

But since Senator Sanders almost surely wants us to copy their fiscal policies (and presumably has no idea that those countries are pro-free market in other areas), I feel compelled to explain that he’s wrong.

And the good news is that other people are producing the evidence, which makes my job easy. Nima Sanandaji is a Swedish economist who just wrote a very illuminating article on this topic for the Cayman Financial Review.

He starts by noting how statists embrace the Nordic Model.

Denmark, Finland, Norway and Sweden have high-tax social democratic systems that for long have been admired by the left. …The high regard comes as no surprise. Nordic societies are uniquely successful. Not only are they characterised by high living standards, but also by other attractive features such as low crime rates, long life expectations, high degrees of social cohesion and relatively even income distributions. …This is often seen as proof that a ”third way” policy between socialism and capitalism works well, and that other societies can reach the same favourable social outcomes simply by expanding the size of government.

But Nima explains that Nordic nations became rich when they had free markets and small government.

The best that can be said about the Nordic welfare state is that the damage is somewhat contained because of cultural norms.

If one studies Nordic history and society in depth, however, it quickly becomes evident that the simplistic analysis is flawed. …High levels of trust, strong work ethic, civic participation, social cohesion, individual responsibility and family values are long-standing features of Nordic society that pre-date the welfare state. These deeper social institutions explain why Sweden, Denmark and Norway could so quickly grow from impoverished nations to wealthy ones as industrialisation and the market economy were introduced in the late 19th century. …The same norms explain why large welfare systems could be implemented in the mid-20th century. Strong work ethics and high levels of trust made it possible to levy high taxes and offer generous benefits with limited risk of abuse and undesirable incentive effects. It is important to stress that the direction of causality seems to be from cultures with strong social capital towards welfare states that have not had serious adverse consequences, and not the other way around.

Dr. Sanandaji then hypothesizes that we can learn a lot by comparing Americans of Nordic descent with those that didn’t emigrate.

…the Nordic success culture is maintained when people from this region move abroad. …The American descendants of Nordic migrants live in a very different policy environment compared with the residents of the Nordic countries. The former live in an environment with less welfare, lower taxes and (in general) freer markets. Interestingly, the social and economic success of Nordic-Americans is on a par with or even better than their cousins in the Nordic countries. …Close to 12 million Americans have Nordic (Scandinavian) origins.

And he produces some dramatic data.

Simply said, people of Nordic descent do very well in America, where the fiscal burden is lower than it is back in Scandinavia.

According to the 2010 US Census, the median household income in the United States is $51,914. This can be compared with a median household income of $61,920 for Danish Americans, $59,379 for Finish-Americans, $60,935 for Norwegian Americans and $61,549 for Swedish Americans. There is also a group identifying themselves simply as “Scandinavian Americans” in the US Census. The median household income for this group is even higher at $66,219.

But here’s the most remarkable information from his article. Nordic-Americans are far more productive than their cousins back home.

Danish Americans have a contribution to GDP per capita 37 per cent higher than Danes still living in Denmark; Swedish Americans contribute 39 per cent more to GDP per capita than Swedes living in Sweden; and Finnish Americans contribute 47 per cent more than Finns living in Finland. …there is prima facie evidence that the decedents of Nordic people who move to the U.S. are significantly better off than those who stay at home.

Here’s the infographic Nima sent with his article.

Wow, this is game, set, match, as far as I’m concerned.

Nima produced similar data a few years ago looking just as Swedes.

But this new data makes it clear that we’re not just looking at a one-nation phenomenon. The lesson is clear. Nordic people manage to be somewhat productive in high-tax, big-government nations.

But if they reside in a medium-tax country with a medium-sized government, they are highly productive (so just imagine what they could achieve in Hong Kong or Singapore!).

And Nima also points out that there is less poverty among Scandinavians in America than there is among Scandinavians in Scandinavia.

Nordic descendants in the U.S. today have half the poverty rate of the average of Americans – a consistent finding for decades. In other words, Nordic Americans have lower poverty rates than Nordic citizens.

So here’s the lesson that will be a nightmare for Bernie Sanders. It turns out that his role models actually teach us that big government makes people less prosperous.

…in the long run, the large welfare states have eroded incentives, and ultimately the social norms that bounded Nordic societies together. The U.S. system, with greater emphasis on personal responsibility, is more in line with the traditional Nordic system that allowed for the culture of success to develop in the first place. Thus, we should not be surprised that Nordic Americans have both higher living standard and lower poverty than their cousins in the Nordic welfare states.

To summarize, the recipe for prosperity is free markets (which you find in Scandinavia) and small government (which is absent in those countries).

But Senator Sanders wants to copy the bad parts of Nordic nations while ignoring the good parts. For those who care about real-world evidence, Dr. Sanandaji’s data suggests we should take the opposite approach.

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A couple of days ago, I (sort of) applauded Senator Bernie Sanders. Not for his views, which are based on primitive redistributionism, but because he challenged Republicans to state whether they support capitalism.

And I think it would be very revealing to see which GOPers were willing to openly embrace free markets, hopefully for both moral and economic reasons.

But not let’s look at this issue from another perspective. Why do some folks on the left oppose capitalism?

I suppose there are several answers. Old-fashioned communists and socialists actually thought capitalism was inferior and they wanted the government to directly plan the economy, run the factories, and allocate resources.

Most leftists today admit that central planning doesn’t work and you need a market-based price system, so their arguments against capitalism usually are based on two other factors.

  1. The rich somehow exploit the poor and wind up with too big a slice of the economic pie. The solution is high tax rates and redistribution.
  2. Capitalism is inherently unstable, causing painful recessions. The solution is to have lots of regulations to somehow prevent bad things.

I think both those arguments are misguided since the first is based on the inaccurate presumption that the economy is a fixed pie and the second overlooks the fact that government intervention almost always deserves the blame for downturns and panics.

Today, though, I want to focus on a new argument against capitalism. Some guy named Matt Bruenig recently argued in the Washington Post that capitalism is coercive.

I’m not joking. This wasn’t parody. He really is serious that a system based on voluntary exchange is anti-freedom.

Here are some excerpts from his column.

Capitalism is a coercive economic system that creates persistent patterns of economic deprivation. …it is well established that capitalism is fundamentally built upon threats of force. …When the physical resources necessary for production are privately held in the hands of very few, as in the United States, the majority of the population is forced to submit itself to well-financed employers in order to live.

And how does he propose to deal with the supposedly coercive nature of capitalism?

Simple, the government should give everybody money so they don’t have to work

To secure freedom and prosperity for all, it may ultimately be necessary to supplement the welfare state with a universal basic income — a program that would provide all citizens with a basic level of financial support, regardless of whether they’re employed. …no amount of labor regulation can ever undo the fact that workers are confronted daily with the choice between obeying a supervisor or losing all their income. The only way to break the coercion at the core of the employment relationship is to give people the genuine ability to say no to their employers. And the only way to make that feasible is to guarantee that working-age adults, at least, have some way to support themselves whether they work or not.


I don’t suppose Mr. Bruenig has thought through what happens if too many people decide to stop working so they can live off the “universal basic income.”

Welfare State Wagon CartoonsCall me crazy, but I suspect the number of people riding in the wagon would exponentially expand while an ever-growing share people pulling the wagon would decide to “go Galt.”

Of course, some leftists are smart enough to realize that somebody has to produce before the government can redistribute.

But anybody capable of writing these sentences obviously isn’t moored to reality.

True freedom requires freedom from destitution and freedom from the demands of the employer. Capitalism ensures neither, but a universal basic income, if successful, could provide both.

While he’s at it, why doesn’t he wave his magic wand so every little boy can play major league baseball and every little girl can have a pet unicorn?

I’ve previously expressed skepticism about the notion of a government-guaranteed income. The fact that Mr. Bruenig thinks it’s a good idea is confirmation that this idea should be rejected.

P.S. I have a Moocher Hall of Fame to celebrate disreputable deadbeats and a Bureaucrat Hall of Fame to highlight overpaid and underworked civil servants. Maybe it’s time to have some sort of Hall of Fame for statists who say make really bizarre arguments. Mr. Bruenig could join Mr. Murphy, Ms. vanden Heuvel, and Mr. Yglesias as charter members.

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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.

Here’s an excerpt from a report in The Hill.

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.

After all, how could anyone support big government over markets after watching these videos narrated by Don Boudreaux, Walter Williams, and Deirdre McCloskey?

Or how could anyone pick socialism (or any other form of coercive statism) after reviewing how market-based economies out-perform big-government economies?

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?


Did he list Venezuela or China, countries that have partial government ownership of the means of production?


Instead he picked Denmark and Sweden.

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?

Hardly. Indeed, if you take the data from Economic Freedom of the World and remove the fiscal policy variable (and thus measure the degree to which markets are allowed to operate), then Denmark and Sweden are both among the world’s top-10 nations for free markets.

And both rank above the United States!

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.

The bottom line, though, is that you get the most growth when you have both free markets and small government. In other words, genuine capitalism.

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.

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Like most Americans, I’m impressed by Dr. Ben Carson’s personal story and achievements.

But since I’m a policy wonk, I have to admit that I’m equally impressed by his instinctive understanding that a flat tax is both fair and good for growth.

Moreover, it’s also worth noting that one of my buddies from grad school is now his chief economic adviser.

So I’ve been observing his presidential campaign with interest and I view his steady climb in the polls as an indication that voters like the idea of a principled outsider.

But his political success means that he’s also a target. Anything he says is fair game for his opponents, particularly the folks in the establishment media who are reflexively hostile to what Dr. Carson represents.

And since he’s not a practiced politician with years of training in how to artfully discuss certain topics, he has given his opponents some material. His comments about whether he would vote for a Muslim created a kerfuffle about whether he favored a religious requirement for high office. And his comments on homosexuality being a lifestyle choice definitely rubbed people the wrong way.

That being said, the latest flareup regarding Dr. Carson’s comments about self defense strikes me at entirely contrived (at least I hope it’s contrived since other possible explanations are even more unseemly).

Here’s how a Washington Post report described Carson’s supposedly controversial remarks.

Ben Carson said Thursday that Adolf Hitler’s mass murder of Jews “would have been greatly diminished” if German citizens had not been disarmed by the Nazi regime. The comment, which came during an interview with CNN’s Wolf Blitzer, was similar to arguments Carson made following last week’s mass shooting at Umpqua Community College in Roseburg, Ore., in which he defended the Second Amendment and suggested that the victims should have fought the gunman.

Carson’s campaign says some people are trying to make a mountain out of a molehill.

…some…have called his remarks insensitive… Armstrong Williams, an adviser to Carson, said…that the average voter does not scrutinize candidates for verbal missteps. “They care about intent. I think people understand what Dr. Carson is trying to say.”

A column in The Hill was much more aggressive in portraying Dr. Carson’s remarks as being flawed and self-destructive.

A series of controversial remarks by Ben Carson is raising new questions about whether he’s ready to take the Oval Office. Carson this week suggested the Holocaust would have been less likely if Jewish people had been armed, and appeared to criticize the victims of an Oregon shooting for not fighting back. …The retired neurosurgeon drew the ire of Democrats, liberal advocacy and Jewish groups…strategists believe the comments will dog Carson down the stretch and could dissuade those from backing him.

Maybe I’m just strange, but this supposed controversy is baffling. Why is self defense against evil suddenly a bad thing?

Didn’t the heroic actions of the three Americans in Europe demonstrate that charging a crazed gunman can be successful? And even if they hadn’t been successful, isn’t it better to die fighting than die cowering? I hope I’m never in that situation, and I don’t know how I would react, but I hope it would be in a similar fashion.

Regarding resistance to the Nazis, I accept that Dr. Carson shouldn’t have said such efforts would have “greatly diminished” Hitler’s monstrous actions, but surely he’s right about the principle.

Let’s look at some of the reality from World War II. Writing for the Washington Post, David Kopel explains that armed resistance against the Nazis was quite effective.

During World War II, 30,000 Jewish partisans fought in Eastern Europe, in their own combat units. In Western Europe, …in France, Jews amounted to less than one percent of French population, but comprised about 15 to 20 percent of the French Resistance. One of the most successful battles of the Jewish resistance was the Warsaw Ghetto Uprising. Nearly every Jew who participated was eventually killed — but they were going to be killed anyway. By choosing to stand and fight, the Warsaw Jews diverted a significant amount of Nazis resources from battlefields elsewhere, thus hastening the Nazi defeat.

He provides extensive analysis of the Warsaw uprising that began in early 1943.

…an uprising began. In the beginning, the Jewish Fighting Organization had about 600 volunteers; the Jewish Military Association had about 400, and there were thousands more in spontaneous small groups. The Jews had only 10 handguns… After four days of fighting, the Germans on January 21 pulled back from the ghetto… Not only the Germans were shocked by the unexpected resistance, but also the Jews were astonished. They could not imagine until then that the beaten, exhausted victims could rise against a mighty enemy who had conquered Europe. …In February 1943, the Polish Home Army transferred 50 revolvers (many of them defective), 50 hand grenades, and four pounds of explosives to the Jews in the Warsaw ghetto. The Warsaw Jews also manufactured their own explosives, including Molotov cocktails.

The Nazis paid a heavy price.

The Germans suffered over a thousand casualties in the first week of fighting alone. The Germans had to spend more time subduing the Warsaw Ghetto than they did conquering the entire nations of Poland or France.

But since the Jews were hampered by having very few weapons, that made it easier for Hitler’s thugs to eventually prevail.

 The Warsaw Jews knew they had almost no chance of survival. They decided that it was better to die fighting than to die in a gas chamber. …the key impediment to resistance was shortage of arms. According to Holocaust historian Abram L. Sachar: “The indispensable need, of course, was arms. As soon as some Jews, even in the camps themselves, obtained possession of a weapon, however pathetically inadequate—a rifle, an ax, a sewer cover, a homemade bomb—they used it and often took Nazis with them to death.” Thus, “the difference between resistance and submission depended very largely upon who was in possession of the arms that back up the will to do or die.”

And what’s the bottom line?

…“If someone comes to kill you, rise up and kill him first,” says the Talmud. [Babylonian Talmud, Tractate Sanhedrin, folio 72a.] That is the best response to mass murderers — in 1943, today and always.

If the manufactured outrage about Dr. Carson’s remarks are any indication, though, it appears that some people don’t believe in fighting back.

I’m not sure why, but I can’t help but suspect that statists want people to depend on government. Even if that means they are more vulnerable. And even though governments historically are the biggest threats to human existence!

Here’s another column worth sharing. It’s by Clayton Cramer for PJ Media and it’s a review of Stephen Halbrook’s new book about the Nazis and gun control.

The basic message is that gun control started out for ostensibly benign reasons under the Weimar Republic, but then was used for evil purposes by Hitler’s gang.

Stephen P. Halbrook’s…latest book, Gun Control in the Third Reich: Disarming the Jews and “Enemies of the State,” is an astonishing piece of scholarship: complete, careful, and thoughtful. …Halbrook traces the development of German gun control law… The problem…, as some pointed out when mandatory registration was under discussion in 1931, “in chaotic times, the lists of firearms owners would fall into the wrong hands, allowing unauthorized persons to seize arms and use them to commit unlawful acts” (p. 29). The lists did fall into the wrong hands — the Nazi government, after the 1933 elections. And they did use them to seize arms, especially from Jews and other “enemies of the state.” …when the time came that German Jews started to be loaded up on railroad cars and shipped to concentration camps, the writing was on the wall, and more than a few knew that they had little chance of getting out of this alive. But by that point, the Nazi government had used the registration lists dating from the Weimar Republic to disarm most German Jews.

Cramer adds his two cents to the analysis, pointing out that more guns at least would have made life more difficult for the Nazis without making life more difficult for the Jews.

Perhaps rifles and pistols in the hands of Germany’s Jews would not have seriously delayed the Holocaust, but the example of the Warsaw Ghetto, where Polish Jews with ten rifles and a few dozen pistols delayed the German Army for six weeks, suggests otherwise. How could Germany’s Jews being armed for resistance have made anything worse?

And that’s basically the moral of the story for the modern fight over gun control.

Bad people will always have access to guns, regardless of their legality.

And in some cases, those bad people will be in control of the government. And the track record of dictators and tyrants is clear. They want a disarmed citizenry.

But if guns are legal for law-abiding people (or if the people can keep their weapons in spite of bad laws), then at least the good people have a way of protecting themselves if circumstances require strong action.

Some clever folks on the left may assert that it’s not an either-or situation because they’re simply talking about provisions to promote “common-sense gun safety.” But as discussed the other day, their real agenda is the banning and confiscation of privately owned weapons.

So it’s easy to understand why most supporters of the 2nd Amendment prefer Dr. Carson’s plain-spoken wisdom over President Obama’s smooth-talking statism.

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Whenever I need to explain the difference between socialism and capitalism, I start by noting that socialism technically is different from Obama-style big-government redistributionism and cronyism.

Socialism involves something more pervasive, involving government ownership of the means of production (which, if you read this postscript, is why Jeremy Corbyn in the United Kingdom is far more radical than previous Labour Party leaders).

It also means eviscerating the competitive price system as a means of determining value and allocating resources, relying instead on politicians and bureaucrats to arbitrarily wield that power (some American politicians favor this latter approach in certain circumstances).

Needless to say, socialism has an unmatched track record of failure. It was such a disaster than only a few supposedly high-ranked academics (see this postscript) thought it worked.

But what about high-ranked communists who grew up under socialism. Did they think it worked?

The Houston Chronicle dug into its archives to produce a story about an incident that may have played a big role in history. It’s about a senior communist functionary who was exposed to a slice of capitalism.

Yeltsin visited mission control and a mock-up of a space station. According to Houston Chronicle reporter Stefanie Asin, it wasn’t all the screens, dials, and wonder at NASA that blew up his skirt, it was the unscheduled trip inside a nearby Randall’s location. Yeltsin, then 58, “roamed the aisles of Randall’s nodding his head in amazement,” wrote Asin. He told his fellow Russians in his entourage that if their people, who often must wait in line for most goods, saw the conditions of U.S. supermarkets, “there would be a revolution.” …In the Chronicle photos, you can see him marveling at the produce section, the fresh fish market, and the checkout counter. He looked especially excited about frozen pudding pops. “Even the Politburo doesn’t have this choice. Not even Mr. Gorbachev,” he said.

This random trip to a typical supermarket may have changed history.

About a year after the Russian leader left office, a Yeltsin biographer later wrote that on the plane ride to Yeltsin’s next destination, Miami, he was despondent. He couldn’t stop thinking about the plentiful food at the grocery store and what his countrymen had to subsist on in Russia. In Yeltsin’s own autobiography, he wrote about the experience at Randall’s, which shattered his view of communism, according to pundits. Two years later, he left the Communist Party and began making reforms to turn the economic tide in Russia. …“When I saw those shelves crammed with hundreds, thousands of cans, cartons and goods of every possible sort, for the first time I felt quite frankly sick with despair for the Soviet people,” Yeltsin wrote. “That such a potentially super-rich country as ours has been brought to a state of such poverty! It is terrible to think of it.”

Since the Soviet Union was mired in poverty at the time, Yeltsin presumably was speculating about the potential wealth of his country.

And the good news is that the rigid communism of the Soviet Union is gone. Heck, the Soviet Union doesn’t even exist. Reagan was right when he predicted  the triumph of freedom, with Marxism being relegated to the “ash heap of history.”

But the bad news is that Russia (the most prominent of the 15 nations to emerge after the crackup of the Soviet Union) is a laggard on economic reform. There was a shift away from close-to-pure communism in the 1990s, to be sure, but the country still has a long way to go before it can be considered capitalist.

Here’s a back-of-the-envelope “statism spectrum” that I created. It’s designed to show that there are no pure libertarian paradises, not even Hong Kong. And there are no pure statist dystopias, not even North Korea (though that despotic regime is as close to pure evil as exists in the world).

Russia, I’m guessing, would be somewhere between China and Mexico.

And this gives me a chance to close with an important point.

Perfect economic policy almost surely is an impossible goal. But that’s fine. We can still enjoy good growth so long as we strive to at least move in the right direction. As I explained back in 2012, the private sector is capable of producing impressive results so long as it has sufficient breathing room to operate.

P.S. If you want a simpler and more amusing explanation of different economic systems, here’s the famous “two cows” approach.

P.P.S. The United States isn’t a socialist nation, but we’re not fully immune to that destructive virus. After all, we have a government-run rail company in America, a government-run postal service, a government-run retirement system, and a government-run air traffic control system, all things that would function far more efficiently in the private sector.

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Two days ago, I contrasted the views of Pope Francis and Walter Williams about capitalism and morality.

I explained that Walter had the upper hand because free markets are a positive-sum game based on voluntary exchange while redistribution (at best) is a zero-sum game based on coercion.

That’s the theoretical argument. Now let’s look at the empirical data, specifically focusing on which approach is best for the less fortunate.

Thomas Sowell, the great economist at Stanford University’s Hoover Institution, is not impressed by the Pope’s analysis. Here some of what Prof. Sowell wrote for Investor’s Business Daily.

Pope Francis has created political controversy…by blaming capitalism for many of the problems of the poor. …putting aside religious or philosophical questions, we have more than two centuries of historical evidence… Any serious look at the history of human beings over the millennia shows that the species began in poverty. It is not poverty, but prosperity, that needs explaining. …which has a better track record of helping the less fortunate — fighting for a bigger slice of the economic pie, or producing a bigger pie? …the official poverty level in the U.S. is the upper middle class in Mexico. The much criticized market economy of the U.S. has done far more for the poor than the ideology of the left. Pope Francis’ own native Argentina was once among the leading economies of the world, before it was ruined by the kind of ideological notions he is now promoting around the world.

I briefly discussed the failure of the Peronist Argentinian model last month, but let’s take a closer look at Professor Sowell’s assertions about the U.S. and Argentina.

My colleague at the Cato Institute, Marian Tupy, has put together a great fact-filled website called Human Progress, and it allows users to access all sorts of databases to produce their own charts and tables.

And here’s what the data shows about per-capita economic output in Argentina and the United States.

Not exactly a ringing endorsement of the supposedly more compassionate system in Argentina.

As you can see from this table, Argentina actually was slightly richer than the U.S. back in 1896. But that nation’s shift to statism, particularly after World War II, hindered Argentina’s growth rates.

And seemingly modest differences in growth, compounded over decades, have a huge impact on living standards for ordinary people (i.e., inflation-adjusted GDP per person climbing nearly $27,000 in the U.S. vs an increase of less than $6,700 in Argentina).

By the way, this is not an endorsement of America’s economic policy. We have far too much statism in the United States.

But compared to Argentina, which generally has ranked in the bottom quartile for economic freedom, the United States has a more market-friendly track record.

To help make the bigger point about the importance of economic liberty, let’s now compare the United States with a jurisdiction that consistently has been ranked as the world’s freest economy.

Look at changes in economic output in America and Hong Kong from 1950 to the present. As you can see, Hong Kong started the period as a very poor jurisdiction, with per-capita output only about one-fourth of American levels.

But thanks to better policy, which led to faster growth compounding over several decades, Hong Kong has now caught up to the United States.

What’s most remarkable, if you look at the table, is that per-capita output over the past 65 years has soared by more than 1,275 percent in Hong Kong.

Needless to say, if the U.S. is out-performing Argentina and Hong Kong is out-performing the U.S., then a comparison of Hong Kong and Argentina would yield ever starker results.

I actually did something like that back in 2011 and the results further underscore that there’s a very powerful relationship between economic policy and economic performance.

Which brings us back to the fundamental issue of what system is best for the less fortunate in society?

I suppose that’s a judgement call, but poor people obviously have higher incomes and more opportunity when there’s strong economic growth.

But as Margaret Thatcher famously explained, some people are so consumed by disdain for success that they’re willing to accept more suffering for poor people if they can simultaneously lower the incomes of rich people.

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In a perverse way, I admire leftists who openly express their desire for bigger government and less liberty.

That’s why I (sort of) applauded when Matthew Yglesias wrote in favor of confiscatory tax rates while admitting the government wouldn’t generate any revenue.

And I gave Katrina vanden Heuvel credit for openly admitting her desire to redefine “freedom” so that it means a claim on other people’s income and property.

Both are proposing horrible policy, of course, but at least they’re honest about their goals and motivations. Unlike politicians, they’re not trying to disguise their intentions behind poll-tested platitudes.

We can now add another person to our list of honest leftists. The new leader of the Labour Party in the United Kingdom, Jeremy Corbyn, is a British version of Bernie Sanders, except he really is a socialist who believes in government ownership and control of business. And the chief economic adviser to Corbyn is Richard Murphy.

And, as reported by the U.K.-based Sun, Mr. Murphy openly says everyone’s income belongs to government.

Chartered accountant Richard Murphy, 57, is the brains behind the “Corbynomics” strategy of renationalisation, higher taxes and printing millions of pounds in “new” money. …his bizarre ideas have already sparked fears among Britain’s top economic experts… One of Murphy’s strategies was revealed in August 2014… The dad-of-two claimed taxpayers’ money was NOT their own – and was instead the state’s “rightful property”. Murphy said: “I would suggest that we don’t as such pay taxes. The funds that they represent are, I suggest, in fact the property of the state.”

To be fair, sometimes people mangle their words. To cite one hypothetical example, accidentally omitting a  word like “not” might totally change the meaning of a sentence and give a journalist an opportunity to make a speaker look foolish.

So maybe Mr. Murphy didn’t really mean to say that the government has first claim on everyone’s income.

But if you continue reading, it becomes apparent that he really does believe that government is daddy and the rest of us are children who may be lucky enough to get some allowance.

“…if we give the state the power to define what we can own, how we can own it and, to a very large degree, what we can do with it – and we do – then I would argue that we also give the state the right to say that some part of what we earn or own is actually its rightful property and that we have no choice but pay that tax owed as the quid pro quo of the benefit we enjoy from living in community. Murphy went on: “Well let me inform you that there is no such thing as ‘taxpayers’ money’: it is the government’s money to do what it will with in accordance with the mandate it has been given and for which it will have to account.

Wow, this truly gives us a window into the soul of statism.

Though let’s be fair to Murphy. He’s simply stating that untrammeled majoritarianism is a moral basis for public policy, even if it means 51 percent of the population ravages 49 percent of the population. And that’s an accurate description of how economic policy works in the United States ever since the Supreme Court decided to toss out the Constitution’s limits on the power of the federal government.

Moreover, Murphy’s view is basically reflected in the “tax expenditure” concept used in Washington and the “state aid” concept in the European Union.

None of this justifies Murphy’s poisonous ideology. Instead, I’m simply making the grim point that statists already have achieved some of their goals.

But maybe it will be easier to counter further attacks on economic liberty now that Murphy has openly said what his side wants.

P.S. There are two types of honest leftists. Richard Murphy, like Matt Yglesias and Katrina vanden Heuvel, are honest in that they openly state what they really believe, even when it exposes their radical agenda.

Some other folks on the left have a better type of honesty. They’re willing to admit when there is a contradiction between statist ideology and real-world results. Just look at what Justin Cronin and Jeffrey Goldberg wrote about gun control and what Nicholas Kristof wrote about government-created dependency.

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