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When Crazy Bernie became a national political phenomenon back in 2015, I pointed out that the Vermont Senator isn’t actually a socialist.

As I remarked in this brief interview with Melissa Francis, the technical definition of socialism involves government ownership and control over the “means of production.” In other words, policies such as collective farms and government factories.

It’s possible that Bernie Sanders secretly supports those policies, but his public positions are conventional statism – i.e., lots of redistribution, cronyism, and intervention.

Those policies are destructive and harmful, to be sure. Just think about basket-case economies such as Greece and Venezuela.

But not all left-wing economic policies are socialism. Which was the point I made two years ago when I put together this diagram.

As you can see, I think Sen. Sanders belongs on the far left, but he represents a different strand of statism. At least when compared to conventional socialists or totalitarian socialists.

And I categorize the Nordic nations as “rational leftists” to provide a benchmark (even though those countries are very pro-market by global standards, thanks to their laissez-faire approaches to trade, regulation, etc).

I”ll close by acknowledging that language does evolve. So perhaps I’m being pedantic by drawing a distinction between ordinary Bernie-style leftism and socialism. After all, I doubt 57 percent of Democrats and 16 percent of Republicans actually favor collective farms and government-run companies (at least I hope not).

P.S. Modern leftists don’t want to end private ownership, but they do want the government to control the economy. That approach was given a test last century.

P.P.S. For examples of socialism humor, click here, here, herehereherehere, hereherehereherehere, hereherehere, here and here.

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I’m in China this week, giving various lectures at Northeastern University in Shenyang. My topic today was “Real-World Examples,” which gave me an opportunity to share many of the charts I’ve developed showing how market-oriented nations enjoy much more long-run success.

One of the charts shows how Chile has enjoyed strong growth since it shifted to free markets, especially compared to Venezuela, which is burdened by a vicious form of statism.

But I noticed that I created that chart back in 2011 and it only shows data for the years between 1980 and 2008. And I thought that might lead students to think I was deliberately omitting recent years because the data somehow contradicts my message about free markets and small government.

So it’s time for me to update my comparison of Chile and Venezuela. And I’m going to have lots of evidence to share because the World Bank published a lengthy report on Puzzles of Economic Growth just a couple of years ago. And chapter 7 specifically compares the two countries we’re examining today.

Chile and República Bolivariana de Venezuela are South American countries of similar size and population. They…share a similar history, cultural heritage and comparable social structures. In 1971, they recorded a similar level of per capita income, that is, $6,603 (chained dollars with a base year of 20001) in Chile and $7,231 in República Bolivariana de Venezuela.

The report explains how neither country enjoyed much success in the 1970s, though oil-rich Venezuela at least benefited from rising energy prices.

What’s most relevant, at least for today’s discussion, is how Chile then jumped over Venezuela thanks to pro-market reforms,

In 2003, this value was nearly twice as high in Chile ($12,140) as in República Bolivariana de Venezuela ($6,253). …Chile became a stellar economic growth example in the region and has been outperforming República Bolivariana de Venezuela ever since. The ratio of GDP per capita in Chile and in República Bolivariana de Venezuela changed from 0.75 in 1983 to 1.94 in 2003.

Here’s a chart from the report, showing how Chile’s economy grew rapidly while Venezuela languished.

The report is filled with lots of data.

One item that caught my attention (in part because of Trump’s short-sighted policies in America) is how Chile dramatically reduced trade barriers while Venezuela was more protectionist.

From 1979, Chile’s economy was characterized by the lowest level of tariff restrictions in all of Latin America (10 percent) and a lack of nontariff barriers… República Bolivariana de Venezuela increased its trade restrictions to force consumers to purchase goods produced by the nationalized industries.

But Chile’s success goes well beyond trade policy.

Here’s a table looking quality of governance and red tape.

And here’s some data looking at obstacles to entrepreneurship. As you can see, it took almost four times longer to open a business in Venezuela in 1999.

I assume the numbers are even worse today. Assuming, of course, than anyone even wanted to open a business in that sad country.

Here are some excerpts from the conclusion of the World Bank report. This is a pretty good summary of how Chile reversed its descent to socialism while Venezuela doubled down on bad policy.

In 1971–2003, both Chile and República Bolivariana de Venezuela experienced periods of growing statism in their economic policy. In Chile, however, it was only a short episode (Allende’s socialist experiment in 1971–73), while in República Bolivariana de Venezuela this policy direction was maintained nearly for the entire period covered by the analysis (with its culmination being Chávez’s populist administration elected in 1998). During these periods, state-owned enterprises grew in both countries; market mechanisms were additionally disturbed by administrative price controls and restrictions imposed on freedom of entry into the market—and constrained business activity in many sectors of the economy… Furthermore, severe restrictions on foreign trade and capital flows were imposed. In Chile, the statist experiment was interrupted after three years—once it had driven the economy into a state of profound imbalance with a giant deficit and unchecked inflation. A radical program of economic stabilization and reforms broadening the scope of economic freedom was initiated. This dramatic change in economic orientation produced positive results. From the second half of the 1980s until the end of the analyzed period (2003), Chile was the fastest-growing country in South America.

Now it’s time for me to share an updated version of my chart (though I’m removing Argentina so we can focus just on Chile and Venezuela). As you can see, the updated numbers from the Maddison database tell the exact same story as my 2011 chart.

And why has Chile grown so much faster? As I told the students here in China, it’s because there’s more liberty to engage in voluntary exchange.

In the latest report from Economic Freedom of the World, Chile is ranked #15 while Venezuela is at the very bottom.

P.S. Some people have tried to portray Chile as a failure, but such assertions are easily debunked.

P.P.S. Kudos to the World Bank for publishing a very substantive report. For what it’s worth, it’s the international bureaucracy most likely to produce sensible publications.

P.P.P.S. The only bad World Bank study I’ve encountered equated high tax burdens with a good report card.

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Last month, we summarized libertarianism in five images.

In the interest of fairness, now let’s give equal time to the other side. After all, statists deserve an opportunity to present their case.

And we’ll start with this image, which makes the same point about coercion found in the “two-sentences” column I shared two months ago.

Unfortunately for our leftist friends, coercion doesn’t lead to effectiveness.

So this next image aptly captures the inherent problem of statist solutions.

So now you understand why Santa Claus sometimes has a problem.

And what happens when you mix the coercive nature of government with the fantasy world of government-provided goodies? Well, President Eisenhower already gave us the answer, but here’s the visual version.

But let’s not forget somebody has to pay for this collectivist utopia.

And that brings us to the joy of taxation.

Last but not least, we’ll close with an image that illustrates how statism works in practice, which is why the message in this poster is so painfully true.

Having now presented five images for libertarianism and five images for statism, I suppose I could put together a poll to see which philosophy has more support.

But since libertarians are against untrammeled majoritarianism, that somehow doesn’t seem right. So instead I’ll simply recycle this bit of humor on the difference between the public sector and the private sector. Actually, there’s a scene from Ghostbusters that tells us everything we need to know.

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In 2016, I posed a rhetorical question about whether young people are so stupid that they shouldn’t be allowed to vote. After all, many of them thought Bernie Sanders would make a good president (of America, not Greece or Venezuela).

Well, maybe we really should increase the voting age. It seems 2016 was not an anomaly. Millennials are dangerously ignorant.

Here’s some analysis from CNN.

Millennials are…bringing a distinctly Millennial approach to policy and governing. And that might include Democratic socialism. Case in point: Alexandria Ocasio-Cortez, the 28-year-old Democratic socialist who won her primary in New York Tuesday in an upset over a 10-term incumbent. More than any other generation before them, Millennials are OK with socialism. A 2016 Gallup poll found 55% of those then aged 18-29 said they had a positive view of it (it’s worth noting 57% supported capitalism and 78% supported free enterprise). …Bernie Sanders’ presidential campaign was instrumental in mainstreaming Democratic socialism.

What’s particularly galling is that young people are pessimistic about their economic future and they’ve decided to blame capitalism for problems that exist because of excessive government!

Millennials’ economic situation also plays a role. …A recent study by the Federal Reserve Bank of St. Louis found Millennials born in the ’80s have a net worth 34% below what was expected. And student debt since 2009 has doubled to $1.4 trillion… For many cash-strapped Millennials in debt, Democratic socialism isn’t radical, it’s a way to fix a system they believe failed them.

In other words, young people want to make Mitchell’s Law a never-ending reality.

Let’s look at another example. Here’s some of what Michelle Goldberg wrote in a fawning column in the New York Times.

…all over the nation, people, particularly women, are working with near supernatural energy to rebuild democracy from the ground up… For younger people who see Donald Trump’s election as the apotheosis of a rotten political and economic system, it often means trying to remake that party as a vehicle for democratic socialism. …Alexandria Ocasio-Cortez, a 28-year-old democratic socialist, shook the Democratic Party by toppling Joseph Crowley, a 19-year incumbent, chairman of the Queens County Democratic Party and potential heir to House minority leader Nancy Pelosi. …the real red wave may be democratic socialism’s growing political influence, especially among young people. …The D.S.A., to which Ocasio-Cortez belongs, is the largest socialist organization in America. Its growth has exploded since the 2016 election… Many of the D.S.A.’s goals, reflected in Ocasio-Cortez’s platform, are indistinguishable from those of progressive democrats. But if the D.S.A. is happy to work alongside liberals, its members are generally serious about the “socialist” part of democratic socialist. Its constitution envisions “a humane social order based on popular control of resources and production, economic planning, equitable distribution, feminism, racial equality and non-oppressive relationships.”

In other words, these cranks are real socialists. They actually want government to own and manage the means of production (“popular control of resources and production” and “economic planning”).

This is a problem for the non-crazy left.

Talk of popular control of the means of production is anathema to many older Democrats, even very liberal ones. …After Ocasio-Cortez’s win, Pelosi denied Republican claims that socialism is ascendant in the Democratic Party. It’s hard to blame her for being defensive, since for generations “socialist” was considered a slur, and it’s one that’s hurled at Democrats indiscriminately.

But young people seem prone to fantasy.

…one recent survey shows that 61 percent of Democrats between 18 and 34 view socialism positively. The combination of the Great Recession, the rising cost of education, the unreliability of health insurance and the growing precariousness of the workplace has left young people with gnawing material insecurity. They have no memory of the widespread failure of Communism, but the failures of capitalism are all around them.

Needless to say, Ms. Goldberg doesn’t list the “failures of capitalism,” but it’s a very safe bet that she’s blaming free markets for problems caused by government (a common theme in US economic history).

No wonder young people are so deeply confused. This is probably what they’re taught in government schools.

But there is a silver lining. Courtesy of Libertarian Reddit, we can enjoy some humor poking fun at Ms. Ocasio-Cortez’s overly earnest form of socialism.

Amusing, but very unfair to religion. After all, we can’t go back in time to confirm details from the bible.

But we can look today at countries like Cuba, Greece, Venezuela, and North Korea to confirm the utter insanity of supporting any type of socialism.

Let’s close with a video from 2013. It’s about Obamanomics and young people, but it’s really about why big government makes it hard for young people to get ahead.

I especially like the explanation of how young people are big losers because of the entitlement state.

Makes me wonder if Ms. Ocasio-Cortez will take the lead on, say, Social Security reform when she gets to Congress?

Needless to say, I won’t be holding my breath.

P.S. Young people aren’t a (totally) lost cause. They may not like capitalism, perhaps because they confuse it with cronyism, but they are sympathetic to “free enterprise.”

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I’m a big believer that some images do a great job of capturing an issue.

Speaking of socialism, let’s look at some more images that reveal the essence of that bankrupt ideology.

Here’s a cartoon from Libertarian Reddit that does a great job of showing the real difference between capitalism and socialism.

Perfectly stated. Reminds me of the insights offered by Thatcher and Churchill.

Sadly, if you provide the statists with real-world evidence, many of them still prefer the world in top-right frame rather than the bottom-right frame.

Heck, the IMF actually publishes studies supporting equal levels of poverty.

As you might suspect, there are plenty of socialists who enjoy the benefits of capitalism while urging statism for everyone else. Think, for instance, about all the leftists who use tax havens.

Or this hipster millennial.

Maybe he could have a ménage à trois with Pajama Boy and Julia? Though only if everyone is guaranteed equal levels of disappointment.

Next is a helpful reminder from Bernie Sanders about the very thin line between socialism and communism.

Though I’m not sure there’s a meaningful difference.

Last but not least, this gem from Libertarian Reddit appealed to my juvenile sense of humor.

Basically the same message you find in the last item in this collection of socialism humor.

P.S. Here’s my two-part series (here and here) on the bizarre allure of socialism.

P.P.S. For additional examples of socialism humor, click here, here, here, here, and here.

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During the Obama years, I criticized the President for various green-energy scams that squandered money and produced scandals such as Solyndra.

And I also noted that many Republicans were happy to support corrupt subsidies to inefficient sources of energy so long as their voters got a slice of the loot.

Sadly, the same thing is happening with Trump in the White House. All that’s changed is that there are different groups sucking at the federal teat.

Catherine Rampell’s column points out how Trump wants the government to pick winners and losers in energy markets.

The GOP…definition of free markets turns out to be pretty confusing… It apparently includes allowing the president to personally dictate what companies must buy, from whom, and at what price; what products they should sell; which employees they should hire and fire; where they should locate… The Trump administration has taken action or raised questions in all these areas… And President Trump’s supposedly laissez-faire co-partisans in Congress have barely said boo. …If that doesn’t count as “picking winners and losers,” it’s hard to say what would. Efforts to prop up inefficient coal-fired plants are…a terrible idea from an economic perspective. The reason these plants are struggling, after all, is that they can’t compete with cheaper natural gas and renewables. Trump is wielding the power of the state to keep uncompetitive companies in business, and costing taxpayers and consumers lots of money in the process.

And remember that this intervention will destroy more jobs than it saves, just as was the case with Obama’s interventions.

This sordid story also is a perfect example of why politicians should never be granted open-ended power.

Trump is now defiantly claiming that “national security” requires bailing out his political allies in the coal industry. It’s the same absurd rationale he has lately invoked for other unfree-market interventions — including, ironically, our military-alliance-straining steel and aluminum tariffs and, perhaps soon, automobile tariffs. …Leave it to Trump to try to strong-arm the invisible hand.

The Wall Street Journal has a hard-hitting editorial castigating the Trump Administration for considering back-door bailouts and special subsidies.

…all of a sudden the Administration wants to do a Barack Obama imitation and play energy favorites. …The supposed problem is that the U.S. is producing an abundance of cheap natural gas thanks to the shale fracking revolution. As a result, national electric wholesale prices for natural gas have plunged by half since 2008… Meanwhile, government subsidies such as the 30% federal investment tax credit have boosted solar and wind production while driving down the wholesale cost. Many nuclear and coal plants unable to compete with renewables and natural gas may have to shut down over the next few years. …Thus, the rescue plan—er, regulatory bailout. According to the Trump memo, Section 202 of the 1920 Federal Power Act lets the Energy Secretary mandate the delivery or generation of electricity during an emergency. It also suggests that the President could use his authority under the 1950 Defense Production Act to “construct or maintain energy facilities” to protect national defense. …Mandating that grid operators buy more expensive coal and nuclear power would raise consumer prices and could reduce natural gas production that has been a boon to many states. And note to Mr. Trump: Energy is one of the biggest costs for steel and aluminum manufacturers. The government rescue for coal and nuclear is as politically abusive as Mr. Obama’s lawless policy to punish fossil fuels. A better way to make coal and nuclear more competitive is to keep chipping away at renewable subsidies and cutting regulation.

The editorial concludes with a very appropriate observation.

As Governor of Texas, Mr. Perry often visited our offices to explain why the U.S. government shouldn’t pick energy winners and losers. He’s still right even if he has moved to Washington.

Amen. Intervention in energy markets is bad when “green” groups get the handouts, and intervention also is bad when coal gets the goodies. That’s true in America and it’s true in other nations.

The Washington Post also correctly opined against this heavy-handed government intervention.

President Trump is preparing what could be the most astonishing and counterproductive instance of central planning the nation has seen in decades.

Mr. Trump last Friday ordered Energy Secretary Rick Perry to recommend ways to prop up struggling coal and nuclear power plants. …One option would require the purchase of electricity from coal and nuclear plants under a law meant to keep power flowing during emergencies, such as hurricanes. Another scheme would hijack the 1950 Defense Production Act, which allows presidential intervention to secure critical goods when national security is at stake. …Americans could pay hundreds of millions, and perhaps billions, more every year for energy. Wholesale electricity markets could collapse as efficient power plants failed to compete with subsidized dinosaurs.

The editorial wisely notes that Trump’s intervention will create a bad precedent that will be abused by a future Democrat president (actually, he’s building on Obama’s bad precedent, but it doesn’t help that Trump is making intervention a pattern).

If Mr. Trump proceeds and the courts somehow allow such a perversion of the law, it would be hard to stop the next Democratic president from, say, using emergency powers to force the purchase of renewables at the expense of coal, oil and natural gas. The president’s latest turn toward economic statism should be no surprise; it has been an animating principle of his presidency. …Mr. Trump is in the midst of picking unnecessary and increasingly costly trade fights with once-close allies, while assuring U.S. farmers that he will use state power — and, presumably, everyone else’s tax dollars — to preserve their margins. Now he is on the verge of asserting dictatorial control over energy markets, using powers meant to be reserved for real emergencies.

Call me crazy, but I want consumers to have the power. And that means allowing competitive markets to allocate resources and determine profitability.

Trump, by contrast, doesn’t seem to have any guiding principles. Yes, he sometimes supports good policy, but he’s also just as likely to favor intervention.

By the way, the Washington Post picked the wrong word in the title of its editorial. At least in theory, socialism means government ownership of the “means of production.” Trump doesn’t want the government to own energy companies. Instead, he wants to control them.

As Thomas Sowell observed when writing about Obama-era intervention, that’s technically fascism.

But since that term is now associated with other nasty attributes, let’s call Trump’s policy statism, corporatism, or cronyism. Or, if you like oxymorons, call it state-led capitalism.

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The good news is that Donald Trump is not imitating all of Herbert Hoover’s statist policies.

The bad news, as I explain in this interview, is that his protectionist mistakes could trigger a repeat of Hoover’s beggar-thy-neighbor protectionism that wreaked havoc in the global economy during the 1930s.

George Santayana is famous for warning that “Those who cannot remember the past are condemned to repeat it.”

Well, this is why I’m so agitated about what Trump is doing. It’s true that the economy will not be wiped out by the trade taxes he’s imposing today. But what happens when other nations retaliate, and then Trump doubles down with additional taxes on global commerce?

That’s a potential recipe for a big reduction in worldwide liberty. Which is exactly what happened in the 1930s, as illustrated by this chart from an academic study.

At the risk of understatement, that would not be good for American prosperity. And blue-collar workers would be among the victims since protectionism always destroys more jobs than it saves.

So what can be done about this?

The Washington Post reports on some bipartisan legislation that would curtail Trump’s authority to unilaterally destabilize world trade.

Sen. Bob Corker (R-Tenn.) introduced a bipartisan bill Wednesday that would give Congress new authority to check the president’s trade moves… Corker’s bill would require congressional approval when the president enacts tariffs under the auspices of national security, as Trump did last week in imposing levies on aluminum and steel imports from Canada, Mexico and the European Union. The legislation, which Corker released with a total of nine Democratic and Republican co-sponsors, is the most forceful congressional response to date to Trump’s protectionist trade agenda. …The bill’s prospects are unclear. Corker acknowledged that some Republicans are unwilling to cross the president, and Majority Leader Mitch McConnell (R-Ky.) has ruled out bringing up the measure as a stand-alone bill. But Corker’s bill appeared to be gaining traction on and off Capitol Hill on Wednesday. The U.S. Chamber of Commerce announced its support, as did Koch Industries. …Corker’s legislation would require the president to submit to Congress any proposal to adjust imports in the interest of national security. The legislation would qualify for expedited consideration for a 60-day period. …The co-sponsors are Republican Sens. Patrick J. Toomey (Pa.), Lamar Alexander (Tenn.), Mike Lee (Utah), Ron Johnson (Wis.) and Jeff Flake (Ariz.), along with Democrats Heidi Heitkamp (N.D.), Mark R. Warner (Va.), Brian Schatz (Hawaii) and Chris Van Hollen (Md.).

I’m sympathetic to such legislation, not only to thwart Trump’s protectionism, but also because I don’t think any White House should have so much unilateral power. In other words, I’m philosophically consistent. I didn’t think it was right for Obama to have the authority to arbitrarily change provisions of Obamacare and I don’t think it is right for Trump to have the authority to arbitrarily change provisions of trade law.

But let’s stick to the trade issue. Lower taxes on global commerce are one of the great achievements of post-World War II era. Policy makers around the world have lowered barriers and allowed the free market more breathing room.

That’s been a very successful policy.

By the way, politicians from developing nations deserve special credit. They’ve been especially aggressive in lifting the burden of trade taxes. Here’s a chart prepared by the Confederation of British Industry.

I started today’s column by warning that Trump shouldn’t emulate Hoover. I’ll end the column by pointing out that Reagan is a better role model.

And if that doesn’t work, maybe we can educate the President on why it’s good to have a capital surplus, which is the flip side of having a trade deficit.

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