The Example of Socialism

Last presidential election cycle, we had an avowed socialist in Bernie Sanders, who gathered a significant number of votes in the Democratic primaries. In New York, voters elected a young self-described socialist, Alexandra Occasio-Cortez, to Congress and she has become the darling of liberals.

Surveys also show that there is a small but growing positive image of socialism among young people in the country.

The rise in the positive opinions of young people regarding socialism is in part, it seems apparent, due to a de-emphasis of social studies and history in our schools and an ignorance of the lessons of Marx, Lenin and Mao-the early founders and formulators of socialist thought. (As a related aside, let’s say up front that not all socialists are dictators or authoritarian. However, socialism by definition asks for a more powerful government and more government intrusion into the day-to-day lives of individuals. So, the question then is how to draw the line on government power and it can be a slippery slope. Nobel Prize economist Milton Friedman wrote years ago, in his best selling book Capitalism and Freedom, how capitalism and individual freedom are linked to each other.)

 

However, it’s odd that people ignore the effects of socialism on the economies of socialist countries. We have examples to use, and ongoing socialist experiments around the world that will show us what happens.  As the cliché goes, “those who refuse to learn from history are doomed to repeat it” so let us indeed look at history.

China in recent years has had an economy that has been growing at an envious rate. If that’s so, then aren’t the principles of Mao and socialism working? Well, actually no. China is an example of how moving away from socialism works dramatically.

When Mao took over and implemented his dictatorship and aggressive government control of the economy, China’s economy foundered for decades and the world’s largest nation was never among the top nations in economic output or per capita income or GDP. After Mao’s death, Deng Xiaoping came to power in China and forced through widespread market-economic reforms. While maintaining the dictatorship, he encouraged private business, beginning slowly with agriculture and expanding to large parts of the economy. The economy began to grow at a pace that was the envy of the world and China now is the second largest economy in the world, while not being even in the top ten only a few years ago. Small but increasing doses of capitalism in China has made them a world economic power.

 

We have also have two vivid examples in the news in recent months in our own hemisphere.

Venezuela was the pinnacle of economic success in Latin America. Fueled by its vast oil reserves, larger even than Saudi Arabia’s, the economy was the largest in Latin America in the 1980’s and was growing at a healthy pace. Per capita income was the highest in the region (Its economy had been the 4th largest in the world in 1950, ahead of even Japan, South Korea and China).

The last twenty years, under two ‘Presidents’ who openly proclaimed socialist ideas and aggressively pursed socialism, Venezuela is very different. Today, Venezuela has one of the poorest major economies in Latin America – and the International Monetary Fund (IMF) foresees it getting far worse. By 2022, the organization predicts Venezuela’s GDP per capita will be just $12,210, which would be a massive economic setback – the Venezuelan economy would be even poorer than it was twenty years ago before the socialist regime of Hugo Chávez first came to power (in 1999). In the last several years, the economy had worsened enough that the government started rationing a wide range of goods. Last year, it became so bad that the list of rationed goods included toilet paper.

 

And for all the praise that radical film maker Michael Moore heaps on Cuba, it actually is an example of how bad things can be and how long the consequences last. When Fidel Castro took power in the 1950’s Cuba became aggressively socialist. Private property and businesses were confiscated and the government ran almost all parts of the economy. For example, Michael Moore in his film on Cuba talks about how great it is that everyone in Cuba has access to health care. True, but he leaves out the part of how long you have to wait to actually get it. People who travel to Cuba talk about how beautiful it is and how nostalgic it is with the old cars and quaint storefronts.  The flip side, if you live there, is that you can’t get new cars and have to drive and try to keep running the ones that were there when Castro came to power or shortly afterward.

Ever since Castro came to power and brought his socialist ideals to the country, the country has lived off massive handouts. First, the Soviet Union gave billions to Cuba just to keep it afloat. They couldn’t afford even the lower standard of living that they had without Soviet cash. Most recently, Venezuela has been giving oil money to Cuba to help keep it afloat. But now, given the state of the Venezuelan economy, Venezuela has no more money to send to its socialist friends in Cuba. After sixty years of socialism, Cuba can’t live without vast sums of money from other people, so the Cuban government announced Friday that it is launching widespread rationing of chicken, eggs, rice, beans, soap and other basic products in the face of a grave economic crisis.

Cuba’s grocery stores are government owned and run. The country imports roughly two thirds of its food at an annual cost of more than $2 billion and brief shortages of individual products have been common for years. In recent months, a growing number of products have started to go missing for days or weeks at a time, and long lines have sprung up within minutes of the appearance of scarce products like chicken or flour. Many shoppers find themselves still standing in line when the products run out, a problem the government has been blaming on “hoarders.”

One person, interviewed by a US news network said the new measures would do nothing to resolve Cuban’s fundamental problems.

“What the country needs to do is produce. Sufficient merchandise is what will lead to shorter lines,” he said.

For those living in Michael Moore’s paradise, the idea of going to a grocery store and just getting whatever you want that’s on the shelf is unheard of….and now would be criminal.

We can learn the lessons of socialism….but if we do, we won’t like socialism and won’t like living in an economy that’s socialistic.

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