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Friday, June 30, 2017

The Folly of Socialism - The Millennial Review

The Folly of Socialism - The Millennial Review
The Folly of Socialism
1/3/2017



J. Alexander Haney, Fiscal Policy Contributor
In 2015, we saw the meteoric rise of Bernie Sanders, which sparked a revolution of sorts among millennials, especially those currently in college. Running on a platform of social, and economic “justice,” Sanders managed to accumulate a massive amount of support. Asserting his stance as one based on equality and justice, he ensured that rhetoric unfavorable to his ideals would come across as greedy and crass. Virtually no one in the United States today would ever argue that justice is a bad thing or that equality is detrimental. However, justice and equality take different meanings with the far left. The ideas propositioned by the Vermont senator are certainly nothing new, and have been a part of society and economics since either has existed, whether in practice or in name. And, both in practice and in name, socialism has failed, time and time again. Quite simply, the fatal flaw of socialism is its failure to take human nature into account. Socialism is dependent on altruism by all, be it by choice or by force.

Communism holds itself up in theory as a model of justice and economic fairness, but every time it had been tried, it failed to provide either of those things. In fact, it usually results in the exact opposite. Every state that has adopted communism has either collapsed, like the Soviet Union, or has become one of the worst places to live on Earth, like North Korea. In terms of other socialist states that have not gone full communist, there are two options for potential patterns. They have either stalled economically after switching from capitalism to socialism, or they have begun transitioning to capitalism from socialism, and have seen their economy grow.

Scandinavian countries like Sweden and Denmark are commonly referred to as socialist countries, but while some aspects of the Nordic economy, like taxation, are very socialistic, others, such as market regulation, are much more open and capitalistic. As shocking as it may seem to many on the left, Denmark ranks about the same as the US in terms of economic freedom according to the Heritage Freedom Index. The Scandinavian countries have set themselves towards fiscal reform and more liberalized economies ever since they had a major financial crisis in the early 1990s, and the improved economies we see today are a testament in showing the power of the free market and fallacy of Scandinavia being socialistic.

With communism, we come to see that the human rights violations prevalent in communism aren’t examples of the system being implemented poorly. Rather, they are proof of an inherent design flaw found within communism. When the government is in charge of enforcing equality, it means that they will work to keep everyone in society down in order to make sure no one rises above the status quo, and they will ensure that no one produces more than what is required to meet their most basic needs. It requires a dramatic reworking of society that relies on everyone’s voluntary participation. Since that’s unrealistic at the country (or even town for that matter) level, governments have to use force, and this is where the purges, gulags, and secret police comes in to forcibly impose equality upon everybody. All over the world, whether in the past or present, we can see the ramifications of those choices.

Most recently, we may look to Venezuela as an example of the destructive nature of socialism. Venezuela sits on the world’s largest oil reserve. Given the monetary value of oil in today’s world, it stands to reason that the South American state would boast exemplary markets, a high standard of living, and little to no debt. And in fact, Venezuela did tout those attributes decades ago, and was by far the wealthiest country in South America. In fact, Venezuela’s wealth per capita was about as high as that of West Germany during 1950. Indeed, Venezuela used to be quite a prosperous country.

Unfortunately for the people of Venezuela, the opposite is true today. The IMF projects inflation in Venezuela will increase 1600% this year. If you’ve not come across any pictures of supermarkets in Venezuela as of late, depictions show the shelves as all but entirely bare. Tom Woods does a phenomenal job outlining the problems of Venezuela due to socialism there. As Woods brings up, Chile, with almost no natural resources, and having thrown off a formerly Communist government, now holds the third highest standard of living in the Western hemisphere. Per capita GDP has risen, poverty has dropped, jobs have increased, and general wealth in the area has skyrocketed from its former position. It is behind the United States and Canada, respectively, in terms of standard of living.

It’s unfortunate to see that despite so much evidence to the contrary, many on the left still see socialism as a viable economic policy for the country and the world. When we are shown the rosy picture of what socialism is supposed to represent, it is important for us to show those advocates the real human cost that true socialism imposes on its people. As much as college tuition may cost, socialism takes away something far more valuable than that, and no promise of free college should justify sacrificing one’s freedom and economic well-being.


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