In my forthcoming (July 18) book, The Problem with Socialism, I
describe how socialism is always and everywhere an economic poison regardless
of the form of government. Socialism is socialism. As Frederic
Bastiat explained in his classic, The Law, the imposition of one
social “plan” or set of “plans” on all of the society – a defining
characteristic of all varieties of socialism — will have the same effects
whether it is instituted by democracy or by a dictatorship. Obamacare
is Obamacare regardless of whether it was imposed by democracy or by a
dictator.
All of history has proven that the effects of socialism
are always and everywhere mass impoverishment; the destruction of civil
liberties; tyrannical government; a population dependent on the state for
survival; and the enrichment of the ruling class. Everyone is equally
impoverished while the political elite live high on the hog, whether it is
the Soviet Union, African socialism, Latin American socialism, or any other
kind of socialism.
At best, socialism turns people into spoiled children constantly demanding
more and more freebies at the expense of . . . . who knows? At worst,
it becomes a totalitarian nightmare where dissenters are mass murdered by the
millions, as was the case with twentieth-century socialism all over the
world.
The latest display of the effects of the malicious myth of “democratic”
socialism is the economic implosion of oil-rich Venezuela. When the
proud socialist Hugo Chavez became president he nationalized industries;
redistributed land and businesses to political cronies; imposed pervasive,
government-imposed price controls; and made himself popular by giving away
lots of free stuff – even houses. He was a Latin American Bernie
Sanders, in other words. The entire socialist world spoke of the new
“socialist paradise” of Venezuela.
But socialism is always and everywhere economic poison because of several
fundamental reasons. It destroys work incentives for one thing.
It is also guided by the false pretense that a few politicians can somehow do
a better job of possessing and utilizing the detailed knowledge that millions
of consumers, entrepreneurs, workers, business managers, investors, and
market participants who make real market economies work possess. And it
foolishly asserts that rational economic decisions can be made without the
benefit of private property, market prices based on supply and demand, and a
market feedback mechanism that rewards those who serve their customers well
with profits while punishing those who do not with losses. By ignoring
these realities the economic implosion of Venezuela was perfectly predictable
and inevitable.
Venezuela has become reminiscent of the old Soviet Union where there were
shortages of everything because of the economic chaos caused by the
elimination of markets based on private property and prices determined by
supply and demand. A May 21 article in The Telegraph by Szu
Ping Chan about how socialism turned Venezuela into “debt and hyperinflation
hell” describes how people there now routinely “queue alongside hundreds of
other Venezuelans for food, nappies, milk, and other basic goods.”
Everything is in short supply – or no supply – thanks to Chavez’s socialist
price controls. Black markets are the only thing saving the Venezuelan
economy.
A recent “yahoo” news article entitled “Venezuela: Where a Hamburger is
official $170” wrote of how stores are shuttered; restaurants are empty;
“nobody is buying anything”; there are long lines of people waiting around
stores for something – anything – that they can use to barter for things they
actually need. This again is exactly reminiscent of daily life in the
old Soviet Union.
Venezuela has become one of the worst places in the world to do business,
ranking 186th out of 189 in a World Bank index of “business
friendliness.” Only Libya, South Sudan, and Eritrea were worse.
Political corruption is rampant; of course. No one can be in business
without paying the “appropriate” bribes to one or another political hacks and
criminals.
People in Venezuela “cannot afford to get ill because when you turn up at
the hospital there is nothing,” says one Venezuelan cited by The
Telegraph. Sick people are desperate for antibiotics, which are
all but non-existent.
Explosive government spending combined with declining oil prices made
Venezuela a “debt hell” as Chavez and his successor, fellow socialist
demagogue Nicolas Maduro, refused to admit the folly of their ways and
resorted to massive money printing. Today a hamburger costs the equivalent
of $170; a night in a hotel is $6,900; and middle-class monthly salaries
savaged by inflation are worth about $35. Food prices more than tripled
just in the past month; and the annual inflation rate is 4,505 percent.
One Venezuelan interviewed for the Telegraph article said that he
had to spend more than half his monthly income just on toilet tissue.
Socialism has resulted in the Zimbabwe-ization of Venezuela.
The Venezuelan government fails to perform what all governments claim to
be their primary responsibility: maintaining law and order in society.
Caracas is now the world’s most violent city in the world according
to the Council for Public Security and Criminal Justice, which computes such
rankings.
The drinking water in Flint, Michigan is like fresh, Rocky Mountain spring
water compared to the drinking water in Venezuela, described by a May 29 New
York Times article about the country’s “hunger, blackouts, and
government shutdown” as “a brownish color” that makes people sick, with many
Venezuelans contracting “skin irritations from showering . . .” One
woman is quoted as saying that because she has been showering with this
government water “her body is filled with small bubbles and they sting
horribly.”
Like all other socialist demagogues, Venezuela’s wealthy,
living-lives-of-luxury, socialist political elite blame all the disasters
they have created on various bogeymen, from “the American government’s
efforts to destabilize the country” (according to the New York Times),
to “a drought that has crippled Venezuela’s ability to generate hydroelectric
power.” This last reason is reminiscent of how the Soviets blamed the
results of their disastrous policy of socialized agriculture on seventy
straight years of “drought.”
Just about anyone who is able to leave Venezuela is doing so. So
far, it’s a much easier task than leaving that other Caribbean socialist
“paradise,” Cuba.
Venezuela has joined a very long list of countries whose economies have
been utterly destroyed by just a few years of socialism. Meanwhile, in
the U.S. hordes of “millennials,” the first PC generation, a generation that
has been indoctrinated since kindergarten in the alleged evils of capitalism
and taught to worship Big Government as their savior, are wildly cheering a
75-year-old communist who wants to be president on the promise of making
America the next Venezuela. (Like the Soviet communists who called
their government the Union of Soviet Socialist
Republics, not the Union of Soviet Communist Republics, I
don’t distinguish between “communists” and “socialists”; they’re all the same
gang of looters, frauds, demagogues, and tyrants).
