Socialism is an economic failure. International socialism didn’t work in the Soviet Union. National socialism didn’t work in Germany. And democratic socialism, while avoiding the horrors of its communist and Nazi cousins, also has been a flop.
Socialism fails because it attempts to replace market-determined prices with various forms of central planning based on government-dictated prices.
Moreover, socialism channels self-interest in a destructive direction. In a free market, people get income and improve their lot in life by satisfying and fulfilling the needs of other people. In a socialist system, by contrast, people squabble over the re-slicing of a shrinking pie.
There’s a famous Winston Churchill quote that basically says that the ostensible problem with capitalism is that people aren’t equally rich, whereas the supposed attractiveness of socialism is that people get to be equally poor.
The Princess of the Levant sent me a visual version of Churchill’s quote, and it’s definitely worth sharing.
Both the Churchill quote and the image on the left are very entertaining. And they effectively make the point that statism is very bad for ordinary people.
That being said, they’re not actually accurate.
Sure, the masses are equally impoverished by socialist systems, but a handful of people escape this fate. You probably won’t be surprised to learn that the government elites have very comfortable lives. And that may be the understatement of the century, as indicated by this report in the U.K.-based Daily Mail. Here are some very relevant passages.
“The daughter of Hugo Chavez, the former president who once declared ‘being rich is bad,’ may be the wealthiest woman in Venezuela, according to evidence reportedly in the hands of Venezuelan media outlets. Maria Gabriela Chavez, 35 … holds assets in American and Andorran banks totaling almost $4.2 billion. … Others close to Chavez managed to build up great personal wealth that was kept outside the petrostate. Alejandro Andrade, who served as Venezuela’s treasury minister from 2007 to 2010 and was reportedly a close associate of Chavez, was discovered to have $11.2 billion in his name … During his lifetime, Hugo Chavez denounced wealthy individuals, once railing against the rich for being ‘lazy.’ ‘The rich don’t work, they’re lazy,’ he railed in a speech in 2010. ‘Every day they go drinking whiskey – almost every day – and drugs, cocaine, they travel.’”
What a bunch of hypocrites. They denounce successful people who presumably earn money honestly, yet they amass huge fortunes by pilfering their nation.
And what’s been happening in Venezuela is no different, I’m sure, than what happened in the past in Nazi Germany, the Soviet Union, and other socialist regimes.
And I’m sure it’s still happening today in other socialist hell holes such as North Korea and Cuba. The elite enjoy undeserved and unearned wealth while ordinary people live wretched lives of deprivation.
Everyone’s equal, but some are more equal than others.
Let’s close by citing some wise words about the impact of socialism on ordinary people from Kevin Williamson of National Review.
“The United Socialist party’s disastrous economic policies have led to acute shortages of everything: rice, beans, flour, oil, eggs, soap, even toilet paper. Venezuela is full of state-run stores that are there to provide the poor with life’s necessities at subsidized prices, but the shelves are empty. … While Venezuela has endured food riots for years, the capital recently has been the scene of protests related to medical care. Venezuela has free universal health care — and a constitutional guarantee of access to it. That means exactly nothing in a country without enough doctors, medicine, or facilities. Chemotherapy is available in only three cities, with patients often traveling hours from the hinterlands to receive treatment. But the treatment has stopped.”
Now ask yourself whether you think the party bosses are suffering like other citizens because of a lack of food and health care (or toilet paper!).
And that giant gap between the treatment of the elite vs. the peasantry tells you everything you need to know about socialism, whether it’s the brutal kind practiced in places such as Venezuela or the kinder, gentler (but equally hypocritical) versions found elsewhere.
Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy at the Cato Institute. Mitchell is a strong advocate of a flat tax and international tax competition.