• Tag Archives Socialism

  • A Virus Worse Than the One from Wuhan

    Posted on by Azrael Comment

    The Wuhan virus pandemic may teach us many new lessons before it’s over—in science, hygiene, interpersonal relations, economics, and more—but one thing is plainly evident already. Socialists need to self-isolate.

    They are learning nothing from the crisis. Indeed, these righteous opponents of exploitation are exploiting it to promote their stale, toxic brew of concentrated state power as the solution to every problem—even when the state itself is complicit in the problem’s severity.

    For example: “In pandemics, we are all socialists,” declares Ross Barkan in City and State magazine. Sorry, Ross, but you don’t speak for me. I’m not about to shun one virus and embrace an even worse one. Barkan thinks profit is the problem in health care and if we just turn the whole thing over to the federal government, we can eliminate profit and all get better health care for “free.”

    But wait, there’s more! Just when you thought a virus calls for maybe medication or face masks, doctor-wannabe Barkan says it cries out for “rent stabilization available to anyone” and government ownership of utilities. That’s right. Illness in the land? Seize the power company!

    Former bartender, now expert-on-everything Alexandria Ocasio-Cortez declares that measures to combat the virus must include “making moves on paid leave, debt relief, waiving work req’s (requirements), guaranteeing healthcare, UBI (Universal Basic Income), detention relief,” etc. You’d think the federal government must be stricken with a bad case of a budget surplus and disappearing debt.

    The amazingly accomplished problem-fixer Bernie Sanders took time out from selfless public service to claim that the pandemic is proof we have too many competing insurance companies. (Do you follow that?) Replace them, he says, with just one big one in Washington that dispenses Medicare for All. He freely admits he neither knows nor cares how many tens of trillions of dollars that might cost. Coincidentally, that’s precisely the same attitude my rat terriers take regarding their vet bills.

    Boasting a resume no more complicated than “social activist,” Alexis Isabel shamelessly pronounces over her avocado toast that “this pandemic is showing how the US has failed by promoting individualism instead of collectivism.” Somebody please inform her that the virus originated in one-party, collectivist China, whose regime lied about it and jailed individual dissidents who tried to warn us about it.

    Yes, these reactions to the pandemic confirm my worst fears about socialists. They are quacks, snake-oil salesmen, con men, shysters. While others are pouring out their hearts and treasures to actually help suffering people and solve a calamity, these pontificating mountebanks are proposing remedies akin to medieval blood-letting.

    To socialists, I say: Here’s the kind of emergency in which you can shine. No need to wait for government action. In this panic environment, you can show the way! All you have to do is get your virus-free comrades together, sell your possessions and share the proceeds communally. If this form of “brotherhood” ever had a chance of success, surely it’s now. In a disaster scenario, people are willing to give just about anything a whirl.

    Once you’ve assembled, then you can tax each other to your heart’s content. You can impose regulations on yourselves, the more the merrier. If you catch anybody getting rich by creating wealth for somebody without permission, you can vilify and expel them. You can even write personal checks to the government; indeed, send them everything you’ve got, if you want. The country will marvel at the example you’ll set.

    Nothing prevents socialists from doing any of these things by voluntary agreement amongst themselves. That’s one of the great advantages of capitalism: You and your willing friends can practice socialism if you so desire, whereas a great disadvantage of socialism is that you can’t practice capitalism until socialism fails so miserably that even its sycophants throw in the towel.

    But a safe bet is that in a world of some eight billion people, not a single socialist will make the slightest attempt to do any of these things. The whole idea of socialism—which explains the inherent hypocrisy of its advocates—is not to freely practice what you preach. It’s to use power to force others to practice what you preach.

    No doubt that extraordinary moments require extraordinary responses, even from government. A case can be made that at least some measures to combat an invasive virus is a matter of national defense, the most legitimate purpose of government and the one that socialists are usually the most reluctant to support. The point of this article is not to offer all the right answers even if I knew what they were, but rather, to warn us all not to lose our heads, or inflate the capabilities of the state, or welcome a heap of new problems by drawing the wrong conclusions and imposing non-sequiturs as long-term policy.

    In a powerful commentary in the March 20 edition of The Wall Street Journal, Kimberley Strassel puts it bluntly:

    Here’s the lesson of the virus so far: Relying solely on government bureaucracy is insane. To the extent America is weathering this moment, it is in enormous part thanks to the strength, ingenuity and flexibility of our thriving, competitive capitalist players.

    “Drug companies,” notes Strassel, “will save lives, even as Bernie Sanders is denouncing them.”

    If the pandemic truly argues for a short-term boost in government spending, let’s remember that near-record peacetime deficits in a booming economy (mostly for stuff socialists favor and demand more of) put us in a terrible financial position to afford new spending. For its fiscal insanity, the federal government deserves not more power, money, and cult-like worship but the harshest calumny for its hopeless mismanagement.

    Before we embrace more government to bail out a sinking private sector, let’s pause and appreciate that it’s the private sector—even in a crisis—that bails out the government sector every day of the week. Where would government be if there wasn’t a private sector to pay its taxes and buy its burgeoning debt? How much could it spend if private people and businesses didn’t earn it in the first place?

    We should be naturally suspicious of any ideology that requires a deadly, worldwide pandemic to make its case superficially viable, if only for the short-term. Surely, the need to stuff the statist genie back in the bottle when this is over will be existentially urgent, or the long-term cost to our liberties and economy could outweigh any short-term victories against the virus. Yet, the collectivists are telling us that they want pandemic-like behavior from government now and forever, crisis or no crisis.

    In the 14th Century, the Black Death wiped out about a third of the European population. In those superstitious times, governments responded in many counterproductive ways. But fortunately, the world did not descend into a permanent Dark Age. Centers of power and coercion actually began to break down as early as the Renaissance of the 15th Century, followed by the Reformation of the 16th and the Enlightenment of the 18th. The world was unimaginably freer in the 19th than it ever was before, and more prosperous by many orders of magnitude because of it. Socialism could have institutionalized the misery of the Black Death but fortunately the world was smart enough to move in other directions.

    Socialism is an intellectual virus, and it’s more deadly than the one from Wuhan. There are hordes of Venezuelans, Cubans, North Koreans and former East-bloc citizens who attest to that. If anyone needs a short refresher course on the topic, here’s a list of recent articles that raise questions about government’s role in the present emergency instead of blindly endorsing its dubious and massive expansion:


    Lawrence W. Reed

    Lawrence W. Reed is President Emeritus, Humphreys Family Senior Fellow, and Ron Manners Ambassador for Global Liberty at the Foundation for Economic Education. He is also author of Real Heroes: Incredible True Stories of Courage, Character, and Conviction and Excuse Me, Professor: Challenging the Myths of Progressivism. Follow on Twitter and Like on Facebook.

    This article was originally published on FEE.org. Read the original article.


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  • Why Socialism Often Leads to Tyranny

    Posted on by Azrael Comment

    There is plenty of anecdotal evidence that communism leads to tyranny. Mention the countries North Korea, Cuba, the Soviet Union, Mao Tse Tung’s China, East Germany, and Venezuela, and most people immediately think of an oppressed population with almost no economic opportunity and no political freedom. The words communist dictatorship roll off the tongue like the two words have gone together forever. In fact, in an extreme irony, communism, ostensibly the most egalitarian form of government, in two cases led to the least egalitarian form of government: royalty or the rule of one family over time. The Kim family in North Korea and the Castros in Cuba have been ruling their countries like the kings and queens of old for some time.

    Sometimes it is argued that the personalities involved lead to tyranny, not communism or socialism. Joseph Stalin, Mao Tse Tung, Fidel Castro, Erich Honecker, and Pol Pot are all bad people, but the personalities at the top matter little. Once a communist form of government is established, tyranny is the only result, regardless of which government official Game of Thrones’d their way to the top. Let’s examine the causal links that make communism a living hell for the people who have to live with it.

    The good news is you are entitled to housing, education, health care, and food. But that doesn’t mean people no longer have to work. The Soviet Constitution of 1936-Article 12 stated that “Labor in USSR is a duty and honorable obligation of each able citizen according to the principle: ‘Those who don’t work—don’t eat.’”

    If you persisted in demanding your right not to work, you wound up in the gulag, so thank God you live in a free enterprise, democratic society.

    The real issue that needs to be addressed here is that a government that controls everything can quash dissent by changing the economic situation of anyone who is pointing out their defects or is involved with the opposition. In a communist society, all jobs, all levels of education, the national police, the medical system, the judicial system, the electoral system, the housing stock, the food distribution system, the military, the press, and all forms of transportation are controlled by the central government.

    Write an insightful article about how a local government official is making a huge mistake (if you can find a computer to write it on), and you may find your apartment changed to the worst one available in a city where you don’t want to live. You could be reassigned from the job you trained years to get. For those of you who think the government using the medical system to advance its own interests is the fevered paranoia of a deranged libertarian, I would remind you that the Hong Kong protestors have developed a separate medical network rather than use public hospitals.

    When most of us interface with the outside world, we expect the highest possible pay for the work we do, and when we buy things, we expect the highest quality at the lowest possible price. Economics adds up those personal tendencies over millions of people in large, complex societies and comes up with a few simple rules that describe economic behavior. Supply and demand, marginal revenue and marginal cost, the theory of money, and specialization and exchange are really just simple rules that take all people’s actions and abilities into account and arrive at a solution that balances the overall societal equation.

    Communists and socialists don’t like these simple economic rules and come up with their own, such as “from each according to his ability, to each according to his needs” (your needs are generally unlimited), which conflicts with human nature. When you implement policies that conflict with human nature, you have to use force to implement them.

    One example of arbitrary socialist economics is Venezuelan President Nicolas Maduro’s drastic intervention in the electronics businesses of Venezuela in 2013. The government of Venezuela basically arrested the managers of one electronics store chain and forced the company to sell its products at lower prices. A few people got a cheap television on a one-time basis thanks to coercive government intervention, but you can bet that any ability to buy quality electronics at a good price in Venezuela is now gone.

    A more serious example of communist economics is the Soviet farm collectivization of the 1930s. All the private, family-owned farms of the Soviet Union were converted to large collectivized farms. Stalin privately admitted to Churchill that 10 million people died, either from starvation or resistance to the forced farm collectivization. With a communist dictatorship, when a leader goes off the rails, there are no moderating forces that bring compromise or allow negotiation for alternative paths to lead a society toward its goals.

    Every person who works in a communist society is paid by the government and knows they will be paid whether the organization they are working for provides goods or services to customers or not. This is very different than a society where most companies are private and employees know that if the company or the part of the company they work for doesn’t sell products that pay the companies expenses, they won’t be employed anymore. A communist society also has no private company competition to provide improved, cheaper, and higher quality goods and services.

    A communist society’s productivity is a mere fraction of the productivity of an economy based on capitalism and free enterprise. The work ethic deteriorated so severely in the Soviet Union that a saying began circulating among the workers: “They pretend to pay us, and we pretend to work.” For a society to operate at an economic level much lower than its potential for generations is a loss that can never be regained.

    One great defender of liberty in the United States that never gets much credit is your local police department. They enforce the laws we all care about—murder, assault, robbery—but they report no higher than the local mayor or county supervisor and are paid for by local taxes.

    Communist societies are very top-heavy. They all have national-level police departments with ominous-sounding names that enforce the one true ideology over the entire country. In many communist countries, these national-level police forces turn family members against each other by asking children to turn in their parents if they say or do something against the government. One phone call seals your fate if you are a dissenter or independent thinker who is questioning how the government is doing things.

    To think about this concretely, imagine some high-level government official in the United States said another political party needed to be eradicated by force and/or locked up in prison. They’d have to get the law passed and then get thousands of local police departments to enforce it—a daunting task. Decentralized power is a power that defends liberty.

    Socialism is communism-lite. They believe in nationalizing some industries and or important societal functions but not all. Socialists will usually nationalize utilities, transportation, and large industries that tend to have labor problems. Here, the personalities involved matter a lot. Socialist governments either respect the prior governmental rules of free elections, separation of powers, and individual choice, or they push for complete government control of everything by their political party and end up allowing no dissenting political parties or individuals.

    To understand whether socialism leads to communism, we will study two cases. The first case is Britain after WWII when socialist parties were elected to national political office. The second case is Venezuela, where Hugo Chavez was elected president in 1999 on a socialist platform.

    These post-war British socialists took it pretty seriously. They nationalized coal, electricity, steel, and the railways and set up the National Health Service to provide government-run health care. Farms and grocery stores were allowed to be private, and the British electoral system was left to allow free and fair elections. After a number of years, the British economy performed poorly under socialism, and the British people elected politicians who believed in free enterprise and turned things around. Socialism doesn’t always lead to communism, and Britain pulled back from the brink when they saw that the socialist promise led to everyone being worse off.

    In Venezuela, the democratically elected Chavistas pushed for governmental control and brought in Cuban intelligence agents to assist them in quashing dissent and controlling the population. Venezuela had a special problem in that the government tried to force businesses into selling goods and services at a loss, implemented draconian currency controls, and were then surprised when the businesses stopped operating. The result in Venezuela was that stores had no goods on their shelves, hospitals had no medicines or machines that worked, and ordinary people took to looking through trash for food. Various political maneuvers were implemented by the Chavistas, the legislature was restructured, the judiciary was stacked, and the electoral system was compromised.

    Now, any political avenue for changing the government in Venezuela is gone, and they have the very dictatorship that characterizes communist societies, along with a broken economy that works very poorly, even by communist standards. If you want to implement communism, you start up mass production of staples, implement rationing, and wink at the black markets that spring up. In Venezuela, the socialists pushed their way through to dictatorship and tyranny, and a complete economic breakdown was the result.

    As I’ve said before, a communist society controls almost every personal, educational, political, and economic aspect of society. When faced with a government that has all those levers of control, you can be the toughest, meanest, smartest person and have people who agree with you—and your chance of changing the people in charge of the government is very low.

    Once the communist party in any given country has command over almost every control point, they all seem to have enough competence to use that authority to stay in power. Someone joked to me once that communism is the Hotel California of political systems—once you are in it, you can never leave. I can think of very few cases where “the people” overthrew a communist government. When a communist government moves on to a more open, pluralistic society, it is almost always because the people at the top decide communism is a bad idea and it is time to move on.

    Gorbachev opened the door, and communism fell in the Soviet Union. When communism fell in the Soviet Union, the countries in Eastern Europe that had communism forced on them threw off that yoke. In China, the people at the top decided to allow some free enterprise and individual opportunity to spring up while not giving up political control.

    A healthy society proactively avoids concentrating all power and resources in one party or person. This is more than just having multiple political parties and elections. It is the deliberate structure of society so that layers of local government, private companies, private or local educational institutions, civic organizations, judicial and police systems, individuals with personal wealth, non-profits, and religious organizations act as a brake on any party or person that goes off the rails and attempts to implement a dictatorship over society as a whole. A healthy society has private businesses that have to serve customers to stay in business.

    In a healthy society, politicians are given power relating only to their function: legislating, performing legal judgments, or managing a very specific, well-defined part of the government. Checks and balances with other offices of government are implemented to further reduce the power of government officials. The next time you get angry at the person your fellow voters put into office, remember that limited government is the tool that makes it so that leader can do fewer things that affect your life.

    The siren song of socialism and communism is alluring. Perhaps it is human nature that we want to be taken care of in all circumstances and be assured that no other person has material circumstances much better than our own. But the record is crystal clear. Socialism and communism lead to underperforming economies, loss of individual opportunity for generations, equality implemented by everyone being poor except the party apparatchiks, lack of innovation and progress, and incredible political and religious oppression. The next time you vote, look past the siren song and vote for someone who understands where freedom and liberty really come from.


    Thomas Gordon

    Thomas Gordon is a Silicon Valley Software Engineer with extensive UCLA Economics training who has blogged on financial matters as The Market Flash on Seeking Alpha.  Twitter tag: @flash7gordon

    This article was originally published on FEE.org. Read the original article.


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  • Why Cuba’s Infant Mortality Rate Is so Low

    Posted on by Azrael Comment

    Fidel Castro, the dictator who ruled Cuba with an iron fist for almost six decades, has been dead for more than three years now. Unfortunately, his regime didn’t die alongside him. The Caribbean’s largest island is still under the burdensome yoke of communism.

    Since Castro took over in 1959, Castroism has been characterized by the brutal repression of political and civil rights, as well as low economic growth. Real GDP growth averaged a meager one percent from 1959 to 2015.

    Despite the lack of freedom and the poor economic track record, Cuba is often praised for its social achievements in health care and education, some of which rival developed countries. A good example of this is the Infant Mortality Rate (IMR), which is defined as the share of children dying before their first birthday. The graph below plots Cuba’s IMR against four developed countries:

    Surprisingly, Cuba’s IMR in 2017 was lower than that of both the U.S. and Canada: 4.1 deaths per 1,000 live births as opposed to 5.7 in the United States and 4.5 in Canada.

    This seems counterintuitive. How could a poor country like Cuba, whose income per capita is a fraction of those of developed countries, outperform two of the world’s wealthiest nations?

    There are a few possibilities, both of which involve health care spending. Are these stellar numbers the result of Cuba spending more than the U.S.?

    Not according to the data. As the following chart shows, Cuba’s health care spending per capita is substantially lower than that of the United States.

    But higher spending doesn’t ensure better results. According to the Bloomberg Health Care Index, which measures cost efficiency in health care, the U.S. spends four times as much as Singapore in per capita terms, yet life expectancy is four years higher in the Asian country. Therefore it could be that, despite spending less, Cuba achieves better results.

    Unfortunately, Cuba’s planned economy is far from what anyone would call efficient. This means that there has to be another explanation.

    In fact, Cuba’s impressive IMR has a simple explanation: data manipulation.

    In a 2015 paper, economist Roberto M. Gonzalez concluded that Cuba’s actual IMR is substantially higher than reported by authorities. In order to understand how Cuban authorities distort IMR data, we need to understand two concepts: early neonatal deaths and late fetal deaths.

    The former is defined as the number of children dying during the first week after birth, whereas the latter is calculated as the number of fetal deaths between the 22nd week of gestation and birth. As a result, early neonatal deaths are included in the IMR, but late fetal deaths are not.

    For the sample of countries analyzed by Gonzalez, the ratio of late fetal deaths to early neonatal deaths ranges between 1-to-1 and 3-to-1. However, this ratio is surprisingly high in Cuba: the number of late fetal deaths is six times as high as that of early neonatal deaths.

    This number suggests that many early neonatal deaths are systematically reported as late fetal deaths in order to artificially reduce the IMR. Gonzalez estimates that Cuba’s true IMR in 2004, the year analyzed in the paper, was between 7.45 and 11.46, substantially higher than the 5.8 reported by Cuban authorities, and far worse than the rates of developed countries.

    That Cuba’s dictatorship manipulates self-reported statistics shouldn’t come as a surprise. After all, the Castros have been trying for years to prove that, despite the lack of freedom in their country, their regime has built a welfare state where high-quality public services are guaranteed for all citizens.

    Nothing could be further from the truth. The only achievement of the 1959 Revolution was to turn Cuba into a huge prison where misery and repression dominate the lives of millions of Cubans that haven’t had the opportunity to flee the country in search of a better life.

    Dictatorships have always resorted to data manipulation for political purposes. This isn’t new. What is really disturbing is that Western intellectuals continue to buy the propaganda of the oldest tyranny in the Americas.

    This article is republished from Intellectual Takeout.


    Luis Pablo de la Horra

    Luis Pablo De La Horra holds a Bachelor’s in English and a Master’s in Finance. He writes for FEE, the Institute of Economic Affairs and Speakfreely.today.

    This article was originally published on FEE.org. Read the original article.


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