|
The Paradise Perspective: Commentary from a Free and Compassionate Alternate Reality Complete List of Poor Nations That Have Adopted Socialist Governments and Then Become Prosperous by Glen Allport Exclusive to STR January 28, 2009 -
1 - The
List [
*** null set *** ] There
are no formerly-poor nations
that have adopted socialist governments and then become prosperous. -
2 - A
Note on Terminology The
public's definition of "socialism" is vague at best. For a
discussion of the term, complete with dictionary definitions, see my
October 2007 column Capitalism
Is Not Freedom, and Socialism Is Not Love. Here, I am mostly
discussing government social policies that involve transfer payments and
other government help to individuals and groups (for example, nationalized
healthcare); it is only in Communist nations where the socialist
"ideal" (and dictionary definition) of having the State own
and operate all means of production
and distribution is actually implemented – which, in turn, is why
Communist nations, since the Russian Revolution in 1917, have always been
among the most abysmal hell-holes on the planet. (Communist China has
transitioned from actual Communism, as practiced under Mao, to a
semi-capitalism akin to National Socialism as practiced under Hitler –
and even that limited, partial shift to personal freedom, property rights,
and free markets has had a stunningly positive effect for the Chinese
people). -
3 - The
List Annotated Back
to the list: As mentioned, the number of poor nations that have adopted
coercive-socialist governments and then become prosperous is
"zero." The "coercive" part is in the nature of
government itself – at the very least, funding for government activities
is obtained via coercion – and this should be made explicit because non-coercive,
non-government socialism (a
family or a voluntary commune, for example) is a very different and far
more positive thing. Having made the point, I will use the conventional
abbreviations ("socialist government" or simply
"socialist" or "socialism") from here on, but the
damage that coercion does to socialism, and indeed to the cornerstone duality
of love and freedom, should always be kept in mind. While
no poor nation has ever adopted a socialist government and then prospered,
there are a great many nations
that have adopted socialist governments, or various levels of
socialist-style government policy despite not calling
themselves socialist, and then either remained poor, or become poor, or in some cases merely become less prosperous as their
existing high level of wealth began evaporating. Government
socialism erodes prosperity, which means that nations without much
prosperity to start with do
very poorly after adopting socialist policies; see much of *
Or see better-formatted PDF version with charts and graphs here. One
of the most important and positive differences for Even
with the huge financial advantage that comes from not trying to dominate
the world, the negative long-term effects of socialist policies in It
should be pointed out that While
Sweden has done a better than average job of controlling government
corruption and "pork" and avoiding corporate and individual
"gaming" of the system, these factors are, like rust, eternally
corrosive – constantly eating away at the integrity of the system.
Welfare and disability fraud, growing bureaucratic bloat, and other
factors represent ever-increasing drains on Swedish resources. Swedish
unemployment, for example – and not unlike in the "Telling
the truth might not be popular, but I wish that Edling's report [which
suggests Swedish unemployment is actually close to 20%] would be
translated and sent to all fans of the welfare state around the world. It
shows that the Swedish welfare state has systematically destroyed personal
responsibility and work ethics. . . . A system that pays people not to
work eventually creates a mentality where many people choose not to
work." -- Finally, because more government socialism means more government, it should be no surprise that Sweden has become not only less prosperous but also less free and dramatically less safe from violent crime in recent years (also consider using Google Translate to read this page of news from Sweden, which reports a huge increase in rape in recent years). Contributing to the problem is a disturbing erosion of the right to free speech and other basic protections: "Dahn
Pettersson, a local politician, has been fined 18,000 kronor for writing
that 95 percent of all heroin brought in comes via Albanians from Kosovo.
. . . In In
the same column, "Fjordman" makes the point that such things are
not isolated incidents: "The
primary reason why I write so much about To
sum up: Even Given
that the United States is, in fact, no longer a "wealthy" nation
but instead the most indebted
nation in history and has lost
much of its former productive capacity, the Obama administration's push
towards more socialist policy does not bode well for Americans. If
Americans are actually foolish enough to want a socialist government, they
need to first create some wealth for socialist programs to operate with – which
would require a return to our free-market, small-government principles. -
4 - Why
Those Results are Inevitable Short
answer: human nature. Slightly
longer answer: the nature of life
itself. Despite
how obvious those answers are, many people seem not to understand them.
Somehow, many of the same people who believe that government should
"adjust" human behavior via rewards and penalties – higher
taxes on tobacco or alcohol, for instance, or fines (such as speeding
tickets), or prison sentences, or specific income tax deductions (e.g.,
for mortgage interest or for purchasing a hybrid car) – also
believe, rather bizarrely, that when government penalizes
the creation of wealth with
high taxation or onerous regulation and rewards
non-productivity with transfer payments and corporate welfare and
other forms of wealth redistribution, human
behavior does not change in response. The
reality is quite simple: Penalize
a behavior and you get less of it, and/or unintended
consequences. Reward
(or protect) a behavior and you get more of it, and/or unintended
consequences. This
is true with cats, dogs, pigeons, and all
other animals, including humans. Yes, there are nuances and seeming
exceptions, but few things about life are more broadly true: make a
behavior more difficult or painful in some fashion, and organisms will
tend to display that behavior less often, or will attempt to shield
themselves from the unpleasant effects when they do
display the behavior – and not always in ways you might expect. Reward
an organism for doing something, and the organism will be more likely to repeat
that behavior; here also, unintended consequences (including "gaming
the system") are likely and may be significant. This
is perhaps the most fundamental and important macro-behavior genetic
programming in the animal kingdom: avoid
pain and seek out reward. Would life have survived for long without such programming? Income
taxation is a fine on income.
Increasing that fine is likely to cause aversive
conditioning and result in changed behavior. Sample result: Bono and
U2 moved
their financial affairs to the Netherlands in 2006 after the Irish
government changed the tax code in a way that would have cost Bono and his
bandmates huge amounts of money. That is, the band responded to an
increase in the fine on their income by removing their income from the
taxing authority's jurisdiction. If someone like Bono, who is famous for
complaining that governments should spend more tax money helping the poor,
prefers to spend his money as he
chooses rather than have it taken by politicians under threat of force,
then how likely is it that other high earners are unaffected by attempts
to confiscate more of their income? Government-provided
welfare payments, be it to the poor or the rich, are rewards for
non-productivity and for misallocation of production and resources. Use
tax dollars to subsidize a corporation's foreign advertising or anything
else it does, and the pressure for efficient operation is reduced. Pay
unemployed single mothers to stay home, and you not only encourage them to
not find jobs but – if the mothers must remain single to qualify for the
"free" money – you also ensure that millions of children will
grow up with unmarried parents and, in many cases, without
their fathers, as has happened in the United States. "While
it is widely recognized that this type of means-tested program discourages
work, it is less commonly understood that means-tested aid also
discourages marriage and rewards single parenthood. Subsidized housing and
other means-tested welfare programs penalize marriage because a single
mother will suffer a substantial reduction or elimination of benefits
whenever she marries an employed male." --
Millennial
Housing Commission Policy Option Paper, 2001 Farm
subsidies, tariffs, and price supports are excellent examples of the harm
done by government giveaways and other forms of protection to business
(sometimes called "socialism for the rich"). Not only is the
loss of productivity sometimes obvious (as when farmers are paid
to not plant crops – which the U.S. actually does, and the
"farmers" may be living
in Manhattan) but a vivid example exists to show how dramatic the improvement
can be when farm subsidies and protective regulations are almost entirely withdrawn.
20
years on •
Competitiveness up •
Output up •
Value added up •
Incomes up •
Land prices up •
Employment down •
Size of farm sector rose from 5 to 7% •
Exports stabilized around 55% Consumers
did well also; food prices mostly fell or remained stable and a larger
variety of foods became available or easier to get. (Prior to the reforms,
a prescription was apparently
required for New Zealanders to buy margarine!) Before the reforms, farmers
in general strongly opposed the idea of reform, and the corrupting and
distorting effect of "free" money or other forms of government
protectionism shows in the continued resistance to such reform among
farmers in -
5 - Helping
Ourselves into Poverty and Tyranny The
general principle behind the
New Zealand experience – that government "help" reduces
efficiency, weakens the industry or other favored group, drives up prices
and reduces choices for the consumer, generally making things worse for
all concerned – is one that needs to be widely learned. Today, however,
most of the world seems headed in the opposite direction. For that matter,
the experience of the United States (especially in the 1800s), Hong Kong
under the British, Switzerland from the 1800s until recently, and other
places that have experienced dramatic
growth in prosperity and human well-being as a result of minimizing
government interference – that experience, also, is being widely
forgotten or misperceived. Increasingly, people in the It
is worth adding a brief description of classical liberalism, because this
viewpoint was the heart of "[A]t
the heart of classical liberalism", wrote Nancy L. Rosenblum and
Robert C. Post, is a prescription: "Nurture voluntary associations. Limit the size, and more importantly, the scope of government. So
long as the state provides a basic rule of law that steers people away
from destructive or parasitic ways of life and in the direction of
productive ways of life, society runs itself. If
you want people to flourish, let them run their own lives."
[Emphasis added] --
Nancy L. Rosenblum and Robert C. Post, Civil
Society and Government, as quoted in the Wikipedia article on classical
liberalism. Even
the tiny amount of power (by today's standards) given to government in our
Constitution was enough to corrode, corrupt, and ultimately destroy the
Constitution's own restraint of
power that our ancestors had insisted upon. Nearly all of today's problems
for America, including the economic crisis now engulfing the U.S. and
indeed the entire world, have their distant roots in that miscalculation
of more than 200 years ago. Our small and limited government became the
crowbar needed by those who lust for power, and the result is a level of
dictatorial control in 2009 undreamed of by the British king in 1776. -
- - - - There
are yet more ways that government intervention (i.e., central planning, in
even the smallest degree) can screw up the market and the economy.
In particular, government or central bank policy can encourage malinvestment,
as we have seen so dramatically in the recent series of financial bubbles
and crashes – the tech bubble of the late 1990s and the housing bubble
that followed, in particular. The disaster in housing was a double-whammy
because the damage from monetary inflation (the primary cause of any large
bubble – a large increase in the money supply has to go somewhere; likewise, without such an increase in the money supply,
any bubble has limited fuel) was compounded by malregulation going back to the Carter administration (the Community
Reinvestment Act, in particular) and made worse during the Clinton
years (see also here).
The federal government encouraged and even indirectly required lending (at least by Fannie Mae and Freddie Mac, via the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992) to
people whose income or credit history simply disqualified them – people
who were unwilling or unable or otherwise unlikely to pay. How very progressive, and as we see now, how incredibly foolish and
destructive. Helping the poor is one thing; using government
to do so is something else entirely. "The
"The
--
Stop
Covering Up And Kill The CRA, Investor's
Business Daily Please
don't think I am just slamming the Democrats on this; Republicans are
equally to blame. Government malfeasance and stupidity in the Perhaps
the most important reason that government socialism ultimately fails to
meet human needs long-term is that government itself is a coercive power
structure – exactly the kind of thing that attracts
and enables psychopaths,
as even a brief listing of government
"leaders" over the years and centuries will confirm. And
really: What healthy and compassionate person wants
coercive power over others? "It
is said that power corrupts, but actually it's more true that power
attracts the corruptible. The sane are usually attracted by other things
than power." --
Physicist and SciFi author David
Brin -
6 - Predictions
for I
have previously made the point in some detail that government is The
Worst Way to do Anything. Unfortunately, the new Obama administration
has promised to hugely increase the use of government to "get things
done" and much of the With
government socialism (including de
facto nationalization of the financial and insurance industries, for
starters) increasingly both the reality
here in the U.S. and the "change" so many are hoping for,
especially in regards to healthcare*, the future is clear: Americans are
on that road to serfdom that
Hayek described so well. (The bailouts, for just one example, are
incredibly expensive and damaging; here is Ron Paul exposing some
of the waste and nastiness, including billions of dollars to expand
the police state, contained in the new, expected-to-pass $825 billion
stimulus package – a bill that "delivers an additional debt burden
of $6,700 to every American man, woman and child."). Expect less
wealth, less freedom, more malinvestment, more malregulation, more
corruption, more corporatism,
more cruelty,
and a general downtrend for quality of life in these United States, unless
and until the nation moves back towards its philosophic and historic roots
of free markets and human liberty.
*
For reasons that socialized healthcare will make things worse see here,
here, and here,
or my column Health
Care: Are Corporatist and Coercive-Socialist the Only Choices? For a
look at why the various government "stimulus" packages will prolong
the economic crisis, click here
for an article by J. D. Tuccille. -
7 - Take
Your Pick: Love and Freedom, or Their Opposites Classical
liberals knew – but seldom spelled out in detail – that liberty was valuable in large part because it fostered a compassionate
and healthy society. The cruelty of power – of kings and
slavemasters and even petty government bureaucrats – was well
understood. Today,
that understanding has been lost and the truth turned on its head. To
regain our prosperity, our freedom, and our status as a beacon and example
to the world – which the Neither love nor freedom can be created by government action, and both qualities are in fact endangered and corrupted by government power. With the exponential growth in technology now heading into the vertical part of the curve, time is running out for mankind to correct the error of using inherently violent and coercive institutions to run society.
Glen
Allport
co-authored The User's Guide to OS/2
from
Compute! Books and is the author of The
Paradise Paradigm: On Creating a World of Compassion, Freedom, and Prosperity.
He maintains paradise-paradigm.net.
This is one in a series of columns on the human condition.
|
