by George C. Leef, The Freeman, 2/16/12
What do the following have in
common: hungry Venezuelans, starving North Koreans, ecological devastation in
the former Soviet Union, and functionally illiterate students in Washington,
D.C., high schools? Give up? They are all consequences of socialism.
In his book The Politically
Incorrect Guide to Socialism, economics professor and National
Review editor Kevin Williamson gives the reader an easily understood
yet highly informative disquisition on the nature of socialism, its inherent
flaws, and the reasons it continues to spread. In connection with that last
point, two of Williamson’s chapters cover the political infatuation with
“energy independence,” which he argues is socialist in essence, and the push to
saddle Americans with the politicized medical care system known as Obamacare.
Williamson’s arguments are sharp and
his examples illuminating. His book is like a wrecking ball going to work on
the already feeble edifice of socialism.
“Hold on a minute,” some will say.
“You can’t compare the bad things that happen in a totalitarian state like
North Korea with our well-intended and generally popular public school system
in America.” Williamson shows, however, that the crucial element of socialism
is present in both, namely governmental control over the provision of goods and
services that would otherwise be done by private enterprise. That invariably
leads to waste and inefficiency—or even worse.
Williamson does a first-rate job of
explaining why those arrangements stifle productivity, depress quality, and
hinder innovation. It is because government officials (and the type of
government is immaterial) do not know what consumers want. That information
only comes from the market’s price system, which socialism prevents from
working. It is also because government officials have no incentive to satisfy
consumer wants since their money is not given by buyers but taken from
taxpayers. Starving peasants in Korea and illiterate students in the United
States—the roots are the same.
The poverty of India has been
compared to the remarkable wealth enjoyed by the people of Hong Kong and
Singapore before, most famously by Milton Friedman, but that is no reason not
to emphasize it again. Following World War II, Williamson observes, India was
seemingly poised for great economic expansion, having suffered little from the
war and benefiting from infrastructure built by the British. India’s economy,
however, remained stagnant due to the naive socialism of Nehru, the first prime
minister, who admired Soviet central planning. Grinding poverty gripped most of
the country.
Singapore and Hong Kong, in
contrast, had suffered considerable war damage. Nevertheless both enjoyed
rapidly rising incomes for all income classes. The fact that prosperity was
widespread is important in heading off the common objection that capitalism
only helps a few. Those two city-states were able to escape from poverty by
rejecting socialism and adopting laissez faire: prices were free, investors could seek profitable
opportunities without government interference and keep their earnings (or
swallow their losses) and taxes and regulations were minimal.
Williamson also points out that in
recent years India has begun rapid economic development, but only because new
leaders have lightened the heavy yoke of socialism.
Defenders of socialism almost always
point to Sweden and say that its experience proves that socialism can work.
Williamson’s chapter “Why Sweden
Stinks” refutes that notion. Sweden seemed to have the best of all possible
worlds—a high standard of living combined with an expansive “safety net” and
generous government benefits. The trouble is that socialism is unsustainable
because it erodes the human qualities that built up the wealth that the
socialist state consumes. Williamson writes that Sweden “is rapidly
transforming itself into the sort of society that will not be able to support
the relatively successful welfare-state arrangements that characterized it
throughout most of the twentieth century.” As Hayek observed, socialism changes
the character of the people gradually, undermining habits of work, thrift, and
self-reliance. We are seeing that in Sweden.
Speaking of Hayek, another of his
famous insights regarding socialism was that under it, the worst people usually
rise to the top. I wish that Williamson had included a chapter on that point.
We hear so often from socialism’s advocates that their system would work
beautifully if it were controlled by good people rather than murderous
dictators like Stalin. It would have been worth several pages to attack the
idea that there is some magic formula to keep vicious, power-mad people from
scheming their way to the top of a system that gives them what they crave.
Finally, although I applaud
Williamson’s effort, he has bundled together under the label “socialism”
several policies better labeled “corporatist” or “collectivist” since they
don’t entail government ownership or abolition of the market economy—only
interventions that hamper it. Ethanol subsidies are bad, but we don’t have a
federally owned energy sector and “public education” doesn’t prevent (though it
surely hampers) home and private schooling. Such distinctions are important.
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