A real world example of socialism.
Posted on May 12, 2016 by Roy Filly
People have a hard time seeing change. Today seems like yesterday. This week seems like last week. And this year doesn’t appear to be that dissimilar from last year. But once one hits a decade or so, things can look very different.
Now we have an opportunity for young people who never saw the Union of Soviet Socialist Republics (USSR) in full bloom get an idea of what socialism/communism can do to an economy. In the USSR lines at stores to buy supplies were the norm, not the exception. In the 1980s the USSR was the “other” super power. Their socialist economy was working on their 12th 5-year plan. Shortages continued in basic consumer items, even in major population centers. Such goods occasionally were rationed in major cities well into the 1980s. Besides the built-in shortages caused by planning priorities, shoddy production of consumer goods limited actual supply.
By contrast, the USA entered the longest sustained period of growth and new wealth under the Reagan administration. Capitalism results in an abundance of products. Socialism invariably results in shortages. But the progressive/statist/altruists called the 1980s in America the “era of greed.”
In a Harvard study (published in 1992) they found that the single most pervasive phenomenon in socialist countries was a shortage of goods. People had “money” to buy goods – the government “gave” them money. But there was nothing to buy! Consumer goods ranging from necessities like food and clothing to luxuries like cars and gold simply could not be found. Even more ridiculous, when a good became available (i.e., a truckload of shoes arrived at a store) they consumer would find that they were all size eleven. They would still buy a pair and then later barter with someone who bought shoes when the shipment had only size eight (the size they needed). If you run a shoe company but are not allowed to keep the profits of your labors, well… You get the inevitable shortages of socialism.
Another aspect of this form of governance is inflation. Of course, that didn’t apply to the USSR because the government literally controlled the price of EVERYTHING. At one point in the USSR, apparatchiks in Moscow were setting the prices of 2 million consumer goods daily.
Today, we get to see the rewards of socialism in a country in the western hemisphere – not some third world rathole! We are talking about Venezuela. On Dec. 6, 1998, Hugo Chavez won a come-from-behind presidential election victory, promising to seek a “third way” between socialism and capitalism. Once Chavez ascended to power in 1999, he ushered in his version of “21st Century Socialism.” (All of you Bernie fans – does any of this sound familiar?)
How many of you realize that the Democrat Party echoes this rhetoric? Google, “US candidates promising third way economy.” You will find the reference below from late last year during the current election cycle.
Nov 18, 2015 – U.S. News > Third way Democrats preparing to challenge the left for factional control … where “both our democracy and our economy are not working for the majority. … Each of these three candidates seems eager to prove they will be the … “Third Way” candidate…
OK, progressive/statist/altruists, let’s examine less than 2 decades since Chavez took the reins of government in Venezuela and made it a socialist nation. His “reforms” resulted in a rolling political and economic disaster – this in a nation where the “social revolution” left one of Latin America’s most resource-rich nations in a shambles.
Let us begin with inflation. Governments that “print money” are just asking for it! Venezuela’s consumer inflation, already the world’s highest, will more than double this year according to the International Monetary Fund. Inflation will surge to 720 percent in 2016 from 275 percent last year. (At this point you need to re-read my post on hyperinflation.)
[Source: Catastrophe Is the New Normal for Venezuelans, by Mac Margolis]
[From the Margolis article] Start with the riddle of why the country with the world’s largest crude oil reserves has suffered constant power outages. (Spoiler: instead of using oil to generate electricity, the government has relied on hydropower while failing to plan for this year’s punishing drought…)
And how has President Nicolas Maduro (Chavez’ replacement after his death) responded to the energy crisis? He cut the work week for public servants to two days. Along with the furlough, Maduro — who also is presiding over the world’s worst recession — ordered a 30 percent hike in the national minimum wage… (Does any of this sound familiar?) Consumers, queueing for hours, can’t find eight out of 10 staple goods at grocery stores…
(Eighteen) years of ring-fencing by the “Chavismo,” left all other vital Venezuelan institutions — the armed forces, the courts and most of the news media, plus the budgets to keep them going — firmly in the hands of (central planning statists)… (Again, I ask you, does any of this sound familiar?)
My friends, we have morons campaigning to bring this to the USA and a majority of young voters who no nothing of socialism are lining up to vote for it. The next time they line up it will be to buy bread – but there won’t be any bread!