Has there ever been an economic system that ended in a more spectacular failure than socialism? While the average person in socialist Venezuela lost 17 pounds last year because of food shortages, in America, we are dealing with the problem of too much food. While socialist North Korea is dark at night, Capitalist South Korea is a beacon of the light and success of capitalism. Millions of people have fled across the Berlin Wall, across 90 miles of shark infested water, and across the mine infested demilitarized zone,to escape the poverty, death, and tyranny of communism, just for the possibility of prosperity in a capitalist system. There is no analog for people escaping capitalism to socialism. I think this speaks volumes. Socialism needs walls to keep people in. Capitalism needs walls to keep out the floods of people pouring in.
Arthur Brooks, President of the American Enterprise Institute, said that the free market “is the only system to wipe out poverty by the billions”. I would add that socialism is the best system to keep millions impoverished. It was liberalization– capitalism– that dropped poverty as a measured by earning one dollar a day in East Asia from 60% in 1970, to near zero today. In Africa, it fell from over 40% in 1995, to about 30% today. In South Asia, it went from over 20% in 1975, to about 5% in 1987. In 1800, 94% of the world’s population lived on two dollars a day or less. By 1990 it reached about 50%. At 1990, the percentage of the population living at $1.90 a day or less was 37%. In 2012 it was about 10%.
While capitalist systems brought millions, actually, billions out of poverty, socialist systems were busy engaging in mass slaughter, political repression, and impoverishing their citizens. An analysis from the Czech National Bank, after reviewing 60 studies on 26 transition economies, found that although there are short-term costs there are strong long-term effects on economic growth. Similarly, a 2015 study found that quote, “privatization enhances privatized firms performance, efficiency, and profitability, which percolates to economic growth.”
But what is capitalism? George Reisman, an American economist Professor Emeritus of Economics at Pepperdine University, defined capitalism as the “social system based on private ownership of the means of production. It is characterized by the pursuit of material self-interest under freedom … capitalism is further characterized by saving and capital accumulation, exchange and money, financial self-interest and the profit motive…”
Let us take a second and look at formerly communist China. While a communist system, it took no time to kill tens of millions of Chinese citizens. Since party leaders began economic liberalization, I wager to say capitalism has saved as many Chinese lives as communism took through poverty alleviation. The economic boom of China was found to be because of trade liberalization, rapid privatization, and sectoral changes.
In the USSR, they produced more steel than was produced in the United States, but we had more steel products. Must have used it making tanks instead of consumer goods. When former commie leader Boris Yeltsin came to the US to an American grocery store (you can talk to any former Soviet resident and get a similar story), he roamed the store in amazement and realized that if Soviet citizens knew this was the alternative to their poverty, they would revolt. Not even he, the leader of the Soviet Union, had it as good as a poor American. This is because of the wonders of the capitalist price system. On a similar note, Soviet Premier Leonid Brezhnev is known to have said that Soviet managers were shielded for innovation like the “devil shies away from incense”.
Even after Barack Obama ended the wet foot dry foot policy which made it easier for Cubans to get refuge in America, 65 Cuban still fled to America between January 12 and March 20. Cuba lacks basic medical supplies from rubber gloves to rubber condoms.
Gerlimar Pastrán and at least another 1,000 women flee from socialist Venezuela to a capitalist Colombian border town to deliver her babies because of Venezuela’s collapsing medical system. Venezuelan Doctor Martin López is quoted in the Wall Street Journal as saying quote, “it’s an embarrassment for me to tell my patients to go to Colombia, but it’s necessary”. Pedro Gonzalez hoped one of Venezuela’s leading public hospitals could save him but they could not. The hospital lacked the basic supplies to save him. He died a week later, in his local Catholic Church in front of the altar.
You can see the concentration camps in socialist North Korea but you can not the graves for the millions of Ukrainian, Russians, Chinese, and others that communist regimes slaughtered in the name of the revolution.
This is the glory of socialism.