Venezuela Proves That Socialism Eventually Kills Even Wealthy Economies

Posted: Nov 27, 2019 9:25 AM
Venezuela Proves That Socialism Eventually Kills Even Wealthy Economies

Source: AP Photo/Ariana Cubillos

For thousands of years prior to the 18th century, authoritarian rule and limited commerce prevented rapid improvement to general human economic conditions. Since then, economic freedom has allowed humans to fly through the air, walk on the moon, conquer numerous diseases, develop hundreds of life-saving medical treatments, more than double our average lifespans, massively improve dentistry, enable billions to live without hunger, and invent conveniences such as appliances, lights, photography, air conditioning, cell phones and indoor plumbing. All of this progress depended on economic freedom: private property rights including the right to trade.

When a system works this well, we shouldn’t mess with it. But alas, leftists point out that economic freedom allows some to get much richer than others. Leftists ignore that in America, the poor today have overall lifestyles far superior to those enjoyed by the middle class fifty years ago, including better cars, better medical treatments, safer food, more affordable clothing, advanced phones and other electronics. And the poor fifty years ago were better off than the middle class 100 years ago, and so forth. But leftists believe they can orchestrate increased income equality without damaging future innovations and prosperity. There is no evidence – theoretical or empirical – to support their beliefs.

The showcase for leftist economic policies is Venezuela. Venezuela seemed to be a country immune to the debilitating effects of socialism: it has the world’s largest oil reserves. The Venezuelan government’s confiscation of wealth and massive giveaway programs in the early years after Chavez’s rise to power caused leftists all over the world to celebrate Venezuela as a success story. In 2007 (about eight years after Chavez took power) Venezuela proudly shipped free heating oil to poor people in the U.S.

It took longer than a few years to destroy Venezuela because of its incredibly valuable natural resources. Eventually, socialism did it. Stealing wealth from those who produce more than they consume has consequences. In recent years Venezuela has been unable to supply its unfortunate citizens with adequate food and other essentials. The Miami Herald reports[1] that 15%-19% of Venezuela’s population has fled the country. Crime rates such as kidnapping are up over 2,000% from the years of democratic rule prior to Chavez’s takeover.

The decline of Venezuela has been truly astounding. Yet leftists plan to impose their hairbrained economic schemes on a global scale just like they did in Venezuela on a national scale.

Millennials and others do not understand economics. They lament over the increasing percentage of our income that goes to health care. What stupidity! In the last 150 years America has gone from having to devote 50% of its workforce to food production to devoting well under 5%. The incredible advances in agricultural productivity have freed up tens of millions of workers to devote themselves to improved healthcare and other pursuits. A cherished goal should be that we are able to meet all of our non-healthcare needs with fewer and fewer workers (and other resources) so that we can devote more and more to healthcare. There is a limit to how many electronic gadgets, automobiles and years of schooling a person needs. But we are nowhere near to reaching the limit to the number of medical cures and innovative treatment methods that can help us live better lives. Eventually, technological advances will permit vastly improved healthcare with less resources – and the resulting excess of resources will be applied to a new sector.

The leftists will not just halt economic progress – they will reverse it. If the leftists gain control of our entire economy they will destroy it. If that happens to America’s economy, what country will take over the role of being the world’s engine of innovation?

Americans today enjoy incredible benefits from the prosperity and economic growth generated by economic freedom. If the leftists takeover our economy the first decade or so will experience somewhat minor problems. But as demonstrated in Venezuela, when the leftists are firmly in control, the decline will eventually become devastating. When the “game” is stealing from people who produce more than they consume and giving the money to people who consume more than they produce, everyone other than the leftist leaders will eventually produce less and consume less. It is the only possible outcome.