I find it interesting that each time one of President Obama’s initiatives fails, he goes back to search out business people involved in our free-market economy to ask their advice, and get their support. Evidence would be his 2013 vacation to Martha’s Vineyard, where he golfed with CEO business leaders. Why is this you ask? I believe it is an age-old question; how can you save socialism, or build a socialist utopia?
The reality is you can’t, but you can temporarily save socialism by introducing opportunities in efficiency which inherently come from free-market policies. Let’s talk some more and take this philosophical dialogue to a higher level.
Indeed, there was a very revealing article in the Wall Street Journal on August 19, 2013. The title was rather tongue in cheek; “US Rice Farmers Cash in on Venezuelan Socialism,” by Sara Schafer-Munoz. The article noted with graphs and charts and empirical data that Venezuela which used to be a net rice exporter is now a net rice importer due to the inefficiencies of socialism. This is because Hugo Chavez, the now deceased president of Venezuela had nationalized rice fields and farmland hoping to make money for the country and feed the poor.
Unfortunately, any economist will tell you that this will never work. Once a country nationalizes an enterprise or business operation in the free market sector, instantly it will become inefficient. In this case crop yields had gone down so significantly there wasn’t enough rice to feed everyone, and as the government gave away more free food, people lined up for the taking, and there wasn’t nearly enough to feed everyone. Therefore the country after promising to feed people for free, and without the ability to make money from the rice that they were selling (due to the economy failing, the currency devaluation) had no choice but to import rice from the United States.
This is rather significant in many ways because it was Hugo Chavez that called the leaders of our country “blue-eyed devils” and chanted negative racist comments in the spirit of Simon Bolivar who chased out the Spanish centuries ago. Now then, some words of wisdom on free-market economics and global economies of scale.
You don’t have to read much from Thomas DiLorenzo to know what’s going on here. The reality is that socialism is very inefficient, and although they often hijack the flows of free-market economies, all the while the leaders claiming that they are okay with capitalism in some cases, what they really want is crony capitalism and a tight group of friends to rule the masses. They get away with this by promising the masses all sorts of things which they may or may not be able to provide in the future.
Well fellow economics students, that is your wisdom for the day, it’s a lesson well learned, once again by those who dismiss free-market capitalism and buy into socialist policies. Please consider all this and think on it.
Lance Winslow has launched a new provocative series of eBooks on Economic Concepts. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank; http://www.worldthinktank.net