There are quite a few myths and falsehoods being perpetuated as we move closer to the elections but they continue to plague the political and cultural landscape with disastrous effects. Here in SA, it is no different. Let’s start with a false comparison used to further a political agenda, which is capitalism versus socialism/communism or collectivism. Firstly it’s not one or the other, capitalism or free trade is a degree or measurement of economic activity by individuals in their personal capacity without third party (govt) involvement in the economy. For this to occur at all it requires individuals to have property rights to utilize the factors of production in the creation of products and services for profit. Socialism depending on its derivative is the advocacy of increasing the degree to which govt must have control over the factors of production and as such its size in the economy. Communism being the full extension of this whereby Govt controls all factors of production and individuals are forbidden property rights and free exchange. Let’s clarify; there has never been a purely capitalistic national economy ever. There has always been a state that inserts its self in the economy and the dealings of individuals economic activities via various mechanisms like tariffs, tax ect. So capitalism as its being presented is a myth, something that has never really existed however its supposed counter, communism ,has existed in its purest form and exemplified in the Soviet Union, North Korea, China and Cambodia. The results thereof speak for themselves, which brings me to my next point which is the follow up fallacy used that capitalism has failed and ‘neo-liberal’ economic policy have failed. This is so demonstrably false it amazes me people spout these falsehoods without being challenged. Looking at the examples above would be enough considering that those policies which resulted in slavery, oppression, famine, cultural holocaust, genocide and of course the largest loss of human life in recorded history. Maybe scope and scale of failure is measured a little differently with collectivist advocates but let’s carry on. Neo liberal policies have failed? What are ‘neo-liberal economic policies’, here’s the definition: An approach to economics and social studies in which control of economic factors is shifted from the public sector to the private sector. Drawing upon principles of neoclassical economics, neoliberalism suggests that governments reduce deficit spending, limit subsidies, reform tax law to broaden the tax base, remove fixed exchange rates, open up markets to trade by limiting protectionism, privatize state-run businesses, allow private property and back deregulation.
It makes discussing the topic a bit easier defining the subject, so let’s look at China and how the above has resulted in the one of the greatest economic surges in growth in modern history, lifting 100s of millions out of poverty. Let’s look at India who has also seen policies as above also resulting in amazing growth and also lifting millions out of poverty. If you really want to top it off you can look at Chile and its growth over the last 2 decades , described as the’ Miracle of Chile’ , the liberal economic policies have greatly reduced poverty and increased growth.
But why? It’s not hard to understand that the more money that flows to individuals rather than govt, the more prosperous they will be. Do you have more money in your pocket when you pay govt more from your salary? Can you provide products at a lower or a higher cost if you pay the govt more from the economic activities you pursue?
Now my question to socialists is at what percentile exactly do you consider the economy socialist?
50% ? 80%? Inevitably it will just lead to communism, as Lenin said “The goal of socialism is communism”. It is simply ideology, masquerading as economic theory. It fails and it at best everywhere it is tried results in tragedy. I mean just look at Venezuela, the prime example of socialist progress where the country is now ruled by a emperor (rules by decree) and is in the midst of massive social unrest, has a foreign army in to ‘control’ the protesters , inflation or the value of its currency is over 40% (every year your wealth loses its buying power by half , think of pensioners) , they have food rationing due to shortages in basic supplies , a crime rate that is one of the worst in the world and power black outs. This is not the exception but the rule.
Now don’t be fooled by thinking that socialism or communism (Marxism as it’s known) is a bottom up approach either , its central planning in its highest form and by its nature comes from the top down . State officials dictate how the means of production are utilized, from the top down to the worker. What it is is force, coercion of the population to use their labour for supposed egalitarian reasons but only results in inflating the bureaucracy. Capitalism is the free, voluntary exchange of labour. Have a look at satellite images of Korea at night; (hint) the dark non illuminated patch is a communist paradise.
Next time: Marxist strategy for societal change, a history of hate and murder. http://www.investopedia.com/terms/n/neoliberalism.asphttp://en.wikipedia.org/wiki/Miracle_of_Chile