Bernie Sanders is shaking things up this primary season by declaring himself a socialist, and as a presidential candidate, he is promising a lot of free stuff. Surprisingly, promising free college tuition has earned him a legion of loyal followers on campuses throughout the United States. “Why surprisingly?” some are certain to ask. After all, free is a magic word that draws people in the same way that fleas are drawn to dogs.
What is surprising is that these supporters are college students, students of higher education, the enlightened of our time. Aren’t they? They should be well-versed in history and economics. They should know that socialist schemes have a long history of failure. Look no further than Cuba, and they can plainly see the results of failed socialist system. If Cuba is too small and insignificant, they can call to mind the results of the failed Union of Soviet Socialist Republics (USSR) or Chairman Mao Zedong’s China. To Chairman Mao’s credit his Great Leap Forward was meant to be a mass mobilization of labor to improve agricultural and industrial productivity. But, the plan failed and led to a famine in China in which tens of millions died. I don’t think this is what Sander’s supporters want, but their apparent ignorance of history leads them in this direction.
If history is too burdensome for our enlightened students, perhaps they should study current events. They would not have to look hard to find contemporary examples of socialism’s failure. The beautiful, oil rich nation of Venezuela comes to mind. They recently celebrated May 1st (May Day) – as all good socialists should – and to fuel the celebration, President Maduro granted all government workers a 30% wage increase (even Bernie Sanders has not offered such an increase), but there is more to it than that. The International Monetary Fund (IMF) has projected nearly 500% inflation in Venezuela for 2016. And, while that is a pretty lofty number, the IMF predicts a whopping 1600% for next year, so a 30% wage increase will be of little benefit to anyone. However, wages are not the largest problem in Venezuela.
Venezuela is a debtor nation, and in January Venezuela shipped $1.3 billion in gold bars to Switzerland just before two big debt payments are due totaling $2.3 billion. It is clear that Venezuela will default on debt payments, but more troubling than that is the fact that Venezuela does not have enough cash to purchase food and medical supplies for its state owned grocery stores.
Food is now rationed, and Venezuelans can only shop on days that correspond to the last digit of their national ID number. It is odd that they can require identification cards, and the United States can’t, but having an ID is no guarantee they will be able to buy food or medicine. Venezuelans stand in line for up to twelve hours, only to find when they enter the state-owned store, the shelves are empty.
Returning home empty-handed, they often find that their houses are dark due to blackouts. President Maduro blames the blackouts on the weather because 75% of their electricity comes from hydroelectric plants, but most of the country believes it is caused by mismanagement and corruption. To conserve electricity, the Maduro government has reduced the work week which also reduces pay. It seems the people of Venezuela are trapped with little hope of improvement, but there is more than a little irony in Venezuela’s lack of power.
Venezuela is an oil-rich nation with 298 billion barrels of proven oil reserves. To put that in perspective, it is more than Saudi Arabia, Russia, or Iran, and it is eight times the reserves of the United States. Oil has been the economic basis of their socialist system, but with oil prices low, there simply is no way to support their extensive socialist system. So, as American college students support Sanders and socialism, the Venezuelans are actually, “Feeling the Bern” of socialism.
There is much written about socialism, but perhaps the most succinct expression has come from Thomas Sowell who said, “Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it.”
Until next time…