How Good is the Beer in a Socialist Society?
A book by the name of Socialism Sucks was written to get people who would otherwise never pick up an economics book to about socialist and capitalist ideas. The book is written in an informal style as the authors travel from country to country and reveal the level of socialism that those countries implement. In order to compare the less free countries to the more economically free countries, the authors rank each area based on the quality of the alcohol each country has.
Young people claim in polls to prefer socialism because they think it inspires fairness more than capitalism which depicts selfishness. I find that very wrong and backwards. Bernie confused many of the young democrats in the recent years by portraying to them an idealized social structure and calling it socialism. Media influence has twisted many people’s political views by either showing bias or misrepresenting the actual meaning of political platforms.
“Think of it as a spectrum.” That is what one of the authors of Socialism Sucks said when he was explaining the levels of socialist versus capitalist societies. I believe this is an excellent way to think about economic policy, or, on a larger scale, ideologies in general. However, there still needs to be a clear definition of what socialism is to see where on the spectrum each country lands.
So, what does socialism mean? It is when you abolish private property in major factors of production and transfer it to public ownership. The most socialism the world has seen is probably China under Mao Zedong or early war communism in the USSR. On the other end of the spectrum, Hong Kong is one of most capitalist countries in world with the large number of private businesses and entrepreneurs allowed through limited government involvement.
In simplest terms, to enact socialism is to get rid of entrepreneurs.
Capitalism. High Risk for High Reward.
When it comes to capitalism, entrepreneurs often arise when the economy is in turmoil. Desperation can sometimes spur people to act when nobody else will. Some people might wonder how entrepreneurs can even exist in such a competitive market or wonder if the risk is worth the reward to open yourself up to new business and new opportunity. After all, most new business owners are out of business within the first five years. So how do business people communicate with each other and the market to see how they are holding up?
The answer - dollar signs. Prices convey scarcity in which we can assign value to items. Entrepreneurs don’t need to know another entrepreneur’s plan if they can see the price of products. As demand increases, so does price usually. As quantity and competition increases, prices may go down to compete for more business. It is the language of economics.
Investigating Various Countries
Sweden is labeled as Not Socialist and it is actually ranked as the 27th most free country. It is a big welfare state with high taxes. This lowered their wealth, however. Based on the alcohol, there is good Belgian beer, but it is very expensive.
Venezuela was coined as Starving Socialism. In the 1970s it was one of most prosperous countries in Latin America with a great per capita income but slowly fell on the spectrum. New leaders came up and the government put more control over entrepreneurs. It seemed to be doing good based on the economic data, but it was being hidden by the fact that Venezuela was producing large amounts of oil and giving false accounts of economic health.
Most younger people are unaware of the historic economic states of countries other than our own which makes it hard to understand the economic changes in the world around us. We should do better at educating ourselves on this topic if we truly want to make informed decisions for the future.
Cuba was much closer to socialism on the spectrum than it was to capitalism. Governments owned hotels. No record of reservation and no credit cards are kept. AirBnB style Cuban rooms were being rented out by individuals. These rooms were better, cleaner, and cheaper because there are incentivizes for the entrepreneur to work hard and reap the financial reward. They have two types of beer in Cuba, and they are both subpar. They lack quality and variety much like the business atmosphere.
Korea represented Dark Socialism. There have been studies where economic freedom/activity can be based on light pollution of countries. At night South Korea is lit up and North Korea is all black except for a little bit in the capital. It is known that many people from North Korea try to escape their country because of the oppression they face. This lifestyle is undoubtedly taxing on the people physically and emotionally.
The authors of the previously mentioned book did interviews and research by going up and down the river in the connecting area between China and North Korea because they were unable to actually enter the country. The disparities between North Korea and South Korea are shocking. Per capita income is around $2,000 in North Korea and $40,000 in South Korea. Same people, same language, same history, same geography. Different economic systems. As one might guess, not the best beverages in Korea.
Fake socialism exists in China. Under Mao there was real socialism. 45 million deaths occurred by the government. Now it’s more centralized on the socialism-capitalism spectrum. Capitalism in bigger cities draws many people in from the slums. The freedom inspires the people to take a chance and strive for a better life.
Hung over Socialism is what they called Russia/Ukraine. The competition in these places is not the prices of products, but rather the length of lines at places. Those at the front of the line are the people who get what they are after.
New capitalism is rising in the country of Georgia. The speaker recommended it as a wonderful place to visit! It reformed later with the help of the Rose Revolution and protests for free markets. Later, a flat tax of 13% was put in place. A real estate practice common to Georgia is that whoever bids highest on property gets it regardless of power or prejudice. Reduced government was instrumental in this turn toward capitalism as they fired entire bureaus and departments. They fired police and crime went down because many officers are corrupt.
Georgia is still poor but growing rapidly. Wine is the best alcoholic beverage there. They have a unique wine making process and maybe one of the first places wine was produced in human history even back to Biblical times.
Now the United States needs recognition for their stance on the matter. Even though the USA is one of the most capitalist societies in the world, the current youth feel like they want less oppression and more equality. They think socialism is the answer to that, but they are dead wrong. They are comparing fantasized goals and neglecting the consequences of the process. When asked explicitly, the polls say that people do not want government-controlled businesses which depicts a clear misunderstanding of what socialism is.
Final thoughts
All of these examples of countries exemplify the fact socialism restrains citizens economically and prevents freedom socially, physically, and mentally as a byproduct. The only way to fix this is by educating people. If people are not properly educated on economic policies in action, they are setting up the generations to follow, along with their own, for failure.
The speaker touched on a few topics outside of just socialism, and those are included below for reference. They are not widely expanded upon because they are merely answers to questions asked of him, but an overarching theme is that limited government is key to economic freedom.
-Universal healthcare is a bad idea.
-Flat tax is a good idea.
-Government bailouts can hurt a country’s recovery process.
Wall Street bailouts hurt our country in the recovery process of 2008 crash. In capitalist society there needs to be profit and loss to encourage good behavior and “punish” bad decisions. Loss is discipline for bad decisions and shows that reallocation of capital. This encourages over aggressive risk taking in financial efforts. Bailouts prevent the realization of those bad decisions.
The idea presented above makes me think of the current situation that some college students are facing with the Student Loan Debt Relief Plan presented by the Biden administration. In the short term, it would seem to help many up and coming graduates that would soon enter the workforce. Unshackling them from the burden of debt would theoretically help stimulate the economy, but the debt must go somewhere, and the repercussions will be felt in the years to come.
References
Liberty Maniacs. “Socialism Spreading the Wealth Bernie Sanders T-Shirt.” Liberty Maniacs, 2023, https://libertymaniacs.com/products/socialism-spreading-the-wealth-bernie-sanders-t-shirt.
Gordon, D. (2020). Book Review:“Socialism Sucks: Two Economists Drink Their Way through the Unfree World”.