Why Socialism Is Dead

Authored by Gary North via GaryNorth.com,

Socialism was a specific philosophy of government ownership of the means of production.

The democratic welfare state was never a variety of socialism.

Marx, the most famous socialist, despised democracy. He despised all attempts at economic amelioration through legislation. He wanted a proletarian revolution. He preached -- the correct verb -- a religion of revolution. That was the thesis of my first book, Marx"s Religion of Revolution (1968). You can download it here.

He was silent about how the state would allocate resources under his system. He published nothing about the actual operations of the post-revolutionary society, socialism, and its final successor, communism. Late in his career, in his final major publication, little more than a pamphlet, he wrote this: "Between capitalist and communist society there lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat." (Critique of the Gotha Program, Pt. IV, 1875) This was a purely political focus. He was silent throughout his career about how the state should or will or can run the economy.

He provided some famous slogans. He offered rhetoric about the inevitable triumph of the proletarian class. But he offered no guidelines for the leaders of the victorious proletarians.

Socialists in the nineteenth century were equally silent about how the state can allocate production so as to create the good society.

In the twentieth century, there was no major detailed theoretical treatise on the economics of socialism that went into detail about the actual operations of central planning agencies in a world where the state owned the means of production. There was no equivalent of Ludwig von Mises" Human Action or Murray Rothbard"s Man, Economy, and State or George Reisman"s Capitalism.

In retrospect, this seems incredible. Here was a movement that captured the Soviet Union and China. Yet there was not a single book, let alone a shelf of books, available to Lenin in 1917 and Mao in 1949 that could serve as a guide to the kind of economic organization that they should impose. There was no treatise that could serve as a blueprint for the socialist New World Order, whether non-revolutionary socialism or Marxist communism. Yet Marx said that his was scientific socialism -- not utopian socialism, like the works of his critics.

Utopia meant "nowhere." They were all utopian socialists, including Marx.

Socialism has always been a movement based mostly on rhetoric. There was never any logic to it. There were endless promises about how politics or class revolution could bring in a socialist paradise, but there was nothing written about how this paradise would operate.

Marx offered his famous ten steps in The Communist Manifesto (1848), but they were mere slogans. The fact that he included a central bank (#5) is indicative of how confused he was about the transition from capitalism to socialism to communism. He never went into any further detail. He had plenty of time to offer details. He died in 1883.

Here is what defenders of socialism refuse to face: there is no theory of socialist economic planning.

Socialist economic theory has always been missing in action. There is also no practical treatise that has served as a guide for socialist economic planners after their national revolutions. Socialist economic planning has been chaotic. No theory of socialist planning ever emerged from this chaos.

When we look at the history of socialism, meaning the state ownership of the means of production, there are few examples.

The USSR and Communist China did come close, but the black markets always operated in both societies.

There have been tiny Communist states: Albania, Cuba, and North Korea. None have produced a theory of socialist planning.

The Labor government of Great Britain from 1945 to 1951 nationalized coal mining and much of medical care, but it did not extend control over the capital markets of The City, the separate legal jurisdiction of the bankers in the center of London. The Bank of England maintained most of its sovereignty. Labor nationalized it in 1946, but then failed to exercise control. It remained Keynesian.

In short, there are no working models of socialism. This is fitting because there are no theoretical models of socialism. It has always been based on rhetoric, not logic. It has never been based on any system of economic causation. It has no theory of economic sanctions comparable to the sanctions in the free market of monetary profit and loss.

This was pointed out in 1920 by Mises in his classic essay, "Economic Calculation in the Socialist Commonwealth." He argued that socialism is inherently irrational in theory. It has no system of private property. It, therefore, has no capital markets. But without capital markets, there can be no prices for capital. Without prices for capital, central planners do not know how to allocate capital to serve the wants of the people. So, he argued, pure socialism cannot survive.

This argument was never successfully refuted by any socialist. Polish immigrant and University of Chicago Professor Oskar Lange wrote several articles in the late 1930"s on Mises" arguments, but they were strictly theoretical. When he went back to Communist Poland in 1945, and was later put into positions of authority in planning bureaus, nothing that he had written in his famous essays was actually implemented by the Polish government. His hypothetical socialist planning board always remained pure theory. It was based on the idea that central planners can do trial and error pricing to allocate capital. But there are no consumer-generated prices in a socialist commonwealth. More to the point, there were no economic sanctions attached to them. If there is no system of monetary profit and loss, there are no meaningful economic sanctions placed on the planners. But there are surely political sanctions, as the planners discovered under Stalin and Mao. It wasn"t that the dictators liquidated capital. It was that they liquidated political opponents and bureaucrats who lost their favor.

There have been very few Marxist economists teaching in American universities. They have had zero influence on the profession. There have hardly been many more socialist economists on the campus. There was a flurry of publicity in the late 1960"s regarding a tiny group of these people, who call themselves the Union of Radical Political Economists. It had the unfortunate acronym of URPE, which was pronounced "urpee." I studied under one of its major figures in grad school, Howard Sherman. He lectured coherently. He wrote in English. He did not use equations. He never presented the case for socialism in the classroom that I attended. If he converted anybody to socialism, it must have been in private.

The socialist professors are confined mainly to the sociology departments and the English departments. These people have never taken an economics course. They do not comprehend the logic of economic causation. Like their predecessors in the nineteenth century, they confine their comments to rhetoric.

We see crowds of undergraduates who claim to be in favor of socialism. But none of these people has ever read a book on socialist economic theory. This is understandable since there isn"t one.

They are motivated by rhetoric. Rhetoric is all they have been exposed to. They go to large mass meetings to protest this or that aspect of capitalism. But they have no agendas. They don"t have a personal agenda, and they don"t have a social agenda. In this sense, they are just like Karl Marx.

The difference is this: they are not going to find sugar daddies like Frederick Engels, who ran his family"s textile plant in Manchester and used a little of his money to put Marx on the dole for four decades.

These people are noisy, but in terms of pursuing a systematic agenda for turning the United States into a socialist commonwealth, they really are harmless.

When Deng Xiaoping inaugurated an agricultural reform in 1979 which relied heavily on private ownership, he launched the most impressive period of economic growth that any large country has ever experienced. But that ended socialist economic planning. When, on December 25, 1991, Mikhail Gorbachev announced that the Soviet Union was going out of business, that ended the lure of socialism among the intellectuals. They had always clung to socialism because they expected that their class would exercise power in a socialist regime. When it became clear that the Soviet Union was too feeble to impose its will on the Russian masses, that was the end of their infatuation with Communism and socialism. It was always about power. It was never about the logic of socialism.

So, in this month, the 100th anniversary of Lenin"s Bolshevik revolution in Russia, we can rejoice in the fact that socialism is dead. From a theoretical standpoint, it was never alive. It was a corpse from day one. It was sustained by rhetoric, not logic.

If you want to visualize the future of socialism, think of Lenin"s corpse in Lenin Square. It"s all dressed up with nowhere to go.

"Liberal Socialism" - Another False Utopia

Authored by Richard Ebeling via The Mises Institute,

Very often bad and failed ideas do not die, they simply reappear during periods of supposed social and political crisis in slightly different intellectual garb, and offer “solutions” that would merely help to bring about some of the very types of crises for which they once again claim to have the answers. Socialism in its various “progressive” mutations represents one of the leading ones in our time.

The latest manifestation of this appeared on August 24, 2017 in the New Republic online in an article by John B. Judis on, “The Socialism America Needs Now.” He is heartened by the wide appeal, especially among younger voters, that Bernie Sanders received during the 2016 presidential contest. He thinks that this may herald a rebirth and a renewed possibility for a socialist alternative to the current American political and economic system.

Having traveled over the decades from the 1970s to the present from being a radical, revolutionary socialist to a more “moderate” one today, Mr. Judis admits that the Marxian-style socialism of the nineteenth and the first half of the twentieth centuries is now long passé. The embarrassing experience of “socialism-in-practice” in the form Lenin and Stalin created in the Soviet Union or by Chairman Mao in China will not fly anymore.

From Soviet Central Planning to “Liberal Socialism”

Central planning seemed not to work too well, and the “communist” variation on the socialist theme also had a tendency to be “authoritarian” with some drawbacks for human life and liberty. (He tactfully avoids mentioning that Marxist-inspired regimes in the twentieth century murdered well over a 100 million people — with some estimates suggesting the number might have been closer to 150 million or more in the name of building the “bright, beautiful socialist future.” See my article, “The Human Cost of Socialism in Power”.)

He turns his mind and ideal to the “democratic socialist” parties and regimes in Western Europe in the post-World War II era, or as Mr. Judis prefers to call it, following John Maynard Keynes, “liberal socialism.” What makes this form of socialism “liberal”? It is belief that there can be a “socialism with a human face.” In other words, a form of “economic” socialism that leaves in place democratic politics with a respect for a broad range of personal and civil liberties.

We have heard this all so many times before. While Mr. Judis wishes to suggest that there is no real or definitive definition of “socialism” (any more than there are of “liberalism” or “democracy”), the fact is that throughout the nineteenth century and well into the twentieth, virtually all socialists condemned and called for the abolition of private ownership of the means of production, and in its place some form of socialist central planning directed by government in the name of “the people.”

Mr. Judis actually more or less admits this, and that the only great debate among socialists and communists in the late nineteenth and twentieth centuries was over how the socialist utopia would be brought about – through violent revolution or through the democratic ballot box. The Russian Marxists led by Vladimir Lenin insisted that only revolution and a “dictatorship of the proletariat” could bring “the workers” to power and assure their permanent triumph over the exploitive capitalist class. The German democratic socialists opted for democratic means to power and rejected the dictatorship of Lenin and later Stalin.

But it is nonetheless the case that well into the post-World War II period this was a dispute over political means and not ideological ends, which remained for both branches of the socialist movement the abolition of capitalism and the imposition of socialist central planning. Communists wanted to bring about this transformation of society in one fell swoop through violent means and imposed dictatorship. The German Social Democrats and the “Fabian” socialists in Great Britain proposed democratic means, with socialism coming more gradually and through incremental extensions of government control and planning over more and more parts of society. But for both, the end result would be the same: centralized government direction of economic affairs and social change.

As the 1950s turned into the 1960s and 1970s, more and more “democratic” socialists in Western Europe grudgingly accepted the fact that comprehensive socialist central planning was a failure as practiced in the Moscow-dominated Soviet bloc countries; and it brought little of the prosperity that government planning promised to provide as an escape from poverty in the “third world” countries of Asia, Africa and Latin America. Plus, the tyranny and brutality of Soviet-style socialism made it ethically difficult to defend. So the democratic socialists turned to the interventionist-welfare state to achieve their “social justice” ends without nationalizing all the means of production or centrally planning all economic activity in society. (See my article, “Barack Obama and the Meaning of Socialism”.)

In Search of Socialist Utopias Elsewhere

But those communist regimes were not so repulsive that many, if not most, of these democratic socialists in the West would not continue to still give moral indulgence and wishful hopes that, maybe, somehow, Marxian socialism would still finally work and fulfill its promise in, first, Mao’s China, then in Castro’s Cuba, or Ho Chi Minh’s Vietnam, or in the Sandinista’s Nicaragua, or . . . The collectivist dream and delusion springs eternal. Plus, after all, even a rude, crude and rough Marxist regime isn’t the United States – please, please almost anything other than capitalist America!

Even today, the enlightened “progressive” can take a tour of Castro’s Cuba with the leftist magazine, The Nation. Don’t miss out! This November 2017 you can go with The Nation and, their advertisement promises, “learn about the Cuban Revolution from experts at some of its most pivotal locations, including the Moncada Barracks, the site of the first armed assault by Fidel Castro and his band of rebels on July 26, 1953.” The progressive political pilgrim to the collectivist promised land will be spending his or her “days meeting with prominent Cuban professors, government officials,” including “urban planners” and “health care workers.” Don’t miss on your chance to visit one of the remaining socialist “utopias” before global capitalism succeeds in taking it away.

No doubt, these “social justice” tourists will not be taken to La Cabana prison, where Che Guevara was assigned by Castro the role of state prosecutor against “enemies of the people,” following Fidel’s triumphant entrance into Havana and seizure of power in January 1959. In the role as unrestrained judge and jury, Che arbitrarily sent hundreds to their death, sometimes literally by his own hand.

Nor are they likely to have quoted to them Che’s words that, “My ideological training means that I am one of those people who believe that the solution to the world’s problems is to be found behind the Iron Curtain.” And that “I can’t be the friend of anyone who doesn’t share by ideas.” Or that Che was the one who in 1960 instituted communist Cuba’s system of forced labor camps. This would not fit in with the heroic face of Che on the t-shirts that, no doubt, some of these “progressive” travelers to utopia would be wearing. After all, Fidel and Che did it all for “the people,” and, well, they did have “good intentions.”

Of course, while such political pilgrims are pleased to visit these places and bask in the moral satisfaction that the few remaining communist regimes in the world are still trying to make that “better world,” even if with the heavy hand of dictatorship, censorship of art, music and political views, the imprisonment of political opponents, and torture and execution of “enemies of the people” (all of which they still mostly turn a blind eye), they prefer to live in their own Western countries and dream the “liberal socialist” dream, as clearly Mr. Judis is doing.

Liberal Socialism as the Regulatory and Redistributive State

What, precisely, is this democratic or “liberal” socialism to which Mr. Judis hopes a younger generation of Americans will turn in the years ahead? It turns out to be the same “utopia” of the interventionist-welfare state that Western countries have been following since the end of the Second World War, though, admittedly, to different degrees in different places around the world.

Mr. Judis wants the government to intensively and pervasively regulate, command, restrict and direct various aspects of the private enterprises in society, while assuring that American society can still take advantage of the self-interested incentives and innovations that can improve the material conditions of life. But the direction, form and extent to which private enterprisers shall be allowed to do those productive and innovative things with their businesses will be confined to and constrained within those avenues that serve the “higher” and “non-market” values and purposes of “society.”

Matching the regulatory and interventionist state must be the redistributive welfare state. The excessive and unnecessary income and wealth of the businessmen and private sector investors of America must be taxed, and heavily, to assure greater material egalitarianism, and to fund all the social services and government-provided safety nets, which “would bring immeasurable benefit to ordinary Americans. A good watchword is economic security – something that is very lacking to all except the wealthiest Americans.”

At this point, it might be wondered what, then, marks off Mr. Judis’ “liberal socialism” from the already existing modern American “liberal” interventionist-welfare state? It turns out that it is all a matter of intentions and the intended recipients. In Mr. Judis’ view, mainstream modern American liberals have lost their way; they too frequently sleep with the enemy (think Bill and Hillary Clinton) in the form of excessively collaborating with businessmen and bankers to the latter’s benefit; American liberals and progressives have stopped sufficiently emphasizing “economic justice” for middle America with their increasingly primary focus on “identity politics.”

Liberal Socialism and Democratic Politics Without Romance

Also, unlike the communists and many radical socialists and some progressives, Mr. Judis calls for moving towards his notion of a better socialist future through a more active participation in the Democratic Party. The task is to nudge and shove mainstream modern American liberals in the Democratic Party further to the socialist left, which in many of their hearts these people already know is right. And to use the Democratic Party as the vehicle to propagandize and persuade more in society that socialism is good and just and the best for them.

In other words, Mr. Judis calls for using the methods of the earlier German Democratic Socialists and the British Fabians, only do so in a way that does not seem to be as threatening or undermining of all the institutions of existing society as those earlier groups often did with their call for the total abolition of capitalism.

Mr. Judis’ “liberal socialism” is really just the existing interventionist-welfare state placed – “democratically” – in the “right” elected hands, so those manning and managing the machinery of government will do what he wants political authority to do, rather than what it is currently being done by Republicans and the current Democratic Party establishments.

A way for Mr. Judis to more easily defend his desire and ideal is to suggest that the existing political-economic system in America today is a free market, “neo-liberal” capitalism, rather than what the Italian economist, Vilfredo Pareto once more accurately labeled it: “bourgeois socialism.” That is, a system of government regulation, redistribution, favors and privileges that benefits many in the private enterprise sectors of society rather than a more “proletarian socialism” that simply would take from “the rich” to give to “the workers” and “the poor.”

What is sometimes called “crony capitalism” is just Pareto’s “bourgeois socialism.” Pareto also understood, in the 1890s, with amazing clarity one of the insights of modern Public Choice theory, that “participatory democracy” of the community as a whole is a theoretical and practical illusion in an complex society. Politics in an unrestrained democracy always becomes a contest among special interest groups capable of gaining concentrated benefits from State intervention and redistribution at the diffused expense of the rest of the society.

In democratic societies it takes the form of coalitions of special interest groups who succeed in offering campaign contributions and votes to politicians desiring elected political office, who then fulfill their campaign promises to those groups once in the actual halls of political power. In totalitarian societies such as in the former Soviet Union, it took the form of hierarchical position within the Communist Party and within the central planning bureaucracy, including the state enterprise managers, who had the decision-making power over access to and use of the socialized means of production; thus, the communist “classless society” had one of the most intricate social webs of power, privilege, favoritism and plunder ever seen in human society.

This “politics without romance,” to use Nobel Laureate, James M. Buchanan’s phase, shows why the notion of “the people” owning, controlling, regulating and overseeing the collective direction of an economy is pure illusion and deception concerning the reality of how and why political power works the way it does.

What Mr. Judis and, far too many who share his views about capitalism and some form of socialism – “liberal” or otherwise – fail to understand is that any and all forms of planning, regulation and political redistribution in fact takes power and decision-making out of the hands of the people about whom they express their concerns.

Real Participatory Liberation under Free Market Liberalism

It is the open, competitive market economy that, precisely, gives each and every individual wide latitude and liberty over his own personal affairs. It is the market that enables each of us to make his own choices concerning the profession, occupation or productive calling to pursue. It is the market that enables each and everyone of us to have the freedom to make our own choices to earn an income and spend that income as we consider best in terms of the values, beliefs, purposes and desires that we think may bring meaning and happiness to our individual lives.

It is the free society of individual liberty and voluntary association that provides truly participatory opportunities to form organizations, clubs, and groupings of almost any type to further the goals and ends outside of the narrower arena of market transactions to better our lives materially, socially, culturally and spiritually. (See my article, “Individual Liberty and Civil Society”.)

At this point, no doubt, Mr. Judis would reasonably ask, but what about those who are unable to provide for themselves, due to personal tragedy, unfortunate circumstances, or simply bad luck? Is this not the reason why enlightened and decent societies had to move “left-ward” to establish and financially provide for those unable to personally meet the essentials of everyday life and to have opportunities to fulfill their potentials as a human being? Is not the welfare state of “liberal socialism” the inescapable necessity of having a humane society?

The classical liberal responds that these very concerns can be far better and more successfully solved and served through the voluntary institutions and associations of civil society than to turn such tasks over to the government. In the nineteenth and early twentieth centuries, before the modern welfare state, all such “social problems” were handled with wide and positive affect by charities, philanthropies and for-profit organizations in places such as Great Britain and the United States. That their workings and successes are virtually unknown to most people in modern society shows the extent to which their history and social nobility has gone down a memory hole of collectivist misinterpretation and misunderstanding of what a society of liberty did and could provide. (See my article, “A World Without the Welfare State”.)

Furthermore, the transfer of such welfare responsibility to the government reduces each and every recipient to a ward of the State. It is politicians and bureaucrats who decide the education your children will receive in government schools; they are the ones who determine the retirement possibilities you will have; the healthcare to which you will have access and its type; the wages and work conditions under which you may be allowed to employed or unemployed, and the forms and types of associations you may enter into and the activities and membership you permitted.

The “liberal socialism” about which Mr. Judis dreams is not the path to liberation but a continuing servitude and obedience to the those with political power and who have the arrogance and presumption to imagine that they know better how people are to earn a living, care for their own lives and that of their families, and associate with other members of society better than those individuals deciding all of these matters for themselves. (See my article, “Democratic Socialism Means Loss of Liberty”.)

One would have thought that after more than seven decades of the interventionist-welfare state as the political left’s “liberal socialist” alternative to Marxian socialist central planning, it would be realized that it is just another constraining and corrupt manifestation of the unworkability of any collectivist system of control and command.

Mr. Judis’ program for a socialist America also shows the intellectual bankruptcy of those on “the left.” The revolutionary transformation of society, for which they yearn, ends up being nothing more than the existing interventionist-welfare state, just with the desire that people who agree with Mr. Judis should be at the helm of political power rather than those with whom he disagrees.

Venezuela: Dictatorship, Collapse, And Consequence

Authored by Brandon Smith via Alt-Market.com,

If you want to outline the numerous failures of ideological and economic socialism, just name any socialist nation and you are sure to uncover an endless supply of examples. In fact, many countries where socialism is not total but making considerable inroads often suffer from severe decline — the U.S. being one of them. Whatever socialism touches it destroys, because forced interdependency does not work. It is a broken concept with no large scale successes (this includes China, which suffers from considerable poverty and a totalitarian government despite it being the most successful garbage economy out of a host of other garbage economies). Yet, proponents of socialism keep trying again and again claiming that "this time is different."

So ample have been socialism"s failures in the past several years that socialists have resorted to a classic blame game in order to maintain the delusion. You see, when you bring up nations at the very end of the socialist cycle on the verge of extinction — nations like Venezuela, all you are going to hear is the argument that it was "the evil western capitalists that sabotaged the experiment."

This is a fascinating journey into cognitive dissonance. Because in order to believe this nonsense, you have to first ignore the cold hard reality that socialist policies and politics have permeated every aspect of most western nations to the point that they can no longer be called free market societies. The fact is, IF sabotage of Venezuela can be proven as the cause of its economic ills rather than the inherent pitfalls of socialism, it would merely be a group of socialist nations sabotaging another socialist nation. "Capitalism" plays no part in this mess whatsoever.

In fact, it has been international banks like Goldman Sachs that continue to fund failed socialist projects like Venezuela through bond investment.  If anything, the banks have been artificially keeping the government afloat when it should be allowed to fail so that it can be replaced.

Venezuela is perhaps the easiest of modern examples of socialist collapse, and maybe it is lazy to pull the Venezuela card when discussing these issues, but consider for a moment that the country is important exactly because it is a cautionary tale. Venezuela as a disaster state is at the end of the path ALL other socialist nations are traveling down. Venezuela is the future, and the future is bleak.

Here is the problem: Human beings need some structure to function as a group, this is true. But, human beings also need participation in a structure to be voluntary, otherwise, they are unlikely to find meaning or happiness within that structure. Without productive and inventive individuals striving to improve a structure, the structure will eventually stagnate or implode. Without individuals to support it, the system is nothing; it does not exist.

Socialists tend to suffer from severe mental blockage when contemplating the idea of "voluntarism." They just can"t seem to grasp it. I believe this stems from a core assumption — the assumption that other people need to be forced to do "necessary" things, otherwise they will not do them. So, for example, socialists and big government champions will consistently argue that infrastructure like roads and fire fighting and police and schools could not exist without taxation; taxation being the stealing of other people"s money to pay for services that are supposedly vital to everyone. However, all of these services and more can and have been built and maintained in the past through free markets as well as through voluntary efforts. Force and taxation was not required back then, but for some reason it is required today.

What changed? Nothing. We have only strayed so far down the path of interdependency and government interference that most people can"t imagine life without it.

Another argument I hear often from pro-socialism types is the argument that interconnectivity is its own rationale. That is, they argue that the community requires dependency, because if you are independent then you are not supporting others and are thus harming the system. "We all have to live together within a society and if you are not helping us then you are hurting us," they state.

See how that works? You MUST participate, because if you don"t you are harming everyone else. It is not a victimless crime to walk away or to build a competing structure like those "selfish" libertarians claim. You are a part of the machine and if you stop serving your function then the whole machine may break and then we all suffer. Therefore, the application of force and coercion becomes morally acceptable because the "needs of the many outweigh the needs of the few."

This is the horrifying perpetual circle that is collectivism; we all stand together or we all fall together, toe the line or else!

Well, as we have seen many times this ideology is not very practical or successful. If human beings were bugs with a central hive mind then maybe socialism would have some merit. But thankfully, most of us are not bugs and we do not thrive in environments that treat us like drones. We might tolerate them for a while, but we certainly do not thrive in them. Frankly, such systems should be allowed to collapse because they are a hindrance to mankind, not a beacon of progress.

When examining Venezuela, we see the classic big government collapse in motion.

First comes economic strife as the inability of the system to provide "equality" becomes apparent. All high minded socialist and communist (same difference) structures end up with an oligarchy. As long as big government is present, the power mongers will flourish.

Beyond the massive gap that inevitably develops between the power elite and everyone else, socialism is actually highly effective at creating wealth equality; in that it makes all other people equally poor. In Venezuela, the government has hiked the minimum wage three times this year, and surprise surprise, this has done nothing to alleviate the problem. Try explaining this to the leftists in the U.S. demanding a mandatory $15/hr minimum wage and they will dismiss the comparison outright. Explain to them how, just like in Venezuela, hiking minimum wage requirements results in more poverty rather than less, and they"ll start talking about what is socially "correct" rather than what is mathematically evident.

At bottom, wage increases and social welfare measures are meaningless in the face of severe currency devaluation.  Venezuela has seen its currency value disintegrate by 93% in the past two years.  So terrible are the conditions now that starvation is becoming normalized.  In Venezuela, they call it the "Maduro Diet".

The next phase of the socialist breakdown is usually dictatorship. When the fantasy of pure equality dies and people are left with very little to show for their faith in the system, they start to become disillusioned and angry. Some citizens will decide to try the peaceful method and walk away from the broken structure so that they can build their own. Ultimately though, this is nothing more than a stopgap.

The Venezuelan government has been cracking down on alternative markets (often called "black markets") for years in order to force the population to remain as cogs within the socialist system. You see, in a socialist framework, people are property to be used for promotion of the system. They are not allowed to leave while the system is in dire straights, because the simple act of leaving stands as a damning indictment of the system itself. Leaving the system or peacefully competing with the system is treated as an act of war on the system.

The mode of dictatorship eventually meets with political opposition. People are only tolerant of tyranny for so long, and they will act. But, being generally moral, the average person will first seek out non-violent strategies to counter overt oppression. Again, this is nothing more than a stopgap. Venezuela has followed the same battle plan multiple dictatorships have followed in the past; namely the imprisonment of political opponents and activists.

This is usually a signal that the subject nation is on the verge of full spectrum collapse or civil war. Within months of any political cleansing, most totalitarian governments either start a war with another country to unify the public through fear, or, they destabilize into civil unrest. It is clear that Venezuela is going to fracture completely in the near term.

In previous articles I have warned about this process within Venezuela in terms of the consequences that will erupt throughout South and Central America. With a breakdown in Venezuela, Donald Trump"s border wall will be looking like a rather fantastic idea as millions rush from the ground zero turmoil that will be created when the region melts into factional war and refugees flee.

My first suspicion though is that no such border controls will exist and we will be caught completely unprepared.

My second suspicion is that this turmoil will provide some attractive opportunities to the establishment elites within the U.S. Remember how Europeans were goaded into accepting millions of immigrants from the Middle East in the name of "atoning" for the war crimes of the West? Parts of Europe are now slowly but surely crumbling under the stress of a completely incompatible culture overrunning the existing value structure. Remember how critics of the policy were told that "we created the mess in the Middle East and now had to pay for it?"

Expect the same exact rhetoric if and when the crisis in Venezuela spills over its borders and disrupts the southern hemisphere. American policies such as sanctions will be blamed. Socialists will chide the American public that they should feel guilty and leave the border open as penance for creating the mess in the first place. And, being that there are still no legitimate border controls, many of these refugees will enter the U.S. unimpeded.

At that point, we will perhaps see the next phase of collapse within the American socialist experiment as we are seeing the dismal results of socialist experiments in Europe overwhelmed by too many immigrants with no intention of assimilation. To make a "new world order", as establishment globalists sometimes refer to it, the old world order has to be destroyed. Socialism is in itself a very effective weapon for undermining the coherent structure of nations and cultures, leaving disaster and ashes in its wake.

With the slate wiped clean, as it were, international financiers and other elitists always seem to be in the right place and time to build the next system; a system even more centralized and more oppressive than the one before.

What we see in Venezuela is a potential nexus for greater calamity in the western hemisphere. And, what we also see is a microcosm of the socialist cancer in action. It is not some self-contained rarity, it is the common and predictable outcome of a society based on collectivist servitude and false promises of equality.

USA: Export Glass Parking Lots Now, or Be a Banana Republic (Venezuela) Later

Our future is increasingly looking like either an Elitist Authoritarian style Socialism with lower standards of living and lots of small wars, or Populist Authoritarian Dictatorial style "Capitalism" which will drive us to one big war and lots of dead people - Vince Lanci

Amazon economy? Bankrupt states? Obamacare? MEH. None of that matters, Vince Just
wake me when the little fat guy nukes one of our carriers.- "Bon Scott"

Demographics as Political System Driver

Is Venezuela a proxy for the US? Initial reactions, our own included, are NO WAY. But think about it. The 2008 bank bailout was the opposite of capitalism. Obamacare is a socialization of medicine. Medicare claims rise, skilled jobs and people (drug addled?) available for them are disappearing. 

It would seem as the East (growing young taxable middle class population) moves towards a capitalistic (not democratic) model, we are moving towards a more socialist system. And that is in no small part because of  our demographics. The baby boom generation distorts every thing they touch demographically: from homes, 401ks, to Gyms, and now healthcare. This is not a judgment, although we have done a polemic style piece blaming them for everything before. 

The wave of Boomers from birth to death were the most powerful drivers of secular trends we have witnessed. And like it or not, the
US is moving towards a more socialist setup on the back of that demographic. It has to. Sure it will go
kicking and screaming as the shrinking middle class bites back by
voting in anti-elitist candidates.  But Trump?

Trump is really just an
authoritarian  carpetbagger in disguise.  But that will not matter.
People will vent, then be disappointed.. then project their expectations
onto someone else with empty selfish rhetoric (Hillary), or worse..
terrifyingly insecure selfish action (Trump 2020).

From "BoomerCare" Is Here to Stay- Demographics Don"t Lie:

The Market Will Fix Everything.. And it Won"t Be Pretty

Market clearing events will happen one way or another. Maybe not on an your timeline. But clearing events will happen. It always ends in 1 of 3 ways. Poverty, Death, or Collapse

1. POVERTY:  The Baby Bust, Gen X, Gen Y, and Millennial Groups hold the bag and exist at a lower standard of living. (Zombie Existence)
   
   • taxes, inflation, lies, and inferior standards are the methods
   
   


2. DEATH: By War
   
   • the ultimate market clearing, de-complexifying event.
   
   
   • social stratification levels flatten and people are all reduced to the same thing. Humans -Fight Club post debt erasure
   
   


3. SOCIETAL COLLAPSE: . In which event  centralized constructs disappear and simpler but functioning entities take their place- Fight Club again
   
   • EU- collapses, nation states re-emerge
   
   
   • US- Entitlement systems don"t just get worse as in 1 above. They totally break
   
   
   • Emerging Markets- regress to war lords and anarchy
   
   

Rapid fire micro news is mind numbing now. As we are constantly forced  to look at the little picture the world moves towards  militarily driven solutions. As one Soren K. Group contributor "Bon" is saying:

Amazon economy? Netflix loses Disney? MEH.  None of that matters. Just wake me when the little fat guy nukes one of our carriers. Then Ill be happy to pay attention. "Cause that is where we are going. The VIX will stay at 7% while bombs are dropping on Seoul. Markets do not reflect risk. And we are going bankrupt unless we start a war. I"m waiting to buy a spot in "Detroit by the Sea" when the war starts... NJ will be cheap then right?

Indeed, our future is increasingly looking like  

1. Elitist Authoritarian style socialism with lower standards of living and lots of small wars, or


2. Populist Authoritarian Dictatorial "Capitalism" which will drive us to one big war

And so, take note of Venezuela... Detroit"s cousin to the South. Then look at IL, CT, and NJ. What we call entitlement programs are really socialist programs.  Or just nuke  North Korea, Iran, and the Saudis Michael Corleone style.

BEAUTY AND THE BEAST - Venezuela is our Newest Dictatorship

via Dave  Pell

"Venezuela always has all the superlatives. It"s the world"s highest inflation by a lot. It"s the world"s highest murder rate. A lot of economists will tell you it"s the most mismanaged economy in the world. And now, a lot of people are saying the world"s most recently born dictatorship. But when I went down there, it was a great place to live, which sounds crazy now, but it"s beautiful." A reporter who has been covering Venezuela describes what"s it like to see a democracy destroyed? "Things can always get worse and worse and worse, and there"s no rule that says that a miserable situation has to end, just because it"s too miserable." (Even Radiohead lyrics got depressed by that line...)

+ "Fugitive Venezuelan soldiers have declared a rebellion against "the murderous tyranny" of the president. Dissident officers have fled the country, seeking asylum. Grenades have been fired at the Supreme Court and, this weekend, assailants under the command of a mutinous captain attacked an army base, making off with weapons." From the NYT: As Maduro"s Venezuela Rips Apart, So Does His Military.

+ "Since Venezuela"s economy began to melt down in 2014, violence, triple-digit inflation, and shortages of food and medicine have caused hundreds of thousands of people to flee in the ways available to them. Elites have obtained U.S. visas and left for Miami. Those in the middle class have escaped by plane to places such as Buenos Aires. The poor have walked across the border to Colombian cities. But there is no refugee flow quite like that of the Warao to Manaus." From BusinessWeek: Forced Into the City After 9,000 Years in the Jungle.

Demographically Driven Banana Republic or Nuclear War ?

We are on an economic Venezuelan path but few see the emperor"s creeping nakedness yet.  A generation that was the peak of capitalistic success (excess) in terms  of stock  valuations will next sound the siren for more socialist policies. And that is not necessarily a bad thing. Problem  is we"ve saved nothing in the good times to prepare for it.

Worse, those that did try to save were robbed by the Fed and other trickle up policy tools. And those people need the kind of help that capitalism won"t provide in its current US form short of soylent green.

Failed Democratic Socialist policies de-evolve into dictatorships as the need to
use force increases. That is Venezuela now. Failed Capitalistic Democracies.....
same thing. Difference here is we replace Capitalism (true capitalism
does not exist in the US now) slowly with Socialism to appease the have-nots.. and then we
fail.

Or we could just have a bigger external war while we still can. Venezuela does not have that choice.

American Students Love Socialism (Just Don't Ask Them What It Is)

Authored by Cabot Phillips via CampusReform.org,

Ask most college students, and they"ll tell you that socialism is a wonderful thing. Just don"t ask them to define it, because you"ll get the same answer.

Last year, a poll was released showing 53 percent of Americans under age 35 are dissatisfied with our nation’s current economic system and think socialism would be good for the country.

The same poll found that 45 percent of young Americans would be willing to support an openly socialist Presidential candidate.

The findings of this poll coincide with the rise of Senator Bernie Sanders, an avowed “Democratic Socialist” from Vermont who received millions of votes in the 2016 Democratic Primary, many of them from millennials.

While it’s clear that young people increasingly view socialism in a positive light, it’s also clear that many of them are uneducated about what it entails, or the impact it’s had throughout history.

The same poll found many millennials are unfamiliar with historical figures often associated with socialism, such as Che Guevara, Joseph Stalin, and Karl Marx.

Wanting to see what millennials in D.C. thought of socialism, Campus Reform headed to Washington, D.C. to ask students two simple questions: “Do you like socialism?” and “What is socialism?”

It quickly became clear that while most of the people we spoke with held an idyllic view of socialism, most had little idea of what it actually is.

One student said of socialism, “I think people throw that word around to try and scare you, but if helping people is socialism, than I’m for it.”

When asked how she would define socialism, her answer was simple: “I mean honestly I’m not not exactly sure.”

“I guess just, you know, getting rid of that wealth gap in the United States?” ventured another.

One student supported it passionately, saying “It’s more of an open form of government and it feels a lot more accessible to a lot more people,” but when asked to explain what socialism actually entails, could only repeat now-common refrain: “To be quite honest I don’t know.”

Watch the full video to see what else students had to say about socialism!

Why The Left Refuses To Talk About Venezuela

During the 2016 presidential election, Bernie Sanders refused to answer questions about Venezuela during an interview with Univision. He claimed to not want to talk about it because he"s "focused on my campaign." Many suggested a more plausible reason: Venezuela"s present economy is an example of what happens when a state implements Bernie Sanders-style social democracy. 

Similarly, Pope Francis — who has taken the time to denounce pro-market ideologies for allegedly driving millions into poverty — seems uninterested in talking about the untrammeled impoverishment of Venezuela in recent years. Samuel Gregg writes in yesterday"s Catholic World Report: 

Pope Francis isn’t known as someone who holds back in the face of what he regards as gross injustices. On issues like refugees, immigration, poverty and the environment, Francis speaks forcibly and uses vivid language in doing so.

Yet despite the daily violence being inflicted on protestors in Venezuela, a steadily increasing death-toll, an explosion of crime, rampant corruption, galloping inflation, the naked politicization of the judiciary, and the disappearance of basic food and medical supplies, the first Latin American pope’s comments about the crisis tearing apart an overwhelming Catholic Latin American country have been curiously restrained.

This virtual silence comes in spite of the fact that the Catholic bishops who actually live in Venezuela have denounced the regime as yet another illustration of the "utter failure" of "socialism in every country in which this regime has been installed."

Thus, for many Venezuelans, the question is: "Where is Pope Francis?"

As with Sanders, it may very well be that Francis has nothing to say about Venezuela precisely because the Venezuelan regime has pursued exactly the sorts of policies favored by Bernie Sanders, Pope Francis, and the usual opponents of market economics.

It"s an economic program marked by price controls, government expropriation of private property, an enormous welfare state, central planning, and endless rhetoric about equality, poverty relief, and fighting the so-called "neoliberals." 

And, as Venezuelan president Nicolas Maduro has helpfully explained, "There are two models, the neoliberal model which destroys everything, and the Chavista model which is centered around people.”

The Chavista model is simply a mixture of social democracy and environmentalism which is easily recognizable as the Venezuelan version of the hard-left ideology espoused by a great many global political elites both in the United States and Europe. Neoliberalism, on the other hand — as I"ve noted before — is a vague term that most of the time really just means a system of relatively free markets and moderate laissez-faire. 

Indeed, no other regimes in the world, save Cuba and North Korea, have been as explicit in fighting the alleged menace that is neoliberalism. 

For this reason, as Venezuela descends into chaos, we are hearing a deafening silence from most of the left, as even some principled leftists have noticed. 

In an article at Counterpunch, for example, Pedro Lange-Churion points out: 

Venezuela was news while it was good news and while Chávez could be used as a banner for the left and his antics provided comic relief. But as soon as the country began to spiral towards ruination and Chavismo began to resemble another Latin American authoritarian regime, better to turn a blind eye.

Nevertheless, as a dedicated leftist, Lange-Chrion unfortunately still mistakenly thinks that the Venezuelan problem is political and not economic. For him, it"s merely an unfortunate coincidence that the implementation of the Chavismo economic agenda just happened to coincide with the destruction of the nation"s political and economic institutions. 

But here"s the thing: it"s not a coincidence. 

In fact, it"s a textbook case of a country electing a leftwing populist who undoes years of pro-market reforms, and ends up destroying the economy. 

This has been going on for decades in Latin America where, as explained by Rudiger Dornbusch and Sebastián Edwards, the cycle repeats itself again and again. 

It"s happened in Argentina and in Brazil most recently, and it goes something like this: first, a relatively neoliberal regime comes to power, moderately reduces government spending, somewhat restrains government power, and ushers in a period of growth. But, even with growth, middle-income countries like those of Latin America remain poor compared to the rich countries of the world, and large inequalities remain. Then, populist social democrats convince the voters that if only the regime would redistribute more wealth, punish greedy capitalists, and regulate markets to make them more "humane," then everyone would get richer even faster. And even better, the evil capitalists would be punished for exploiting the poor. Eventually, the economy collapses under the weight of the new social democratic regime, and a neoliberal regime is again elected to clean up the mess. 

Venezuela is in the midst of this cycle right now. After decades of relatively restrained government intervention, Venezuela became one of the wealthiest nations in Latin America. During the most recent twenty years, though, the Chavistas were able to take that wealth and redistristribute it, regulate it, and expropriate it for the sake of "equality" and undermining capitalist evil. But, you can only redistribute, tax, regulate, and expropriate so much before the productive classes give up and the wealth runs out. 

To the leftwing mind, the explosion of poverty that results can"t possibly be the result of bad economic policy. After all, the Chavismo regime got everything it wanted. It redistributed wealth at will. It "guaranteed" a living wage, health care, and plentiful food to everyone. "Equality" was imposed by fiat over the cries of the "neoliberal" opposition. 

The only possible answer, the left assumes, must be sabotage by capitalists or — as the Pope reminds us — too much "individualism." 

The problem the global left has in this case, though, is that this narrative simply isn"t plausible. Does Colombia have fewer capitalists and individualists than Venezeuala? It almost certainly has more. So why do Venezuelans wait hours in line to cross the Colombian border to buy basic food items not available in the social-democratic paradise of Venezuela? Has Chile renounced neoliberal-style trade and markets? Obviously not. So why has Chile"s economy grown by 150 percent over the past 25 years while Venezuela"s economy has gotten smaller? 

The response consists largely of silence. 

This isn"t to say that what the left calls call "neoliberal" is without its faults. Some aspects of neoliberalism — such as free trade and relatively free markets — are the reason that global poverty and child mortality are falling, while literacy and sanitation are rising.

Other aspects of neoliberalism are odious, particularly in the areas of central banking and crony capitalism. But the free-market answer to this was already long-ago voiced by Ludwig von Mises, who, in his own fight against the neoliberals, advocated for consistent laissez-faire, sound money, and far greater freedom in international trade. 

For an illustration of the left"s answer to neo-liberalism, however, we need look no further than Venezuela where people are literally starving and will wait hours in line to buy a roll of toilet paper. 

And if this is what the the left"s victory against neoliberalism looks like, it"s not surprising the left seems to have little to say.