May 5, 2006

Socialism -- why is it still with us?

Longish but well thought out essay on why Socialism still continues to attract followers. From Technology/Commerce/Society:
Why Isn't Socialism Dead?
The President of Bolivia, Evo Morales, celebrated May Day by ordering soldiers to occupy his country's natural gas fields. The purpose of this exercise was not military, but economic: Morales has demanded that all foreign companies currently operating these fields must sign a contract with Bolivia that would allow them to retain only 18% of the production, while the remainder would go to Bolivia's state-owned oil company. The 18% concession to the foreign companies was not an act of generosity on the part of Morales, but simply of expediency: Bolivia needs these companies to tap its natural gas resources, because it is unable, at least at present, to operate the natural gas fields on its own.

Morales, a fiery populist who was elected in a landslide, is clearly seen as following in the footsteps of Venezuela's own firebrand populist President Hugo Chavez. Furthermore, only last week, Morales and Chavez met with Fidel Castro, enacting a kind of socialist love-fest that issued in a partnership agreement aimed at creating a web of economic alliances in South America that would resist the insidious lure of American-style free trade -- its ultimate aim would be economic autarky for the region, free from foreign control.

In addition to sending in the troops, Morales is also sending forth a good bit of inflammatory rhetoric. He refers to the foreign companies operating Bolivia's natural resources as having "looted" them, and his decision to send in troops on the traditional socialist holiday, May the First, was clearly not a coincidence. In a similar vein, Morales' mentor, Hugo Chavez, has also been preaching that to be rich is to be wicked, while to be poor is to be virtuous -- and though he may be quoting scripture to support his arguments, there can be no serious question that Chavez-style populism is simply socialism with a South American accent.

And this leads to the question I want to address, namely, Why isn't socialism dead?

The Peruvian economist, Hernando de Soto, has argued in his book, The Mystery of Capital, that the failure of the various socialist experiments of the twentieth century has left mankind with only one rational choice about which economic system to go with, namely, capitalism. Socialism, he maintained, has been so discredited that any further attempt to revive it would be sheer irrationality. But if this is the case, which I personally think it is, then why are we witnessing what certainly appears to be a revival of socialist rhetoric and even socialist pseudo-solutions, such as the nationalization of foreign companies?

It should be stressed that de Soto is not arguing that, after the many socialist failures of the twentieth century, capitalism has became historically inevitable and that its expansion would occur according to some imaginary iron clad laws without any need for active intervention. On the contrary, de Soto is fully aware of the enormous obstacles to the expansion of capitalism, especially in regions like South America, and his book is full of dismal statistics that demonstrate the uphill battle against bureaucratic red-tape that is involved in getting a business license or even buying a house in many third world countries. But, here again, the question arises, If capitalism is mankind's only rational alternative, why do so many of the governments of third world nations make it so extraordinarily difficult for ordinary people to take the first small steps on the path of free enterprise?
Read the whole thing -- very interesting timeline from early Marx through the present. The fools in power down there need to re-read their history books... Posted by DaveH at May 5, 2006 2:40 PM