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A Brief Global Survey of Economic Good and Misery

The Poisonous Fruits of Socialism

By Mike Scruggs- “Socialism is the philosophy of failure, the creed of ignorance, and the gospel of envy.”—Winston Churchill

National flag of Socialist Republic of Vietnam

Churchill had rightly pointed out earlier in his pithy way that “The inherent virtue of socialism is the equal sharing of misery.” It is not just totalitarian communism that doesn’t work.

Whenever democracies turn their countries over to demagogues who promise prosperity based on redistribution of property, wealth, and earning power to appeal to the envy and covetousness of ignorant or misinformed voters, calamity and poverty inevitably follow.

Socialism does not work, because it violates the realities of human nature and basic economics. When its failure begins to be seen, however, socialists become more coercive, trying strenuously to make bad ideas that will never work, work. A fellow Vietnam veteran and friend, who had spent a year in the Hanoi Hilton POW camp, summed up communists in one word.

“They are bullies, just bullies.” That is because neither communism nor democratic socialism works. They inevitably fall back on coercion and bullying, including political correctness campaigns in a vain attempt to make bad ideas work. In addition, “liberal” or “progressive” ideas that that do not meet the tests of reality do not work and result in social conflicts, economic failure, cultural confusion and decay, and more coercive government.

Last week President Trump visited communist Vietnam to negotiate with communist North Korean leader Kim Jong-un on nuclear disarmament and a more peaceful relationship with South Korea and the world. Vietnam has been dropping some of its communist economic dogma in recent years and is beginning to show some improvement due to trade. Last year their economy grew by seven percent. However, they are by no means yet prosperous.

Vietnam is a country of 94.6 million people (2016) in population, the 15th largest in the world. However, their annual per capita GDP (PPP), at $7,482, is less than 13 percent of the U.S. and ranks 128th in the world. Some of my Vietnam veteran friends have commented that Hanoi and Saigon (Now Ho Chi Minh City) are relative showcases, and the rest of Vietnam has not changed as much as the propaganda suggests.

GDP is Gross Domestic Product. The “PPP” (purchasing power parity) means the actual figures have been adjusted to show comparable buying power with the United States and other countries. Per capita GDP is not the same as per capita individual income, which is lower. Per capita GDP includes government spending, which varies in proportion among the nations, and may or may not efficiently prosper the public. The U.S. per capita GDP in 2018 was about $62,500, ranking 11th highest in the world.

There are just over 2.0 million first and second generation Vietnamese in the U.S. The vast majority are U.S. citizens. Their average household of 3.8 people had an average annual income of $65,643 in 2018, exceeding the overall average of $61,372 for the U.S. by over $4,000. This is an amazing immigrant success story and a stark contrast between capitalism and socialism. The Vietnamese American comparison to the U.S. is somewhat exaggerated, because so many of them live in California.

The cost of living in the San Francisco Bay area is 21 percent higher than the U.S. national average. The cost of living in the Jonesboro-Paragould, Arkansas area is 19 percent below the U.S. national average. Nevertheless, the contrast between Vietnamese American capitalism and the now more liberalized communism of Vietnam is staggering.

The contrast to North Korea is four times more staggering. The CIA estimates that North Korea’s population in 2016 was 25.4 million and the per capita GDP (PPP) was approximately $1,800, only 24 percent of that of Vietnam and 2.9 percent of that of the U.S. According to the CIA, North Korea ranked 184th of 198 countries in per capita GDP (PPP). Somalia, with a per capita GDP (PPP) of less than $700 was at the bottom of 198 countries. The 14 countries ranked below North Korea were all in Africa.

The Republic of South Africa, however, was ranked 90th in the world with per capita GDP (PPP) at $13,840. South Africa has vast mineral resources including diamonds, gold, and rare minerals necessary for high technology and defense, but it is now in the hands of a socialist-communist government that intends to confiscate the properties of the white South African minority. If this takes place, it will lead to economic disaster as it did in Zimbabwe.

The 12 highest ranking countries on the International Monetary Fund GDP (PPP) list, which differs slightly from the World Bank, and CIA lists, are Qatar 1, Luxemburg 2, Singapore 3, Brunei 4, Ireland 5 (low taxes, minimal government intervention), Norway 6, Kuwait 7, United Arab Emirates 8, Switzerland 9, San Marino, 10, the U.S. 11, and Saudi Arabia 12. Notice that many of these countries have an abundance of oil wealth. Others are tiny European principalities.

The CIA ranks Lichtenstein number 1 with over $139,000 per capita GDD (PPP).
To satisfy reader curiosity, I have listed some of the larger economies in the world by their International Monetary Fund GDP (PPP) rank: Germany 18, Taiwan (Republic of China) 19, Sweden 23, UK 26, France 27, Japan 28, South Korea 32, Italy 33, Russian Federation 41, Mexico 64, People’s Republic of China (PRC) 79, and Venezuela 101, but slipping fast. In 1950, Venezuela ranked 4th, just below fast recovering West Germany.

South Korea, which is 28 percent Christian, had a population of 51.5 million in 2017, and a per capita GDP (PPP) of $41,416, more than 23 times that of North Korea and 5.5 times Vietnam. The Republic of China with GDP (PPP) of $52,900 has 2.7 times the GDP prosperity of the communist People’s Republic of China at $19,559, although the PRC is leaning capitalist in many ways and is famous for manipulating its currency and economic statistics.

Mexico, our Southern neighbor with a population of 124 million, has above average prosperity with a GDP (PPP) of $20,645, although a growing percentage of it may be related to drug cartels. The murder rate in Mexico is five times that of the U.S.

The Russian Federation is no longer communist. Its government might be called soft-authoritarian and influenced by a corrupt oligarchy of government-made capitalists, but it is beginning to compare more favorably with Western Europe with a $4.3 trillion economy and a GDP (PPP) is $34, 765 compared to Germany’s $4.6 trillion economy and a GDP (PPP) of nearly $55,000. In 1923, German Social Democrats nearly destroyed their country through hyperinflation caused by runaway social spending. The UK has a $4.4 trillion economy and a GDP (PPP) of $46,000.

There is widespread misunderstanding about Scandinavia’s experiment with socialism. Sweden, for example, learned a severe lesson from the financial crisis of the late 1990’s, but unlike most other countries, they recognized their mistakes and corrected many of them. The strongest reforms began in 2007. New regulations halted out of control social spending and taxes, which had brought their economic growth to a standstill. They took measures to limit government spending and prohibit deficit budget plans. They reformed their tax system to even out the load and avoid over-taxing productive people.

This is amazing and in stark contrast to the dangerous situation in the U.S. and other Western countries where 50 percent or more of the working population pay only negligible taxes and thus have no stake is wise tax policy. These reforms made Sweden a much easier place to do business. Sweden ranks 19th of 169 countries on the 2019 Economic Freedom Index. This reforming spirit has spread across Northern Europe. Socialism failed in Scandinavia, but that failure was recognized and corrected. Sweden and other Western European countries have made serious and dangerous mistakes on immigration policy, but public displeasure with the results has begun to move government policy. I only hope it is not too late.

Venezuela is the latest case of turning capitalist riches into socialist rags and social calamity. Once the richest country in South America, socialist demagogues have turned it into Marxist Hell.

Venezuela was oil rich, but massive social spending, the nationalization of the oil and other industries, and revolutionary transfers of wealth and power drove Venezuela’s most productive people away. Practically nothing is being produced in Venezuela, and most goods must be imported.

A drop of oil prices from $100 to $40 per barrel forced Venezuela to borrow huge sums that could not be repaid. They have the highest inflation in the world, with prices doubling at least every 25 days last year and escalating much higher this year. Venezuelan money is practically worthless now, and their economic depression is twice as bad as in the Great Depression of the 1930’s.

Crime is escalating, and they now have the world’s highest murder rate. Its financial implosion has caused a “Health Holocaust.” Ninety percent of Venezuelans are now unable to feed themselves. The average adult has lost over 20 pounds. Socialism is the tyrannical rule of bad ideas.

Yet the Democrat Party in the U.S. is promoting this tyranny of ignorance, envy, and demonstrably stupid ideas to replace our Republic with radical revolutionary chaos and despotism.

_______________________________________________

Mike Scruggs
Author and Columnist
a.k.a. Leonard M. Scruggs

Mike Scruggs is the author of two books: The Un-Civil War: Shattering the Historical Myths; and Lessons from the Vietnam War: Truths the Media Never Told You, and over 600 articles on military history, national security, intelligent design, genealogical genetics, immigration, current political affairs, Islam, and the Middle East.

He holds a BS degree from the University of Georgia and an MBA from Stanford University. A former USAF intelligence officer and Air Commando, he is a decorated combat veteran of the Vietnam War, and holds the Distinguished Flying Cross, Purple Heart, and Air Medal. He is a retired First Vice President for a major national financial services firm and former Chairman of the Board of a classical Christian school.

His viewpoint is unapologetically Christian, conservative, and patriotic. He has been a Republican County Chairman in two Southern states and remains an active participant in church, political, and veterans’ affairs.

http://www.thetribunepapers.com/category/columnists/scruggs/

http://www.universalmediainc.org/books.htm

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