The most tedious thing about socialists is their false intellectual superiority. They always claim that socialism offers all the answers. But when asked why socialism doesn’t work, they answer it hasn’t been “tried correctly.” The evidence of human history tells a different tale.
Socialism has been tried repeatedly and has failed repeatedly. As a consequence, where pro-free market governments are identified with prosperity, innovation and shared opportunity, socialist governments signify collective deprivation, economic stagnation and despair.
Still, if false superiority is the most tedious element of socialism, one of its most pernicious facets is government control of industries. This authoritarianism has been an economic and political disaster. Consider the appropriation of industry in Latin America. In Brazil, the national energy firm has engaged in a long history of bribery and gross mismanagement. Venezuela — the nation with the world’s largest oil reserves — is a failed state thanks to socialism. As the Economist recently explained, South Africa’s state-owned diamond-mining firm is a money-losing enterprise. These are just a few examples of many, but the diamond example is telling. Only socialism would allow such ludicrous failure: a loss-making diamond-mining firm managing an area of abundant diamonds.
Facing these repeated indictments of state-controlled industry, you’d think that the Western consensus would have moved against future state appropriations. But you’d be wrong. Socialism has always rested upon a foundation of arrogance, false optimism and intellectual dishonesty.
Take Bernie Sanders’ comrade, Jeremy Corbyn, the man most likely to become the UK Labour Party’s next leader. Corbyn is promising unprecedented changes should he take power. First, he says he’ll nationalize British energy firms by purchasing a controlling share of these companies. The catch? His plan will cost hundreds of billions of pounds in acquiring that controlling share. But that’s not all. Managed by government, competition in the UK energy market will collapse. Infrastructure investment will diminish and, with time, the costs to taxpayers via direct subsidy will balloon. Again, just look at the Latin American examples.
Corbyn also seeks far greater government control over the British banking system. Promising to cut down on banking rules and capital flows, Corbyn would destroy the UK’s golden ticket — the banking centers of London which bring hundreds of billions into the economy each year. Under Corbyn, capital would fly away to New York.
But Mr. Corbyn also plans a “people’s bank” that will engage in massive infrastructure spending, paid in part via unrestrained quantitative easing. This is particularly absurd. After all, economic theory at its most basic level proves that hyperinflation flows from inflationary spending divorced from new products and services. A major public bank would also be a gold mine of potential corruption via political patronage. Who gets to be the bank manager? Corbyn.
But there’s another issue here. It has been repeatedly proven that government run industries are comparatively unproductive in both efficiency and outcomes when compared to private competitors. Why? Because of human nature.
Absent a profit incentive that asserts the mutual benefit of both company (in higher revenue) and consumer (in better service), government industries have little interest in achieving the best service at the lowest cost.
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And so, hamstrung by government bureaucracy, these industries grow ever more bloated, ever more inefficient and ever more expensive. In the end, there’s only one loser: taxpayers who must pay the bill.
Of course, for socialists, reality is irrelevant. Convinced of their innate moral and intellectual virtue to throw back the lessons of history and forge new reality, socialists ignore facts and statistics. Instead, leaders like Corbyn revel in their dreamworlds of socialist unreality and government authoritarianism. And unchecked by intellectual challenge, they will ride that crazy car straight into the economic and political abyss.