Sunday, January 27, 2013

Viva Poverty!

If there is one thing we know about socialism, it’s that it doesn’t work. This iron law of economics, as solid a result as the dismal science has ever produced, brooks no exception. “Not working” means that no socialist society can provide a meaningful standard of living for its citizens, much less compete militarily with surrounding capitalist societies. The Soviet Union collapsed without firing a shot, not because Russians are a bunch of weak-kneed wusses, but because their country was flat-out bankrupt. China turned to capitalism because its leader, Deng Xiao Ping, realized that Mao suits and Little Red Books were both useless and inedible. North Korea retains socialism only by maintaining a prison-camp society.

Even less dramatic examples have come to naught. Margaret Thatcher put paid to the pink socialism of Labor Party PMs James Callaghan and Harold Wilson. As she famously said, “Socialism works until you run out of other people’s money.” You can steal from the rich for a year, or perhaps two, but then the bank account is dry.

In the best case a socialist society is run by an honest and honorable man. One thinks of Julius Nyerere of Tanzania, who ruled his country reasonably gently (for a Communist, and Hitler-mustache notwithstanding), and then after twenty-odd years, retired. He lived the rest of his life peacefully in his own country (not in exile), earning the honorific Mwalimu (teacher) from his countrymen. He accomplished some good things, and partly because of his legacy Tanzania is not riven by the civil wars and ethnic conflict that plague the rest of the continent. But his economic policies were a complete disaster. The country was substantially poorer at the end of his rule than at the beginning. Indeed, in the poverty sweepstakes Tanzania excelled, bested only by nearby Ethiopia, a socialist experiment that plumbed depths of hell that not even Dante imagined.

So now comes Socialist Action (SA) with a resolution on Cuba presented at their August convention, and described in an article by Jeff Mackler. That nation, having long since run out of other people’s money, is now desperately seeking new sources of cash to support so-called social welfare projects, aka free unicorns. The stunning revelation is that Cubans are actually going to have to work for a living--a novelty that creates complex theological and legal tangles for Marxist minds to deal with.

So the bearded geniuses have decreed that 178 occupations are now legal in Cuba. These run the gamut from hairdresser to restauranteur. Mackler assures us, however, that nothing substantial has changed. People were already engaging in these professions, albeit illegally, and all the government is doing is regulating (and presumably taxing) existing practice. For Mackler this is important, because the major thrust of the article is to reassure readers that Cuba is not embarking on the Capitalist Road, following the well-trod path of Eastern Europe and China.

Well, he certainly has me convinced! No restaurant, for example, can have more than 50 seats--not even a restaurant with really good food! For if restaurants served more than 50 people, then a talented cook might have to hire an additional waitress--may the heavens forfend! She, miserable soul, would be ruthlessly exploited while delivering delicious dinners to hungry diners, some of whom could actually leave her a tip.

Our desperate waitress might actually float a makeshift boat to escape from such a fate. She’d certainly be much happier in North Korea, where hard work is properly punished.

Among the litany of problems Mackler describes are corruption and the black market. “Bureaucratic abuse has been and remains widespread, including government and military personnel using state-owned trucks to steal or otherwise sequester food products from state or cooperative farms for sale on the black market.” Now this I simply don’t understand. Why would good, honest, civil servants--revolutionaries no less, trained in the work ethic of psychopath hero Che Guevara--steal from their fellow citizens?

Mackler does actually answer this question--the argument is tortured and indirect. But the conclusion is simple--it’s America’s fault. That’s it--absent the United States all civil servants in Cuba would be scrupulously honest. It is only because of the trade embargo that Cubans are forced into such degrading activities such as stealing.

I point out that black markets are a creature of socialist societies, where prices don’t reflect reality. There is no black market for foodstuffs in the United States. Prices are set efficiently by the market, rather than regulated by a bunch of bearded crackpots. And corruption is primarily a problem of government. In 2010, 90% of the Cuban workforce was employed by the state. Of course corruption will be rampant in that environment. The cure for corruption is to put people in charge of their own money--you can’t steal from yourself.

These Cuban reforms won’t accomplish their goals. If you want people to work hard, invest in their property and their future, and manage resources well, you have to put them in control. You have to allow people to run businesses with as few restrictions as possible. Cuba’s halfhearted steps in this direction won’t make much difference. Mackler is correct about the limited, present reforms--they’re not much of a step toward capitalism.

Mackler does criticize the leaders of the Cuban state. He calls them “revolutionaries of action,” another one of those Marxist theological terms that I won’t try to define. But he admits that Cuba is not a democracy, and he advocates a more stringent adherence to majority rule. Presumably he thinks the majority should vote on how capital is to be allocated, and he would also deny individuals much protections from such rule. So if you had a successful restaurant, the majority could vote to confiscate it.

All this is particularly ironic given the picture that accompanies Mackler’s article--it’s a picture of majority rule in action as it exists now in Cuba. To me, it looks like mob rule. Here’s the link again--take a look and see if you don’t agree.

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