Tag: Socialism

Socialism vs. Capitalism: Results – Theory – Morality

George Noga
“Tyranny is the political corollary of socialism, as representative government is the political  corollary of a market economy. To suggest otherwise ignores history.”  (Ludwig von Mises)
Socialism vs. Capitalism: Results – Theory – Morality
By: George Noga – March 24, 2019

        Apologists for socialism disingenuously compare ideal socialism to the actual practice of capitalism. What if we compared ideal capitalism to real-world socialism? In this post, we compare results to results, theory to theory and morality to morality.

The Results of Socialism Compared to the Results of Capitalism

       No serious economist argues socialism produces better results than capitalism. Socialism never has created sustained prosperity. It can only achieve a brief illusion of prosperity by plundering a nation’s wealth, confiscating assets, inflating, borrowing, nationalizing, and printing worthless currency. But it always ends the same way, i.e. starvation amidst plenty. Socialism’s failures are legion: the USSR, Venezuela, Cuba, North Korea and the Chicoms. It never has worked for more than 25-50 people, such as a family, clan or tribe, where familial bonds supercede economic considerations.

In just the past 25 years (per the World Bank) capitalism has cut extreme poverty by 75% – equal to 1.2 billion human beings, with an additional 50 million being lifted out of poverty each year. Every day, another 135,000 people escape poverty. Today less than 10% of the world’s population live in extreme poverty and it could end within our lifetime. This is by far the greatest economic accomplishment of all time, thanks to capitalism. Capitalism’s successes also are legion: the USA, Western Europe, Japan, the Nordics, Singapore, Canada, Australia, Botswana, New Zealand and South Korea.

The Theory of Socialism Compared to the Theory of Capitalism

        Under ideal socialism, the governing values of the citizens are community and equality; they view their economic well being as a common enterprise. They share the work according to their abilities and no one demands extra benefits due to greater talent or work effort. All inequalities due to undeserved advantages or disadvantages are eliminated. In this socialist utopia, all the people are economically equal.

        Ideal capitalism means self interest and markets. Some citizens are more talented,  exert more effort or take greater risks; hence, some are wealthier than others. But this arouses no envy because all the citizens are unselfish. When someone is in need, neighbors help. Just as in the socialist utopia, the citizens care about each other and value community. All of the good aspects of the socialist utopia are present but so are additional benefits such as innovation and the production of more and better goods.

          If one assumes people under ideal socialism are entirely altruistic, then it is only fair to make the same assumption under ideal capitalism. Moreover, the free market isn’t dependent on altruism and it functions even when comity is in short supply. Socialism always fails, in theory and practice, because it is fundamentally opposed to human nature; people are hard wired to respond to self interest and to incentives.

The Morality of Socialism Compared to the Morality of Capitalism

        Comparing results to results is no contest; capitalism wins hands down. But when comparing ideal to ideal, capitalism also wins because, if people act altruistically, the incentives of capitalism produce greater prosperity. Socialists distort by comparing an idealized version of socialism to non-idealized capitalism and by assuming people act selflessly under socialism but selfishly under capitalism. What if we compared ideal capitalism to socialism as actually practiced – with its mass murders, brutal dictators, starvation, grinding poverty and human desperation as in say, Venezuela?

        Capitalism, non-coercive cooperation in markets, is also superior morally. People succeed only by providing goods valued by their fellow man. The most potent force on earth is a consumer armed with a free choice; even a large corporation can’t force anyone to buy its products. The political corollary of socialism is tyranny and it inevitably results in starvation amidst plenty; there is nothing moral about that.

Next: Hotel Europe – you can check out any time, but you can never leave.

Texting – Sears – Tyler – Hauser – Laffer

George Noga
A 70% top income tax rate loses the government $65 billion over 10 years.
Texting – Sears – Tyler – Hauser – Laffer
By: George Noga – January 24, 2019

       This is a special mid-week posting of micro topics, many of which are timely, especially the segments about the progressive plan to raise marginal tax rates.

Micro Topics: CO2 emissions of electric vehicles often exceed those of gas vehicles, depending on the fuel used to generate the electricity and how long a charge lasts. The $7,500 tax credit is a wealth transfer from the middle class to the wealthy; nonetheless, it remains a darling of the left. . . . . . . Canada increased fines for texting while driving to $1,000 and loss of license. MLLG opposes distracted driving, but there are always unintended consequences of government actions. Where texting is illegal, drivers often relocate texting to their laps – out of sight of police but infinitely more dangerous.

Socialism & Sears: In the USSR, a man goes into a store and asks, “You don’t have any meat?” The clerk responds, “No, we don’t have any fish; it’s the store next door that doesn’t have any meat.” I have a stable of commie jokes; a favorite is where the USSR conquered the entire world but spared New Zealand just to know prices in the real world. These stories are so funny because they are true; commies had no way to know what things cost. We just learned Soviet economists (oxymoron) resorted to Sears catalogs to set prices for consumer goods – as did the Chicoms. Progressives are ignorant of the lessons of the USSR and the truth behind all the commie jokes.

John Tyler: Our national history spans but a few lifetimes and there are some amazing stories. My favorite is John Tyler (Tippecanoe and Tyler too), our 10th president (1841-45) born in 1790 during George Washington’s first term. Two of Tyler’s grandchildren are alive today.  The entirety of US history took place in the lifetimes of Tyler, his children and grandchildren, spanning 229 years and still going. Therefore, you should not be overly shocked to learn that the United States government in 2019 still is paying pensions to widows and children of Civil War veterans.

Hauser’s Law: Alexandria Ocasio-Cortez and progressive know-nothings (oxymoron) proposed a top income tax rate of 70%. They obviously know nothing about Hauser’s Law, which states that, regardless of tax rates, the individual income tax collects 18% of GDP – 20% in a strong economy, 16% in a weak one. In the 75 years since WWII, the top rate has varied from a low of 28% to a high of 92%, but the revenue it produced was constant at 18%. The Tax Foundation, when adjusting for the effects of behavioral changes, found that a 70% rate lost $65 billion in tax revenue over 10 years.

The Laffer Curve: Progressives also know nothing about the Laffer Curve. Economists know that as rates rise (starting from zero) tax revenues increase, but at a decreasing rate. Eventually a point is reached at which tax revenue is maximized. Beyond that point, tax revenues decrease at an increasing rate, i.e. the Laffer Curve. Higher marginal income tax rates actually result in less tax revenue. Economists have determined that tax revenue is maximized at a rate of 35% to 40%; once rates rise above 40%, total tax collections begin to fall and at an ever increasing rate.

The reason Hauser’s Law and the Laffer Curve work should be apparent; people (especially the wealthy) modify their behavior based on tax rates. If progressives want more tax revenue (within the existing tax code) they must do a Willy Sutton and go to where the money is, i.e. the middle class; there never are enough rich people. MLLG has written extensively about Hauser and Laffer and may soon need to devote a full posting to them amidst all the progressive jibber-jabber about hiking tax rates.

Our next post January 27 is a climate change update; don’t miss it.

Slaves, Socialism, Supreme Court and ICE

George Noga
Did the US Constitution consider slaves 3/5 of a person? Can socialism ever appear to work? Can the world run out of money? These questions and more.
Slaves, Socialism, Supreme Court and ICE
By: George Noga – October 28, 2018

Micro Topics: “Medicare for all” is the new cry of lefties. Single-payer health care has been tried and it failed miserably – with Native Americans and veterans. It adds trillions to the deficit, but the real cost is in lives. . . . . “The left destroys everything it touches, sports, comedy, schools, fun, everything”. (Charlie Kirk) . . . . . In the latest PC craze, schools abolish homecoming kings and queens, substituting “royals“. But aren’t royals a privileged hereditary aristocracy? . . . . . For 2015-16, uber-liberal NPR can confirm only 11 school shootings; with 96,300 schools, that is one shooting per 8,755 schools. . . . . Not long ago, liberals and media applauded when jack-booted ICE agents conducted a pre-dawn raid to seize a 6 year old boy; his name: Elian Gonzalez.

Only 3/5 of slaves were counted per the Constitution but it was not due to southern racists, but northern abolitionists. Nor did the 3/5 have anything to do with the putative human worth of a slave. In 1789, there were 1.8 million freemen in the north but only 1.1 million in the south. The south wanted to count all 650,000 slaves to achieve equal representation in the House of Representatives; the north didn’t want to count any, hence, the 3/5 compromise. The Constitution refers to slaves as “persons“, nowhere as 3/5 of a person. This issue is misunderstood and often demagogued by liberals.

Socialism can appear to work  briefly because socialists plunder a nation’s wealth to create the illusion of progress. They confiscate assets, loot industries, banish managers and pad payrolls with hacks. They strip natural resources and despoil the environment. They run giant budget deficits and borrow all they can before defaulting. They tax the upper and middle classes into oblivion. They hyperinflate and print worthless currency. They pillage banks and make phoney loans to acolytes. They impose price and rent controls and prohibit evictions. They freeze prices and impose currency exchange controls. Wealth creators flee along with their capital and knowhow. After socialists ransack a nation’s patrimony, it always ends the same, i.e. starvation amidst plenty. Never has socialism created sustained prosperity, only short-term pillage and plunder.

The world is running out of money. The supply of money is finite and when it’s gone, it’s gone. Seriously! We can’t just keep printing money because that only inflates, i.e. more money chasing the same supply of goods and services. Space aliens, pandemics or climate change won’t do us in; in the end, the planet simply runs out of money. World government debt is $64 trillion while GWP is $76 trillion for a ratio of 84% and spiraling upward. Total global debt (public and private) is $230 trillion, over 300% of GWP. Who will be the one to borrow the last dollar in the universe?

SCOTUS confirmations are circuses as Congress quit legislating, leaving lawmaking to courts. Uncertainties about vacancies create angst, as justices now can serve 40+ years. To fix this, MLLG resurrects an old, but simple and elegant, idea which may be new to readers. Justices (limited to one term) would serve staggered 18-year terms with one term expiring every 2 years. Every president would have 2 appointments each term. This removes all the angst and uncertainty and no president could ever appoint a majority. Eighteen years is enough to serve; moreover, this change would enable more experienced justices to be appointed because longevity would no longer matter.

Our next post November 4th offers perspective about the midterm election.

Nordic Nations and Socialism

George Noga
Liberal politicians and media celebrities conflate Nordic nations and socialism. 
Nordic Nations and Socialism
By: George Noga – October 7, 2018

         The stunning victory of democratic-socialist Alexandra Ocasio-Cortez squarely inserted socialism as an issue for 2018 and 2020. Polls show more Democrats have a favorable view of socialism than of capitalism. Bernie Sanders and Hillary Clinton praised Nordic countries as veritable socialist utopias. Joy Behar on The View cited Nordic countries as proof socialism works. The media, millennials, progressives and many regular Americans believe Nordic nations owe their success to socialism.

          This post addresses that issue head on. Please visit our website www.mllg.us and read our posts of April 24, 2016, Is Scandinavian Success Due to Socialism? and October 15, 2017, Socialism, Sweden and Scandinavia for background information. For brevity, this post focuses on Sweden; however, the same narrative, to varying degrees, applies to the other Nordic nations: Denmark, Finland, Iceland and Norway.

The Progressive Nordic Narrative

         Circa 1970, Sweden (and other Nordics) morphed into a big government, social welfare state; Swedes sharply increased taxes and public spending and discouraged private enterprise. Over the next two decades, public spending soared from 30% of GDP to 60%. Sweden instituted a cradle to grave welfare state with uber-generous benefits including heavily subsidized child care, preschool, university, maternity, family and sick leave, unemployment benefits, pensions and health care.

       During this same timeframe (1970-1990), Sweden was rich; in 1970 it was the fourth wealthiest country. Therefore, the liberal perspective is that Sweden was both wealthy and socialist at the same time. This narrative of the Nordics as successful socialist states is beguiling because, taken without context, it has the color of truth.

 
The Truth About Nordic Nations and Socialism

            During the 19th century, Sweden was so dirt poor it sent waves of immigrants to America. Circa 1870 Sweden turned to classic laissez-faire liberalism and began a century of rapid economic growth culminating in becoming the fourth richest country. During the 100 years it took Sweden to get wealthy, public spending was 10% of GDP and it was a capitalist economy. Also, Sweden was neutral during both world wars, profited from trade with all sides and preserved its industry and male population intact.

             From 1970 to 1990 Sweden was a social welfare state as described supra. By 1990 it all unraveled. There was Kafkaesque bureaucracy, drug addiction, welfare dependency and crime; the educated and affluent fled Sweden. The economy ground to a halt; inflation skyrocketed and no new private sector jobs were created for 20 years. Sweden dropped from 4th to 14th in wealth. By 1990 Swedes viewed their socialistic experiment as a colossal failure and reversed course; they cut taxes, deregulated, privatized, restored free markets, cut pensions, and voted out leftist governments.

Takeaways from Nordic Nations and Socialism

1. No Nordic ever was truly socialist, i.e. with government ownership or control over the means of production, distribution and finance. They were big-government, social welfare states, which liberals conflate with socialism when it suits their purpose. True socialist states are Venezuela, North Korea and Cuba. Sweden was a capitalist success and a socialistic failure; today, all Nordics have capitalist market economies.

 

2. Nordic people saw their socialistic experiment as an abject failure and rejected it. Moreover, their big-government social welfare model also is vastly underperforming. Nordic GDP growth is about half that of the US and other more laissez-faire states.

 

3. Sweden was rich prior to its socialistic flirtation; it became much poorer during it. Socialism turned Sweden’s big fortune into a small one, just as Venezuela, once the richest nation in South America, has been rendered a basket case under socialism.

 

4. No socialist economy ever has generated enough wealth to fund social benefits on a Nordic scale. No socialist economy ever has produced sustained prosperity; they only plunder wealth that already has been created. They create hunger amidst plenty.

 

5. Nordics are not as wealthy as Americans believe. The GDP of Houston, Texas is bigger than Sweden’s; if Sweden were a state, its per capita GDP would be similar to our poorest state. But Sweden is 30% more expensive than Mississippi, which means, that in terms of purchasing power, Sweden would be the poorest US state by 30%.

Next: Protecting your assets and your family during the coming spending crisis. 

Kavanaugh – SunRail – Election Meddling

George Noga
Robots don’t create unemployment – politicians do. 
Kavanaugh – SunRail – Election Meddling
By: George Noga – August 26, 2018

Micro Topics: If liberals were in charge in 1776, America’s founding document would  be the Declaration of Coexistence and New Hampshire’s motto would be Live Free or Coexist. . . . . The Second Amendment exists to protect citizens against tyrannical government and recently it was used twice successfully (Nevada and Oregon) for that very purpose. . . . . Progressive comedy is meant to be serious, but when they are serious, it is comedy. . . . . Robots don’t cause unemployment, politicians do. . . . Under capitalism, both buyers and sellers customarily say “thank you” after transactions because both benefited – unlike under socialism or when dealing with government.

SunRail & Greece: We once wrote that the Greek national railway, Hellenic Railways, could save money by paying every passenger to take a taxi. We yucked it up at this example of socialism run amok and why Greece was bankrupt, never believing such lunacy could happen in America, much less in Central Florida and within just a few years. Silly us! SunRail could pay every rider $35 to take Uber and save money.

The math is straightforward: SunRail costs $34 million to operate; tickets bring in only $1.9 million, creating a loss of $32.1 million. Average ridership is 3,500 for the 254 days each year SunRail operates, resulting in 890,000 riders. Dividing SunRail’s loss by the passenger count, equals over $36; hence, SunRail could pay each passenger $35 for Uber and taxpayers would be better off. Incredulously, government considers SunRail a success and is rapidly expanding it. Even the Greeks weren’t that crazy!

Kavanaugh Causes Progressive Paroxysm: Progressives contort into pretzels to avoid uttering “abortion” in which they believe passionately but refuse to say aloud; they substitute euphemisms like women’s health, reproductive rights and choice but they all mean only one thing: abortion. They demand abortion anywhere, at any stage of pregnancy, at any age and for any reason including gender selection, which is equivalent to femicide. Preposterously, they argue that females must be aborted to protect their rights; i.e. that it is necessary to kill women in order to save them.

Progressives also twist into pretzels to oppose Judge Kavanaugh even though their real argument is not with him but with the Constitution. Kavanaugh clearly is eminently qualified and has an impeccable personal narrative, but liberals demand judges who will enact their agenda from the bench. They have given up on the legislative branch and the thought of losing the judicial branch reduces them to paroxysms. However, just as they refuse to utter the word abortion, they refuse to articulate that their real bete noire is not Brett Kavanaugh but the Constitution of the United States of America!

Election Meddling: America is awash in progressive crocodile tears over meddling although the USSR/Russia interfered in every US election since the 1950s. Perhaps Obama ignored the 2016 meddling because he was busy with his own interventions. Following are the top six of meddler-in-chief Obama’s most egregious meddles.

(1) In Kenya he supported Raila Odinga, an Obama relative, whose son is named after Fidel Castro; (2) Israel, where he diverted US government funds to Netanyahu’s opponent; (3) He favored the Muslim Brotherhood in Egypt; (4) In Honduras he supported leftist Zelaya who defied the Honduran constitution and supreme court; (5) Macedonia, where he destabilized a center-right government at George Soros’ behest; and (6) He publicly opposed Brexit while visiting England just before the vote.

Next on September 2nd, we will post something apropos for Labor Day. 

Destroying the Link between Capitalism and Wealth

George Noga
If  capitalism and liberty lose the culture war, it will be because Americans have lost the link that brought us our unprecedented cornucopia of  wealth.
Destroying the Link between Capitalism and Wealth
By: George Noga – March 11, 2018

      This is the second and final post seeking to answer the question: Does capitalism sow the seeds of its own destruction? The first part is on our website: www.mllg.us. This question first was posed 100 years ago by economist Joseph Schumpeter. We will conclude by comparing Schumpeter’s predictions with where America stands today.

       We are engaged in a great culture war for the preservation of capitalism along with wealth and liberty, which are symbiotically linked to capitalism. If we have capitalism, we ipso facto have liberty and wealth. Without capitalism we become poorer and less free, while under socialism we are impoverished and tyrannized; think Venezuela.

     How bad is the anti-capitalist mentality? One poll showed 4 out of 10 US adults preferred socialism to capitalism. A YouGov poll asked if respondents had a favorable view of capitalism or socialism. With Democrats, it was tied at 42%; millennials chose socialism 43% to 32%. In a Gallup poll, 47% of respondents reported they would vote for a qualified socialist for president; 69% of those ages 18-29 said they would. Of  millennials, 58% would rather live under socialism than capitalism. In a Politico poll, Democrat voters in every age group, gender and race said they liked socialism.

     Unsurprisingly, few people, especially millennials, understand what capitalism, socialism or communism really is. Large majorities conflate European social welfare states with socialism. They particularly believe Sweden is the model of a successful socialist country. Read our October 15, 2017 post “Socialism and Sweden” on our website; it shows Sweden as a free-market capitalist country. Liberals and millennials it seems are not only brainwashed but ignorant. Perhaps they can spend their next vacation in Venezuela, Cuba or North Korea to see real socialism at work.

Let’s revisit Schumpeter’s prediction, which contained five sequential points.

  1.  Capitalism will create great wealth. This has come true to an extent few dreamed.
  2.  More people will be educated. Again true, in America education is universal.
  3.  Professors and teachers will promote anti-capitalist ideas. BINGO!
  4.  People will vote for social welfare states. Already true  as shown by polling.
  5.  Capitalism’s success brings about its own destruction. This hangs in the balance.
     Schumpeter feared the demise of capitalism, along with wealth and liberty, would usher in a new dark age and we may have to wait centuries for the reemergence of capitalism and liberty. If Schumpeter’s final prediction comes true, we will drag the entire planet into a lengthy and unspeakable Orwellian torpor where men lead lives of quiet desperation, where war is peace, bad is good, immoral is moral and big brother always is watching. Nowhere is it written that liberty will survive.
My March 18th post is mega special; hint: it is my 75th birthday!

Why Intellectuals Hate Capitalism

George Noga
Does capitalism really sow the seeds of its own destruction? 
Why Intellectuals Hate Capitalism
By: George Noga – March 4, 2018

       This is the first of two posts seeking to answer the above question about capitalism and self destruction. This question has a nexus to our three February posts (available at www.mllg.us) about the debt crisis. Both stem from the consequences of the stunning success of capitalism in creating enormous wealth for all. This first post explains why intellectuals and progressives loathe capitalism and love socialism.

       A century ago economist Joseph Schumpeter wrote that capitalism would self destruct: “I do not think capitalism can survive. Its demise will not be due to economic failure; instead, its very success undermines the institutions which protect it and creates conditions in which it can’t survive.” He theorized: (1) capitalism would enable more people to become educated; (2) they would be taught anti-capitalist dogma by professors now free to promote their ideas rather than to work; (3) people thusly (mis)educated would vote for liberal welfare states leading to the end of capitalism.

       Vituperation from socialist professors has infected college students and wafted into the general population. There are six main reasons liberals hate capitalism.

1. Capitalism evolved organically. No intellectual wrote a capitalist manifesto; Adam Smith merely explained what happened naturally. Capitalism just happens; it doesn’t require professors to theorize. No one is capable of controlling capitalism, whereas socialism requires controllers, i.e. intellectuals who know what is best for everyone.

2. Capitalism is egalitarian. An uneducated, uncouth bloke can make a fortune by say recognizing the market for used auto parts and buying and stripping junk cars. He gets rich because he provided a valuable service to consumers. In contrast, the intellectual is unrecognized and unrewarded. Successful capitalists repulse elites.

3. Professors are rewarded by bureaucrats, not markets. They succeed by pleasing their statist employers, not by pleasing students (customers) or by attracting new students. Capitalism does not reward them based on their exalted education and good intentions. They prefer regulation to the chaos of the marketplace. They believe their pet theories should override the free decisions of individuals, if necessary by using the police power of the state. Their peers all are anti-market and they must go along to succeed.

“Capitalism is: To each according to his accomplishments.” 

4. Consumers are sovereign; intellectuals have no special status. The common man holds all the power; his decisions to buy (or not to buy) determine what is produced and makes suppliers rich (or poor). Wealth is achieved only by serving consumers.

5. Capitalism brooks no excuses for shortcomings. Capitalist success is based strictly on one’s ability to provide value to his fellow man. Capitalism is to each according to his accomplishments; those who fail are found wanting by their fellow men.

6. Intellectuals desire control over others. They fail to understand why the unwashed, poor ignorant rubes in flyover land believe they know what is best for them and for their families. Intellectuals see themselves as heroic emancipators, crushing greedy capitalists, saving helpless victims and reaping the just approbation of all mankind.

      America’s immense, broadly shared wealth comes with pernicious consequences.  Any society rich enough to have millions of pet insurance policies with acupuncture, chiropractic and mental health benefits is a society that arguably has lost its critical connection between wealth and capitalism. More on this next week along with our conclusion about Schumpeter’s prediction of capitalism’s self destruction.

Our March 11th post is the second and final part dealing with Schumpeter.

Red October – Socialism, Sweden and Scandinavia

George Noga
Scandinavian countries are not prosperous because of socialism but despite socialism. They tried socialism; it failed; they rejected it and reinstituted free market capitalism.
Red October – Socialism, Sweden and Scandinavia
By: George Noga – October 15, 2017
      Many Americans, especially millennials and progressives, believe Scandinavian countries, particularly Sweden, are veritable socialist Utopias. Bernie Sanders and Hillary Clinton said so during the last election and were unchallenged by the equally clueless media. Whenever I discuss politics or economics with liberal interlocutors, they invariably cite Sweden as proof that socialism works. They are wrong on all counts; Sweden is neither socialist nor especially wealthy. Let’s look at some history.
        Sweden once was so dirt poor it sent waves of immigrants to America. Circa 1875 Swedes embraced free market capitalism and began to prosper. Around 1970, Sweden took a hard left turn; taxes soared, welfare expanded and private enterprise was discouraged. The predictable result was rampant crime and drug addiction, Kafkaesque bureaucracy, welfare dependency and emigration by successful Swedes. By the 1990s Swedes saw socialism as a colossal failure; they cut taxes, restored free markets and economic freedom; they replaced leftist governments with right-leaning ones.
     The stories of the other Scandinavian countries (Norway, Denmark, Finland) are similar. Today, all four enjoy dynamic market economies albeit with robust social insurance programs financed by high middle class taxes. They can afford such benefits only because of successful capitalist economies that produce sufficient wealth. No socialist economy has ever generated enough wealth to fund such benefits. Sweden is not prosperous because of socialism; it is prosperous because it survived socialism.
       Note: The Scandinavian model of social insurance can only work in small, homogeneous populations with deeply shared and ingrained values, social and cultural cohesion and a middle class (there never are enough rich) willing to accept extraordinarily high tax rates.
       Americans incorrectly believe Scandinavian countries are wealthy; however, they compare very unfavorably to the US. The GDP of Houston, Texas is larger than all of Sweden. If Sweden were a US state it would rank among the very poorest in per capita GDP. Moreover, Sweden is 30% more expensive. This means that when considering both purchasing power and GDP, Sweden would be the poorest US state – by far.
       With the lie of Scandinavian socialism outed, consider if communism, socialism or any collectivist economy ever has produced sustained prosperity. The short answer is never. Socialism may produce short-term gains by nationalizing property, debasing currency, seizing assets and borrowing. This is akin to mortgaging your home, selling your patrimony and stealing your neighbors’ property – all to finance a gigantic party. But the party always ends when the other people’s money runs out.  
       Examples of communism/socialism are Cuba, USSR, North Korea and Venezuela. Their horrors are obvious except to diehard progressives. These are the places to observe the reality of destructive collectivist schemes. Liberals and their media running dogs falsely cite Sweden and Scandinavia as socialist success stories when, in fact, they are socialist failures and capitalist successes. It is all a big lie as indeed all of collectivism is a big lie. Commies promise you Sweden but they give you Venezuela!
Red October continues next week with a healthy dose of commie humor.

Red October – A Tale of Six Islands

George Noga
Communism promises Xanadu, Valhalla, Elysium and Zion; it delivers North Korea,
Venezuela, USSR and Cuba. It promises a Garden of Eden but delivers hell on earth.
Red October – A Tale of Six Islands
By: George Noga – October 8, 2017
      Our month-long series chronicling 100 years of communism continues; this week we compare island nations with command economies to ones with market economies. There is something about the self-contained nature of islands that invites comparisons. For good measure, we contrast liberal US cities and states with conservative ones.
       Communist Cuba, a brutal dictatorship, has a failed economy; its GDP ranks 137 and its freedom index 171. Most Cubans’ take home pay is $30/month. It is a nihilistic society where one-third of all pregnancies are terminated. Socialist Greece, constantly being bailed out by its neighbors, is a failed state. Uber-liberal Puerto Rico is bankrupt; it owes $75 billion in bonds and $40 billion in unfunded pension liabilities – equal to $100,000 per household. People are rapidly fleeing this crime-riddled wasteland.
       Singapore is rich; less than 20% of its economy is in the public sector and taxes are half that of the US. It ranks #2 in the world for economic freedom. The #1 place for economic freedom is affluent and capitalist Hong Kong. Taiwan, a vibrant free market democracy, ranks high in both wealth and freedom. A mere few generations ago all six of these places were desperately poor. Today, the ones (Singapore, Hong Kong, Taiwan) that chose freedom and capitalism are all rich. The ones (Cuba, Greece, Puerto Rico) that chose collectivist, anti-market schemes are impoverished hellholes.
       Deep blue states (California, New York, Illinois) are hemorrhaging people with 1,000 each day abandoning them for deep red states (Texas, Florida, Utah). They move to escape blue states’ confiscatory taxation, job killing minimum wages, forced unionization, welfare fraud, choking regulations, green energy mandates and social pathologies. As humans always have done, they gravitate to places with economic freedom where household income is $10,000 higher and people are happier.
        Many cities have been governed by progressive politicians, often for more than a half century; Detroit, Newark, Cleveland, Chicago, and Washington come to mind. The legacy of such liberal stewardship is bankruptcy, shrinking population, failed schools, high taxes and crushing debt. They are dismal, dangerous and dirty places. If liberal policies worked, they should be thriving magnets showcasing progressive ideas and the failure of free market capitalism. Instead, contrast these failed cities with successful ones such as Dallas, Houston or Salt Lake City. Whether it be islands, states or cities, it is clear that more liberty and less government works and that socialism fails.
       As I oft have written, liberalism (and every one of its collectivist cousins) is a lie. They promise Utopia, Xanadu, Nirvana, Elysium, Valhalla and Zion but what they give you is death and desperation as in Venezuela, Cuba, the USSR and North Korea. Economist Ludwig von Mises nailed it nearly 75 years ago when he wrote:
    “The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and a resistance to every kind of improvement. They call themselves liberals, but they are intent on abolishing liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want the government to be omnipotent. They promise the blessings of the Garden of Eden, but they plan to transform the world into one gigantic post office with every man but one a subordinate clerk in a bureau.”
Red October continues next Sunday with “Socialism, Sweden and Scandinavia”.

Red October – 100 Years of Communism

George Noga
A brief history of communism (and its socialist cousins) as it turns 100 this month
Red October – 100 Years of Communism
By: George Noga – October 1, 2017
         This month marks the 100 year anniversary of the communist takeover of Russia. Throughout this centenary month MLLG chronicles the century of communism and its close cousins – socialism, utopianism and collectivism – in our series: Red October.
      From time immemorial, quixotic romantics have dreamt of paradise: Utopia, Elysium, Valhalla, Xanadu, Eden, Nirvana. In the end, all they had to show for their fantasies and delusions was a sea of blood and millions of broken lives. Despite its grisly record, collectivism still exerts a powerful emotional appeal on progressives, who remain slaves to Utopia. Our Red October series documents communism’s century of mental poison and human misery to bestir those beguiled by its siren song.
         America’s first settlements began with Utopian dreams. When colonists arrived in Jamestown everything went into a common store, severing all links between work and benefit. Within 6 months most died from starvation. When another 500 settlers arrived, 440 more died. When the Pilgrims arrived at Plymouth, the socialistic Mayflower Compact governed them; soon they were eating rats and most died. Like socialism everywhere (Venezuela today), there was starvation in the midst of plenty. Only when they rejected socialism and embraced property rights did the colonists prosper.
         A hundred years of communism has produced death and destruction on a massive scale. Soviet communism killed 50 million, not counting tens of millions in Gulags. Not to be outdone, Mao and the Chicoms killed 70 million. Pol Pot killed 6 million in tiny Cambodia. Then there is Laos, Cuba and North Korea. The toll in death, torture, misery, destruction and suffering is unparalleled in human history. It must be noted that even the reviled Nazis were socialists as Nazi is shorthand for the National Socialist Party. Fear not, the unreconstructed commies will get it right the next time.
         The evils of collectivism are on full display today in oil rich Venezuela – once the wealthiest country in South America. After 18 years of Chavez/Maduro style socialism people are starving. Medical care is unavailable; operating rooms are filthy; and people die for lack of antibiotics. Infant mortality is higher than in war-ravaged Syria as incubators are broken and there no longer is any baby formula. Shortages, including toilet paper, are endemic. Inflation is nearly 800% and the economy has contracted by one-third. People are dying daily in the streets while others are desperately fleeing.
      The gulf between the words and deeds of communism and all forms of collectivism is an unbridgeable abyss. They speak of comradeship, equality, brotherly love, peace, prosperity, progress and freedom. Their deeds result in brutal dictatorships, Gulags, world wars, police states, totalitarianism, economic stagnation, shortages and a general sense of torpor and malaise. They promise Utopia but deliver Venezuela. They want to be judged by their lofty intentions but they are damned by their actions.
        Communism and its collectivist cousins always fail because they are diametrically and fundamentally opposed to human nature – which is deeply ingrained and cannot be overrode. From each according to his ability; to each according to his needs abrogates human nature. Even people as altruistic, homogenous and devout as the Pilgrims chose to starve rather than to modify their humanity to conform to that deadly mantra.
       Collectivism sometimes may work for a family, clan or tribe where familial bonds (a key part of our human nature) override economic incentives. However, throughout human history, there is no example extant where socialism has worked for a group of more than 25 people. Judge collectivists by their actions – not by their words!
Our Red October series continues next Sunday with “A Tale of Six Islands”.