Socialism - abolishment of private property in the major factors of production and replacing it with some form of collective ownership and or control
These were the words of Socialism Sucks coauthor Benjamin Powell in defining the true essence of socialism to a group of university students in a lecture dating back to the last academic year. In today's society we often hear socialism thrown around as a buzz word -- inciting fear and rage in some, hope and promise in others. Few really stop to think about what the word means, or what it would be like to live in a system with a socialist structure. Often times few are even able to cite differences between capitalist and socialist ideals, equating capitalism with greed and socialism with equality. Through his work, Powell aims at tearing down these conflations, giving insight into the reality of socialist regimes from around the world. Traveling and studying Cuba, Venezuela, Sweden, China, Georgia, and Korea, Powell elucidates the economic systems of each, addressing common misconceptions for each country's economic structure and presenting the results of such policies on daily life through his first hand experiences. In this analysis, I will delve a little bit deeper into a few of the nations Powell used as case studies to expand, counter, or provide my perspective on information given in his lecture.
Sweden
A common country cited for those touting socialist ideals is Sweden, but if we step back and examine it we will find that it does not totally fit into the definition of socialism. Sweden allows its citizens to own private property or have their own businesses. Ranking 23rd nationally in GDP, Sweden follows the correlation that we observe with other nations that have free markets and private ownership (Sweden Economy Ranking). Sweden does however provide ample resources to its citizens in many differnt forms as a result of higher tax rates... examples include universal healthcare, high pension income, good public transport systems, public safety, and investments in clean energy as a result of higher tax rates (Gray, A.). So while the government does provide a lot of resources to its citizens, the nation of Sweden is much more of a free market entity than what is often thought. Individuals still have incentive to grow, innovate, and achieve. Commenting on Sweden's propensity to innovate, senior writer for the World Economic Forum Alex Gray states "Innovation performance is measured by average performance on 25 indicators. Sweden leads in human resources - the availability of a high-skilled and educated workforce - and quality of academic research" (Gray, A.). The combination of the two principles of private property ownership coupled with state sponsored efficient programs and resources make Sweden unique in its own respect. The country is able to maintain incentives for private business ownership and production while providing resources. This combination however, is also what seems to confuse those who cite Sweden as the pinnacle of socialism in the current age as the picture is not merely just black and white.
Venezuela
Contrasting the rather free market of Sweden with Venezuela, the realities of socialism become very apparent. In 1999 Hugo Chavez began to implement policies that would take Venezuela from the prosperous country it was at the time, to a nation of rampant inflation, slums, and poor quality of life for its citizens. These policies included nationalization of industry and agriculture, welfare initiatives, and overvaluation of currency by artificially lowering prices which resulted in rampant inflation (Di Martino, D.). Though at one time a country with bounds of potential, today Venezuela is no longer regarded as a world leader and is most notable for its issues with inflation. State ownership reduces competition and disrupts the supply chain both of which result in lower quality products and a reduced number of options for consumers. Powell chose to measure the quality of products in a country by the alcoholic beverages produced within that country. Partially out of comedic effect, but not entirely removed from academic practice this comparison actually checks out... states with good supply, competition, resources, and incentives will invariably produce better products - especially non essential ones like alcoholic beverages.
Conclusion
Before making statements on the economic functions of other countries it is important to be educated on their actual policies and what they result in. Real socialism involves state control of supplies, industry, and property. In reality many regimes fall in a gray area. It is hardly always a clear distinction between capitalist and socialist... it is rather a spectrum. Through comparison of many countries and policies we are able to see the consequences of policies that tend more towards socialist ideologies than capitalist ones.
Resources
Di Martino, D. (2019, March 21). How Socialism Destroyed Venezuela. Economics21. https://economics21.org/how-socialism-destroyed-venezuela
Gray, A. (2017, January 30). Why Sweden beats other countries at just about everything. World Economic Forum. https://www.weforum.org/agenda/2017/01/why-sweden-beats-most-other-countries-at-just-about-everything/
Sweden Economy Ranking: by GDP and 60 other indicators. (2020, April 14). Georank.org. https://georank.org/economy/sweden
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