Economist Milton Friedman once said that, if you put the government in charge of the Sahara desert, there will eventually be a shortage of sand. No wonder that, after 14 years of socialist government, Venezuela — the country with the world’s largest oil reserves — is currently importing gasoline. This fact highlights Venezuela’s painful descent into chaos, as the economy crumbles and the nation’s social fabric unravels. There is even talk now of a civil war.
Venezuela is a prime example the failure of the socialist model, between 1999, when Hugo Chavez took over as President, and 2016, average per capita income in Venezuela rose by 2 percent. In the rest of Latin America and the Caribbean, it rose by 41 percent over this same period.
The Venezuela government reacted to skyrocketing inflation by following the typical socialist script: it imposed price controls and has been raiding businesses it accuses of hoarding. As a result, there are widespread shortages of food and medicines. Under control of its socialist government, Venezuela currently has an infant mortality rate well above that of war-torn Syria. Mothers in childbirth die of infection or minor labor complications because doctors lack antibiotics or even soap to clean surgical tools and operating tables.
For another example consider Robert Mugabe, Chavez’s erstwhile friend and the President of Zimbabwe, who has been in charge of his unfortunate country since 1980. Since then, Africa’s income per person rose by 48 percent. In Zimbabwe, a socialist dictatorship, it has declined by 25 percent.
The great achievements of society have not come from government bureaus. Einstein did not construct his theory under the order of a government leader. Henry Ford did not revolutionize the automobile industry that way. The only cases where the masses have escaped poverty is where they have embraced capitalism and largely free trade. Where are the masses the worst off? Where capitalism is not practiced! The record of history is crystal clear. There is no alternative way to lift people out of poverty. It is the productive activities that are released by a free enterprise system.
Upcoming….more Bible teaching on economics, why it takes VW twice as many workers to build a car as Toyota, and a look at the Scandinavian socialist countries.