Fred LaSor: Socialism is not the answer

As contradictory as it sounds, many of the world’s poorest people live in countries with sizeable natural wealth. I’m not the first to say this, but I’ve observed it first hand. An example:

When I worked there in the 1980s, the World Bank ranked the Central African Republic the fourth or fifth poorest nation in the world despite large reserves of gold and diamonds, much or it in easily-accessible alluvial deposits. Of course the World Bank looks mostly at economies in terms of monetary activity, and much of CAR’s market activity was based on barter and therefore “below the radar.” For most Central Africans, it was a subsistence-level existence, with only a handful of people benefiting from the nation’s resources. Those few were tremendously wealthy, and since they were often high-level government officials it was easy for them to get mining permits and export licenses.

The issue wasn’t national wealth, but how that wealth was distributed. Approximately one percent of the population — perhaps even less — controlled more than 95 percent of the wealth. Those people lived well, with fancy cars, large houses, and many imported goods.

The reaction from many university people or government officials when they hear of maldistribution is to suggest socialism, almost as if it’s a magic solution to the problem. This despite the fact it has never worked in the past, and the suggestion usually comes from people in the elite class who won’t, ultimately, give up their privileged status in favor of a more egalitarian society. We can surmise, rather, their real intention is to buy off the peasants with feeble promises while they cement their own place at the top. I’ve seen that in several self-described socialist countries where I served. The greater the wealth gap, the more people talked of “spreading the wealth to the farmers and workers” and the less it actually reached the poor.

As the gap between rich and poor has increased recently in America, with the rich expanding their wealth while people at the bottom of the economic ladder see wages stagnate or diminish, calls go out for socialism. Bernie Sanders is the outspoken example, but by no means the only one: more will appear in 2020. A few of the super-rich in Silicon Valley even say they’d happily pay more in taxes, a humble-brag way of parading their virtue at no personal cost.

Pressure from Democratic candidates is building to introduce socialism. The previous administration would’ve socialized health care if they could’ve done so without universal coercion or had been willing to stand up to special interests who demanded complex exceptions. In the end, forcing everyone to purchase insurance and introducing favoritism resulted in a monstrosity that was intolerable to too many voters. Still the pressure toward socialism continues despite numerous historical failures.

The American alternative to old Europe’s socialism has been to allow market pressures and individual incentives to drive the economy. It has worked well for us — we’re the wealthiest nation in the world, with an amazing record of innovation and invention in our past. There are critics who insist our wealth is the result of abundant natural resources and energy sources, or cheap labor, or great expanses of open land. Those aren’t to be denied. But other countries have many of those attributes, some in even greater abundance, but aren’t competitive. This is not to brag, it’s to recognize our success and give thanks to divine providence. And to recognize we have a working economic and political model that can certainly stand improvements, but socialism isn’t an improvement.

Fred LaSor lived for more than twenty years in Africa before retiring to the Carson Valley.