5/31/2016 - Thomas Sowell Townhall.com
Socialism sounds great. It has always sounded
great. And it will probably always continue to sound great. It is only when you
go beyond rhetoric, and start looking at hard facts, that socialism turns out
to be a big disappointment, if not a disaster.
While throngs of young people are cheering loudly
for avowed socialist Bernie Sanders, socialism has turned oil-rich Venezuela
into a place where there are shortages of everything from toilet paper to beer,
where electricity keeps shutting down, and where there are long lines of people
hoping to get food, people complaining that they cannot feed their families.
With national income going down, and prices going
up under triple-digit inflation in Venezuela, these complaints are by no means
frivolous. But it is doubtful if the young people cheering for Bernie Sanders
have even heard of such things, whether in Venezuela or in other countries
around the world that have turned their economies over to politicians and
bureaucrats to run.
The anti-capitalist policies in Venezuela have
worked so well that the number of companies in Venezuela is now a fraction of
what it once was. That should certainly reduce capitalist
"exploitation," shouldn't it?
But people who attribute income inequality to
capitalists exploiting workers, as Karl Marx claimed, never seem to get around
to testing that belief against facts -- such as the fact that none of the
Marxist regimes around the world has ever had as high a standard of living for
working people as there is in many capitalist countries.
Facts are seldom allowed to contaminate the
beautiful vision of the left. What matters to the true believers are the
ringing slogans, endlessly repeated.
When Senator Sanders cries, "The system is
rigged!" no one asks, "Just what specifically does that mean?"
or "What facts do you have to back that up?"
In 2015, the 400 richest people in the world had
net losses of $19 billion. If they had rigged the system, surely they could
have rigged it better than that.
But the very idea of subjecting their pet notions
to the test of hard facts will probably not even occur to those who are
cheering for socialism and for other bright ideas of the political left.
How many of the people who are demanding an
increase in the minimum wage have ever bothered to check what actually happens
when higher minimum wages are imposed? More often they just assume what is
assumed by like-minded peers -- sometimes known as "everybody," with
their assumptions being what "everybody knows."
Back in 1948, when inflation had rendered meaningless
the minimum wage established a decade earlier, the unemployment rate among
16-17-year-old black males was under 10 percent. But after the minimum wage was
raised repeatedly to keep up with inflation, the unemployment rate for black
males that age was never under 30 percent for more than 20 consecutive years,
from 1971 through 1994. In many of those years, the unemployment rate for black
youngsters that age exceeded 40 percent and, for a couple of years, it exceeded
50 percent.
The damage is even greater than these statistics
might suggest. Most low-wage jobs are entry-level jobs that young people move
up out of, after acquiring work experience and a track record that makes them
eligible for better jobs. But you can't move up the ladder if you don't get on
the ladder.
The great promise of socialism is something for
nothing. It is one of the signs of today's dumbed-down education that so many
college students seem to think that the cost of their education should -- and
will -- be paid by raising taxes on "the rich."
Here again, just a little check of the facts would
reveal that higher tax rates on upper-income earners do not automatically
translate into more tax revenue coming in to the government. Often high tax
rates have led to less revenue than lower tax rates.
In a globalized economy, high tax rates may just
lead investors to invest in other countries with lower tax rates. That means
that jobs created by those investments will be overseas.
None of this is rocket science. But you do have to
stop and think -- and that is what too many of our schools and colleges are
failing to teach their students to do.
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