May 2, 2019 Reading Time: 3 minutes

Socialism: it’s an ideology that was tried, measured, and found wanting in the twentieth century. Instead of heaping up riches, socialist countries heaped up political prisoners and corpses.

A staggering 3.4. million people have fled Venezuela on foot for neighboring countries. This is the country that Salon called an “economic miracle” in 2013, and which two English journalists only recently called a “paradise.” Socialism represents a set of ideas that should have taken its rightful place in the dustbin of history.

But what is it? When most people right and left say “socialism,” they probably don’t really mean socialism. You have real, honest-to-goodness socialism when you have “a centrally planned economy in which the government controls all means of production.” Someone might advocate heavy taxation and redistribution but still advocate that most if not all of our interactions with one another be mediated by markets and the institutions of civil society.

This rules out the Scandinavian countries as exemplars of socialism, for example. They are free-market economies with large welfare states. Denmark, Sweden, Norway, and Finland rank 15th, 27th, 25th, and 17th, respectively, on the Fraser Institute’s Economic Freedom of the World Index. They’re all in the top quartile of the Index and all categorized as “Mostly Free.” High taxes and big social programs? You bet. Freer markets than almost anywhere else in the world? Those too. Denmark, Sweden, Finland, and Norway demonstrate the triumph of free markets, not central planning.

The report summarizes: 

Since our first publication in 1996, numerous studies have used the data published in Economic Freedom of the World to examine the impact of economic freedom on investment, economic growth, income levels, and poverty rates. Virtually without exception, these studies have found that countries with institutions and policies more consistent with economic freedom have higher investment rates, more rapid economic growth, higher income levels, and a more rapid reduction in poverty rates.

We can stare at our navels and theorize endlessly about what the ideal society would look like. Or we could follow the economist Ronald Coase’s advice and simply look out the window. Adam Smith was right: “there is a great deal of ruin in a nation,” but there is far more of it in countries that have experimented with central planning and far less of it in countries that have largely relied on markets.

People can vote with their feet for different political, economic, and social institutions. They have overwhelmingly voted for liberty, opportunity, and prosperity when free to do so, and even when not free to do so they often risk life and limb to get out of societies heavy with central planning and into societies where markets are relatively free. I don’t know of many people risking life and limb in makeshift rafts trying to get to Cuba from the United States.

Through migration people vote an overwhelming “no” for socialism, a system that was, as the economist Rober Heilbroner put it, “the tragic failure of the twentieth century.” If anything, the prison camps and body counts testify that “failure” is an understatement. Let’s hope we keep our ethical wits about us, to borrow a phrase from Deirdre McCloskey, so that it doesn’t also become the tragic failure of the twenty-first.

A version of this piece ran at Forbes

Art Carden

Art Carden

Art Carden is a Senior Fellow at the American Institute for Economic Research. He is also an Associate Professor of Economics at Samford University in Birmingham, Alabama and a Research Fellow at the Independent Institute.

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