The Essence Of Socialism Is Declining Productivity

July 13, 2021 By Francis Menton @ Manhattan Contrarian 

In our freedom-based economic system, we are accustomed to economic growth of a percent or two or three every year. How does that happen? Every person with a private business quickly catches on that they can make a little more money if they can just figure out how to make the product a little better, or a little more efficiently, or with slightly less input material or labor. Millions of people working independently on this project in the aggregate deliver a little economic growth most every year.

Meanwhile, socialism follows the incentive system of the bureaucracy. If you are the business manager, your superior in the central planning bureau headquarters has no idea whether the product you are making is any good or not. Your way to get ahead is to convince that guy that you need a bigger budget and more staff to accomplish your mission. Each year you use more people and more materials to produce less and lower quality product. In the aggregate, the economy is shrinking, although that tends to get hidden for decades in fraudulent economic statistics, until it becomes too obvious to conceal. Like, for example, when starvation sets in on a mass scale.

You would think it would be almost impossible in today’s world for mass food shortages and starvation to happen in an entire country. After all, all a government needs to do to provide plenty of food for everyone is to allow private businesses to operate in the fields of food production and distribution. Just get out of the way, and the private sector will take care of it, and the people will have plenty to eat. And yet examples of mass food shortages and even starvation are not difficult to find. Funny, but it’s always the usual (socialist) suspects:

Cuba

Likely you have read about the mass protests in Cuba over the past couple of days, and about the widespread calls for “freedom” among the people. But then, Cuba has been under the thumb of the same dictatorship for about 60 years, with the same lack of freedom all that time, and without much in the way of these mass protests. So why now?

Reports on the situation cite multiple reasons for the situation having now come to a boil; but the most commonly recurring themes are economic shrinkage and food shortages. From the Wall Street Journal, July 12:

The protests come as Cuba’s economy contracted 11% last year. The island was slammed by the coronavirus pandemic and its vital tourism industry collapsed as a result. . . . Amid a hard-currency shortage, Cubans must stand for hours in line to buy basic goods such as chicken or bread or even to take a bus.

The tourism industry was the one part of the economy with mostly freedom-based market exchange. Without that, the people can’t get food.

Or from NPR, July 11:

Thousands of Cubans marched on Havana's Malecon promenade and elsewhere on the island Sunday to protest food shortages and high prices amid the coronavirus crisis, in one of biggest anti-government demonstrations in memory. . . . "We are fed up with the queues, the shortages. That's why I'm here," one middle-age protester told The Associated Press. He declined to identify himself for fear of being arrested later.

North Korea

A new round of famine in North Korea? I haven’t seen much about it in major news sources, but with a hat tip to Bryan Preston of PJ Media I find a July 11 piece from Radio Free Asia, headline “Facing Chronic Shortfalls, North Korea Tells Citizens to Start Supplying Their Own Food.” Excerpt:

North Korea is ordering citizens to start producing their own food to prepare for a long-term food shortage that could last for three years, but ordinary people say that the government is shirking its responsibility, sources in the country told RFA. The UN’s Food and Agriculture Organization estimated in a recent report that North Korea would be short about 860,000 tons of food this year, about two months of normal demand. RFA reported in April that authorities were warning residents to prepare for economic difficulties as bad as the 1994-1998 famine which killed millions by some estimates, but experts said that the situation was dire, but nothing like the 1990s.

A shortage of two-months worth of food out of a year, or about 16%, sounds like enough to lead to widespread starvation. In the 90s, unknown hundreds of thousands, perhaps millions, died. And the bast they can say is that this round is unlikely to be as bad. It’s hard to conceive of how monstrous the government of North Korea is.

Venezuela

As with North Korea, the situation of mass hunger and even starvation in Venezuela has become so chronic that it barely makes the news any more. We can get a fairly up-to-date overview of the situation from a March 19 piece in the journal Frontiers in Sustainable Food Systems, headline “Food Security in Venezuela: From Policies to Facts.” The author is Janet Rodriguez Garcia, a professor at Central Venezuela University in Caracas.

Ms. Garcia duly takes note that with the advent of the Chavez (socialist) dictatorship in 1998, Venezuela moved quickly to make food security a human right and to pass numerous laws and regulations to effectuate that right:

The 1999 Venezuelan Constitution explicitly included, for the first time, the term “Food Security” in Article 305. Subsequently, the government approved various laws and guidelines to regulate the right to food of the population. . . .

But somehow, the state of nutrition of the Venezuelan people has not only not improved, but has grown steadily worse under the socialist regime:

Despite these laws, and after the decree of the right to food in the Venezuelan Constitution, the country still has significant nutrition deficiencies. For instance, the State of Food Security and Nutrition in the World 2019 (FAO et al., 2019) reported that the prevalence of undernourishment increased by 21.2%, rising to 31% the following year (FAO et al., 2020). According to Caritas, the Global Acute Malnutrition in children under 5 years of age (GAM) was 14.4% in 2020 (Caritas de Venezuela, 2020). Moreover, the national report jointly issued, in December 2018, by the Bengoa Foundation, the Venezuelan Health Observatory, and the Agri-food Network of Venezuela, 33% of children under 2 years of age showed growth retardation when using the Size/Age indicator (Fundación Bengoa, 2018), that is, according to the data provided by these NGOs, that malnutrition is a foremost Public Health concern in Venezuela.

So Ms. Rodriguez Garcia, what is the answer? You might think that the good professor would recognize that all the successful countries of the world provide adequate food for their people by the simple device of letting the private sector handle the job. But if you think that, you are forgetting that Ms. Rodriguez Garcia is an academic, and likely also beholden to the corrupt Venezuelan regime. So, here is her prescription:

Venezuela requires cohesive, integrated, continuous, and progressive state-policies and laws rather than government initiatives that change according to political interests. Experts, statespersons, and health professionals should design the food policies. To properly set objectives and goals, an accurate diagnosis is required. The particular needs of each age-and-vulnerable-group should receive special consideration.

Yes, the problem so far is that the food policies have been designed “according to political interests”; so the solution is simply to have the food policies be designed instead by “experts, state persons and health professionals.” Well, why hadn’t anyone thought of that before?

The depth of the ignorance of people who pass for the intelligentsia is truly astounding. But I wonder, how many students graduating from college in the U.S. today have ever been taught at any point in their education anything about the perverse incentives of the socialist system that lead inevitably to declining productivity and, ultimately, to starvation? Probably, just about none.