Socialism in Bolivia Works … Not   Leave a comment

I owe this story to Josh Bennett over at Patriot’s Lament.

Image result for image of bolivian miner protestTwo years ago, Bolivia was being hailed as a socialist dream. Bolivian President Evo Morales had recently won re-election by a huge margin. His previous eight years in office had weakened property rights in the country, using frequent nationalizations and demonizing capitalism. According to the Globalist in 2014, Bolivia’s socialism had produced its best growth in decades.

Of course, that neatly ignored the increase in commodities prices over those years which filled the coffers of the government while the miners (you know, the people who do the actual work of extracting the wealth) were living hand-to-mouth.

Morales claimed that nationalism was good for the environment and better for the people while he balanced the government books on their backs. That’s how socialism works — take money from the people who do the actual work, take away their freedom to decide their own lives, fund programs that provide government jobs and then take credit for the hard work of those you are raping. That’s how socialism works.

But it doesn’t work well forever. It might look good for a while, but inevitably the price of oil drops and the State of Alaska can’t pay its bills and starts to demand taxes from the citizens. Oops! I digress ….

With the downturn in commodities prices, the Bolivian miners began to feel the squeeze and now they are demanding greater freedom to pursue their own interests. These people are digging in the dirt with picks and shovels and socialism isn’t cutting it for them. They want liberty to negotiate with the larger mining companies who have the capital to buy better equipment. More minerals extracted from the ground means a better standard of living for these miners.

I don’t condone the miners killing of the Bolivian Interior Minister, but I understand the anger that it driving their violent protests. Socialism cannot function when the people demand to benefit from the produce of their labor. These miners insisting that the government allow capitalism to return puts the lie to the belief that socialism is better fo the poor. It’s better for the government elites. I’m sure President Morales lives a very fine life, as befitting a former coca grower. Meanwhile, the miners are starving and they recognize that the capitalists can provide the means to betterment of their lives which socialism has failed to do.

Understand that the United States of America is not a capitalist country. We are a socialist country. You can prove that to yourself if you like. Just pause and think about it. Bernie Sanders made a good case that we are already a socialist country. He pointed out that Social Security was called “socialist” when FDR proposed it. The minimum wage was considered a radical intrusion into the market, otherwise known as “socialism.” Unemployment insurance, abolishing child labor, the 40-hour work week, collective bargaining, strong banking regulations, deposit insurance and jobs programs were all described as “socialist.” Sanders pointed out that these programs “have become the fabric of our nation and the foundation of the middle class.”

Historical analysis has shown that the New Deal extended the Depression all the way through 1945 and it only really broke its stranglehold on the economy when Congress voted to ease the socialism. The American middle class grew and thrived in the second half of the 19th century, a long time before the New Deal.

Americans in FDR’s time opposed any socialism, so FDR didn’t call his programs what they really were. Instead, he tricked the voters with rhetorical manipulation. He imposed orthodox 19th-century democratic socialism on the United States while couching it as “fair play”.

Marx did not invent socialism. He espoused one version of socialism in the 19th century. It failed, mainly because by the time his theories got out into the publish, it was already becoming clear that he’d been wrong. Ownership of capital was becoming more broad-spread. The working classes were not starving in greater numbers as capital was concentrating in fewer hands. Instead, they were experiencing improved standards of living.

Eduard Bernstein and other socialists departed from Marx at that point and became “democratic socialists”. They shifted the focus away from revolution to using democratic institutions to regulate capitalists in ways Bernstein thought would benefit workers — thus promising government pensions, minimum wages, state regulations of working hours, etc.

This form of socialism without the gun gained popularity in western Europe, especially among the elites in Britian, who became the Fabian Socialists. It took decades to jump the pond to the United States, but the New Deal propaganda worked because many people who support socialism imagine that they are opposed to it.

Pew Research surveyed Americans about which government programs should be cut. Huge majorities opposed any cuts to Medicare or Social Security. The popularity of these programs extends across all political parties. But wait, these same people claim to oppose socialism. They rationalize their support for these programs with the argument that they “paid in” to some trust fund, but the Social Security trust fund was never fully funded and it was emptied by Bill Clinton to pretend to balance the deficit. Social Security is nothing more than taking the property of current wage earners and redistributing it to beneficiaries. In the 25 years I worked in the private sector, my employers and I paid into Social Security approximately 3 1/2 years worth of benefits at current benefits. Someone else will be paying the additional 10-20 years worth of benefits I am likely to draw (I had a great aunt who lived to be 106, so ….) Now I work for the State of Alaska where we are exempt from payroll taxes. Our central retirement program follows the same percentage and employer match, but it is invested. And even with the volatility in the market, it’s growing. If things continue this way, my personal retirement funds will pay for those 10-20 years of addition pensions. Social Security is predicted to go into the red and to be completely dependent upon the general fund the same year I reach legal retirement age.


Back to the subject ….

In America, though, where “socialism” is a bad word, this sort of thing isn’t socialism. We call it “compassionate conservatism” or or the social support safety net. Majorities of Americans also like poverty relief programs like Medicaid and housing assistance, so its not surprising that a large portion of the federal budget goes to these programs:

Source: Office of Management and Budget, Table 5.1

Socialism isn’t just cash transfer payment (that’s where some people are taxed on their income so that others can receive benefits they didn’t earn). It’s also largely about government regulation. The New Deal wrought a revolution by taking a largely unregulated economic system and imposing a massive amount of new regulation on property owners in the form of laws related to wages, labor, prices, and more. This sort of regulation is far more damaging than mere cash transfers since it directly impedes the creation of wealth before it can even be redistributed.

Image result for image of clinton trumpSo, here we are — about to elect another president and both of the two main-party candidates are socialists who are in bed with corporate America. You cannot argue that Clinton is not in bed with Wall Street. Her wealth and most of her campaign came from her Wall Street supporters. Why do you think they’re backing her? Do you think it’s because she’s going to regulate them and make them behave?

How naive are you? She’s the definition of a corporately-backed politician. You can be assured that she has promised her backers that they will like what comes out of the White House if she wins the Oval Office. And they will. That is the the definition of socialism – the means of production controlled by the government.

Then there’s Donald Trump who is the definition of a crony capitalist, which is just another term for “socialist”. Donald Trump has, in the past, used government regulations, imminent domain and government funding programs to build his businesses. This is just another step in the process. When the means of production grabs the reins of government, it’s still socialism.

Two shades of the same tyranny. We’re not that different from Bolivia, except we had a century of robust capitalism in the 19th century that has given us the banked wealth to skate for decades while slowly strangling the capitalist goose that laid a golden egg.

That halcyon existence is running out of gas. We can’t continue to do what we’ve done in the past, opting for socialists in the White House time after time after time, and expect different results. We might have four more years to get our heads out of the sand, but my gut says we don’t have eight more years. We can’t sustain another $10-20 trillion in debt without wrecking the economy. We shouldn’t seek to burden the Millennials with taking care of the entitled old people when Social Security goes bankrupt.

I’m 11 years away from legal retirement. I don’t worry about myself. I have two personal retirements that are doing okay — they could have been better invested by my former employers who controlled those funds for 15 years, but my current employer’s investment portfolios are doing well. My husband has an IBEW pension that will continue until I die. My offspring know that if they take care of me, I’ll take care of them — they’ll get a house and a free housekeeper in my retirement years. And that’s as much as I want to burden Millennials for my retirement — a reciprocal agreement with the two humans I supported for two decades.

But, yeah, I worry about the retirees who staked their future on the socialism called Social Security and Medicare. We are in so much trouble, folks!

Image result for image of venezuela socialism failI find so many parallels between Bolivia and us. Yeah, we’re 1st world and they’re 3rd world. We’ve ceded our resource development to the government so it can “manage” environmental concerns. Our capital companies are in bed with the government for their own survival. The government is $20 trillion in debt, but there is also a deep amount of debt in the private sector. States like Alaska were doing great a few years ago — a socialist dream, Alaska! — but now with the fall of commodities prices, those governments are struggling and the only “solution” on offer is taxing the people. I work for the State of Alaska and I’m saying this is a horrible idea. We the people cannot afford extra money coming out of our income. And if oil prices don’t rebound, at some point, we will be facing a 30% state income tax in order to support our current government. Obviously, something has to give because socialism never works out in the long run.

Bolivia is roiled by violence as socialism fails. People in Venezuela are starving. What happens to us when our socialism fails?


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