Tag: socialism and food

Collectivism Has Destroyed Venezuela

By Trey Johnson | Venezuela

Millions of Venezuelans escape a country destroyed by bad government and coercive collectivism.

The border of Colombia and Ecuador is full of Venezuelans who are doing their earnest to escape the clutches of a coercive regime in search of free markets and better opportunities. Common tourists, amongst the droves of Venezuelans, must wait hours and hours in a line that wraps around the immigration office here in Ipiales, Colombia. During peak days, it can take over 24 hours to cross the border between Colombia and Ecuador.

The border crossing’s elevation is 2898 m (9500 ft), which makes the experience a rather cold one as nighttime approaches. Individuals in line are able to stay warm with the help of vendors selling coffee, hot dogs, and empanadas.

Most South American countries have no choice but to allow free movement of these refugees due to treaties signed by UN member states. The strain of this situation hampers economic stability and the free flow of goods and services due to long lines at the border.

While in the line, one can also learn of the tragedies affecting the people of Venezuela and understand why they are leaving their beloved homeland. Men and women full of fond memories and past success, now crushed by coercive collectivism. Doctors, welders, and professionals of all sorts are throwing away their experience to land a job in a neighboring country, hoping to make the minimum wage of $300 per month in favorable countries such as Chile and Peru. Ecuador and Colombia are not desirable, and Brazil’s language barrier makes the destination unattainable.

To date, an estimated 4 million Venezuelans have left the country. Hyperinflation is the sole reason these people have left. “There is a lot of work, but there is no money.” The minimum wage is currently 2,000,000 Bolivars per month which equates to $3 USD per month. That is $36 per year. The price of a kilogram of beef in Venezuela is $3 dollars and the price of shampoo is also $3.

To make matters worse, the Venezuelan government instituted new currency controls on money entering the country through financial institutions. In order to send money to your family members stuck in Venezuela, you must have a bank account in both Venezuela and an outside country. One refugee believes this policy is “choking the people.”

The current administration’s new constitution would completely eliminate the ability to own private property. This market uncertainty makes investments impossible.

The people who are working to stay in the country are almost at the end of what seems to be the brink of collapse. Schools are functioning, but they have no food to feed their students. Most of the faculty members leave the schools in search of new opportunities. Revolutionaries like the violin playing patriot and Oscar Pérez have become heroes to Venezuelans trying to take back their country.

The Venezuelan regime is continuing to provide a box of food to each family in accordance with its collectivist agreement. This box is called CLAP and contains two packages of flour and rice along with powdered milk “if you are lucky.” The frequency of these food distributions is about once every 5 to 6 months according to a refugee waiting in the 24-hour line.

One wealthy Venezuelan had a stable career for over 15 years. He had a house, a car, and “a whole complete life.” He went on trips with his family inside and outside the country. Right now he is busy moving groups of Venezuelans to more favorable environments scattered throughout South America. He understands the attraction of collectivism and believes “the Venezuelans have to learn the lesson.”

A Colombian bus driver passes and asks, “are you going to Cúcuta?”, a town on the border of Venezuela and Colombia, 32 hours in the opposite direction from this particular crossing.

It is truly a sad state of affairs for the people of Venezuela who slowly lost their grip on freedom and their country. Experts believe it will take 30 years to bring this country back to its former self. Many Venezuelans will most likely never return to their homeland, which is but another civilization lost to socialism and coercive collectivism.

Thousands of Venezuelans at the Border of Colombia and Ecuador

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Why Does Socialism Starve People?

By Mason Mohon | USA

It comes up in every single debate. We see it every time we are arguing with a communist or another sort of lefty. The right-wing proponent will throw out instances like Venezuela, the Soviet Union, and other catastrophic failures of socialist economies. This is followed by the response from the left-winger that either those were not real communism/socialism, or that there are factors that the right-winger fails to realize. In reality, both of these arguments are really bad. We cannot throw out death counts and assume they are causally related to the institution of socialism. What must be explored is economic law, and we need to look at what sort of incentives a socialist economy creates, and whether or not it is compatible with human actors.

In this article, socialism and communism will be used interchangeably because they both fit the definition of a planned economy.

We must first look into how we are supposed to study economics. The beginning of all economic thought comes from logical deductions coming from the action axiom. That is, we begin all economics with the axiom that man (human) acts. It is why Mises termed his magnificent economic treatise Human Action, and it is the starting point the Austrian School of economics comes from. This article is not to explore all of the warrants behind this line of thought, though. For an in-depth explanation of praxeological reasoning, I recommend the “Chapter Zero” of Chase Rachels’s book A Spontaneous Order, which is written by Will Porter and titled Epistemology and Praxeology. Within it, it is explained why we begin here and has refutations of the opposition.

What is important, though, is that we deduce economic law logically, not through reflecting upon history. This is not to say that history is not important, for it can prove itself to be an important tool in many instances, but all too often will people interpret history one way, which goes directly against logical deductions, one example being the second industrial revolution. Economic law cannot be deduced from history, it can only be reflected on and compared.

What this means to the present situation is that it goes directly against what it means to be a student of economics to say that “the Soviet Union had starving people, and because of that socialism/communism must lead to starvation.” We cannot use a historical example as an economic law. Rather, we must look to what economic law says and the reasoning behind why it says what it says. Once we have done this, then we may say that socialism is causally related to starvation and mass death. It is simply not enough to make claims about historical repetition.

Now, we may look at the economic issues with socialism. The argument will take its form in three planks: how socialism will cause misallocation, how socialism will incentivize people to produce, and how socialism will incentivize people to climb society.

In the first place, we must look at why socialism causes misallocations. These misallocations are the causes of the shortages of food and resources we associate with socialism. It is often objected that instances where this misallocation did occur, it was “not real socialism” or “not the right brand of socialism.” The problem is that misallocations will occur in any instance where the factors of production are no longer privately owned, which is the defining characteristic of socialism. In any economy, to determine whether or not an entrepreneur or producer is engaging in fruitful, efficient, and socially productive action, they must engage in economic calculation. This is the action of seeing whether or not their initial investment has created a profit or a loss. If an entrepreneur or producer discovers they have suffered a loss (people are not buying what they are providing), they discover that it is not good for resources to go where they are putting them. In a socialist economy, no economic calculation can exist, because market prices are nonexistent. Because of this, there is no way to discover whether or not resources are going to the right places. With something like food, it is extremely important that we figure out if it is going to the right places. To read more into how entrepreneurs serve society, I recommend this article.

Now that we have established the economic law proving socialism to misallocate resources, we can look at history and the world around us to see this being reflected. Socialist commonwealths across the globe have fallen apart. It is why there was no food in the Soviet Union, and it is why Venezuela failed to properly utilize its oil, resulting in profound economic decline. Some economies may seem to be socialist and successful, but those are instances in which we are either misunderstanding what their economy is, or they are purely surviving off of luck, meaning enough resources to keep the country from collapsing have been delegated, but there is no way to know what kinds of losses this is and will be producing without economic calculation.

Furthermore, we must look at the incentives to produce that are produced by a socialist economy. In Hans-Hermann Hoppe’s critique of socialism in his book Democracy: The God That Failed, he explains the ways wealth can be created within an economy. There are three, the first of which being mixing your work with untouched land. The second is to produce the good by combining or changing resources, and the third is by transferring a good through voluntary and contractual means. If the ownership of all assets is assigned to the collective (or the state), then individuals who mix their work (or homestead) with land, individuals who produce, and individuals who exchange lose their incentive to create wealth, because anything they create they will not own, for the collective (or the state) shall assume ownership. The cost of performing fruitful tasks is raised, and those that do not act productively still benefitted, increasing the incentive to not work (to each according to his need).

Moreover, we must look at the paths available to people to get to the top of society. In a capitalist free-market society, the best way to climb to the top is by starting a business and serving consumer needs. As Dr. Hoppe said, if one “wants to increase his wealth and/or rise in social status, he can only do so by better serving the most urgent wants of voluntary consumers through the use he makes of his property.” Clearly, the way to raise your own social status in a private property order is to serve others, making selfishness ultimately selfless. A socialist order stands in stark contrast, for to rise one must appeal to the collective or whoever elects people into the state. Doing this promotes cutthroat dirty politics, and it forces one to rise through “promises, bribes, and threats.” This has clearly been reflected throughout the world of big government and socialism, for Soviet Union leadership was given to whoever could stab the most people in the back in the end.

In conclusion, it is important that we know the causes of socialist terror. It is not logical or economically sound to make quick assumptions about starvation in the past and claim socialism and communism are failures. Rather, we must make praxeological economic deductions from the basis that man acts to determine whether or not socialism will work. The results are in strong opposition to socialism, which causes misallocations, laziness, and dirty politics. In the end, the results are catastrophic, and history only stands to prove.