Are we the next Venezuela?


noun, a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole

And all who believed were together and had all things in common. And they were selling their possessions and belongings and distributing the proceeds to all, as any had need.

Acts 2:44-45 ESV

Should the community own or regulate the means of production?

Do you oppose slavery? How about child labor? Do you think there should be a minimum wage? Mandated paid time off for any purpose? Are equal employment and non-discrimination laws justified?

If yes to any of these, you support community regulation of production – socialism.

Should the community own or regulate the means of distribution?

Should emergency rooms be able to refuse patients who they think won’t be able to pay? Should all roads be converted to toll roads? Should Social Security, Medicare, Medicaid, and SNAP all be shut down?

If yes to all of these, congratulations, you are a truly committed capitalist.

Should the community own or regulate the means of exchange?

Should the government be printing money? Should there be a central bank? Should the government punish counterfeiters?

If yes to any of these, you support socialism.

I’m being facetious!

I am vastly oversimplifying a complex set of arguments. But so is every post you see equating socialism to the disaster in Venezuela or capitalism to all material progress in today’s world.

Let’s get a couple facts straight:

  1. Private ownership of property has immense incentivizing power and has helped pull billions out of poverty. See China’s economic growth since the introduction of private markets in the 1970s.
  2. Private ownership of property can lead to immense misery and suffering. See any industrializing or developing country in the last couple centuries.
  3. Government can cause great harm. See Nazi Germany, Stalin’s USSR, Mao’s China.
  4. Government can do great good. See modern public roads and emergency services.

Private or public, the quality of any organization depends on

  1. how well the people within it behave and
  2. how well the rules governing behavior are crafted.

Socialist and Capitalist are practically useless labels

If we implement a good set of regulations and abide by those regulations, then the balance between public and private efforts becomes less important. The moral issue doesn’t revolve around socialism vs. capitalism. It revolves around the behavior of people. One of the beauties of capitalism is that it can turn some degree of selfishness to the benefit of the community, but no system can survive a “greed is good” mentality. One of the beauties of socialism is that it encourages people to look outward and think of the good of the community (a topic Christ may have said one or two things about), but without proper incentives, people just don’t stick to it.

Dismissing someone’s argument because it is “socialist” or “late-stage capitalism” isn’t an argument. It provides no meaning or benefit to anyone. It signals your tribe and that’s it.

Let’s talk about real issues

Obviously, encouraging people to behave well is a challenge. What does behaving well look like? What are permissible ways to encourage such behavior?

There are obvious challenges to crafting good regulations, too. There is data to guide us in some things, but in others, it is too sparse to provide enough useful information. This is why macro economists – the ones focused on governmental regulation of the economy – so often disagree. There is enough noise in the data to support a wide range of interpretations or there is too little data to provide any firm interpretation at all, so they make it up based on their biases. In an ideal world, we would make some compromises to try things out and then be prepared to change course when things go wrong.

Clearly, there is still plenty to argue about. So let’s not waste time accusing anyone of trying to drive us into a Chavezistic Socialist hell. Let’s talk about real issues:

  • How can we improve our education so we can raise future generations successfully?
  • How can we structure our healthcare markets (because we’re all still talking about markets here, even if in some plans the government acts as the go-between for consumers and producers) to stop wasting resources for inferior results?
  • How can we better provide security for the times when the foibles of human nature meet market failures and people struggle to make ends meet?

If we come to the table and look for solutions to these (and other) issues, rather than calling each other names and throwing support behind demagogues, then the answer to the post title is no, we are not the next Venezuela.