Our country is now being ruled by a political party that has moved so far left as to turn our government and economy to Socialism, although they would call it Democratic Socialism as if using the term democratic makes it a more acceptable socialism. The followers of Bernie Sanders and other socialist congressional leaders have so influenced the Democratic Party that even Pres. Biden has forsaken his previous views and has become a puppet for leftist policies. Our recent graduates from colleges that indoctrinate socialistic ideals, actually believe that socialism is the answer to all the evils in life but have not learned anything about world history and the failure of socialism.
All of us might be surprised to learn that the failure of socialism is not confined to Russia, China, Cuba, Venezuela and other Central and South American countries; but includes United Kingdom, India, and Israel. Yes, these three now prosperous countries tried socialism in the past and in each case it failed miserably.
All of us might be surprised to learn that the failure of socialism is not confined to Russia, China, Cuba, Venezuela and other Central and South American countries; but includes United Kingdom, India, and Israel. Yes, these three now prosperous countries tried socialism in the past and in each case it failed miserably.
Israel
Israel is unique in that it is the only nation where socialism was successful—for a while. The original settlers want a government that would control for the benefit of the people. Most people worked on collective farms called kibbutzim where they did chores for money or food. There was no private property, people ate in common and children under 18 lived together. Any money earned on outside was given to the kibbutz. From 1955 to 1975, Israel was one of the fastest-growing economies in the world. However, because of rapid growth issues with private consumption and increasing income inequality, a demand for free market grew. In 1965, Israel suffered its first major recession followed by the Six-Day War which brought a short-lived prosperity due to military spending. This resulted in accelerating inflation reaching rate of 17% from 1971 to 1973. |
The government kept borrowing and spending and driving inflation. The government’s share of the economy grew to 76% while national debt skyrocketed. The government printed money which contributed to the inflation by churning out money. (Sound familiar?)
In 1983 Israel was close to collapse when a sympathetic U.S. president, Ronald Reagan offered a grant of $1.5 billion if the Israeli government agreed to abandon socialism and adopt some form of U.S. capitalism. Israel government finally accepted and within a year their inflation dropped from 450% to 20%. The Israeli economy was opened to imports and eventually would top the developing world in the 2000’s.
In 1983 Israel was close to collapse when a sympathetic U.S. president, Ronald Reagan offered a grant of $1.5 billion if the Israeli government agreed to abandon socialism and adopt some form of U.S. capitalism. Israel government finally accepted and within a year their inflation dropped from 450% to 20%. The Israeli economy was opened to imports and eventually would top the developing world in the 2000’s.
India
Acceptance of socialism was strong in India before their independence because of resentment against British colonialism. Nehru adopted socialism when he became the first prime minister. For 30 years the socialistic government restricted imports, prohibited foreign investment, and maintained price control on a wide variety of industries. Any producer who exceeded their licensed capacity faced possible imprisonment. The government took over all major banks.
At the same time there were wars with Pakistan and China; droughts in 1971 to 1973; and the oil price crisis. All of which contributed to a 40% deterioration of foreign trade. Economic performance from 1965 to 1981 was worse that anytime since independence. It will not be until 1980 when India begins to slowly turn from socialistic practices. India has since then become the 4th largest auto market, the 2nd largest smartphone market, and its GDP ( total value of goods and services produced in a country) ranks 5th in the world. |
United Kingdom
The once most powerful and prosperous country in the world, met its demise in 1913 when the powerful trade unions began spending union funds on political objectives. (Also sounds familiar.) From 1950 to 1975 UK’s investment and productivity record was the worst of any major industrial country. The government owned the largest manufacturing firms such as auto and steel. Individual tax rates were 83% on earned income and 98% on capital income. The government owned most of the housing. After the “winter of discontent” in 1979 where public-sector workers went on strike for weeks. Mountains of uncollected rubbish pled high in cities. Bodies remained unburied and rats ran in the street. Newly elected Conservative Margaret Thatcher took on the unions. Union membership fell from 12 million in late 1970 to 6 million in late 1980. Privatization was the main reason for the reversal of the corrupting effects of socialism. |
In the 1980’s, Britain’s economy grew faster than any other European economy except Spain. Productivity grew faster than any other industrial economy; 3.3 million new jobs were created; and inflation fell from 27% high in 1975 to 2.5% in 1986. By the time Thatcher left government state-owned industries had been reduced by 60%; over 600,000 jobs had passed from public to private sector and the UK once again had a robust economy.
Conclusion
You can see from examining Israel, India, and the United Kingdom that the economic system that works best for the greatest number is not socialism with its government controls, utopian promises, higher taxes and misuse of other people’s money; but the free-market system with its emphasis on competition and entrepreneurship. All three countries tried socialism for decades, and all three finally rejected it for the simplest of reasons—it doesn’t work.
(This information is taken from The Heritage Foundation article titled “Three Nations That Tried Socialism and Rejected It.” If you would like to read the complete article click this link.)
(This information is taken from The Heritage Foundation article titled “Three Nations That Tried Socialism and Rejected It.” If you would like to read the complete article click this link.)