My cousin was recently writing a paper on the “pros and cons” of socialism for a class assignment. When I saw the question my reaction was, “Benefits of socialism? What benefits? That everyone is equally miserable?” But this question did get me thinking. Obviously there are some people who believe in socialism, but what benefit do they see from a system that has failed numerous times? The main benefits that people will cite include; “Everyone has Equal Ownership,” “Economic Equality,” “Everyone has a Job” and “Better use of Resources.” On the outside these may seem like benefits, but they need to be examined closer.
First, the idea that everyone has equal ownership may sound good, until one realizes that this merely means no one really has ownership of anything. Indeed, it is like the old story about Soviet Russia where workers at a factory were asked who owned the factory and the products that were produced, and the workers answered, “We own them.” When asked who owned the three dilapidated vehicles that sat at the end of an empty parking lot the workers answered, “We own them, but the one is driven by the manager of the factory, one by the political commissar, and the other by the police.” Supposed ownership is worthless if you do not see any benefits. In America everything is owned by individuals rather than collectively, but individuals actually reap the benefit of what they do own.
Next, we come to the Socialism’s supposed benefit of “Economic Equality.” This too only sounds good until one realizes the deeper implications. This means that no matter how hard one works they will fail to get ahead or change their economic status. Hard work is thus discouraged. No matter how much harder one may work, they are not rewarded. In a society that is scared of telling someone that they have failed this may seem like a benefit, but instead of providing any quantitative benefits this shrinks or stagnates the economic growth of a society.
The third supposed benefit is that everyone has a job. In the real world this acts similarly to the previous “benefit,” for if everyone has a job, with no potential to lose income, why should one work hard? After all no matter how lousy one’s work is he will not lose their position. Both of these “benefits” combined result in the destruction of the work ethic and entrepreneurship.
The Final supposed “benefit” is that in socialism there will be a “Better use of Resources.” According to this belief, the Government’s regulation of resources will cause the resources to be used more efficiently. The problem is that the Government will not necessarily know where to send resources to encourage the best innovation. Take for example solar panel company, Solyndra, in the United States, the Government picked which company it believe would produce quality solar panels, and poured millions of dollars to subsidies this one companies product. A year later Solyndra folded, after the Government forced much of their competition to go out of business. Solyndra is one example of where the Government was mistaken, and possibly destroyed the innovation that could have led to more effective solar technology. Socialism picks economic and technological winners and losers, and thus technology fails to reach its full potential.
It is also good to note that if entrepreneurship is discouraged than discovery and invention would also be suppressed, since individuals have nothing to gain. Innovation carries out the desire to use resources more efficiently. If we look throughout history we see that it was economies employing capitalism that learned how to better use energy sources and invent medical, commercial, and consumer devices that have made the lives of everyone much better. Looking at examples of socialized economies we find a failure to efficiently use resources, North Korea, a fully socialist country, has a food shortage despite the fact that they are located in a fertile area of the world. In the real world, the idea that Socialist economies make a better use of their resources is entirely wrong.
Socialism may work in a perfect world, but in the real world it has continually shown to be a failure. Capitalist markets have continually outpaced their socialist counterparts. Government intervention has stagnated Economic growth in many areas around the world. Socialism has failed to pull any nation out of poverty. A final example of this is a comparison of the history of West Germany and East Germany. 20 years after the Second World War, West Germany had healed and was prospering, but just on the other side of the Berlin Wall there were still bombed out buildings.