SAS: Learning lessons from across the world

by Chloe Westley, Campaign Manager

At the TPA, we believe in lower taxes and better public services, because these policies have been proven to improve the lives of millions of people across the world. In stark comparison, socialism has caused misery and destruction. It's failed every time it has been tried, from one corner of the globe to the other.

Yet when politicians here talk about the benefits of statist policies, they rarely talk about the UK. In almost every case - apart from the NHS - they point to 'better' socialist systems overseas. We hear it time and again, not least about our friends in Scandinavia.  Jeremy Corbyn once called the socialist regime in Venezuela an ‘inspiration’, alongside other prominent figures in the Labour party. But - painfully and predictably - the experiment in Venezuela has now failed.

The oil-rich country, which used to be one of the wealthiest in South America, is suffering from hyperinflation of 1.3 million percent, leaving millions of Venezuelan’s starving and causing a mass exodus of three-million people. Among the disastrous ideas lauded by these purveyors of illiterate economics are price controls, which led manufacturers of goods to simply stop manufacturing or importing them to Venezuela, as they were not making a profit. This has led to a scarcity of products, and as a result many Venezuelans are paying marked-up prices on the black market, or for those who cannot afford this, eating zoo animals.

It should go without saying that any economic model that results in people being forced to eat their own pets is far from ideal. Yet even at rock bottom, the curative powers of socialism’s alternative — free markets — are evident. Deng Xiaoping, the former Chinese Premier, had come to power just six years after the death of Mao Zedong, who had overseen the catastrophe of the Great Leap Forward, and with it, the deaths of an incalculably massive number of his own people.

Despite this, Deng opened up the Chinese economy to market forces. He slowly rolled back some of the worst socialist policies that had governed China for decades, resulting in a surge of prosperity. China was coming to enjoy the benefits that the liberal west took for granted. As Sir Vince Cable put it, Deng’s capitalist reforms were “an economic transformation which lifted hundreds of millions of people out of poverty and converted a poor, inward looking, totalitarian country into a global superpower.” 

So why is it that in Europe, Asia and the Americas alike, socialism has routinely failed, not only to make life better for ordinary people, but has actively made it worse?

Socialist states like Venezuela rely on central planning in order to function, with civil servants given responsibility for setting prices on everything from oil to bread. It's a concept that has failed spectacularly so many times. The fact is that bureaucrats rarely get the balance right. In the UK, tuition fees have created swathes of undervalued degrees; train fare caps stunt investment in the railway network. But even now, British politicians continue to call for price controls on rent and energy bills.

It’s one of the main lessons of socialist disasters of the last century, which instinctive interventionists have yet to learn. These systems have proved to be basically unworkable, let alone in the complex world of the 21st century. Market forces, based on hundreds of millions of voluntary exchanges every day, can judge the value of goods and services in a free society far better than any civil servant in Whitehall could ever hope to. Trying to understand, predict and outdo the billions of decisions made by consumers is impossible, but for some, the allure of central planning remains strong.

The other key lesson to learn from the failure of socialist regimes is that businesses aren’t the bad guys. When politicians in the UK sneer at ‘big business’, they express a serious ignorance of the role enterprise plays in keeping us all prosperous. Businesses generate wealth for their employees and the local community that they are part of, as well as tax revenue for the government to fund public services and infrastructure.

When businesses are obstructed by government, as we have seen in Venezuela, they leave, taking the jobs and assets they provide with them. They no longer sell those goods people desperately want to see. Or companies become dependent on overzealous government rules and regulations, and ordinary people lose again.

So when the Leader of the Opposition describes those paths as “inspiring”, it becomes crucial for organisations like the TPA to reject the socialist vision of the future in favour of a creed that not only values the rights of the individual in free markets, but has been proven time and again to work in practice.

The TPA was set up in order to stand up for the public who are constantly squeezed by greedy governments to pay for wasteful projects, and there is no more wasteful ideology than socialism. Lessons from around the world couldn't be any clearer. Hopefully we can help British politicians, from all sides of the political spectrum, understand that too.