A Millennial Introduction to Socialism Part II

One of the great complaints about capitalism that all supporters of Bernie Sanders cite is the incessant greed that the pursuit of profit creates in our country.   We are told - by people who most likely majored in the humanities - that we should not put profit over people and that community well-being is a more laudable goal.

Let me ask you young folks a question...

Have you enjoyed toilet paper shopping lately?  How is that going?  Are you enjoying finding empty shelves, long lines and near panic-like conditions among shoppers desperate to find cleaning supplies, meat and bread?

Well, my friends, welcome to what the world looks like in Venezuela every day.   Take a look at this video.  It will take only 3 minutes and 43 seconds away from your Instagram posting and will help you see what the world would look like if we adopted socialism on a macroeconomic scale.

Shortages happen from time to time in a market economy.  The shortages we are seeing at this time stem from historic increases in the demand for everything we think we will need to get through this pandemic.   As demand increases, suppliers scramble to increase production in order to profit from this unique opportunity.  We have seen countless stories of companies shifting away from beer production, for example, in order to produce hand sanitizer.  Car makers are shifting into the production of medical equipment and so on.

The driving motivation behind this shift is not the common good, but rather the uncommon profit opportunity.

In socialism, businesses would be prevented from capitalizing on this shift in demand.   Prices would be controlled by government, inventories would be rationed - by the government - and the incentive to increase production would be eliminated - leading to permanent shortages.

This is what life is like every day in Venezuela.   The government there has waged war on entrepreneurship for over two decades and thus the incentives to produce toilet paper - and everything else - has been wiped out.  People in this once prosperous nation now line up every day to try to find things that will help them survive.

In America, because of capitalism, we know that eventually the flow of goods will return to its normal level.  None of us go to bed at night wondering if there will ever be meat at the store again.

If left to the devices of people like Bernie Sanders - and his young followers who have not taken an economics class, nor have ever lived in Venezuela - we would face shortages of everything, every day.