Thankful for capitalism. “Obvious facts about socialism are not discussed enough,” writes Charles Calomiris:
Socialism has been abandoned in virtually all of the developing world. Countries today do not seek to emulate the disasters of North Korea, Cuba, or Venezuela. They also avoid high taxation of the rich. That reflects the recognition that countries compete with each other for capital. Expropriating the rich tends to make them leave, and when they leave they take their wealth with them.
This philosophical shift in the developing world is a major change since the 1980s when socialism was still fashionable among some. The shift away from socialist thinking was grounded in the growing body of empirical evidence about the kinds of policies that produced growth and poverty alleviation—that is, policies that used markets as a lever of economic development. Now developing countries such as Mexico, Brazil, Colombia, Chile, India, China, South Africa, Vietnam, Thailand, and Indonesia are known as “emerging economies,” a description that recognizes their need to emerge from state control of their economies through privatization, free trade, and the creation of viable private financial intermediaries to promote growth and poverty alleviation. All around the developing world, socialism is understood as a false promise, an ideological opium that repressive elites use to retain and expand power. Capitalism, in contrast, is seen as the force that has lifted over a billion people out of poverty worldwide since 1990. […]
The facts about socialism and capitalism may shock the young people of America, many of whom lionize Bernie Sanders, an unapologetic socialist who honeymooned in the USSR, as the new conscience of our nation—and many of whom, 51% according to Gallup, now have a positive view of socialism. Only 45% have a positive view of capitalism. That represents a 12-point decline in young adults’ positive views about capitalism in just the past two years. Many of these young people are thoughtful and intelligent—but they are also ignorant about the history and economics of the systems they favor or condemn.
[Charles W. Calomiris, “Socialism: The Opiate of the Corrupt and Ignorant,” Economics 21, November 14]