Furious Friday – Part 2

Cannibalism, Nazism and property rights

Welcome to Part Two!

If you haven’t already...listen to Part 1 before jumping into this episode

Let’s look at these claims:

  1. Means of production owned by the public or state
    1. This removed property rights – Which is the foundation of wealth accumulation
    2. Think of a group assignment – social loafing
    3. Property rights lead to incentives
      • Zimbabwe – Took property rights away – expropriated land and property rights
      • China – Introduced property rights – Incentivised farmers – reduced starvation
      • Australia – Same thing – gave the convicts rights – as was only way to get them to work – Joke: ‘pretend to pay us, so we pretend to work’
  1. Equal opportunity for all
    1. I have an issue with this – it is equal outcome for all, NOT equal opportunity (unless zero)
    2. The outcome is nobody can get ahead, so they have zero opportunity
      • You want to start a business? You can’t!
      • You want to buy a house? You can’t!
      • You want to save for yourself? Well, you don’t get paid…and the government can take all your savings anyway
  1. Economic activity and productions are planned by central planning
    1. There is no feedback system here – so no recourse for when things go wrong
      • State gets it wrong – tough luck
    2. Free market gets it wrong – that person goes out of business and someone else prospers
      • New Coke – That was a decision that was corrected quickly due to feedback from the market
    3. Forced Labour
      • Uzbekistan – Cotton industry – Millions of people a year are forced to work on cotton fields – Doctors, teachers, businessmen
      • Not just adults – Children aged 11-15 in September – Forced to
    4. Price Controls = Mass starvation
      • Creates shortages as no incentives to create more
      • Example – you are a farmer – it costs you $10 to produce a bag of apples, BUT the Government will only allow you to sell the bag for $5… will you continue to work for a $5 loss?

John Oliver – Venezuela

  1. No facts – Funny guy, but he kept saying “if only”, “If only” the oil prices kept going up, “if only” Chávez had stayed alive…
  2. He forgot one “if” – if only they hadn’t destroyed the most productive oil company through having the government take control
  3. ‘Epic mismanagement’ – that is inevitable in a socialist society – free market isn’t
    • Give all the power to the top to control – the workers don’t make decisions
  1. Socialism leads to lower inequality
    • Sadly, again not true
    • Creates higher inequality as power is centralised – no free market or ability to improve yourself
    • And at the same time – wealth plummets and poverty sets in for the masses.
    • No middle classes here – simply poverty and ultra-wealthy (the State)

Example: Let’s go through the list of countries with Socialist ruling parties – 15 in total.

 Country GDP per capita Gini coefficient Less than $2 per day Top 10%
Angola 42.7 30%
Bolivia $2,934 45.8 7% 93.9
Congo $669 40.2 77%
Ecuador $3,720 46.5 4% 35.2
El Salvador $4,622 46.9 2% 38.6
Ethiopia $720 33.2 34% 6.6
Guinea-Bissau $738 50.7 67% 19
Greece $15,558 35.8 10.2
Mozambique $1,113 45.6 69% 18.8
Nepal 32.8 15% 15.8
Nicaragua $1,947 46.6 11% 31
Portugal $17,089 35.6 15
Tanzania $490 37.8 47% 9.2
Uruguay $10,285 41.7 0.1% 11.8
Venezuela $7,232 46.9 10% 18.8
Australia $27,193 32

12.5

*Data sourced from the World Bank via Wikipedia.

Greece and Portugal – those stats are from 2015. Government was only elected in 2015, so give it some time

Heaven and hell

I’m not religious, but I do believe in Heaven and hell – Look at some parts of the world – they are living in hell!

Examples of Socialism/Communism implemented faithfully – Starvations and killings

  1. China – Mao – 61 million – Starvation lead to cannibalism in both
  2. Russia – 45 million
  3. North Korea – Forced labour camps – mass starvation
  4. Germany – Hitler was a socialist – Nazi = National Socialist German Workers’ Party
    • Unemployed promised work and bread
  5. Today: Venezuela – population has lost average of 19kg in weight per individual since Maduro took over
  6. Capitalism – I guess is responsible for deaths as well – Obesity and smoking – but it’s the individuals choice at least!
    • Unless you are Bernie Sanders – ‘bread lines are a good thing’

The unfortunate thing  

It does work in the short term (social proof) – but then stagnates as there is no incentive for further growth

  1. Venezuela – Poverty halved in the beginning due to taking all of privately owned business and giving it away – how did that work out?
  2. Oil rich having largest reserves in the world – but no means of getting it out of the ground – They have to import it
  3. Price controls and creating more money – that is what happens when State gets their hands-on the money supplyPrint, print, print = Hyperinflation and no ability to transact!

Socialists are Hypocrites!

  1. Stating that there is “discrimination”, but now they engage in it with socially engineered policies which discriminates against those who have something
  2. To get the outcomes they want, they discriminate against the rich through taxes

Socialism works from manipulating the masses – take from those who, unfortunately, are the productive ones (hence why they have the wealth in the first place)

Two fish

  1. Sail fish – fastest fish – over 100km per hour – if in a pond that dries up, it will die
  2. Sea Horse – Less than 1/100th of a kilometre per hour in a large ocean prospers
  3. Destroys society – nobody can swim faster than the pack

Compared to Capitalism

Capitalism affords economic freedom, consumer choice, and economic growth.

  1. Socialism, which is an economy controlled by the state and planned by a central planning authority, provides for a greater social welfare …
  2. As Thatcher famously and correctly said, “The problem with socialism is that you eventually run out of other people’s money.”

Thanks for listening…

Next Friday’s episode – we’ll look at why free markets lead to a better life for you and how to build wealth within that system.

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