Tag: socialism

Cuban Blogger Yoani Sanchez Keeps Speaking Truth to Power

Yoani SanchezIt’s the 490th anniversary of Havana today and the Cuban government has arranged for celebratory activities. Ordinary residents of Havana and all Cubans who cherish their civil and human rights have less to celebrate, however, as Cuban blogger Yoani Sanchez regularly reminds us. Sanchez has become a major irritant of the regime because of her penetrating posts about the absurdities and injustices of everyday life in communist Cuba. You can see her blog in Spanish here, and in English here.

Just over a week ago, in an incident that was widely reported in the international press and that reveals the threat to the Cuban regime of the growing Cuban blogger movement, Sanchez was assaulted in Havana by plain-clothed government agents. Though she was forcefully beaten, she and her friends managed to fight back and get away. More than that, they took pictures of their assailants and of the incident for posting on the blog, prompting the government thugs to leave the scene. One photo of an agent features the caption “She is covering her face…Perhaps afraid of the future.” Another photo features Sanchez pursuing her assailants with the caption: “They have watched us for decades. Now we are watching them.” Very smart.

As it happens, last week we posted a beautifully written paper by Sanchez (in Spanish) on Cato’s Spanish-language web page, www.elcato.org. (The paper just won a prize in an essay contest in Mexico organized by TV Azteca at which my Cato colleague Juan Carlos Hidalgo was a judge.) Her essay, “Liberty as a Form of Payment,” describes the fraudulent deal that Castro promised when he came to power. In exchange for liberty, Cubans would be better off culturally, economically, and in other ways. Sanchez describes the reality of social control under communist Cuba in which the real exchanges occur as a consequence of the power relationship. Access to housing, jobs, new goods, and the possibility of minor improvements in life, all depend on a well documented support of the revolution through attendance of mass meetings and membership in the communist party, for example.

Or through personal relationships with those in power. Sanchez describes how young women long ago began prostituting themselves to high ministry or military officials in exchange for non-monetary goods or privileges. Such “courtesans of socialism” later turned to traditional prostitution with the arrival of currency convertibility in Cuba. Sanchez also optimistically describes the role that technology, especially the internet, is playing in creating spaces of liberty. In a country where people increasingly feel the regime’s days are numbered, such exercises of personal freedom can be powerful.

Chávez Declares Socialism the ‘Kingdom of God’

ChavezA new poll in Venezuela shows that President Hugo Chávez’s approval ratings have fallen from about 60 percent early this year to 46 percent now. Likewise his disapproval ratings have increased from about 30 percent earlier in the year to 46 percent now, and 59 percent of those polled view the country’s situation negatively.

Despite having received upwards of $800 billion in revenues during Chávez’s ten years in power, the government is doing a dismal job of carrying out its proper functions—such as controlling crime or corruption—and public administration in other areas is deteriorating. Chávez recently announced regular cuts in electricity and water provision. (These issues will be discussed in an upcoming Cato forum on Venezuela on November 10.)

As domestic conditions deteriorate, Chávez is apparently feeling more empowered, or at least feels the need to continue his relentless accumulation of power. Today, El Universal, a Venezuelan daily, reports that Chávez has announced that he can expropriate private enterprises at will because he was given that power by the people. Why worry about the rule of law when you have the ability to interpret the will of the people? Chávez’s comments reported today should dispel any doubts that he considers himself a savior to his country:

Every day I’m more of a revolutionary, every day I’m more socialist… I’m going to take Venezuela toward socialism, with the people and the workers…The revolution is not negotiable, socialism is not negotiable, because every day I’m more convinced that socialism is the kingdom of God on earth. That is what Christ came to announce.

Michael Moore’s Billionaire Backers

I wrote in Libertarianism: A Primer, “One difference between libertarianism and socialism is that a socialist society can’t tolerate groups of people practicing freedom, but a libertarian society can comfortably allow people to choose voluntary socialism.” (In the final section, “Toward a Framework for Utopia.”)

Now Ira Stoll notes the irony that it was very successful capitalists who put up the money that allowed Michael Moore to make his anti-market screed Capitalism: A Love Story:

The funniest moments of all in the movie, though, may just be in the opening and closing credits. We see that the movie is presented by “Paramount Vantage” in association with the Weinstein Company. Bob and Harvey Weinstein are listed as executive producers. If Mr. Moore appreciates any of the irony here he sure doesn’t share it with viewers, but for those members of the audience who are in on the secret it’s all kind of amusing. Paramount Vantage, after all, is controlled by Viacom, on whose board sit none other than Sumner Redstone and former Bear Stearns executive Ace Greenberg, who aren’t exactly socialists. The Weinstein Company announced it was funded with a $490 million private placement in which Goldman Sachs advised. The press release announcing the deal quoted a Goldman spokesman saying, “We are very pleased to be a part of this exciting new venture and look forward to an ongoing relationship with The Weinstein Company.”

So maybe I should add a corollary to my claim:

One difference between libertarianism and socialism is that a socialist society won’t put up the money for people to make libertarian movies, but in a capitalist/libertarian society the capitalists are happy to put up the money for anti-capitalist movies.

And if you doubt that a socialist society would discriminate against anti-socialist movies, you can either observe socialism in practice — in Cuba, China, the Soviet Union, East Germany, etc. — or read the chilling words of bestselling economist Robert Heilbroner in Dissent:

Socialism…must depend for its economic direction on some form of planning, and for its culture on some form of commitment to the idea of a morally conscious collectivity…

If tradition cannot, and the market system should not, underpin the socialist order, we are left with some form of command as the necessary means for securing its continuance and adaptation. Indeed, that is what planning means…

The factories and stores and farms and shops of a socialist socioeconomic formation must be coordinated…and this coordination must entail obedience to a central plan…

The rights of individuals to their Millian liberties [are] directly opposed to the basic social commitment to a deliberately embraced collective moral goal… Under socialism, every dissenting voice raises a threat similar to that raised under a democracy by those who preach antidemocracy.

Taking Over Everything

“My critics say that I’m taking over every sector of the economy,” President Obama sighed to George Stephanopoulos during his Sunday media blitz.

Not every sector. Just

This president and his Ivy League advisers believe that they know how an economy should develop better than hundreds of millions of market participants spending their own money every day. That is what F. A. Hayek called the “fatal conceit,” the idea that smart people can design a real economy on the basis of their abstract ideas.

This is not quite socialism. In most of these cases, President Obama doesn’t propose to actually nationalize the means of production. (In the case of the automobile companies, he clearly did.) He just wants to use government money and government regulations to extend political control over all these sectors of the economy. And the more political control achieves, the more we can expect political favoritism, corruption, uneconomic decisions, and slower economic growth.

More Evidence on America’s Socialism

KPMG has released its annual survey of personal income tax rates around the world. The survey covers 86 countries, including all the high-income nations and many middle- and lower-income nations, such as Brazil, China, and India.

The chart shows the top personal income tax rates in 2009 for national governments, per the KPMG study. The current top U.S. rate is 35 percent, which is substantially above the 86-country average of 28.9 percent. The Obama administration plans to let the U.S. rate jump to 39.6 percent in 2011, which would be almost 11 points higher than the international average.

Worse still, the United States has state income taxes with rates up to 10 percent that are piled on top of the federal tax. Some of the nations in the survey (e.g. Canada) also have subnational income taxes, but many, or  most, of them do not.

Finally, note that supporters of government health care expansion have been eyeing further increases in the top U.S. tax rate above 40 percent. Alas, we need more of the Global Tax Revolution to sweep across our shores.

British Economic Suicide

A Bloomberg story on one cause of the ongoing British economic disaster under Prime Minister Gordon Brown:

Andrew Wesbecher moved to London from New York in 2006 to sell software to banks and hedge funds. This month he joined the exodus of American expatriates fleeing high taxes and the city’s shrinking financial industry … Americans are heading home as Britain plans a 50 percent tax rate for those who earn more than 150,000 pounds ($248,000) a year and employers cut benefits for workers living abroad, reducing the allure of London. That comes a year after the U.K. said foreigners who have lived in the country for more than seven years must pay 30,000 pounds annually or give up the special status that shields overseas income from British taxes.

Since the 1980s, London has boomed as an international city open to the world’s entrepreneurs and their wealth, and perhaps home to more billionaires than any other city. The British economy as a whole has done quite well, pulled ahead by London and driven by a new free-market spirit in the wake of Margaret Thatcher’s privatization, deregulation, and tax cuts. Thatcher rightly argued that her cuts to income tax rates “provided a huge boost to incentives, particularly for those talented, internationally mobile people so essential to economic success.”  High tax rates at the top end were a “symbol of socialism” that she wanted to scrap.

Brown is killing the free-market goose that laid the golden eggs of Britain’s success. I really don’t understand the vision of such politicians – don’t they know what they are doing? I want people to be successful. I want entrepreneurs to create wealth. I love growing, vibrant cities.  Why do some people want to destroy all that?

Don’t Count on Getting Your “Investment” Back from Government Motors

The president and his appointees have expressed their hope that Government Motors will eventually pay back taxpayers for their “forced investment” in the company.  But there aren’t many cases of this sort of lemon socialism actually paying off.

Now most everyone connected with GM is admitting the same thing.  Reports the Washington Post:

If a new General Motors emerges from bankruptcy as planned, U.S. financial aid for the company will expand to nearly $50 billion, but neither the government nor the company is forecasting how much of the public money will be repaid.

It’s sure to be a stretch. For the United States to fully recover its investment, the value of General Motors stock will have to reach levels it has never before attained.

“I’m not going to predict it – that’s not my job today,” GM chief executive Fritz Henderson said in a recent interview.

“I don’t know how much we’re going to recover,” a senior Obama administration official said as the company headed into bankruptcy last month.

This uncertainty stems from the difficulty in valuing the 60 percent GM stake that the United States will receive in exchange for the public investment. The government also gets preferred shares and other compensation.

The stake will be worth enough to fully cover the government’s direct investment only if GM’s stock rises above $68 billion. Even at its recent 2000 peak, GM’s stock was worth only $56 billion.

“I don’t see GM hitting those benchmarks in a very long time,” said Maryann Keller, a veteran automotive analyst and author of “Rude Awakening: The Rise, Fall, and Struggle for Recovery of General Motors,” which was published in 1989.

She noted that global competition will continue to squeeze American automakers. Though the world’s factories can produce about 100 million vehicles a year, demand for them only stands at about 55 million, and the gap will push prices and profits down, she said.

“It’s very unlikely” that the government will recover its money, said David Whiston, auto equities analyst at Morningstar. “GM will be a smaller company after the bankruptcy and there are going to be more foreign automakers entering the market that will make GM’s efforts more difficult.”

Oh, well.  As they say, it’s only money!