In his lecture about socialism around the world, Benjamin Powell discusses his book called "Socialism Sucks-Two Economists Drink Their Way Through the Unfree World". Powell mainly focuses on different countries with different levels of socialist governments and how those socialist policies negatively affect the people living in those countries.
First of all, Powell makes a clear point to define socialism as the abolition of private property to replace it with collective or state ownership of private property. Many people confuse socialism with ideals such as equality and fairness, but these do not necessarily correlate. Also, he is quick to point out how many democratic socialist politicians such as Bernie Sanders point to European countries such as Sweden for inspiration. Powell makes a clear point, however, that these countries are just capitalist societies with high tax rates and extensive social safety nets and are actually becoming less economically free over time due to the increase in government spending. While politicians are free to argue for more taxation, the agenda that many of these "democratic" socialists desire more closely aligns with policies that are in place in countries like Venezuela and Cuba.
With this in mind, countries such as Cuba and Venezuela rank extremely low on the economic freedom index, mostly due to the government owning the means of production and private property. Venezuelans are actually starving and Cubans face extreme poverty and very few incentives to provide quality services. For example, Powell showcased how there was very little effort in advertising within the Cuban business community. He attributes this largely to the fact that almost every business is operated as a government program such as the DMV or the USPS. It does not matter how many customers come in, because businesses have no incentive to actually make profits. Therefore, having customers is more of a hassle than a privilege to the workers. Powell also claims that Cubans do not have access to a wide variety of goods. As the name of the book suggests, Cubans usually only have access to two types of beer along with very limited options within restaurants and grocery stores.
In addition, the author discusses North Korea and how it may be the most economically impoverished place in the world. Powell states that the average North Korean probably makes less than $3,000 per year while South Koreans just across the border make over $40,000 per year with the only major difference being the government structure in place, which is socialism in North Korea and capitalism in South Korea. There is also very little electricity in North Korea which makes the entire country appear dark at night, whether you are looking from across an international border or from outer space. This can be attributed to the lack of innovation which is derived from the economic system in place. In addition, Powell also discusses China and how it has cronyism in place that is meant to protect the state, but how Hong Kong, a capitalist city, has one of the highest rates of economic freedom in the world just miles from China. It seems to trend that government messing with the economy makes the economy less free.
Finally, Powell mentions a country called Georgia that was once a part of the Soviet Union. Despite the collapse of the USSR, it took until 2004 for Georgia to redesign its economic structure to favor capitalism. Ever since this took place, Georgia's economic freedom rating has skyrocketed along with personal income increasing rapidly. Georgia is a fantastic modern-day example of how support for free market capitalism can lift so many people out of poverty. The authors closing remarks discuss the United States and the ways that capitalist and socialist policies within our government affect people and economic freedom. In essence, the United States needs to be warry of socialism and the hope that it brings, because good intentions do not always bring desirable outcomes, especially when it comes to reducing individual economic freedom.
