5. Socialism’s Apparent Failures

Hasn’t socialism failed time and again? 

It’s an old canard that “socialism has never worked” anywhere in human history. “Look at Venezuela!” a Trump supporter who answered his Democrat son’s cell phone thundered at me the other day as I was phone-banking for Bernie. 

First of all, I’ve never heard anyone try to buttress this claim by shouting, “Look at Denmark!” or “Look at Sweden!” Without denying that every country has its share of problems, I think you’d be hard-pressed to say that democratic socialist countries in Europe “have never worked.” At any rate, most of them enjoy their universal health care better than we like our own healthcare system.

But why not: let’s look at Latin America. To the point that socialized medicine, for instance, works best in smaller countries where it’s easier to organize, I’d match Marx’s own point that the overthrow of capitalism will be most effective in countries where there is actually enough wealth to redistribute — and the United States is the wealthiest country in the world. Even so, Latin American socialism has fared far better, economically, than its provincial, neo-McCarthyist critics in the United States would lead us to suppose. 

“Purely from the perspective of poverty reduction,” Klein writes, “the results have often been stunning. Since the election of Luiz Inácio Lula da Silva, and now under the leadership of his former chief of staff, Dilma Rousseff, Brazil has reduced its extreme poverty rate by 65 percent in a single decade… More than thirty million people have been lifted out of poverty. After the election of Hugo Chávez, Venezuela slashed the percentage of the population living in extreme poverty by more than half — from 16.6 percent in 1999 to 7 percent in 2011…Ecuador under Rafael Correa has dropped its poverty rates by 32 percent, according to the World Bank. In Argentina, urban poverty plummeted from 54.7 percent in 2003 to 6.5 percent in 2011, according to government data collected by the U.N. Bolivia’s record under the presidency of Evo Morales is also impressive. It has reduced the proportion of its population living in extreme poverty from 38 percent in 2005 to 21.6 percent in 2012..and unemployment rates have been cut in half. Most importantly, while other developing countries have used growth to create societies of big winners and big losers, Bolivia is actually succeeding in building a more equal society” (179-80; this was written before the military coup in Bolivia, and civil unrest that can be attributed to a power-hungry president responding desperately to a greedy right-wing opposition but not, I think, to socialism itself).   

It must be said that many of these figures rely on government statistics, and I am not attempting to portray each case as an unadulterated economic victory. The story is always complex, I am far from an expert on any of these countries’ histories, and I am quite willing to learn and be proven wrong. But let’s look at one of them — indeed, let’s look at Venezuela. How did Venezuela arrive at its current economic situation? 

It’s undoubtedly true that massive and rapid expenditures on social services during Venezuela’s economic boom contributed to the current crisis; but they were not the only factorThese expenditures were made possible by the country’s wealth in oil, but with that wealth came a fatal “century-old dependence on oil, which is in turn a legacy of the capitalist world order and Venezuela’s peripheral position within this order,” so that when the price of oil declined, so did Venezuela’s economy. Poor governmental planning also applied to its practice of artificially lowering exchange rates to a perilous level; currency speculation had more to do with a shortage of basic goods and subsequent overinflation than “socialism” did, as

“the currency exchange system’s complexity allowed importers to apply for dollars at an extremely low rate — around twelve bolivars per dollar until very recently — and then sell imported goods at prices based on a market rate hundreds of times higher. Many of those goods simply passed through Venezuela on their way to Colombia, where the profit rates rose even higher. The bank bosses, state bureaucrats, the customs service, and the National Guard all took their cut. En route, fortunes were made.

“It came as little surprise that the commercial bourgeoisie hoarded goods and raised prices at will or that the industrial and financial sectors sent their capital abroad to starve the national economy. But it is surprising that those who were responsible for transforming the Venezuelan state — for attacking corruption and for introducing redistribution policies — also took their share.”

Indeed, corruption within the government had leached tens or hundreds of billions out of the Venezuelan economy, which was then further hobbled by homicidal and politically motivated U.S. sanctions that left it without recourse to international credit markets. At the same time as John Bolton bragged that these sanctions would cost the Venezuelan economy $11 billion, Steve Mnuchin had the gall to declare that “This is a country that is very rich in oil resources…There is no reason why these resources shouldn’t be used for the economic benefit of the people there” — as though that weren’t the very plan of the socialist government which American foreign policy had a hand in punishing to begin with. 

Finally, we can admit that Maduro’s governance has been even more violent and more corrupt than his predecessor’s; one of the most disappointing of his failures of moral leadership has been that he has invited multinational mining companies into Venezuela after Chávez had kicked them out. 

So — have socialist countries often been managed by dictators without any regard for the human rights of those who oppose them? Yes. Have these countries also failed economically? Yes. Is this the simple result of “socialism” (as opposed to corruption, imprudence, and, indeed, capitalist habits of speculation and the cruelties of global free markets)? I don’t believe that it is. 

And how has socialism fared in the United States? While historians may argue whether the Great Depression was caused by capitalism, there is little doubt that its extraordinary solution, Roosevelt’s New Deal, was the highly successful greatest socialist experiment in American history. Roosevelt’s critics maligned him — as they would later malign Truman  — for being a socialist, too.

Read on for more.