As the world economy lurches toward an increasingly likely double dip, Monty Pelerin sees one decidedly positive result from this financial crisis.
The end of democratic socialism is at hand. The welfare states of the U.S. and Europe are financially out of control, spent and unsustainable. They have reached the point that Margaret Thatcher defined as the end of socialism: They have run out of other people’s money. These areas of the world are about to change dramatically.
Victor Davis Hanson has a piece in National Review Online focused on Europe. His comments, while directed at Europe, are also applicable to the United States. Hanson states:
Five years ago, the European Union’s account of itself resonated with end-of history triumphalism. In organic fashion, democratic socialism would spread eastward and southward, recivilizing the old Warsaw Pact and the Balkans through cradle-to-grave entitlements, state unionism, radical environmentalism, and utopian pacifism.
How quickly the dreams of just a short time ago have been shattered. Now the once-smug EU struggles desperately to survive. The financial problems of Greece and several other countries threaten its very existence. Incredibly, in spite of this experience, the U.S. marches in double-time toward the goal that Europe is now being forced to abandon.
The myth of Socialism should have been abandoned long ago. In the 1920s, Ludwig von Mises demonstrated that Socialism and its close relative, Interventionism, were not capable of long-term management of an economy. The Soviet Union and a host of other highly socialized economies provided subsequent empirical support for Mises’ theoretical argument.
Despite overwhelming evidence, Socialism does not go away. Like a vampire, it reappears and seemingly cannot be terminated. Like the vampire, it sucks the life out of each economy it touches. Despite experience, each new generation seems to produce gullible people lured by the siren song of socialism. Each generation seems destined to battle these false promises anew.
Read the whole thing.