How apropos that on the weekend of the annual convention of Democratic Socialists of America taking place in Chicago the socialist government of Venezuela is demonstrating yet again the inherent incompatibility of socialism and democracy. It was not just a coincidence, in other words, that twentieth-century socialism was defined by tyranny, dictatorship, and oppression – and not democracy.
Nobel laureate F.A. Hayek explained how socialism destroys democratic institutions in his 1944 classic, The Road to Serfdom. Socialism involves the forceful substitution of governmental planning for the individual plans of all the citizens of a country, Hayek explained. Such a system attracts as its political leaders some of the most immoral and unethical people in society – those with the fewest qualms about abusing their fellow citizens in the name of achieving a socialist utopia.
Once the socialist plans are put in place, they inevitably fail. Without capitalism’s market feedback mechanism that rewards good customer service with profits and penalizes poor service with losses, there is little incentive for efficiency. Socialist price controls create nothing but chaos, usually by imposing prices so low that it is impossible for a farmer or a merchant to make a living. The result, which is on display today in Venezuela, can be economically catastrophic. If the world has learned anything from the history of socialism, it is that it is economic poison.
The Road to Serfdom: T…
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The rulers of a socialist government, Hayek further explained, would “soon have to choose between disregard of ordinary morals and failure.” This is true, I would add, whether the government is an…