Saturday, October 24, 2009

Utopian Socialism and the damage it inflicts

The Dangerous Return of Utopian Socialism
Jeffrey Sachs is senior economist at the UN and author of the bestseller "Common Wealth" and the controversial Time essay "The Case for Bigger Government". In a recent interview in the Brussels newspaper De Tijd Jeffrey Sachs blames “unbridled American market capitalism” for the financial crisis and pleads in favor of the Swedish social model as an alternative. His ideological argument is revealing for the dominant utopian-socialist mind at the top of the UN.

The Swedish social model, which Sachs would like to introduce, has not the only the largest Size of Government of Western World, but also the weakest economic performance of the OECD. In 1970, Sweden still was the fourth wealthiest nation in the world. Thirty years later, Sweden had fallen to rank 17 with catastrophic social consequences. In the meantime the U.S. consistently managed to remain the second or third for more than half a century. So there is not much socio-economic wisdom to be learned from the Swedish Social Model.

Sachs also argues that "unbridled capitalism" is the cause of the current crisis. The reality is that during the last twenty years central planning progressively intruded Western economies who now bear the burden of governments spending 40% to 55% of GDP. Entrepreneurs face ever more crippling restrictions, licensing schemes, quotas and price and quality controls. Businessmen endure tens of thousands of pages of new rules and regulations each year, all written in a lawyers slangy that totally undermines the legal certainty of the free market and which transformed business into a gamble on the next political caprice and on judicial interpretations of the legal jargon. Size of government, computerized control and dirigisme has now reached a level plan economists of the Soviet Union could only dream of. Not the capitalistic system failed, but excessive dirigisme is to blame for the crisis. [...]

The article also looks at and factors in Monetary Policy, the New Monetary system, Kyoto and Emission rights, and the Market oriented Alternative. Utopian socialism is the culprit, not capitalism.

In another article, George Handlery sums it up well:
[...] Government directed and politically inspired planning and democracy do not mix well. Those condemned by government pressure or their self-inflicted errors to drink the mixture of political power and economic dominance are likely to choke while ingesting it. The foul taste comes about because the plan will be misguided and because its correction will prove to be more than difficult. That will be because concentrated political and economic power will lack the checks and balances that the ability to correct errors presumes. Political power will be devoid of checks and balances because the difficulties of the economy to deliver its promises will create a resistance that will have to be suppressed. Furthermore, the separation of economic and political power is a precondition of lived liberty. Once this separation of powers is undermined, the resulting centralized power will become openly tyrannical. That will happen because dictatorship will be possible and, due to various deficiencies, most necessary.

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