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(Editor's note: A shorter version of this article was recently published in both English and Spanish at ELAMERICAN.COM).

For producing both material goods and personal fulfillment, freedom makes all the difference in the world. One country that proved that convincingly in the last 40 years is New Zealand. It is a model from which nations the world over can learn a great deal.

Situated in the South Pacific midway between the equator and the South Pole, New Zealand is two-thirds the size of California. Its 5.1 million inhabitants live on two main islands and a scattering of tiny ones. From my multiple visits there, I can confidently claim it to be among the worlds most geologically diverse and beautiful destinations.

In 1950, New Zealand ranked as one of the 10 wealthiest countries on the planet, with a relatively free economy and strong protections for enterprise and property. Then, under the growing influence of welfare state ideas that were blossoming in Britain, the United States and most of the Western world as well, the country took a hard turn toward government control of economic life.

With economic ruin staring New Zealand in the face, the countrys leaders in 1984 embarked upon one of the most comprehensive economic liberalization programs ever.

The next two decades produced a harvest of big government and stagnation. Increasingly, New Zealanders found themselves victims of exorbitant tariffs, torturous regulations, massive farm subsidies, a huge public debt, chronic budget deficits, rising inflation, costly labor strife, a top marginal income tax rate of 66 percent, and a gold-plated, incentive-sapping welfare system.

The central government in those years established its own monopolies in the rail, telecommunications, and electric power businesses. About the only things that grew during the period from 1975 to 1983 were unemployment, taxes, and government spending. This was the democratic socialism that Bernie Sanders admires, but which New Zealanders eventually realized was a national calamity.

With an endless roster of failed government programs and economic ruin staring them in the face, the countrys leaders in 1984 embarked upon one of the most comprehensive economic liberalization programs ever undertaken in a developed nation. The two heroes most responsible for this radical redirection were Roger Douglas and Ruth Richardsona story told by Bill Frezza in this video.

From the mid 1980s into the 1990s, the New Zealand government sold off dozens of money-losing state enterprises.

Another hero of that day was economist Roger Kerr. His son Nicholas lives in Dallas, Texas and is an adjunct scholar with the Lone Star Policy Institute. Nicholas delivered a fascinating speech in January 2020 in which he explained his fathers pivotal role in saving New Zealand from socialism. He points out that among the maze of stupid regulations the socialists imposed, you needed a prescription from your doctor if you wanted margarine.

In another documentary narrated by Swedish author Johan Norberg, the New Zealand transformation is explained beautifully. It also does a fine job depicting the socialist nightmare that prompted the free market reforms. It ought to be mandatory viewing for any course in economic development.

All farm subsidies were ended in six months. Tariffs were cut by two-thirds almost immediately (today the average tariff is just 1.4 percent). Most imports enter the country completely freeor very nearly soof any quota, duty, or other restriction.

Taxes were slashed. The top rate was cut to 33 percent, half of what it was when the big government crowd was in charge. The books were finally opened so people could actually see what government elites in Wellington were spending their money on.

From the mid 1980s into the 1990s, the New Zealand government sold off dozens of money-losing state enterprises. The government workforce in 1984 stood at 88,000. In 1996, after the most radical downsizing anywhere in recent memory, its public sector workforce stood at less than 36,000a reduction of 59 percent.

Establishing a new business in New Zealand was made quick and easy, largely because the regulations that were not abolished were finally applied evenly and consistently. At the same time, compulsory union membership was abolished, as were union monopolies over various labor markets.

Both the Fraser Institutes Economic Freedom of the World Index and The Heritage Foundations Index of Economic Freedom rank New Zealand as the third freest economy in the world.

The dramatic changes paid handsome dividends. The national budget was balanced, inflation plummeted to negligible rates, and economic growth surged ahead at between 4 percent and 6 percent annually for years.

New Zealands national government bobs back and forth between the major political parties but the reforms of nearly four decades ago have remained largely intact. By some important indexes, the country is in a remarkable and enviable position.

Both the Fraser Institutes Economic Freedom of the World Index and The Heritage Foundations Index of Economic Freedom rank the country as the third freest economy in the world, producing steady GDP growth as one result.

The Heritage Foundations Index reveals in its analysis of New Zealand that Subsidies are the lowest among OECD countries, and this has spurred the development of a vibrant and diversified agricultural sector. It also points out that There are very few limitations on investment activity, and foreign investment has been actively encouraged. The top personal income tax rate, at 33 percent, is right where it was when it was slashed in half nearly 40 years ago.

The Fraser Institute also ranks countries in terms of overall Human Freedom and, separately, in terms of Personal Freedom; New Zealand comes in at #1 and #4, respectively.

Freedom Houses global tally of political rights and civil liberties gives New Zealand a score of 97 out of 100, placing the country in its top category for freedom.

Reporters Without Borders rates nations according to how much freedom of the press they allow. In its latest ranking, RTB puts New Zealand at #9 in the world. Only eight countries possess greater press freedoms.

The World Bank produces an annual Doing Business Index that measures the burden of government regulations on entrepreneurs. New Zealand scores the very top position#1 in the world for both starting a business and the ease of doing business. To open a business in the average country elsewhere in the world takes three to four times longer than it does in New Zealand.

With all this freedom, a socialist might expect New Zealand to be among the poorer countries of the world, perhaps even a cesspool of exploitation. But of course it is not.

Transparency International rates the world based on how corrupt each countrys public sector is perceived to be by experts and business executives. Once again, New Zealand is #1.

Writing in the New Zealand Herald, the University of Waikatos Alexander Gillespie notes additional measures of New Zealands status, some of which are exceptional while others are more modest:

The Economist says our internet (in terms of affordability and access) is also ranked 2nd best, behind Sweden. Conversely, the last Global Competitiveness Report has us fall a spot, to 19th place. Similarly, the Global Innovation Index, recorded New Zealand falling out of the top 25, to 26th position.

For peace, in terms of societal safety and security, the extent of ongoing domestic and international conflict, and the degree of militarization, Vision of Humanity says we are ranked 2nd best, behind Iceland.

The Democracy Index, which looks at considerations such as free and fair elections and influence of foreign powers, has us at 4th best in the world. Norway, Iceland and Sweden do better.

Our happiness remains steady, as the 8th most cheerful place on the planet, says the World Happiness Report.

Home schooling is legal in New Zealand, with minimal registration requirements. Parents may use the national curriculum or choose an alternative. Its popularity is growing.

With all this freedom, by one measure or another, a socialist might expect New Zealand to be among the poorer countries of the world, perhaps even a cesspool of exploitation. But of course it is not, as anyone who understands economics and human nature would predict. The International Monetary Fund reports that GDP per capita in the land of the Kiwis is the 22nd highest in the world, while the Legatum Institute puts New Zealand in the top 10 in global prosperity.

If the gap between rich and poor concerns you, you should be happy to know that New Zealand scores relatively well by that indicator too. The Gini Coefficient, crude though it may be, is the most often cited representation of a countrys wealth inequality. It ranges between 0 (everyone has the same income) and 1 (one resident earns everything, nobody else earns anything). World Population Review claims that New Zealands Gini is 0.672, better than the world average of 0.74. The same index reveals the country with the best Gini in the world is the U.S., at 0.480.

The World Banks calculation of the Gini Coefficient differs markedly from the above, and decisively in New Zealands favor. The World Bank says New Zealands Gini before taxes and transfers is 0.455, nearly identical to the 0.486 for the U.S. (Click here for a critique of the Gini Coefficient.)

New Zealands Labour Party Prime Minister is Jacinda Ardern, who is often regarded overseas as more leftist than she has governed at home. Though more sympathetic to public sector spending than the opposition ACT or National Parties, she earned the enmity of many progressives last year for ruling out new taxes on wealth or capital gains. But in the aftermath of the Christchurch mosque shootings in March 2019, she was cheered by many on the left for pursuing anti-free speech and anti-gun measures.

A businessman and friend of mine, Emile Phaneuf, moved from Arkansas to New Zealand a few years ago. He was attracted by its economic and personal freedom. He tells me that the country has mostly lived up to his high expectations but adds a caveat: Housing regulations are a mess.

New Zealands experience is one of numerous examples in which socialism caused ruin that capitalism then fixed.

In 2018, Arderns government banned foreigners from buying most residential property. Landlords face a myriad of rules that restrict rent increases and force them to provide services such as broadband. In time, the housing market may desperately need the same liberating forces that fixed the rest of a once over-regulated economy.

Meanwhile, here in the Americas, Venezuela sits at the opposite end of the spectrumdead last or close to it in every measure of freedom. The result? All the hot air from politicians there about We will help people has come to nothing but despair, misery, hunger, impoverishment, and tyranny. The one-way human traffic speaks volumes. It is a story of failure and human tragedy that socialism produces repeatedly.

New Zealands experience is one of numerous examples in which socialism caused ruin that capitalism then fixed. (Germany under Ludwig Erhard after World War II is an especially spectacular one). I know of no cases in history in which capitalism produced disaster that socialism then repaired. None. The only thing socialism does for poor people, it seems, is give them lots of company. What New Zealand did, central-planning disasters from Venezuela to Cuba to California must eventually imitate to recover.

What is the big-picture lesson here? Montesquieu, the French Enlightenment thinker, summed it up in 1748: Countries are well cultivated, not as they are fertile, but as they are free.

My Response to Time Magazines Cover Story on Capitalism by Lawrence W. Reed

New Zealand Farmers Break Free of Crippling Subsidies by Josh Siegel

New Zealands Remarkable Transformation by Daniel J. Mitchell

Tariffs Were Killing New Zealands Economy; Free Trade Turned It Around by Patrick Tyrrell

Greece Should Copy New Zealands Dramatic Policy Reform by Daniel J. Mitchell

The New Zealand Way (podcast) by Maurice P. McTigue

Rolling Back Government: Lessons from New Zealand by Maurice P. McTigue

A Virus Worse Than the One from Wuhan by Lawrence W. Reed

The XYZs of Socialism by Lawrence W. Reed

Eight Principles of Freedom by Lawrence W. Reed

Trailblazers: The New Zealand Story (video) narrated by Johan Norberg

How Business Leaders Helped Save New Zealand from Socialism by Nicholas Kerr

(Correction: This article was updated to reflect that the capital of New Zealand is Wellington.)

Originally posted here:
New Zealand's Path to Prosperity Began With Rejecting Democratic Socialism | Lawrence W. Reed - Foundation for Economic Education

It is one year since the World Health Organization (WHO), on January 30, 2020, declared that the outbreak of COVID-19 constituted a Public Health Emergency of International Concern (PHEIC).

WHO Director-General Tedros Adhanom Ghebreyesus issued a statement accompanying the declaration noting that 98 cases had been reported in 18 countries outside of China. Although these numbers are still relatively small compared to the number of cases in China, he said, we must all act together now to limit further spread.

One year later, the total number of cases has passed 100 million. The total number of deaths has reached 2,225,000. The daily death toll is the highest it has ever been, with more than 14,000 people succumbing to the virus every day.

In the United States, there have been 26,107,110 cases, according to the Johns Hopkins Coronavirus Research Center, and the death toll has reached 440,000. In India, there are more than 10 million reported cases and 154,000 deaths. In Brazil, more than 9 million cases and 223,000 deaths. In the United Kingdom, nearly 4 million cases and 106,000 deaths. In Italy, 2.5 million cases and more than 88,000 deaths.

The International Committee of the Fourth International, at the earliest stages of the crisis, identified the pandemic as a trigger event, comparable to World War I, that would intensify and accelerate the profound contradictions of the global capitalist system. The health crisis would evolve inevitably into a global social and political crisis. Medical measures alone would not bring the pandemic under control.

Rather, the struggle to contain the pandemic would develop into a class struggle, as it became increasingly clear that the major classes in societythe capitalist class and the working classhave irreconcilably opposed interests. These antagonistic positions find expression in the conflict between the capitalist and socialist programs.

The positions of the ruling class proceed from the defense of capitalist property: the private ownership of the means of production and the geostrategic interests of the nation state. The positions of the working class strive objectively toward socialism: the ending of the profit system and exploitation of labor, and its replacement with the scientifically planned reorganization of economic life on the basis of human needs and the global unification of mankind through the abolition of the nation-state system.

One year into the crisis, the pandemic has starkly revealed the class divide that separates the capitalist and socialist programs.

1. The capitalist program insists that the response to the pandemic must prioritize saving the financial markets over saving lives.

The socialist program insists that the response to the pandemic must prioritize saving lives over saving the financial markets.

2. The capitalist program asserts that pandemic policy must be driven by profit interests.

The socialist program advocates that medical policy must be guided by science.

3. The capitalist program advocates a program of herd immunity, allowing the virus to spread with as few restrictions as possible while vaccinations are produced and distributed.

The socialist program calls for all measures to impede virus transmission until the necessary number of people to stop community spread of the virus have been inoculated.

4. The capitalist program insists, in accordance with its herd immunity strategy, that factories and other workplaces be kept open for business.

The socialist program insists that all nonessential workplaces be closed down until inoculated workers can safely return to their jobs.

5. The capitalist program demands that schools be reopened, claiming falsely that there is little risk to students and teachers.

The socialist program, based on scientific evidence that schools are a major source of virus transmission, demands that schools remain closed until the pandemic has been brought under control.

6. The capitalist program seeks to restrict social expenditures aimed at counteracting the economic impact of the pandemic on the great mass of the people, while demanding that central banks provide unlimited support for the financial markets and large corporations.

The socialist program demands full income compensation to workers and small businesses for the duration of the crisis. The resources for this critical social rescue plan will be obtained through the immediate restitution of the trillions of dollars extended to the large corporations under the provisions of the CARES Act, and the expropriation of the pandemic profiteers who have made tens of millions and even billions of dollars as a result of unlimited Federal Reserve support for the financial markets.

7. The capitalist program promotes a policy of vaccination nationalism, restricting and opposing equitable distribution of vaccines throughout the world.

The socialist program, recognizing that the coronavirus can be eradicated only through a scientifically directed international strategy, calls for a globally coordinated inoculation program.

The divergent class interests in responding to the coronavirus pandemic are behind the increasingly sharp political divisions. The ruling class, fearful of mounting opposition to its profit-driven program of herd immunity, is encouraging the growth of fascist organizations.

The working class, in developing its own response to the pandemic, is recognizing the need for class unity, militant class action and, above all, an international socialist and revolutionary political strategy.

The policies fought for by the Socialist Equality Party in the United States and those of the parties and organizations throughout the world that are affiliated with the International Committee of the Fourth International articulate and advance the objective interests of the American and international working class. The time has come for all those who support the program of socialism to become actively engaged in the struggle for its realization.

The rest is here:
Capitalism vs. socialism: The pandemic and the global class struggle - WSWS

I understand why Democrats are fuming.

Donald Trump ran up budget deficits in his first three years to levels seen in our history only during major wars and financial crises thanks to tax cuts, military spending and little fiscal discipline. But now that Joe Biden wants to spend more on pandemic relief and prevent the economy from tanking further, many Republicans on cue are rediscovering their deficit hawk wings.

What frauds.

We need to do whatever it takes to help the most vulnerable Americans who have lost jobs, homes or businesses to Covid-19 and to buttress cities overwhelmed by the virus. So, put me down for a double dose of generosity.

But, but, but when this virus clears, we ALL need to have a talk.

There has been so much focus in recent years on the downsides of rapid globalisation and neoliberal free-market groupthink influencing both Democrats and Republicans that weve ignored another, more powerful consensus that has taken hold on both parties: That we are in a new era of permanently low interest rates, so deficits dont matter as long as you can service them, and so the role of government in developed countries can keep expanding which it has with steadily larger bailouts, persistent deficit spending, mounting government debts and increasingly easy money out of central banks to finance it all.

This new consensus has a name: Socialism for the rich and capitalism for the rest, argues Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, author of The Ten Rules of Successful Nations and one of my favourite contrarian economic thinkers.

Socialism for the rich and capitalism for the rest happens, Sharma explained in a phone interview, when government intervention does more to stimulate the financial markets than the real economy. So, Americas richest 10%, who own more than 80% of US stocks, have seen their wealth more than triple in 30 years, while the bottom 50%, relying on their day jobs in real markets to survive, had zero gains. Meanwhile, mediocre productivity in the real economy has limited opportunity, choice and income gains for the poor and middle class alike.

The best evidence is the last year: Were in the middle of a pandemic that has crushed jobs and small businesses but the stock market is soaring. Thats not right. Thats elephants flying. I always get worried watching elephants fly. It usually doesnt end well.

And even if we raise taxes on the rich and direct more relief to the poor, which I favour, when you keep relying on this much stimulus, argues Sharma, youre going to get lots of unintended consequences. And we are.

For instance, Sharma wrote in July in a Wall Street Journal essay titled The Rescues Ruining Capitalism, that easy money and increasingly generous bailouts fuel the rise of monopolies and keep alive heavily indebted zombie firms, at the expense of startups, which drive innovation. And all of that is contributing to lower productivity, which means slower economic growth and a shrinking of the pie for everyone.

As such, no one should be surprised that millennials and Gen Z are growing disillusioned with this distorted form of capitalism and say that they prefer socialism.

The past few years should have been an era of huge creative destruction. With so many new cheap digital tools of innovation, so much access to cheap high-powered computing and so much easy money, startups should have been exploding. They were not.

Before the pandemic, the US was generating startups and shutting down established companies at the slowest rates since at least the 1970s, Sharma wrote. The number of publicly traded US companies had fallen by nearly half, to around 4,400, since the peak in 1996. (The number of startups has increased in the pandemic, but that may be because so many businesses closed.)

Alas, though, big companies are becoming huge and more monopolistic in this easy money, low interest rate era. Its not only because the internet created global winner-take-all markets, which have enabled companies like Amazon, Google, Facebook and Apple to amass cash piles bigger than the reserves of many nation-states. Its also because they can so easily use their inflated stock prices or cash hoards to buy up budding competitors and suck up all the talent and resources crowding out the little guys, Sharma said.

So, yes, yes, yes we must, right now, help our fellow citizens, who are hurting, through this pandemic. But instead of more cash handouts, maybe we should do it the way the Koreans, Taiwanese, Singaporeans, Chinese and other East Asians have been doing it cash assistance to only the most vulnerable and more investments in infrastructure that improve productivity and create good jobs. The East Asians also focus on making their governments smarter, particularly around delivering things like health care, rather than bigger one reason they have gotten through this pandemic with less pain.

Biden plans a big infrastructure package soon. He totally gets it. I just hope that Congress, and the markets, dont have debt fatigue by the time we get to the most productive medicine: infrastructure.

Going forward, how about more inclusive capitalism for everyone and less knee-jerk socialism for rich people. Economies grow from more people inventing and starting stuff. Without entrepreneurial risk and creative destruction, capitalism doesnt work, Sharma wrote. Disruption and regeneration, the heart of the system, grind to a halt. The deadwood never falls from the tree. The green shoots are nipped in the bud.

Views expressed above are the author's own.

END OF ARTICLE

Read more:
Feeding monopolies and zombies: Made in the USA: Socialism for the Rich. Capitalism for the Rest - The Times of India Blog

President Biden signs executive orders in the Oval Office of the White House in Washington, D.C., January 20, 2021.(Tom Brenner/Reuters)

AlthoughPoliticos flagship product, Playbook,is still recovering from Ben Shapiros problematic guest appearance a couple weeks back, todays iteration of the morning newsletter still managed to scrounge together some interesting quotes from a longtime Biden aide, who remains unnamed. Per the aide, the White Houses decision to move forward with a reckless $1.9 trillion relief package instead of pursuing a less frivolous bipartisan bill, runs counter to Bidens instincts. Noting the harsh tone of the statement Biden issued on the Republican proposal, the advisor mused that I think it sounded more like Ron Klain than Joe Biden. Klain, Bidens chief of staff, is reportedly still bitter over Republican opposition to the Affordable Care Act a decade ago, and his governing philosophy was warped by the experience. Politicos source explained Ron has this whole thing: Remember how they rat-fed us on the ACA!, the expletive standing in for disagreed with.

One of the Trump campaigns favorite attacks on Biden was that he would be a Trojan horse for socialism. Neither Bidens affect nor his record lent itself to this message. What is true is that Biden is susceptible to having his back-slapping instincts overridden by the technocratic partisans hes surrounded himself with. Partisans who are irrationally vexed by any pushback on their agenda, and who believe any such pushback to be obstructionism for obstructionisms sake.

Biden may not be Bernie Sanders with a grin, but his is likely to be the Vox.com presidency, and any illusions of unity or a return to regular order in Congress should be discarded after his outright rejection of a good-faith effort at bipartisanship.

Go here to read the rest:
Biden: Tool of the Partisan Left, Not Socialism - National Review

Despite the afternoon showers, about 12 vehicles participated in a caravan protest which drove around low-income neighborhoods of Springfield Saturday afternoon.

Protesters, who gathered at Grant Beach Park, were in support of the national "Cancel the Rents" movement, created in response to the impact of the COVID-19 pandemic on renters and homeowners. The movement was initiated by the Party of Socialism and Liberations (PSL), a national socialist political party.

Caravans across the country showed their support of the movement for a weekend-long demonstration, held Jan. 29-31 in cities including Atlanta, Ga., Denver, Colo. and Los Angeles, Calif.

One-time stimulus checks of any amount are not sufficient, we need consistent replacement income for those who cannot work, the Cancel the Rents website states.

In March 2020, former President Donald Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law. The act responds to the pandemics impact on the economy, public health, state and local governments, individuals and businesses, according to the United States Congress.

Initially, the CARES Act provided $1,200 stimulus checks per individual within American households with incomes less than $99,000 with up to $500 per underage dependent, according to the U.S. Department of Treasury. The CARES Act of 2021 will pay individuals an additional $600 and up to $600 per qualifying dependents.

According to the Center on Budget and Policy Priorities, as of December 2020, despite the federal financial help, one of five renters were not caught up on rent payments due to the pandemic and 31% of renters living with children are twice as likely to not be caught up on payments.

We believe there is no way this country can come out of this crisis unless rents are canceled and mortgages are stopped, Gloria La Riva, co-founder of the PSL, said.

La Riva attended the caravan with her husband Richard Becker, who is also a member of the PSL. La Riva said the two spent four days driving from San Francisco, Calif. to Springfield for the protest.

La Riva said she and Becker love Springfield but are concerned for its residents.

Going through Springfield, it is shocking how many homes are boarded up, how many broken windows there are with people living in them and its a crisis of homelessness, poor housing, crowded housing and people who cant pay, La Riva said.

According to the Ozarks Alliance to End Homelessness 2020 Unsheltered Point-in-Time Report, a survey conducted in communities across the country on a given night in January counting the number of individuals experiencing homelessness, 238 Springfield community members were homeless on Jan. 30, 2020. 68% of the surveys participants reported sleeping on the streets or in a homeless camp the night prior.

In September 2020, the Centers for Disease Control and Prevention established a national eviction moratorium a temporary halt of residential evictions during the COVID-19 pandemic until Jan. 31, 2021, according to the CDC.

However, CDC Director Rochelle Walensky extended the moratorium to March 31, states a CDC media statement released on Wednesday, Jan. 20.

Members of the Cancel the Rents movement, including Springfield PSL member Ryan Minor, who participated in Saturdays caravan, dont believe the extension is enough.

These moratoriums are only a delay, Minor said. Once this moratorium ends, people wont be able to pay that back. I dont know of any regular working person who can do that. If theyre already suffering to the point where they cant pay rent, they certainly wont be able to later.

Minor, La Riva and Becker were only three of those who concluded the caravan at Westport Park to eat pizza and discuss the movement under the parks pavilion as rain continued to pour down.

For more information about Cancel the Rents, visit canceltherents.org

Follow Greta Cross on Twitter, @gretacrossphoto

Subscribe to The Standard's free weekly newsletter here.

Read the rest here:
Springfield Party of Socialism and Liberations host Cancel the Rents caravan protest - Standard Online