The Experiment: Capitalism versus Socialism
An interesting article:
The Experiment: Capitalism versus Socialism
Experimentation is a major tool in the scientist’s arsenal. We can put the same strain of bacteria into two Petri dishes, for example, and compare the relative effects of two different antibiotics.What if we could do the same with economic systems? We could take a country and destroy its political and economic fabric through, say, a natural disaster or widespread pestilence – or a war. War is the ultimate political and economic cleansing agent. Its full devastation can send a country back almost to the beginning of civilization.
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Don’t you wonder what the outcome might be? Well, as it turns out, we have already performed The Experiment. It’s post-war Germany.
Following the devastation of World War II, Germany was split into two parts. The German Federal Republic, or West Germany, was rebuilt in the image of the western allies and a capitalist legal-political-economic system. By contrast, the German Democratic Republic, or East Germany, was reconstructed using the socialist/communist principles championed by the Soviet Union. The Experiment pitted the market economy of the West against the command economy of the East....
In West Germany, capitalism rebuilt the devastated country into a political and economic power in Europe, rivaled only by its former enemy, Great Britain. Instead of creating a rich 1% and a poor 99%, West Germans thrived: average West Germans were considerably wealthier than their Eastern counterparts. The country developed economically, and its people enjoyed lives with all the pleasures that wealth, modern technologies and quality free time could provide.
By contrast, East Germany’s socialist policies created a state that fell woefully behind. Its people were much poorer; property ownership was virtually non-existent amid a collectivist regime; food and material goods were scarce and expensive, available mostly to Communist Party elites; spies were everywhere, and people were summarily arrested and jailed; the state pretended to pay its workers, and they pretended to work. A wall of concrete, barbed wire and guard towers was built to separate the two halves of Berlin – and keep disgruntled Eastern citizens from defecting to the West. Many who tried to leave were shot.
By the time of reunification, productivity in East Germany was barely 70% of that in West Germany. The West boasted large, vibrant industries and other highly productive sectors, while dirty antiquated factories and outmoded farming methods dominated the East. Even staples like butter, eggs and chicken – abundant and affordable in West Germany – were twice as expensive in the eastern “workers’ paradise.”
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Moreover, state-guaranteed health care in the East did not translate into a healthier society. In 1990, life expectancy in the West was about 3½ years longer than in the East for men, and more than 2½ years longer for women. Studies found that unfavorable working conditions, psychological reactions to political suppression, differences in cardiovascular risk factors and lifestyles, and lower standards of medical technology in East Germany were largely responsible for their lower health standards.
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Freedom was the single most important ingredient that caused West Germany to succeed. Freedom is the elixir that fuels innovation, supports a diversity of thought, and allows people to become who they want to be, not what the state demands they must be. When the government guarantees equality of outcomes, it also stifles the creativity, diversity, ingenuity and reward systems that allow people and countries to grow, develop and prosper. The Experiment has proven this.
These days in the United States, however, forgetful, unobservant and ideological politicians are again touting the supposed benefits of socialism. Government-provided health and elder care, free tuition, paid day care and pre-school education, guaranteed jobs and wages are all peddled by candidates who feel government can and should care for us from cradle to grave. They apparently think East German socialism is preferable to West German capitalism. Have they learned nothing from The Experiment?