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Why Are Western Citizens Second Class?

Entrepreneurship Makes Clear Why Socialism Fails

The opinions expressed by columnists are their own and do not necessarily represent the views of
AP Photo/Andrew Harnik, File

Democratic Sen. Bernie Sanders is running for president again. Fresh on the heels of Rep. Alexandria Ocasio-Cortez's triumph as an avowedly socialist candidate for Congress, Sanders boasts that ideas he first proposed -- including a higher minimum wage, universal health care and free college for all -- are now "part of the political mainstream."


That's arguably true -- at least in the sense that those concepts are front and center when listening to Democrats running for president. U.S. Sens. Kamala Harris of California, Cory Booker of New Jersey, Elizabeth Warren of Massachusetts and Kirsten Gillibrand of New York are all dutifully towing the socialist party line. Sanders did mount a serious threat to Hillary Clinton's ascendancy to the Democratic presidential nomination in 2016; many still believe he had a better chance of beating Donald Trump than Clinton did. And according to The New York Times, he raised a record-breaking $5.9 million within 24 hours of announcing his candidacy this week. (To put things in perspective, when he launched his 2016 campaign, he raised a comparatively paltry $1.5 million in the first 24 hours.)

One thing that can be said about Bernie Sanders is that he isn't a Johnny-come-lately to socialism, jumping on the political bandwagon because it's "cool." Sanders has decades of experience raising the Red Standard. His support for Marxist regimes in Nicaragua, Cuba and elsewhere is well-documented. Perhaps because he is being taken seriously as a 2020 presidential contender, videos of him from the 1970s and 1980s are now percolating throughout the internet. One features what appears to be a shirtless Sanders on his honeymoon in the former Soviet Union, singing "This Land Is Your Land" with a bunch of drunk Russians. In another, he attacks a local television journalist who calls the Nicaraguan regime "communist." Perhaps the most "popular" Sanders video this week is one in which he defends people waiting in lines for bread as "a good thing."


It might be easy to dismiss this as youthful exuberance. But by the 1970s and 1980s, the failures of collectivist regimes were well known. Furthermore, Sanders wasn't particularly young at the time. And he hasn't disavowed his enthusiasm for collectivism, even as we watch yet another socialist country -- Venezuela -- collapse before our eyes. (Bread lines indeed. Venezuelans would consider lines with actual bread in them a step up from their current diet of trash, rats and zoo animals.) True to form, socialist President Nicolas Maduro denounces the idea of a crisis as capitalist fearmongering, and he is refusing to allow in any humanitarian aid to alleviate the suffering of his starving citizens.

Lots of people who didn't care for Hillary Clinton were cheering for Bernie Sanders as the underdog in 2016. But whether a majority of Americans agrees that socialism is the way the country ought to go is a different question. (Some Democrats -- Minnesota Sen. Amy Klobuchar among them -- clearly don't think so.)

One of the aspects of America's history that makes a transformation to socialism less likely is our strong tradition of entrepreneurship. Not only is the prospect of owning one's own business still very much a part of the American dream but entrepreneurship has also exploded as a field of study in the past two decades. And studying entrepreneurship makes it quite clear that socialism fails not because "It hasn't been tried properly" but because of inherent structural flaws that condemn it to failure every single time, flaws not unique to government but to any human endeavor done the same way with a large group of people.


Anyone who teaches entrepreneurship could assemble a list of solid lessons that entrepreneurship teaches us, lessons which we would do well to heed as we contemplate moving away from a free market economy to more centralized control. Here are mine:

1) Every idea (and this includes public policy ideas) has untested assumptions.

2) Even if you're an expert or a genius, you're going to be wrong about something.

3) Innovation comes from the most unlikely places, when you least expect it.

4) You can hazard a guess, but you cannot predict the future.

5) Large organizations cannot pivot as quickly as smaller ones.

6) If you throw a lot of money at untested assumptions, you are just going to lose a lot of money.

7) A failed business model taken larger just becomes systemic failure.

8) This is why top-down decision-making and centralized control do not work.

9) Without competition, there is no accountability.

These rules apply not only to governments but also to large companies in the private sector, many of which have found out the hard way. Of course, the major difference between a government and a private company is that no one assumes a private company will never run out of money.

Unfortunately, many people still think that a government cannot run out of money. That, I'm afraid, is a lie. Its citizens can contemplate that, to their everlasting regret, when they find themselves standing in bread lines.


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