The Week @ Yale: The Eternal Return of Socialism

For those of you in the New Haven area, I am returning to Yale this week for the latest installment of my lecture series for the William F. Buckley Program at Yale, this time on the topic “Liberalism vs. ‘Neoliberalism’: Why Is Socialism Popular Again?” The lecture will go off Thursday at 4:30 pm in WLH 116, at 100 Wall Street, right in the middle of campus. If you’re not able to attend, not to worry, the lectures are being videotaped and posted to YouTube by the Buckley Program, and I’m also rolling them out as Power Line podcasts in due course.

Here’s a preview/excerpt of this week’s lecture:

But let us linger a moment further and reflect more closely on the general failure of socialist economics, and understand the deepest reasons for that failure. Take note, first, of the results of what might be called the greatest controlled experiment in human history—the comparison of capitalist countries next to socialist countries, in particular, West Germany versus East Germany from 1945 to 1990, and North and South Korea from 1953 to the present.

In 1945 Germany was virtually destroyed, though it did have a lot of human capital—trained engineers, scientists, doctors, managers, and skilled workers. West Germany embraced the capitalist market economy—quite aggressively so under the legendary finance minister and later Chancellor Ludwig Erhard—while East Germany went in for a centrally-planned socialist economy. The result by 1990 was a gap in per capita income of almost three-to-one between West and East Germany. Not that this was noticed by the liberal intelligentsia in the West. In 1986, the CIA produced an estimate that real per capita income in East Germany was higher than real per capita income in West Germany, a finding any cab driver in Berlin could have told you was utter nonsense, but the CIA apparently never talked to any Berlin cab drivers. After the Berlin Wall came down and Germany was reunified, it emerged from the files of the East German intelligence service that they were alarmed at how bad was the quality and accuracy of U.S. intelligence findings about East Germany, thinking that the U.S. didn’t take East Germany seriously and that this was actually dangerous for Europe.

North and South Korea present the same controlled experiment, in which two destroyed and prostrate nations rose from the ashes simultaneously to become, in capitalist South Korea, a prosperous middle-class country, and the North, the scene of famine in recent decades, in which the average height of its citizens is two to three inches shorter than in the South. Or if you want just compare Venezuela today, a formerly wealthy country by regional standards, where the GDP has shrunk by two-thirds under socialist rule, with any of its neighbors.

Occasionally you hear the cliché that Venezuela, or East Germany, or the Soviet Union, or whatever failed socialist country you want to point to, is “not real socialism,” or that “true socialism has never been tried.” We actually need to take seriously the underlying charge of incompetence (or corruption) behind this slogan, because it is important to understand why socialism is inherently incompetent and corrupt.

More to follow. Meanwhile, here is the video from the last lecture on “The Endless Quest for Social Equality,” which is not yet posted as a podcast, but stay tuned:

Bonus for Bay Area readers: I know what I’m doing this summer: A course on “Conservatism from Burke to Bannon” from May 28 – July 5. There may be seats for guests and auditors, if you want to try to drop in.