The Problem with Socialism

Dawn J. Bennett, founder and CEO of Bennett Group Financial Services, recently interviewed Tom DiLorenzo on Financial Myth Busting with Dawn J. Bennett. DiLorenzo is an economics professor at Loyola University Maryland Sellinger School of Business and the bestselling author of The Problem with Socialism. In his interview with Dawn J. Bennett, DiLorenzo discusses his bestselling book and the numerous issues with socialism.

Socialism in Scandinavia

DiLorenzo’s book debunks the common myth that Scandinavian countries are proof socialism can work, an argument that Bernie Sanders made in an earlier Democratic debate.

According to DiLorenzo, while Sweden was one of the most prosperous countries in the world from the late 19th century until about the 1940s and had the highest per capital income growth of any country during that time, the nation destroyed its job growth.

“They started nationalizing some of their industries; they adopted a very large welfare state, and a heavily progressive income tax. That was their version of socialism,” explained DiLorenzo. “As a result, Sweden did not create one single net new job from 1950 until 2005, according to the Swedish Economic Association. They destroyed job growth. So Bernie Sanders had got it all wrong. The only reason why Sweden was once prosperous is capitalism, and not socialism. Socialism killed prosperity in Sweden.”

Socialism and the Environment

DiLorenzo also disproves the popular misconception that socialism is better for the environment, compared to a loosely regulated free market.  A chapter in his book, “How Socialism Causes Pollution,” is dedicated to this poor argument.

“The basic theory of the cause of pollution is that it’s unregulated free markets, and the pursuit of profit leads to pollution,” DiLorenzo tells Bennett. “Well, the socialist countries of the Soviet empire outlawed profit seeking for 70 years. So when we had the collapse of socialism all around the world in the late 80s, early 90s, and people were finally able to go and look around these formerly closed societies, they found that they had the worst ecological catastrophes in the whole planet, far worse than anything we’ve ever seen here.”

He continued, “There was even a book written called Ecocide in the USSR, ecological suicide. We heard about things such as boats on the Volga River having signs on them saying don’t throw cigarettes overboard, the river may catch on fire, because there were so many chemicals floating down the river. The problem was the absence of property rights. When nobody owns property they tend not to take really good care of it. To relate to that idea ask yourself who takes better care of cars; people who rent cars, or people who own their own cars? If the society has an absence of property rights then you really have a lot more ecological damage than you do in a capitalist society. Besides that, the wealthier countries are always healthier and cleaner.”

To view DiLorenzo’s full interview on Financial Myth Busting, click here.

 

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