Bernie Tells a Whopper About China

Oh, I try to stay clear of politics these days. You know, yeah.

But sometimes, someone makes such an outrageous claim that I can’t help myself from chiming in. This post is courtesy of Bernie Sanders, who said the following in an interview recently on CNN:

“China is an authoritarian country … but can anyone deny, I mean the facts are clear, that they have taken more people out of poverty than any country in history. Why you criticize when I say that — that’s the truth. So that is the fact. End of discussion.”

First, the fact. Yes, China has taken more people out of poverty than any country in history.

Second, the non-fact. End of discussion. Nope. Not in a million years. Not until Bernie answers this one question: How did China relieve its destitution and poverty?

Answer: capitalism

So you see, Bernie has just disproved the over-arching thesis of everything he says about economics. He is crediting authoritarianism (and socialism??) for China’s growth. Major whooper alert.

Here are the other facts that Bernie has eschewed.

During the years that socialist command economics were under full-force in China, how many people were brought out of poverty? That’s the wrong question. How many people died because of their oppressive policies. Uncountable.

From Mao’s take-over in 1949 until the wakening years after his death thirty years later, China was severely impoverished. GDP per capita was among the lowest in the world. They were isolated from the world economy. The great famine of 1958-1961 killed millions. Their army was in tatters. When they attacked northern Vietnam in January of 1979 (hey, weren’t the Vietnamese their socialist comrades!), they were embarrassingly rebuffed by their southern neighbors who were actually poorer than they were!

So what happened? What changed? How is it that the impoverished China of the early 1980s has grown into an economic powerhouse?

I have to say it again: capitalism.

Economic reforms loosened the strings on individual achievements which were muzzled under the socialist command economy. And while the authoritative communist regime continued their hold onto power with a death grip (think Tienanmen Square 1989), the new economic freedoms allowed unprecedented growth and unprecedented foreign investment.  In other words, capitalism started doing its thing.

Let me leave you with an example from Vietnam, who following China’s lead, also implemented market reforms in the 1980s that began to raise the Vietnamese out of poverty as well.

In 1984, there was famine in parts of Vietnam. Their lush farm lands couldn’t even feed their own people. They had to import low-quality grains from places like Bulgaria. I’ve had many Vietnamese families tell me about those years living under a socialist command economy. The common Vietnamese word they use is “kho” – meaning miserable. And then the market reforms hit. The government began allowing farmers to exceed their government quotas of rice in order to sell the excess or plant other cash crops. What happened when farmers began to have incentive to grow more knowing that they would actually benefit from it? Production soared. Within a few short years of allowing people to pursue their own personal interests, Vietnam went from not being able to feed their own people to being one of the largest rice exporters in the world.

The transformation was remarkable. And yes, it all happened under an authoritarian communist regime.

But it’s not the regime that gets the credit, it’s the individuals (and also government entities) who took a risk to invest money, to solicit investment, to plant extra, to think big, to dream for a better life for their families. There was profit to be had by the people. And they did it. They used the mighty tool called capitalism, even within a tightly controlled economy, to better their lives.

So let’s make this very clear: socialism didn’t build China’s wealth. Not by a long shot.  Socialism doesn’t pull anyone out of poverty. It just holds back growth potential. Imagine where China would be today if Mao allowed entrepreneurship back as early as 1949?

So, Bernie, your China example is just disproving your point about capitalism.

Life, liberty, and the pursuit of happiness. China has been experiencing their own brand of this for the past thirty years, no thanks to socialism.

Socialism? Seriously? I take my cue from my years in Vietnam.

I’m sorry, but I can’t take socialism seriously. Blame it on my ten years living in Vietnam when I received a first-hand lesson of what socialism really is and what it really does.

And what it doesn’t do.

The political left in America is giddy with idealistic hope that the dawn of the Democratic Socialist United States of America is right around the corner.

I have to laugh. Poor JFK must be doing some serious flips in his grave. Same with FDR. They might have to rename his hometown to Hide Park instead of Hyde Park by the fact he would hide in embarrassment from these people espousing the death of capitalism, mostly from his own party! It’s ironic that I point out FDR because he was the most socialist president – in terms of nationalizing the state’s economy – America ever had. But he was, thankfully, no Alexandria Ocasio-Cortez. Cortez, the new poster child for the Bernie Sander’s democratic socialist bandwagon, says that capitalism will not always exist.

Let’s hope that isn’t true.

Let me backpedal just a moment in case you think I’m trying to be political here. I am not. I have my personal political beliefs, of course, but I greatly respect other points of view. I am a strong proponent of rigorous debate between both sides of the political aisle. One of the greatest features of America is its pluralism, which pushes us to consider new ideas while defending our own points of view.  No one party has the exclusive claim on truth or good ideas. I hope any two Americans could easily agree with that statement.

Furthermore, every country uses socialism to one degree or another.  FDR, of course, introduced social security in the 1930s as a means of taking care of the nation’s elderly. It was the state mandating people to pay a portion of their earnings to the government so that the government would manage it and distribute it back to retirees. We don’t need to get into a debate about how well it works, but it has been functioning successfully for 80 years. My parents have been using social security benefits as a key means of income during their retirement. In addition, the U.S. has long used Public Utilities as a means to expand access to electricity and water systems throughout the US. Public Utilities continue to be a bedrock of American energy management.

Government control of certain parts of society is good. Needed. Even desirable at times. Governments, when well-managed, can achieve things that private citizens mainly cannot. (Now this wasn’t always the case. If you need a historical case study, look up J.P. Morgan or JD Rockefeller.) There’s a small community about 25 miles north of New York City where the local government decided to create a gorgeous park around a lake. It has a raised walking path which creates a stunning setting and a terrific place for the entire community to come together and enjoy the outdoors. This is an example of government at its best. Seeing a need and creating something for the community, through tax dollars, that gives citizens tangible benefits. Every government will take at least a part of the nation’s economy and manage it directly.  How much control should the government have? It’s clearly a debatable point.

I say all of this to clarify that I not hear to bash the need for a functioning government. We all need governance, but there should be a healthy, on-going debate about its role and how much of the economy, and what part of the economy, it should have control over.  After all, it will never be zero, nor should it be.

But what I’m hearing from the far-left is a departure of the America of the past. The death of capitalism? Really? You sure you want to go there? What would take its place? Government control over the entire economy? (As a side note, look into Elizabeth Warren’s Accountable Capitalism Act. A proposal for the government to have direct input (control?) over companies worth over a billion dollars.)

And this brings me back to Vietnam.

I arrived in Vietnam to teach English in August of 1994, just a few months after the US lifted the trade embargo against Hanoi. That was 19 years after the fall of Saigon. Thirty years after LBJ ramped up US involvement in the Vietnam War. In 1994, Vietnam was dirt poor. A GDP of barely a $1000 per capita. I arrived in Haiphong, a city near the coast due east of the capital, and everyone I met worked hard to make ends meet. There were very few foreign products — no Coca-Cola besides an occasional flat bottle brought in from China. Westerners were still referred to as “Lien Xo” – Soviets, because since 1979 nearly any expat in the country was Russian. I was apprehensive about being there, not completely sure how a young American man would be viewed. But I can’t tell you how many times I saw the faces of the Vietnamese I met light up when they heard I was a “Nguoi My” – an American. They would smile from ear to ear and put their finger in the air and say “America number 1.” I was shocked, actually. And so very welcomed into their community.

Why was America number 1 in their eyes? I came from a country, after all, that spent billions of dollars and many years fighting against the communists in Vietnam. (And remember, I was living in the communist north – no sympathetic Saigonese there.) But America was number 1? Why?

Simple. An enviable economy. America had built themselves into a superpower through decades of innovation and economic achievement. That’s what the Vietnamese people I met those years wanted. They wanted opportunities to work for a better future. They wanted opportunities to have “luxury” items they could never afford. A bicycle. A washing machine. Dare they dream- a motorbike? A reliable food supply. Consumer products like toothpaste and soap and laundry detergent. In 1994, when I arrived, Vietnam was just beginning to awaken from nearly twenty years of a post war economy driven by what? Socialism.

If you visited Vietnam today, you’d hardly recognize it. The country is engulfed by commercialism, entrepreneurship, and dare I say it? Capitalism.

What happened?

Over the first several years of living in Vietnam, I came to learn a phrase which was frequently used, “thoi bao cap.” A literal translation is something like “the time period when the government supplied everything.” That sounds kind of frightening, doesn’t it? This phrase was always, and I mean always, followed by another phrase “ghe lam,” which means “truly miserable.”

As I lived there and delved into their history and listened to their stories, I began to understand how miserable that time really was. Here are a few examples:

  • During “thoi bao cap,” if you happened to be rich enough to own a bicycle, you might be stopped and harassed by the police. Why? Because they would want to know how you had enough money to own a bicycle.  It was that rare. Poverty was the expectation.
  • During “thoi bao cap,” Vietnam did not grow enough rice to feed its own people. There were bouts of famine in the countryside. The government imported low quality grain from eastern Europe to try and make up the difference. Can you imagine a Vietnamese meal without rice? My friends and neighbors didn’t have to imagine. They lived through it, telling me how truly insufferable this grain was. But they had no choice to eat it because there wasn’t enough rice. (My first thought was how in the world could there not be enough rice ? Have you been to Vietnam? Have you seen the expansive rice fields? Hello, what about the Mekong Delta? What’s going on?)
  • During “thoi bao cap” each family would line up and wait for hours to receive their monthly rations from the state run stores. It was referred to as “the brick years” named for the people who would write their names on a brick and place it on the ground to reserve their spot in line at the state stores so they wouldn’t have to stand for hours on end. Of course the stores had no supplies and the amount of food and goods received was extremely paltry. There were no other options. No corner stores. No “pho” stalls on the evening streets. No shops or markets. They lived on the basics of basics.
  • During “thoi bao cap: if a family was lucky enough to raise a few chickens, and if they were lucky enough to slaughter one in order to have a luxurious chicken dinner, they would shut their house up as tight as possible and eat in the back, hoping no one would smell it and then question where the meat came from.

There are many more examples, but I think this illustrates the point of how poor Vietnam was throughout the 1980s and into the 1990s.

What changed? Cause this is not the Vietnam you will experience today if you travel there. (And you should.)

The answer is simple. Vietnam slowly allowed elements of capitalism to creep into their economy. Once it starts, good luck stopping it.

Wait a minute. A communist government that allows capitalism? (Have you ever wondered what has made China rich today? It wasn’t their unyielding grasp on Maxist-Leninism.)

Famed North Vietnamese General Nguyen Vo Giap even said that a socialistic society needs capitalism (he said for a time) in order to build its economy. Hmmm, I wonder if the Vietnamese themselves have had enough time. It’s 2018 now. Are they ready to go back to “thoi bao cap?”

And here, to me, is the proof in the pudding. Or the water in the rice paddy.

Both Vietnam and China have followed the same model. Renovation. And when it came to economics, that meant giving the individual more control over their own personal economic activity. Allowing the citizens to innovate and create things which previously didn’t exist. It’s called capitalism, and it has pulled millions of people out of desperate poverty in a relatively short amount of time.

Remember the years when Vietnam couldn’t grow enough rice to feed its citizens? Well, in the 1980s, the government changed their policies. For the first time under their communist government, farmers could keep their own products once they had fulfilled their yearly government quotas. Well, can you guess what happened? The farmers suddenly had incentive to grow more rice and more vegetables and more everything. The surplus could be used to sell in the local markets, to feed local families, to help increase their monthly income. An increased income meant they had money to spend on consumer products which in turn created a market for yet more consumer products. This is capitalism 101. Even working under the strict economic constraints of a socialist government, capitalism proved to be an amazing force to combat poverty.

Capitalism isn’t a cure-all. It has its weaknesses. It has its excesses.  But of all economic systems and theories, what’s better at giving people freedom to achieve their goals and reach their potential? As Milton Friedman said long ago on the Phil Donahue Show:

” … the record of history is absolutely crystal clear, that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by the free-enterprise system.”

So, I’m sorry. I can’t take this thought of “killing capitalism” seriously because the results would be catastrophic.

And that’s my opinion based on my years living in the Socialist Republic of Vietnam.

What are your thoughts?



What is Democratic Socialism?

What is Democratic Socialism?

This is a question which has never been more pertinent in a US presidential election cycle with the prominence of democratic socialist candidate Bernie Sanders, enjoying an unprecedented look as the Democratic Party nomination. It is also worth noting that the front runner Democratic candidate, Hillary Clinton, has done little to distance herself from this “Democratic Socialism” label. So in order for the American public to make an informed choice, this term needs to be defined in a specific way.

Now, if Facebook memes are your main source of political information, you might start to get the impression that democratic socialism is a calmer and wiser version of the socialism which decimated the former Soviet Union, China, Vietnam, and any other society which tried a centrally planned economy. In a way, that’s true, but you might also get the impression (if you use Occupy Democrats as your guide) that democratic socialism is not a strange concept at all to America and that America has used democratic socialistic ideas many times during our existence. At best this sentence is misleading if not an outright falsehood.

Let’s start with a definition. Democratic Socialism (or Multi-Party Socialism) is a governmental system which uses taxes as a means of controlling the economy, especially by redistributing tax dollars in ways that benefit society’s less well-off. The hallmark of democratic socialism is a mixed economy–that is, an economy which allows free enterprise to exist but uses an aggressive and big government mindset to own and manage certain industries and create a massive safety net for the entire nation. The safety net might include single-payer healthcare, (Canada, UK) tax payer funded education (Denmark), housing, job training, and many other benefits. (You’ll already notice that I didn’t use the word “free” as Bernie Sanders uses it. That is, “free higher education” – “free healthcare” because there’s no such thing as free higher education. It should be correctly labeled as tax-payer funded higher education.)

Supposedly, if you google “75 ways that America is a socialist country” you’ll have your “proof” that America is already socialist and that this movement towards Democratic Socialism is nothing to be alarmed about. But this thought is disingenuous on many levels. The first and the easiest one to understand being that even if America is socialistic in 75 ways, it doesn’t mean that America would be better if it was socialistic in 76 ways or that America would be worse if it was socialistic in 74 ways, or in five ways. This is no way to gauge whether a country qualifies as a democratic socialist country or not.

The United States is only “socialist” in the sense that any nation with a democratic or republican style government naturally will have certain “social” aspects to the way they govern. Every country is socialist to a degree. If it wasn’t, it would be called anarchy. The theory of American democracy comes from what is called the Social Contract Theory. In this theory of how governments formed, people willingly and voluntarily banded together to form a government for the good of their community. It wasn’t through compulsion. This means that people willingly give up certain rights for the good of everyone so the rule of law and order could reign supreme. This way, the government is derived by the people, and the rights given are also agreed upon by the people, not the government. By extension, the social contract theory may create many areas within society which uses a more socialistic approach to maintain order or to accomplish large tasks which they couldn’t accomplish on their own–building roads, building school systems, and using government to provide for the needy. All of these are legitimate and useful ways for governments espousing democracy to act. But these in themselves do not make a country a democratic socialistic country. And just because a country has socialist elements doesn’t mean that democratic socialism would make it even better.

America has long espoused a robust market economy, with the role of government as that of a regulator, but not a major portion of the country’s economic output. This is in stark contrast with a mixed economy where the government plays a much larger role in the economy. America’s market-economy-past has had both its triumphs and failures. America became an unprecedented economic engine from the late 19th century through the 20th century. Innovation and limited government oversight drove economic progress. Unfortunately, in the midst of this tremendous growth, many workers, imigrants, and poor members of society were left behind, forcing the government to step in and rightfully regulate the playing field so free competition could survive and workers could make a fair wage in a safe working environment. These changes started in the early 20th century and ebbed and flowed in various degrees over the next few decades, until the Franklin Roosevelt administration drastically expanded the reach of government as a means of combating the Great Depression.

Since the 1930s, the general trend of American economics has been larger government oversight and regulation, and an ever-expanding federal government which controls more and more of the economic system. And while America still has a market economy today, it has gradually moved closer to a more mixed economy in various areas. It has also expanded America’s safety net to unprecedented heights.

Yes, it’s not just Canada that has a safety net. America has a huge one. Massive, really, and this reality often gets lost in the midst of political soundbites on TV. But think about these examples:

  • Fifty million Americans are receiving some kind of federal government assistance. That’s 1 in 6 people.
  • A typical family earning less than approximately $40,000 a year pays no federal income tax. None. But, if they have children or are in other types of circumstances, they will even GET money back from the government. (child tax credit) Repeat, they will get a tax credit even though they didn’t owe any taxes. These can add up to thousands of dollars.
  • Millions of American students receive Pell Grants and federally backed school loans.
  • Most poorer families can qualify for free health insurance, and this did not start with Obamacare. Many states have for years offered tax-payer funded healthcare to the neediest of citizens.

This is by no means an exhaustive list of the services that the government supplies in 2016. What about tax rates? Democratic socialism demands high taxes from their citizens. Where does America currently stand in that regard? Do the rich “pay their fair share” as the democratic candidates like to say?

  • The highest tax bracket for 2015 is 39.6% (this of course does not include state income tax, social security, medicare, capital gains, or the local tax you pay at stores) Meaning that the highest earners in America easily pay more than 50% of their income in taxes, while, if I can remind you all again, the lowest age earners pay no federal or state income tax (though everyone pays the SS, medicare, etc…)

Is a 50% tax for the rich fair? That’s up for you to decide.

If all of this happens under a MARKET economy, then what exactly are the Democratic Socialists wanting?

  • Democratic Socialists want a mixed economy. That means more government control over industry – especially the banking industry.
  • They want to drastically increase tax rates, especially on the rich – 70% is not an uncommon goal. Others have espoused a top tax rate of 90% for the richest of Americans after their income hits a certain threshold. While these sounds extreme, it’s not unprecedented, as this was, believe it or not, the highest tax rate under the Eisenhower administration.
  • They want to institute carbon credits to squeeze the producers of fossil fuels.

This is just a small list of what Democratic Socialists want. The problem is, this vision is far removed from the vision of the founding fathers because of one crucial ideal: liberty. Democratic socialism, by its nature, limits liberty. As has been said, “The bigger the government, the smaller the individual.”

One of the basic principles of the U.S. Constitution is limited government. The founders were expressly concerned with a government which would have too much say in their lives, so the powers of the federal government are expressed powers – meaning those specifically written in the constitution. If they aren’t listed, the government doesn’t have that power. Likewise, the rights of citizens were specifically put in the constitution to limit the government’s ability to curtail individual freedom.

One more thing about freedom. We have in America the Statue of Liberty, not the Statue of Equality. American ideals were never centered around equality but has held liberty to be more important than equality. Equality is a European value. (See French Revolution.) In this way, Democratic Socialism is historically not an American value. We have always espoused the individual. We have upheld personal responsibility. We have never wanted the government to tell us what to do, what we can make, what field of study we should focus on, or how successful we can become. We have always been innovators, dreamers, individuals searching for happiness the way we see fit. Our equality comes from the equality of opportunity – the idea that if you work hard enough in America and show some grit, then you can do what you love, live where you want, and espouse to dreams with no limits. These are all goals which conflict with democratic socialism in one way or another.

So that’s where we’ve come from. It’s up to the American people to decide whether we want to change our priorities as a nation, or to uphold what the Founding Fathers held dear: freedom from an overreaching government.

That’s my take. What’s yours?