Failed Economies: As Zimbabwe locked down following a military coup this week, Venezuela defaulted on its debt. On the surface, these events in these two countries — one African, the other South American — seem to have little in common. But, in fact, they share two very big things: Both are socialist, and both are failed states.
Indeed, both nations are near collapse, suffering from hyperinflation, economic contraction and widespread hunger. What's most alarming about this is that both countries have been, in the recent past, highly successful as capitalist economies. Today they are basket cases, Marxist-inspired dictatorships that were systematically run into the ground by their socialist leaders.
X In Zimbabwe's case, just 40 years ago it was the richest and most productive country in Africa. Today, it is an utter disaster. This week, after 93-year-old Marxist dictator Robert Mugabe who has led the country since its independence in 1980 tried to position his wife to be his eventual successor, the military stepped in, removing Mugabe from power and putting him under house arrest. Mugabe's wife has fled the country.
"What is clear is that Zimbabwe's economy has collapsed under Robert Mugabe," noted the Sky News website.
Yes, the case against Mugabe's special brand of African socialism is convincing.
Food output fell by half during the 1990s as Mugabe drove European farmers from their lands and gave the farms to his supporters who largely lacked any farming experience. Alarmed by the collapse of the economy and soaring inflation, Mugabe simply declared inflation illegal. And he cracked down on anyone who spoke up in opposition to his insane Marxist policies.
Meanwhile, a needless war in the Congo led to massive indebtedness and soaring interest rates and hyperinflation. Inflation rose from roughly 59% in 2000 to a peak of 80 billion percent at the end of 2008. No that's not a misprint: 80,000,000,000%. In addition to freezing prices, the government froze wages. To enforce its edict, it arrested business owners who were caught charging more than the law allowed.
The result: GDP fell from $6.78 billion in 2001 to $4.4 billion in 2008, World Bank data show.
Following the global financial crisis, Mugabe was forced to back off some of his worst policies, leading to a rebound in the economy in recent years. But Zimbabwe remains one of the poorest and worst run nations on the planet.
Venezuela's socialist path has been slightly different, but the results have been the same.
Just like Zimbabwe, Venezuela once thrived with a large middle class and a strong, oil-based economy. But starting in 1999 under socialist military dictator Hugo Chavez, major swathes of the economy were seized and put under government control and ownership. Venezuela's massive oil reserves were likewise taken over by the government. Today, its state-run oil monopoly barely pumps any crude at all.
The economy is in a free fall.
"It's defaulted on its sovereign debt, run out of money ... has widespread hunger, mass poverty, and the wreck of its medical system," wrote Monica Showalter, a former IBD writer, in the American Thinker. "The electrical company is bankrupt, the water isn't running, the bridges are falling apart, and now even the Caracas subway seems to be shutting down."
Under first Chavez and, since 2013, his hand-picked successor Nicolas Maduro, the economy's once hardy private sector has been strangled into submission. By piling up massive amounts of debt, the government hid its incompetence and the inevitable economic decline. But now, faced with nearly $200 billion in outstanding loans that it can't pay, Venezuela will soon be cut off from private-sector lending — and its economy will get even worse, if that's possible.
"The government, meanwhile, has failed for years to ship in enough food and medicine for its citizens," noted a CNN report. "As a result, Venezuelans are waiting hours in line to buy food and dying in hospitals that lack basic resources."
What's both surprising and disappointing is that there are many prominent Americans, some of them elected officials, who have lauded these governments and the socialism they represent. Even after the recent 100 year anniversary of the Bolshevik takeover of Russia, which began the world's failed experiment in Marxist-socialism, there are those who maintain socialism could work, given the right conditions.
But the record is very clear: Each year, the Heritage Foundation issues its Index of Economic Freedom — essentially, a sliding-scale that measures the degree of economic freedom vs. socialism across all major countries. Heritage's index correlates very nicely with economic success, wealth and citizens' well-being. So you probably won't be surprised to know that out of 180 ranked nations, Zimbabwe is No. 175 and Venezuela is No. 179. And, like those two, all the other bottom-performing countries are socialist, one-party states.
Based on this, here's a little thought experiment: Suppose there was a company that made airplanes, and every one of the airplanes it ever made, all of them, crashed and burned. Would you fly in one of that company's planes?
Of course not. And that's precisely the case with socialism. Everywhere it's been tried — everywhere — it has brought economic failure, human misery, want, hunger, strife, even mass death. There are no socialist "success stories." None.
So Zimbabwe and Venezuela aren't so different after all. Just two more socialist success stories. And those that have for years lauded Mugabe, Chavez, Maduro and others of their ilk, should hang their heads in shame.
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