THE SOUTH AMERICAN UTOPIA VIRUS

People line up to buy basic food and household items outside a supermarket in the poor neighborhood of Lidice, in Caracas, Venezuela on May 27, 2016. AFP / RONALDO SCHEMIDT (Photo credit should read RONALDO SCHEMIDT/AFP/Getty Images)

For hundreds of years people all over the world have protested in the streets for “equality”.  The masses want more.  Sympathetic politicians tell them they “deserve” more.  Today is no different.  People are now protesting in Chile for equality.  The same is happening in Europe and the United States.  Supposedly all that is needed is to elect a new regime; a government that will forcibly take from the rich and give to the poor.  Then utopia will prevail!  It is that simple.

Of course, it is never simple.  The newly elected regime will promise prosperity, but collectivism never delivers a rising standard of living, especially for the poor.

I was in Argentina and Chile last year.  Our walking tours were led by intelligent, relatively enthusiastic young people in their late twenties or early thirties.  During the tour, the guides talk about the history and politics of the country.  Both Argentina and Chile have a history of mass protests for equality, resulting in the election of a new government that promises to redistribute income and raise wages for the middle classes and the poor.

Of course, only productivity increases will create the prosperity to make people truly better off.  Redistributing income and wealth reduces incentives to work and produce, slowing productivity.  All the new government can do is print money to fund programs for the masses.  This results in hyper-inflation and a significant reduction of the standard of living of the poor and middle class alike. 

Such “utopian” governments are also rife with corruption.  After all, if you are corrupt enough to print money what is wrong with sharing some of it with your cronies?  After a few years of high unemployment, inflation and misery the masses reject the government they had previously supported and buy in to the next “progressive” regime, which promises them, of course, equality and utopia. 

This happens every fifteen years or so in many South American countries.  Despite the repeated failure of regime after regime, our walking tour hosts complained about how bad things are and told us about the utopian platform of the latest politician that they plan to support in the next election.  I came out of these walking tours realizing that South American voters are suckers for utopia and never learn their lessons. 

Look at Venezuela, where millions of people have fled a repressive, socialist government to flee to other South American countries where things are not perfect, but better than they are in Venezuela.  Chile and Argentina are full of Venezuelan refugees.  A cab driver in Buenos Aires told me, “Man, these Venezuelans are great for our country.  No one works cheaper and harder than Venezuelans.”

As we head into the 2020 fall election it would be wise to understand that the utopia virus is alive all over the world, including the United States.  Unfortunately, caseloads are up, and there is no vaccine for this disease.  More and more people wish for a regime that will create prosperity by taxing the rich and giving to the poor. 

Until we recognize that economic incentives truly matter; until we understand that producers should be honored and not vilified and until we realize that there is no utopia, we will head down the South American path. 

Don with Venezuelan refugee working in a restaurant in Buenos Aires
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