Bush Chavezs Economic Model Leads To Poverty - Road to the Middle Class

IT SHOULDN’T need to be said, of course. It ought to be the common knowledge of every street urchin in the Third World. Government control of the economy leads to poverty.

Here’s what Bush actually said on his Latin American tour, according to AFP:

"I strongly believe that government-run industry is inefficient and will lead to more poverty," Bush replied to a question on Chavez’s economic model, which includes nationalizations and muscular state intervention.

"So the United States brings a message of open markets and open government to the region," he said.

The question is: Why would anyone ask such a question? It’s a matter of the science. We know that politically-run enterprise doesn’t work. It’s been tried again and again, and it never works. In fact it was tried repeatedly in scientifically-designed nation-state experiments, a privilege rarely extended to social scientists. The results were repeatable. And government-run industry failed, every time it was tried.

The answer is: Power. People who seek political power are people who are practitioners of power. Power is what they understand; power is what they do; power is what they are good at. And, whatever else he may be, President Chavez of Venezuela is certainly good at a crude, thug-dictator kind of power.

Of course, it is not just general economic policy where the inefficiency of government-run industry appears. As Arnold Kling writes in “The Political Economy of Alternative Energy,” if you take a look at the proposals of the global warming crowd, it is all about privilege, subsidy, and rent-seeking, with Al Gore as chief rent-seeker with his peculiar carbon-offset company. If the global-warming enthusiasts succeed in implementing their agenda, Al Gore will make a lot of money with his Generation Investment Management LLP.

The most important, inconvenient truth about energy policy is that there is no justification for a subsidy for good energy. Subsidies for wind farms, solar energy, ethanol, and so forth, whether they come from government "energy policy" or personal carbon offsets, are pure pork.

“Pork,” of course, is a polite term for “rent-seeking,” itself a polite term for political power. And political power is a polite term for force.

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Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.