Policies That Don't Work
November 23, 2006
Recent Latin American elections have put some leftists in power, but almost all of those who got themselves elected did so by promising stability and growth through moderate economic policies, rather than radical reforms. So said John Lyons, writing in The Wall Street Journal. These centrist politicians include Oscar Arias in Costa Rica, Alan Garcia in Peru, and even Daniel Ortega in Nicaragua. "Longtime socialist politicians in Brazil and Chile [won by] championing market-friendly policies," he claimed.
The one exception, of course, is Venezuela's Chavez, who is using the country's enormous oil wealth to support anti-American policies and radical economic and political change. So far, his policies haven't worked, despite the billions of dollars he's been spending on them.
This is disappointing news for Chavez and his followers, to be sure, but they aren't ready to give up the good fight just yet. That's too bad. The problem with radical socialist policies (well intentioned or not) such as land and money redistributions is that they don't work. And they don't work because they violate the most fundamental rules of human psychology - that, as a rule, people tend to do more of those things that gratify them and less of those things that hurt them.
When you redistribute wealth (of any kind), you can't help but penalize wealth builders and reward wealth consumers. Nicaragua, Peru, Mexico, Brazil, and Ecuador have all seen the damaging psychological effect of these policies within the past 25 years and - so far, at least - they do not want to return to them. But those are the older people. The young kids - the kids who are in high school and college now - have no such experience and are perfect candidates for socialist propaganda. Time will tell if they need to relearn the lessons their parents learned.
posted by M. Masterson @ 9:38 AM,
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