Voices

Socialist policies always lead to corruption

2018-12-21 05:54

Corruption is a feature and not a bug of socialism. Every socialist system is guaranteed to have a high level of corruption.

It is also true that, when out of power, socialists are among the biggest opponents of corruption.

So how do we reconcile these two facts?

Firstly, it is important to note that many socialists are good people, they are motivated by a need to address what they consider to be societal injustice.

Any of us can understand this desire when we see the disparity in the standards of living between the middle and lower classes, we feel that it is unfair that some should have more than others.

This was certainly part of my motivation for adopting the ideas of socialism and communism.

They seemed to offer a solution to the problems I saw all around me – people living in corrugated iron shacks, people working in Taiwanese-owned textile factories for pay as low as R400 a fortnight while there were people living a comfortable, middle-class life just 13km away from my township of Madadeni.

This state of affairs enraged me: the standard of healthcare we were subjected to, the appalling education system we had to make do with, the dirt roads and cramped taxis and busses we had to use while the people living in town all had comfortable cars.

It was clear to me that, in the hope for us all to be equal, the only fair system was a socialist one.

But, alas, it does not and has never worked anywhere.

The reason why a socialist system can never work is the trade-off that has to happen at the heart of it – individual liberty in exchange for more power given to the state.

While a liberal order is, by its nature, one in which power is distributed among many competing centres (this is especially true of its accompanying economic system: a free market founded on the basis of individual property rights), socialism concentrates all power in politicians, and all we can do is hope that all those politicians and the people who work with them have good intentions, are incorruptible, and will not succumb to the weaknesses that abound in human nature.

To understand society, one must acknowledge that society is made up of individuals, each with their own desires and needs.

These needs and desires are embedded in the conscious as well as subconscious mind of the individual.

Any given person might believe that they will do only the right thing if they had the power but far too often, this is not the case, regardless of whether the power is concentrated in the hands of socialists or capitalists.

In South Africa this is quite evident when we see how corrupt the left-leaning ruling party the ANC has become.

With the dawn of democracy in SA, instead of being shed, much of the state involvement in the economy inherited from the apartheid era was preserved.

And so too, the corruption was also preserved, the scale of which increased to frightening levels because now there were social programmes and regulations meant to uplift poor black people and which served to make the state even bigger.

The predictable, most easily identifiable result, is that more power resides in the hands of the state, with a concomitant increase in opportunities open to corruption.

In 2008, the global economy entered a recession. The worst recession since the Great Depression, commentators said.

The responses to this crisis across the globe were of two main types:

1) Keynesian-style spending increases meant to stimulate growth, and

2) fiscal austerity, meant to free taxpayers from any additional burdens and invest in the economy, as in the UK with the Conservative-Libdem coalition.

South Africa chose the Keynesian path.

Since 2008, our debt-to-GDP ratio has gone from 27.8% to over 50% and is projected to top 60% within the next few years.

This route created many more opportunities to loot and we are reaping the results.

State capture would have been a lesser problem without Treasury and the Minister of Finance at the time, Pravin Gordhan, inaugurating such a huge increase in debt-financed government spending.

Gordhan, by all accounts, is incorruptible but by increasing the role of the state in the economy, he provided ample opportunities for less moral government leaders and civil servants to take advantage of this concentration of more power in the state.

I think most commentators have yet to join the dots.

The genius of liberalism (including free markets and property rights) is the assumption that everyone can be corrupted and thus power needs to be dispersed among as many people as possible.

This, coincidentally, leads to better outcomes for the poor than a utopian, socialist vision where the practical effect is the transfer of power from many individuals to a small elite who say the right things.

The EFF reinforces this lesson: as the most radical socialist party out of the big three, many of its supporters were shocked to find its leaders allegedly implicated in the VBS scandal as well as possible corruption in Johannesburg.

Those of us who have long been aware of this defect of socialism were not surprised.

It was inevitable that members of the EFF would misuse the power they had. It is human nature.

If you are worried about the plight of the poor, reject socialism.

If you want clean governance, shrink the size of government to as small a size as is constitutionally possible.

The poor will only escape poverty if they are free to participate in an economy of free individuals – their incomes may start out at the low end but they will only improve over time as has happened everywhere else where market liberalisation has been tried.

. Dhlamini is a data science researcher at the Free Market Foundation

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July 14 2019