Obama tells Argentine students capitalism and socialism are just theories, choose what works

Ramirez cartoon from today’s IBD

“A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.”
Milton Friedman

While in Argentina recently Obama had the audacity to say — in a country that has experienced firsthand the ravages of socialism — to an audience of young students that their generation should not worry their fuzzy little minds with abstract theories such as capitalism and socialism or communism but just choose what works.

He grandly expounded:

I guess to make a broader point, so often in the past there’s been a sharp division between left and right, between capitalist and communist or socialist.  And especially in the Americas, that’s been a big debate, right?  Oh, you know, you’re a capitalist Yankee dog, and oh, you know, you’re some crazy communist that’s going to take away everybody’s property.  And I mean, those are interesting intellectual arguments, but I think for your generation, you should be practical and just choose from what works.  You don’t have to worry about whether it neatly fits into socialist theory or capitalist theory — you should just decide what works.

And I said this to President Castro in Cuba.  I said, look, you’ve made great progress in educating young people. Every child in Cuba gets a basic education — that’s a huge improvement from where it was.  Medical care — the life expectancy of Cubans is equivalent to the United States, despite it being a very poor country, because they have access to health care.  That’s a huge achievement. They should be congratulated. But you drive around Havana and you say this economy is not working. It looks like it did in the 1950s. And so you have to be practical in asking yourself how can you achieve the goals of equality and inclusion, but also recognize that the market system produces a lot of wealth and goods and services. And it also gives individuals freedom because they have initiative.

And so you don’t have to be rigid in saying it’s either this or that, you can say — depending on the problem you’re trying to solve, depending on the social issues that you’re trying to address what works. And I think that what you’ll find is that the most successful societies, the most successful economies are ones that are rooted in a market-based system, but also recognize that a market does not work by itself.  It has to have a social and moral and ethical and community basis, and there has to be inclusion. Otherwise it’s not stable.

And it’s up to you — whether you’re in business or in academia or the nonprofit sector, whatever you’re doing — to create new forms that are adapted to the new conditions that we live in today.

It is not a theory. It is history. Socialism and communism have failed time and again while capitalism has lifted millions out of poverty, providing jobs and comfortable lifestyles and ample liberty.

In a 1990 article an Argentine business consultant described how socialism “worked” for Argentina:

Perón nationalized the railroads, airlines, buses, com­munications, foreign trade, and energy, among other ac­tivities. The immediate effects were a drastic deteriora­tion of service and huge deficits. …

The nationalized railroads lose $4 million a day. Grossly overmanned, the equipment is rapidly deteriorating and the service is disastrous. … Aerolineas Argentinas, the national airline, is just as bad. It costs the taxpayer $900,000 a day in subsidized losses, and international passengers are forced to pay fares that are 40 percent higher than average. …  Similar stories can be told about energy, water, and the postal service. In each case the government has enacted laws preserving the monopoly status of the state-owned companies. …

“That which government does not own it controls with regulation.”

An Investor’s Business Daily editorial today points out: “At one time, Argentina was one of the five richest nations in the world, with a per capita income rivaling that of the U.S. But for most of the last 100 years Argentina has suffered under socialism and then economic collapse. It now operates as virtually a Third World country. Yes, Argentina, by all means: Choose what works.”