New Government Programs to Fix Failed Government Programs

David Boaz

Scott Lincicome points out that “U.S. law and regulation are littered with attempts to ‘fix’ problems caused by other government policies—not by reforming or eliminating those policies but through even more subsidies, tariffs, regulations, or waivers.” He focuses especially on industrial policy proposals that propose to use government action to counter existing government policies — not to repeal those existing policies but to pile on new interventions. But that’s not the only place where we can see the phenomenon.

Take, for instance, the California legislature’s vote to spend “$100 million to rescue its struggling legal marijuana industry,” as the Los Angeles Times headline puts it. The money isn’t going directly to marijuana purveyors. Rather, it will go to cities and counties to help them hire staff to assist businesses in completing the cumbersome environmental studies needed to get the required license. Three years ago I wrote that the costly schedule of regulations and taxes would squeeze out small farmers and entrepreneurs, ensuring that only a few big firms that could afford legal and compliance costs would dominate the market. Turns out, compliance is so costly that even the big firms “continue[] to struggle to compete with the large illicit pot market” of farms and retailers that presumably just aren’t trying to make themselves legal and registered.

Or how about President Biden’s $213 billion federal program for affordable housing? He proposes to build 500,000 affordable units. And upgrade others. And also “an innovative, new competitive grant program” to encourage cities and states to reform or eliminate exclusionary zoning rules. So that part is good, but why do cities and states need a federal grant to change their laws? Meanwhile, Amazon is planning to spend $2 billion to encourage affordable housing. But why spend all this taxpayer (and shareholder) money? Just fix the original problem: zoning and land‐​use regulations drive up the cost and complexity of building housing. All these new affordable‐​housing programs are trying to fix a problem caused by existing government programs.

Lincicome concludes:

So the distortions created by entrenched economic policies can get papered over with new government actions, often making things even worse, and can undermine new economic policies that might in theory have a more legitimate justification. These old policies, moreover, are difficult to reform and—in many cases—actually become more entrenched over time.

Before we create new policies, it would behoove us to eliminate the policies that may have caused the very problem we’re trying to solve.

Posted on June 17, 2021  Posted to Cato@Liberty

Give the Gift of P. J. O’Rourke

David Boaz

The Cato Institute offers lots of great Christmas gifts -- Pocket Constitutions (also a good gift for Bill of Rights Day!), books, apparel, even Cato-branded Lands' End merchandise. But I have my own holiday recommendations that I've made before.

Media Name: PJ3.jpg

I decided one year to give a young colleague a post-graduate course in political science and economics — P. J. O’Rourke’s books Parliament of Whores and Eat the Rich. So I went to my local Barnes & Noble to search for them. Not in Current Affairs. Not in Economics. No separate section called Politics. I decided to try Borders (RIP). But first — to avoid yet more driving around — I went online to see if my local Borders stores had them in stock. Sure enough, they did, in a couple of stores just blocks from the Cato Institute. Checking to see where in the store I would find them, I discovered that they would both be shelved under “Humor–Humorous Writing.” Oh, right, I thought, they’re not books on economics or current affairs, they’re humor.

Yes, P.J. is one of the funniest writers around. But what people often miss when they talk about his humor is what a good reporter and what an insightful analyst he is. Parliament of Whores is a very funny book, but it’s also a very perceptive analysis of politics in a modern mixed-economy democracy. And if you read Eat the Rich, you’ll learn more about how countries get rich — and why they don’t — than in a whole year of econ at most colleges. In fact, I’ve decided that the best answer to the question “What’s the best book to start learning economics?” is Eat the Rich.

On page 1, P. J. starts with the right question: “Why do some places prosper and thrive while others just suck?” Supply-and-demand curves are all well and good, but what we really want to know is how not to be mired in poverty. He writes that he tried returning to his college economics texts but quickly remembered why he hated them at the time–though he does attempt, for instance, to explain comparative advantage in terms of John Grisham and Courtney Love. Instead he decided to visit economically successful and unsuccessful societies and try to figure out what makes them work or not work. So he headed off to Sweden, Hong Kong, Albania, Cuba, Tanzania, Russia, China, and Wall Street.

In Tanzania he gapes at the magnificent natural beauty and the appalling human poverty. Why is Tanzania so poor? he asks people, and he gets a variety of answers. One answer, he notes, is that Tanzania is actually not poor by the standards of human history; it has a life expectancy about that of the United States in 1920, which is a lot better than humans in 1720, or 1220, or 20. But, he finally concludes, the real answer is the collective “ujamaa” policies pursued by the sainted post-colonial leader Julius Nyerere. The answer is “ujaama—they planned it. They planned it, and we paid for it. Rich countries underwrote Tanzanian economic idiocy.”

From Tanzania P. J. moves on to Hong Kong, where he finds “the best contemporary example of laissez-faire....The British colonial government turned Hong Kong into an economic miracle by doing nothing.”

You could do worse than to take a semester-long course on political economy where the texts are Eat the Rich and Parliament of Whores. So, bookstore owners, leave them in the Humorous Writing section for sure, but also put copies in the Economics, Politics, and Current Affairs sections.

Still time to buy them for Christmas and educate all your family and friends while they think they're just being entertained!

Posted on December 5, 2019  Posted to Cato@Liberty

Happy Repeal Day!

David Boaz

Today is a great day for freedom. On this day in 1933, the 21st Amendment was ratified, thus repealing Prohibition. My former colleague Brandon Arnold wrote about it a few years ago:

Prohibition isn’t a subject that should be studied by historians alone, as this failed experiment continues to have a significant impact on our nation.

Groups like the Women’s Christian Temperance Union, a key force in the passage of Prohibition, survive to this day and continue to insist that Prohibition was a success and advocate for dry laws.

Prohibition-era state laws, many of which are still on the books today, created government-protected monopolies for alcohol distributors. These laws have survived for three-quarters of a century because of powerful, rent-seeking interest groups, despite the fact that they significantly raise costs and limit consumer options. And because of these distribution laws, it is illegal for millions of Americans to have wine shipped directly to their door.

The website RepealDay.org urges celebrations of the "return to the rich traditions of craft fermentation and distillation, the legitimacy of the American bartender as a contributor to the culinary arts, and the responsible enjoyment of alcohol as a sacred social custom." It's easy! You don't have to hold a party. Just go to a bar or liquor store and have a drink.

RepealDay.org says that "No other holiday celebrates the laws that guarantee our rights." I think that's going too far. Constitution Day and Bill of Rights Day do exactly that. And in my view, so does Independence Day. But that's quibbling. Today we celebrate the repeal of a bad law. A toast to that!

Cato celebrated the 75th anniversary of repeal with this policy forum featuring Michael Lerner, author of Dry Manhattan: Prohibition in New York City; Glen Whitman, author of Strange Brew: Alcohol and Government Monopoly; Asheesh Agarwal, Former Assistant Director of the Federal Trade Commission’s Office of Policy Planning; and Radley Balko, Senior Editor, Reason.

Posted on December 5, 2019  Posted to Cato@Liberty

Voters Like Benefits But Don’t Like Paying for Them

David Boaz

A banner headline in the (paper) Washington Post today reports:

Poll: Americans like Green New Deal's goals, balk at cost

Funny, that. When you ask Americans if they support a proposal that would "create millions of good, high-wage jobs and ensure prosperity and economic security for all people of the United States; invest in the infrastructure and industry of the United States to sustainably meet the challenges of the 21st century; [and secure] clean air and water; climate and community resiliency; healthy food; access to nature; a sustainable environment; and justice and equity" — they approve!

But when you tell them that it might "increase federal spending by trillions of dollars"—gee, ya think?—support collapses:

Image without a caption

This is not a new phenomenon, but it's good to see leading pollsters such as the Washington Post, the Kaiser Family Foundation, and the National Opinion Research Center (which conducted the poll) picking up on the point. Cato's director of polling, Emily Ekins, has found similar results:

The Cato 2018 Health Care Survey...first replicated the results from myriad other surveys finding a majority (65%) of Americans favor regulations that prohibit insurance companies from refusing to cover, or charging higher premiums to, people with pre-existing conditions, while 32% oppose. However, support plummets when Americans are faced with likely consequences of these regulations.

The new Cato 2018 Paid Leave Survey of 1,700 adults finds that nearly three-fourths (74%) of Americans support a new federal government program to provide 12 weeks of paid leave to new parents or to people to deal with their own or a family member's serious medical condition.... However, majorities of Americans would oppose establishing a federal paid leave program if it cost them $450 a year in higher taxes.

Advocates often present policymakers with polls that show popular support for some proposed government program -- the Green New Deal, paid family leave, child care, free college, etc. But those polls never seem to point out the costs of the free service. When a poll does note costs, support tends to drop by a lot.

Note that even this Post-Kaiser poll mentions the large increase in federal spending, but doesn't point out that federal spending has to be paid for with taxes. In polls about "larger government with more services," there's evidence that if you remind respondents that "more services" means higher taxes, the margin by which people prefer "smaller government with fewer services" rises by about 9 points. So if Post-Kaiser had also asked respondents whether they would support the Green New Deal if it meant substantially higher taxes, support would have fallen further below 30 percent.

Any policymaker trying to ascertain what voters want should remember to look at both sides of the ledger: what they say they want in theory, and what they're willing to give up to get that benefit.

Posted on November 27, 2019  Posted to Cato@Liberty

What to Be Thankful For

David Boaz

Endless war. A $23 trillion national debt. Intrusive regulation. Criminal injustice. Presidents who don't think the Constitution limits their powers. It's easy to point to troubling aspects of modern America, and I spend a lot of time doing that. But when a journalist asked me what freedoms we take for granted in America, I found it a good opportunity to step back and consider how America is different from much of world history — and why immigrants still flock here.

If we ask how life in the United States is different from life in most of the history of the world — and still different from much of the world — a few key elements come to mind.

Rule of law. Perhaps the greatest achievement in history is the subordination of power to law. That is, in modern America we have created structures that limit and control the arbitrary power of government. No longer can one man — a king, a priest, a communist party boss — take another person’s life or property at the ruler’s whim. Citizens can go about their business, generally confident that they won’t be dragged off the streets to disappear forever, and confident that their hard-earned property won’t be confiscated without warning. We may take the rule of law for granted, but immigrants from China, Haiti, Syria, and other parts of the world know how rare it is.

Equality. For most of history people were firmly assigned to a particular status — clergy, nobility, and peasants. Kings and lords and serfs. Brahmins, other castes, and untouchables in India. If your father was a noble or a peasant, so would you be. The American Revolution swept away such distinctions. In America all men were created equal -- or at least that was our promise and our aspiration. Thomas Jefferson declared “that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God.” In America some people may be smarter, richer, stronger, or more beautiful than others, but “I’m as good as you” is our national creed. We are all citizens, equal before the law, free to rise as far as our talents will take us.

Equality for women. Throughout much of history women were the property of their fathers or their husbands. They were often barred from owning property, testifying in court, signing contracts, or participating in government. Equality for women took longer than equality for men, but today in America and other civilized parts of the world women have the same legal rights as men.

Self-government. The Declaration of Independence proclaims that “governments are instituted” to secure the rights of “life, liberty, and the pursuit of happiness,” and that those governments “derive their just powers from the consent of the governed.” Early governments were often formed in the conquest of one people by another, and the right of the rulers to rule was attributed to God’s will and passed along from father to son. In a few places — Athens, Rome, medieval Germany — there were fitful attempts to create a democratic government. Now, after America’s example, we take it for granted in civilized countries that governments stand or fall on popular consent. 

Freedom of speech. In a world of Fox and MSNBC, Facebook and Twitter, it’s hard to imagine just how new and how rare free speech is. Lots of people died for the right to say what they believed. In China, Russia, Africa, and the Arab world, they still do. Fortunately, we’ve realized that while free speech may irritate each of us at some point, we’re all better off for it.

Freedom of religion. Church and state have been bound together since time immemorial. The state claimed divine sanction, the church got money and power, the combination left little room for freedom. As late as the 17th century, Europe was wracked by religious wars. England, Sweden, and other countries still have an established church, though their citizens are free to worship elsewhere. Many people used to think that a country could only survive if everyone worshipped the one true God in the one true way. The American Founders established religious freedom.

Property and contract. We owe our unprecedented standard of living to the capitalist freedoms of private property and free markets. When people are able to own property and make contracts, they create wealth. Free markets and the legal institutions to enforce contracts make possible vast economic undertakings — from the design and construction of airplanes to Bitcoin and Venmo. But to appreciate the benefits of free markets, we don’t have to marvel at skyscrapers while listening to music on our iPhones. We can just give thanks for enough food to live on, and central heating, and the medical care that has lowered the infant mortality rate from about 20 percent to less than 1 percent.

A Kenyan boy who managed to get to the United States told a reporter for Woman’s World magazine that America is “heaven.” Compared to countries that lack the rule of law, equality, property rights, free markets, and freedom of speech and worship, it certainly is. A good point to keep in mind this Thanksgiving Day.

A version of this article was published in 2004 and was included in my book The Politics of Freedom.

Posted on November 26, 2019  Posted to Cato@Liberty

What to Be Thankful For

David Boaz

Endless war. A $23 trillion national debt. Intrusive regulation. Criminal injustice. Presidents who don't think the Constitution limits their powers. It's easy to point to troubling aspects of modern America, and I spend a lot of time doing that. But when a journalist asked me what freedoms we take for granted in America, I found it a good opportunity to step back and consider how America is different from much of world history — and why immigrants still flock here.

If we ask how life in the United States is different from life in most of the history of the world — and still different from much of the world — a few key elements come to mind.

Rule of law. Perhaps the greatest achievement in history is the subordination of power to law. That is, in modern America we have created structures that limit and control the arbitrary power of government. No longer can one man — a king, a priest, a communist party boss — take another person’s life or property at the ruler’s whim. Citizens can go about their business, generally confident that they won’t be dragged off the streets to disappear forever, and confident that their hard-earned property won’t be confiscated without warning. We may take the rule of law for granted, but immigrants from China, Haiti, Syria, and other parts of the world know how rare it is.

Equality. For most of history people were firmly assigned to a particular status — clergy, nobility, and peasants. Kings and lords and serfs. Brahmins, other castes, and untouchables in India. If your father was a noble or a peasant, so would you be. The American Revolution swept away such distinctions. In America all men were created equal -- or at least that was our promise and our aspiration. Thomas Jefferson declared “that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God.” In America some people may be smarter, richer, stronger, or more beautiful than others, but “I’m as good as you” is our national creed. We are all citizens, equal before the law, free to rise as far as our talents will take us.

Equality for women. Throughout much of history women were the property of their fathers or their husbands. They were often barred from owning property, testifying in court, signing contracts, or participating in government. Equality for women took longer than equality for men, but today in America and other civilized parts of the world women have the same legal rights as men.

Self-government. The Declaration of Independence proclaims that “governments are instituted” to secure the rights of “life, liberty, and the pursuit of happiness,” and that those governments “derive their just powers from the consent of the governed.” Early governments were often formed in the conquest of one people by another, and the right of the rulers to rule was attributed to God’s will and passed along from father to son. In a few places — Athens, Rome, medieval Germany — there were fitful attempts to create a democratic government. Now, after America’s example, we take it for granted in civilized countries that governments stand or fall on popular consent. 

Freedom of speech. In a world of Fox and MSNBC, Facebook and Twitter, it’s hard to imagine just how new and how rare free speech is. Lots of people died for the right to say what they believed. In China, Russia, Africa, and the Arab world, they still do. Fortunately, we’ve realized that while free speech may irritate each of us at some point, we’re all better off for it.

Freedom of religion. Church and state have been bound together since time immemorial. The state claimed divine sanction, the church got money and power, the combination left little room for freedom. As late as the 17th century, Europe was wracked by religious wars. England, Sweden, and other countries still have an established church, though their citizens are free to worship elsewhere. Many people used to think that a country could only survive if everyone worshipped the one true God in the one true way. The American Founders established religious freedom.

Property and contract. We owe our unprecedented standard of living to the capitalist freedoms of private property and free markets. When people are able to own property and make contracts, they create wealth. Free markets and the legal institutions to enforce contracts make possible vast economic undertakings — from the design and construction of airplanes to Bitcoin and Venmo. But to appreciate the benefits of free markets, we don’t have to marvel at skyscrapers while listening to music on our iPhones. We can just give thanks for enough food to live on, and central heating, and the medical care that has lowered the infant mortality rate from about 20 percent to less than 1 percent.

A Kenyan boy who managed to get to the United States told a reporter for Woman’s World magazine that America is “heaven.” Compared to countries that lack the rule of law, equality, property rights, free markets, and freedom of speech and worship, it certainly is. A good point to keep in mind this Thanksgiving Day.

A version of this article was published in 2004 and was included in my book The Politics of Freedom.

Posted on November 26, 2019  Posted to Cato@Liberty

Women Too Gutsy for Hillary Clinton

David Boaz

Hillary Clinton and Chelsea Clinton have a new book out, The Book of Gutsy Women. The publisher says they "share the stories of the gutsy women who have inspired them—women with the courage to stand up to the status quo, ask hard questions, and get the job done." They certainly tell the stories of some inspiring women -- Harriet Tubman, Helen Keller, Anne Frank, Maria Montessori, Marie Curie, and more. But I couldn't help noticing some women who didn't make it into the book's 432 pages.

  • not Margaret Thatcher, who fought every day to make her way up in an almost totally male-dominated political system;
  • not Ayn Rand, who fled the Bolshevik revolution to become a bestselling novelist of ideas in her third language;
  • not Jeannette Rankin, the first woman elected to Congress, who became the only Member of Congress to vote against U.S. participation in both World War I and World War II;
  • not Anne Hutchinson, who fought the Puritan theocracy of Massachusetts and was banished from the colony;
  • not businesswomen such as Helena Rubinstein, Elizabeth Arden, and Estee Lauder, all of whom climbed out of poverty and built major cosmetics businesses;
  • not Marva Collins, Virginia Walden Ford, and Eva Moskowitz, who fought to give poor families alternatives to failing public schools;
  • not Lilli Vincenz and Barbara Gittings, who came out of the closet and fought for gay and lesbian rights when doing so could mean losing one's job, family, or life;
  • not Deirdre McCloskey, who as a successful 53-year-old economist in 1995 decided to recognize her female identity and transition.

I suppose these women were just a bit too gutsy for the authors. Thatcher too capitalist, Rand too individualist, Rankin too antiwar, and so on. These women epitomize the line from historian Laurel Thatcher Ulrich: Well-behaved women seldom make history. And they don't quite fit the parameters of Hillary and Chelsea Clinton's East Coast Establishment woke-but-not-too-woke liberalism.

Posted on November 25, 2019  Posted to Cato@Liberty

How the Vaping Ban Will Hit Small Businesses

David Boaz

Sudden concern over lung illnesses possibly associated with vaping has led to a rash of state and federal bans on flavored vaping liquids. Public attention has focused on the biggest e-cigarette company, Juul, which has taken to running full-page ads in newspapers proclaiming that its products are safe and only for sale to adults.

,

But in this case, like many others, the dirty little secret of regulation is that it ends up imposing more costs on small companies than on the biggest players. Juul, which received a $12.8 billion investment from Altria (formerly Philip Morris), can afford legal and regulatory compliance costs that may squeeze out its smaller competitors.

Travis Pritchard, manager at Vaporz in Whitesboro, N.Y., told the Washington Post, “After the mom-and-pop stores are essentially flushed out of New York, the only devices you’ll find are Juuls.”

, ,

University of Notre Dame economist Benjamin Pugsley agreed: “When you have regulations that are increasing the entry cost of any particular industry, that tends to favor the large incumbents.”

The same phenomenon has occurred in many industries over the years.

Prohibition in the 1920s shut down many small brewers and distillers, but the big companies such as Anheuser-Busch and Brown-Forman, the makers of Jack Daniel’s, had the resources to wait out the 14-year ban and emerged bigger than ever.

In 2016 the European Union passed sweeping new regulations on tech firms to protect data privacy. Big companies like Facebook and Google fought hard against the new rules. But once the legislation passed, they invested big in dealing with it. They mobilized hundreds of people in Europe and the United States, many of them highly paid lawyers, to study the detailed law and review contracts and internal procedures. They had frequent contact with EU regulators.

Smaller companies didn’t have such resources. Some online-ad companies including Verve and Drawbridge pulled out of Europe. Journalists began to report that the regulations were disproportionately burdensome to smaller firms. Investors worried that smaller firms couldn’t handle the compliance costs. The Wall Street Journal reported that “some of the restrictions are having an unintended consequence: reinforcing the duopoly” of Facebook and Google.

Meanwhile, about the same time, California legalized marijuana. As a libertarian, I applaud that move. People would no longer be arrested for buying, selling, or using marijuana. We can expect less crime, more legal jobs, and rejuvenated cities.

But there's a catch. California didn't just repeal laws and stop arresting people; instead, it set up a regime of taxes, licensing fees and regulation. And again we see that big companies are better prepared to deal with regulation and paperwork.

Scott Wilson of the Washington Post reported, “Fewer than 1 in 10 of [Humboldt] county’s estimated 12,500 marijuana farmers are likely to make it in the legal trade....Less than 1% of the estimated 69,000 growers statewide have received a permit to farm marijuana since the beginning of the year." Large agricultural companies started planning to cultivate cannabis on an industrial scale. Long-time small growers saw the legalization law as just another way to put them out of business.

These aren’t isolated cases. As a Small Business Association study in 2010 found, “Small businesses, defined as firms employing fewer than 20 employees, bear the largest burden of federal regulations. . . . 36% higher than the regulatory cost facing large firms.”

Goldman Sachs CEO Lloyd Blankfein noted in 2015 that new regulations created a “moat” around his firm:

"In some ways, and there are some parts of our business, where it’s very hard for outside entrants to come in, disrupt our business, simply because we’re so regulated. You’ll hear people in our industry talk about the regulation. And they talk about it, you know, with a sigh: Look at the burdens of regulation. But in some cases, the burdensome regulation acts as a bit of a moat around our business.”

There are some understandable rationales for regulations — to protect consumers or workers, safety or the environment, to ensure competition, to stabilize markets. The costs and benefits of each regulation — and the aggregate burden of regulations — should be debated. But one thing is clear: the more complex and costly regulations are, the more they will disproportionately burden smaller companies and start-ups compared to large incumbents.

If we want an economy and society characterized by innovation, progress, competition and upward mobility, let's not regulate smaller businesses out of existence.

Posted on October 24, 2019  Posted to Cato@Liberty

Design, Doorknobs, and the Great Enrichment

David Boaz

As Americans become older and wealthier, there's growing interest in "aging-in-place design" for our homes. In the Washington Post, Stephanie Brick notes that aging-in-place

actually falls under the umbrella of universal design, which is becoming better known in the design industry as inclusive design. This is design — from the full architecture of a building to minute details such as material or fixture selections — that creates an equal experience for people across a wide spectrum of abilities.

Although many of us hearing this would naturally think of the Americans With Disabilities Act (ADA), Brick notes that inclusive design is not just "a set of minimum requirements to be met" but a "holistic strategy" that seeks make living spaces accessible in multiple ways for many kinds of people, now and in the future.

What occurred to me as I read the article is that this is a manifestation of our increasingly affluent society. The average new single-family home today is about 1000 square feet bigger than new homes in 1973, even as household size has declined. Homes are safer, more luxurious, and more technologically advanced than they were a decade or a generation ago. Inclusive design is part of that trend. Deirdre McCloskey writes in her imminent book that "the greatest, yet regularly overlooked, fact about the modern world" is the Great Enrichment, the fact that we are roughly 3,000 percent richer than our ancestors in 1800. And that enrichment continues, in the United States and in increasing parts of the world.

Of course, there are always tradeoffs in design choices. Stephanie Brick notes that "knobs can be difficult to grip for someone with arthritis or who has limited mobility. Lever handles for doors and faucets, as well as pulls for cabinetry hardware instead of knobs, are a simple adaptation." But at the same time as Brick's article appeared, a Wall Street Journal "Mansion" section article addressed the damage pets can do to houses, including a $1.25 million Colorado home: "Another $1,000 was spent to replace door levers with doorknobs because the pups were sneaking into guest rooms and gobbling up things like vitamins." Inclusive or not, no design is going to satisfy every customer.

Posted on October 1, 2019  Posted to Cato@Liberty

China Celebrates an Anniversary of a “People’s Democratic Dictatorship”

David Boaz

Next Tuesday the People's Republic of China is celebrating the 65th anniversary of its founding on October 1, 1949. Quite an extravaganza is planned, even as protesters in Hong Kong plan a counter-rally. China's opposition to democracy in Hong Kong and in China itself is not just the recalcitrance of cranky old men. It's part of the Chinese Communist state's founding mission.

Take the speech of Mao Zedong on July 1, 1949, as his Communist armies neared victory. The speech was titled, “On the People’s Democratic Dictatorship.” Instead of life, liberty, and the pursuit of happiness, it spoke of “the extinction of classes, state power and parties,” of “a socialist and communist society,” of the nationalization of private enterprise and the socialization of agriculture, of a “great and splendid socialist state” in Russia,and especially of “a powerful state apparatus” in the hands of a “people’s democratic dictatorship.”

Tragically, unbelievably, this vision appealed not only to many Chinese but even to Americans and Europeans, some of them prominent. But from the beginning it went terribly wrong, as really should have been predicted. Communism created desperate poverty in China. The “Great Leap Forward” led to mass starvation. The Cultural Revolution unleashed “an extended paroxysm of revolutionary madness” in which “tens of millions of innocent victims were persecuted, professionally ruined, mentally deranged, physically maimed and even killed.” Estimates of the number of unnatural deaths during Mao’s tenure range from 15 million to 80 million. This is so monstrous that we can’t really comprehend it. What inspired many American and European leftists was that Mao really seemed to believe in the communist vision. And the attempt to actually implement communism leads to disaster and death.

Fortunately, after Mao died in 1976, China changed rapidly. In far-flung parts of the country, villages and communes had already begun recreating markets and individual plots of land. Mao's old comrade Deng Xiaoping, a victim of the Cultural Revolution, had learned something from the 30 years of calamity. He began to implement policies he called “socialism with Chinese characteristics,” which looked a lot like freer markets—decollectivization and the “responsibility system” in agriculture, privatization of enterprises, international trade, liberalization of residency requirements.

The changes in China over the past generation are the greatest story in the world—more than a billion people brought from totalitarianism to a largely capitalist economic system that has eroded the continuing authoritarianism of the political system. But on its 70th birthday, the CCP still rules China with an iron fist. There is no open political opposition, and no independent judges or media. President Xi Jinping has become more authoritarian, and has concentrated more power in his own person than any ruler since Mao. Some say China is becoming "the perfect dictatorship." But there are rumblings of dissent inside the Chinese leadership. Maybe the passion and endurance of the Hong Kong protests, coming on top of the oppression of the Uighurs and the Hui, closures of liberal think tanks, tightening of economic controls, and a general increase in repression, will be a beacon that will help China return to its faltering path toward openness.

Posted on September 26, 2019  Posted to Cato@Liberty

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