How End-Users Suffer Under Socialism

How End-Users Suffer Under Socialism
Investor's Business Daily

Economic Systems: If you ever wonder why we so resist socialism,
consider the latest news out of that collectivist island paradise known
as Cuba.

Central planners announced this week that they were fresh out of money
to buy toilet paper -- yes, toilet paper -- for the island's 9 million
citizens. But not to worry. A nameless official for state-run monopoly
Cimex and quoted by Reuters assured that "the corporation has taken all
the steps so that at the end of the year there will be an important
importation of toilet paper."

The predicament would be funny if it wasn't so pathetic. But toilet
tissue is hardly the only item Cuba is lacking. Food itself is in short
supply, with red bean and chickpea rations cut by a third, according to
the Miami Herald. Special hard-currency-only stores for the elites have
mysteriously failed to open after last week's "inventory," with no
explanation given.

There's no gas, either. The Associated Press this week reported that
state planners have decreed that oxen -- yes, oxen -- would replace
tractors in the fields, a bid to conserve fuel. This, despite the fact
that Cuba gets 100,000 barrels of oil a day from Hugo Chavez's Venezuela
-- effectively free, because Cuba never pays its bills.

But again, not to worry: Cuban socialists say the ox represents progress
because it's so eco-friendly.

As these examples of Cuban progress roll in, CNN is presenting Cuba's
socialized health care system as "a model for health care reform in the
United States," according to a report on the cable network last week.
The report credits low cost and universal coverage.

"How does Cuba do it?" gushed the CNN anchor. "First of all, the
government dictates salaries. Doctors earn less than $30 per month --
very little compared to doctors elsewhere. And priority is given to
avoiding expensive procedures, says Gail Reed (a contributor to the
Cuban communist party propaganda organ Granma), who's lived and worked
in Cuba for decades."

But instead of pluses, these features are at the root of why the Cuban
system is not a model. Government-dictated salaries -- like Medicare
payments here -- reduce incentives for doctors to provide quality care.
And when cheap procedures are a priority -- as they are, say, in the
U.K. -- teeth get pulled instead of filled. But the basic problem with
socialism is that there's literally nothing there.

CNN gives little attention to the fact that hospitals in Cuba have no
Band-Aids and are short on aspirin and actual medicine. Photos from
TheRealCuba.com show hospitals strewn with filthy mattresses, infested
with cockroaches and full of bony patients nursing ugly bedsores. The
only plenty within Cuba's universal coverage system is one of want.

The scary thing is that if you copy that system, the same shortages
appear. Take Venezuela, which is following the socialist model and now
suffers shortages of milk, meat, steel, gasoline and tires. (Yes, it too
had a run on toilet paper a few years back.)

This week, the country crossed its first milestone for socialist street
cred. It was forced for the first time in its history to import a crop
it has grown exquisitely well since 1730: coffee.

The problem with the telltale shortages in Cuba isn't a few incompetents
at a state-owned toilet-paper company or some hurricane that's wiped out
its crops. Nor is it the U.S. trade embargo of which the country
constantly complains.

"The system itself is dysfunctional," explains Brian Latell, a leading
expert on Cuba at the University of Miami. "Workers have scarcely any
incentive to be productive. The distribution and transportation systems
have broken down."

Even with slight improvements from the newer Raul Castro administration,
"it's a centrally planned economy and still highly centralized. There's
little private enterprise and initiative."

The shortages are a natural byproduct of central planning, price-fixing
and a system that disregards human nature.

Yes, four hurricanes did damage estimated at $10 billion last year,
Latell acknowledges. But Cuba has also been a bad credit risk for nearly
50 years, he adds, limiting its own access to credit out of loathing for
capitalism. That has cut into the nation's productive capacity, which
was once one of Latin America's highest.

Now, "they're not producing anything to speak of to earn hard currency,
they're not exporting to earn, and the economy is in a terrible state,"
Latell says.

An economic system that can't supply its people with commodities as
basic as toilet paper is no model for anyone.

How End-Users Suffer Under Socialism - Yahoo! News (13 August 2009)
http://news.yahoo.com/s/ibd/20090811/bs_ibd_ibd/20090811issues01