By now everyone with at least an ounce of political knowledge would have heard of Alexandria Ocasio Cortez. She is the member-elect of the United States House of Representatives for New York’s 14th congressional district, having won the district’s general election in November 2018. Being a self-identified democratic socialist, her economic illiteracy has a high potential for danger.
It is recommended that Part 1 of this article be read.
Healthcare:
The democratic socialist platform calls for a system of universal healthcare. Typically their rhetoric consists of calls for “free” healthcare, payed for with tax money of course. “The 1% need to pay their fair share” they say. What they don’t realize is that artificially making a good or service free (or even creating a price ceiling for it, a maximum cost below its normal market value) will greatly increase demand for that good or service. With healthcare becoming free or even artificially cheaper, more people will use and abuse it. This will inevitably lead to shortages, of nurses, doctors, drugs, medicine and hospital beds, to name a few. The ever-so-praised NHS of the UK, has 1 million people waiting to be admitted to a hospital at any given time.
It is also worth noting that any industry that becomes “socialized”, or “nationalized”, in effect becomes a state monopoly which has no incentive to provide services which are high in quality and low in cost, as they don’t have to compete with other firms over voluntary customers; their revenue is guaranteed through taxation. In fact, lower quality services and shortages are good news to socialists, as they justify higher budgets and spending, so that the program would do more “good”.
Universal Jobs:
It’s no secret that socialists of all kind love to “create jobs”, they boast about it all the time. Be it a public works project, subsidies to failing companies or just plain old bureaucracy. “Look at all the jobs created”, say the socialists. “Where would all these jobs go if there wasn’t government spending?” Enter the broken window fallacy. Indeed, what is seen is the jobs and projects created by public spending, but what is unseen, is the all the jobs, products and services that cannot be produced due to higher taxes. The more people are taxed for public works projects, the less they have to spend on what they want, hence, more money is wasted on relatively more useless public works projects rather than spent on products actually wanted by people.
These socialists may even go further, by making certain whole industries public and then creating jobs, they are using spreading-the-work schemes, which essentially reduces individual efficiency to the point where 2 or more people have to be hired to fulfill the duties of just one employee. Much like with healthcare, as explained above, the products of these industries will be rendered lower in quality and higher in price, prompting the administrators to lobby for an even higher budget. Instead of minimizing costs the way a private, competitive firm does, they’d be maximizing them. Studies show that public industries are roughly twice as inefficient as private ones. Of course, socialists will either call this “capitalist propaganda” or, if they have a streak of intellectual honesty, will simply claim that it’s a price worth paying for guaranteeing everyone with stable jobs, as the market never could. Ignoring examples such as the post-World War 2 boom.
Education:
As if the previous policies weren’t already recipes for economic disaster, enter the socialists’ endless battle for free college education. When education is guaranteed (either made free or guaranteed student loans by the government), the demand for degrees goes up, which allows the universities to increase their tuition fees without risking losing students. It should be noted that many degrees are simply not profitable to study, such as “gender studies”, “whiteness studies” or “outer space plastic juice box making dance therapy”. In addition to this, colleges will no doubt create more social justice warriors. Campuses have been called socialist indoctrination camps, places where Marxist, social constructionist pseudo-intellectuals rule liberal arts departments and Keynesians run the economics departments.
Housing:
It is common socialist rhetoric to say that everyone has a right to housing. Should they mean that as a right to own a house, then their prescriptive policy would be to lower interest rates and have guaranteed loans to allow for the poor whom are “oppressed by the capitalist overlords” so that they’re able to afford to buy houses. Of course, this just creates a bubble which inevitably pops and brings a bust which will undoubtedly be blamed on unregulated capitalism by the socialists (note that this is exactly what lead to the 2008 financial crisis).
Another method is to impose price ceilings on rent, also known as rent control. This will make it unprofitable for the landlord and will turn away potential landlords from renting out their properties, which would actually create a housing shortage. It will also destroy incentive on the landlord’s behalf to maintain their properties, leading to certain areas turning into ghettos.
Green Energy:
Ocasio-Cortez and most modern leftists despise fossil fuels. They greatly over exaggerate the effects of global warming (see: Al Gore) and say that the Earth is doomed unless we all switch to 100% renewable, green energy. This can be very problematic in this modern day and age, where demand for electricity is high due to consumer electronics. Our video games, phones, computers and internet depend on it. When some politician wants to bring in green energy, they essentially mean to ban cheap, reliable and efficient power. But they won’t even stop at fossil fuels. They also go against other reliable power sources, notably hydro-electric power as well as nuclear, which they of course deem as harmful to the environment.
While on the topic of environmentalism, it’s important to point out that communist and democratic socialist countries tend to have awful pollution when compared to capitalist ones. In East Germany, 80% of the water supply was unsuitable for fishing and swimming. The air there, as well as other socialist countries at the time such as Bulgaria, Romania and Yugoslavia were reportedly so bad that visitors vomiting was common, and they had to use headlights during the day to see properly. Democratic socialist Venezuela has experienced twice as much deforestation compared to other South American countries, with many of their lakes polluted by sewage and industrial waste. This tragedy of the commons occurs when there is no actual private owner to actually care.
Foreign Affairs:
Although Ocasio-Cortez seems to have an anti-war message, one shouldn’t be too quick to commend her. It’s important to note that Bush, Obama and Trump were all anti-war candidates, but all of them changed when they got into office and started bombing. Given the admiration she showed John McCain after his death earlier this year (“John McCain’s legacy represents an unparalleled example of human decency and American service”), one should be very skeptical of any anti-war or anti foreign intervention platform she may claim she has. Even if she actually is anti-war, she’d still be pro foreign aid, which is essentially taxing the poor people of rich countries and giving that money to the rich people of poor countries, the politicians and the “supreme leaders”.
Another reason why she might become more pro intervention would be to “create jobs”, as discussed before. She will, no doubt, assert that war is started by capitalists trying to take over the world to sell their products to foreign countries. This old Marxist theory fails to see that capitalism is about private property rights, and that war, something which is expensive and means high inflation and taxes, bigger size and scope of the government, as well as the destruction of property abroad, is the complete opposite. If capitalist want to sell to other countries, why would they not just support free trade?
Conclusion:
Alexandria Ocasio-Cortez will be a horrible candidate. She will cause shortages, inefficiencies, higher prices, bubbles and busts, will destroy the comfort and high quality living standards of those she rules over and will in the end blame it all on deregulation, corporate greed and capitalism. Of course, she will be just fine, with all the food and electricity she wants, leaching off the wealth of those who work in the private sector. Let’s hope she doesn’t add anything to communism’s death count; 100 million dead is far past enough.
Books:
Some good books about this subject include “The Problem with Socialism” and “Organized Crime” by Thomas DiLorenzo, “Economics in One Lesson” by Henry Hazlitt and “Excuse Me, Professor” edited by Lawrence Reed.
