Five Times the Government Ruined Everything by L.R. Borbón

Self-reliance and independence: the two core principles of the United States of America and the two principles that continue to breathe life into every great entrepreneur or company that rises above the situation in which they were born into. 

But why are these two pillars so critical to the wellbeing of a successful nation? 

The answer lies not in what an individual or corporation can achieve on their own—rather in the ability to act independently of an overreaching government that seeks to impose its will on its constituents. 

We see these modern-day examples of overreaching governments in nations like China, Russia, Venezuela, North Korea, and Zimbabwe. All formerly respected - or at least tolerated - on the global stage, these countries have been consumed by communist or socialist takeovers under the facade of creating equality amongst their citizens. 

But was equality ever truly achieved? 

Or did the actions of a few affect millions in generations to come, which only served to disenfranchise their citizens and rob them of the rich sources which so many of these countries sit on—but have failed to realize and capitalize on because of this fantasy belief that the bigger the government, the better.

Five Nations That Wrecked Their Economies and People with Government Overreach

The Russian Federation, The People’s Republic of China, The Democratic People’s Republic of Korea—names that ring with a sense of peace and equal representation and of governments made by the people for the people. 

.. or is it just really great branding?

All of these nations have at one point been better off than they are now. Had they joined the West in committing to free markets, they would surely be as developed, healthy, and happy as any other place in the world.

But they aren’t. Not by a long shot. Let’s find out why.

1.) The Soviet Union's Marxist Experiment Failed to Create Any Growth in the Long Term

On a cold gloomy night on July 17, 1918, the Bolsheviks or incoming communist government of Russia gathered the ruling family in a basement cellar and executed all 7 members. This execution would change the trajectory of Russia for a century to come, ushering in an era that would see the end of a free press, individual liberty, and, most importantly, the freedom to pursue economic enterprise. 

Several decades ago, half of Russia’s exports were raw materials. This means that between harvesting oil or timber and sending it out of the country, not a single Russian was able to refine or process it into anything of higher value.

Today, despite technological advancements all over the world, that ratio is still about the same. A hundred years of communism and the resultant mafia government, and there has been positively no progress in Russia. The average Russian earns just $16,000 a year.

2.) The People's Republic of China Used To Be Communist... and Horrible!

China, as we know it today, was formed in 1921 under the influence of Mao Zedong, a communist enthusiast that marveled at the work Lenin had done in Russia—so much so that he created the framework for his own Chinese form of communism called “Maoism”. In Maoism, General Mao Zedong focused on heavy industry with surpluses extracted from peasants, leaving consumer goods as secondary items of importance. 

The results of this new and ever-so-shiny system were as follow:

a.) Significant waste of raw materials due to impractical supply targets and inefficient means of production

b.) A poor end product, or no end product at all, which led to unhappy customers.

c.) Lower wages than expected, which led to unhappy laborers.

Mao also single-handedly caused the deaths of around 30 million people, because he decided that all sparrows must die because they were eating the crops of his farmers.

Unfortunately, the sparrows were also eating the locusts, which were actually eating even more of his crops than the sparrows. Mao’s fantastic new government was left with no sparrows, and no food, but more locusts than he could possibly hope to deal with.

All of this happened, by the way, at the same time that companies in the United States were commercializing household pesticides and selling them for a few bucks at your local grocery store.

3.) How The Democratic People’s Republic of Korea (North Korea) Became a Laughing Stock

Created after the disastrous Korean War, North Korea today is the prime example of what can go wrong when power is not only centralized, but turned into a religious act of nationalism. To this day, North Korea is known for its near-dystopian form of government only witnessed in novels such as George Orwell’s “1984”.

North Korea survived for a few years economically using old technology left behind by the Japanese and Soviets, but after a while, they just couldn’t hack it on their own.

Then, ironically, by the 1970’s, North Korea began purchasing Western factories for their own use, simultaneously disproving communism as an effective way to manage resources and forsaking their own population to poverty and starvation, all in one fell swoop.

Kim Jong-Il, the long-time leader of this very good-hearted and super equal people’s paradise, famously spent over $1 million dollars per year on Hennessy Cognac. The money spent on a single one of the ~1,600 bottles could have doubled a North Korea family’s annual pay. But surely getting drunk with your comrades is a more honorable communist activity than redistributing wealth.

This is the nature of collectivism. It inherently concentrates power, which inherently creates starvation for the masses.

4.) The Decline of Venezuela

In the 1970s with the founding of OPEC, Venezuela witnessed the rise of an upper class, a middle class, and a working-class that could achieve great wealth—this, in turn, transformed Venezuela into one of Latin America’s wealthiest nations. But at the turn of the decade, a new government formed under the control of Hugo Chavez, who bet his country’s survival on the price of oil. He spent his presidency signing off on massive government spending bills, banking on oil exports to pay for everything. When the price of oil collapsed, he tried every socialist trick in the book - nationalization, price controls, taxes, land reforms - to try and stem inflation and general poverty. And wouldn’t you know, it didn’t work. And now, as inflation rises to an unprecedented level, the average Venezuelan can no longer purchase everyday items such as bread or water. 

After Hugo Chavez’s reign ended with his death, a man named Nicolas Maduro came to power. Maduro took a look at the failing social programs, bloated government spending, price controls that were starving producers, huge taxation policies, and a population faced with imminent starvation, and decided that in fact there had to be even less economic freedom.

That’s right. Despite his advisors telling him otherwise, Maduro decided to keep most of Chavez’s policies, strengthen some, and blame all of the poverty and squalid conditions on capitalism.

Maduro was obsessed with the public’s opinion of him, and as long as he kept them happy by using words like “equality”, “people”, “common good” and “republic”, he could do whatever he wanted.

5.) Hyperinflation in Zimbabwe:

A little-known country in the heart of the African continent with a violent past, bloodied by an overzealous dictator and a worsening economic situation. Zimbabwe, as we know of it today, started when Robert Mugabe overthrew the democratic government and imposed his new iron will over the small African nation. With incredible government spending, Mugabe’s reign over the agriculturally based economy wreaked havoc on its people and led to one of the first countries in the world to experience what we now call, “hyperinflation”.

The story of Zimbabwe is a simple one. Modern monetary theory, characterized by printing money to pay off government debt, does not work, no matter how many times heads of state who stand to gain from printing money say it does.

By starting their money printer and ripping off the emergency stop button, Zimbabwe’s inflation rate hit 231 million percent. When 100 trillion Zimbabwean dollars could be exchanged for just $0.40, the government finally decided to allow citizens to use foreign currency. The problem was almost immediately solved, but not before many Zimbabweans found their life savings completely erased.

Printing more money does not mean you actually have more money. It just doesn’t. It never will.

Dear reader, freedom is not given. Neither is individual liberty or self-reliance. You must fight for these rights. And nothing is ever going to get better unless good people like you, stand up in the face of adversity and tyranny. 

Or as Irish statesman and philosopher, Edmund Burke once proclaimed, 

“The only thing necessary for the triumph of evil is for good men to do nothing.”