New book warns America: Embrace markets or embrace poverty

Rainer Zitelmann’s new book, “How Nations Escape Poverty,” is nominally about Poland and Vietnam — two countries that were immiserated by socialism but recovered as they rejected socialism in favor of freer markets. But it’s also about America — and the poverty that awaits Americans — if this nation continues to repeat the mistakes Poland and Vietnam made and have taken great pains to correct.

Poland suffered under the 180-proof version of socialism called communism from the end of World War II, when the yoke of national socialist Germany was replaced by the yoke of the Soviet Union’s rebranded version of the same thing. Both were economic and personal tyrannies, where no one was free to exchange goods and services at market prices or really much of anything else. The government planned everything.

'Only a society that allows people to become rich and have a positive attitude toward wealth can overcome poverty.'

Personal, economic, and national stagnation ensued.

It became rational in these planned economies to do the least amount of work because no matter how hard you worked, the party comrade who worked less (or not at all) received just as much. Which wasn’t much, regardless. Communism was effective at very little except spreading privation and misery.

The United States spent 12 years fighting to prevent South Vietnam from falling to the communists who already controlled the north. More than 50,000 Americans gave their lives to prevent that fate from befalling the South Vietnamese. The effort ultimately failed, and all of Vietnam fell under the spell of the god that always fails, to paraphrase the title of a 1949 collection of essays about communism written by those who experienced it firsthand.

Eventually, the Vietnamese and the Poles had experienced enough. Both nations began the process — very much still a work in progress — of resuscitating their economies and the economic lives of their people by abandoning doctrinaire socialist policies in favor of freer market alternatives.

They have both prospered accordingly.

Poland, Zitelmann writes, has been “beating out the rest of Europe and America in economic growth since the 1989 emancipation of Polish enterprise, with more than one million new private firms launched in four years and per capita GDP up 2.5 times by 2017.”

And unlike the dark days of communism in Vietnam when children shared a single bowl of rice a day and ate meat maybe once or twice a year, people now have plenty of meat to eat.

Zitelmann’s account of this transformation from the poverty of socialism to the prosperity of freedom begins with a hat tip to Adam Smith, who wrote the first book about the mechanics and morality of the market. Smith’s “Wealth of Nations” explains why some nations have wealth and others have less — or none. The book explains that poverty can only be cured by self-interest — including the desire to get rich — an insight that socialists have never understood or reject for reasons that can only be guessed at.

A man wants to improve his situation, to better the lot of himself and his family. He realizes that the way to do that is by improving the situation of others. He creates something or he offers something of value to others, who are willing to pay something of value to him in exchange for the thing he offers that is of value to them. Everyone profits from this free exchange.

It’s odd how socialists regard this general improvement of everyone’s situation with contempt. It’s even odder how no one profits under socialism — except those who wield power. They are improved at the expense of everyone else.

When people are free to improve their situation, they will, for the same reason that many plants grow better in the sun than in the shade. And they’ll do so without diminishing the prospects of others in the process.

Only the anvil of socialism — tied around everyone’s neck — can do that.

As Zitelmann puts it: “Only a society that allows people to become rich and have a positive attitude toward wealth can overcome poverty.”

In Vietnam, this change of mind began in 1986 when free-market reforms, called “Doi Moi,” were enacted by the communist government. Nearly 40 years later, Vietnam has become an economic powerhouse and home to one of the world’s largest privately owned conglomerates, VinGroup. Ho Chi Minh City, the nation’s capital, bustles with economic activity and looks more vibrant and modern than New York, where “profit” and “private” have become dirty words to the socialists who run what was once America's greatest city.

Poland has also embraced what America is rejecting — and it shows. Zitelmann observes that Poland’s economic growth and rising living standards are surpassing the stagnating United States, a nation that has forgotten what socialism costs because we have enjoyed the affluence that socialism invariably destroys.

Ironically, as Zitelmann's book lays out, as socialism waned in Eastern Europe and Asia, it began to wax in the very country that spent blood and treasure trying to save the world from the immiseration of socialism.

Several generations of Americans have grown up assuming the supermarkets will always be full of affordable food, that their homes will always have electricity and hot water, and that they can afford socialism.

“How Nations Escape Poverty” is a reminder that they can’t — and they'd better remember before they regret forgetting.