Socialism is in the news these days because of, but not limited to, the announced candidates for the Democrat presidential nomination, the media darling (MD), the Green New Deal, and health care. Holman W. Jenkins, Jr. has a Lesson For Young Socialists at WSJ. You should, of course, read the whole thing. We generally support Holman’s article but we have three things to add or clarify.
First we start with the most trivial, the title. Holman gives a lesson not just to the young but all socialists. The lesson applies to The Bernie and MD.
Second, Holman is close to misleading about the market. There is a market for airplane rides but not a market for new passenger jets. There are millions of buyers and many seller of airplane rides. There are quite a few buyers of large new passenger jets but very few sellers of them. There is also a market for Boeing’s stock. It is true that Boeing, a company with less government support, made the right decisions and Airbus, a company with more government support made the wrong decisions. As Holman puts it:
Boeing’s management was vilified at the time for declining to compete with Airbus to replace its own fabulously successful 747 jumbo jet. But Boeing treated its business like a business. Its forecasts showed the market was likely to evolve in ways unfavorable to another very large passenger plane.
Because Boeing had more at risk it was more likely to be right but it wasn’t a market solution from the selling side because there were so few producers. There was nothing to assure us that Boeing’s forecasts were right. Capitalistic companies make mistakes all the time. The difference is that they suffer the consequences while socialistic companies do not.
Lastly, Holman ends with this:
Today the socialist miscalculations of our infallible leaders are measured mainly in dollars. This represents a great leap forward over the socialist failures that characterized the last century.
Umm, we know Holman knows about North Korea, Venezuela, and Zimbabwe to name a few socialist countries that have seen violence this century. More than currency has been lost in each of those hell-holes.
We think that Holman oversold the Boeing versus Airbus comparison but he is right that there is a big difference. Boeing was at risk because it would be punished by another market, the stock market. Airbus was, like the California rail project Holman includes, only spending money from taxpayers.