REPORT: Here’s What Socialism Really Does to Healthcare

June 18, 2017

REPORT: Here’s What Socialism Really Does to Healthcare 1000 Words / Shutterstock.com

In 1959, economist Gunnar Myrdal declared that socialism had definitively defeated capitalism. In his book “Beyond the Welfare State,” Myrdal argued that the only thing remaining for the Western world to do was to get with the program and embrace Soviet-style central economic planning.

In 1974, Myrdal received the Nobel Memorial Prize in economics, ironically sharing it with legendary free market economist Friedrich von Hayek. But the years have disproven Myrdal’s socialist theories — and the most egregious example today is the destruction of Venezuela’s economy, and in particular, the utter decimation of their health care system, which has left the people without life-saving care.

As seen in Venezuela and even in Britain, socialist health care inevitably leads to dehumanization — when patients become cost items in the government budget, the old, the sick and the terminally ill will be the first to lose their rights.

Reality proved Hayek was right, not Myrdal: today, the centrally planned Soviet empire is long gone. What remains of Chinese economic socialism is slowly but inevitably giving in to free-market capitalism. Mega-billionaire Jack Ma, founder of Alibaba, has replaced Mao and Marx as the country’s economic icon.

Even in Cuba, people can see the beginning of the end of central economic planning. This would be a good time to banish centrally-planned economies to the 20th century Hall of Shame, once and for all.

Venezuela: a monument to socialism’s abysmal failure

Sadly, we cannot pretend that these economic systems only exist in history books. Over the past 18 years, a socialist government has turned Venezuela into a man-made economic disaster zone.

Government has gradually taken over the economy, socializing oil rigs, farm land and a whole range of industries, including banks, phone companies, utilities and manufacturers of everything from steel and cement to glass containers.

To beef up its central planning, the government in Caracas has also created a disastrous system of price controls. Its effects on the economy are put on full display by an inflation rate of 800 percent per year.

As destructive as it is to destroy property rights and free markets, these are not the most appalling consequences of socialist economic tyranny. At no point do Venezuelans suffer more than when government’s central planning puts people’s very survival in jeopardy.

Why doctors are fleeing Venezuela in droves and patients are dying

On top of widespread starvation, Venezuelans can no longer rely on even basic health care when they need it. The Wall Street Journal describes a system with “dilapidated hospitals and shortages of medicine, supplies and equipment.”

Adding insult to injury, the Journal reports Venezuela is losing its physicians to other countries:

The exodus of doctors is exacerbating the already serious strain on Venezuela’s once-vaunted public-health system … Figures released last month by the country’s health ministry showed maternal mortality there increased by 66% last year; infant mortality, which rose by 30% last year, is now higher in Venezuela than in war-torn Syria. Malaria and diphtheria rates are soaring amid shortages of insect repellents, vaccinations, and public-health funding.

According to the Journal, an estimated 16,000 doctors have left the country over the past 12 years. To put that in perspective, imagine if the United States lost 213,000 doctors.

Venezuela’s self-inflicted economic and social collapse is an atrocity in and of itself. However, it also goes deeper than a sad story of trouble in one country.

There is a profound lesson to be learned from the country’s tailspin. Venezuela is the 21st century example of what happens when a government tries to re-engineer a free society to fit their pet ideology.

The country’s turn from a functioning market economy to a pit of economic chaos did not happen like lightning from a clear blue sky. It was the work of dedicated socialists with egalitarian ambitions, a desire for political power and the willingness to impose their ideas on an entire country, regardless of the consequences.

Socialist ideas cost lives

The same ideological preferences that drove Venezuela over the cliff are visible everywhere in the Western world, including the United States. In some ways, those ideas have already set root in our societies.

Single-payer health care is a good example. While the Venezuelan health crisis is extreme, it is not unique in its kind.

Even in stable, functioning countries, egalitarian ideas — put to work under central government planning — inflict serious harm on people. A case in point is the British National Health Service which, over the years, has put thousands of patients through a treatment protocol called the Liverpool Care Pathway.

Formally created to provide end-of-life care, the protocol has evolved to function as a death row for patients deemed too old or otherwise too costly to be worthy of life-supporting treatment.

When government guidelines determine that it is not worth the money to save children, some of those children have been coerced onto the Liverpool Care Pathway. There, they have been starved and dehydrated to death, sometimes over a period as long as ten days.

Lessons for the West

This is, of course, nothing short of brutal. Yet the mechanisms that put a child to death at the hand of a government-run health care system are in no way evil in themselves.

Together they create a system where people assume the government is better at providing health care than free-market capitalism. Governments combine the idea of universal access to health care with the idea that nobody should have to pay for his or her own health care.

In order to mix these two goals, government centralizes funding, production, and distribution of health care. Government takes it upon itself to decide whether or not a patient will get sufficiently better to merit the cost of treatment.

Politically-motivated procedures, such as abortions and euthanasia, take resources from health care that could save people’s lives.

Eventually, patients’ lives become cost items in a government budget. It does not matter whether the system abandoning the patient is called the Liverpool Care Pathway, or the Venezuelan health care system.

Once government central planning has dehumanized humans, only the sheer quantity of that dehumanization makes a difference. So far, Venezuela surpasses most other countries in the world.

Hopefully, this time the world will learn and remember the terrifying lessons that socialists in Caracas have written for the afterworld.

If not, who knows what country is next?


Sven Larson

Sven Larson is an economist specializing in macroeconomics and the welfare state. He has worked for several free-market think tanks and is the author of "Industrial Poverty" a book about the European economic crisis. His forthcoming book "The Rise of Big Government" explains how egalitarianism conquered America. He has a Ph.D in Social Sciences with a Major in Economics from Roskilde University, Denmark.