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When Will We Ever Learn? (Vol. 26)

Updated: Feb 7, 2023

analyticsbox | Nov 17, 2021

A Globe

The Real World Teaches Us All We Need To Know

The history of the modern world has seen almost every form of government, regulation, taxation, etc. We can learn a lot from real world examples. In our first short video explaining Economic Systems, we showed this picture of the Korean Peninsula.

This picture explains a lot. South Korea follows a free enterprise/market economic system similar to what we have now in the USA, and North Korea follows a Communist/Socialist approach. It’s easy to see where the lights are shining the brightest.

The world is full of examples that should teach us so we don't repeat the same mistakes. In The Facts No Spin #24, I relayed the story of the Pilgrims. Communal farming failed, individual ownership of the land succeeded.

In Africa, Botswana and Zimbabwe are neighbors. Botswana pursued a free market type economic policy with sound government, Zimbabwe followed a dictatorial type regime with very little freedom. Want to guess which one has progressed economically and reduced poverty from 35% to 10% over the last 30 years? Of course, it is Botswana with a per capita GDP 6 times more than Zimbabwe. Zimbabwe remains economically depressed.

Chile hired some American economists to revamp their government policy and institutions. After they did, rapid growth and prosperity followed.

In our third short video explaining Economic Systems, we explained how Venezuela went from the richest country in South America to a dictatorship and poverty in the last 20 years following an increasingly socialistic approach.

Even Sweden, a poster child for some, tried to have government run private industry in the 70’s and 80’s but they realized it didn't work and went back to private enterprise. They tried the wealth tax, along with about 15 other countries and that didn't work. Almost all countries that tried it have repealed it (an overview of Sweden is in No Spin #23).

Russia, Cuba, Hong Kong. The examples of success and failure are many and ALL tell the same story - free enterprise works and socialism doesn't.


We have many examples of good intentions that just don't work. To paraphrase Milton Friedman, judge policy by results, not intentions. We have many examples of good intentions gone awry. See The Facts No Spin #10 covering the War on Poverty. After 20+ Trillion Dollars spent - there has been no improvement in the poverty rate.

Good economic policy, with proper incentives, works.


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