Millennials Get It Wrong about Socialism

Last month’s 100th anniversary of the Russian Revolution is an appropriate occasion to remind us of the human atrocities committed by communist regimes. But we also should take time to reflect on the progress that has occurred since the fall of the Soviet Union and its socialist economic system in 1991.

A recent poll of Millennials found that 51 percent of them identified socialism as their favored socioeconomic system, with an additional 7 percent identifying communism as their favored system. Only 42 percent favored capitalism.

Socialism Kills, Always

Most Millennials I’ve met—and I meet quite a few as a college professor—are nice enough people. Most have no desire to see their fellow humans suffer. So I’m left to conclude that they have no appreciation for how socialism actually works in the real world.

Socialist regimes—through executions, intentional starvation, and brutal prison-work camps—killed more than 100 million of their own citizens in the 20th century. In places such as Cuba, North Korea, and Venezuela the atrocities continue.

Such atrocities are no accident. The nature of a centrally planned economy reduces humans to labor inputs who must be coerced to perform a part of someone else’s economic plan. If people are permitted to make their own choices, no economic plan is possible. A socialist system naturally selects leaders willing to exercise coercion to see that the plans are carried out.

The economic track record of socialism is as dismal as its human rights record. But we need not direct Millennials to history books to see it. They need only look at what has happened to former socialist countries during their own lifetimes, as these countries have moved away from socialism and towards capitalism.

Economic Freedom Leads to Better Outcomes

The Economic Freedom of the World Annual Report provides the best measure of the degree to which a country is relatively capitalist or socialist. The index relies, of course, on the availability of reliable data. Consequently, socialist regimes, like Cuba and North Korea, are unranked because of the lack of such data. But the index does allow us to assess changes in former socialist countries since they abandoned socialism.

Russia, for example, scored only 4.3 on the index’s 10-point scale in 1995, when it was first ranked. It has since improved its score by 52 percent and now ranks in the top 50 percent of all countries included in the index.

Other former Soviet-bloc countries moved toward capitalism more quickly. In the rankings in 1995, Estonia scored a 6.2 and Latvia a 5.7, ranking 57th and 75th, respectively. Since then, Estonia has moved up in the rankings to 17th place, and Latvia has jumped from 75th-freest economy in the world to 26th.

Outside the former Soviet bloc, China began its move away from socialism in 1978, just before the first Millennials were born. China’s first score was 3.6 in 1980. China has since improved by 76 percent and even this improvement understates China’s reforms as many special enterprise zones within China are much freer than the country as a whole.

But the rankings don’t tell the entire story. The result of the move toward capitalism has been increased prosperity: The people are better off. Average incomes have increased 250 percent in Russia since 1995. In more economically free Latvia and Estonia, incomes are up 487 percent and 461 percent, respectively. And it’s not just the rich getting richer. The percent of the population living on less than $5.50 per day has dropped 23 percent in Russia, 19 percent in Latvia, and 22 percent in Estonia.

The changes in China are even more striking. Average incomes are 12 times greater now than in 1995. More than 90 percent of the population lived on less than $5.50 a day back then; today, only about one-third of the population does.

Millennials could delve into history books to learn about Socialist atrocities. But they could also just look at the facts of the world and see how prosperity has increased as the former socialist countries have begun embracing capitalism. If they’d do either, I doubt you’d find many socialists among them.

Reprinted from the Independent Institute

Benjamin Powell


Benjamin Powell is the Director of the Free Market Institute at Texas Tech University and a Senior Fellow with the Independent Institute. He is a member of the FEE Faculty Network.

This article was originally published on FEE.org. Read the original article.

Millennials Are Obsessed with Cryptoassets

Millennials Are Obsessed with Cryptoassets

Now, this is revealing. The New York Times ran a piece on Bitcoin with this sentence: “from less than a cent in early 2010 to around $2,600 currently.” The problem is that when the story went live, the price was actually $3,400.” An editor didn’t think to check it, because he or she didn’t know to do so.

This is how quickly these markets are moving. Not even the people assigned to be experts know enough to do a competent edit.

And this is precisely why so many of us are constantly intrigued by these markets.

Cryptofriends 

Last week, when the NYT story was being filed, I was sitting at the national convention of the Young Americans for Liberty, feeling a vague sense of discomfort for one ridiculous reason. It had been a full day since I had talked with anyone about cryptoassets. So I grabbed the nearest dude and threw out a couple of observations. He lit up. He could talk ICOs, trading platforms, obscure coins and services, with the best of them. Soon others arrived. Then more. Pretty soon we had a big crowd, all talking and thinking about these bizarre new ways to invest.

Pretty interesting. I could never have assembled such a posse of group discussion if I had been talking about bank stocks and the S&P 500. Too boring. The crypto market, on the other hand, is incredibly interesting, lucrative, changing and wildly dynamic. Yes, many people lose their shirts. This is not a disgrace but a bragging right. If you have bought high and watched the thing fall to zero, it only demonstrates your derring do. If you have made money, you are a bit cheeky about it because, after all, these markets are edgy.

There is some glory in checking your smartphone in the middle of the night to find that your assets are up 10% since you went to bed. When you wake up and you are down 20% total, it’s sad but still exciting. That’s why people play these markets. And some people are truly winning.

What does it mean to be a millionaire but all your assets are in brand new digital things with names like BCH, NEO, GBYTE, FCT, or DSH? And do you really want this information known? Probably not.

It’s a Mania

Another scene: I’m at the UPS store and paying with a Bitpay debit card. The guy behind the counter nonchalantly says that his choice coin is Monero. I banter with him a bit. We do what everyone in these discussions does: we test the limits of each other’s knowledge. Who among us is the more tech savvy and experienced. Discerning that gives insight into the real question: what is your crypto net worth?

How likely is it that some dude I bump into at a mail service would know anything about this new thing going on? Could be a coincidence. Or he could be the voice of a generation. According to the New York Times, the second conclusion is the more likely truth.

After years as a niche market for technologically sophisticated anarchists and libertarians excited about a decentralized financial network not under government control, digital coins may be on the verge of going mainstream…. Cryptocurrency has understandable appeal to millennials who came of age during the 2008 financial crisis and are now watching the rise of antiglobalist populism threaten the stability of the international economy.

Typically with such reporting, there are great insights in this story, despite the misquoted price. The 2008 financial crisis traumatized a generation. They no longer trust banks. Conventional financial markets are driven by electronic trading, and there is no way to beat the market in the short run. Plus, there is the draw of the new and techy. Young people have no assets but they do have tech skill. Crypto markets are easy to get into and you are rewarded for knowing your way around. Older people tend to lack such skill, and they are afflicted by incredulity: surely this market is nothing more than a techno tulip mania.

I can recall being in front of an audience of 3,000 people some three years ago, interviewing a major and famous global investor. In passing – slightly expecting to be ridiculed – I asked about Bitcoin. He blew up in fury, as if I had committed a faux pas. This is a fake, he said, just like all social media platforms and time-wasting video games. If young people think this is productive, they are sadly mistaken. This country needs to get back to making things rather than taking food selfies.

I was crypto shamed.

And that was that.

Meanwhile, the dollar exchange ratio of Bitcoin moved from $30 to $3,000. Our savvy and “mature” and responsible investor was completely wrong. And he had misinformed thousands of people who had paid for his advice. And he was wrong because of the old Latin phrase: “Damnant quod non intellegunt.” They condemn what they do not understand.

The young have no such hangups. They don’t need a theory to justify their interests. They discern that the market is pointing a certain direction even if they do not know why. You could chalk it up to naivete of youth. Or you could look at the old investor and observe that his failure to believe is due to the foolhardy incredulity of age.

What It Is

Let me attempt, yet again, to explain why these markets are not tulipmania. Tulips had always existed. Cryptoassets, on the other hand, are a new innovation. What is it? Some people understood early on. For people not stuck in the old ways, not biased by prevailing practices, this was promising and exciting.

For the rest of us, it took time. It’s true that it is a way of hacking the internet to make a market-driven money. It’s true that the blockchain technology that backs cryptoassets makes for a great payment system, far faster, cheaper, and better than existing practices. Millennials know that the old way failed and, because of experience, they trust that there is a technological solution, even if old-world institutions are slow to adopt it.

There’s more going on than just that. This technology is the newest and best iteration of a universal human demand to document ownership rights. After many years of struggling to understand this, this is my best-possible explanation. Humanity documented “mine and thine” since the ancient world: stones, clay, parchment, vellum, databases. There must be a record to compel social assent to anything.

And it is not only about rights. It is about rules. But the failing of every previous piece of technology has been that it has been centralized: only one authoritative copy. Blockchain distributes that knowledge and authority to an infinite number of nodes.

Is that an innovation? Yes. It’s everything. With millions of applications, only one of which could imply the possibility of abolishing government money and central banking in favor of a market-controlled money. And that’s just the most obvious. Blockchain actually offers up the hope that humanity can learn to master its own affairs on a purely voluntary basis: no need for coercive relationships, geographical jurisdictions, or preemptive revenue collection by force. It’s the realization of the old liberal dream.

But not yet. It will take decades to get there. In the meantime, young people are having a blast. Good for them. They understand more about the world than those who are charged with copy editing the New York Times.


Jeffrey A. Tucker


Jeffrey Tucker is Director of Content for the Foundation for Economic Education. He is also Chief Liberty Officer and founder of Liberty.me, Distinguished Honorary Member of Mises Brazil, research fellow at the Acton Institute, policy adviser of the Heartland Institute, founder of the CryptoCurrency Conference, member of the editorial board of the Molinari Review, an advisor to the blockchain application builder Factom, and author of five books. He has written 150 introductions to books and many thousands of articles appearing in the scholarly and popular press.

This article was originally published on FEE.org. Read the original article.