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"Experiments, with Korea."


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Diario de Navarra

Alvaro Bañón Irujo

Professor of Financial Management at the University of Navarra

"There is no shame. The Western capitalist system won the Cold War because it is inherently better."

In the second half of the 20th century, the two superpowers confronted each other on the Korean peninsula in one of the most bloody episodes of the "cold war". In 1953, the resolution of the conflict consisted in the division of the peninsula in two, north and south of the 38th parallel. In the north, a communist dictatorship was established, and in the south, the poorest area at the time, a capitalist democracy. Both started from the same point.

What has been the result of this experiment almost from laboratory? South Korea, the capitalist one, besides establishing itself as a consolidated democracy with all rights, occupies the twenty-ninth position in the world in per capita income with thirty thousand dollars per inhabitant, one position ahead of Spain.

North Korea, the communist one, competes for the sad honor of being the poorest country in the world with a per capita income of six hundred dollars. Fifty times less. We could use multiple indicators to highlight the abysmal differences between the two countries, remember that in 1953 they started from the same status, but perhaps the most dramatic is the difference in height. South Koreans have a height average between five and eight centimeters higher than their neighbors to the north. The reason? To eat regularly in the face of the problems of the North's communist regime, which is unable to feed its citizens.

And what is the purpose of this historical reflection? To highlight that socialist/communist solutions at Economics do not work. This is nothing new, they never have. In addition to the moral and ethical aspects, abominable and endless, the solutions they propose are ineffective in terms of wealth creation and distribution. Wealth is not created, it is destroyed.

For several generations it has not been necessary to explain it in Spain. It was only necessary to point out the example of Eastern Europe to understand that these regimes only created famine, hardship and destitution. In addition to witnessing the only wall in history erected by the government of the East to prevent its inhabitants from escaping the country. Walls are usually erected, unfortunately, to keep immigrants out. The communist regime erected it as a containment against the flight of hundreds of thousands of its inhabitants to capitalist countries in search of prosperity and freedom, a better future.

Western capitalism is not perfect. There are aspects that could be corrected, but it has more than proved to be the system that creates more wealth and distributes it better. People flee from Cuba to Miami, not the other way around. However, now in Spain, some shamelessly defend the same solutions that led to disaster in those Eastern countries during the second half of the 20th century: price controls in different markets, such as rent, see data for what has happened; invasion of economic sectors by public initiative; interest in the nationalization of companies, especially if they are multinationals; attacks on private property; obsession with economic equality; the massive size of the state; etc.

Obviously, no one will clearly propose the establishment of a socialist or communist regime from today to tomorrow. However, measures are gradually being introduced that not only restrict our freedom, but also undermine the capacity to generate wealth and the motivation of people, especially the youngest, to undertake, create value and earn money. The underlying idea is that it is better to be a civil servant and live off the public purse. That is, under the control of the State.

This is not being alarmist or extremist, it is a matter of stating the reality. Lately, it is accepted as normal that people of communist ideology occupy responsibilities in the national and autonomic governments. We have a Vice-president of the Government who, beyond cloying phrases, was the president of the Communist Party of Spain in Galicia. And she does not deny it. The former Minister of Consumer Affairs, Alberto Garzón, boasted of being an admirer of the former German Democratic Republic, where more than six hundred people were gunned down by the border soldiers of the communist regime for trying to jump the Berlin Wall. A few days ago, the current Minister of Equality defended Lenin on television.

In 2020, the Government of Navarre itself sent letters to legitimate owners of vacant homes, an end found out fraudulently, threatening them with their inclusion in a public rental exchange. And what was worse, there were citizens who saw this as a "logical" measure.

Ask the numerous immigrants from the East who have settled in Spain in the last decades. They will explain to you the "goodness of the system" that they suffered, how it equates to 20th Century Fascism and how both ideologies should be persecuted.

There is no need to be ashamed. The Western capitalist system won the Cold War because it is intrinsically better: it gives freedom, it creates more wealth, it motivates to create and because thanks to that motivation to undertake and earn money, society prospers. Remember that it was the citizens themselves, with the financial aid of great and very different characters such as St. John Paul II, Margaret Thatcher and Ronald Reagan, who broke down that wall of tyranny and poverty. It only remains for us to raise it here.