The Western Privilege of Terrible Economics
A strange luxury is alive in wealthy democracies: the liberty to dabble in terrible ideas and rarely have to pay the complete tab. Lets call this “The Western Privilege of Terrible Economics”. From fashionable campus manifestos to prime-time politics, socialism is once more touted as moral common sense, as though decades of evidence were simply an unhappy misconception. It’s billed as compassionate and contemporary, a solution to everything free markets supposedly ruined. It reads well in practice, but fails when the bills come due and the shelves turn empty.
What looks good on paper tells a different story on a grocery shelf
I was born in Venezuela. My family witnessed a middle-income petrostate destroy price signals, politicize production, and burn its currency until wages couldn’t purchase food. This is not a metaphor. Living standards cratered, hyperinflation became the invisible tax, and millions fled. Meanwhile, in elite institutions worldwide, the trend goes the other way. On campuses, socialist clubs are active, panels romanticize nationalizations, and speakers are applauded for vowing price controls and “free” everything. This phenomenon seems pervasive in the West. At the leading universities of my other home countries, Argentina and Brazil, it is common to see Che Guevara flags at rallies and to hear open sympathy for Nicolás Maduro’s authoritarian, socialist project. Che portraits are a vibe, not a history; the same students waving his face on a poster would be horrified by the Cuban regime’s persecution of homosexuals during the UMAP years ( I mean, who wouldn’t). The marketing is sleek. The results are very far from that.
Why the sales pitch lands
The romance persists in the world’s most influential countries because this messenger polls particularly well. Take the United States, for example: Recent surveys place Senator Bernie Sanders third among the most favorably viewed national politicians—often just behind the Pope and Volodymyr Zelenskyy—followed in fifth by a younger politician named Alexandria Ocasio-Cortez (AOC) who shares most of his economic beliefs. That tells us something fundamental about voter fatigue with insecurity, medical bills, and a sense that the game is rigged. But it does not change the meaning of the program being sold.
And the trend is not just hashtags and vibes. Consider figures such as Zohran Mamdani, a self-styled democratic socialist whose ascent from New York state politics to the likely new mayor has made him a movement leader. His platform is a grocery list of levers for market controls—rent freezes, fare-free transit, state-run grocery stores, and tax increases to pay for permanent expansions of the state’s role in daily markets. The aesthetic is Scandinavian; the mechanics are Venezuelan. The bet is that America can defer trade-offs in the world’s financial capital.
The Western privilege: costs that you don’t pay
Why does resurgent socialism sell in rich nations? In wealthy countries, expenses can be cushioned or exported. Capital can escape to more friendly regimes. High earners can move. Supply chains can be rerouted. The bill falls on the fixed and the unseen: small enterprises without lobbyists, renters when building slows, and would-be workers priced out by well-meaning mandates. Rob Henderson has called these “luxury beliefs”—beliefs that signal virtue to those who will not pay the cost. Supporting maximal state control while interning at a prestigious nonprofit is cheap. Supporting it while operating a corner store beneath layered regulation is not.
Socialism for dummies: the roadmap of how to destroy the economy
Start with price controls, the gateway drug to terrible economics. A price ceiling below market levels—on bread, gasoline, or medicines—sounds compassionate. But markets are information systems. Prices tell producers what to make, how much, and where. Cap the price, and you will mute the signal. Suppliers cut quantity or leave. Demand rises because the sticker is lower. The result is not affordability; it is scarcity—followed by lines, ration books, and, sooner or later, corruption and black markets. Venezuela’s “bachaqueo” was not a cultural quirk; it was the rational response to a system that prohibited legal profits and thus created illegal ones.
Rent control is the fancy cousin: if price controls are the gateway drug, rent control is the one your mother warned you about. Limiting hikes on current units seems merciful, but it penalizes new development and hastens the deterioration of the housing supply. Builders put projects on the shelf, landlords repurpose units for other uses, and the pipeline runs dry. Five years later, the same politicians complained about unaffordable housing and suggested more severe caps. The cycle repeats because the mechanism—price discovery—was intentionally broken.
Beyond that, the pattern repeats. Energy and food caps create empty shelves and smuggling; currency theater manufactures an official fantasy exchange rate for insiders and a harsher market rate for everyone else; politicized credit keeps bad projects alive while starving productive ones. The economy turns into a museum of intentions: beautiful posters, broken machines.
The buffers of wealth
Wealthy nations can play with such concepts longer since previous prosperity purchases time. Capital markets soften errors. Customers can swallow greater costs for some time. Governments are capable of borrowing in their currency. The institutional scaffolding—credible central banks, independent courts, and accumulated goodwill—delays the destruction. However, these are buffers, not miracles. Switch enough policy dials in the wrong direction, and the buffers collapse, gradually and then abruptly.
Cronyism isn’t a solution either…
To be clear, none of these issues excuse cronyism, regulatory capture, or winner-take-all capitalism, and it does not dismiss the moral impulse to aid the vulnerable that attracts many to socialism. Market power can be misused, inequality can eat away at trust, and health care, housing, and education face scarcity and gatekeeping. The question is not whether to care, but which levers deliver. The remedy is to open up supply and competition and build competent safety nets: legalize more housing, streamline permits to unleash energy, speed up generic drug approvals, and simplify the tax code so productive investment outcompetes lobbying. Deploy cash transfers and catastrophic insurance to backstop hardship directly, rather than distorting every market with a new ceiling or quota.
The Bottom Line
Very long story short: don’t bite the hand that feeds you. In this case the hand that has been responsible of feeding billions, while the other caused the largest famine in world history. Take your pick!
The popular rebirth of this idea should worry you. In affluent institutions and cities in the U.S., Argentina, Brazil, and much of Western Europe, the costs of ideas are abstract. “Public ownership” is a slogan, not the line item that starves maintenance budgets. Maduro is framed as complicated or well-intentioned, not as the leader whose security forces crushed dissent while food lines stretched for blocks. The social proof of lecture halls and hashtags creates the illusion that following basic economics is optional. It is not.
The popularity of Bernie Sanders and the campus zeal for planned solutions reflect valid aspirations for security, dignity, and fairness. They do not indicate that the math of command economics has gotten better. When scarcity is “repealed” by decree the consequence is a humanitarian caravan. The next time a politician offers Scandinavian results with Venezuelan means, remember who pays when the bill comes and that economics is a process for translating intentions into consequences and not a game of morality. Disregard the mechanisms, and consequences disregard intentions.
source featured image: https://portlanddsa.org/category/socialism-dsa/
