There's some critical points that Reason article left out. In referring to DeSoto, an important part of his premise is that capitalism is a system for the poor. If it is not applied to the poor in sufficient quantity, it doesn't work.
Thus, when the bulk of development aid or government supplied capital gets squirreled away by elites, or laws are enacted that preserve the capital of the elites in a way that blocks too much capital from ever reaching the poor, capitalism will fail the majority.
Laws that limit taxation too much, then, can be counterproductive, if the sole beneficiaries are the elites.
I agree that socialism, with its heavy tax burden, can grind away a nation's productive capacity. But so can a tax system that limits capital availability to the poor that is inevitably championed by Social Darwinists under the guise that the elites create jobs but the poor would squander the capital in unproductive ways, which is why they're poor to begin with.
Ultimately, Sweden will have to shed some of its socialism to stem its decline. But that is not to say that all socialistic policies lead to bad results. Social Security and Medicare helped elderly US retirees to lower poverty rates than any other age group, for example.
Where socialism is least needed is among healthy adults capable of productive labor. But even there, public education and short term emergency aid (like unemployment compensation or job retraining) have sufficient merit to avoid the risk of dependency that some forms of socialism can lead to, counterproductively. |
