Sometimes socialism seems reasonable.
Emphasis on “seems.”
Take natural resource socialism. Ores and oil are “just there in the ground” and “belong to everybody.” So it “just makes sense” that “the people” should “own” the mining and drilling and refining industries, and run these operations to share the profits to help “everybody,” not just a few.
The Mexican government bought into this back in 1938, when it nationalized the U.S.- and Dutch-based oil companies. Today, the industry is under-capitalized, its equipment old and inefficient. Mexico itself is a mess. The government is corrupt and the people far poorer than would have been the case had they not bought into the nationalization mania.
The cause of the problems should not be in dispute. “By cutting off Mexican oil exploration from foreign investment and foreign know-how,” Ryan McMaken writes in an interesting analysis, “the Mexican state has only succeeding in making the Mexican oil industry less efficient, and less capable of taking advantage of the natural resources in Mexico.”
Which is why the government has been making tentative “liberalization” moves, de-monopolizing Pemex, the government’s oil outfit.
Unfortunately, though the damage done by bad government policy and monopolistic privilege is everywhere to see, many people (especially intellectuals) in Mexico blame “neo-liberalism” and non-existent “free markets” for rising prices and the specter of economic collapse.
Once bitten by the natural resource socialism bug, it’s apparently easy to dismiss evidence. Or the common-sense notion that government over-reach has made the mess they now struggle with.
This is Common Sense. I’m Paul Jacob.
1 reply on “Oil’s Bad that Ends Bad”
Yet, the alternative to socialism for everyone should not be socialism for the well-connected.