By Tom Quiner
In light of the Democratic Party’s embrace of socialism, it is worth contrasting its effectiveness when compared to free enterprise using real world examples. A perfect comparison is Cuba vs. Hong Kong.
In 1961, Cuba embraced unabashed socialism while Hong Kong embraced unabashed capitalism.
Interestingly, Cuba owns some nice assets, such as productive agriculture thanks to their rich soil; such as 7% of the world’s Nickel and Cobalt reserves; such as 20 billion barrels of oil reserves (top 20 in the world); such as tourism, thanks to their beautiful beaches. Oh, and their people were well-educated.
By contrast, Hong Kong had nothing except a harbor and uneducated people.
When the Castro brothers took over then-capitalist Cuba, how did they leverage their nation’s considerable assets? Under their new socialism system, per capita GDP rose from about $2500 in 1961 to about $4000 by 2007.
By contrast, Hong Kong’s per capita GDP grew from about the same starting point as Cuba in 1961 to over $30,000 by 2007.
To make this really simple, the Hong Kong economy grew more than 7 times faster than Cuba, as you can see on the accompanying chart. And that was with practically no assets.
When they started out, the per capita GDPs of these two countries were in alignment with global averages. But the economic drag produced by socialism, and the corruption that usually accompanies it, has ground Cuba into the dirt.
Interestingly, the Corruption Perceptions Index produced by Transparency International ranks Hong Kong as the 15th least corrupt public sector in the world (ahead of the United States’ 19th place ranking) compared to Cuba’s abysmal 63rd place ranking.
I present this data in the humble hope that a few socialist wannabes will rethink their infatuation with Cuba and the Castro brothers.