Now that the youth actively votes Bernie Sanders, Mélenchon and Corbyn in the name of social justice, we often hear how free-market politics only benefit large corporations, while leaving the rest of the population poor and exploited. However, behind Corbyn’s “for the many, not the few” lies real dangers. I come from post-communist Georgia and I believe that the Georgian case well illustrates the economic model that works for the many and the one that works for the few.
After 70 years of Soviet rule, Georgia left the USSR in 1991. Communism or in other words a big government and an inefficient economy had produced an ugly system where only a minority – bureaucrats – had resources, while the rest of the population was equally poor. “Free goods for everyone” soon became no goods for everyone as shortages became the main feature of the Soviet Union. Corruption was like a growing cancer – it had spread in every sector of the state: education, healthcare, police. In the 90s, it seemed like there was no cure.
Following the 2003 Rose Revolution, a new governing elite embarked on the mission to overhaul the economy in what was then considered to be a “failed state”. Kakha Bendukidze,a great reformer and at that time Minister of the Economy, was a true free-marketer who believed that the recipe of success lied in a small state and greater economic liberties. “Government are at best useless, and at worse counter-productive” he said.
By 2007, Georgia had 12.3% of GDP growth, modernized public services, four time’s higher foreign investment, low corruption and most importantly – a middle class.
How did a country burdened by soviet legacies and lacking natural resources manage to become a success story in the post-soviet region? By limiting the role of the state and by giving greater freedom to economic actors. The logic behind this was simple:
The speed, the efficiency and the quality of reforms decreased the level of corruption significantly, which led the World Bank to call Georgia’s anti-corruption reforms a ‘unique success’. The laissez-faire economics resulted in a flexible labour market, low tax rates and simplified barriers for new businesses. This increased Georgia’s attractiveness in the region and consequently, improved foreign investment. By 2010, Georgia ranked in the top 15 economies in the World Bank’s Doing Index Business.
Liberalization, greater individual responsibility, a small state and the will to reform overhauled an impoverished, corrupt economy and created a middle class. Kakha Bendukidze, with his allies, managed to transform a broken, rusted machine into a functioning economy. Today, Georgia is no longer considered as a failed state. It has a long road ahead and poverty remains a serious challenge yet we learnt that the solution does not lie in socialism. Georgia’s success story too, does prove how a small state can make everyone, including the poor, better off.
Obviously, Britain is not the Georgia of 1991 and socialism is not soviet communism. However, Corbyn's thinking remains dangerous. If Soviet Union is outdated and does not sound convincing anymore, a more recent example would be Venezuela. A country that should have been prosperous and wealthy, is now completely destroyed by socialism. The ill-advised policies led to a starving population experiencing constant shortages of food and medicaments, corruption and high crime rates.
History teaches us that often, by limiting economic liberties, the state ends up limiting political freedom. In Venezuela, this has led to violence, chaos and political instability. In Britain it is less likely but remains a possibility. Jeremy Corbyn fights for “ideals” yet fails to fight for everyone equally. For example, he criticizes imperialism but does not criticize Russia for annexing Crimea. He urges Grenfell Tower victims to use Kensington’s houses, yet totally disregards the concept of private property. His one-sidedness is frustrating and his disrespect for democracy and sovereignty is alarming. His ideals of "social justice” and his methods are not going to deliver a fair and prosperous society. Raising taxes on the rich and punishing those who are successful is not the solution to poverty. It will impoverish Britain as a whole and it will not make the poor better off. On the contrary, it will make everyone poorer.
As Margaret Thatcher once said “Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them.”
Instead, the Conservatives should put greater emphasis on meritocracy, hard work, individual responsibility, independence and liberty by creating opportunities. Those are the principles that might inspire the youth.