- - Monday, July 29, 2019

In the 1980s, prior to the fall of the Berlin Wall, more than 60 percent of East Germany’s residents suffered from respiratory illnesses. Measured across all Eastern European countries, air pollution was 13 times higher than in Western Europe. The Soviet Union, meanwhile, was the first industrialized country to have a reduction in life expectancy not due to suicide or drug-related deaths.

Now, flash-forward to the present. An article in the International Journal of Epidemiology finds, “within a few years of the collapse of the Berlin wall in 1989, life expectancy started to steadily increase in the countries of CEE” — the Czech Republic, Hungary, Poland, Slovakia, Russia and the Baltic states. What prompted this dramatic turnaround? Economics.

The big change in the late 1980s and early 1990s was in the economies of CEE countries — they abandoned socialism and embraced capitalism. Statistical coincidence? Hardly. It turns out that socialism is not just a bad economic model; it’s a terrible environmental model. Planned economies and government-directed production dramatically mis-allocates resources, and not just to the detriment of economic efficiency, but to the near total destruction of the environment.

For example, before the arrival of capitalism and market-based prices, most planned economies greatly subsidized the price of electricity. The idea was to provide the social benefit of access to energy at a cost affordable to all members of society — socialist equality. 

But in fact, what happened was that heavy industries overused the cheap energy to the detriment of technological advances. It has been found that during this period market-based economies used only one-third of the energy per GDP unit of production that socialist economies consumed. As a consequence, the environment suffered from dirty over-production of electricity due to inefficient socialist planning models.



And, this brings us to the Green New Deal of Rep. Alexandria Ocasio-Cortez of New York. AOC’s chief of staff recently commented, “Do you guys think of it as a climate thing? Because we really think of it as a how-do-you-change-the-entire-economy thing.” Change the entire economy thing? From capitalism to? Yes, to a socialist planned economy. And yet, history demonstrates time and time again, not just the economic failure of socialism, but its devastating effect on the environment. Socialism and environmental protection are incompatible.

However, we’re told by the AOC crowd that there’s a new paradigm at work now. Older models — and the older folks who used them — don’t understand Twitter, so they don’t realize that things will be different this time. Fair enough, so let’s look at more current examples. How about Cuba and Venezuela?

The planned social democracy of Venezuela currently sees massive deforestation and repeatedly unconstrained oil spills. In June, the U.S. Agency for International Development found widespread water pollution to the extent that 70 percent of the country’s hospitals reported a lack of safe drinking water. Why? Lacking the accountability of private property ownership, and market-based price and cost systems, government agencies are accountable only to their plans — meeting their production goals at any cost, health and safety be damned.

And Cuba? Decades of government pressure to constantly increase production has resulted in almost total destruction of the Cuban environment. Agricultural production in the country is actually declining, and pollution is so advanced it was observed by the Marti News organization, “The contamination of over two hundred and fifty rivers and tributaries has caused high incidences of digestive diseases in most cities on the island.”

The Green New Deal as a model for both an environmental utopia and a blissful social democracy is more than just a dream — it’s a nightmare. It takes two diametrically opposed models and just says they’ll work together in spite of that never having happened in human history. Before ruining both the economy and the environment, the Democratic Socialists would do well to read Friedrich Hayek’s seminal work, “The Road to Serfdom.”

• Kevin Cochrane teaches business and economics at Colorado Mesa University, and is a visiting professor of economics at The University of International Relations in Beijing.

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