Last night in Dublin I was having a conversation with a 65-year-old man who was ranting about the high unemployment rate in the European Union, which in the 17-nation currency area rose to 12.2 percent in April. The current unemployment rate is a new record since the data series began in 1995. My new friend was very open about being an outright socialist and said that Europe’s problem is that people are not being treated fairly.
Capitalism, he explained, promotes a culture where people do not share their resources because it encourages inequality. To solve the European unemployment crisis, my friend suggested that Europe “needs a dictator” to come in and simply tell everyone what to do so that there will be true equality. The problem, however, my Irish friend confessed, is that when someone gets in a power “they get carried away with it,” and people end up being taken advantage of. He did not seem able to connect the dots that countries that have tried socialism and dictatorships are countries where the poor are worse off in the long-run. Therefore, his proposal will not work.
The conversation raised several questions for me. To start, I wondered why this 65-year-old man drinking a Smithwick’s beer, sitting next to me drinking a pint of Guinness, did not see that we were both experiencing equality thanks to the free market, property rights, and the rule of law. I also wondered why he thinks that something like socialism would be the best way forward given the fact that a form of it is currently not working in the European Union.
While a 12.2 percent unemployment rate is a number that we are used to hearing since 2008, young adults are feeling this worse than any age group. For example, for those under 25-years-old in Greece the unemployment rate is 62.5 percent. In Spain, unemployment surged past 56 percent this year. In total, there are 26 million young people in formally rich European Union countries who are as “NEETS”(Not Employed, or in Education, or Training).
For my Irish friend this data justifies a call for socialism as a solution, but he does not see that the European Union’s socialistic planned economies created a Europe where 26 million young adults have no employment prospects in the future and are despairing about life in general. In fact, suicide rates have significantly increase since the economic downturn all over Europe.
What my Irish socialist friend really wants is a world where everyone has an equal chance to have a good life. This is what we all want. So the central question is not about how we distribute resources but how freely people are to exchange their resources for everyone’s benefit. The kind of equality that make societies work is the kind where people are free to perform and make their own contribution to the common good. David Schmidtz helps us here:
Historically, the welfare of the poor always—always—depends on putting people in a position where their best shot at prosperity is to find a way of making other people better off. The key to long-run welfare never has been and never will be a matter of making sure the game’s best players lose. When we insist on creating enough power to beat the best players in zero-sum games, it is just a matter of time before the best players capture the very power we created in the hope of using it against them. We are never so unequal, or so oppressed, as when we give a dictator the power to equalize us. By contrast, the kinds of equality we have reason to care about will be kinds that in some way facilitate society as a positive sum game. . . . the kind of equality that is liberating is also the kind that historically has been a key to human prosperity—namely, acknowledging people’s right to use their own judgment about how to employ their talents under prevailing circumstances, as free as possible from encumbrances of a race-, sex-, or caste-defined socioeconomic roles.
Planned economies and socialistic governments employ the opposite framework by making unequal decisions about who gets what. The best thing that could happen for the 26 million “NEETS” is for the European Union to dissolve so that working adults can have a decent chance at meeting their own needs and those of their families through a positive sum game because redistribution has helped no one.