One of the worst disasters in Britain’s peacetime history happened on July 26th, 1945, when a Labour government headed by Clement Atlee swept into office with a landslide majority of 145, sweeping wartime leader Winston Churchill from office. The UK had been on the winning side of the war, but was soon on the losing side of the peace.
It was reckoned that Labour’s promise of nationalization, a National Health Service and a welfare state appealed to voters, especially those who had fought for Britain’s future against Nazism, and who wanted a new and better world. Alas. They were in for a cruel disappointment. The monies that could have rebuilt Britain’s war-shattered industry and economy went on transfer payments instead of investment.
A system of compulsory insurance for healthcare, with government meeting the premiums for those unable to do so, would have given universal coverage, and created a huge fund that insurance companies would have invested in the economy. Instead a zero-sum game was created, with a giant bureaucracy that was simply too big to manage. The founders actually thought that health expenditure would diminish as people were cured of ailments, but instead created a potentially infinite demand.
The nationalization of Britain’s industries turned them into loss-making, subsidy-dependent monsters that served the interests of the unions, political paymasters and bureaucrats instead of the public who were their consumers. They became a laughing stock and a joke, turning Britain into “the sick man of Europe” with the worst strike record and the lowest growth rate in Europe. That was until we privatized them under Margaret Thatcher.
The blunt fact discovered the hard way then was that socialism doesn’t work. Markets allocate resources, weed out the inefficient, and bring success to those who satisfy consumer demand at prices they are prepared to pay. Socialist planners do not. They leave industry serving political, rather than economic, ends, and under Atlee took huge strides into running it into the ground. It took decades for the UK to recover from the damage that socialism inflicted upon it in that disastrous government of 1945-1951. When the voters heaved it on the scrapheap to return Churchill to power, it was already too late.
The point is that socialism was, and is, a construct of the mind, a vision of a mythical world that might be, one that bears little relation to the real world. It was a disaster then, and would be a disaster now. No-one who experienced that immediately postwar world would want to return to it. Yet the policies that socialists propose today would undoubtedly reproduce its squalor and poverty, just as they have done in Venezuela. One is left wondering how many times we have to repeat that disaster before its lesson is finally beaten into their thick skulls. It doesn’t work.