A certain amount of headscratching over on the left as Podemos doesn't make the predicted breakthrough in the Spanish elections:
It was supposed to be a historic moment for the left in Europe. Podemos, the anti-austerity party founded barely two years ago, was set to become Spain’s second force in Sunday’s re-run of December’s inconclusive election and, perhaps, be in a position to enter government in a leftist coalition. The polls were unanimous in this respect. Some people even began to think that perhaps the pollsters were being coy and Podemos might just end up snatching the election from the jaws of the conservative People’s party.
It didn’t happen. Not only that but Podemos, which had taken part in the election in coalition with other political forces, suffered a severe setback, losing about 1.1 million votes. Even though the Socialist party also slumped, Podemos went nowhere near overtaking them as everybody had been expecting.
Why did the polls get it so wrong?
We don't insist that we are correct in this diagnosis but we would hope that we are. The result simply being that the Spanish voters had a look around the world and went "Naah, no thanks".
We do not, by any means, back the idiocy that euro membership has forced upon Spain as economic policy. As with Greece the correct policy to have followed was that devaluation that could not be done.
However, the plan on offer from Podemos was alarmingly close to those policies which have worked so well in Venezuela. And do please note that the shortages and rationing there started well before the oil price slide. This is not controversial by the way, Podemos, as with Owen Jones and others, were praising Bolivarian socialism well past the point that it had started to implode even if they're now viewing events with a "Who, me?" insouciance.
What that Venezuelan experience has told us is that we do indeed have a spectrum of economic policies available to us. Ranging the entire spectrum from Hong Kong style laissez faire free markets all the way through to tax and benefit heavy free markets like the Nordics. where you want to be on that spectrum will be a matter of your trade off between equity and efficiency - we go for the efficiency side of that as we think that equity should be considered inter-temporally. Increasing equity today at the cost of making the future poorer is not justified beyond a very limited amount. But we understand that not all moral compasses are as firmly butted as our own.
The importance of this all being that non-market systems simply do not work. Yes, of course, there are areas (externalities, public goods, there's a list in every textbook) where pure free markets don't work well if at all. But the general basis of a workable society simply does have to be market based. If that's a lesson that all take away from that Venezuelan disaster then that, even if not the disaster, is a good thing.
And our suspicion about the Spanish result is that people are grasping that.