Central economic planning has never worked, and never will. Venezuela is an excellent example, as a friend pointed out with sharing a Bloomberg article about the new minimum wage in the tail-spinning socialist country:
Starting this week, 7 million employees are guaranteed 1,800 bolivars a month -- worth about $20 at the black-market rate. President Nicolas Maduro intended the mandate as political boost, but it’s having the opposite effect as companies, already hit by Venezuela’s epic economic contraction, tell workers they can’t afford to keep them. While there have been many similar moves in the past, never has one been so disruptive, arriving amid hyperinflation, depression and devaluation. Some employers are restructuring costs, rejiggering pay scales and negotiating settlements with workers. Others are simply dismissing people. Much of the action happens secretively as companies try to avoid punishment by the government, which has been jailing those it believes are flouting the rules.
Some businesses are afraid to close because you apparently need government approval to shut the doors. Together with all the other government controls imposed on the economy, Venezuela is now the 21st century epitome of central economic planning. The country is a monumental economic disaster zone, with one million percent inflation, widespread starvation and a population fleeing just about anywhere to get away from the gift that is socialism and economic central planning.
I cannot help wondering how many of the Venezuelans who are now suffering madly under their totalitarian regime, who voted for Hugo Chavez - the now-defunct leader of the "Bolivarian revolution" - when in 1999 he started his country's descent into egalitarian Hell. It would also be interesting to hear from those who continued to vote for him, what hindsight tells them when they have to kill their pets to put food on their children's plates.
The only silver lining in the central-planning disaster is that we now have a solid century of experience with it. After the revolution in late 1917, the Soviet communists began their remaking of the Russian economy in 1918. Therefore, when it comes to the horrors that economic central planning brings with it, we are equipped with good material to resist it.
One area where we might want to apply this knowledge, is green central planning. For at least four decades now, the environmental movement, the origins of which are more than a little shady, has been advancing their own version of central planning. We are now beginning to see the consequences at a systemic level. A recurring example is the unrelenting push to put us all into "environmentally friendly" vehicles, the problems with which are only getting more serious. The latest example is from Toyota:
Toyota Motor plans to recall more than 1 million vehicles due to an issue with the engine wire harness which can pose a fire risk. The models affected include the gasoline-hybrid Prius model, in Japan, North America, Europe and other regions. Japan's transport ministry issued a domestic recall announcement, according to Reuters. The automaker said that in affected vehicles, the wire harness which connects to the hybrid power control unit can come into contact with the covering at the connection point. According to Toyota, the insulation on the wires could wear down over time due to vehicle vibrations, which could cause an electrical short circuit, leading to a risk of fire.
The construction, maintenance and repair of hybrid vehicles is not exactly an environmentally friendly endeavor. Some of the more atrocious aspects include the enslavement of children in Africa for the purposes of extracting a precious metal, essential to the production of hybrid batteries. Yet the green central-planning efforts continue in the form of massive government subsidies and a regulatory machine favoring electric power over internal combustion.
An even better example of what this central planning leads to is the "green car" scam known as Tesla Motors. This house of tax-paid cards continues its tailspin and will hopefully be re-organized to live strictly on the free market, or have to shut its doors. The former alternative would be better for the employees; both would be good for taxpayers.
Wind power is another staple of green central planning. How many times have we not been told that wind energy is renewable, clean and capable of replacing almost all fossil fuel, and solar power will take care of the rest?
As it turns out, wind energy is not that environmentally friendly after all. On the contrary, as demonstrated in an innovative Chinese research project, wind energy it is actually harmful to the environment:
Wind farms (WFs) can affect the local climate, and local climate change may influence underlying vegetation. Some studies have shown that WFs affect certain aspects of the regional climate, such as temperature and rainfall. However, there is still no evidence to demonstrate whether WFs can affect local vegetation growth, a significant part of the overall assessment of WF effects. In this research, based on the moderate-resolution imaging spectroradiometer (MODIS) vegetation index, productivity and other remote-sensing data from 2003 to 2014, the effects of WFs in the Bashang area of Northern China on vegetation growth and productivity in the summer (June–August) were analyzed. The results showed that: (1) WFs had a significant inhibiting effect on vegetation growth, as demonstrated by decreases in the leaf area index (LAI), the enhanced vegetation index (EVI), and the normalized difference vegetation index (NDVI) of approximately 14.5%, 14.8%, and 8.9%, respectively, in the 2003–2014 summers. There was also an inhibiting effect of 8.9% on summer gross primary production (GPP) and 4.0% on annual net primary production (NPP) coupled with WFs; and (2) the major impact factors might be the changes in temperature and soil moisture: WFs suppressed soil moisture and enhanced water stress in the study area. This research provides significant observational evidence that WFs can inhibit the growth and productivity of the underlying vegetation.
The part about soil moisture and water stress should alarm people in our western states, where dry climate is already a challenge for both farmers and ranchers.
Green central planning is yet another example of how public policy is being guided by an ideology rather than the protection of individual and economic freedom. With some luck, the regulatory rollback under the Trump administration will mark the turning point for green central planning in America, but we are by no means out of the woods yet (no pun intended). It is of paramount importance that we remain vigilant in fighting the destructive machine of central planning, regardless of the color of its clothes next time it shows up on our doorstep, asking us to change our lives and pay more taxes.