Can Economic Development Survive without them?
We are in the midst of our national election. As American citizens, we have the right and the privilege to vote. We need to feel confident our process is fair. Our freedoms are most evident when we exercise our right to vote. Our country is based on a government of the people, by the people and for the people. Economic development depends on these freedoms. There are plenty of examples where lack of fair and free elections prohibit freedom and economic development.
Kim Jong-un rules North Korea
. His father, Kim Jong-il, and grandfather Kim Il-sung, ruled before him. This dynasty has ruled since North Korea’s founding in the 1940s.
The government controls all means of production. Severe grain and food shortages have caused widespread starvation and malnutrition throughout the country. A black market trade with China exists with the by-product of massive inflation.
“By 1958 all privately owned farms were incorporated into more than 3,000 cooperatives; each cooperative comprises about 300 families on about 1,200 acres. The farm units are controlled by management committees, which issue orders to the work teams, set the type and amount of seed and fertilizer to be used, and establish production quotas. Produce is delivered to the government, which controls distribution through state stores.”
“At an industrial park where they build appliances and other products for companies from South Korea, 55,000 North Koreans typically earn about $62 each a month.”
Two pounds of apples or potatoes costs $16.
Probably not a lot of entrepreneurship going on in North Korea.
Then there’s Venezuela
, which was once the wealthiest and most stable democracy in Latin America. The economy was not diversified and the country relied on oil. Oil prices tanked and the country was in debt. The government artificially inflated the currency. They wanted voters to be happy with cheap imported goods. They were, but this resulted in no incentive to create their own industries. They implemented austerity measures. There was widespread corruption.
Lieutenant colonel, Hugo Chavez led a coup against the government. More than 100 people were killed, but his coup was defeated. The government released Chavez from prison after two years, in the name of national unity.
An ardent supporter of Socialism, Chavez spoke in Cuba, but later softened his rhetoric, ran for president and won. His first priority was to re-write the Constitution providing new rights to free government-provided health care, college, and “social justice”. The structure of the government was similar to the U.S. model, with a Presidency, a legislative branch, and a Supreme Court. After several Supreme Court rulings went against Chavez, he “stacked the court” by passing a law to add 12 new justices, that he would choose.
Millions fled the country as mass starvation and violence ensued after socialist policies were enacted and government seized private industries, including media outlets, oil and power companies, mines, farms, banks, factories, and grocery stores. Homicide rates doubled, inflation was one of the highest in Latin America, opponents were silenced and people waited for eight hours in line for basic necessities like food.
Chavez had a high approval rating to start, but people turned against him, including allies and the military. An anti-Chavez protest march resulted in deaths and injuries and then there were two more military coups. The first due to the violence and the second because the interim president dissolved the Constitution. The military recognized Chávez’s vice president, Diosdado Cabello, as successor. Once sworn in, Cabello restored Chávez to power. Chavez would continue to give out freebies, all the while consolidating more and more absolute power, especially over the election process. Before Chavez died of cancer, he designated Nicolas Maduro as his successor. There is continued dispute over who is president.
What are the common results of countries who do not have elections or have fraudulent elections, act as totalitarian or authoritarian governments embracing Socialism and Communism?
- Seizing control of all production - nationalizing all businesses
- Lack of innovation and competition
- Seizing private property
- Food shortages, malnutrition and starvation
- Low wages
- Dissent not tolerated with a crackdown on free speech
- Consolidation of power to a few elite – control of election process and more
- Failing economies
- Low quality of life
Obviously, economic development is impossible in these situations. The goal of economic development is the opposite of these results. Economic developers strive to help citizens create wealth by facilitating the creation of high-wage jobs. We celebrate a free and open society where innovation and competition are promoted as ways to achieve higher quality, solve problems and raise the standard of living. Economic development organizations like ours work with educational institutions, government, employers and others to help citizens improve their lives. The goal is for everyone to have the opportunity to get an education, obtain a good-paying job, provide for family, live in a safe neighborhood and live their lives freely with self-determination. Only free, fair and democratic elections in a free society provide the environment for economic developers to help citizens thrive.