Which system is more conducive to human flourishing, capitalism or socialism? If you want people 50 years from now to live better, longer and happier lives, which of those two systems would you advise them to embrace?
Capitalism wins hands down. By encouraging work, innovation, entrepreneurship and customer service, it prompts creative people to produce the wealth that allows us to live better, longer and happier lives. Socialism, on the other hand, is not concerned about wealth creation; it wallows in redistribution and consumption, fueled often by envy and revenge. Socialists are most animated when they use political power to punish somebody (like the “rich”) and they are typically less interested in helping somebody. Socialists are far more generous with other people’s money than with their own.
From history we learn that socialism is the economics equivalent of the Hindenburg dirigible — puffed up with pomp and promise before crashing and burning. Then rather than learn from the experience, most socialists figure that if they just pull an all-nighter, they can get it right the next time.
What I really want the reader to know is the revealing story of two nations from recent times — Venezuela and Poland. In broad terms, one chose socialism, the other chose capitalism. The outcomes couldn’t be more starkly instructive.
Take gross domestic product per capita. In the early 1930s, the two countries were virtually the same by this measure. For the next 60 years, Venezuela’s mixed economy outperformed Poland’s heavily socialized one.
Then in 1989, a liberated Poland turned decisively in a capitalist direction — prices were freed; regulations, taxes and bureaucracy were slashed; private property, investment both domestic and foreign were encouraged; entrepreneurship was unleashed; and state enterprises were privatized.
In 1998, Hugo Chavez came to power promising a full-blown, unadulterated socialist program. “Power to the people!” he declared, as he socialized just about everything. Hollywood leftists proclaimed the dawn of a new society in which, for the first time, socialism would work.
Poland’s per capita GDP today is between six and seven times higher than Venezuela’s. Annual personal income after taxes is more than four times higher in Poland than it is in Venezuela.
The market capitalization of Polish companies stands at $197 billion. Venezuela’s domestic companies, by contrast, are worth a measly $3.98 billion. That’s barely 2 percent of Poland’s.
Socialists will take comfort in the fact that Venezuela is home to only a single billionaire (probably Nicholas Maduro pre-January 2026 or one of his friends), while Poland boasts 10.
Life expectancy in Poland (at 79.2) is more than six years higher than Venezuela’s 73.
Inflation is one of the very few measures in which Venezuela’s number is higher — a whopping 618 percent vs. Poland’s 2.2 percent. Another is national debt: Venezuela’s is 216 percent of GDP, while Poland’s is merely 64 percent.
Tourism tells a similar tale. In the most recent year for which figures are available, 429,000 foreigners visited the workers’ paradise of Chavez/ Maduro. In the same year, an astonishing 88.5 million visited Poland.
The natives are restless too. Since 1998, about eight million Venezuelans fled their country, fueling one of the largest diasporas since World War II. Nobody speaks of “Polish refugees” today.
Only socialists can look at Poland and Venezuela and arrive at the wrong conclusion. For everybody else, which system works and which does not is as certain as where the sun rises and where it sets.