What Russia and China Know That We’ve Forgotten

What Russia and China Know That We’ve Forgotten

By Mark Nestmann • September 24, 2019

Starting in the fall of 2003, I spent nearly two years living in Vienna, Austria. I was there to earn a master’s degree (LL.M.) in international tax law from the Institute for Austrian and International Tax Law.

One of the most stimulating aspects of my time in Vienna was the opportunity to interact with other students. They came from all over the world, including Russia, China, Mexico, and of course, Europe. Since the courses were taught in English, all students needed to be proficient in my mother tongue. That made it much easier for me to communicate with them.

Between lectures, my classmates and I would congregate in the lounge of the Accountants and Auditors Academy, where classes were then taught. And we had some fascinating conversations about the proper role of government.

In one freewheeling exchange, I was part of a group that included students from China, Belgium, and Austria, in which we discussed how our respective societies dealt with tax evaders. “We rarely put them in jail,” I volunteered. “Unless you do something really bad, you usually just pay a fine.”

A Belgian student took issue with imprisoning tax evaders. “That’s an absolutely last-ditch solution,” he responded. But a student from China disagreed. “In my country, we shoot them,” she said.

Another discussion revolved around whether capitalism or socialism was the superior way to organize a society. Most of the students from Europe advocated socialism. One young man from Austria remarked, “Capitalism is so heartless. The only realistic alternative is socialism.”

A Russian student responded, “We had socialism in the Soviet Union for 70 years. And you know where it left us.” The student from China who had previously shared her knowledge of how her country punished tax evaders chimed in as well. “China was socialist for many years,” she reminded us. “It wasn’t until the government brought capitalism back in the 1980s that hundreds of millions of people in my country emerged from poverty.”

Investopedia defines socialism as “a populist economic and political system based on public ownership … of the means of production.” And while the idea that all of us should have an equal share of in the economy is superficially attractive, billions of people have first-hand knowledge of why socialism simply doesn’t work. While Russia and China no longer can be considered socialist economies, it’s alive and well in economic wastelands such as Cuba, Nicaragua, North Korea, Venezuela, and Zimbabwe.

Yet, despite overwhelming evidence that socialism doesn’t work, it’s now viewed favorably by tens of millions of Americans. Overall, 43% of Americans now believe that our country should embrace socialism. More than 50% of Americans under the age of 30 view socialism positively.  

A case in point is the “Green New Deal” introduced in Congress by Rep. Alexandria Ocasio-Cortez (D-NY). The proposal would fundamentally transform the US economy. Among other initiatives, the Green New Deal would give all citizens universal health care coverage, federally guaranteed jobs, federally guaranteed housing, and a free college education.

While the Green New Deal isn’t socialist in name, its objectives sound a lot like it. As Ocasio-Cortez’s chief of staff, Saikat Chakrabarti, puts it:

The interesting thing about the Green New Deal is it wasn’t originally a climate thing at all. We really think of it as a how-do-you-change-the-entire-economy thing.

And the price tag? The Republican National Committee (RNC) estimates the Green New Deal will cost US taxpayers as much as $93 trillion. The non-partisan Aspen Institute uses the RNC’s tally as the upper limit of the Green New Deal’s cost. The low end of the range, though, is still a whopping $52 trillion.

The young Chinese and Russian students in my LL.M. program had first-hand knowledge of what socialism really looks like. It wasn’t a pretty picture. Perhaps the millions of millennials who embrace it today should talk to a few of the millions of refugees who fled socialist countries to find better lives in capitalist societies.

Are you listening, Alexandria Ocasio-Cortez?

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About The Author

Since 1990, Mark Nestmann has helped thousands of clients seeking wealth preservation and international tax planning solutions. He is the author of highly acclaimed Lifeboat Strategy and other books & reports dealing with these subjects.

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