The dramatic fall in value of the British pound teaches the most important lesson Americans should learn before they vote in the November election; the economic failure of the Welfare State.
From England the message is coming through loud and clear: Don’t follow the siren sounds of the socialists planners who claim they can redistribute the wealth and build a more just society. Don’t swallow the demagoguery of the politicians who try to buy the people’s votes with their own money by catering to special interest groups.
Don’t follow the utopian plans of the elitists who preach that they can build the Kingdom of Heaven in this world right now by government decree.
For the last 30 years, Britain has had nationalized electricity, gas, water, coal, steel, railroads, and long-distance trucks and buses. Nobody profited by this government takeover, certainly not the taxpayer, and not even the consumer or the worker.
Because of the absence of competition, prices in nationalized industries increased much faster than those in private industries. “Bringing coals to Newcastle” used to be an expression that described England’s unlimited abundance of that essential national resource. Yet after the coal mines were nationalized, the inefficiency was so great that England had to import coal.
In housing, the social planners argued that tenants should be protected from greedy landlords, and that rent control would fix a “just price” for all. The result of artificially-low rents is the virtual elimination of privately-owned apartments or rooms to rent. Landlords sell their property whenever tenants leave because the rent does not cover the costs, and the law makes it difficult if not impossible to remove even the most objectionable tenants.
Those who cannot afford to own their own homes, or whom circumstances compel to take temporary housing, must resort to public housing, which is plagued with muggings, vandalism, noise, and inconvenience.
Socialized medicine has resulted in long queues for medical care, long waiting lists to get into hospital beds, and the emigration of many experienced doctors and specialists, while more and more money each year is spent on administration. The waiting list for an operation to have eye cataracts removed is two years.
About 64 percent of the Gross National Product is taken by the government. The progressive income tax rate goes up to 98 percent, to which is added a variety of taxes on capital, including a new gift tax and a prospective wealth tax.
The average British worker pays one-third of his own wages for the welfare state, and probably up to 20 percent of adult males are on welfare.
British Socialism is a spectacular economic failure, and the proof is in the pound. Since 1971, when the pound was allowed to float, it has suffered an effective devaluation of 44.6 percent.
Britain has asked the International Monetary Fund for a giant loan of $3.9 billion. This is in addition to the $2 billion Britain has received from the Fund within the last year, plus %5.3 billion from other international sources.
Ron Nessen said that the Ford Administration will support any IMF action to prop up the pound. Question: Should our government commit billions of American dollars to the International Monetary Fund to save Socialism in England?
