Frequently Referenced Countries
China
Governed by the Communist Chinese Party (CCP) since 1949, China and its economy have changed considerably over that time. China’s economy was state run throughout Mao Zedong’s rule until 1976. Disasters like the Great Leap Forward demonstrated the failure of central planning. When Deng Xiaoping allowed market reforms to begin in the early 1980s, the economy began one of the largest expansions in the history of humanity. China’s current economy is often labeled as a version of “authoritarian capitalism.” Recently, increased governmental control of critical sectors of the economy and growing limits on the rule of law suggest state-control is being at least partly restored.
Nordic countries (Denmark, Norway, Finland, Sweden)
Denmark, Norway, Finland, and Sweden are often referred to as socialist countries, but they are far from it. The economies of these Nordic countries are not controlled by the government. They are all market economies with relatively high taxation that helps fund government assistance to their citizens. Sweden is often held up as a model of socialism, but that notion stems from Sweden’s trend toward socialism in the 1960s and 1970s. By the early 1990s, the dire consequences of excessive government intervention on economic growth and prosperity had become obvious enough that Sweden reversed course, cutting taxes and regulations, and embracing market reforms.
North Korea
North Korea is a state-controlled economy. Though the North Korean government periodically releases economic information, their facts and figures prove unreliable. Government control has shifted economic priorities toward defense, causing major issues countrywide in areas such as food production and living standards. Most of the country lives in extreme poverty.
Venezuela
Venezuela has suffered a severe economic decline from its socialist policies. The nationalization of important industries such as electricity, agriculture, water, and oil has led to blackouts, irregular water supply, and food shortages. In industries not nationalized, government-mandated price ceilings have forced private businesses out of the market, resulting in nationwide shortages. Today, most Venezuelans live in poverty. The government has only recently relaxed some of its socialist economic policies in response to widespread shortages. However, it is far from recovered or operating as a free-market economy.
Soviet Union
The Soviet Union (USSR) was a socialist economy that existed from 1922 to 1991. State control led to widespread famine in the 1920s. In the aftermath of World War II, it operated as the communist alternative to the market system promulgated by the United States and western Europe. By the end of 20th century it was apparent that the Soviet Union’s socialist economy was unable to keep pace with the global economy and was unfit to respond to the needs of its own citizens. In 1991, the Soviet Union collapsed.
Cuba
In 1959, under the leadership of Fidel Castro, Cuba began its journey toward a socialist economy. As Cuba nationalized industries, its once flourishing economy stagnated. The country relied heavily on Soviet subsidies to cover necessities and social programs. Poverty and inequality rose steadily. After the Soviet Union fell, Cuba’s economy crashed. Living conditions worsened, and famine struck the nation. Only after Cuba introduced market-oriented policies in the late 1990s did it begin to see some modest economic growth. Today, Cuba is constituted as a communist country, though its economic policy is slowly incorporating market reforms.