Portugal: a Socialist failure

by João Cerqueira

On April 25, 1974 Portugal became a socialist country, ruled by the PS (Socialist Party), or  ruled by the PSD (Social-Democratic Party).

In the Constitution itself, it was written, so that there would be no doubts or deviations, that the road to Socialism was a national objective. At present, only countries such as North Korea, Cuba and Venezuela maintain such a totalitarian precept in their constitutions. Nevertheless, in Portugal this definition of a political course that may be contrary to the will of the voters does not seem to bother anyone.

The Portuguese Left decreed that the nationalization of the economy was the way forward, by bringing prosperity, social justice and, of course, the end of capitalist exploitation. Rising in the opposite direction to the democratic countries of Europe – where Portuguese emigrants found better living conditions – the Portuguese Left chose the way of the Communist countries – where no one wanted to go.

Thus, the main national companies were withdrawn from their owners and handed over to State management.

At the same time, these same entrepreneurs were arrested or forced to leave the country.

The result of these policies: in 1977 the government led by Mário Soares was forced to call the IMF because Portugal was in bankruptcy, and in 1983 Mário Soares was forced to ask for foreign aid for the same reasons.

It was by this time that Soares himself said that it was necessary to “put Socialism in the drawer.”

Having failed the nationalization policy, the PortugueseLeft soon discovers another solution to make the country grow: public works and incentives for consumption.

So, the government started to build roads, bridges, viaducts, cultural centers, football stadiums and even an airport that is now without planes.

Did it work? Did Portugal becamericher? No. Portugal goes into bankruptcy for the third time and has to call once again the IMF.

Having all failed, what then remains to the Portuguese Left as a solution to develop the country? And the answer is nothing. Nothing, because the Left has not changed its old recipe: to continue to intervene in the economy, to encourage domestic consumption – thus leading households to get into debt – and to maintain high taxes that prevent the creation of new businesses and drive away foreign investment.

I invite you to do a Google… search for country development rankings.

You will find Norway, Australia, Japan, the United States, Holland, Germany, Canada, South Korea, New Zealand, Switzerland, Hong Kong etc. That is, all the developed countries are liberal economies. Socialism does not enter into these rankings, not even in Norway where there is indeed a Social Democracy, but where the State has not spent oil revenues on roads and football stadiums.

Now a socialist government backed by communists rulesPortugal.

Is the economy growing? Yes, but, as the OECD said, it was the liberal reforms of the previous government that allowed this growth, not the socialist politics.

Meanwhile, Portuguese public debt continues to increase.

Conclusion, when the current European economic boom is over, Portugal may again have to call the IMF.