It is becoming clear that Democrats either fail to learn the lessons of history or, having learned them, simply fail to heed them. The proof is in the pudding of the job reports for April and May. While experts predicted 1 million jobs would be created in April, the real number was barely a fourth of that, and although the May numbers showed an improvement, they still were way below the lofty projections made.
President Joe Biden was warned that overly generous COVID-19 relief benefits would disincentivize people from working. A history lesson bears this out. Biden’s ignorance about it may stem from its occurrence in the aftermath of a war for which he dodged military service due to various ailments although, interestingly, they never precluded him from playing high school and some college athletics.
When the Vietnam War ended in April 1975, victory left Hanoi with a major problem. It had been importing 1 million tons of rice annually to feed the northern part of the country, but with the south now under its control too, it was faced with having to import 2 million more tons. Something had to be done to address a low-yield rice production problem, so the leadership turned to a man named Gen. Dong Si Nguyen.
Nguyen had proven to be an immensely successful innovator during the war. He commanded the infamous Ho Chi Minh Trail (HCMT), which was Hanoi’s logistical bloodline for getting their troops and war materiel down to the southern battlefields. The HCMT was a network of about seven major north/south roads and dozens of east/west roads. For the North Vietnamese to transit the HCMT successfully without the U.S. interdicting them was a chess match for both sides. While the U.S. would introduce a counter-measure to stop the flow of supplies, Nguyen would then introduce a counter-counter measure to start the flow back up again. The introduction of new tactics and technology resulted in the chess match going on for most of the war, but in the end, the Vietnamese prevailed.
So Hanoi decided Nguyen was the right man with the right creative mindset to head the country’s effort to stimulate rice production. Nguyen immediately assigned quotas to different provinces, only to fail the first year as production fell way short of those quotas. Nguyen realized he needed to change tactics by taking an approach that would motivate his workers. The answer? He turned to capitalism, offering them the chance to reap the rewards of their own hard work. If quotas were met, they would share in the excess production.
The result was that, within two years, Vietnam had become a rice exporter. In the decades since, it has occasionally ranked as the largest exporter of rice in the world. By the time he died in 2019 at age 96, Nguyen had lived long enough to see Vietnam not only ranked as the third-largest rice exporter in the world that year but also set records in coffee production, surpassing Brazil to become the leading exporter. Additionally, Vietnam became the largest exporter of cashews, accounting for 60% of the world’s export production and became a major exporter of mangoes as well. While Hanoi had spent years fighting a war to get us out of Vietnam, it learned that the principles of capitalism America espoused were great motivators for their own population to work hard for success.
Nguyen had grasped those principles quickly. He recognized that “All economic systems are categorized based on who owns the means of production; who owns the capital,” and, as long as Vietnam owned the means of production, transitioning from importer to exporter was virtually impossible. What the country needed was government intervention in the distribution of resources, rewarding laborers with sweat equity based upon their own performance. After all, when it comes to labor, it is privately owned – i.e., no one other than the individual controls output.
Thus, no matter how much the government attempts to force people to work, the people control how much work they do or simply choose not to do. And, if doing nothing still gets them money, many may choose not to work. Thus, “all discussion surrounding labor comes down to one goal: incentivizing production.” Nguyen discovered that although capitalism permits the most productive workers to reap greater rewards, allowing for inequality among them, it is still the best way to benefit the state. “Prosperity is a far better motivator than dread.”
A 21st century Biden is hard-pressed to learn the lessons 20th century Nguyen did. Biden continues to pump unemployment benefits to many workers who find they make more money not working than working. Consequently, small businesses looking for workers are unable to find them as Biden naively suggests they offer more money.
Interestingly, in Texas, there are 60% more jobs available today than there were a year ago. Meanwhile, the state workforce commission reports the number of job openings in the state is almost identical to the number of Texans receiving unemployment benefits. People making less than $32,000 per year are better off financially receiving unemployment benefits than going back to work.
This has caused Republican Gov. Greg Abbott to announce he will start rejecting federal COVID-related unemployment benefits that provide an extra $300 per week. Not far behind Abbott is Indiana Gov. Eric Holcomb. Thus, Texas and Indiana will be joining 16 other states rejecting unemployment handouts as they recognize it kills the work incentive. If more than a third of the states recognize this, why doesn’t Joe Biden?
It took a Vietnamese Communist only a year to learn that incentivizing a workforce is in the best interests of a country. How long will it take socialist Biden to learn this?
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