Is Socialism the Answer for Honduras?

May 24, 2013 | Updated Jul 24, 2013

Libre Party presidential candidate Xiomara Castro de Zelaya wants to move Honduras away from an economic model based on neoliberal capitalism and toward one based on socialism. For more than two-thirds of the people in the country who struggle to survive on $3 or less per day, this is probably a good idea because the primary outgrowth of such a move (if implemented competently and without generating excessive civil turmoil -- both very big "ifs") would be the redistribution of power, wealth, and control over national resources. For them, neoliberal capitalism has produced nothing but misery, so to them a new economic model emphasizing more balance in society through more government control and regulation sounds pretty nice.

For them, concepts like free trade, open markets, and private enterprise are of no consequence because they're not able to compete in such a world, and so they keep getting left farther behind until all hope of ever having a good life for themselves and their children is gone. The truth is that Honduras is not equipped and ready to compete successfully in a neoliberal capitalist environment. Most of the country's children are poorly educated or not educated at all, while most of its adult workforce is poorly trained in some of the most basic skills and thoroughly untrained in those skills that are in high demand.

It should come as no surprise then that neoliberal capitalism has not worked in Honduras and cannot work there until a foundation has been laid to bring its people up to speed. Capitalism is all about competition and profit, and there is nothing inherently wrong with that... so long as there is a level playing field. Otherwise, capitalism becomes unfair, cruel, and unsustainable. The winners keep winning, while the losers keep losing. This is where Honduras is right now, and both Mrs. Zelaya and her husband, former President Manuel Zelaya, deserve credit for putting their personal welfare on the line and pointing out the situation.

Unfortunately, the Zelayas have diagnosed the core problem as being neoliberal capitalism, and so they've assumed that all that is needed is to remove it and replace it with something else. In this case... socialism. But neoliberal capitalism isn't the core problem so much as it is an environment that makes everything worse for most Hondurans.

The core problem happens to be poor governance. Such poor governance, in fact, that Honduras is unable to offer the kind of basic services and systems that enable societies to thrive -- things like good laws and sound public policy, a first-rate public education system, affordable and quality healthcare, a well-maintained transportation and communications infrastructure, decent and reliable public utilities, a modern tax collection scheme, an efficient way of paying employee wages on time, and professional administration by career civil servants.

It is poor governance that is responsible for such horrid public education in Honduras, for most of the corruption and inefficiencies, for most of the strikes, for the sorry condition of public hospitals and clinics, for the unmaintained and unrepaired roads and bridges, for the medieval sanitation and unsafe drinking water, for the substantial lack of tax revenue, and for the unmotivated and unresponsive government workers.

Note that while neoliberal capitalism and more recent phenomena like the growth of narcotrafficking and organized crime and gangs have clearly aggravated inequality, crime, violence, and instability in Honduras, all the conditions mentioned above were present in the country long before -- which makes sense, given that poor governance has defined Honduras for most of its history.

The Zelayas believe that Honduras cannot develop and prosper unless there is a more equitable distribution of the country's resources, which means that those who currently possess or control most of the financial wealth and property are going to be required to give up some of it so that the majority of Hondurans who have very little can have more. Under a socialist system, the Honduran government would become the protectorate of the people and it would supposedly ensure that the allocation of resources is fair and just.

This is a scary scenario for those who place a higher relative value on their privacy, independence, and freedom. Not so scary, though, for those who are barely able to survive from day to day, and happen to need a lot of help. The concentration of economic power in Honduras would move from the private sector to the public sector, and individual rights would be protected so long as they were consistent with the so-called "public good". The government would increasingly seek to own the bulk of the country's means of production (as small as that may be), thereby discouraging private enterprise and entrepreneurship. That's what economic socialism is all about.

One can debate whether this is good or bad for Honduras as a whole, but there is absolutely nothing in the economic socialist model that begins to fix the problem of poor governance in the country. In fact, by expanding the size, power, and intrusiveness of government, the chances are that the problem will become much worse.

Yet the situation in Honduras for most people has gotten so bad that many understandably feel it's time to try something totally different... that anything is better than what they presently have. It is this desperation, mixed in with the undiminished anger over Mr. Zelaya's overthrow in 2009, that has fueled the growth of Libre and may give Mrs. Zelaya a reasonable shot at winning the Presidency this November. Stranger things have been known to happen.