Why does socialism lead to slower economic growth?

[win win]

China/India have higher GINI coefficient than the US. Their growth is faster.
Europe has lower GINI coefficient than the US. Their growth is slower.
Venezuela, Cuba, Former USSR, North Korea all tried "all equal" societies. They all failed.

Why is it that there is a very strong correlation between socialism/fairness and economic growth?

[Fuzzy Bear]

The quick answer is "the lack of incentive to take risks and put in greater resources and effort toward an enterprise".

At a certain level, it all comes back to this.  All human beings function on a "What's in it for me?" level.

[FEMA Camp Administrator]

The way the question is framed here is not entirely fair, in that China and India still have quite a ways to go in terms of providing broad-based access to wealth for their people (I'm making a few assumptions here). This is a phenomenon that was observed back in the fifties, but ironically as a point against capitalism--why were the Second and Third Worlds growing substantially faster than Europe or the United States!? As we can see now, this was largely the product of economies making up for lost time. If we were hanging out at the gym, we'd call them "beginner gains" (I think that's how the phrase goes)--the initial burst of muscular growth after one hits weights for the first few times. India, China, the US, and Europe have different starting points.

That said, there are reasons for socialism to cause lower economic growth, though they are not presented here in your premise. If we're talking about development over centuries, there are good reasons for countries that provide for rule of law and protection of private property to surge ahead of those where investment environments are uncertain. While internal trade barriers and expropriative monarchs were a threat to this in the eighteenth century, the major threat in the twentieth century has come from expropriative populists. This is a long-standing argument, but one that doesn't seem particularly relevant to the dilemma you describe.

As for Europe in particular--we're not really discussing socialism per se, but rather larger welfare states or social market economies. So why is growth slower there? If I had to guess it's just perhaps an environment less favorable to innovation or radical (economic) change. We should also remember that the population of several European countries is declining, so this may account for it in a way that political economy cannot.

We should also keep in mind, however, that growth isn't everything. Some of these societies may provide all around better economic security and even access to highly-prized consumer goods even in the face of relative stagnation compared to the outside world.

[Crumpets]

Simple answer: socialism is not a growth-driven ideology.

[parochial boy]

Ignoring the definition of Socialist argument, economic growth in most developed economies has been much slower since the liberalisations of the 1980s than it was during the Social Democratic era of the post-WW2 consensus. The recent "slow growth" in Europe especially can be put down to the "austerity" politics introduced after the financial crash. Decidely not "Socialism" in anyway, shape of form. While the recent struggles have a lot to do with Germany's export driven model and the consequential impact of the slow down in China.

Of course, the fact that what we call neoliberalism has led to slower growth is pretty widely known, and pretty widely accepted - it just serves the interests of the people in power to insist that alternatives to deregulation, privatisation and tax cuts are doomed to failure and to, as the OP did, cherry pick statistics to try and prove this.

[Atlas Has Shrugged]

BeCaUsE TRUH sOcIaLiSm hAsNt bEeN tRiEd

[SWE]

Because "economic growth" is not something worth valuing

[pbrower2a]

If you are talking about Marxism-Leninism, then the absence of a market makes economic decisions more rigid, often decided on ideological considerations. The communist government in Poland found Krakow (city with a great university) too bourgeois, found some low-grade coal, and started digging the coal so that it could make Krakow more 'proletarian'. Because the coal is high in sulfur, burning it in  for local power gives south-central Poland the sort of smog that makes that of Los Angeles look delightful by contrast.

Markets give signals of inadequacy, obsolescence, and glut that centrally-planned economies mistake for prosperity.

If it is a matter of inequality, then people heavily in debt to buy a chance at opportunity and compelled to pay above-market prices for stuff because of monopoly while having no job security might work longer and harder under harsher conditions... more toil means more production of goods and services, 24-hour retailing, and lower living standards than productivity might suggest.

But note well: we Americans are at the end of the age of industrial scarcity. We rarely need more stuff, as many of our consumer purchases are now replacements. Employees have become little more than conduits of funds from one group of capitalists to another. I question whether Americans are more prosperous because they pay more in rent than they used to or because they burn more fuel in longer commutes.

Making people already filthy-rich even more filthy-rich while living standards stagnate isn't going to make workers happier.    

[PSOL]

Venezuela is not run under socialist principles given the existence of private capital, most notably that in the hands of Chavez’s daughter and future owners as liberalization of PDVSA is expected to occur. The former Soviet states also cannot be used given that they are former Soviet states.

Given that this is a troll post, I will not go further then to show you this channel where you can learn more information in a quick manner: https://m.youtube.com/channel/UCPPZoYsfoSekIpLcz9plX1Q/featured.  Watch the videos on economics and the SU.

[Meclazine for Israel]

Two parts to your question.

Firstly, China and India. They are exporting manufactured goods from a large population base after a long history of business inactivity. They are coming off a low base.

In 1985 for example, people in China were not allowed to own a car.

Their growth rate is 5-7% for reasons other than socialism.

Secondly, as for socialism itself, it sounds great in principle, but when it comes to doing business it never appears to work for the people.

The incentive is nil for entrepeneurs and leaders to make the extra effort.

And if any incentives do materialise, they are absorbed by corrupt Government leaders (Russia). Putin is the richest man

And those parts of China that are killing it at the moment would have a capitalist mentality.

The number of beds in Wuhan for critically ill patients of Corona-Virus was 110 when this pandemic began.

A city of 11 million with only 110 ICU beds.

Smells like socialism.

[BP🌹]

Venezuela, Cuba, Former USSR, North Korea all tried "all equal" societies. They all failed.

Cuba is actually quite well off.

Of course, I realize that you're a (actually somewhat amusing) troll because of your username, but I wanted to make the post regardless.

[Badger]

Simple answer: socialism is not a growth-driven ideology.

That's the first and most appropriate answer.

Second answer, China says hello.

[OSR stands with Israel]

Venezuela, Cuba, Former USSR, North Korea all tried "all equal" societies. They all failed.

Cuba is actually quite well off, and it's very dishonest to suggest that the USSR collapsed because of its economic system.

Of course, I realize that you're a (actually somewhat amusing) troll because of your username, but I wanted to make the post regardless.

LMAO

[Badger]

Venezuela, Cuba, Former USSR, North Korea all tried "all equal" societies. They all failed.

Cuba is actually quite well off, and it's very dishonest to suggest that the USSR collapsed because of its economic system.

Of course, I realize that you're a (actually somewhat amusing) troll because of your username, but I wanted to make the post regardless.

Dude, no. Just no.

[BP🌹]

Cuba punches far above its weight in terms of quality of life metrics compared to other countries with similar income levels, and it does so much more sustainably than developed countries: https://morningstaronline.co.uk/article/w/cuba-found-to-be-the-most-sustainably-developed-country-in-the-world-new-research-finds

Its life expectancy is on par (if not a little higher) than that of America. It has one of the highest literacy rates in the world. It has given the world important medical innovations such as the elimination of mother-to-child HIV and syphilis transmission, and a vaccine to treat lung cancer. This is all with US sanctions.

You can disagree (particularly on the grounds that Cuba isn't a democracy), but you've gotta admit that there's some merit to what I'm saying.

As for the Soviet Union: forgive me - I had a lapse of judgement. Command economies are indeed unsustainable. Market socialism (what Cuba is moving towards) is the way to go.

[Intell]

1. Economic Growth is not inherently good
2. Economic growth has slowed down since social democratic nations embraced neoliberalism and austerity.

3. China is far from free-market capitalism and is in aspects very state-orientated and socialistic (in a non-welfare state model) and is experiencing massive economic growth.