At first glance it looks like socialism does not match very well with globalization requierments. In a deeper focus it becomes a fact. Socialism and globalization does not match to each other. By definition globalization means the chance of getting access to better business opportunities, higher economic returns and profits throughout a global allocation of resources ,taking advantage of greater capital mobility to move into places with the more convenient input prices. As a result, people chances of increasing their welfare improves, as it has been the case in the last four years for Latin America, which it has benefited from strong global demand for natural resources allowing an economic growth of 4% on average.-.
On the other hand, Socialism means to restraint opportunities only to those one the State can afford . Therefore, it rules out any chance of getting advantages of the best opportunities, because the State (political by nature) moves in slow motion, it is inefficient to manage public resources, and its planning horizon is a short run span. So, given its nature, any possible action derived from the State depends crucially of the resources available .Whether these resources are not enough, the result will be egalitarian poverty, which means every one will turn out to be levelled off downward. On the contrary, whether resources are high enough even above the requirements, the result will be corruption. Those two options, corruption and higher poverty ,represent the past experience in Latin America as a result of state intervention in economic activity. A lot of Latin America countries has understood this fact, so they have changed their approach to dealing with markets and private sectors ,turning out its policies to a more friendly tone. For instance, although politically is considered a close regime, Cuba is a mixed economy strongly depending on tourism ,which is based on private sector. China has moved slowly but steadily to deeper integration with global economy open up opportunities for private sector.-
At the same time these days, poverty and income inequality reduction does not depend only from the State help. Empirical evidence suggests that it depend more critically upon the private sector capacity to create wealth ,which under the proper institutional framework and complementary social policy support for the more vulnerable , allow to reduce poverty and inequality. But, it also depends , of entry barrier for small investor to go into business opportunities. All of this imply less State intervention in the economy, which do not imply to get rid of the State. This has been the Chilean economic experience at its highest point of success.(1990-1998).-
Considering the precedent paragraph explanation , the world economy and the majority of Latin America economies, have chosen to follow the history trends supporting markets to do their job. To pretend the opposite it is not just the riskier thing to do, but it is to move back history clock.-
But not only pragmatic markets options are available to reduce poverty, unemployment and inequality , Idealism is also available, except that it has a high price. Chile paid a high price for such idealism. Since 1940 up to 1985, ideology was the driven force in Chilean economy ,whether it was leftist or rightist , both experiences represent the risk of ideology when it apply into the economy. Idealism do not solve poverty and worse of all, it becomes fatally linked with corruption, How is it so?. Idealism do not produce financial resources to finance it. . Today, socialism and idealism are closer than ever, but unfortunately corruption, poverty and inequality are its derived product . Therefore do move out of global trend, instead try to manage the best way to take advantage from it.