Socialism on its Way Out in Europe?

That’s what the Economist claims, (bold highlights mine)

TEN years ago almost half of the 27 countries that now make up the European Union, including Germany, Britain and Italy, were ruled by left-wing governments. Today, following the defeat of the ruling Socialists in Portugal's general election on June 5th, the left is in charge of just five: Spain, Greece, Austria, Slovenia and Cyprus. In Spain, by far the largest of these, polls suggest the Socialists will be removed from office at an election that must be held by next March. There are many theories for the left's weakness in Europe. One is simply that left-wing parties struggle when times are hard. Our chart shows the number of left-wing governments in the EU-27 countries over the past couple of decades against the annual GDP growth rate in the region. The growth figure is shown with a two-year lag, the hypothesis being that economic changes take time to have political effects. So the five left-wing governments this year are shown against the growth (or, in this case, contraction) figures for 2009.

Well if this true then this should be good news. This only goes to show that socialism has been and will always be a failed economic development model.

Although I think Europe's socialism has merely been replaced by crony capitalism or state capitalism as evidenced by the string of bailouts which is not exactly a good or promising development.

Besides, I’d add two more factors to what seems as fueling a structural decline of socialist leaderships: one is globalization and two is the internet. More people interacting with each other across the globe impels for the growth of forces of decentralization which goes against the rigid vertical structure of industrial era based governments.

Anyway, the next crisis will blow up both the balance sheets of the politically favored banking system and that of the governments’ (and this includes Central Banks). This will likely push political developments away from socialism, unless governments successfully enforce mass protectionism circa 1930s by shutting down the web and trade.

My guess is that people around the world are beginning to appreciate economic and political freedom more than what has been depicted by the mainstream.