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Monitoring Market and Anti-Market Developments From Stalin On.

Monitoring Market and Anti-Market Developments From Stalin On. A Commanding Heights Eyewitness. So what about S and D?.

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Monitoring Market and Anti-Market Developments From Stalin On.

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  1. Monitoring Market and Anti-Market Developments From Stalin On. A Commanding Heights Eyewitness

  2. So what about S and D? • After completing my studies and being engaged in teaching and research a few years, it became apparent that to study markets is not to appreciate what their functioning can mean. Markt am Marienplatz, Muenchen

  3. So what about S and D? • Studying economies without functioning markets gives an appreciation for what markets offer: • Incentives and rewards for productivity • Consumer welfare and abundance

  4. What markets offer • Answers to questions of monopoly • Automaticity – no need for central management • Liberty and responsibility

  5. Lenin Had Placed Market Abhorrence in the Ascendance • Keynes gave the 1st world non-authoritarian, national economic planning. • Bolschevism “КТОКОГО” was the motto of the “Communist” countries in the 2nd world

  6. Alternative Economic Systems • Nehru and Ghandi led the developing world down the path of central planning in their admiration of what Stalin had accomplished. They gave the 3rd world ISI.

  7. Alternative Economic Systems • Liberals gave the world price controls, industrial regulation, welfare state “entitlements” and intrusive government. They then invented and now wish to abandon their “third way.”

  8. The Outcomes: Western Economies • Western “market planning” efforts to direct investment and manage a market economy was short lived and worked poorly. State planning agencies were downgraded to “structural policies.” “It won’t work!”

  9. The Outcomes: Western Economies • Asian statist planning is in retreat in Japan. Heavy state management has been less offensive where people are thrifty, investments large, and recovery underway.

  10. The Outcomes: Central Planning • Helping to document the decline of central planning in the Soviet Union and the German Democratic Republic made for some fascinating experiences.

  11. I was there in August,1961when the Berlin wall was built.

  12. I attended a conference in the Berlin Reichstag in November, 1969.

  13. On Wednesday of that week, GDR opened the wall.

  14. The Outcomes: Central Planning • The shortage economy failed to adopt new technologies or increase productivity, to make any effort to produce quality products, and had devastating ecological effects. • It was already unraveling by the time Khruschev succeeded Stalin.

  15. The Outcomes: Import Substituting Industrialization • The developing countries were a disaster in all their non-market efforts to overcome poverty and initiate economic growth. • But they also have many non-economic problems to complement their economic backwardness.

  16. The Outcomes: Import Substituting Industrialization • China’s Deng never bought into ISI. He was the only communist leader who may have put his country onto a development path.

  17. The Outcomes: Import Substituting Industrialization • The Asian Tigers may yet have their statist approach come back to haunt them (I believe it already did in the Asian crisis). • Still, their competent work force, their thrift and investments, and their quality production has apparently placed them on the road to development. We may hope that others are beginning to find the path as well.

  18. Watching the Change • First as an economics student and later as an economist, I was privileged to watch this all come about. • I missed the market-planning phase, because it was dying out shortly after WWII as I was moving toward high school age.

  19. Watching the Change • But I saw the decline of central planning • And the peak of messing with markets under Kennedy, Johnson, Nixon, Carter and others. • I read Hayek’s Road to Serfdom. His scholarly writings were more to the point.

  20. Watching the Change • I was skeptical of Ronald Reagan at first, but was amazed at the way he sought an economic philosophy in Friedman’s and Hayek’s work.

  21. Watching the Change • The same can also be said of Margaret Thatcher, who read and consulted with Hayek.

  22. Watching the Change • I have also observed that most academics in the social sciences and many other professionals who harbored anti-market sentiment continue to do so. • It’s amazing that something so simple as the way markets function could fall short of understanding. Like other forms of prejudice, anti-market sentiment is mostly a function of not understanding or refusing to do so.

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