Tuesday, December 09, 2008

Down to One Question

One can write a dozen essays and argue oneself hoarse over the merits of market economy and still get the ignorant response typical of most people, that governments need to "regulate" the market else it "fails."

I can't count the number of such situations I've found myself in over the past decade or so, and I wish I had this pearl from William Norman Grigg (Pro Libertate), published today on LRC:

Obama is a reasonably bright fellow. Somebody he respects – assuming there is any great enough to command his attention and rebuke his errors – needs to ask him this question, and compel him to answer:

"If the key to prosperity is a centrally planned economy fueled by fiat currency, why isn’t Zimbabwe the wealthiest nation in history?"

Yes, indeed, why not?


ajokic said...

I wouldn't be so happy with this question about Zimbabwe. It is easy to answer it in a way that does nothing for a libertarian. Zimbabwe is targeted from the outside by Anglo-American menace, so no wonder economy is not doing well. It says nothing about how well planed economy would have done absent imperialism.

CubuCoko said...

Are they perhaps under siege, like Serbia was in the 1990s? Hardly. What is happening there is the same thing that happened in the USSR in the 1930s - when you kill off those who produce food, the people starve, but the Party gains power.

Deucaon said...

I think Mugabe is trying to break Milosevic's record.

Also: http://www.rogershermansociety.org/yugoslavia.htm

There really isn't much to add but I can tell you for certain the embargoes don't cause hyperinflation since:

A) Embargoes are ineffective and never actually enforced properly.
B) If the government stops making its designated currency while the price of supplies goes up then the value of the currency will become more valuable thus equalizing the inflation so its not an international problem but rather a national one.

The solution is:

A) Always export more product than you import.
B) Never enforce price controls.
C) Stop producing your designated currency.
D) Stop exporting your designated currency.
E) Payback your debt with foreign currency.
F) Always pay for imports with foreign currency.

Raising the value of your designated currency in foreign markets is easy, simply refuse to accept foreign currency and give out loans to neighbouring states in the form of your designated currency. Though you have to be careful since it might (and probably will) drive down the value of your designated currency as more foreign states will have your designated currency (see rule D of 2) but it will probably be temporary.

ajokic said...

Yes, Zimbabwe has been for some time under economic siege like Serbia was, or worse. Resettlement of black peasants on the lands vacated by white industrial "farmers" cannot possibly be characterized as you appear to do as killing those who produce food, but is a just process that would have produced more and better food had it not been sabotaged by white people within and especially without Zimbabwe. It is sad to fall pray to global propaganda about corrupt governments in African countries as the single cause of poverty and famine. Rather the causes are international institutions like World Bank, IMF and evil individuals with power, like Summers who calculated that under-polluted Africa is where multinationals should dump toxic waste. Similarly, outsiders bring and ensure famine in Africa. We are hearing from intellectuals of the continent more and more the cry to the West: Please do not help us, stop it! Why is that? Because planned economy does not work or because of the most awful interventionism by imperialist neocolonial powers which is devastating the continent. Ask yourself: Who is to blame for dismantlement of Yugoslavia? I know your answer. Then ask yourself: Why would the culprits for things gone awfully badly in Africa be any different?

ajokic said...


Thanks for the link, however, Watkins' piece id purely descriptive and has no discernable explanatory value. Irrational policies by the government are to blame for hyperinflation, which supports you claim that embargo is not the cause. Well, things are much more complicated with respect to causes, and while little episodes can serve the purpose of painting the picture of dictators as irrational, looking globally things may look differently. It is often said that the alternative to hyperinflation is either depression or military defeat. And for a government under siege neither of those looks attractive, and we cannot blame them for that. The most disgusting aspect of Western reporting on Zimbabwe is the glee with which the hope is stated that the economic hardship and hyperinflation will cause the demise of the regime. So much for the Western humanitarian impulses. It is often perfectly rational when fighting against defeat foreigners are desiring for you to make hard choices in pursuit of self-defense.

Deucaon said...


Yugoslavia's demise was more the result most people in Yugoslavia not giving a damn about Yugoslavia or actively working to destroy Yugoslavia rather than the actions of foreign powers. Lest we forget Milosevic's embargo on RSK/RSB in 1994. After all: Do you honestly think that a state which has had been stockpiling weapons, building fortifications and instilling a siege mentality on its populace for 50 years would succumb so easily to foreign interference? In the end, after all is said and done, the Yugoslavs have no one to blame for Yugoslavia's death but themselves.

And the idea that Whites in Zimbabwe would sabotage their livelihood for... something... is ridiculous.

CubuCoko said...

I understand where both of you are coming from, but in the case of Zimbabwe, historical facts are somewhat different than Yugoslavia. It was the British that brought Mugabe to power in the first place. You see, the white British settlers in what was then Rhodesia declared independence in 1965, but this was never recognized. Britain led the blockade of Rhodesia, and after a lengthy civil war forced the country back into the colonial fold in 1979. Whereupon it turned it over to the ZANU (Mugabe) in 1980. There is a parallel between Zimbabwe and Yugoslavia in that Mugabe has run the country like Tito - "president" for life and all. And certainly, the Empire is hypocritical in condemning Mugabe, when he's merely the extreme end of their own political spectrum (what they really want is to have his kind of power, but can't yet get away with it). But let's not defend a government that abuses its own people, practices racism in the name of fighting racial injustice, and destroys its own economy on the altar of political power and bygone ideologies, just because its enemies are just as wicked.

Personally, it's up to the people of Zimbabwe to get rid of Mugabe or live in his "African socialist paradise" if they can. The rest of the world should butt out. But that doesn't mean we can't use Zimbabwe as an example of what socialism in its final malignant manifestation does to people.

CAP said...

I don’t see you can use an eccentric form of socialism, as practiced by Mugabe (largely along traditional tribal lines) to endorse a supposedly ‘free market’ economy, either.

Do you really think capitalism is any less of a planned economy than some version of socialism? And let’s allow there have been socialist economies (built around nationalized industries and resources) in the U.K. Sweden and France that have functioned just as well as more privately weighted ‘capitalist’ ones.

It’s not a question of how much it’s planned, but only for whom it is planned. Amerika thinks it’s a ’free’ economy because it’s big business can buy its politics, while they despise Europe where politics can buy (‘subsidize’) big business. But what’s the difference really? Business plans government or government plans business? Either way, plans there most certainly are, and centralization (for the biggest business, or the biggest party) follows as a consequence. Much like Kapitalism quickly implies empire and conquest.

The sheer hypocrisy of the Clinton years – when they attacked European subsidization in the name of ‘a free market’ was really just a bitch about Amerika’s ‘market’ share in certain sectors – a feeble argument to ‘level’ the playing field so that Washington had the advantage. And you wonder why European economists laugh at the U.S. and its debt-driven gymnastics! – You wonder why all those Euro bankers rolled their eyes when Bernanke was appointed! (actually they ran through his CV, pointing to many questionable policies, shaking their heads).

But hey, bankers, right?

The whole phony game of a ‘market’ built on ‘supply’ and ‘demand’ as defined by the biggest winner comes home to roost though when the economy goes global, and business plays one government against another, sells out one labor force and buys big where its cheaper. See that’s called sawing off the branch on which you’re sitting. When you make people too poor to buy the products you need to sell, demand she is looking a little sad, and soon supply is as well. Which is not to say there aren’t demands, like secure employment, health and education opportunities, public transport and a stable environment, but only that the supplier’s with the say, don’t care to meet those demands.

‘Free’ ‘Markets’?

Show me one.

ajokic said...

Gray Falcon:
It is nice to suggest that the rest of the world (meaning UK-US imperialist aggressors) should butt out of Zimbabwe's internal affairs. However, this "should" statement is not a license to blame its socialist system for its economic ills, precisely because the rest of the world did not butt out, and continues to meddle. Blackagendareport has an excellent article on this:

You say:"the Yugoslavs have no one to blame for Yugoslavia's death but themselves."

That is just as irrational as suggesting that the Iraqis have no one to blame for the total devastation of Iraq but themselves. You can then try the same idea with Vietnam, Afghanistan etc.

CubuCoko said...

We're obviously arguing from very different points of departure here. I don't doubt in the least that the Empire wants Mugabe replaced, but the whole "not letting them get IMF loans is tantamount to genocide" argument is absurd. If Zimbabwe needs to borrow money at exorbitant interest from international bankers just to buy chlorine for its water... I mean, come on.

And while we're looking at the Yugoslavia experience, keep one thing in mind, too. The country worked fine while the foreign credits kept coming. Once the bill came due for payment, however, everyone wanted out. (Ironically, all the successor states ended up having to repay the debt, now with a decade's worth of compound interest. The devil always comes for his due.)

Deucaon said...

Red Star:

A "Free Market" regardless of what kind of government has control or what its policies are. The "Free Market" tends to be called the "Black Market" and can be found in every state on the planet.


The US didn't invade and occupy Yugoslavia in 1991 but instead used proxy forces (i.e. extremists whose followers consisted more of traitors than of foreign nationals) and resorted only to brute force when it was clear that those proxy forces were ineffective (while in Iraq the US did the exact opposite) so you really cant compare the two.

ajokic said...

@Deucaon: If you agree that US attacked Yugoslavia, and did this in two ways, first by using proxy forces, then when that proved insufficient US attacked using its own brute force, how can you maintain that your previous claim that "the Yugoslavs have no one to blame for Yugoslavia's death but themselves".

Well, you cannot make both these claims. I suggest--as I did before--that you give up the latter idea, as it is obviously and recklessly false.

CubuCoko said...

I'm going to close this thread to further comments because we've veered way off-topic, but let me offer a closing observation. I don't think the murder of Yugoslavia was caused by outside forces; there were plenty of people internally who wanted it gone. They were assisted from the outside, no argument there, and the crisis was used to advance a variety of political agendas in Europe, U.S. and the Islamic world.

The last "Yugoslavia" (Serbia-Montenegro) was destroyed from the outside, with the assistance of the criminal regime in Montenegro and the quislings in Belgrade - but I doubt that's the Yugoslavia any of us was referring to here.

Mark said...

I know you wrote that you'll close this thread, but I just wanted to say I'm glad to meet a free market fan. Here (i.e. Croatia) we are bombarded with "Buy Croatian" spots and protectionism is on the rise. There is a big, intuitive aversion here against free trade, capitalism and competition although they are eager to better better stuff for lower prices in Ljubljana, Graz or elsewhere.