a brief flame...

Brad De Long delong at econ.Berkeley.EDU
Tue Jul 7 16:51:56 PDT 1998

>Of course, capitalism was still much stronger
> materially than socialism in socialism's first
>historical period. The differences Brad
>mentions are explanable in terms of the competition
>between the two systems and the capitalist system's
>economic blockade and constant war on
>(which was not reciprocated)
>the socialist system after
>socialism started from a much smaller material
>base than the existent capitalism.

Even Jeffrey Sachs--whose numbers on the effect of increased "openness" on economic growth are in my opinion way, way high--would only claim that $1 in increased ability to export generates $5 of increased economic product.

East Germany's total exports in the mid-1980s were, IIRC, about 5% of GDP less than one would expect if it had been a "normal" capitalist country. Applying the Sachs 5-for-1 rule would then suggest that had trade been at "normal" levels East German GDP would have been not one-quarter but a little less than one-third that of West Germany...

Brad DeLong

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