On Tue, 4 Jan 2005 10:57:24 -0500 lweiger at umich.edu writes:
> Quoting Jim Farmelant <farmelantj at juno.com>:
>
> > Cambridge University economist, Joan Robinson, back in
> > in the mid-1960s wrote a famous article, "Korean Miracle,"
> > for Monthly Review which greatly praised North Korea's
> > economic policies, which indeed at that time were
> > producing greater economic progress there than
> > was being experienced back then by South Korea.
> >
> > Jim F.
>
> Sorry, Jim, I respect you as a poster, but what the hell does this
> have to do
> with anything that has been said?
It supports Lacny's point that it was only in relatively recent times, that South Korea really overtook North Korea, economically. Back in the 1960s, it seemed to Joan Robinson and lots of other obervers, that it was North Korea that seemed to have a brighter future ahead, economically. It was not until some years later, that South Korea began to economically surge ahead of the North.
> Justin observed that command
> economies like
> the Soviet Union sometimes did a bang-up job of industrialization
> (perhaps
> better than hypothetical capitalist economies would've) but never
> achieved
Precisely. Soviet-style economic planning has often been able to do a better job of promoting rapid industrialization than has capitalism. As critics of Soviet-style socialism are quick to point out, this sort of progress was purchased at the expense of very high social and environment costs. But if one is honest about it, one would be hard put to find an example of industrialization anywhere, whether capitalist or socialist, that did not come at a very high cost. If Soviet industrialization entailed the gulags and the despoilation of the Soviet environment, then capitalist industrialization in the US, entailed the enslavement of Africans, brought here by force, the genocide of the aboriginal inhabitants of the country, the exploitation of industrial workers etc.
> anything close to Western levels of affluence. Doug suggested that
> this was
> merely a matter of differing starting points. I said not so
> fast--EG/WG (and
> NK/SK) started out _very, very close_ to one another. And now
> others have
> claimed that WG and SK reached the finish line only because the US
> gave them
> rocket boosters while EG and NK were forced out of the race because
> the US made
> them run with rocks on their backs.
And there was of course, also Justin's point that Soviet-style economies come to grief once they attempt to move beyond simple industrialization to the creation of complex consumer economies. Then their planning mechanisms seem to inevitably break down, leading sooner or later, to a turn towards a reliance upon markets. Justin sees this as a vindication of the arguments of Hayek & von Mises concerning the impossiblity of rational economic planning, once the economy has become sufficiently complex. Other people such as Allin Cottrell & Paul Cockshott have contended that Hayek and von Mises are mistaken on this point, and that rational planning is possible under such conditions but that such planning requires the existence of sophisticated computer networks to process the huge numbers of variables that must be taken into account. Justin, as I understand him ,would argue that Cottrell & Cockshott fail to take into account the role of the human element in all of this, that they ignore the importance of incentives to ensure that economic actors gather together the information that would be required for rational planning, such that only markets can ensure that the necessary information is actually acquired. And that under a Soviet-style economy there would be inevitably be incentives for people to generate false information or to pretend to have information that they don't actually have, so that rational economic planning would still be impossible regardless of how much computer power, the planners might have at their disposal.
Cottrell & Cockshott, as I understand them, would disagree, arguing that nothing would preclude the planners in a socialist economy from implementing the right sorts of incentives, that would be required for ensuring that good information is gathered.
So it becomes clear that there are at least two different views concerning the collapse of Soviet-style economies. One interpretation holds that such collapses demonstrate the impossiblity of rational economic planning under conditions of economic complexity, while the other interpretation holds that the Soviet collapse simply demonstrated that the particular planning model that they had been following had become played out, and that a more sophisticated, high-tech based model could been adopted to take its place, and would have worked.
>
> -- Luke
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