Yugoslavia, market socialism, democracy, etc.

Wed Nov 15 11:48:17 MST 1995

     This is the third time I've sent this, so if this
proves to be a duplicate or triplicate, I apologize.  The
first time I sent "reply", but since Louis P. had sent his
message to me personally and only secondarily to the list
I guess it only went to him.  Way to go, Louis!  That's
being a real professional computer whiz!  Just for that
I'll send you some good bourbon with fingers inside which
you can share with the software women Trotskyites. :-)
(In the future, just respond to the list, please.  I'm a ditz.)
     As PB sj noted it is easy to criticize Yugoslavia in
the 1980s.  But then just about all of the command socialist
economies were performing pretty awfully as well.  I would contend
that much of the problem in Yugoslavia, especially what was
driving the hyperinflation, had to do with the accelerating
political breakup of the nation after the death of Tito who was
more or less holding it together on his personal charisma.  The
independent republics were running massive budget deficits to
subsidize local enterprises with massive endogenous money creation
occurring, partly to cover rising foreign borrowings, in a soft
budget constraint disaster scenario.
     This was not the fault of market socialism per se, but its
peculiar construction in Yugoslavia where throughout the 1980s
republics could draw on the central bank without restraint and did
so.  This was ended at the end of 1989 and thus it was the case that
at least the hyperinflation was under control in 1990.  But by then
it was too late and secessions and war erupted.
     The performance of Yugoslavia as a whole was pretty good compared
to most European nations of whatever system in the postwar period,
despite the bad 1980s.  Even Kosovo grew on balance and certainly did
better than neighboring and ethnically similar Albania which was
command socialist and which started out about even with it in 1945.
The much better performance of Slovenia cannot be said to have been
at Kosovo's expense.  The former subsidized the latter, not the reverse.
     Finally, Louis objects to my asking about democracy since he is
so busy thinking.  How convenient, as the late great Church Lady would
have said.  FACT:  There has never been a permanent command economy
in world history that was a functioning democracy.   Marx mostly supported
democracy, despite occasional snide remarks about "bourgeois democracy"
and support for the "dictatorship of the proletariat."  I remind that
Hitler's Germany was a command economy and even had planning.  It was
only its racist nationalism and its capitalism that separated it from
the Stalinist regime in its essential character.
Barkley Rosser

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