Communicator (communicator) wrote,
Communicator
communicator

Health and efficiency

In the past I have tended to capitulate to the idea that 'old-style' socialism was an inefficient economic model, compared to global capitalism. It wasn't so much that I was convinced by the arguments, as that I lacked the confidence and data to make a counter-claim: it was easier to give way on this ground and fight in areas - to do with human decency for example - where I felt more confident.

I have always had a sneaking suspicion, however, that the apparent economic superiority of modern capitalism is due to the fact that it is sucking prosperity from the rest of the globe, into the West (particularly the US, but the rest of us too). This makes it look as if we are generating wealth, through the efficiency of our economic systems, when we are really just concentrating it (or - to put it another way - exporting poverty).

I have always wanted to use the disasterous plummet in prosperity that followed the introduction of capitalism to Russia as a counter-example to capitalist triumphalism. However I was too ignorant to make a good fist of it.

Joseph Stiglitz is professor of economics at Columbia University, and the winner of the 2001 Nobel Prize. In his article in the Guardian he provides some facts and figures, and intellectual credibility, to back up this intuition:

"The move from communism to capitalism in Russia after 1991 was supposed to bring unprecedented prosperity. It did not. By the time of the rouble crisis of August 1998, output had fallen by almost half and poverty had increased from 2% of the population to over 40%.

"Russia's performance since then has been impressive, yet its gross domestic product remains almost 30% below what it was in 1990. At 4% growth per annum, it will take Russia's economy another decade to get back to where it was when communism collapsed."

Socialist economic organisation in Russia was discredited by its link to repressive political systems. I argue that it is those repressive systems which were at fault not the economic systems which were arbitrarily associated with them. Public control of institutions, such as the NHS or the BBC or the National Coal Board, can be combined with open and democratic political structures. Or it can be combined with violent political repression.

Similarly capitalism can be combined with democracy, or it can be combined with hatred of social liberalism, and a preparedness to use violence for political ends. If - as I fear - capitalism is moving in this direction, then claims of its superior efficiency will not be enough to save it. Partly because efficiency alone is not enough, and partly because that efficiency may be no more than a chimera.
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