Economics, Maduro Style

Don

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Agorism FTW!
Nicholas Maduro said:
For those that underestimate me, I say I’m a socialist and I know what I’m doing.
Does anybody remember this from a couple months ago? Venezuela's economy was imploding, and Maduro, the socialist president, declared that more socialism (and jailing the "exploiters") would solve their problems?

How's that working out lately?
Venezuelan President Nicolas Maduro is turning to an army brigadier general to run the economy, two months after using troops to control prices and slow the world’s fastest inflation.

Rodolfo Marco Torres was named finance minister yesterday, replacing Nelson Merentes, whose attempts to improve relations with businessmen failed to prevent inflation doubling to 56 percent during his nine months in office. Merentes will return to head the country’s central bank, Maduro said in a state of the nation address to congress.

Active or retired officers now control a quarter of Maduro’s cabinet as he looks to shore up their support after the death of former President Hugo Chavez, according to Rocio San Miguel, president of Caracas-based security research organization Citizens’ Control. Their increasing role indicates greater state involvement in the economy and prompted bonds to fall to a six-week low today.
Ah, the de facto military junta theory of economics, because the leaders of an organization that demands what it wants supplied, and jails those who fail to comply, knows all about economics. Sadly predictable, but certainly no condemnation of socialism, right? :rolleyes:

So how's he gonna fix it?
The government will impose a maximum 30 percent profit margin across all industries via a presidential decree today, and the country will work to reform its currency distribution system this year, Maduro said. The official exchange rate of 6.3 bolivars per dollar will remain, he said, even as the black market rate tumbles to 74.
Yeah, that oughta do it. :ROFL:

This is what happens when you decouple the economy from the pricing system through government meddling, as we've now known for at least seventy years.
 

zarada

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yeah, funny how authoritarian leaders believe they are such experts in all sorts of disciplines, including (sadly) economics.

Quote:
Originally Posted by Nicholas Maduro
For those that underestimate me, I say I’m a socialist and I know what I’m doing.


haven't socialists always? look at all the successful socialist economies of the former Eastern Block. they were all thriving just before they fell, weren't they?
 

Xelebes

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[/I]haven't socialists always? look at all the successful socialist economies of the former Eastern Block. they were all thriving just before they fell, weren't they?

Some countries rose very high under socialist-derived systems in that Eastern bloc.
 

zarada

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the 'heights' to which the USSR rose and the means by which it achieved those appearances are not necessarily to be envied.

http://www.history.com/topics/fall-of-soviet-union

"... The Soviet Union was supposed to be “a society of true democracy,” but in many ways it was no less repressive than the czarist autocracy that preceded it. It was ruled by a single party–the Communist Party–that demanded the allegiance of every Russian citizen. After 1924, when the dictator Joseph Stalin came to power, the state exercised totalitarian control over the economy, administering all industrial activity and establishing collective farms. It also controlled every aspect of political and social life. People who argued against Stalin’s policies were arrested and sent to labor camps or executed.

After Stalin’s death in 1953, Soviet leaders denounced his brutal policies but maintained the Community Party’s power. They focused in particular on the Cold War with Western powers, engaging in a costly and destructive “arms race” with the United States while exercising military force to suppress anticommunism and extend its hegemony in Eastern Europe..."
 

Xelebes

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If the measure is "true democracy", fine. But we are talking economics and the amount of industrialisation and economic development that occured under Stalin is nothing less than meteoric.
 

zarada

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If the measure is "true democracy", fine. But we are talking economics and the amount of industrialisation and economic development that occured under Stalin is nothing less than meteoric.

the economy of every one of these states went bust after the first stages of socialism, when their people fell into chronic apathy.

the reason Eastern Block governments fell is, first and foremost, the under or nonperforming economy. by the 80s their products had become so shoddy and undesirable that they could only sell them to each other. their lack of freedom would still have been bearable to most if there had been enough decent food, shelter and clothing to go around.
 

Xelebes

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the economy of every one of these states went bust after the first stages of socialism, when their people fell into chronic apathy.

the reason Eastern Block governments fell is, first and foremost, the under or nonperforming economy. by the 80s their products had become so shoddy and undesirable that they could only sell them to each other. their lack of freedom would still have been bearable to most if there had been enough decent food, shelter and clothing to go around.

Empires rise and empires fall. Probably the biggest problem for the Soviet Union was that instead of focusing on its domestic industrial and consumer base, had focused much of its industrial might on messianic foreign expansion or arms.
 

robjvargas

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If the measure is "true democracy", fine. But we are talking economics and the amount of industrialisation and economic development that occured under Stalin is nothing less than meteoric.

Building mediocre infrastructure to produce below-grade products that become the source for fictionalized economic statistics and "projections" is hardly the stuff of economic legend.

I have spent a lot of time with liberals who simultaneously celebrate the economic successes of socialism/communism in the USSR and decry the Cold War of the 1980's as an unnecessary aggression against a failing state.

There's a mean streak in me that gets some enjoyment watching them try to reconcile the two stances.

I do hope no one here is contradicting themselves that way.
 

Xelebes

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Building mediocre infrastructure to produce below-grade products that become the source for fictionalized economic statistics and "projections" is hardly the stuff of economic legend.

I have spent a lot of time with liberals who simultaneously celebrate the economic successes of socialism/communism in the USSR and decry the Cold War of the 1980's as an unnecessary aggression against a failing state.

There's a mean streak in me that gets some enjoyment watching them try to reconcile the two stances.

I do hope no one here is contradicting themselves that way.

A lot of you people seem to be stuck thinking of the Soviet Union in the 1980s. It is a curious omission when one is being asked about the Soviet Union from 1925-1965.
 

robjvargas

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The crumbling of the 1980's didn't just appear from nowhere. There's a very good reason to believe that it was largely always that way.

"Everyone is equal, but some are more equal than others." The USSR personified that. A few at the top were kept in luxury at the expense of the vast majority of the population.
 

raburrell

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The crumbling of the 1980's didn't just appear from nowhere. There's a very good reason to believe that it was largely always that way.
If you look closely at the crumbling, the factor at the center of it was Chernobyl, not the arms race. Before that things were in an (unhappy) stasis. Reagan and Thatcher get far, far more credit than they deserve.

"Everyone is equal, but some are more equal than others." The USSR personified that. A few at the top were kept in luxury at the expense of the vast majority of the population.

The relative luxury at the top doesn't begin to explain what the rest were forced to live on. It's a huge country which tried (with both successes and failures) to modernize in a short period of time.

That said, if the lesson is about inequality here, perhaps we should be paying more attention to our own situation on that front.
 

robeiae

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A lot of you people seem to be stuck thinking of the Soviet Union in the 1980s. It is a curious omission when one is being asked about the Soviet Union from 1925-1965.
The Soviet growth in this period was, by and large, all smoke and mirrors.

It's based on such things as the government saying a factory produced 5000 (or whatever the set quota was, plus an extra ten percent or so) tractors in one month, which were then shipped out to farms that put them to use. It ignores the reality, wherein many of those tractors didn't work, many farmers didn't know how to use them, and when they did work and were used, they broke down, then were never used again because there weren't enough people who knew how to fix them.

True enough, there was huge economic growth in the Soviet Empire in this period (mostly because of just how little industry there was previously), but it was hardly sustainable growth. It didn't really prove to be an admirable thing in the least, despite so many would-be communists in the West falling all over themselves to applaud the successes of the Soviet Union.

Then there's China's growth. Anyone for backyard steel?
 

raburrell

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Long, detailed paper on the subject. Starts by assessing Soviet height/weight data for citizens born in the 50s, which the paper claims is at the 10-20% percentile of US.

Note: at least from the abstract, seems to me like the author is making some unsupported leaps in causality, but it's long and I haven't finished. Thought I'd share in case anyone else is interested - it's at least an attempt at approaching the question from a data standpoint instead of a nakedly ideological one.
 

Xelebes

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Long, detailed paper on the subject. Starts by assessing Soviet height/weight data for citizens born in the 50s, which the paper claims is at the 10-20% percentile of US.

Note: at least from the abstract, seems to me like the author is making some unsupported leaps in causality, but it's long and I haven't finished. Thought I'd share in case anyone else is interested - it's at least an attempt at approaching the question from a data standpoint instead of a nakedly ideological one.

By the sounds of it, the timing of the fall makes it look like Kruschev's destalinisation was ultimately disastrous to the people and mirrors the industrialisation of the British Empire (Holodomor = Highland Clearances; gulags = Thirteen Colonies, Canada, Australia.)
 

raburrell

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By the sounds of it, the timing of the fall makes it look like Kruschev's destalinisation was ultimately disastrous to the people and mirrors the industrialisation of the British Empire (Holodomor = Highland Clearances; gulags = Thirteen Colonies, Canada, Australia.)

Agreed, although that's kinda what my original reaction to the paper was rooted in. IMO it was less de-Stalinization and more the massive demographic imbalances created both by the war and the Gulags, alcohol consumption, etc. Although I suppose you could argue the former was a consequence (or reaction) to the rest as well. Either way, I'm not fond of the methodology of comparing against Western (and later-dated) percentile charts.

That said, data from that era is certainly not easy to come by so I think the author at least made a good effort to elucidate what the effect of the period economies were.
 

robjvargas

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If you look closely at the crumbling, the factor at the center of it was Chernobyl, not the arms race. Before that things were in an (unhappy) stasis. Reagan and Thatcher get far, far more credit than they deserve.
So the Soviet collapsed in three years. Everything was hunky-dory until Chernobyl's reactor exploded? I don't think so. Chernobyl was a symptom, not a cause.



The relative luxury at the top doesn't begin to explain what the rest were forced to live on. It's a huge country which tried (with both successes and failures) to modernize in a short period of time.

That said, if the lesson is about inequality here, perhaps we should be paying more attention to our own situation on that front.

No, it isn't. I withdraw that point. Has no relevance here. Maybe a tangential one. At best.

The Soviet Union was in a state of denial practically from its beginnings. It's famous "5-year-plan" social planning was an utter failure, and I don't see any data that the USSR ever actually met those plan goals.

Reagan's policies provided the force that toppled an infrastructure that was already heavily stressed. It may have already been headed toward collapse. But many in the Soviet hierarchy at the time admitted it was the political, military, and economic policies of Reagan that provided the final impetus.

http://wais.stanford.edu/History/history_ussrandreagan.htm

Don't misunderstand. Reagan didn't "win" the Cold War. If there's a win/loss verdict here, it's that the USSR lost. But Reagan's policies had a major effect nonetheless.
 

raburrell

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So the Soviet collapsed in three years. Everything was hunky-dory until Chernobyl's reactor exploded? I don't think so. Chernobyl was a symptom, not a cause.
Given that all I claimed was an 'unhappy stasis', you need to read my post again.

From what you're saying, I don't think you have a good sense of what kind of strain on the Soviet government Chernobyl actually was. The idea that Chernobyl caused the collapse is pretty well supported - start with Gorbachev. http://www.project-syndicate.org/commentary/turning-point-at-chernobyl

No, it isn't. I withdraw that point. Has no relevance here. Maybe a tangential one. At best.
That income inequality is bad? Not quite sure how you decide it isn't revelent, but whatever.

The Soviet Union was in a state of denial practically from its beginnings. It's famous "5-year-plan" social planning was an utter failure, and I don't see any data that the USSR ever actually met those plan goals.
No one is arguing otherwise. The causality is a subject of debate, yes.

Reagan's policies provided the force that toppled an infrastructure that was already heavily stressed. It may have already been headed toward collapse. But many in the Soviet hierarchy at the time admitted it was the political, military, and economic policies of Reagan that provided the final impetus.

http://wais.stanford.edu/History/history_ussrandreagan.htm

This is the long-held jingoistic interpretation, yes. Not sure what an unsigned article by someone flogging a book adds to it.

Don't misunderstand. Reagan didn't "win" the Cold War. If there's a win/loss verdict here, it's that the USSR lost. But Reagan's policies had a major effect nonetheless.

See above.
 
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robjvargas

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Given that all I claimed was an 'unhappy stasis', you need to read my post again.

From what you're saying, I don't think you have a good sense of what kind of strain on the Soviet government Chernobyl actually was. The idea that Chernobyl caused the collapse is pretty well supported - start with Gorbachev. http://www.project-syndicate.org/commentary/turning-point-at-chernobyl
Gorbachev is hardly a reliable source.

From your link:
The Politburo did not immediately have appropriate and complete information that would have reflected the situation after the explosion. Nevertheless, it was the general consensus of the Politburo that we should openly deliver the information upon receiving it. This would be in the spirit of the Glasnost policy that was by then already established in the Soviet Union.
The Soviet Union didn't say anything until other nations started detecting the radiation from the fallout drifting on the winds. Even then, as I recall, it was several more days before the extent of the accident was admitted.
 

raburrell

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Gorbachev is hardly a reliable source.
Yes, much less so than an unsourced hagiography of Reagan :roll:
Any memoir must be read with an eye to the motives and character of the individual writing it- the truth can usually be found in what they wish you to see. In any case, the rest of the link shows the enormity of the cleanup effort in his eyes, which also came at personal cost to him. (His wife's death is widely attributed to it).

For a more objective assessment, you could look at what the reactor in Japan is doing to that country - current cleanup estimates are running around 10 trillion, and may well bankrupt the country.
From your link:

The Soviet Union didn't say anything until other nations started detecting the radiation from the fallout drifting on the winds. Even then, as I recall, it was several more days before the extent of the accident was admitted.
Do I believe they didn't know everything for a few days? Yes, and historical records exist which bear that out. But no, I don't believe they were eager to tell the rest of the world, no. Our illustrious and ever-so-transparent government wouldn't have been either.
 
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Xelebes

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Holding up the Soviet economy as an example of the success of centralized planning is arguing otherwise.

We're not arguing that central planning has examples of success. We're arguing that socialism has examples of success. Don't move the goalposts. More importantly, the key is industrialisation not the particular system you use. The particular system you end up using should largely refer to and reflect the ethical system that the state already has.
 
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robeiae

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Yes, much less so than an unsourced hagiography of Reagan :roll:
Ronald Hilton is not a Reagan hagiographer. That piece quoted at Stanford is from the WAIS forums, I think: http://waisworld.org/en/wais/home

Here's some more Hilton: http://wais.stanford.edu/Russia/demiseofsovietunion.htm

Christopher Jones writes: "I agree that the Soviet Union collapsed of its own weight. I noticed that when Ronald Reagan died, he suddenly "won the cold war" and "defeated the Soviet Union." This of course is as ridiculous as the Americans winning the Battle of Britain. Communism was overthrown because it lost touch with its power base: the workers. Reagan had nothing at all to do with it. Probably the two men who could be most credited with the downfall of the Communist empire in eastern Europe was Pope John Paul II and Lech Walesa".
If that's a Reagan hagiographer, then I'm a pepperoni pizza...

That said, RobV should have sourced the bit properly, imo.

Regardless, Hilton is--or was--a respected academic. And he would certainly not have agreed with the idea that Reagan caused the collapse. Just as surely he--nor any serious historian--would allow that Chernobyl caused it.

There were many causes, it is true, but I think it's fair to look back at the beginning, how things were set up and what directions they could possibly, consistent with the above piece. The people running the Soviet economy never actually knew what they were doing, imo. They knew what they wanted: industry and growth. And they knew what this was supposed to look like. So they built it, a hollow construct that mirrors those of other authoritarian-inspired public work projects, with production and distribution absolutely controlled and not allowed to respond to actual needs, actual conditions.

It looked good. For a while. But it was always going to fall apart, imo.
 

robjvargas

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We're not arguing that central planning has examples of success. We're arguing that socialism has examples of success. Don't move the goalposts. More importantly, the key is industrialisation not the particular system you use. The particular system you end up using should largely refer to and reflect the ethical system that the state already has.

Which now renders my economic inequality statement relevant. The USSR's economics did not match their ostensible ethics.

Other than building a lot of factories that produced substandard goods, I don't see any objective measure that declares the USSR a socialist success. Even their most highly touted military technology was mediocre. Maybe excepting the AK-47.