Paul,
I shall try to not upset michael by avoiding
plowing through much debated ground and try
to make (mostly) new points.
First let me express agreement with Louis
on at least one point. I expect a worsening of
conditions, at least in the near term, for most
Serbians economically. Indeed, that is what
Scahill reported. I would be curious to hear the
followup. Were those price increases of last
October a one shot adjustment, or have they been
followed by renewed inflation? In this regard it is
worth remembering that back in 1993, Yugoslavia
experienced for a short period the highest rate of
inflation seen since Hungary in 1946, which was the
highest ever recorded in all of known history.
My point
was that a "Polish-Scandinavian-Slovenian" solution
might lead to something not too bad somewhere down
the road. I fully agree that a "shock therapy" that imitates
what has been done in a whole lot of other countries will
not necessarily improve things and could make them a
whole lot worse. Unfortunately it appears that such policies
may be what are being pursued. I do not claim that the
"Polish-Scandinavian-Slovenian" solution is necessarily
the "best of all possible worlds."
Rather than review the political aspects of Milosevic's
rule, I think it is worth noting a few areas of economic
policy where we might see some improvement, even in
the relatively short run as a result of his removal. One is
that the country was under various embargoes. The removal
of these may help. Also, as Scahill noted, there had been
some corrupt privatizations where firms were basically
handed over to cronies of Milosevic's wife. Many of the
"seizures" that Louis complained about amounted to a
retaking of control by workers of some of those firms. This
would seem to be at least a move back towards the more
traditional Yugoslav system from something not so good.
Let me also make clear that I have long been a defender
of the old Yugoslav system. Indeed, the files of pen-l are full
of debates between me and Louis over this. In case he wants
to start those again, I agree that there were problems of
inflation, unemployment, and growing regional inequalities
under the old system. Was the alternative command central
planning, actually existing or idealized?
Let me more directly comment on Paul Phillips' remarks,
especially vis a vis the comparison between Slovenia and
Poland. Paul is correct that Slovenia (along with Hungary
and maybe Slovakia also) has moved above its 1989
benchmark level of real per capita income. However, Poland
did so several years ago and is now more than 30% above
it whereas Slovenia is only a few percents above it. In any
case, I think it is clear that I think the Slovenian approach has
a lot to offer, especially in comparison with what most of these
countries have done.
I would also remind again, yet again, that although what
happened in Poland was called "shock therapy," it was not
really all that shocking. Indeed, the similarities between
Poland and Slovenia look greater to me than their differences.
Thus, although Poland has allowed free convertibility of the
zloty, it has like Slovenia placed restrictions on direct foreign
investment. Some of that is for similar reasons, to protect
workers' management. It is a little known fact that in response
to the Solidarnosc challenge, Jaruzelski implemented a mild
version of Yugoslav style workers' management. One of the
factors not only in the restrictions on FDI, but also on privatization
more generally in Poland (where there also remains a large
state-owned sector, much to the tut-tutting of the IMF et al), was
that privatized firms lost that aspect. That, of course, reflects
a difference in that Poland did not emphasize workers' ownership
in its privatization scheme in contrast to Slovenia.
As near as I can tell, the two main other differences
between the two are that Poland decontrolled all prices
whereas Slovenia retains some price controls, and that
the banks in Poland are now more privately owned. Both
retained substantial portions of their social safety nets,
although neither have them to "Scandinavian" levels. In
short, they have a lot of similarities.
Another one is that neither had to dismantle a command
central planning mechanism after 1989. There were a lot
of subsidies and price controls in place in Poland. But, it
had by then essentially followed Hungary into becoming
a de facto market socialist economy, and was suffering some
of the endemic problems of those economies, that is high
inflation and high foreign indebtedness (and, yes, Doug,
Poland did get a break on those debts, unlike either
Hungary or Slovenia).
Finally, to Louis. I do not think that socialism is either
a necessary or a sufficient condition for a guarantee of
full employment, although traditionally we have certainly
seen much lower unemployment in socialist economies
than in capitalist ones. But, there are a variety of ways to
get full employment. Thus, I am reasonably sympathetic
with some of the "employer of last resort" schemes that
have been proposed by Mat Forstater's colleagues at the
U. of Missouri-Kansas City Center for Full Employment and
Price Stability and also from bill mitchell at the University
of Newcastle (formerly on pen-l, but no longer), even as I
disagree with their "chartalist" views of money.
(Just to answer the obvious, the chartalist view says
that money is what governments demand in payment for
taxes. Thus, a chartalist would deny that cowrie shells, used
as a medium of exchange, unit of account, and store of value
among the intensely market capitalist Kapauku of New
Guinea, would be a "money," because they had no government
collecting cowrie shells as taxes. I disagree with this position,
although if Mat and I start debating it, Doug Henwood will
proceed to the other room to vomit and probably unsub.)
Barkley Rosser
----- Original Message -----
From: <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Thursday, March 22, 2001 9:12 PM
Subject: [PEN-L:9386] Re: Re: Re: Re: Re: Re: Serbia after Milosevic
> Barkley and Louis,
> Just a couple of points. Poland is not the only transitional
> economy where GDP is higher now than it was in 1989. For
> Slovenia this is also true. Also, Slovenia has relied far less than
> Poland on foreign investment.
>
> I would also point to the fact that Slovenia has relied on capital
> controls and still controls 30+ per cent of prices and still has state
> ownership of the largest banks with somewhere around half the
> assets in the country. (Barkley, this is all in the papers I sent you
> and the tables that accompanied them.)
>
> What I am suggesting is that the so called Serbian neoliberal menu
> that Louis posted is not feasible since Slovenian type privatization
> was tied to eschewing Polish type shock treatment. Indeed that
> is one of the central theses of a paper I am giving with my
> Slovenian colleague to a conference in Portoroz in June. It is also
> coming out in a book to be published in Slovenia in a few weeks.
>
> The central thesis of all of our work is that the market is an
> institution that needs to be created, nurtured and disciplined over
> time. It is not 'natural' as the neolibs would have it, and it is
> necessary to develop countervailing institutions for it to work in
> anything like an efficient or moderately just manner. And it
> requires the development of a strong labour movement to control its
> excesses. The idea of shock treatment as it is usually
> understood, represents abject ignorance of how markets actually
> work.
>
> Paul
> Paul Phillips,
> Economics,
> University of Manitoba
>
> From: "J. Barkley Rosser, Jr." <[EMAIL PROTECTED]>
> To: <[EMAIL PROTECTED]>
> Subject: [PEN-L:9381] Re: Re: Re: Re: Re: Serbia after Milosevic
> Date sent: Thu, 22 Mar 2001 17:39:21 -0500
> Send reply to: [EMAIL PROTECTED]
>
> > Louis,
> > I would prefer to see a system with zero
> > unemployment. I don't claim Polish shock
> > therapy was perfect or wonderful. Only that
> > in conjunction with (real) Scandinavian
> > social safety nets and Slovenian privatization
> > approaches, about as good as one is going
> > to get from a "transition to capitalism" program.
> > The Polish farmers were suffering under
> > Polish socialism. Their problems run deeper
> > than capitalism, although arguably they were
> > at least partly due to the failure to follow through
> > on collectivizing that sector under the Polish
> > version of socialism, that always held back, at
> > least partly due to the political power of anti-Russian
> > sentiment and the strength of the Roman Catholic
> > Church. Hungarian ag is in much better shape.
> > One can criticize GDP all one wants, but it
> > does represent something. Poland is the only
> > one of the transition economies in Europe to have
> > clearly moved ahead of its 1989 level of real per
> > capita GDP, and has done so by a substantial
> > amount. There are still a lot of people in Poland
> > who are worse off than they were in 1989, but their
> > numbers and percentages are a whole lot less
> > than anywhere else in Central or Eastern Europe,
> > even probably including my old fave, Slovenia.
> > They are certainly far better off than the people in
> > Serbia were under Milosevic.
> > Barkley Rosser
> > ----- Original Message -----
> > From: "Louis Proyect" <[EMAIL PROTECTED]>
> > To: <[EMAIL PROTECTED]>
> > Sent: Thursday, March 22, 2001 4:58 PM
> > Subject: [PEN-L:9379] Re: Re: Re: Re: Serbia after Milosevic
> >
> >
> > > >Louis,
> > > > We went through this before. I note that Poland
> > > >has the best growth performance now of any of
> > > >the "transition economies."
> > >
> > > Growth performance? Is that what we are shooting for?
> > >
> > > >Some of its problems
> > > >have nothing to do with its transition or its version
> > > >of "shock therapy," e.g. the mess in agriculture which
> > > >goes back to its failure to collectivize away from the
> > > >dinky and misshapen private plots that are all over
> > > >the place.
> > >
> > > Polish farmers are bearing the brunt of capitalist restructuring and
will
> > > surely join with the revolutionary movement that capitalist suffering
will
> > > eventually unleash.
> > >
> > > >fairly rapid growth, the unemployment rate has come
> > > >down fairly substantially there.
> > >
> > > I advocate zero percent unemployment. The right to a job is a human
right.
> > >
> > >
> > >
> > > Louis Proyect
> > > Marxism mailing list: http://www.marxmail.org
> > >
> > >
> >
>
>
