Making Economic Sense
Making
Economic Sense
by Murray Rothbard
(Contents
by Publication Date)
Chapter 97
Should We Bail out Gorby?
The debate over whether or to what extent we should
bail out Gorby ($10 billion? $50
billion? $100 billion? Over how many years?) has almost universally
been couched in false and
misleading terms. The underlying concept seems to be that the United
States government has,
through some divine edict, become the wise and benign parent of the
Soviet Union, which, in its
turn, has for most of its career been a wild and unruly kid, but a kid
that is now maturing and
showing signs of taking its place as a responsible member of the
family. It is supposed to be up to
the parent, engaged in a behavioristic reward/punishment form of
raising said kid, to mete out a
reward/punishment scheme so as to reward improvement and to punish (by
rewarding less--it's a
very progressive form of child-rearing) any regression back to the
wild-kid state. And in tune
with modern mores, the "rewards" are exclusively monetary, that is, to
put a candid face on it, we
are engaged in a process of bribing the kid to be good.
And so the debate, within the circle of "parents"
of the Soviet Union which all Americans
have willy-nilly become, runs along these lines: Gorby did wonderfully,
and freed Eastern
Europe and began to free the Soviet Union; for this he should be
rewarded copiously. On the
other hand, Gorby slipped back for a while, and began to play with
those bad companions the
despotic Black Colonels, for which he should be punished (by
withholding bribes); but recently,
Gorby has gotten better.
In addition to the nuanced complications of trying
to figure out to what extent to reward
Gorby and to what extent to withhold the rewards, there is an extra
complication, due to the fact
that Gorby and the USSR are, after all, not one and the same. If we
reward Gorby heavily, will it
discourage the more advanced reformers such as Yeltsin, or will it push
Gorby more in their
direction? On the other hand, if we punish Gorby, will this lead to the
dread Black Colonels--the
real despots--taking over, or will
Yeltsin and the liberals take over instead? The U.S.
Establishment, which worships the status quo ("stability") almost above
all things, at least in
foreign affairs, and fears change like the head of Medusa, of course
plumps for Gorby all the
way.
Within this debate, too, everyone, even the most
enthusiastic bailout advocates, recognize
that the U.S. budget is limited, and that therefore there has to be
some restraint upon the total
handout.
The result of all these complexities is that, as in
most other areas of American life, our
seemingly vibrant democracy appears to be engaged in free and vigorous
debate, but is really
only parsing relatively trivial nuances within a basic, unargued, and
implicitly assumed,
paradigm: the U.S. as parent trying to find the precise formula for
correcting previously unruly
offspring. Unfortunately, the basic paradigm never gets discussed, and
desperately needs airing
and criticism.
There are many fundamental flaws with this
universally held paradigm. First, no one
appointed us as parents of the Soviet Union. To be more specific, the
United States, as rich and
powerful as it is, is not God; its resources are strictly limited and,
over recent years, have
experienced ever narrower limits.
Even if we wanted to and set out to do so, it is
not in our power to cure all the ills of the
world.
There is no way we can stop or reverse the
volcanoes, heal the sick, or resurrect the dead.
It is not just that we are not responsible for Third World (or Second
World) poverty; there is
nothing we can do about it, except bankrupting and impoverishing
ourselves. We can only serve
as a beacon-light on how to get out of the mire. For the United States
and Western Europe did
not become relatively rich and prosperous by accident or by a trick of
nature; we lifted ourselves
by our bootstraps out of the nasty, brutish, and short lives common to
mankind.
We--or more precisely our ancestors--did it by
devotion to property rights and the rule
of law, and by providing the institutional means for a free and
developing economy to flourish.
The best--indeed the only thing we can do for the impoverished Second
and Third Worlds--is to
tell them: look, here is how we became prosperous: by defending the
rights of private property
and free exchange, by allowing
people to save and invest and keep their earnings. If you
want to prosper, follow our forefathers: privatize and deregulate. Get
your government off your
backs and out of your lives.
If we adopt this new (or rather, return to the
original U.S.) paradigm, the whole question
of bailing out Gorby looks very different. U.S. government aid can only
be a reward for Gorby
and the rest of the neo-Communist nomenklatura. Regardless of rhetoric,
such aid can only
strengthen the State in the Soviet Union and therefore diminish and
cripple the only hope for
Russia and the other republics: the nascent and struggling private
sector. Aid to Gorby, therefore,
may be a reward for Gorby and his friends; but it is necessarily and
ineluctably a harsh
punishment for the peoples of the Soviet Union, because it can only
delay and cripple their
return, or advance, to a free economy.
To paraphrase a famous statement of Dos Passos
("all right, we are two nations"): every
country is really two nations, not one. From one nation--the people
interacting voluntarily, in
families, churches, science, culture, and the market economy--all
blessings flow. The "second
nation"--the State--produces nothing; it acts as a parasitic blight
upon the first, productive
nation: taxing, looting, inflating, controlling, propagandizing,
murdering. In the Soviet Union and
other Communist countries, the State grew so wildly as to virtually
swallow up the first nation,
and the parasite ended up by virtually destroying its host. The Soviet
people need a U.S. bailout
of its own State apparatus like it needs--to use an old New York
expression--a hole in the head,
and quite literally. And while the American public, one hopes, resists
the notion of foisting upon
the Soviet Union more of what has brought it to its current sorry
state, we might even turn our
attention away from foreign woes and tyrannies, and focus again upon
our own beloved State
here at home.
But then there is the seeming clincher in rebuttal:
if we don't bail out Gorby, won't worse
people come to power in the USSR? Well, who knows? In the first place,
it is not given to us to
decide the fate of the Soviet Union; that, after all, is up to the
Soviets themselves. Again, the
United States is not God. In the second place, since the future is
uncertain, a post-Gorby Soviet
Union could be better or worse. So if we can't predict the
consequences, shouldn't we, for once,
do what is right? Or is that too arcane a concept these days?
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