The pace of change in the Soviet Union and Eastern Europe is so brisk that it is risky to write anything about it. Nevertheless, the virtual dismantling of the Berlin Wall and the beginning of liberalization in East Germany are exhilarating news, the climax of months of historic developments.
The banking dilemma seems eternal, like the monetary dilemma, the tax dilemma, and the marital dilemma. The essence of the banking dilemma, however, is that the depositors’ money is not in the vault awaiting the depositors’ decision to withdraw it. Instead it is out on loan or invested in the money market or in mortgage-backed securities.
It is generally agreed, both inside and outside Eastern Europe, that the only cure for their intensifying and grinding poverty is to abandon socialism and central planning, and to adopt private property rights and a free-market economy. But a critical problem is that Western conventional wisdom counsels going slowly, “phasing-in” freedom, rather than taking the always-reviled path of radical and comprehensive social change.
The sudden collapse of Communism in Eastern Europe has amazed and elated the West. But what does it mean? If Communism has lost, what has won?
The usual answer is “democracy.” And this is assumed to be not only obvious and unambiguous, but unquestionably good.
True, free elections are finally being held in what used to be tyrannical one-party oligarchies. So far, so good. But we are entitled to doubt that this is the end ofthe matter, let alone “the end of history.”
Riots in the streets; protest against a hated government; cops arresting protesters. A familiar story these days. But suddenly we find that the protests are directed, not against a hated Communist tyranny in Eastern Europe, but against Mrs. Thatcher’s regime in Britain, a supposed paragon of liberty and the free market. What’s going on here? Are antigovernment demonstrators always, by definition, heroic freedom- fighters in Eastern Europe, but only crazed anarchists and alienated punks in the West?
He had been widely touted by the American media as the savior of Peru from hyperinflation and from the dangers posed by the current socialistic Garcia regime as well as the fanatical Maoist-type guerrillas who call themselves “The Shining Path.” Mario Vargas Llosa, tall, aristocratic, eminent avant-garde novelist and ex-leftist, was running for president of Peru.
The Soviet Union was the first country to introduce a fully nationalized healthcare system. To the cheers of Western “progressives,” Lenin signed a decree in 1919 stating that every Soviet citizen had a right to free medical care. Looking at the history of Soviet health decrees, it appears as if the system has been improved every year. And the present Soviet constitution, adopted in 1977, contains the right to “health” (not just health care).
The “partnership of government and business” is a new term for an old, old condition. We often fail to realize that the point of much of Big Government is precisely to set up such “partnerships,” for the benefit of both government and business, or rather, of certain business firms and groups that happen to be in political favor.
Sometimes it seems that our entire apparatus of economic education: countless courses, students, professors, textbooks, backed up—in the case of oil pricing—by a decade of experience in the 1970s, is a gigantic waste of time. Certainly it seems that way when we ponder the near-universal reaction to the Kuwait crisis.
