Freeman

ARTICLE

Perspective: Soviet Keynesians

DECEMBER 01, 1991 by YURI OLSEVICH

The Soviet Ministry of Finance would be very surprised to find out that its monetary policy since 1985 has been a typical Keynesian one. The Keynesians advocate a budget deficit and oversupply of money for the stimulation of consumer demand. Keynesianism was discredited in the West during the 1970s because Keynesian policies directly led to stagflation, where there is inflation, no economic growth, and rising unemployment. The excessive supply of money was extremely destructive even in the West where there is market competition. What can we say about the Soviet economy, where there is no competitive market and only huge monopoly structures? Here we see that the oversupply of money combined with price increases is a direct path to the decrease in production and destruction of the economy. That is what we witness today.

In 1985 the government’s philosophy was, “We’ll suffer, but we’ll learn.” This hasn’t worked because it isn’t the government that suffers, but rather the general public.

—Yuri Olsevich of the Soviet Academy of Sciences,

writing in the April 1991 issue of Ogonyok

The Role of Government

The rightful role of government in a free society is to provide justice, not goods and services. It does this using law. Life, liberty, and property existed before legislation, thus causing man to make laws to secure these. The law is merely the organization of the individual’s natural right of lawful defense. It is the substitution of this common force for individual forces that is to protect persons, liberties, and properties, equally.

The inevitable question now arises: How can the government provide any goods or services if the only way it can do this is to steal the property it is supposed to protect? The inconvenient answer for fans of redistribution is that it cannot do the impossible. It either provides justice by protecting property, or perverts justice by redistributing it—but it cannot do both simultaneously.

—R. W. Boehm, writing in the June 1, 1991,

issue of the Portsmouth, New Hampshire, Herald

The Market in Burned-Out Light Bulbs

In Kiev, the capital city of the Ukraine Republic, the price of a new light bulb is 35 or 40 kopecks. (There are 100 kopecks to a ruble.) Yet a market has emerged in Kiev for burned-out light bulbs, and people pay as much as two rubles for a burned-out light bulb. I doubt that any American could figure out why burned-out light bulbs would be selling for five or six times the price of a new light bulb; only a native of the Soviet Union could understand that.

The explanation is simple. The price of a new light bulb is indeed only 35 or 40 kopecks, but the average person cannot find, let alone buy, them. There is a shortage of light bulbs, as well as a shortage of everything else. So people buy burned-out light bulbs, take them to their place of employment, and when no one is looking, they unscrew the functioning light bulb, replace it with a burned-out light bulb, and take the new one home.

—Emanuel S. Savas, speaking at

Saint Vincent College, March 20, 1991

A Little Vacation

New York City’s shelter system for homeless families has become so livable that hundreds, if not thousands, of families who could stay elsewhere are flocking to shelters so they can move to the top of the list for permanent subsidized housing, city officials say.

Dorian and Renita Steeley and their three children, for example, were crowded into a two-bedroom apartment with relatives. But they wanted their own place. So they went to the city and said they were homeless. They now have a pleasant two-bedroom apartment in a Bronx shelter, at a cost to the city of $2,730 a month.

Mr. Steeley is certified to work with the mentally ill, and Mrs. Steeley has been employed as a dental assistant. But they are now receiving public assistance, and neither plans to work until they get a permanent place to live.

“I consider this a little vacation,” she said recently.

—Celia W. Dugger,

writing in the September 4,1991,

issue of The New York Times

Medical Care

The only problem with our medical-care system is that the government and other third parties are paying the bills.

The government has established various cost-containment programs in an effort to reduce its share of the financial burden for hospital care, physician services, and prescription drugs for Medicare and Medicaid patients. These programs have given the government license to ration medical care and have raised the cost for those who pay their own bills by as much as 50 percent.

The only thing that is breaking down is the government system of paying for medical care. If our bloated bureaucracy can’t provide medical care for a small percentage of the population, why would anyone want it to try to provide medical care for all Americans?

—Francis A. Davis,

writing in the March 1991

issue of Private Practice

The Power of Attraction

Don’t get too upset with the declining standards all around you and your inability to influence others regarding what you see as the errors of their ways and their thinking. Remember, the only person you are responsible for is you. That puts a big premium on your thinking and your behavior. Concentrate, therefore, on improving yourself, and if you get good enough, the power of attraction will soon reveal itself by influencing others to follow your example.

—H. F. Langenberg,

speaking before the Republican Women’s Club,

Union, Missouri, April 18,1991

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December 1991

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Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
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