Making economic sense phần 9 pot

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 pri- vate sector. Aid to Gorby, therefore, may be a reward for Gorby and his friends; but it is necessarily and ineluctably a harsh pun- ishment 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 coun- tries, the State grew so wildly as to virtually swallow up the first nation, and the parasite ended up virtually destroying its host. The Soviet people need a U.S. bailout of its own State appara- tus 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 con- sequences, shouldn’t we, for once, do what is right? Or is that too arcane a concept these days? Z Economics Beyond the Borders 407 102 W ELCOMING THE VIETNAMESE F rom its inception America was largely the land of the free, but there were a few exceptions. One was the blatant subsi- dies to the politically powerful maritime industry. Trying to protect what has long been a chronically inefficient industry from international competition, one of the initial actions of the first American Congress in 1789 was to pass the Jones Act, which protected both maritime owners and their top employ- ees. The Jones Act provided that vessels of five or more tons in American waters had to be owned by U.S. citizens, and that only citizens could serve as masters or pilots of such vessels. Times have changed, and whatever national security consid- erations that might have required a fleet of private boats ready to assist the U. S. Navy, have long since disappeared. The Jones Act had long ago become a dead letter, but let a law remain on the books, and it can always be trotted out to be used as a club for protectionism. And that is what has happened with the Jones Act. Unfortunately, the latest victims of the Jones Act are Viet- namese immigrants who were welcomed as refugees from Com- munism, and who have proved to be thrifty, hard-working, and productive residents of the United States, working toward their citizenship. Unfortunately, too productive as fishermen for some of their inefficient Anglo competitors. In the early 1980s, Texas shrimpers attempted, by use of violence, to put Viet- namese-American competitors out of business. The latest outrage against Vietnamese-American fishermen has occurred in California, mainly in San Francisco, where Vietnamese-Americans, legal residents of the U.S., have pooled their resources to purchase boats, and have been engaged in 408 Making Economic Sense First published in February 1990. successful fishing of kingfish and hagfish for the past decade. In recent months, in response to complaints by Anglo competitors, the Coast Guard has been cracking down on the Vietnamese, citing the long-forgotten and long unenforced provisions of the Jones Act. While the Vietnamese-Americans have been willing to pay the $500 fine per citation to keep earning their livelihood, the Coast Guard now threatens to confiscate their boat-registration documents and thereby put them out of business. The fact that these are peaceful, legal, permanent residents makes all the more ridiculous the U.S. government’s contention that they “present a clear and present threat to the national security.” Dennis W. Hayashi of the Asian Law Caucus, who is an attorney for the Vietnamese fishermen, notes that all of them “are working toward citizenship. They were welcomed as polit- ical refugees. It is noxious to me that because they have not yet sworn allegiance to America there is an implication that they are untrustworthy.” In the best tradition of Marie Antoinette’s “let them eat cake,” the government replies that the Vietnamese are free to work on boats under five tons which would operate closer to shore. The problem is that the Vietnamese concentrate on fish that cater to Asian restaurants and fish shops, and that such kingfish and hagfish have to be caught in gill nets. So why not use gill nets in small boats closer to shore? Because here, in a classic governmental Catch-22 situation, our old friends the environmentalists have already been at work. Seven years ago the environmentalists persuaded California to outlaw the use of gill netting in less than 60 feet of water. Why? Because these nets were, willy-nilly, ensnaring migratory birds and marine mammals in their meshes. So, once again, the environmentalists, speaking for the interests of all conceivable species as against man, have won out against their proclaimed enemies, human beings. And so, seeking freedom and freedom of enterprise as vic- tims of collectivism, the Vietnamese have been trapped by the Economics Beyond the Borders 409 U.S. government as pawns of inefficient competitors on the one hand and anti-human environmentalists on the other. The Viet- namese-Americans are seeking justice in American courts, how- ever, and perhaps they will obtain it. Z 410 Making Economic Sense The End of Collectivism 103 T HE COLLAPSE OF SOCIALISM I n 1988, we were living through the most significant and excit- ing event of the twentieth century: nothing less than the col- lapse of socialism. Before the rise of the new idea of socialism in the mid and late nineteenth century, the great struggle of social and political philosophy was crystal-clear. On one side was the exciting and liberating idea of classical liberalism, emerging since the seven- teenth century: of free trade and free markets, individual liberty, separation of Church and State, minimal government, and international peace. This was the movement that ushered in and championed the Industrial Revolution, which, for the first time in human history, created an economy geared to the desires of and abundance for the great mass of consumers. On the other side were the forces of Tory statism, of the Old Order of Throne and Altar, of feudalism, absolutism, and mer- cantilism, of special privileges and cartels granted by Big Gov- ernment, of war, and impoverishment for the mass of their sub- jects. In the field of ideas, and in action and in institutions, the classical liberals were rapidly on the way to winning this battle. 413 First published in October 1988. The world had come to realize that freedom, and the growth of industry and standards of living for all, must go hand in hand. Then, in the nineteenth century, the onward march of free- dom and classical liberalism was derailed by the growth of a new idea: socialism. Rather than rejecting industrialism and the wel- fare of the masses of people as the Tories had done, socialists professed that they could and would do far better by the masses and bring about “genuine freedom” by creating a State more coercive and totalitarian than the Tories had ever contemplated. Through “scientific” central planning, socialism could and would usher in a world of freedom and superabundance for all. The twentieth century put this triumphant idealism into practice, and so our century became the Age of Socialism. Half the world became fully and consistently socialist, and the other half came fairly close to that ideal. And now, after decades of calling themselves the wave of the future, and deriding all their opponents as hopelessly “reactionary” (i.e., not in tune with modern thinking), “paleolithic,” and “Neanderthal,” socialism, throughout the world, has been rapidly packing it in. For that is what glasnost and perestroika amount to. Ludwig von Mises, at the dawn of the Socialist Century, warned, in a famous article, that socialism simply could not work: that it could not run an industrial economy, and could not even satisfy the goals of the central planners themselves, much less of the mass of consumers in whose name they speak. For decades Mises was derided, and discredited, and various mathe- matical models were worked out in alleged “refutation” of his lucid and elegant demonstration. And now, in the leading socialist countries throughout the world: in Soviet Russia, in Hungary, in China, in Yugoslavia, gov- ernments are rushing to abandon socialism. Decentralization, markets, profit and loss tests, allowing inefficient firms to go bankrupt, all are being adopted. And why are the socialist coun- tries willing to go through this enormous and truly revolutionary upheaval? Because they agree that Mises was right, after all, that 414 Making Economic Sense socialism doesn’t work, and that only desocialized free markets can run a modern economy. Some are even willing to give up some political power, allow greater criticism, secret ballots and elections, and even, as in Soviet Estonia, to allow a one-and-one half party system, because they are implicitly conceding that Mises was right: that you can’t have economic freedom and private property without intellectual and political freedom, that you can’t have perestroika without glasnost. It is truly inspiring to see how freedom exerts its own “domino effect.” Country after socialist country has been trying to top each other to see how far and how fast each one can go down the road of freedom and desocialization. But much of this gripping drama has been concealed from the American public because, for the last 40 years, our opinion- molders have told us that the only enemy is Communism. Our leaders have shifted the focus away from socialism itself to a variant that is different only because it is more militant and con- sistent. This has enabled modern liberals, who share many of the same statist ideas, to separate competing groups of socialists from the horrors of socialism in action. Thus, Trotskyites, Social Democrats, democratic socialists, or whatever, are able to pass themselves off as anti-Communist good guys, while the blame for the Gulag or Cambodian genocide is removed from social- ism itself. Now it is clear that none of this will wash. The enemy of freedom, of prosperity, of truly rational economics is socialism period, and not only one specific group of socialists. As even the “socialist bloc” begins to throw in the towel, there are virtually no Russians or Chinese or Hungarians or Yugoslavs left who have any use for socialism. The only genuine socialists these days are intellectuals in the West who are enjoy- ing a comfortable and even luxurious living within the supposed bastions of capitalism. Z The End of Collectivism 415 104 T HE FREEDOM REVOLUTION I t is truly sobering these days to turn from a contemplation of American politics to world affairs. Among the hot issues in the United States has been the piteous complaint about the “martyrdom” of Jim Wright, Tony Coelho, and John Tower to the insidious advance of “excessive” ethics. If we tighten up ethics and crack down on graft and conflict of interest, the cry goes, how will we attract good people into government? The short answer, of course, is that we will indeed attract fewer crooks and grafters, but one wonders why this is something to complain about. And then in the midst of this petty argle-bargle at home comes truly amazing, wrenching, and soul-stirring news from abroad. For we are privileged to be living in the midst of a “rev- olutionary moment” in world history. History usually proceeds at a glacial pace, so glacial that often no institutional or politi- cal changes seem to be occurring at all. And then, wham! A pil- ing up of a large number of other minor grievances and tensions reaches a certain point, and there is an explosion of radical social change. Changes begin to occur at so rapid a pace that old markets quickly dissolve. Social and political life shifts with blinding speed from stagnation to escalation and volatility. This is what it must have been like living through the French Revo- lution. I refer, of course, to the accelerating, revolutionary implosion of socialism-communism throughout the world. That is, to the freedom revolution. Political positions of leading actors change radically, almost from month to month. In Poland, General Jaruzelski, only a few years ago the hated symbol of repression, threatens to resign unless his colleagues in the communist gov- ernment accede to free elections and to the pact with Solidarity. 416 Making Economic Sense First published in August 1989. [...]... run, political and economic freedom go hand in hand In particular, that “democratic socialism” is a contradiction in terms A socialist economy will inevitably be dictatorial 418 Making Economic Sense It is clear now to everyone that political and economic freedom are inseparable The Chinese tragedy has come about because the ruling elite thought that they could enjoy the benefits of economic freedom... (Actually, despite the fascination of Western intellectuals with First published in January 198 5 432 Making Economic Sense the Stalin-Trotsky schism, it was far more an intra-Bolshevik personal and factional squabble than any sort of ideological betrayal.) In the case of the magnificent free-market revolution of November 199 4, however, the betrayal began to occur almost immediately Indeed it was inevitable,... eager for models and for the West to instruct them on how to speed up the process How do they desocialize? Unfortunately, innumerable conservative institutions First published in September 198 9 420 Making Economic Sense and scholars have studied East European Communism in the past 40 years, but precious few have pondered how to put desocialization into effect Lots of discussion of game theory and throw... betray Republican principles to the Democrats The peoples’ revolution is not a one-shot proposition; it is an ongoing process, of which the grand sweep of November 199 4 was a notable instance The new populist revolution is 436 Making Economic Sense multi-pronged, and necessarily takes place both inside and outside the machinery of elections Note the war for whatever is left of the soul of Slick Willie... Communist countries, the spectrum of socialism ranged from the quasi-market, quasi-syndicalist Previously unpublished 426 Making Economic Sense system of Yugoslavia to the centralized totalitarianism of neighboring Albania One time I asked Professor von Mises, the great expert on the economics of socialism, at what point on this spectrum of statism would he designate a country as “socialist” or not At... appropriately enough, was launched by President Bush in his victory address before Congress on March 6, 199 1: In the war just ended, there were clearcut objectives, timetables and, above all, an overriding imperative to achieve results We must bring that same sense of self-discipline, that same sense of urgency, to the way we meet challenges here at home After summarizing some of his current domestic... West! Particularly enthusiastic about the new development is Szigmond Jarai, deputy director of the Budapest Bank and chairman of the government committee supervising the establishment of 428 Making Economic Sense the daily stock exchange Jarai declared that “the stock market is the heart of an effective economy We need to reduce our bureaucracy and free up entrepreneurs,” he added, sounding, as... American history has been the occasion for a Great Leap Forward in the power of the State, a leap which, at best, could only be partly rolled back after the war First published in May 199 1 The End of Collectivism 4 29 A conflict as seemingly minor as the War of 1812 took the Jacksonians three decades to wash out of American life; and freedom was never able to recover fully from the Civil War and the... Korean conflict The War Labor Board, designed to privilege unions, set wages, and arbitrate disputes, inspired the National Labor Board in the early Roosevelt New Deal, to be succeeded by the 430 Making Economic Sense National Labor Relations Board under the Wagner Act and to be supplemented by a reprised War Labor Board during World War II Particularly dangerous for an acceleration of statism are successful... one-shot increase, and not of the continuing and accelerating kind characteristic of monetary expansion And, furthermore, what consolation is it for a consumer to have the price of an item be 424 Making Economic Sense cheap if he or she can’t find it? Better to have a bar of soap cost ten rubles and be available than to cost two rubles and never appear And, of course, the market price—say of ten rubles—is . pooled their resources to purchase boats, and have been engaged in 408 Making Economic Sense First published in February 199 0. successful fishing of kingfish and hagfish for the past decade. In recent. gov- ernment accede to free elections and to the pact with Solidarity. 416 Making Economic Sense First published in August 198 9. On the other hand, in China, Deng Hsiao-ping, the architect of market. is the total abolition of socialism and statism across the board. 422 Making Economic Sense First published in March 199 0. For one thing, as we have seen in the Soviet Union, gradual reform