How is one supposed to understand anything about the economy, if most things published on the subject are egregiously unintelligent. See, for instance, this article titled “It’s stupid economists, people.” I don’t know if economists are stupid, but the author of this article definitely is.
The article’s author, who obviously has no understanding of the post-Soviet economies, chooses to pontificate about them:
After the fall of communism, for instance, many economists urged the leaders of the formerly planned economies to switch to market-based economies in one big bang. Since few people knew how to behave in a market economy, it was a disaster.
Within a very short period of time, the post-Soviet people learned, however. Today, just 21 years after the fall of the Soviet Union, there are functioning market economies in the FSU countries. Things are not perfect but the level of economic well-being has soared compared to what was in existence in 1990. Russia, for instance, has weathered the global economic crisis quite well. Ukraine, with its 300+ years of brutal colonial domination, is not doing quite well. Still, I can’t think of a single person I know back home whose economic well-being has not improved dramatically in the past 20 years.
The article suggests that it would have been a better idea to avoid the shock therapy in the FSU countries and, instead, drag out the transition period forever. Yeah, tell that to the people who only have one life to live. Living in a state of transitional uncertainty is very stressful to the majority of people. We went through a couple of bad years when I was in my late teens. But if that period had been extended to a few decades, I can’t see what I would have gained by being 40 instead of 20 when the economy started going back into a working mode.
An attempt to introduce elements of the market economy slowly and make them coexist with Socialist economic mechanisms was made by Gorbachev in the late eighties. This attempt was a resounding failure since the market economy was so much more robust and attractive that it literally exploded the Soviet economic structure from within.
It would be great if the author of the article learned a few things about that before pontificating.
After making these uninformed statements about the post-Soviet countries, the article’s author trots out the old and tired myth about how it is possible to make collective ownership work because, if one looks hard enough, one might find a couple of instances of it possibly working in Nepal and Maine. The journalist seems to recognize that you need to “comb the world” to find something as unnatural and unusual as a successful collective ownership of anything, yet it does not prevent him from cheering on a system of ownership that, I’m fairly certain, he would not have tolerated for two days in his own life.
Clarissa's Blog 
I agree with you on this. The author is not a known economist, so at least his stupidity cannot be associated with the profession. Collective action almost always fails in practice not least because of the free rider problem. Mancur Olson’s 1965 book, The Logic of Collective Action, is the great work in this field.
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I know that if I have to share any of my possessions with other owners I immediately lose interest in these possessions and will not take such good care of them as if they were my own. I’m convinced that most people feel the same way.
As for the free rider, this is an issue I face every time I assign a group project to my students.
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Why are people so obsessed with communism and the FSU bloc? Seriously, almost every time someone wants to argue about economy/healthcare/society/whatever models, all they do is juxtaposition their favorite model to communism and point out that ‘shit ain’t that bad’ compared to it.
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Because this is the only alternative to capitalism that actually existed in the modern era and was tried out in practice. The question of an alternative to capitalism is the central question that preoccupies most of philosophers today. If no such alternative exists, then criticizing capitalism is pretty much a waste of time.
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I see capitalism with more social welfare policies, aka a modern welfare state, as an alternative to US kind of capitalism, where corporations are people.
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That’s definitely a system that works in many places.
Yet, I’m curious to see if anybody does manage to conceive of the third possibility (capitalism, communism, and … ???).
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I’m not sure if a third option is logically possible; either the means of production are owned collectively or they are owned by individuals. All of the proposals for ‘third options’ that I’ve heard really just fall somewhere in between ‘laissez-faire’ and totalitarianism, the two extremes on the spectrum.
Maybe the real problem is that we are presupposing that their must necessarily be a distinction between ‘Owners’ and ‘Workers.’ Of course, this seems almost unavoidable in any large corporation (as you’ve mentioned, the cooperative model does not appear to work as effectively), but if you had an economy consisting of small businesses, then management and labour would effectively be one and the same. I doubt, though, that a modern industrialized country could be managed that way, at least not without significant advances in technology.
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” but if you had an economy consisting of small businesses, then management and labour would effectively be one and the same”
– I actually think that we are moving in the direction of small businesses / freelancing / self-employment offering the absolute majority of employment opportunities. The governments will keep bailing out the dysfunctional outdated behemoths until it becomes clear that it is no use, they need to go.
Today it makes less and less sense every day to work for a big company. Smaller businesses end up with the best employees.
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Oh, I entirely agree; but my point in saying that I don’t know whether this would be feasible in a modern industrialized economy is that I don’t see how we can maintain our material wealth without, somewhere down the line (probably in China), having large factories which, almost by definition, cannot exist as small businesses.
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I don’t see capitalism in its present form, with the distribution of wealth, or even of the ownership of the means of production that we have, as being inevitable. What I do see as inevitable is money. People will value some things more than others, and in order to get those things from other people, they have to do things other people want them to do. And that will involve work that is not intrinsically motivated. It’s no use critiquing capitalism when the real issue is that people don’t want to have to work to satisfy other people.
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