File spoon-archives/marxism-international.archive/marxism-international_1997/97-01-23.012, message 40


Date: Tue, 21 Jan 97 21:39:23 EST
From: boddhisatva <kbevans-AT-panix.com>
Subject: Re: M-I: Susan Woodward on Socialist Yugoslavia





		Mr. Rosser,


	When looking at Yugoslavia and the other "failed experiments" of
East European market socialism, consider their paucity of credit
mechanisms. Credit systems are utterly essential for market systems (and
all modern economies) to work. I think you will find that nearly every
failing market system - capitalist or socialist - has an inadequate or
corrupted credit system.  Simplistically, producer goods need the credit
markets to value them properly, just as consumer goods need the consumer
market.  Consumer credit provides a feedback between the two.  Economies
become unstable without proper credit markets because new technologies are
not properly valued before they are committed to, and in a way that
appropriately reflects their inherent risk.  This is, of course, one of
the essential flaws with planned economies.  They have essentially
arbitrary credit.  Some capitals get carte blanche, while others are
squeezed brutally, and there is no middle ground.  Where, in a market
system, a new technology may require a half dozen or more creditors to get
going (requiring different terms and rates of return) , a planned economy
has one creditor who gives the "thumbs up" or "thumbs down" on a project,
like Caesar.  





	peace




     --- from list marxism-international-AT-lists.village.virginia.edu ---


   

Driftline Main Page

 

Display software: ArchTracker © Malgosia Askanas, 2000-2005