Monday, November 9, 2009

Government Controlled Economies' Troubled Legacy

If you read the headlines you will find no shortage of articles on why capitalism is a failed system.  They also propose that more regulation and federal planning is the solution to the economic crises.   A short list of proposed controls includes: limits to executive pay and price controls on health care and commodities, and limits on the trading of certain financial instruments.

The only trouble with limiting peoples' ability to freely engage in what they believe will be mutually benefitting transactions (even if the participants sometimes don't benefit), is you must limit their other freedoms in order to be successful.  Inevitably some "greedy capitalists" and other resistors who drag their feet must be killed. Some advocate that this is a small price to pay given the positive social outcomes.  Unfortunately the historical examples of successful highly regulated or centrally planned economies are hard to find. 

However, the failures are almost limitless (most links are all to Wikipedia in an attempt to avoid any media bias on either side):

Asia

Europe  (Eastern Bloc)
  • Soviet Union
  • East Germany
  • Poland
  • Romania
  • Czechoslavakia
  • Bulgaria
  • Hungary
  • Albania
Latin America

Africa and the Middle East
When we look at the overall wealth (GDP), freedom of movement, freedom of religion, freedom of press, and even the distribution of wealth (perhaps the biggest single motivator of these political movements), it is obvious to any mediocre student of history that government controls on the economy help no one, but the ruling elite.

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