Monday, February 04, 2008

Choice of Economic Systems

I have been reading a lot of articles and books on communism and communist states these past few months. It is strange that in many instances where a higher quality of life is observed, people try to explain those variables as a result of communist government intervention, while they neglect to think about the causes for the low income levels in these regions. It is certainly laudable that these regions have high social indicators (if the official statistics are correct), but isn't it as important to find out why they are doing badly on economic indicators. Is it sufficient that people are more literate when they are dirt poor?

There is something missing in this equation, and I do want to know what. I am also extremely skeptical about aggregate numbers on well being. Aggregates hide a lot of regional differences. Means distort the differences between the highs and the lows. What is true is that all ships rise in a rising tide (Buchanan analogy), that is precisely why even the poor in America are better fed than the poor in India. Please do not tell me that the poor in India are happier. That is not true! Happiness is a relative term that has no measurement standard. Interpersonal measurement comparisons can just not be made objectively with happiness as a measure. It is easy to romanticize the notion of an agrarian economy. One crop failure in such areas is sufficient to induce famine like conditions and acute poverty. Besides, these people endure hard labour under harsher conditions to get that one 'earth grown' and 'self grown' meal.

If communism is indeed good and has lead to better health and literacy in these regions, why hasn't it reduced poverty or lead to higher incomes? Or is the ideal of communism to keep everyone equally poor but well read?

1 comment:

effay said...

"Or is the ideal of communism to keep everyone equally poor but well read?"

Poor = can't afford many books other than Das Kapital which leads to well read because you've got to be to suffer through that bore.

Hmmm...maybe in cases where you can only afford a few books, you will chose those with enduring value, or religious import. Since these books would tend to be of high literary complexity, these people might be more literate than some rich person who just reads magazines all day (or maybe even just looks at the pictures). For instance, think of the US founding fathers who were incredibly well read even though many learned to read from only one book - The Bible.

Just an impromptu thought.