[OPE] Question about books that are sound introductions to economics

I leafed through Prof. Michael Lebowitz's latest missive yesterday, called
The Socialist Alternative. If you read that you will see that there is not a
word about workers getting the "full value" of the labour-hours they work.
Instead, he talks specifically about "extracting surplus value" which can be
used for the benefit of society. He couldn't be much clearer than that
really. The reason why the "extraction of surplus value" is not regarded as
exploitation in this case is, because the Marxist-Leninist bureaucrats are
extracting it, instead of the nasty capitalists, and they're redistributing
it for the benefit of society. What exactly this has to do with Marx's own
theory, I have no idea. It is gratifying if oil revenues are funding local
social programs, but if the economic base of the country conks out, you're
no further ahead.

It is known that thousands of Cuban advisors are employed in Venezuela - in
the Department of Military Intelligence, the Intelligence Directorate, the
Central Bank, the Interior Ministry, the Emigration Service, etc. In
addition there are also many other advisors from Europe, the US and other
Latin American countries. Mr Chavez is hurrying things along, but he might
fall over his own efforts insofar as they're out of step with what his own
people actually want.

I don't doubt that many social programs happening in Venezuela are very
progressive, and I haven't said otherwise. But I am skeptical about many of
the economic policies. Among other things, you don't need a Phd in economics
to understand that, if you get 30% general price inflation and counting,
that is simply unsustainable. Okay, it is not as bad as 100% inflation as in
1996, but it's going to wipe out of lot more business, if it has not done so
already. Lenin already noted that the best way to defeat the capitalists was
to debauch the currency and slap on taxes.

The logical end result of that is, aside from more and more price controls,
that the state has to take over and organize production - which is
presumably exactly what Mr Chavez is driving at. But insofar as the price
controls don't work, the informal economy is just going to increase, and in
that case you are worse off than with a market economy, not better off,
because you have less freedom and less efficiency and people don't get
essential products and services they need.

Venezuela cannot even feed its own people, it imports two-thirds of its food
needs, including a third from the US. I don't regard that as a responsible
policy, and I think it makes the Bolivarian revolution very vulnerable. One
good blockade, or a shift to other oil suppliers, and there's going to be a
lot of hungry Bolivarians. They might have good medical services and
schools, but they'll be hungry. Given the problems Cuba has had with its own
agricultural policy, are the Cubans really wellplaced to advise Venezuela on
this? If the local people don't even understand very much about economics,
and request textbooks, how is all this going to succeed? I assume that
within five years, there's going to be a lot of disaffected people in
Venezuela - how are you going to be able to unite these people to work
together for the reconstruction of society, other than with the threat of
force? If these questions cannot even be asked and discussed, on the ground
that it is "ideologically incorrect", there's a problem.

The original aim of the exercise was to create a more egalitarian
distribution of wealth and income, and a more balanced development of
society, which is certainly possible; there are a variety of methods to do
this, and there is nowadays a lot of international experience which shows
the kinds of policies that work, and which do not. If however the end result
of Chavism is economic dislocation and poverty, then many people will
conclude socialism does not work, and they're likely to want to leave the
country - unlike the advisors, they may not even be able to leave. You can
be ideologically staunch and live in a mess, but if you live in a mess,
serious questions are raised about the merits of your ideological
staunchness.

J.
 

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Received on Thu Sep 23 03:32:52 2010