Libertarian Alliance Showcase Publication No 7: Some advice to Czechoslovakia about how to do capitalism … 1992 archival piece, worthy of note.

David Davis

More holiday reading from the Libertarian Alliance library archives. This piece was actually very kindly written by Brian Micklethwait, in about an hour one Tuesday afternoon, especially for me, as a favour to some friends of mine in the trade department of the Czechoslovak (as it then was) Embassy in London, in 1992.



One response to “Libertarian Alliance Showcase Publication No 7: Some advice to Czechoslovakia about how to do capitalism … 1992 archival piece, worthy of note.

  1. Not surprisingly, I fundamentally disagree with Micklethwait, although he’s not as bad (or as culpable) as Jeffrey Sachs, who advised the Russian Government, with disastrous consequences for the Russian people, whose life expectancy fell below what it was in Stalin’s time.

    Insofar as “Capitalism” entails a society structured and run primarily in the interests and for the benefit of Capitalists (i.e. the owners of Capital), imposing capitalism in the context of a former Communist State must mean handing over the economy to the former regime oligarchs and black marketeers (both often gangsters), with predictable results.

    I very much doubt that “the people of Czechoslovakia wanted “Capitalism.” They might well have wanted a free market, but that’s not the same answer. I have here a history of NTS, a Russian revolutionary organization, which polled people on what economic system they would choose. Overwhelmingly, people chose “Neither Communism nor Capitalism.” Something more like “Social Democracy” or liberalism is what they had in mind. “Neither Communism nor Communism” became an NTS motto.

    On solely economic grounds, the people would have been well advised to implement Mondragon-style co-ops. These show twice the return on capital employed of Spanish investor-owned businesses, without any government support. However, building these is no easy matter if they are to be successful.

    In so many ways, I would pin the blame on Nixon and Kissinger. CIA spent years building departments ready to assist post-Communist societies in their economic re-development, in line with George Kennan’s successful strategy of Containment. In pursuit of “Detente”, the Soviets demanded that these be closed down, because they implied that the Americans wanted Communism to fail. Well, sure we did!

    And Nixon and Kissinger kow-towed to them, and closed these departments down.

    Now to be sure, these departments were not working with models that would appeal to pro-“Capitalists” purists. They were much more in line with the meliorist Social Democratic, “Open Society” patterns on which the successful economies of the US and Europe were based. (The EU now exceeds the US economy in GDP).

    I think that Hell will freeze over before Russians enthuse over “Capitalism” after their experiences with it. The same is increasingly true of Europe and the US. But then, the road to Hell was always paved with “good intentions.”

    It’s like re-modelling a boat. You can start at the prow and work backwards steadily towards the stern. What you cannot successfully do is demolish the ship in mid-ocean, rebuild it fom pieces in the water, and expect to get where you want to go to.

    Bon Voyage!