Comparative Political Economy

Free-marketers often point to the varying success of pairs of countries -- the United States vs. the Soviet Union, West vs. East Germany, Hong Kong and Taiwan vs. China -- to illustrate the benefits of markets over planning, regulation, and socialism. Some even point out the closer but real differences in GDP per capita between the United States and Western Europe. In his 1984 book Endless Enemies (p. 380) Jonathan Kwitny added the less familiar pairs "Morocco versus Algeria, Malaysia versus Indonesia, Thailand versus Burma, Kenya versus Tanzania." Now Rama Lakshmi reports in the Washington Post that we can see the results of two systems of political economy in one country:
It didn't take long for the first athletes arriving in New Delhi last week for the upcoming Commonwealth Games to catch a glimpse of modern India's two faces. Their gateway to the country was the capital's gleaming new international airport terminal, built by a privately led consortium and opened in June four months ahead of schedule. But the official wristbands that the visitors were handed at the airport turned out to be an emblem of India's famous red tape and government inefficiency. When the teams reached the athletes' village, the police guarding the facility refused to recognize the IDs, saying that the Games Organizing Committee had not sent the required authorization order. The jet-lagged athletes stood about under a tree for hours with their luggage, calling their embassies for help, and the problem was not finally resolved for four more days. To observers, the incident illustrated more than just the well-documented sloppiness that has marked India's preparations for the Games. It also underscored the gap that has emerged between a government rooted in a slower-moving, socialist era and a private entrepreneurial class that is busy building global IT companies, the world's largest oil refineries and spectacular structures such as the $2.8 billion airport terminal. "It is about two aspects of the India story," said Rajeev Chandrasekhar, an entrepreneur and member of Parliament. "India's private sector has been exposed to competition and therefore has developed capability. Accountability is firmly built into the entrepreneurial mind-set. But the government structure is a relic of the colonial past and continues to plod along."... For the Delhi [airport] project, [Grandhi Mallikarjuna]Rao said, his company worked with 58 government agencies. "Our nation is in the process of transition from a command-and-control economic system to a more efficient market-driven structure," he said. "It will take some time till this transition is complete."
Given all this history, the interesting question is why some people in the United States want to continually transfer such vital functions as energy and health care from the competitive, accountable, capable entrepreneurial sector to the slower-moving, plodding, command-and-control bureaucratic sector. (Of course, the already-government-influenced health care and energy industries are not the most entrepreneurial sectors of the economy. But as the examples above demonstrate, even imperfect markets work better than government direction. Nor are the government-run local schools very competitive or accountable, but they are more so than they will be under tighter federal control.)

Posted on October 2, 2010  Posted to Cato@Liberty

Krauthammer Misreads History

Charles Krauthammer calls same-sex marriage "the most radical redefinition of marriage in human history." Really? Some might say that ending "till death do us part" was more radical. And maybe ending the requirement that the bride promise to "love, honor, and obey." And how about the end of polygamy? Polygamy was probably the most common marital system in the broad sweep of human history, but now it is virtually unknown in the Western world; indeed, ahistorical conservatives warn that allowing two people of the same sex to make a vow of marriage could lead to polygamy. More currently, I would suggest that the truly radical redefinition of marriage is the revolution over the past generation in the idea that people should marry before they cohabit or have children. Barely a generation ago cohabitation simply wasn't acceptable; now it  is just assumed. Out-of-wedlock pregnancy is celebrated on the cover of People and no one seems to much care. In 2009, for the first time, more 25- to 34-year-olds were unmarried than married. A writer as smart as Krauthammer should be able to see that that gay liberation and gay marriage are a product, not a cause, of the unprecedented redefinition of sex, marriage, and childrearing. But like socially conservative politicians, Krauthammer is not about to confront his friends, colleagues, and fans by denouncing that radical redefinition of marriage. Sensing discomfort with rapid social changes, he shouts "Look over there!" Reducing the incidence of unwed motherhood, divorce, fatherlessness, welfare, and crime would be good for society. But it's not easy to figure out what to do. That's why social conservatives point to a real problem and then offer phony solutions.

Posted on October 1, 2010  Posted to Cato@Liberty

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