Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Path: utzoo!decvax!microsof!uw-beaver!cornell!vax135!floyd!cmcl2!philabs!sdcsvax!sdcrdcf!trw-unix!prudence From: prudence@trw-unix.UUCP Newsgroups: net.politics Subject: A Response to Jeff Myers Note Message-ID: <207@trw-unix.UUCP> Date: Mon, 23-May-83 10:42:27 EDT Article-I.D.: trw-unix.207 Posted: Mon May 23 10:42:27 1983 Date-Received: Fri, 27-May-83 02:18:12 EDT References: uwvax.887 Lines: 36 Jeff Myers recently posted a note to this newsgroup in which he makes two points: 1) Government-run business do poorly because the government only nationalizes business which are tottering in the first place, and 2) The Soviet Union trails us because of the damage they sustained in WWII and because they started from a lower base. Point 1: This is valid, governments frequently use the ill health of an industry as an excuse for nationalization, however, the effect of such a move is usually to make the business even weaker. As a counter-example, look at the package delivery business. The U.S. Post Office abandoned the package delivery side of the mail because it was losing so much money. Congress repealed the Post Office monopoly on package delivery, and as a result, firms like Emory and REA have stepped in, providing excellent service at a low price. This is typical, because the government has never been capable of running a profitable operation. The single example Mr. Myers offered, Renault, is a rare exception. Newsweek reported that the reason Renault does so well is because of minimal government interference. Point 2: While it is true that the USSR suffered during WWII, Germany and Japan both suffered more, yet the free market has allowed entrepeneurs to rebuild the countries. The stifling Soviet bureaucracy has prevented this mechanism from working. Let us also dispell the notion that the Soviet Union was some sort of primitive backwater at the time of the Revolution. In 1910, the USSR was the fifth largest industrial nation in the world and a net exporter of food. Communism has had such a crippling effect on a naturally productive nation that countries as devoid of resources as Switzerland have long surpassed them. Let me end with a lesson from history. Laissez-faire capitalism is the only form of economy in history that has coincided with freedom and prosperity. The unending cycle of stagflation and recession that we have been suffering for nearly 20 years is a direct result of having abandoned such an economy. Prudence ucbvax!trw-unix!prudence