Economies Advance When People Come First – Not the Market

Elio Delgado Legon

Foto: Caridad

HAVANA TIMES — The neoliberal model of capitalist development has failed along all lines. That’s not just my opinion, it’s the assessment of every economist who has their head on straight.

Leaving the solution to all economic problems to the market, without state intervention, was the worst error committed under capitalism, which has now come to a dead end and has plunged into a deep crisis that could mark its end.

Social movements in all capitalist countries are gaining strength in their struggle against that irrational economic system that insists on perpetuating its own mistake. In my view, it’s a model that is tied hand and feet, because only measures that might be considered left would be able to save what’s left of capitalism.

But the transnationals, which are ultimately the entities that govern in the capitalist countries, never allow such measures because they are unable to see beyond their short-term profits.

If we make some comparisons, we can see quite clearly the difference between the neoliberal model and other models such as the socialist one, where people come first – not the market.

I can begin by pointing to the example of China, where in 1949 industrial development was still very limited. It was a country with a still very backward rural economy.

Between 1959 and 1961, due to adverse weather conditions, severe famine occurred in that country.

Foto: Caridad

However, during the last 30 years, China’s GDP has maintained an average annual growth of around 10 percent. Last year it saw an increase of 9.2 percent and is projecting a 7.5 percent rate for 2012, since it is now focusing on quality and not quantity.

Since 2008 China has been the second world economic power, and with the way things are going it will soon to be first – surpassing the United States. Currently it is the world’s largest exporter and second largest importer.

Another example is Vietnam, which was reunified in 1976 after having been left largely destroyed by a war of US aggression that killed several million of its citizens, most of them civilians.

Nonetheless, between 1990 and 1997 the GDP grew by eight percent annually and about seven percent each year between 2000 and 2002, making it the world’s fastest growing economy. Last year Vietnam’s GDP grew by 5.89 percent with the distribution of wealth benefiting the entire population.

Many other countries, some with socialist political-economic systems (as well as others that have simply have abandoned neoliberalism and now prioritize their people’s well-being) have managed to maintain acceptable levels of economic growth amid the global crisis.

These nations have neither high rates of unemployment nor are they experiencing recession, which together constitute the bane of the developed capitalist world today.

Venezuela, Ecuador, Bolivia and Nicaragua, among others, are undertaking the construction of socialist systems and the result is within sight of all: they are maintaining their economic growth despite the global crisis, significantly decreasing unemployment and distributing wealth among all of the people through programs to improve the lives of their citizens.

Foto: Caridad

Other countries that have adopted development models distinct from neoliberalism have taken quantum leaps in their economies and today their peoples do not have to suffer the hardships that plague the capitalist world.

Take the example of Argentina, which during Carlos Menem’s government — with its neo-liberal model and its “carnal relation” with the United States — plunged into the most frightful misery. Today that country is advancing and developing despite the capitalist world crisis.

I could point to other examples, such as Brazil, which despite having faced many obstacles has instituted programs that have allowed for substantial improvement in the economic situation of its people and is continuing to develop.

I have cited these examples so that people can understand why the Cuban economy is growing and developing, despite attempts to destroy it with a blockade (which can be described as criminal) and our nation not being immune to the multiple crises that afflict the world.

This is simply because the first and most important priority is the people, not the market.

6 thoughts on “Economies Advance When People Come First – Not the Market

  • Venezuela, Ecuador, Bolivia and Nicaragua, among others, are undertaking the construction of socialist systems
    Elio, would you mind providing any evidence?

  • Mark G, you apparently are not distinguishing between a socialist state power and a mode of production existing under that state power. The PRC and SRV have states led by transformationary political parties. The capitalist state powers that formerly had ruled these countries have been destroyed.

    All the ultra-left Trotskyists and Maoists have one thing in common, they all declaim loudly that China and Vietnam are now capitalist countries. I think that you may be in agreement with one of these major tendencies.

    You apparently can’t get your mind around the fact that a transformationary party in power can experiment with variations in the economic mode of production, and try to build a socialist country by trial and error, i.e., by using the Scientific Method of hypothesis, experimentation, new hypothesis.

    Countries like China, Vietnam and Cuba have socialist state powers. They are enemies of the monopoly capitalist states of the world, even though the capitalists have established economic relations in order to have access to labor in those countries and increase profits. You should allow these socialist-led states to do what they feel they must, in order to survive and progress, and put your creative energies into the debate as to how our post-capitalist US republic would function. Unfortunately, I suppose you never thought of that!

    I suspect however that you are one of those who still believe in the Marxian principle that the socialist state must own everything productive in sight, even though this has been thoroughly disproves in the laboratory of history. Even so, it’s a pleasure to speak with you.

  • Elio’s analysis is both superficial and wrong.

    China and Vietnam achieved sustained levels of economic growth by embracing capitalism. They are also experiencing income inequality on par with the United States and greater than in Europe.

    China and Vietnam are using the revenues generated by liberalizing their economies to make impressive investments in physical infrastructure such as skyscrapers, expressways and high speed rail. Where China in particular is lagging the so-called neoliberal countries (including the United States) is in making investments in social infrastructure to ensure equitable access to education, health care and social security.

  • Grady, sending Navy Seals is just one of several options. (lol).

    P.S. We do agree somewhat. You said “It is seemingly-magic credit extended with the flick of a computer key.” This is called “printing money”. It is inflationary and that is just what Brazil, Argentina and Venezuela are doing to sustain their annual 4% growth rates. Them chickens will come home to roost one day!

  • Yes, Elio, you are amazing, truly amazing, because you are a patriot and a transformationary socialist. Your arguments in favor of socialism over the “neoliberal model of capitalist development” are well made.

    Pay no attention to the man who calls your analysis faulty. He is the same one who advocated, in an earlier article comment, for US Navy Seals to be sent into Cuba in a commando-style raid to extract the criminal Alan Gross from prison.

    The main point in your article to which issue might be taken is your demonization of the “market,” equating it with neoliberalism as though they were the same. They are completely different.

    Neoliberalism is the strategy being used by the world capitalist bankers and industrial capitalists to batter down national market barriers to multinational corporation penetration, to displace national enterprise by multinational enterprise. The battering ram being using used is massive public credit debt which, once taken on, must then be “serviced” with endless and growing (compounded) interest payments.

    Neoliberalism is an evil monstrosity that has enserfed not only less developed countries to the international bankers, but Europe, the US and Japan, as well. So-called “austerity” being forced on all countries is merely a way to ensure that the people’s money goes to pay public credit debt interest, rather than to people’s real needs. This robbery of the people kills ironically the people’s ability to purchase needed goods in the market from capitalist enterprise, and sends the economies into recession and depression.

    The public credit debt taken on by governments is not money loaned. It is seemingly-magic credit extended with the flick of a computer key. This credit is not the property of banks. It is monetization of something the peoples own by natural right, their ability to work in the economy and produce use-values. All that should be paid therefore is principal and a one-time credit generation fee, not endless interest as a time-based rental fee.

    The market, on the other hand, is simply a clearing house for goods and services that need to be exchanged in a modern economy. It has built-in forces that help prices reflect true values in the chains of production. It transmits production incentives and disincentives up and down the lines of production.

    The market acts differently in different modes of production, capitalist or socialist, and is a critical economic tool. If properly appreciated by transformationary socialists, it can be a dynamic tool under socialist state power for building the socialist bridge to the theoretical, far-in-the-future classless, stateless society.

    Thank you, Elio, for your excellent article. I hope you continue to contribute to Havana Times.

  • Elio, you are amazing. Truly amazing. Your analysis is so faulty, I don’t know where to begin to criticize because my choices are so great. Let’s look at China, shall we? Can you even call that system socialist? The US is still economically three times as large as China so the number one spot is safe for awhile yet. And here is the kicker…China can only grow as long as it’s best customer, the US, grows along with it. OK, here’s another word for you…inflation. As these Latin American economies grow, largely by printing money, inflation within their economies grow.*insert Venezuela) The antedote to rising inflation is to increase exports which increases hard currency. How will they do that if those economies you say are failing (the US and Europe) can’t buy their crap? In what hard currency will these international transactions take place if the Euro and the Dollar are weak? Please don’t say the Yuan and expose your complete ignorance. The Yuan is a dollar-based currency now more than ever. Here’s the bottom line: Capitalism is not going anywhere. Will there be a redistribution? Yes. Will new rules be developed to govern the markets? Probably. Will we all look to Cuba with its crumbling infrastructure, food shortages, and negative population growth as the model of economic salvation? Never. Cuba’s best hope for the future is toward normalizing relations with a strong and growing US economy. Any other scenario just prolongs the agony for that sinking ship called Cuban socialism.

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