Bring Back the Commies!

Who in hell is this ignorant little gobshite, Neil Clark? He’s actually seriously suggesting that under the Socialist Dictatorships of pre-1989 Eastern Europe people were better off than they are now. It’s not just the vileness of the purely monetary comparison that he makes (not being jailed or tortured because you disagree with the powers that be has some sort of value, surely?) but  the fact that  the statistics he uses are complete  bollocks as well.

The statistics speak for themselves. GDP in the former communist states fell between 20% and 40% in the decade after 1989 - an economic contraction which, in the words of Budapest economist Laszlo Andor, "can only be compared to the Great Depression of the 1930s".

Only Poland had managed to return to its 1989 level of output by the end of the 20th century. Hungary, considered by many the most "advanced" economy of the region - and certainly the one most open to foreign investment - had to wait until 2002.

No one with the slightest pretension to economic literacy believes the old statistics. Firstly, they did not even measure GDP, they used other more Marxist measures. I know more about Russia than I do Eastern Europe but the basic methods of measurement were the same. It is an oft told tale that things like tractor output were measured in tonnes.Yes, the weight of output was what counted, not the number, or their value,  their utility, but the weight. I remember being at the British Embassy in Moscow at a talk by my old Professor, Richard Layard (and he’s no right winger, believe me,) when he was working with the Russian Foreign Trade Ministry and trying to actually make sense of the old statistics. He told the story of some workers at the Volga car plant in Moscow. They’d worked out that they could save 5 or 6 kg’s of the car’s weight by slightly changing the way the chassis was made. In a western firm that would be an addition to value, being able to make a car with less raw materials. In the Socialist system this would be a loss of GDP, as tonnage of cars produced would fall. The workers were lucky to keep their jobs for suggesting such a reduction in production.

Secondly, of course, (sticking with the example of cars)  when the West measured the output of a car, we meant a Ford Escort or Fiat Panda or the like. East Germany meant a Trabant, made of papier mache. It is almost impossible to make a valid comparison between the two things.

Everyone got these things wrong, the CIA and literally everyone. No one could actually grasp quite how poor these places were. Gorbachov in a speech in 1986 made the point that the Soviet economy, absent population growth and resource extraction, was the same size as the Tsarist one in 1913. An entire 70 years and a bit of industrial development had produced no increase in value added at all....and as all good economists know, GDP is value added in an economy.

The old figures were purely bullshit, nothing that can be used to make a valid comparison with now at all. We could even look at Germany...at unification Ostmarks were exchanged at 1:1 with D Marks, one of the things that is still causing huge problems in the East. But even responsible economists thought that 2:1 would have been valid.....now we think that 4:1 would have been about right. What this means is that in 1989 we were overvaluing the GDP of East Germany by a whole 100%. This Clark character is simply spouting nonsense.

While a minority have seen real wages rise, for the vast majority in the countries in question, the transition process has witnessed a spectacular fall in living standards. In Hungary, average real wages fell by 24% in the first six years of transition; in the Czech Republic it was only in 1997 that average, real wages reached their 1989 level.

This is further frothing nonsense. As one who was actually there in E Europe at the time (yes, my first visit was in December 1989 to Hungary, doing business in Warsaw by March 1990, full time residence in Moscow from Feb 1991)  they were not cash economies in any normal sense of the word. You could have pockets stuffed with money and not be able to find anything to buy. Time was the thing, not money. Even on a $100 a day (around the average monthly wage) expenses package in Moscow I still had to spend 2 hours a day scrounging up the food required to keep me going. To ignore all of that and just talk about cash incomes is obtuse, whether from ignorance or design.

Inequality has risen sharply. Countries that not so long ago prided themselves on their egalitarianism now challenge Britain at the top of the European income inequality tables.

Jesu Christe, where do they find such people? Is he seriously suggesting that in a place where cash incomes have little meaning we should measure equality by cash incomes? Does he not know of the special stores for special people? Or how the further up the party one got,  the better stores one had access to? Leading, at the top, to never visiting a store at all, having it all delivered to you at home? Gorby never got more than a few hundred dollars a month for being Party General Secretary yet he wore thousand dollar suits. The special housing for the favoured? (I’ve walked past the same Gorby’s place many a time and believe me that didn’t come out of his pay packet.)

Reformers blame problems on the legacy of 40 years of communism. But could it be that the reform process itself is responsible? Far from being a panacea, as claimed by eastern Europe's political elite, following the IMF-EU economic prescription has caused hardship for millions.

Well, there we have it folks, absolute proof that the man’s a complete dingbat. Of course, socialism was great and capitalism is grinding the faces of the poor into the dust. I don’t know whether he is using completely absurd comparisons because he actually believes them, and is therefore hopelessly ignorant, or because he does know them and wants to make a political point in a grossly mendacious manner. Whichever it is the entire argument is complete and total bullshit. Both he and the editor that published this tripe should be ashamed of themselves.

Yes, I have emailed this to him and will inform you of any response.

Udate:
More Neil Clark stuff:
Guardian Archives.
A book review from the New Statesman. Apparently George Soros is not actually a CIA spy but he is in bed with the Bushies.
Pravda: (Yes, really, Pravda):

Milosevic, Prisoner of Conscience. Neil Clark raises a lone voice for a man whose worst crime was to carry on being socialist
I always remember my first visit to Belgrade, in the summer of 1998. As an unreconstructed socialist, completely out of step with the spirit of the age, I had spent most of the Nineties trying to escape, as best I could, to a place where it was still 1948. So imagine my delight when I arrived in Belgrade and found a city that seemed miraculously to have escaped all the horrors of global grunge.
Bookshops, self-service restaurants and state-owned department stores abounded: a walk down the city boulevards reminded one of a British high street in the late Sixties. My delight turned to ecstasy when, on entering a state-owned bookshop, I saw on prominent display in the window a copy of that classic tome Arguments for Socialism by Tony Benn. What a truly wonderful place was Belgrade! Yet here I was, in the capital city of a nation
commonly regarded as the 'pariah' state of Europe and whose leader - a certain Slobodan Milosevic - was routinely dismissed in the western media as Europe's Saddam Hussein.

(Taken from the New Statesman).

Dr Frank comments on a earlier piece.

Well, I think that’s enough for now eh? Unless anyone else has a link to more absurdities from this complete nutso.

The Daily Ablution has more.