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Guest Post: Go Figure, The Poorest Place In Europe Is Run By Communists

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From Simon Black of Sovereign Man

Go Figure, The Poorest Place In Europe Is Run By Communists

Ah Moldova… the poorest country in Europe, which just so happens to have had a Communist party majority in its parliament since 1998.

These two points are not unrelated.

Despite having achieved its independence from the Soviet Union over 20 years ago, the state is still a major part of the Moldovan economy…from setting prices and wages to media, healthcare, agricultural production, air transport, and electricity.

Under such management, it’s no wonder, for example, that Moldova has to import 75% of its electricity. It is the exact opposite of self-sustaining.

The government does a reasonable job of chasing away foreigners as well.

Agriculture is the mainstay of Moldova’s economy… and while on one hand they say “we welcome foreign investment in agriculture,” on the other they say “foreign investors cannot own agricultural property.” It’s genius.

The average wage here is less than $300 per month… all while Moldovans’ purchasing power is getting eaten away by inflation. GDP per capita, meanwhile, is in the ballpark of many destitute African nations like Swaziland.

 Go figure, the poorest place in Europe is run by Communists

Of course, not everyone is poor. The politicians at the top of the totem pole are doing great, always pulling the strings in their favor at the expense of everyone else.

Since the last election in 2010, the Communists still hold the most seats in Parliament. The three other main parties banded together to form a majority coalition to take control of government.

Very little has changed. The Communists are still a powerful force in Moldovan politics, and the other parties aren’t exactly champions of economic freedom.

They bicker away about the budget, about who to tax and how much to tax, about what laws to pass and what regulation to implement. As usual, it’s the exact opposite of what they should be doing.

 Go figure, the poorest place in Europe is run by Communists

Economic freedom… all freedom, really, is not built by passing laws and rules and regulations.

Rather, it’s like what Michelangelo said about sculpting: to achieve growth and freedom, one need only remove the unnecessary stone, underneath which lies the masterpiece.

The likelihood of these guys figuring it out, unfortunately, is zero. And that doesn’t just go for Moldova, but all western governments.

Europe is now taking a dangerous slide back into Communism… or at least steep radicalism. Neo-Nazi parties and openly Marxist politicians are dominating the scene.

 Go figure, the poorest place in Europe is run by Communists

This is nothing new. As usual, history is full of lessons from when people have turned to radical figures in tough times.

The French, for example, were driven to behead their King in the late 18th century due to dismal economic conditions.

They traded an absolute monarch (Louis XVI) who wrecked the economy for a bloodthirsty dictator (Robespierre) who continued wrecking the economy, and eventually traded him for yet another dictator (Napoleon) who continued wrecking the economy.

This is the vicious cycle that forms when an entire nation reaches the point of desperation, and we are seeing signs of this forming all over the west. The only question is… who will become the next Moldova?

 

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Mon, 07/02/2012 - 16:26 | 2581620 CTG_Sweden
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Article (Simon Black of Sovereign Man):

 

”Europe is now taking a dangerous slide back into Communism… or at least steep radicalism. Neo-Nazi parties and openly Marxist politicians are dominating the scene.”

 

 

 

My comments:

 

I think the author is exaggerating recent developments in Europe here. The Greek nazi/fascist party only got about 7 % of the votes. The ex-communist/left socialist party is losing ground in former West Germany.

 

But it is true that radical opposition parties tend to get more popular in economic downturns.

 

Poverty also tends to benefit communism. Since communism is about distributing assets from upper- and middle-class people to poor people it is not surprising that the communist party is still popular in a poor country.

 

But I guess that few people really care about what happens in a country like Moldova. I guess that more people are worried about a possible renaissance of real communism in China. If the general public in China suddenly feels that their living standard has not risen fast enough and that they could get a better life by taking what the upper- and middle classes have, that may cause problems in China. If it is true that Chinese businessmen try not to keep more assets than they have to in China this may be a real element of risk.

 

My assessment is that it should be possible to increase the living standard for the general public pretty fast in China. Remember that Henry Ford could double the pay for his workers to $5 and at the same time cut shifts from 9 to 8 hours early in 1914. By that, 88 days of work became the equivalent of the price-tag of a brand new entry-level Model T (I am not kidding). I suspect that rather modest investments could increase productivity in China to the extent that doubled wages could be accomplished shortly.

 

I wonder what would happen if the living standard in China would become something similar to, let´s say, South Korea in 10 or 15 years. Perhaps Chinese men would then demand the right to import wives from countries like the Philippines, Thailand and India (there is a huge surplus of men in China)? If China could offer a significantly higher living standard than India it is not a far-fetched idea that this could lead to a significant influx of people to China. And I am not so sure that Chinese leaders are more enthusiastic about such a scenario than leaders in Japan and South Korea have been in the past. My impression is that Malaysian leaders have not prioritized a higher living standard to the extent they could have since that would make Chinese people living there more inclined to stay. A few years ago I read that a Malaysian prime minister or some other member of the Malaysian government was not worried in the 1970s when Chinese physicians emigrated to Australia.

- Aren´t you worried about brains leaving Malaysia? the reporter asked.

- I think that it is trouble leaving Malaysia, the minister replied.

 

Perhaps it is a far-fetched idea that the Chinese government has encouraged investments which do not improve productivity in order to avoid “trouble”. But sometimes I actually wonder how committed the Chinese leaders really are to the idea to improve the living the standard for the general public as fast as they can.

 

I wonder what would happen if poor people in China would riot due to their poverty and other people´s wealth. Would they ask for more communism or would they identify their leaders with the idea of communism since they use Mao and the red flag as their symbols?

 

I also wonder how “well-engineered” the power structures in China really are. If it is true that most Chinese leaders make almost no money as party officials and on the offices they are holding and make almost no money on things like being members of the board of large government owned companies I am not sure who really rules China. Or do they just get what they are officially paid? If the latter alternative is true I think that China has a big, potential corruption problem. The cost of providing the top Chinese leaders with at least the same salaries, perks and pensions as EU commissioners should be quite modest compared to the GDP of the country. Of course, an EU commissioner pension is not enough for some people, but for most people that´s enough.

 

To me, it seems unlikely that the Chinese leaders are true communists although they call themselves communists. The question is whether there is some kind of other great hidden ulterior agenda which is driving them. My impression is that communist leaders in the Soviet Union were driven by a hidden ulterior agenda which is reflected in what happened during the Interwar period and in the privatization of government owned assets in the 1990s. To me, it seems unlikely that there has been a similar hidden agenda in China. But if there is no other hidden ulterior agenda I think that there is a substantial risk for corruption in China. My impression is that the comparatively generous compensation packages for EU commissioners are partially due to the fact that nobody really believes that European mainstream politicians have a true dedication to the common good or something like that. Everybody, including themselves, know that they are generally slimy assholes who don´t really like their electorate (there are also a few – usually naïve – idealists, which are primarily communists, greens or nationalists). And in order not to create chaos due to corruption they, and most other people, realize that you got to pay them at least what they get now in order to get a society that works.

Mon, 07/02/2012 - 16:57 | 2581737 AchtungAffen
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"Go Figure, The Poorest Place In Europe Is Run By Communists"

The only country (in the world) without child malnutrition and illiteracy too, run by commies...

Mon, 07/02/2012 - 22:19 | 2582472 prole
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America?

Tue, 07/03/2012 - 12:39 | 2584284 AchtungAffen
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Cuba

Mon, 07/02/2012 - 17:36 | 2581863 elwu
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"Of course, not everyone is poor. The politicians at the top of the totem pole are doing great, always pulling the strings in their favor at the expense of everyone else"

So?  That's the same in every country, communist run or not.

Mon, 07/02/2012 - 18:35 | 2581984 Zero Govt
Zero Govt's picture

Er, shouldn't a Communist country have everyone on the same wage, including politicians???

Some are more equal than others under Communism, in the USSR they even seperated beaches for the peasants and politburo 

Mon, 07/02/2012 - 18:04 | 2581944 liszt
liszt's picture

By-the-way, the USSR was the only system not affected by the disaster of 1929.

Why capitalism is doomed ? Because it's build on businesses which each one put more offer of the market than demand, hence there is no matching for offer and demand. Foremost if the benefices cannot be re-injected for too high productivity.

The main priority is not communism or capitalism, it's democracy. So we should focus on thoroughly build a better democracy, and every obstacle like huge hedge funds etc, which are not matching people's will, must be put away.

What ever you write, you won't be able to delay the system's death. Don't try to broadcast fallacies, as you like usually to fight them, so fight every fallacy. Open the eyes : You should have a look at J.B Say's law : only wages are sustaining demand, they are insufficient for that. Therefore the debt crisis. Not because of keynesian.

Read Galbraith, and keynes ! they never thought about global economy, they didn't get it, while neoconservatives are totally false.

 

Mon, 07/02/2012 - 19:58 | 2582200 Moe Howard
Moe Howard's picture

Yep, the USSR did not have any economic problems after 1929. That is the positive thing about being dirt poor, there is only one direction to go - up.

They were starving in 1928, 1929, 1930 and up. No change.

Mon, 07/02/2012 - 18:31 | 2581981 Zero Govt
Zero Govt's picture

Good article

".. who will become the next Moldova?"

Pretty much the whole of Europe as there's technically no political choice. Look at Britain, 3 Parties 1 of which is Marxist and 2 of which window dress their wet Marxism (the Liberals) and socialism (Tories) in liberal terms like "fairness"

None of these educated Statist politicians/toerags talk about free markets

the only genuine choice voters have is to Stop Paying Taxes ...cut the suckers off and knife this rotten sham called "democracy" that has failed and ruined society for thousands of years

Mon, 07/02/2012 - 20:45 | 2582279 boiltherich
boiltherich's picture

Mr. Black, you conflate a legislative majority of communists/socialists into a cause of poverty levels as if there were no other reasons for the plight of Moldova.  The fact is that Moldova is a region that is contested, formerly a part of Romania, still claimed by romania with part claimed by Ukraine.  It is about the size of Maryland, landlocked, no major industry, it always was poor, They declared independence when the Soviet Union broke apart but Russian forces still occupy it. 

CIA Factbook says this about the running of the country:

" Moldova became the first former Soviet state to elect a Communist, Vladimir VORONIN, as its president in 2001. VORONIN served as Moldova's president until he resigned in September 2009, following the opposition's gain of a narrow majority in July parliamentary elections and the Communist Party's (PCRM) subsequent inability to attract the three-fifths of parliamentary votes required to elect a president. Moldova's four opposition parties formed a new coalition, the Alliance for European Integration (AEI), which has acted as Moldova's governing coalition since. Moldova experienced significant political uncertainty between 2009 and early 2012, holding three general elections and numerous presidential ballots in parliament, all of which failed to secure a president. Following November 2010 parliamentary elections, a reconstituted AEI-coalition consisting of the Liberal Democratic Party, the Liberal Party, and the Democratic Party formed a government, and in March 2012 were finally able to elect an independent as president."

 

The communists have not been in power for several years and are the minority opposition.  "After the July 2009 elections, the alliance was formed by the following parties: Liberal Democratic Party (18 seats), Liberal Party (15 seats), Democratic Party (13 seats), and Our Moldova Alliance (7 seats). On August 8, 2009, the four Moldovan parties agreed to create a governing coalition that pushed the Communist party into opposition; the Communists had been in government since 2001. The name of the coalition is the "Alliance for European Integration".  Check your facts.  Communists are the largest single party but the minority parties formed a coalition large enough to be the majority.

I would also contest the statement that Moldova is the poorest place in Europe, by many metrics that would be Belarus, though no data out of that nation can be trusted for accuracy, it is run by a former communist "mob boss" who has kept many crony communists in power, though they no more run the place as a communist nation than Ronald Raygun ran the USA as one.  And even poorer by any metric is Albania.  Or, is that somehow not part of Europe anymore?

For the barking moonbat above me who thinks even Texas republicans are pinko commies all I can say is help IS available.

Mon, 07/02/2012 - 23:07 | 2582584 boiltherich
boiltherich's picture

ZG.... stick your red arrows where they will do the world some good, up your assw.

Tue, 07/03/2012 - 07:49 | 2583125 Pseudolus
Pseudolus's picture

Agree with you. The whole region is impaired by their legacies. However, let me split hairs. Albania, is neither as poor as nor as dismal as Moldova/Belarus. 

Especially looking from this beach here...:-)

O cuni, edhe nje beer

 

 

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