Founder and Director of the Center for Political Innovation
The flim-flam economics of Milton Friedman, Ayn Rand, and Alan Greenspan is treated as holy gospel in US society. Certain broad sweeping claims are repeated as if they are facts. “Markets always produce the best results.” “Government intervention in the economy only makes people poorer.” “The free market lifts people out of poverty, while state central planning only makes people poor.” “The market creates innovation and leads to new technology being invented, while government suppresses creativity.”
These claims fly in the face of numerous undisputed facts. I have assembled six indisputable historical realities that demonstrate how clearly the free market fanaticism routinely preached in America and assumed to be true simply doesn’t match reality.
1. Russia and China became modern industrial countries and superpowers with 5-year plans under the leadership of Communist Parties.
Prior to 1917, Russia was a rural agrarian country with almost no electrification. By 1936, it was the world’s leading producer of steel and had the world’s largest hydroelectric facility. In the 1930s, the world marveled at how rapidly the USSR industrialized with Stalin’s program of “Five-Year Plans,” which mobilized the country to build and rewarded those who worked especially hard and set records in programs called “Stakhanovism.”
China was the “sick man of Asia,” one of the poorest countries in the world prior to 1949. It was under the leadership of the Communist Party, which still to this day carries out Five-Year Economic Plans and maintains a large number of state-controlled industries and state-directed private corporations, that China rose to being the second-largest economy on earth.
“Communism has just never worked anywhere.” “Communism just makes people poor.” These statements don’t match reality. Pointing to famines that took place during efforts to expand agricultural production, or human rights violations, or atrocities doesn’t change this reality. The central premise of neoliberal economics and standard American anti-communism and political “common knowledge” since the 1990s is just false.
2. The Asian Tiger countries utilized massive government control and state planning to achieve their successes.
Libertarian, neoliberal, free market literature is full of praise for the Asian Tigers. South Korea, the island of Taiwan, and Singapore were all led by non-communists, and they all did business primarily with Western investors. This is supposed to be proof that the free market is the answer.
Claiming these countries are proof that the free market is the answer is an absurd distortion of reality. The fact that these governments are anti-communist or that Western investors were the primary business partners doesn’t change the fact that the economy was still heavily controlled by the government. State-run industries were major players, often created by the state itself, and under heavy military dictatorships private companies were told what they could and could not do with a very heavy hand. These bonapartist military states were seen as a barrier against Communism by the US government, and were enabled to implement central planning and rapidly build themselves up.
Source: News - The Center for Political Innovation
