" Ten years ago, Nobel laureate Milton Friedman had just three words of advice for countries crawling out from under communism: Privatize, privatize, privatize. But now he says he was wrong -- that establishing the rule of law is probably more basic than privatization. In fact, in some countries, privatization without the rule of law is just stealing. Friedman isn't alone in changing his mind to champion the role of law in societies... " LINK --------------------- Privatization Requires New Regulatory Institutions, But Creating Them Is Not Easy... Success Depends on the Sequence The second point that Stiglitz and other critics of the reforms make is that the reforms were implemented in the wrong sequencing. And again I think there is something that is correct there. Think of the following notion. You have a lot of things that you have to do. You want to fix the country and move in a certain direction. Then you make a list of all the things that you have to do, in no particular order... LINK
I mentioned in another post that it may not be that neo-liberal reforms are flawed but that they were implemented in a flawed manner in both the Soviet Union and Latin America during the 90's. These two links go into more detail with this view. Does anyone know of any other countries besides Chile that prior to the 90's and collapse of the Soviet Union had successfully made the transition from state-owned to privatization? By there being few examples of this it could be said that economist really didn't have the best models for how to properly make this transition with the 90's market reforms. This could explain why there were problems with the 90's neo-liberal reforms that many have rebelled against. But today more economist have recognized what was done wrong with the Soviet and Latin American reforms so the mistakes made with them probably won't be repeated.
This is too broad a question. You can go back to Post-WW2 Germany/Italy, or even further back towards the general development of market economies in Europe. What kind of time frame are you thinking? And Friedman isn't saying anything about economic transitions now. He isn't saying much about anything.
maybe he's been resurrected by some magical voodoo ceremony somewhere (like "weekend at bernies"), hand rises from the grave, gnarled and withered seeking out sweet human flesh on which to feast and quench his insatiable hunger. maybe he'll just go back and do his old job? maybe they'll marry him to margeret thatcher whilst she's in cryogenic suspension. maybe he's part of the crew of the marie celeste, 'pirates of the caribbean" style? these characters always cheat death and continue causing misery for quite some time.
If you follow the link you will see that the article was written in 2003, and quoted information from 2000. No one is saying the man is currently alive. After having lived through deregulation of utilities in California I will agree with the premise that And destroying them without proper oversight and transparency can also create huge problems for the consumer. Think of the abuses of Enron.
I got the impression from the information in those links that the mistakes made in the 90's with market reforms were the results of economist not having the right models to guide them in knowing how to properly make the transition from state-owned to privatization. I mean now days economist are pointing out that market reforms must be done with certain laws in place,done in a certain sequence or order,and that privatization must be done with oversights to prevent corruption. Why weren't these things known or done in the 90's? How was the situation with post WW2 Germany and Italy different from the situation with the Soviet countries after the collapse? Weren't both of those countries facist under Mussolini and Hitler? So they may not have had the same types of government controls on the economy that you had under Soviet communism,so their transitions may have been different from what needed to be done with the former Soviet countries.
China has made the most sensible and systematic transition to a market economy of any country that I'm aware of. It has focused on making an orderly transition from a state-owned to a market economy before it throws the country into chaos with ploitical reforms. The Soviet Union did just the opposite, which is why it's had so many problems since the fall of communism.
http://news.bbc.co.uk/2/hi/asia-pacific/923447.stm What I got from this link is that China didn't put in place or enforce certain laws needed to aid the transition to a more open market economy and as a result they've had their share of corruption problems.
As you will soon find out - he doesnt say anything of the sort - as he's been dead some weeks now. As for the content of the thread - Friedman could say what he liked as long as he himself never had to suffer. Its never the economists that suffer - just the people they hate ! The very people their antequated notion of "profits above social care" discriminates against would be rather surprised if friedman hadnt backtracked. What dying man wants lo leave the earth with the knowledge that he destroyed others lives so that his bank manager might gain?
Here's one example of a former Soviet country that seemed to have made the best transition to a market economy. Take note of how they privatized. ---------------------------------- " In the space of 10 years, Estonia -- a country of 1.3 million people and roughly the size of the Netherlands -- has gone from being part of a closed and extremely inefficient economic system to being widely acclaimed as the leading transition economy of the former socialist bloc and, according to some economic rankings, as being one of the most promising economies in the world. The first legislation regulating privatization, a law on small-scale privatization, was adopted at the end of 1990 while Estonia was still part of the Soviet Union. Comprehensive legislation regulating the whole privatization process was passed in July 1993. These laws set general guidelines for carrying out privatization irrespective of the size of a company. The Privatization Act stipulated that employees of an enterprise do not receive any special privileges or rights in the privatization process, and that all potential purchasers compete on equal terms. This was possibly the most ambitious privatization program of those adopted in the countries of Eastern and Central Europe. Now more than 75 percent of the nation's GDP is produced by the private sector, while more than 85 percent of formerly state-owned enterprises have been privatized. Estonia was quick to realize that given the small size of the country and its limited resources, it was absolutely crucial that it adopt liberal economic policies and be open to the world... " Link
I agree with you on this one Sentient. Funny how people get religion and consideration at the end of their lives.
Absolutely, its not just Friedman either. The major capitalist economists all realise at the end of their lives that their economy and fortune was bought at the price of someonelses misery. Hardly credible they hadnt realised it earlier, they just didnt feel the bony hand of death on their shoulders at the time they were making the banks richer
You know what my point is. The point is that Estonia was one of the few countries that moved from communism to capitalism by doing it the correct way. They first added or changed laws that would support a market economy,then they privatized through oversightes. I'am not sure about the sequence of their market reforms but it seems they did them in such a way that didn't hurt their economy.
I think it's more that they got a better understanding of how a communist to capitalism transition should happen. Milton Friedman didn't change his mind about privatization,he changed his mind about how it should be done. Like I said earlier,I think the reason economist gave the wrong prescriptions for moving from communism to capitalism in the 90's was because there doesn't seemed to have been too many previous models for how to make that transition properly.
Economists like to oversimply the world and it make it only about money. When they do that they open the systems to abuse, if there are not regulations in place to oversee and moderate the excesses of greed.
