Average Joe Economic Blog

News, reviews and opinions regarding the global economy.

Washington D.C. Closes the Free Market System; Russian Federation Now the Center of the Free Market

Spheres of influcence between the Western Worl...
Image via Wikipedia

Scary title, but is this is not far from fantasy. History has a way of repeating itself, and we have to look at the Russian Federation. The Russians had an authoritarian monarchy, then transitioned to a Marxist-Communist system. Finally, they have a republic/free market system. Although each transition was difficult, and fraught with violence and anarchy, the Russian Federation is beginning to understand that a free market has greater benefits than their older system

Russian Transitions

Our history books mark the assassination of the tsar Nicholas II in 1918 as the beginning of the Soviet Union. Unfortunately, the true formation of the Soviet Union known to many is established in 1924, adopting a constitution based on the dictatorship of the proletariat. Literally, six years of violent suppression by Lenin and the hierarchy of many peasant uprisings and conquest of many nations is at the core of this post.

Once the dictatorship is established, many industries revert to the state. The different ministers in the Prolet bureau being actual owners of the companies within these industries created an oligarchy system of rich politicians and the poor masses. For 65 years, heavy restrictions on the populous, World War II and the Cold War exposed many the inefficiencies of the Soviet system. Lack of food, poorly made consumer items, a set wage table, high level of exports and support to like-minded countries, and lack of individual, free-thinking innovation created stress the Soviet Economic Block. The break occured in November of 1989, with the bankruptcy of the Soviet state, the Berlin Wall collapse, and the destruction of the Warsaw Pact.

Two years after the Wall falls, elections are held in the newly created Russian Federation. The next year, 1992, Yegor Gaidar enacts price liberalization that abolishes the communist system. What few people remember is the fact that between 1992 and 1998, violence, corruption and mafia groups filled the void of many legitimate businesses beginning their start. It was not until the Russian ruble collapses and Russia’s GDP is down by 40% that a powerful figure, Vladimir Putin is appointed Russian President after Boris Yeltsin resigns.

Since 1998, Russia has grown and prospered, redressed many evils in their past, and have a stronger economy following the 2008 economic collapse. Although they continue to have issues with the free market system, Russians continue to be force in the economic world.

The New USSA (United Soviet States of America)

The “Occupy” groups have stated their main political and economic ideology. The United States has transitioned from a mercantile group of colonies to a free market powerhouse, all without a catastrophic event, only relatively peaceful internal paradigm shifts.

The US has endured protests in its past. Anti-war, anti-government (Whiskey Rebellion), and anti-globalization (America First movement). The difference with the “Occupy” movements is the attack on the free market system and the political system at the same time.

What the “Occupy” groups, who supposedly represent 99% of the population (actually, another group “We Are The 53%” states that “Occupy” does not represent the majority, and the 53% is a majority). Although 56% of “Occupy” supporters do not believe the movement will have success politically, economically, they could have a major impact.

After the 2008 crisis began, Americans began hearing the word, nationalization. The US government started procuring substantial shares in many financial and industrial companies for large “bailout” dollars. Many Americans did not protest these government controlled entities. What many American supporters did not know was the following reprocusions:

  • Low-level employee benefits became worse, or non-existant
  • Financial institutions stopped lending to consumer, commercial and industrial businesses

Without a peep, Americans allowed the US government dictate the terms of doing business of the employers. However, this did not develop into an increase in employment, even after several economic recovery plans passing Congress and signed by the President.

As the “Occupy” movements begin to transition from a peaceful to violent movement, the city, state and federal politicians must make a decision. Those politicians who support the “Occupy” movements must decide on using equal force on the participant citizens to enforce the laws. The other decision is to give in, slowly, to the demands of the “Occupy” groups. The simple and direct option would be to nationalize all industries in the United States. The government did it before without resistance once, why not go for broke?

Conclusion

The mob does not understand that any economic system has both good and bad results. Individuals can comprehend this idea. Unfortunately, many republics are consumed by the idealism that the mob rules the politicians. In a way, this is true, but governments tend to execute reactionary policy with extreme programs, laws and regulations.

It is only a matter of time before the critical point of no return decision is delivered to the US government. The extremism began with the 2008 Presidential election, 2010 off year elections in the House of Representatives, and the 2012 campaign of both parties. It is just a matter of time.

Related articles

Creative Commons License
The Average Joe Economic Show by Brandon Holm (Host) is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License.
Based on a work at averagejoeecon.info.

Enhanced by Zemanta

  1. averagejoeecon posted this