This Mises Institute guy isn't serious, is he? can he really be claiming that the Yugoslavs enjoyed peace and prosperity "under the market"? Since libertarians always castigate me for using "capitalist" very loosely, I find it quite ironic that they call Yugoslavia "capitalist". I was not aware that Yugoslavia had ever been capitalist. i thought that the peace and prosperity in the pre-Milosevic era had been achieved under a liberal-communist regime: liberal both in terms of economic decentralization and in terms of human rights and politics. I thought that Yugoslavia then degenerated from liberal communism through a strange series of market-socialist regimes into a bizarre nationalist state capitalism, also called fascism. Silly me.
Secondly, even if Yugoslavia was capitalist at some stage (when?) to the ebst of my knowledge this was notr its high-water mark of "peace and prosperity". In fact, Yugoslavia's "golden age" corresponded to a very specific type of communism. Under Tito, Yugoslavia was a model for both teh West and the East, of what was called the "Third Way" of Worker Self-management. under this system, factories and indiustries were directly controlled by workers' councils who amde the administrative decisions, not by capoitalists or a centralized state. Thus the workers got all teh fruits of tehir labor, not capitalists or government officials. This was perhaps the purest form of communism achived by any European regime, though Nicaragua nad soem African regimes may have gone beyond it. Workers in charge of tehir own destiny is even more democratic than state ownership, which in turn is more democratic than capitalist ownership.
In addition to the economic democracy achieved by Tito, Yugoslavia was politically quite liberal. there was a relatively free press, full freedom to emigrate (unique in east Europe), religious tolerance, and non-communsit political factions. Tito did an excellent job of keeping the ethnic groups equal and preventing any one from becoming disproportionately powerful. sadly, thsi harmony began to erode after his death. If teh "capitalist" stage you're referring to si between his death and the Bosnian War, then correct me if I'm wrong, but I don't thing that era was particularly peaceful. Wasn't Milosevic gradually gaining power, and beginning to foster inequality between the ethnicities?
: 2. This letter by Mises Institute senior fellow Jeffrey Herbener of Grove City College appears in the Wall Street Journal, May 7, 1999:
: "Steve Hanke's expose on the hyperinflation-induced collapse of the Yugoslavian economy ('Yugoslavia Destroyed Its Own Economy,' editorial page, April 28) illustrates a principle about war and peace proffered by the great Austrian economist Ludwig von Mises. 'Free trade, both in domestic affairs and in international relations,' Mises wrote, 'was the necessary prerequisite of the preservation of peace.' Ignorance of this fact has led to the erroneous conclusion by some that the cause of modern wars has been aggressive nationalism. But Mises saw that 'aggressive nationalism is the necessary derivative of the politics of interventionism and national planning.'
: "No peaceful solutions can be found to the conflicts that arise in dire economic circumstances between people with nationalistic hatreds for each other. The prosperity and voluntary, mutually beneficial interactions of the unhampered market economy, in contrast, create a peaceful normalcy in which diverse groups can live in harmony.
: "Yugoslavia only repeats the pattern of countries with ethnically diverse populations, living in peace and prosperity under the market, where nationalistic hatreds have ignited into war in the wake of central-bank inflationary disruption and destruction of the market system. The central-bank-produced hyperinflationary collapse in Indonesia has been followed by violence against ethnic Chinese and Christians. Nationalistic fervor has been excited in Russia in the aftermath of its central-bank hyperinflation. And these are just examples of central-bank hyperinflationary disasters from the 1990s; the 20th century is chock-full of others, e.g., Weimar Germany and Nationalist China.
Unfortunately, that just isn't so. i would like to be able to say that socialism puts an end to ethnic conflict, ever and always, but that's an oversimplification. Ethnic hostility has arisen under right-wing capitalism (Indonesia), liberal democracy (India), federalism (Nigeria), advanced capitalism (modern Germany), conservative dictatorship (the DR), socialist democracy (Zimbabwe), communism (Guyana), Third World nationalism (Guinea), Stalinism (Stalin), etc. Every single type of government you can name. The only conclusion we can draw, I think, is that if opportunistic businessmen and politicians desentitze the population to ethnic hatred, thsi kimnd of thing will become mroe and more common.
: "Only the socialist destruction of economic activity has rivaled hyperinflation as a source of conflict in the 20th century. In North Korea, Rwanda and Sudan, to name a few examples in the 1990s, stark economic conditions resulting from socialism have unleashed, respectively, Korean nationalistic impulses against Japan, Hutu genocide of Tutsis, and Muslim ethnic cleansing of Christians.
Um, this is dubious to say the least. Number one, the Korean hostility towards Japan is not exactly unjustified. Do you knwo how the Koreans have been treated in japan, supposedly an 'enlightened capitalist democracy'? Second of all, to call the Sudan or Rwanda 'socialist" is.....well, evidnetly someone's definition of socialism is looser than my definition of capitalism. The Sudan was Islamic fundamental;ist- the last time they called themselves 'socialist" was in teh mid-70s, and most of the wqorld did at that time- it doesn't mean that they actually were. Rwanda is perhaps the textbook example of an overpopulated capitalist colony, its economy tailored to feed the Western capitalists' market for fertilizer and tourism. Can you give me some examples of efforts in Rwanda to turn the economy over to public control? or to increase teh standard of living of the people? Then why would you call it socialist?
Thirdly, your examples are hardly unbiased or representative. Why not look at Nicaragua, Cuba, Kerala, Bengal, Laos, the Seyuchelles, Guinea-Bissau, tanzania, or many other socialist or communist states which ahve succeeded in licking the ethnic question?
: "No panacea of political form exists to solve the problem of aggressive nationalism. Neither democracy nor supranational structures per se will do any good. 'What can safeguard durable peace is not simply government by the people,' Mises wrote, 'but government by the people under unlimited laissez faire.'
I agree that no political syustem is GUARANTEED to solve the ethnic problem. But some forms are better than others, and I still say socialism is better. laissez-faire is perhaps the worst antidote of all. Where has laissez-faire succeeeded in mitigating ethnic hostility? Modern Germany, an advanced capitalism, until this month based citizenship on bloodlines and race. In America, our race problem is infamous and shows no signs of getting better. Economic shocks and poverty are necessary outcomes of capitalism, and when they happen, the business calss needs to find a scapegoaqt to avoid the people gettinbg angry at them. This leads to ethnic hatred. In 1934, for example, Trujillo in the DR found taht the international market was causing sugar prices to drop. he blamed it all on the Haitoians, and took the opportuinity to kill 40,000 of them.
: He realized that, 'What is needed to make peace durable is neither international treaties and covenants nor international tribunals and organizations.... If the principle of the market economy is universally accepted, such makeshifts are unnecessary; if it is not accepted, they are futile. Durable peace can only be the outgrowth of a change in ideologies'."
Indeed, but laissez-faire won't do it; if anything, capitalism aggravates the problem....