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To: S.C. Barnard who wrote (31749)8/27/1998 11:41:00 PM
From: Night Writer  Read Replies (1) of 97611
 
scba,
I don't think you are an idiot. I think you realize what a big task the Russian government has on its' hands. I remember reading an excellent book in college written by Milton Friedman. (sp?) It explained that in a poor or backward country communism was a more efficient economic system. It is good at producing and distributing basic needs. However, as societies needs become more sophisticated communism breaks down and cannot meet those needs. The problem is the transition from a basic need society to a sophisticated need society.

The problem is capitalism is a very sophisticated economic system. You cannot turn off the communist economy and turn on capitalism. You have to have a mix of the two systems or evolve to capitalism. The basic structure for capitalism does not exist to make a rapid transition.

Most Russians do not understand the basics of capitalism. Making a profit is not in their culture. They don't understand how to buy wholesales and sell retail. If they understand that, understanding inventory expense and the time value of money is beyond them.

It is going to take years to transition Russia into a capitalist economy. It is a massive education project. Right there is a problem. The school system (what is left of it.) doesn't know what to teach.

You have to look at Russia as a large experiment in economic and social engineering. Don't expect a lot and be happy if it can stabilize. That would buy more time to fix it in the long term.
NW
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