After the Rain : how the West lost the EastVaknin, Samuel
History
After the Rain : how the West lost the East
Vaknin, Samuel
Europe, Eastern -- Economic conditions -- 1989-; Europe, Eastern -- Politics and government -- 1989-
The Trader economies - These economies are equivalent to the
cardiovascular system. They provide the channels through which goods
and services are exchanged. They do this by trading or assuming risks,
by providing physical transportation and telecommunications, and by
maintaining an appropriately educated manpower to support all these
activities. These economies are highly dependent on the general health
of international trade. Many of the CEE economies are Trader economies.
The openness ratio (trade divided by GDP) of most CEE countries is
higher than the G7 countries'. Macedonia, for instance, has a GDP of
3.6 Billion US dollars and exports and imports of c. 2 billion US
dollars. These are the official figures. Probably, another 0.5 billion
US dollars in trade go unreported. Additionally, it has one of the
lowest weighted customs rate in the world. Openness to trade is an
official policy, actively pursued.
These economies are predatory in the sense that they engage in zero-sum
games. A contract gained by a Slovenian company - is a contract lost by
a Croatian one. Luckily, in this last decade, the economic cake tended
to grow and the sum of zero sum games was more welfare to all involved.
These vibrant economies - the hope of benighted and blighted regions -
are justly described as "engines" because they pull all other
(scavenger) economies with them. They are not likely to do so forever.
But their governments have assimilated the lessons of the 1930s.
Protectionism is bad for everyone involved - especially for economic
engines. Openness to trade, protection of property rights and
functioning institutions increase both the number and the scope of
markets.
Return
Market Impeders and Market Inefficiencies
Even the most devout proponents of free marketry and hidden hand
theories acknowledge the existence of market failures, market
imperfections and inefficiencies in the allocation of economic
resources. Some of these are the results of structural problems, others
of an accumulation of historical liabilities. But, strikingly, some of
the inefficiencies are the direct outcomes of the activities of "non
bona fide" market participants. These "players" (individuals,
corporations, even larger economic bodies, such as states) act either
irrationally or egotistically (too rationally).
Public-domain text, read in full here on John Shaqi.
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