…of a concept that’s lost on one of the main groups of central planners of the world, those of Russia.
This one comes from an article in Pravda, which plays a role for the Russian government similar to that of The New York Times for the Democratic Party’s administrations. Interestingly, in addition to being missed by the Pravda author, it’s also missed by Tom Friedman, who cited the article in his NYT article.
The context is an alleged oil war being waged by the US and Saudi Arabia against Russia and Iran, an attempt, supposedly, to destroy those two nation’s economies. (I say “alleged” and “supposedly” because of course President Barack Obama wouldn’t do such a thing. Both he prefers engagement with our enemies over contesting with them, and an oil war would be inconsistent with Obama’s promise to Vladimir of greater flexibility in this post-2012 election period. Besides, the Pravda author denies the existence of a war, so that settles it.)
The tidbit from Pravda:
The planned economy of the Soviet Union was not able to cope with falling export revenues [from collapsing oil prices]….
The planned economy was not able to cope.
Planned economies just aren’t flexible enough. More, by introducing like a dam into a river a small body of men into the information stream that is the core of a free market economy, planned economies can’t react with the speed that a freely flowing river of information produces for an unfettered market economy.
This is a fact well known to capitalist economists and empirically demonstrated all over the world, repeatedly, if most dramatically by that Soviet Union collapse.
Unfortunately, this tidbit also is lost on our own central planners, and so we get Obamacare and Dodd-Frank; an explosion of economy-governing rules from EPA, the CFPB, et al; and a burgeoning production of Executive Orders from our Democratic Party President.