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We'll take capitalism

If ailing Western economies seem not to have found the formula yet for preventing the periodic swings of the business cycle and assuring steady, stable growth, they can at least take comfort from one fact: The ailing communist economies of the world are in far worse shape. As a just-concluded Monitor series brings out, the socialist economic system launched by Marx, Engels, Lenin et al. has not turned out to be the shining dream its founders envisaged. The collectivist approach has fallen far short of the mark.

Examples abound.In the Soviet Union, self-designated to be the master builder of communism, the economy is marked by mismanagement, waste, inefficiency. Industrial production is faltering, there are chronic shortages of consumer goods, and the regime still relies heavily on grain imports to bolster food supplies. The nations of Eastern Europe do better than their Soviet mentor, but they too lag behind their West European counterparts in standards of living and, despite their denials, are still subsidized by Moscow.

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Moving to other parts of the world, Cuba after years of Castro-style communism remains totally dependent on Soviet subsidies -- hardly a recommendation for Marxist economics. Mozambique today produces less food and other crops than it did 10 years ago. Angola operates largely a black-market economy. Vietnam and client states in Indochina are beset by malnutrition and industrial stagnation. China, the most populous of the communist states, is similarly weighed down by appalling industrial inefficiency and waste.

To be fair, the record is not unrelievedly bleak and needs to be measured against some gains. China, for instance, is managing to feed its massive millions and is improving the lot of the peasants. Cuba can point to certain social achievements, such as the dramatic drop in the mortality rate and the high incidence of literacy -- one of the highest in Latin America. But there is no hiding the fundamental deficiencies of the communist economic system. Overcentralized planning, inflated and rigid bureaucracies, a lack of personal incentives, and pervasive political controls -- these are the hallmarks of the Marxist model that act as a break on individual resourcefulness and create inertia.

Significantly, communist nations which have broken the Soviet mold to some extent and, like Hungary, have loosened central controls and given citizens incentives to produce have generally improved economic performance. They have made other mistakes -- relying too heavily, for instance, on imports of Western technology and going heavily into debt -- but they have shown that a little freedom goes a long way. The question is whether communist leaders in the future will have the courage to change, to free their economies of the shackles of orthodoxy and let the winds of reform blow. Or whether they will go on, as they have, muddling through.

The political problems attending a reformist course are obvious, as Poland vividly illustrates. If decentralization and greater individual freedom are the prescription for what ails communist ecomomies, there are risks involved. But communist leaders ought to be acutely aware that they have not provided the world a successful model. Just the opposite. They have demonstrated how little a command economy has to offer -- to the very proletariat it is supposed to serve.

We'll take the problems of capitalism anyday.

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