Archive for the ‘Communism’ Category

Why communism eventually fails

To the editor: Jeffrey Engel's Op-Ed article oversimplified the reality. ("U.S., Russia, Europe, China have different views on Berlin Wall's fall," Op-Ed, Nov. 1)

East Germans gave their government high marks for meeting immediate postwar needs. Its failure was due to the inherent failures of communist governments to meet long-term economic growth needs. The result was massive passive resistance and further economic decline.

When confronted with similar failures, both Russia and China faced massive opposition. It was not that the communist leaders in Russia lacked the courage to fire on their own people, it was that the troops failed to open fire. Similarly, in Tiananmen Square, Beijing brought in ethnic Mongolians to clear out the protesters.

Vietnam has transitioned from a failed communist economic system to a Western-style mixed economy with single-party authoritarian political rule without revolt. But as Hong Kong demonstrates, meeting economic needs without some degree of popular political participation will not succeed in the long term.

The reality is that while meeting the economic needs of the people is important, long-term stability requires popular political participation in governance.

Norm Rodewald, Moorpark

Follow the Opinion section on Twitter @latimesopinion

Go here to see the original:
Why communism eventually fails

The cold war, Catholicism and modern capitalism

The Vatican at dawn. Catholic social teaching proposes correcting the way market forces work so that they serve the public interest and the common good. Photograph: Filippo Monteforte/AFP/Getty Images

It was 25 years ago this month that communism ceased to be a threat to the west and to the free market. When sledgehammers started to dismantle the Berlin Wall in November 1989, an experiment with the command economy begun in St Petersburg more than 70 years before was in effect over, even before the Soviet Union fell apart.

The immediate cause for the collapse of communism was that Moscow could not keep pace with Washington in the arms race of the 1980s. Higher defence spending put pressure on an ossifying Soviet economy. Consumer goods were scarce. Living standards suffered.

But the problems went deeper. The Soviet Union came to grief because of a lack of trust. The economy delivered only for a small, privileged elite who had access to imported western goods. What started with the best of intentions in 1917 ended tarnished by corruption. The Soviet Union was eaten away from within.

As it turned out, the end of the cold war was not unbridled good news for the citizens of the west. For a large part of the postwar era, the Soviet Union was seen as a real threat and even in the 1980s there was little inkling that it would disappear so quickly. A powerful country with a rival ideology and a strong military acted as a restraint on the west. The fear that workers could go red meant they had to be kept happy. The proceeds of growth were shared. Welfare benefits were generous. Investment in public infrastructure was high.

There was no need to be so generous once the Soviet Union was no more. What was known as neoliberal economics was born in the 1970s, but it was not until the 1990s that market forces reigned supreme. The free market spread to poorer parts of the world where it had previously been off limits, expanding the global workforce. That meant cheaper goods but it also put downward pressure on wages.

Whats more, there was no longer any need to be inhibited. Those running companies could take a bigger slice of profits because there was nowhere else for workers to go. If citizens did not like reform of welfare states, they just had to lump it.

And, despite some grumbles, thats pretty much what they did until the global financial crisis of 2008. This was a blow to the prevailing free-market orthodoxy for three reasons. First, it was the crash that should never have happened. Economists had constructed models that showed markets were always rational and self-correcting. It was quite a shock to find that they werent.

Second, the financial crash made countries poorer. Deep recessions have been followed by historically weak recoveries characterised by falling real wages and cuts in benefits.

Finally, the crisis and its aftermath have revealed the dark side of the post-cold war model. Instead of trickle down, there has been trickle up. Instead of the triumph of democracy, there has been the triumph of the elites.

See original here:
The cold war, Catholicism and modern capitalism

U.S., Russia, Europe, China have different views on Berlin Wall's fall

The Berlin Wall continues to haunt the world. Only shards remain of the concrete and barbed wire that once divided a city and split a continent. Few can be found in Berlin itself. Sections adorn a men's room in Las Vegas, a pedestrian mall in South Africa and the dining room at Microsoft. Bits can even be found on EBay (buyer beware).

But the wall's legacy, not its collectibility, is the problem. The world cannot agree on precisely why it fell, and more broadly why European communism collapsed and the Cold War ended. Four contradictory explanations dominate, from the most powerful corners of the Earth: the United States, Russia, Europe and China. This is no mere academic debate. How political elites understand the past directly affects their strategies for the future, and conflicting readings of a shared pivot point offer a recipe for ongoing international instability.

Americans largely understand the Cold War's end as a story of triumph. "By the grace of God," George H.W. Bush declared, "America won." Forty-plus years of economic and military dominance won, to be specific. After decades of containment, Ronald Reagan commanded "tear down this wall," and the Kremlin, recognizing the folly of continuing an exceedingly expensive and unwinnable arms race, complied (a few years later, but still).

Soviet surrender, coupled with a democratic eruption in Eastern Europe, symbolized to American minds acceptance of not just U.S. global dominance, but of American values. Europe's oppressed peoples wanted to be like us, American leaders thought, because as George H.W. Bush said, "We know what works. Freedom works." All but ignoring the activism that helped erode communism from within, and lumping together Eastern Europe's reforming and recalcitrant regimes, the American story offered a profoundly simple, yet profoundly powerful explanation for the Cold War's end: Might makes right, and we were right all along.

Like all dominant historical narratives, this one's accuracy matters less than its popularity, even as it offers an obvious recipe for subsequent success: So long as the U.S. is strong enough to withstand any threat while holding fast to its ideals, the world will eventually fall in line. Believing ourselves capable of outspending and outfighting any potential adversary, just as during the Cold War we might time and again liberate oppressed peoples who yearn only for the opportunity to enjoy our way of life.

"If the wars of the 20th century have taught us anything," Bill Clinton explained, "it is that we achieve our aims by defending our values and leading the forces of freedom."

Such triumphalism proved bipartisan. "The toppling of Saddam Hussein's statue in Baghdad," George W. Bush declared in 2003, "will be recorded alongside the fall of the Berlin Wall as one of the great moments in the history of liberty." Five years later, Barack Obama situated his international coming-out party in Berlin. In the midst of financial crisis and international critique, the site offered a reminder that the American system had worked. "Let us remember this history, and answer our destiny," Obama preached, "and remake the world once again."

Europeans don't buy this story. Their prevailing explanation for communism's collapse gives credit not to American might and ideals, but instead to their own continental elan. Force had not destroyed communism. Instead, its absence made Eastern Europe's velvet revolutions possible. By avoiding war for more than two generations, a long time given recent history, sage European strategists gave communists time to come to their senses.

Peace was no accident in this European narrative. It derived from transnational institutions and integration designed to heal bloody divisions. Europe had nearly committed suicide in World War I. It tried again in World War II. No one believed it might survive a third try in the Atomic Age. So its leaders finally forged a common home, melding divergent economies, religions, cultures and nations into a society in which even the threat of force had no place. By the close of the 1980s, victory seemed at hand. "The watchword of post-1945 politics: We must never go to war with each other again,' " the president of the European Commission explained, "buoyed the hopes of those who built the community. That objective has been achieved."

Europe had vanquished war! The hubris underlying that conclusion exceeds even the belief that people the world over desired to be American. Yet this narrative explained not only Europe's success, but also communism's surrender. When Mikhail Gorbachev spoke of a "common European home," stretching "from the Atlantic to the Urals," he was, it seemed, expressing less a desire to control Europe than to marry it, and a willingness to forsake even socialism to fuse East and West.

See the original post here:
U.S., Russia, Europe, China have different views on Berlin Wall's fall

Pope Francis: being with the poor is Christianity not Communism – Video


Pope Francis: being with the poor is Christianity not Communism
Pope Francis met on Tuesday with participants in the World Meeting of Popular Movements which is holding a conference here in Rome to discuss problems facing the poor, the unemployed and those.

By: vatican

Continue reading here:
Pope Francis: being with the poor is Christianity not Communism - Video

Heres Why a Free-Floating Ruble Will Matter to Investors

Since the end of communism in 1991, Russia has managed its foreign-exchange rate through various policies as a way to prevent sharp swings in the ruble.

As early as today, the central bank likely will abandon a system that requires the currency to trade within a fixed trading band, after spending $68 billion of international reserves this year in an unsuccessful bid to stem the rubles decline, according to Commerzbank AG and Goldman Sachs Group Inc. Such a step would put Russia as close as its ever been to a free-floating exchange rate, a goal the central bank has pledged to accomplish by next year.

Q: What is the central bank likely to do?

A: It may scrap an existing trading band and say it will conduct discretionary currency interventions, according to Commerzbank and Goldman Sachs.

That would make interventions less predictable than the current system, where the central bank automatically intervenes to defend the ruble once it reaches the weak end of its trading band, currently between 39.2 and 48.2 against a basket of euros and dollars. Once the central bank spends $350 million supporting the currency, it moves the band by 5 kopeks. The process is repeated each time the currency falls by 5 kopeks.

Since Russia may continue buying and selling foreign currencies, it is still not a fully free-floating system, which requires the exchange rate to be determined by the market without central bank intervention. Removing the band gives the exchange rate more flexibility and paves the way for the central bank to stop intervention once the ruble stabilizes.

Q: Why would they change the currency policy?

A: The current intervention policy has failed to shore up the ruble, with the currency weakening to record lows repeatedly since September. It has also cut the nations gold and foreign-exchange reserves to a four-year low of $439.1 billion.

Removing the band discourages speculative wagers on a weakening ruble because it makes central bank intervention less predictable and gives policy makers more room to carry out interventions large enough to support the currency.

The change would likely be more effective and significantly less costly than a large policy rate hike, Goldman Sachs analysts Clemens Grafe and Andrew Matheny wrote in a note yesterday.

More here:
Heres Why a Free-Floating Ruble Will Matter to Investors