“Politics in command”

During China’s “Great Leap Forward,” the communists had a slogan that captured the very essence of their “economic reform” program. That slogan was “Politics in command.” It meant that the state would allocate economic resources, not the free market. “Economic” decisions would come from the top down, in true centralized fashion, rather than from the bottom up, through decentralization.

Given the catastrophic effects of this “politics in command” program (millions starved), the Chinese government was eventually forced to embrace market-oriented reforms in order to survive and avoid a Soviet-style disintegration. In China and other communist nations, “politics in command” proved to be a complete and devastating failure.

Given its failure, one might be inclined to think that “politics in command” is a totally discredited notion. Not true. In last week’s Saipan Tribune, for instance, we saw how the vocational education (or adult basic education) department at the Northern Marianas College still clings to “politics in command” at the expense of the much wiser policy of economics in command.

Last week, some NMC government workers actually called for government price controls. They suggested that the government should raise the “pay scale” for certain trades, such as auto mechanics, plumbing, carpentry, electrical engineering and the like. They would have the government decide how much each job was worth. They would let government set labor prices. Instead of relying on market forces, they would artificially determine how much each trade was worth. In other words, they would leave politics firmly in command.

These government bureaucrats and educators don’t care about inflation. They don’t care about how much more it would cost us to hire plumbers, mechanics or electrical engineers at their inflated, government-distorted prices.
(In the first place, what right does the government have to dictate how much each job is worth to us as employers and consumers?)

All these educators care about is the continued funding of their sacred political offices. They are honest enough to admit it, too: If vocational wages are not raised, there will be no “market” for their services. They will not be able to attract vocational students to NMC.

Never mind whether the market actually needs the services of these local vocational graduates or not. Never mind the fact that nonresident workers can reliably provide these services at a lower rate. These NMC folks want us to pay more for these services for political rather than economic reasons: namely, to preserve their own jobs–the local economy and natural market forces be damned!

Imagine what would happen to the American economy if the Federal government raised the wages of manufacturers to a minimum of $15 an hour. Don’t let Nike subcontract in China, Korea or Vietnam. Imagine how much higher the consumer price index would be without the benefits of free trade and comparative advantage.

Speaker Ben Fitial has the right idea: in regards to local workers, quality rather than quantity should be emphasized. Scrap the 20% local quotas. Focus on management and professional positions rather than mere numbers, which we do not have.

Forget about plumbers and electricians; nonresident workers can take care of those positions at reduced cost. Let the locals be doctors, engineers, attorneys, and CEOs. Or better yet, just let the market decide.