Funny—how things turn out

[B][I]First of a two-part series[/I][/B]

Judging from recent economic events in the United States and elsewhere in the world—economics doesn’t seem to make much sense to anyone anymore.

I remember not too long ago the United States government was so apprehensive of the communist threat from China and the former Soviet Union that the nation fought several wars to keep the evil scourge confined if not outright defeated. In those days communism was the antithesis of capitalist philosophy and as such was the contested archenemy of the U.S. government and Wall Street moguls and all they represented—(or should it be mongrel). But nothing remains the same forever—as we have seen of late.

It was only a few years ago in a country representing the epitome of a state controlled economy, that Chinese Deng Xiaoping, General Secretary of the Communist Party of the People’s Republic of China (PRC), had the revolutionary revelation that “to be rich is glorious.” He had this epiphany after realizing that if the party wanted to create vast wealth, China should encourage a market driven economy—reward individual initiative—abandon many government financed and inefficiently operated means of production and, in turn, embrace the tenets of capitalism and private enterprise—full bore—Wall Street style. This they have done with a vengeance to the extent that the United States has lost much of its manufacturing industry as a result of outsourcing to China and elsewhere as the production of vast amounts of manufactured items of all types previously “Made In the USA” has been moved overseas.

This is nowhere more obvious than when you visit Walmart and note that most non food items on sale have labels indicating they were manufactured in China. While this has “knocked-off” many American manufacturers of similar items—the up-side, however, is that Walmart’s cornucopia of stuff has made many products affordable that might not have otherwise been the case and in doing so has raised the standard of living of many Americans. I have often wondered if the Chinese government provided the financing for the rapid expansion of Walmart as a way to facilitate the marketing of Chinese products? If so, it will have been one of the most brilliant marketing strategies of all time—and that you must admire.

Meanwhile, on the other hand, with the American Government as the previous, foremost free world advocate of capitalism and private enterprise—and to some extent a modified laissez faire economic system—we now witnesses Congressional action designed to inject a great tranche of the financial resources of the United States into the economy in a manner to become a direct participant in the country’s financial sector not too unlike that of the former communist and socialist economies. As a result some observers think that approach is simply one way to “pave the path of good intentions” and maybe it is—I’m not sure at this point. Nor, I suspect, are many of those in the U.S. Congress and elsewhere who cautiously recommend government investment in the financial and automobile manufacturing sectors.

Thus, while China and Russia are on track to largely abandon much of the previously communist state controlled mechanisms to direct their economies—they have adopted much of the doctrine of capitalism.

Meanwhile, if recent actions are an example, the United States government is starting to take the country the other way and is now embracing what heretofore were communist and socialist convictions to support the nation’s deteriorating domestic economy. Today, the U.S. Government and by extension the American taxpayer is heavily participating in the economy in ways it previously detested. The American government is now—or soon will be—a major participant in the ownership of banks, insurance companies and possibly major players in the automobile manufacturing industry. All this is not too different from what the former Soviet Union and the PRC cast off as not being an efficient method to raise the standard of living of their population.

Wow! I’m confused. Friends—we live in strange times.

Is that not ironic, incongruous—or what?

Do you suppose the Russians will soon fear the U.S. as a dangerous meddler experimenting with socialistic philosophy as a competitor in their plans to encourage growth of their new capitalistic economy? If so, would it not be similar to that of America which was once so suspicious and distrustful of the intrusion of communism in what was once our own society’s economy founded upon the system of free enterprise?

Of course, things are really not that bad yet—I just couldn’t resist considering the dichotomy presented by the situation.

There’s no denying that both countries have undergone marked change from their previously professed guiding economic philosophy. To be continued.

[I]Editor’s Note: In the 60’s the author served as an economic development project advisor when the State Department undertook programs to implement President Kennedy’s foreign policy of encouraging the then newly emerging independent countries in Africa and Asia to use the tools of capitalism and private enterprise as implementing agents for their national economic development aspirations as a competing economic alternative to Soviet style communism and socialism. [/I]