Sunday, September 2, 2012

The Soviet Lesson: Black Markets A Danger to Primary Economies


Most People have no idea what really happened to cause the Collapse of the Soviet Union.  They suppose it was a contest between Freedom and Oppression and that Freedom won.  Actually, it had been a contest between the Black Market and the Official Economy.  

Things had been fine under Stalin.  Stalin tolerated no Black Market.  The Gulags were not filled with Political Prisoners, no, that is all a Conservative Right Wing Myth created to discredit Planned Economies, so, no, Stalin was tossing the Black Marketers into the Siberian Labor Camps and throwing away the key, and good for him.  But Stalin could not live forever, and the people who followed him decided to do what most other Government Officials do with Black Marketers, that is, to give them free run and let them do business as long as they pay sizeable bribes.  

Finally by the time of Gorbachev it was recognized that the huge Black Markets were something of a Cancer that was holding back the Real Economy – that the reason so many things were being rationed, after Planning had indeed ‘planned’ for just the right amount of just about Everything, was that Petty Government Officials in league with Black Marketers were siphoning off the Cream of the Economy and selling to Foreign Markets for pocket-able Hard Currency.  So Gorbachev made a huge mistake.  He ANNOUNCED that he was going to crack down on Corruption.  One should never ANNOUNCE such a thing.  One needs to put together a Secret Police, formed on the policy that loyalty would begat loyalty, and that these loyal secret police would have great careers for the rest of their lives if they only obeyed orders NOW.  Then there should have been a Mass Overnight Arrest of EVERYBODY.  That is how Stalin would have done it, and when was Stalin ever wrong?  

But Gorbachev tipped his hand and the Black Marketers and Corrupt Public Officials were quicker on the move than he was.  And there were so many of them!  Honest Officials were clearly outnumbered.  The Crooks took over.  It wasn’t about Freedom at all, was it?  Everyone knows the big Winner of the Big Collapse was the Russian Mob.  Still is, though Putin is making an effort to bring back some level of decency and honesty, law and order… and all the while being blamed for it by the West, who has always taken the side of the Black Marketers, Petty Corrupt Officials and the Mob – just as they do in their own Countries.   After all, who can win an honest election without all that untraceable cash that comes from bribery and corruption? 

This brings us to the Present Condition of the West, or rather, of the entire Global Economy.  With Unemployment Rising, we should really expect that people will not simply stay home (or stay in the street after their homes have been foreclosed) and starve to death.  In Arab Countries and Africa they are recruited into Crazy Ass Militias who attempt to take over Governments, so that afterward about 1% of them can get good paying Government Jobs when they are finally Victorious and get to run the same kind of shabby show as the people they had fought against.  It is very similar to Democracy in that way, that nothing ever changes except the crooks who are in power.   But in Countries where the people are a bit more squeamish about open rebellion, or are wise enough to recognize that the Foot Soldiers of a Rebellion are just being exploited and will eventually end up dead or with nothing, well, in this case, the people turn to Crime.  In Countries with a sizeable Organized Crime Presence, the Unemployed simply migrate over to the Dark Side.  

Now, as I said before, a Black Market Economy is a Cancer on a Good Economy.  How?  Well, firstly, criminal enterprises do not really pay much in taxes.  Take America for example, where they have an Income Tax.  When the economy was healthy and a large percentage of working Americans had well paying manufacturing  jobs, they paid most of the taxes (while the Rich were ostensively paying a Higher Bracket, as they call it, in all actuality this was offset by a thousand and one ‘deductions’ which allowed them to virtually pay nothing at all).  But what about at present, when all of these Former Workers  are now working in Illegal Gambling, Illegal Drugs, Trafficking Arms and Sex Slaves?  No taxes.  Then there is the Complicit Government Corruption – the local Public Officials and the Local Police who take their bribes to cast a blind eye to it all, well, they become Economically Dependent upon the continuation of it all.  

The Bigger it all gets, the more Self Interest is involved in maintaining it.  And just like with the Former Soviet Union, we may eventually come to the day when it finally simply takes over.  Government Offices will be shut down and Police Forces released from duty.  And we will finally all be FREE, free to obey what any petty thief or mobster tells us to do or we’ll get killed if we don’t.   

Oh, it’s Great for the Mobsters!  Just like after the Fall of the Soviet Union, they can come on the Televised News and Celebrate how wonderful it is to finally be FREE… all while the really Good People will be too intimidated to speak their minds.   Oh, and besides, the Media will be in on it anyways, just like they are now.

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