"Cuba ponders how to fix socialist economy"

[Kuciwalker]

Originally posted by Victor Galis
Well, they could relax price controls. Obviously their problem is that they're not producing enough of these goods and demand exceeds supply. Higher prices would cut demand down.

Going capitalist would just mean most of the people still wouldn't get this stuff, but a lucky few would get lucky. Look at the other Carribbean nations that are capitalist. For the most part, they're not exactly wealthy either.

There's already a market, the black market. Relaxing price controls would increase efficiency by letting the market operate openly.

[Victor Galis]

Originally posted by Kuciwalker


There's already a market, the black market. Relaxing price controls would increase efficiency by letting the market operate openly.

That's an interesting and capitalist interpretation. In reality the black market would die out since the incentives for participating in illicit trade would no longer outweigh the risks.

[Kuciwalker]

That was my point. The black market is replaced with a licit market, which should operate more efficiently (if only because they don't have to avoid/bribe the authorities).

[LordShiva]

Originally posted by Kidicious
If the police are corrupt the problem must be the leadership. In that case they need to be replaced.

Leadership can be bribed too. As long as the economic system results in inefficiencies such that illegally circumventing those inefficiencies is profitable, there will always be a supply of bribe money, and as long as those in power have control over that economic system, there will always be a demand for bribe money.

[Kidlicious]

Originally posted by LordShiva


Leadership can be bribed too. As long as the economic system results in inefficiencies such that illegally circumventing those inefficiencies is profitable, there will always be a supply of bribe money, and as long as those in power have control over that economic system, there will always be a demand for bribe money.

I think there are a lot of people who don't take bribes.

[Kidlicious]

Originally posted by Kuciwalker
That was my point. The black market is replaced with a licit market, which should operate more efficiently (if only because they don't have to avoid/bribe the authorities).

But instead there is a capitalist authority taking profit.

[Victor Galis]

Originally posted by Kidicious


But instead there is a capitalist authority taking profit.

My suggestion had nothing to do with a free market or floating prices. I just suggested that price controls be adjusted to somewhat realistic levels.

[LordShiva]

Originally posted by Victor Galis
My suggestion had nothing to do with a free market or floating prices. I just suggested that price controls be adjusted to somewhat realistic levels.

By a benevolent dictator?

[RGBVideo]

My suggestion had nothing to do with a free market or floating prices. I just suggested that price controls be adjusted to somewhat realistic levels.

The amount of corruption lessens as the free market price comes closer and closer to the official price set by the price controls. The question is, why would we in society anymore need the massive government bureau to investigate and set the optimum market price which minimizes corruption, when even ideally it's only an imitation of a free market price? Just scrap price controls altogether and you won't need to investigate what'd be the ideal price amount.

[Kidlicious]

Originally posted by Victor Galis


My suggestion had nothing to do with a free market or floating prices. I just suggested that price controls be adjusted to somewhat realistic levels.

I think it would be better to increase supply and enforcement, and maybe replace some leadership if the problem calls for it. On the supply side not much can be done probably since the economy is constrained by how many dollars they can get. I don't know about the enforcement.

[Victor Galis]

Originally posted by VJ

The amount of corruption lessens as the free market price comes closer and closer to the official price set by the price controls. The question is, why would we in society anymore need the massive government bureau to investigate and set the optimum market price which minimizes corruption, when even ideally it's only an imitation of a free market price? Just scrap price controls altogether and you won't need to investigate what'd be the ideal price amount.

Because you have a monopoly situation since all the businesses are government run.

By a benevolent dictator?

By a competent administrator.

[Kidlicious]

Society is going to pay either way, either with higher prices or taxes. So raising the fixed price to limit corruption won't really make things better.

[Kuciwalker]

Originally posted by Kidicious
But instead there is a capitalist authority taking profit.

There's already one, as I've said several times already. It's just right now, in addition to their profit, they have to skim extra off for bribes.

[Victor Galis]

Originally posted by Kidicious
Society is going to pay either way, either with higher prices or taxes. So raising the fixed price to limit corruption won't really make things better.

Yes, it will. People will be forced to buy what they want to buy most with their limited incomes as opposed to buying whatever happens to be available. If the country doesn't produce enough of a certain good, you can't sell that good very cheaply.

Arguably, the country should try to produce more of those things which are in short supply, but that's a long-term discussion.

[RGBVideo]

...then get rid of the government monopoly and allow invididual citizens to produce and sell the goods they are willing to create? Universal price controls are not a new idea. The first time they were experimented under a close surveillance of a strong central government was way back when Emperor Diocletianus was ruling Rome. The experimentation was a spectacular failure exactly because the actual trade moved on to black market. Why people are still creating arguments to support price controls altough it failed in both theory and practice thousands of years ago is a mystery to me.