Communism still matters liberty still matters

Those who grew up in East Germany seem to have a harder time cottoning to the realities of capitalism:

We analyze the long-term effects of living under communism and its anticapitalist doctrine on households’ financial investment decisions and attitudes towards financial markets. Utilizing comprehensive German brokerage data and bank data, we show that, decades after Reunification, East Germans still invest significantly less in the stock market than West Germans. Consistent with communist friends-and-foes propaganda, East Germans are more likely to hold stocks of companies from communist countries (China, Russia, Vietnam) and of state-owned companies, and are unlikely to invest in American companies and the financial industry. Effects are stronger for individuals exposed to positive “emotional tagging,” e.g., those living in celebrated showcase cities. Effects reverse for individuals with negative experiences, e.g., environmental pollution, religious oppression, or lack of (Western) TV entertainment. Election years trigger further divergence of East and West Germans. We provide evidence of negative welfare consequences due to less diversified portfolios, higher-fee products, and lower risk-adjusted returns.

That is from a new NBER paper by Christine Laudenbach, Ulrike Malmendier, and Alexandra Niessen-Ruenzi.

But if you are looking for a contrary point of view, consider this new paper by Sascha O. Becker, Lukas Mergele, and Ludger Woessmann:

German separation in 1949 into a communist East and a capitalist West and their reunification in 1990 are commonly described as a natural experiment to study the enduring effects of communism. We show in three steps that the populations in East and West Germany were far from being randomly selected treatment and control groups. First, the later border is already visible in many socio-economic characteristics in pre-World War II data. Second, World War II and the subsequent occupying forces affected East and West differently. Third, a selective fifth of the population fled from East to West Germany before the building of the Wall in 1961. In light of our findings, we propose a more cautious interpretation of the extensive literature on the enduring effects of communist systems on economic outcomes, political preferences, cultural traits, and gender roles

That said, I still believe that communism really matters, and durably so, even if the longer history matters all the more so.  And now there is yet another paper on East Germany and political path dependence, by Luis R. Martinez, Jonas Jessen, and Guo Xu:

This paper studies costly political resistance in a non-democracy. When Nazi Germany surrendered in May 1945, 40% of the designated Soviet occupation zone was initially captured by the western Allied Expeditionary Force. This occupation was short-lived: Soviet forces took over after less than two months and installed an authoritarian regime in what became the German Democratic Republic (GDR). We exploit the idiosyncratic line of contact separating Allied and Soviet troops within the GDR to show that areas briefly under Allied occupation had higher incidence of protests during the only major episode of political unrest in the GDR before its demise in 1989 – the East German Uprising of 1953. These areas also exhibited lower regime support during the last free elections in 1946. We argue that even a “glimpse of freedom” can foster civilian opposition to dictatorship.

I take the core overall lesson to be that the eastern parts of Germany will experience significant problems for some time to come.

And speaking of communist persistence, why is it again that Eastern Europe is doing so well against Covid-19?  Belarus is an extreme case, with hardly any restrictions on activity, and about 14,000 cases and 89 deaths.  You might think that is a cover-up, but the region as a whole has been quite robust and thus it is unlikely to be a complete illusion.  And no, it doesn’t seem to be a BCG effect.

Does communism mean there is less of a culture of consumption and thus people find it easier to just stay at home voluntarily?  Or have all those weird, old paranoid communist pandemic ministries persisted and helped with the planning?  Or what?

Double credit on this one to both Kevin Lewis and Samir Varma, neither less excellent in his conjunction with the other.


Did the East Germany study account fottge fact that more capitalist favoring people may have emigrated to former West Germany after renunification?

On the Eastern Europe paradox of low Covid rates, my guess is that it is due to smoking rates, the Germany low rate is probably this as well.

The percentage of smokers is an interesting hypothesis. Germany is also high ~ 29% of men.
So far I think only a French team has done a study on this.

Lung cancer has higher incidence in respiration experts than in atheistic bigglewaggers.

Are you retarded?

Maybe the lower COVID-19 rate in Eastern Europe has something to do with Slavic languages. We know the virus often spreads from asymptomatic individuals, which implies individuals are spraying viral droplets around the room merely by speaking rather than coughing or sneezing. I don't know anything about Slavic languages, do they have less "plosive" consonants than West European languages?

That's a real Hazel of an explanation right there...

Hungary, Romania, Albania and the Baltics don't speak Slavic languages. In particular, Romanian is a Romance language, just like French, Spanish and Italian. So that doesn't pan out.

Romanian phonetics are heavily influenced by Slavic lanaguages, to the extent that lay people hearing Romanian would probably not guess they were listening to a "Romance" language. But MikeW is still speaking nonsense. Polish in particular has a large number of sibilants that probably spray more saliva droplets than any sounds in Italian. French strikes me as a language that is very low on "spray" compared to say Dutch or German, yet France is doing quite poorly.

How about Hungary then? :)

Did they do an IQ test on East Germans? Chinese and Vietnamese communists figured out capitalism much faster.

If by “figuring it out” you mean “starved by trade sanctions” then you should just say it. Communism in Vietnam was punished for its stubborn resistance - in the end they could choose only between nationalizing their natural resources or eating, and they chose the latter.

Christ, it takes only two months of contact with Anglo-Americans to promote opposition to dictatorship! This is incredible on the face of it. Publish in the Journal of Empirical Results.

Most people around the world will think this theory to be utterly absurd on its face, but it sounds utterly natural to the Americans. American capacity for self-congratulation is unrivaled in the world. Even the old Commies could not top it.

“ American capacity for self-congratulation is unrivaled in the world. Even the old Commies could not top it.”

Always astonishes me how that is true even among the educated and relatively open-minded. Suggest on MR that the US could learn something from other countries, COVID-19 responses being one example, and about half of the comments will shoot it down.

It's more usual that you get balanced responses suggesting that South Korea and Germany are unusually good, but that pure policy is not their reason for success and luck played a big part, and that the US is also not really unusually bad compared to Western Europe.

The 'robust response' tends to be to 'The US is uniquely bad in the world because Trump and the US's rich are uniquely awful and has destroyed all the amazing, Democrat voter dominated public health organisations' sort of comment, not to anything which simply states the US is average and assigns blame for a lack of overwhelming success anything like equally to Democrat and Republican stakeholders.

Responses that are genuinely and sincerely based on importing ideas from other regimes are treated fairly, while those that simply use other countries as a stick to beat local enemies are treated poorly.

The fact that none of the authors appears to be American is just such a chef's kiss on this comical comment. Certainly *someone* seems to be laughably self-congratulatory here.

Just ask Greece, I'd imagine the development of such a distaste was even quicker than just 2 months in 1946. I suppose when you let the Nazi collaborators out of prison and re-arm them, the people get the picture.

Guatemalans were probably just as quick to dislike it, but things have worked out much better there; by all accounts the dictatorship is looking healthy again after the Americans cut the funding to the war crimes tribunal.

Possibly an effect of loss aversion? You expected (or at least hoped) your future was going to be in the were in the western sphere and suddenly it wasn't.

The reunification was more of an Anschluss. Until today, "Ossis" are rare in positions of power (Gauck and Merkel being notable exceptions) and infrequent in top jobs, management, or academia. Even on universities located in the East, Wessis form the majority of professors.
Scratch the surface of shiny new roads built by Western taxes, and you will find a dysfunctional, resentful society suffering from massive brain drain, maybe the worst in the world. The alienation was cemented during the migration wave 2015, when the asylum seekers were given massive official attention, precisely the kind that the East has been lacking for decades. Since then, the AfD is a "Volkspartei" in the DDR, gaining up to 30 % of the vote and winning pluralities in many counties.

On purely economical terms, the DDR was better of in 1989 than both Czechoslovakia and Poland. It was horribly mismanaged, though, to the point that quality of daily life in both CZ and PL is much better. No one I know would trade Liberec for Görlitz.


Like Reunification/Anschluss, there is another word-mapping I would use: Wende/Revolution.

If anyone is looking for a frame in which the disrespect which US midwesteners feel coming from US liberal elites is comparable to the disrespect Eastern Germans feel coming from German liberal elites, look no further than Wende/Revolution:

Eastern Germans achieved a peaceful revolution, yet no one in present day Germany labels that achievement as such. Instead within days after the Wall came down, the German media adopted the phrasing "die Wende" (turning point). A phrasing coined by the Eastern German Socialist Party in order to remove the dignity of the achieved and turn it into something passive, that "rolled over us". Within years after the wall came down, that degrading phrasing became the de-facto one.

Not the least, because Western German lefties felt the same way: It rolled over them. They didn't want people waving national flags, they didn't want Reagan and what he represented to win. They didn't want that all the bad news about socialism they regarded as imperialist propaganda to become undeniable.

In this regard, this phrasing "Die Wende" was achieving a "reunification" of another importance: That of Eastern and Western German Socialists.

Genau und richtig! “... because Western German lefties felt the same way: It rolled over them. They didn't want people waving national flags, they didn't want Reagan and what he represented to win. They didn't want that all the bad news about socialism they regarded as imperialist propaganda to become undeniable.”.

Also consider that the airlift and the wall went up in Berlin in reaction to the American introduction of the deutsche mark (the West Germans "did it" but official announcements followed). The Soviet Union curiously disliked the notion of "rejuvenating" Germany in 1948, but such an action was not exactly a poor business decision on the part of the United States.

It is fascinating that in the West there is the notion that the wall was finally brought down in 1989, when it had been the sole reason it went up in the first place.

To be clear, for anyone unfamilar with Czechia, Poland, and East Germany, this person is very confused if they indeed believe living standards to be higher in CZ and PL than in East Germany. Perhaps Praque beats out rural Meckenburg-Vorprommen, but by no reasonable measure do its eastern neighbors have a better standard of living on average.

I have traveled extensively around those places and I speak German good enough to hold conversations about politics etc.
With the exception of a few big cities, East Germany has a major livability problem. The young generation is simply gone. Average age in places like Zittau exceeds 60. Bus services cancelled, there are not enough doctors for the geriatric population.
Yes, the streets and roads look better than in Poland or Czechia, this kind of material investment that can be bought with money has indeed been done extensively after 1990.
But most of the places, again with exception of a few cities like Dresden, have no future and the dwindling population knows it. In 20 years, forest will take quite a few of the abandoned human settlements.
Although CZ and PL are nominally poorer, they are also way more lively. I would not live in semi-deserted Zittau if you paid me to. The look of the city that lost 40 per cent of its population and is chock-full of abandoned houses with windows covered in dust woud beat any life optimism out of me.

+5 i.p. to Kechlibar

Having spent years in Poland and traveled widely in Czechia, I agree with Kechlibar. Quality of life is much nicer today in Breslau (Wroclaw) than in Dresden. Not sure when Willl was last in Bohemia or Silesia, but things have changed.

East Germany had to build a fence to keep people from escaping. The West has to have fences to keep from being overwhelmed by an influx. Notice the difference.

Neo-Marxists like to ignore this point. Marxists never go away because they aren't motivated by a search for the truth. They just want power.

In fact the wall went up because the Western powers broke an agreement when they introduced the DM into circulation and announced Marshall Plan contracts would carry on.

The BND contained plenty of Nazis in the 50s for a reason - the reunification of Germany and its dependence on the United States as a Bretton Woods country was seen by the Soviets as the betrayal they were waiting for. Nothing validated Stalin's paranoia more than these sorts of strong-arm political actions, and he did his part to serve as a foil against which capital expansion seemed the best alternative.

Surely when the Soviet delegation left the Bretton Woods meeting they were correct in equating the World Bank and the IMF to extensions of Wall Street. Anchoring the entire global economy to your currency via the petro dollar and majority ownership of gold created a command economy that the Soviet Union could only have dreamed of - perhaps it was envy that kept the USSR going all those years.

In fact the wall went up because the Western powers broke an agreement when they introduced the DM into circulation and announced Marshall Plan contracts would carry on.

The wall went up in 1961 in response to emigration. The object of the Berlin blockade in 1948 was politico-military and aggressive. Amusing how red-haze frauds never disappear.

"The wall went up in 1961 in response to emigration. The object of the Berlin blockade in 1948 was politico-military and aggressive. Amusing how red-haze frauds never disappear."

Propaganda is very effective, but you're incorrect. People were "emigrating" because of trade sanctions, in the same way that the United States illegally blockades Venezuelan oil transport, seizing ships so as to void their fulfillment contracts and then seizing them given their "breach of contract". Then the PR claim is "Venezuela's economy is in shambles."

Now given that the policy of the USSR was to keep Germany from rebounding economically after the killing of 27 million Soviet citizens.

While Timothy Mason, a Marxist historian, generated the idea that economic punishment pushed Germany into war in WW2, most historians (such as Richard Overy) reject this, pointing to the ideological and non-economic nature of the invasion of Poland.

Therefore the USSR was intent on keeping Germany split and their economy weak. The U.S. had different plans, and wanted Germany as both a buffer state and an economic client state.

Erhard himself sought out and was received by American intelligence officers as the war ended, and was appointed finance minister of Bavaria, soon occupying a similar post for all of West Germany.

The introduction of the DM decreased currency in circulation by 93%, and price controls were removed. Along with the reunification plan for West Germany and Marshall Plan funding, this provoked the USSR into action. The Soviets viewed the U.S. as a "fascist" power that was beginning to exert economic control over states on the borders of the USSR, especially Germany.

The American plans and intentions were accurately judged by the Soviets. Look at the preparations by the CIA, they speak plainly enough for you to follow.

"1. The Soviet Union and its Eastern European satellites are relatively self-sufficient. Essentially trade and shipping embargoes would only somewhat slow down current rats of growth particularly as relates to the chemical and petro-chemical industry and tot he installation of pipelines. The principle vulnerabilities in the bloc are in the GDR on one edge and Communist China on the other. In the case of the East German regime, marked economic dislocation would result from a trade embargo requiring revamping of current economic plans and readjustments which would seriously injure East German production for a period of some months. In the case of Communist China the main vulnerability is in food, particularly supplies of wehat contracted with Canada and Australia. Embargoes on these two might indirectly create some serious problems for Moscow.

2. To be effective economic countermeasures will require closely coordinated action by all members of NATO, and probably agreement to parallel action by certain others such as Sweden, Austria, Switzerland and Japan.

3. If used as a primary weapon, economic countermeasures will be regarded by the USSR not as a convincing expression of will to resist Soviet designs with respect to Germany and Berlin, but as evasive action, indicating unwillingness to face the prospect of defending our interests by force; Khrushchev has made this clear to FRG Ambassador Kroll. It is accordingly essential that planning for the use of economic countermeasures be developed in close and appropriate relationship with measures in the military, diplomatic, and psychological fields.

Blockage of access would create a situation in which the outbreak of hostilities would be imminent and the economic embargo to be imposed would be total, including among other things:

a) The prohibition of the use of all financial facilities of the NATO countries to carry on current transactions with the USSR, Est Germany, the other Sino-Soviet Bloc members and their Nationals.

b) The expulsion of all Sino-Soviet Bloc technical experts and foreign trade officials witout diplomatic immunity from the NATO countries.

c) The freezing of all assets of the members of the Sino-Soviet Bloc under jurisdiction of the NATO powers.

d) Termination of trade agreements involving Sino-Soviet Bloc countries.

e) The denials of all exports to Sino-Soviet countries.

f) The stoppage of all imports from Sino-Soviet countries to NATO countries.

g) The closure of NATO ports to Sino-Soviet countries to NATO countries.

h) The prohibition of calling at Sino-Soviet Bloc ports of vessels and planes of the NATO countries.

Allied Countermeasure Studies Underway.

Quadripartite studies (UK, France, Fed. Rep, and US) in Bonn on possible countermeasures against East German regime have been in process for almost a year. A tripartite working group (UK, France, and US) meeting in Washington for over a year has been examining possible non-military countermeasures against the USSR and its satellites, excluding Communist China. These basic studies should now be considered first by the UK, France and Fed. Rep. and then within NATO, looking to agreement on:

1. Countermeasures which, in the absence of legal or administrative problems, could be implemented promptly, provided necessary preliminary preparations are now made on a stand-by basis; and
2. Countermeasures on which existing legal and administrative obstacles to implementation should now be removed."

Why did the East German guards have shoot to kill orders when it came to East Germans trying to get away?

It seems my comments are not coming through, perhaps this will:

My longer comments are not posting, so these articles are simply meant to illustrate one notion: why does anyone order soldiers to shoot at civilians?

Because they want them to follow some directive, and understand that no foreign power will stop them from exercising lethal force in this way.

I am not disputing that the East German border guards were ordered to shoot people escaping the country, only that this says nothing of the state of the economy. One might make the same fallacious connection between some facet of capitalism to try and explain American defections to the Soviet Union. It seems to me the better explanation is individuals and their preferred flavour of state ideology. As we can see, both "sides" are fully capable of killing civilians because they would like to.

The broader point is that the East German economy was targeted by the United States, like all other communist or "communist" countries.

I have to admit that it is cunning to make every effort to destroy an economy, and then make claims about how ineffective that economy is.

No, the BLOCKADE was implemented when the D-Mark was introduced. And that happened because the Russkies wanted the plates, but the US wouldn't fork them over. And yes, the BLOCKADE was aggressive.

The blockade was the first response to economic warfare, the wall was the second response.

The U.S. plainly wanted to seize control of Germany's economy, and the USSR was intent on keeping Germany impotent for obvious border security reasons.

The U.S. provoked, provoked, provoked - JFK's military budget increase was one of the key reasons Khrushchev considered the wall. If the Americans were going to declare war, economic or military, the Soviets were going to button up what they could still hold on to.

Really, the naivete about American intentions is incredibly delusional - you know nothing of your own government.

Here's the GDR pamphlet concerning the wall and how they thought about the events. (

I think this is a much better explanation than those for, say, Israel's walls.

Isn't the basic point that communist countries routinely had measures in place, including lethal force, to keep people from escaping?

While the West has to deal with the exact opposite problem.

I would have to disagree and say that this is the preferred view of the U.S. government, but perhaps not the fact of the matter.

How can I say that? Well first let's look at why people are leaving. I think even many libertarians would agree with me that the Communist economies were quite strong.

Certainly the CIA at the time agrees with this view:

Then I think many Libertarians would follow my argument to the next step - organized, multi-lateral trade sanctions are a form of economic violence. Again the CIA agrees, as you can find in the next few pages of the document linked.

So we must now ask: to whom can we attribute the most economic harm in these communist societies? Is it the bureaucratic regimes running them, or the United States maintaining blockades?

Certainly it is a mix, but the modern case of Iran is illustrative. While the regime is not exactly nice they are not incompetent. Rather on the other side of the fence the United States regularly freezes Iranian bank assets, unilaterally denies access to financial transaction mechanisms by denying them access to SWIFT, and with the alleged Operation Olympic has begun a campaign of cyberwarfare against the so-far civilian nuclear energy facilities in Iran.

The net result is that Iranian banks are never sure if they will still have their funds tomorrow, and that even legal international aid in the form of medicine is denied for fear of legal prosecution in some domain by the United States - even cancer medication is difficult to get, let alone Covid relief if there will be any in the form of medicine.

So I propose we examine the collapse of the political and economic situation in East Germany through the lense of the actual events which took place in the real world, which was an organized, U.S.-led global penning-in of the communist bloc. As the CIA notes this was to be executed in concert with media campaigns et al, such as the alleged Operation Mockingbird which infiltrated the press and funded student movements and art culture.

Therefore while we must acknowledge the handful of deaths associated with the Berlin Wall, we must also acknowledge that Soviet policy was heavily influenced by the Second World War and Western intervention in the Russian Civil War.

The United States lost 400,000 dead, 670,000 wounded in WW2 - that's 3% of the population dead, all military age men. The USSR saw 8,000,000 - 10,000,000 military dead, 12,000,000 - 19,000,000 civilians dead, 22,000,000 wounded.

Why so many Soviet civilian deaths? As historians such as David Stahel, David Glantz, John Ericksonm abd Richard Overy attest, many civilians were exterminated by the German Wehrmacht on the march - villages assaulted by battalions etc. It was not a conventional "total war" but a scourging which continued even to the Soviet advances in 1943-44, where retreating German units decimated villages and towns as they moved back from the frontline. Soviet soldiers followed a trail of bodies back to Berlin.

Perhaps now it is easier to understand why the USSR viewed the actions of the United States as that of aggression. The United States quickly reoriented its policy to one of economic consolidation with Bretton Woods etc, and produced NATO and other global institutions which it subsequently used as a cudgel. While the United States viewed the revival of Germany as good for business, growing the U.S. economy in turn as the German economy was restructured to focus on exports to the U.S., the USSR viewed such actions, including the re-hiring of former SS officers and other Nazis into the West German secret police (BND), as a switching of sides. It was increasingly natural to view the United States as having forged an alliance with the German state which had tried to quite literally expunge its people from the earth.

The American perspective is unfortunate - as the CIA document shows, at the time and into the Vietnam era they viewed China as a co-conspirator with the USSR, it's eastern edge. In fact there was little to no cooperation and there would be a permanent ending of any diplomatic communication in due course.

And so the United States fought a war against a fake enemy, disunited and national in true character, but viewed as ideologically menacing and anti-capitalistic - a true irony given both Stalin and Mao's penchant for utilizing state capital instruments to industrialize their societies, believing naively that industrialization would lead to much stronger economies which could allow them to vault further to "full communism".

No, communist economies were not strong. Citing the CIA? They always overestimated the strength of the USSR and none of them saw the collapse of the Soviet Union coming.

The old Stalinist line was that any problem communist countries had was due to Big Bad Uncle Sam or some group of fascists.

The simple basic point, across generations, and many continents, is that people desperately wanted to get out of communist countries. Thus, the shoot to kill orders that guards had to keep people in.

Care to present any data that contradicts the facts, or are you just going to spout propaganda?

Many thousands of people wanted to flee communist countries, and many of those risked death and some found it trying to leave. Same can't be said for people wanting to go the other way. That's a fact, and a telling one.

Obviously what explains the favorable covid-19 outcome in Belarus is that the population has been following Lukashenka's advice to drink vodka to deal with it, :-).

lol. Also I don't like people throwing the word "rates" around and then using death rates rather than infected rates. Death rates from any disease depend on how good your hospitals are. If you get a heart attack in the USA you might likely live, but in Sudan less so. The relevant stat to track is C-19 infection rates, not death rates.

Death rates attributable to Covid are accurate within a factor of two or so. Infection rates may be undercounted by an order of magnitude or more. Different methodologies and testing coverage make comparisons between countries very problematic.

Belarussian rates seem to match Russian rates, for another lockdown vs no lockdown comparison.

In today's Washington Post there was a story about Belarus reporting a sudden jump in deaths and infections, perhaps paralleling what is happening in neighborring Russia, although after being slow to do it there has been a much stricter lockdown regime than in Belarus, which led to reports of Putin being "bored" because he will not get to have his big 75th anniversary Victory party on May 9. But now he has a real crisis on his hands, so maybe it will not be so boring for him.

As it is, looks like Lukashenka's vodka recommendation did not work out so well after all.

All of the listed points can be explained by a simple hypothesis: higher risk aversion.

It follows one invests less in stock; and if he/she does invest, prefers stable companies to companies with high valuation, whose fortune can turn on a dime.

Inhabitants of showcase cities lost their relative status, likely elevating their already levels of risk aversion.

Higher risk aversion naturally explains better readiness for disasters, higher compliance with guidelines and less incredulity/normalcy bias.

Btw, higher risk aversion also means people take much fewer loans, which naturally leads to less revenue for banks. Banks then look for revenue from other sources, namely fees. Naturally, it makes investment products in eastern Europe objectively less attractive. It looks as if too much financial literacy pushes society into an undesirable equilibrium.

Is this really capitalism vs communism?

Was the US South communist before 1865?

Or do you think the South was more capitalist as the capital wealth in the South before 1860 was priced higher than the capital wealth in the North.

Was Lincoln a communist for destroying the capital wealth of the South with the stroke of a pen?

Would half the population of Saudi Arabia be considered better off than their peers in East Germany? Ie, women in East Germany had more freedom and property, capital, control than women in Saudi Arabia today.

The northern European states have values closer to the commie idealism by being democratic while very homogeneous while the UK has become democratic while being very diverse and divided making real democracy a harder struggle. The centuries of colonial power mixed diverse gene pools along respective class lines, followed by the post war labor shortage bringing in tens of thousands of low class workers from former colonies. In the British version of the South trying to succeed from the Union, the post war labor recruits from the former colonies were deemed not British until that technical status became known to all, and democratic values of equal rights kicked in. The british white nationalists want those from Barbados 70 years ago send back more than the want the Poles from 10 years ago send back.

If the 10% of the US in 1790 had limited citizenship like the communist party did/does for the next century, say by rewriting the story of Andrew Jackson so he wasn't an example of the unwashed, unconnected, masses have equal right to power economic and political, would the US be considered communist? That would simply have been the power balance in South Africa.

I find the Mayflower story bizarre in that it's used to justify capitalism when what was done is the workers revolting against the capitalist much like Marx imagined. The capitalists paid the workers expenses to build a colony which returned the investment plus profit for the risk to the capitalists. Think of the colony like a factory. If the capitalists gets the land, pays the workers to build a factory, and then when the factory is half built the workers declare they will use the factory to produce what they want which they will use or sell contrary to the intent of the factory owner, that sounds Marxist.

In a capitalist system, are company towns allowed? How are charter cities any different than company towns? Singapore and Hong Kong are charter cities, company towns. Are they capitalist, or communist?

> Does communism mean there is less of a culture of consumption and thus people find it easier to just stay at home voluntarily? Or have all those weird, old paranoid communist pandemic ministries persisted and helped with the planning? Or what?

What follows is by no means an empirical account, just what I've read and heard from my eastern friends, particularly Romania:

In general, there is huge distrust of the government and it's competence. Both from supporters and opposers.

Initially, there was a sentiment of denial. A lot of the people working in Western Europe, including Italy, hurried home for the Easter holidays. They ignored quarantine warnings. As a result, there was a big jump from 30 to hundreds of (tested) cases in Romania. Romania is definitely not testing enough people, as evidenced by the low ratio of infected vs. deaths.

I believe this distrust towards the government and distrust of everyone else (also a hallmark of communism) prompted many to switch and self quarantine much more strictly.

Interesting theory, though many people have argued that Eastern Asia is doing well because people have a high trust in government.

Most of the "trust in government" metrics don't look too high or low. Consider Hong Kong, Korea, Japan. HK low, Korea high (but off the back of a government that seriously turfed out corruption! that's real draining the swamp), Japan pretty typical.

The difference might be down to the fact that "low trust" only means a kind of generalized malaise and distrust. I'm not sure if you get proper full on partisan "The government is trying to actually destroy our people" (and plausibly they might be). Even the extreme distrust is kind of thing where plausibly you can turf out the bad elements - Carrie Lam, Park Geun-hye, etc - rather than plausibly an establishment class that hates its people.

You can't put all the same post-Communist countries in the same bag. There is as much a difference between them, as there is between let's say Spain and Sweden. Anyways, the culture of consumption in most of them is on par or even worse than all the other countries in Europe.

Stop trying to find rationale and cultural reasons for why some regions are more hit than others. It is just totally random.

But yes randomness is a much bigger factor than anyone will admit. Of course, what's the fun of that?

There are too many variables to control for in the paper by Luis R. Martinez, Jonas Jessen, and Guo Xu to reach their result.
A higher willingness to protest is IMO much more convincingly explained by the following:
- areas under initial US/British occupation were the ones closer to the West German border
- these areas were consistently able to receive West German tv and radio without having to resort to large and conspicuous antennas, so the more you get to the west the more citizens were constantly exposed to Western media as well as information about the protests happening in other East block countries at the time.
There is even a term for this in German:

Ah yes, just as being close to the Canadian border seems to improve the behaviour of Americans. With a notable exception or two, I suppose.

Are German publicly trade stocks more or less volatile than U.S. publicly traded stocks? My guess is that U.S. publicly traded stocks are more volatile; and my guess is that Americans have less risk aversion as compared to Germans. Why do Americans have less risk aversion? Partly based on experience: what goes down eventually goes back up. And partly based on propaganda: what goes down eventually goes back up. It's been a long time since stock prices in America went down and stayed there. Who do we have to thank for this? The Fed, whose main job is to maintain (rising) financial asset prices. Americans are accustomed to financial risk. Over 30 million are unemployed now as the result of the pandemic, and they are mostly on their own. Germany has experienced an economic contraction too, but Germany has a much more generous (and efficient) system of unemployment benefits. I can't help but laugh whenever I hear Trump and his followers refer to the "Chinese flu". In Germany, older folks refer to the American Great Depression: it began as an American economic crisis when the stock market crashed in America but eventually made its way to Germany where it caused widespread unemployment, starvation, and misery and brought you know who to power.

Good points - the dollar is not the global reserve currency for no reason. Precisely because it would be a disaster should the American economy fail, it reserves the right to issue as much debt as it pleases. This is perhaps the most difficult example of a "free market" to analyze.

I think the latest U.S. bailout packages signal quite clearly that this is also an issue of ownership. The staggering corporate stock buybacks and lean running appear more like extraction operations, now funded by public money in the form of bailouts. This money is not being invested in the U.S. economy, and perhaps is not being invested anywhere at all for the time being. In any case it will be invested at the behest of individuals rather than states, ala the famous elephant graph. The global poor get richer, but not enough relative to their national peers to eliminate political unrest. The middle class shrinks, and even fewer people add to their wealth, while national infrastructure and the real economies in the West shrink.

It must be said that Hitler was not an odd fascist - nationalization of the economy and isolation were so attractive to people because they were being pauperized by the capitalist economy. Fascism was the safer choice if the German people wanted to be allowed to purchase food or shelter.

You find this sentiment in Italy and France as well among the fascist thinkers - it looked quite clear to these people that liberal democracies were more interested in creating captive labour markets than directly raising the living standards of people. It makes me wonder if one key descriptive factor to do with capitalism is that actions aside from efficient use of capital are incidental - ethics as such has no purchase, e.g. it is nice if making a profit here or there also raises standards of living, but it cannot be the will of the market to think of housing and agriculture as anything but investment in a future work force.

As is the educational system, financed by taxes on the parents and their investments in higher education so that their children are acceptable as docile employees in the business world, which sells them their own production.

One may recall this expression: when the U.S. economy coughs, the world catches the flu. U.S. reliance on rising financial asset prices for prosperity causes the world to shudder.

There's an enormous price to be paid for having a buffoon as our president and lackeys as his advisors and cabinet, not only in terms of American influence in the world but in the acceptance of American values, including the value of freedom.

I dare say, but are you pointing at Slick Willie, W, or O?

What will you get under Joe "all hands but no marbles" Biden?

The orange oaf may still be your least bad choice.

Maybe geographic easternness just magically confers immunity. Seems to be working for Japan. What happened to the big outbreak we were breathlessly promised two weeks ago?

What? Didn't you hear that Japan issued a national emergency on April 16th when deaths were shooting up to 154 when there were only 54 deaths two weeks earlier? Two weeks later and there are 458 Covid-19! It could reach *1,000* by summer!!

Well, realistically they will hit 1000 before the end of this month. But still.

They are working on getting those numbers up.

The woman in the story is taking mass transit. That's 100% guaranteed safe in New York.

Arbeit macht frei! Japan has it right - if they do not have work, they have nothing. Certainly Abe has a more willing or cowed population than Trump does, so likely they will march on making this or that widget until the virus has worked its way through the population in full.

I'm not really that pessimistic - once the bodies becomes difficult to ferry away, and people see the hazmat suits around as in Italy, people may begin to resist their work. We'll see.

We'll see in time if there are excess deaths that are greatly beyond reported covid deaths or not. I'm thinkin' not.

It could be that the less "developed" countries have more robust healthcare systems, because they were not subject to privatization. Italy's Lombardy region is currently carrying the burden of over half of their national virus deaths - the wealthiest region in the country with the most advanced private/public health sector. Their service is oriented at high turnover and less family care, and while this may have worked during capitalism-as-usual, its "lean" model and shrinking effect on public health budgets led to a system which was about making money failing disastrously in a situation which demanded capacity and infrastructure to provide healthcare in the pandemic.

It is interesting to think that capitalism may not be as agile as was imagined, and when external events are fast enough and severe enough, the systems it develops - always lightly muscled so as to remain attractive to shareholders - are by that same nature unable to cope with really fundamental issues when conditions are not maintained.

It becomes less difficult to understand how liberal news outlets obediently revolve around the term "stability" - often of the sort highlighted by Taiwan's decades of martial law under the White Terror.

Life expectancy in Belarus is 74. Life expectancy in Italy is 84. The median age of death by Covid-19 is 80.

Life expectancy in the United States is 78.

If you wanted to be poetic, you could say Italy is getting a taste of what it's like to live in the West.

Life expectancy at birth has nothing to do with it. The figure you need is the proportion of the population (especially the male population) over 70.

Yes I agree. I've only been able to find good stats for populations by >65, and I admit the correlation with covid severity is not perfect, but I would like to see stats by over 70 or 75

This is definitely significant. The FSU has a big difference between male and female life expectancy.

I am based in Minsk, Belarus. It is unclear whether Belarus is doing as well as Tyler describes here. First of all, there is a lot of uncertainty about the data—as some regions (Vitebsk) seem to be overwhelmed by cases. Second, Belarus has the historic experience of Chernobyl (80% of the radiation fell on Belarusian territory). They generally do not trust the political leadership (but unlike other Eastern Europeans do not revolt due to the incredible risk-adversity of a society that lost 25%+ of its population in WW2); but in cases of crises, they know the effects of misinformation first-hand and act upon their own judgment. Although there are plenty of people who nevertheless go to football games (Belarus is the only European football league that continues playing) and churches are still open, people cancel private events (e.g. weddings) and stay home.

Today, Lukashenko made the final announcement that they will not cancel the Victory Parade on 9 May 2020. I predict that only a fraction of the people will show up. Moreover, some local authorities (Baranovichi District) have now canceled mass gatherings and the Victory Parade despite Lukashenko's dismissal of COVID19 concerns. It is unclear what the consequences of these decisions will look like—as Lukashenko will certainly be not pleased with this.

It’s VERY rare for a Democrat to criticize communism.

Tyler doesn’t do that here, of course, but kudos to him for at least hinting that it might not be entirely wonderful.

Even if he has to throw in a “but they sure rock at fighting the Wuhan Virus!” at the end. Possibly thanks to their innate resistance to the evils of consumerism.

Baby steps, Tyler!

Like a mirror, the communist evils you see so clearly in China are evidence of the implementation of state capitalism. State surveillance was pioneered in America, as was not following international law - in this, China has truly grasped the torch of liberty.

Their economy is very consumerist, and they know more about you than you do of them.

Yes there’s about 150 years of pent-up demand in China. Expect consumerism to continue, and even the Chinese government to be completely unable to stop it.

The Chinese government doesn't want to stop it. They're following the Bismarckian paradigm: "Let them have whatever they want as long as we remain the boss."

But the reality is that Chinese economic strength is reliant on a bed of low wage workers who don't consume or import very much, and so the reality of "Let them have whatever they want", is limited so as to not include "Let them have freedom from the hukou, and high wage bargain through independent unions, and Non-Tariff Barrier free imports". Now those would pretty much bash pretty firmly the two tier system of income growth for coastal elites and poverty for migrant workers, all in service of export driven growth.

(It does include such things as "Let them have wet markets" and "Let them having view high budget patriotic military epics at the multiplex though". Which is perhaps nice for the Chinese consumer, considering how you view it relative to Maoism and poverty.)

I imagine the KMT's version of China would have had nicer concentration camps, but it seems Mao improved the lot of a great many people who had been living in poverty for generations.

Modern China has a fundamental issue in that capital wants to escape the country. They are attempting to harness capitalism to build a real country, but wealthy individuals following a free market ideology are more keen to ferry that money away.

So China has to figure out how to manage this paradox. At the same time that capitalism has grown its economy, they are reaching a point where independent capital - as it operates elsewhere in the world - would rather not invest in the state, and when given the chance run for the hills.

Really the question is: How can a communist country keep its capitalist economy from lowering its population back into poverty?

Most realistically the answer is to follow something like the route the United States took - conquer the trade routes, chiefly the South China Sea and complete the Belt and Road initiative. This kind of extralegal control of markets prevents this "leakage" problem, but it will take perhaps decades for the American military to degenerate to such a state that this kind of aggression will be tolerated.

"It’s VERY rare for a Democrat to criticize communism."

Also, what's up with the fact that Democrats aren't demanding fresh hearings on Watergate? Why don't they spend more time criticizing the Kingdom of Jordan for its actions during the 1967 war with Israel?

Ricardo's comment needs to be printed out and bronzed for future generations to behold, because no one is going to believe that he is this stupid.

Should we tell him who runs China?

Or would that just ruin the surprise?

Elizabeth Warren is significantly to the left of me, but still I can observe the irony. She can say explicitly "I love capitalism" and everyone right of center will reject it, because it doesn't fit in their heads.

Talk about errors in upbringing. Too many people are taught that the historic American social contract is un-American and off the table.

The apogee of this was probably "privatize social security." We are past that peak, and living on a shoulder where it is "perfectly respectable to pay campaign funds to pornstars." Because freedom.

On that shoulder too many people facing the choice between a different conception of market democracy will choose corruption.

Because in late stage capitalism they mistake corruption for freedom.

Because they mistake corruption, and even dishonor, for freedom.

We reject it because she's a corporate, Federalist Society shill, and she's done her part in ravaging the economy and hurting people.

Tyler a Democrat? He is a hard core Libertarian. Just because someone is able to recognize that Trump is incompetent hardly puts them on the Left. At least on Communism Tyler is more reliably "right wing" than a lot of the modern GOP.

“ Consistent with communist friends-and-foes propaganda, East Germans are more likely to hold stocks of companies from communist countries (China, Russia, Vietnam) and of state-owned companies, and are unlikely to invest in American companies and the financial industry.”

This seems like an example of “home bias” which is observed in investors in all countries not just ones exposed to communist propaganda:

Also, a 100% American portfolio would have generated the best returns over the past 10 years but this isn’t always true. A portfolio of Russian, Vietnamese, and Chinese stocks would have outperformed American stocks in the 2000s.

Would communist investors have been able to predict this when making their investment? They may have thought it likely but aren't all stock transactions made with the idea of future success?

One of my most ancient political beliefs, formed through the fall of communism, is that ex-communists can't be good capitalists because they aren't taught the right things in elementary school.

My simplistic idea then was that if you were taught from childhood that property is theft, that capitalism is corrupt, and then a switch is flipped and you are told to be a capitalist, you will think you have just been told to become corrupt. To start stealing everything in sight.

Is still kind of looks that way to me.

And if there is a lesson to be learned in this post communist age, it is that the social contract should be respected. That there is a specific social contract for market-based democracies.

It isn't enough that we are "capitalist" if we are not teaching old-fashioned values like honesty and fair play .. and democracy, truth justice and the American way.

Obstruction of justice is bad by the way. For that very reason.

I must say that the virus seems like the first medical sign that we are approaching the post-capitalist age.

The wage gap shows that this is long overdue - real inflation is around 1%, and the virus has shown that the real economy is in bad shape while stocks trend up. This disconnect with reality is not a problem until a virus kills you for dreaming.

Fascists old and new are examples of people rejecting the liberal social contract because they have been rendered more like serfs than citizens.

I disagree. This seems more like the ox is pulling the plow, and then someone shoots the ox in the head, and says "wow, that ox wasn't very healthy."

The pandemic is definitely not an internal problem to our political or economic systems.

That said:

I love market-based democracy. I do see the merit in some critiques. What some people call "late stage capitalism" I might see as a loss of values.

But market democracies are still better than all the rest! No one has done it better in terms of creating wealth and happiness for their citizens.

When do you think was the last time you had a free market? I can't find a good date. Could you provide any non-ideological evidence for your position? Because all I can see is capital flight and corrupt governments assisting in the pauperization of millions.

The facts seem to weigh heavily against your claim that it is a better system; perhaps for shareholders, but not for citizens.

This is especially damning, no?

'“It’s a fair critique of corporate earnings to say that earnings “growth” in 2019 is a bit deceptive as the value is being financially engineered by corporate finance departments, not organic, core-business growth,” wrote Tom Essaye, president of the Sevens Report, in a Wednesday note to clients. “Companies aren’t making any more money than in 2018—they just have a smaller share count to spread the money over, so EPS are rising.”'

"Is still kind of looks that way to me."

That's rather hard to square with the entrepreneurial outburst following Deng Xiaoping's reforms.

Is it square with melamine milk?

anonymous is probably reasoning this based on Russia. But one would think that the breakdown of established sources of law and "the system" as a whole, and the concomitant opportunities for already corrupt to become probably had more to do with it than them believing that they had been asked to become corrupt due to education about what capitalism meant.

They were probably doing what they could get away with and knew wasn't right, with a side order of "but if I don't, someone else will". Rather than "Oops. Misunderstanding. When you said 'Be a good capitalist', I thought you meant 'Be evil and self serving'!".

I suspect it's not actually one of his earliest political beliefs though. Maybe more of a post-2016 idea that the problem is people talking about our early 21st century established elites being self-serving and incompetent, and that everything should start with affirming positivity about them... "We have nothing to fear but cynical realism itself"

It's true, that as I was forming my first adult of beliefs I looked at the sort of virtue taught in a Lutheran Church, and how it was compatible with capitalism, and how that value system was lacking(*) in post-Soviet Russia.

But I think China confirms the belief. They don't have a strong moral foundation, so they just need to shoot someone now and then as an example. As they try to set what are for them new boundaries.

* - it might be lacking in the most charismatic Christian denominations as well.

You can tell I'm a bit of a skeptic for above reasons (e.g. 'Aren't these things well explained by simply opportunity, before resorting to differences in psychology and values and moral beliefs?').

But I would really prefer it not to be true for reasons that it seems to have a pretty repugnant implication.

Namely that it implies that only these sort of 'Protestant Work Ethic' 'Bourgeois Dignity' types (referencing Weber-meets-McCloskey) with the 'proper education' and white shoe upbringing can really be trusted with liberal capitalism where they can be expected to self police (and where they should be perhaps properly be exempt from being policed by their inferiors). And that the best humanity can do otherwise is submit to a sort of heavily policed authoritarian capitalism where the state prevents them from indulging their worst impulses.

It confirms a social hierarchy that adores in centre-piece a rather smug and self satisfied bunch (literal and acculturated WASPs), while ceding ground to complacency about corrupt capitalism in China and Russia, as the sort of best that can be expected, until missionaries for moral capitalism have gone about their work. (And perhaps Protestant Christian, even Mormon, missionaries, but certainly not those dirty Evangelicals...).

Do you believe in honor as a personal virtue?

Can you see how honor, consisting partly of honesty and fair dealing, could improve a market economy?

And for what it's worth, I think that kind of honor is accessible to anyone. We often see it in people who do start with humble beginnings.

This seems a bit of a shift. Your initial comment that sparked off the chain, which I'll paraphrase, seemed to be that specific pre-existing beliefs from specific education and culture relating capitalism being moral are required for capitalists to behave in a moral and creatively entreprenuerial fashion, rather than simply steal assets, become rentiers, etc. Try capitalism with a people without that education and culture, and you simply get corrupt kleptocracy.

Shifting to the idea that much more generally held beliefs, which are perhaps with some variation human moral universals, could help markets to function to some degree, is a bit of a shift.

It isn't a shift for me.

It is what I meant above by "honesty and fair play .. and democracy, truth, justice and the American way."

I’m trying really hard to stop my trolling but some of you are making this increasingly difficult.

1. Less tourism than in Western Europe. Pandemic started later.
2. Under measurement of cases and deaths.
3. Authoritarian culture means people can be put in lockdown more easily.
4. In some countries like Russia, the extent of testing/Covid-deaths is much greater than in Western Europe and North America, so they are supressing it more effectively.

BTW - a better topic. Who understands human behavior less, Communists or Libertarians?

Libertarians. Communists may spout an ideology completely divorced from reality, but they are exceedingly well informed on the dynamics of power and how to wield it to crush their enemies.

I disagree, liberal democrats seem the most divorced from reality. Look at the delusional language attending these graphs which, elsewhere, are used to determine that current economic policy is becoming more and more disconnected with reality. The preferred view in liberal circles is close to the PIE's - maybe prices are just being weird.

As reported here, the children of Vietnam War draftees earn less and are less likely to hold a job:

I stands to reason that having lived under Communism's baleful and long-lived yoke would have a bigger effect.

As for Covid, if all the young Eastern Germans have decamped for better opportunities in Western Germany, there would only be fearful oldsters less likely to socialize left in the East, and thus naturally self-distancing.

Once again I think the CIA is perhaps the most honest party; you can see how Vietnam's economy was doing in the post war years. One ideological stance is certainly to imagine that Communism crippled the country, however I might propose another, informed by the Pentagon Papers and evidence of political action, which encourages one to see a situation where the United States wished to prevent the nationalization of natural resources and integrate them instead with global markets.

Huge capital investment was part of the Vietnam war - remember the United States provided the French 80% of their funding in the First Indochina War - primarily because French nationals owned quite a bit of real-estate which they wanted to recover.

It is curious how one finds their way to view the war from the former perspective. A story in which the country which barred elections, installed a puppet regime, ran Operation Phoenix to stimulate population transfer of Christians amenable to the regime's ideology, then dropped unheard of numbers of munitions on the country's infrastructure and people, followed by decades of economic sanction producing starvation. Somehow it is this country, the United States, which is the leader of the free world, rather than an aggressor who, in an attempt to liberalize local markets by force, chose starvation as the final measure, culminating in the current capital integration of Vietnam.

It helps to remember that by modern standards the US was communist back in the 1950s and 1960s. Any time someone suggests going back to the old tax rates, industrial policy and enforcement levels, we hear cries of communism. Of course, we called it capitalism back then, but it was nothing like what we call capitalism today.

How much does liberty actually matter? Right now, people are being given the choice between working in dangerous jobs or not eat. That isn't exactly the textbook definition of liberty. It sounds more like the old liberty at the point of a gun.

The 'isms , communism and fascism, will remain with us, as long as people associate the former with higher wages and the latter with free health care, regardless of what unappealing packet deal they may be part of ( bundling ).

Don't you have that backward? Communism = free health care, fascism = guaranteed jobs at good wages (for those belonging to the racial/ethnic ruling group)

The “enduring effects of [fill in the blank] economic or political system” is well known in the context of slavery and the Andean mita system. The vast depopulation (as adults were shipped out as slaves) of some West African regions has led to persistently weak economies to this day. The need for miners in Bolivian silver mines resulted in forced labor drafts in small Peruvian villages at the same altitude as Bogota meant, to this day, poorer villages than those nearby but higher or lower than Villages who lost working aged men during colonial days that ended two centuries ago.

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