MESCP, tomatoes and economic czars

Hugo Marcelo Balderrama

By: Hugo Marcelo Balderrama - 09/06/2024

Guest columnist.
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The Hungarian novelist, Gyorgy Faludy, said that the 300,000 million pengös he earned from the publication of a novel was barely enough to buy a chicken, two liters of oil and a few tomatoes.

It happened that, by that year, 1946, Hungary, a product of the Second World War, had its economy in tatters, since most of the railway tracks and locomotives were destroyed, and those that were in good condition were stolen by the Soviets. To make matters worse, Hungary agreed to pay reparations of US$300 million to the Soviets, Yugoslavs and Czechoslovaks.

The government, instead of letting the natural market forces operate, decided to stimulate the economy by printing money. The paradox was that money had to be loaned for the ink.

Which it was the result?

Inflation reached 41900000000000000%. Let me put it simply, prices doubled every fifteen hours. Obviously, real wages, which reflect purchasing power, fell through the floor. Although people had jobs, they were worthless.

What is all this story about?

There, in the mid-2000s, a group of analysts, this server among them, used that example in a TV program to warn citizens that the Movement Towards Socialism was taking Bolivia on a path very similar to the scenarios of Hungary, Cuba or communist Korea.

However, the least that happened to us was that they treated us like "pretentious brats", since it was inconceivable that some twenty-somethings would question the Productive Social Community Economic Model, which, including the Constituent Assembly, was being imposed in Bolivia.

Almost two decades have passed since that episode, Bolivia suffers from a fuel shortage; The dollars disappeared, so much so that the regime itself is desperately looking for them; young people have lost hope in their country; food begins to become scarce; Our international trade is non-existent in the world, and families have difficulty making ends meet. So, here's another question.

Did the Productive Community Social Economic Model (MESCP) fail?

Depends. If his expectations were that this model would lead us down the path of development and wealth, it was a failure. However, if we look at the model from the perspective of the dictatorial system of 21st Century Socialism, it was a resounding success, since we have miserable economies, a destroyed nation and poor citizens, but at the same time, rich dictators.

It turns out that the MESCP, despite the bombastic marketing label, was nothing more than the putting into practice of the prejudices that many thinkers, politicians and common people tend to have against free enterprise and capitalism.

Its real objective was to replace the alleged "chaos" and the supposed "imperfections" of the free market with the central "planning" of the economy. Obviously, planning would be in the hands of "experts" like Arce Catacora and other economists, those economic czars, in the words of the great Ludwig Von Mises.

Its implementation involved the destruction of private property, for example, banks were forced to grant loans at regulated rates; to spend the International Reserves without any qualms, and to raid workers' retirement with full hands.

However, the worst thing is that we Bolivians end up becoming slaves and hostages of the system, since something as basic as getting tomatoes became, at best, a meme, and at worst, a sign of the tragedy that came.


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