Despite its myriad problems, the Cuban economy has proved resilient when times get tough, according to Pavel Vidal, a former economist at the Cuban Central Bank who now teaches at the Javeriana Cali University in Colombia.

“In normal conditions, Cuba’s centrally planned economy impedes economic growth, progress and innovation,” he said. “But in times of crisis, having a plan to assign resources where they are needed is an advantage.”

Prices allocate resources efficiently. So, when we’re short of resources we shouldn’t use prices?

No wonder the place is fucked with that sort of insanity.

9 thoughts on “Jeez”

  1. Not strictly true, is it Tim? In extremis, rationing may be necessary to prevent the price mechanism in a market becoming violent force rather than dosh. Although centrally planned socialist economies are rather good at getting an economy to that situation. But I wouldn’t worry too much about Sr Vidal. Colombia’s got a thriving market economy & the market price of socialist economists, particularly in Cali, is likely to be a brief burst of automatic weaponry some pleasant sunny day. There’s little appetite there for following the neighbour’s economic trajectory.

  2. ‘the Cuban economy has proved resilient when times get tough’

    How can they tell there is a difference? Difficulties metastatic, Charles.

  3. Presumably there are also times when the price mechanism might take a bit too long to operate – wartime for example. Would you source your armaments by a pure free market price mechanism? Oh dear we’ve lost a battle, the price of tanks has gone through the roof, but the factories aren’t geared up to produce more yet, they need to build another factory………… of course the cheapest tank maker’s tank might not be compatible with the one you’re using now, thus making all your old ones useless……

    Market forces work fine when you are trying to maximise the personal utility of every single person. When that is not the goal (and wars are definitely not maximising the personal utility of those getting shot) then centralised direction of the economic activity usually makes more sense.

  4. Fortunately the Cuban economy and society has enjoyed great success under wise governance even despite the extensive trade embargo organised against it – managing to produce one of the best health care systems in the world, according to their thoroughly trustworthy official statistics. On the other hand, if Brits need to fill in a few more customs declaration forms, their entire economy is going to collapse and take their health service down with it.

  5. “Think you’ll “enjoy” that one, I saw it and thought of you…”

    Why? I’m neither a care home operator, or an swindled investor in one……….

  6. “The company’s owner and chief executive Sean Murray lives on the south coast, has a luxury yacht and a fleet of high-performance cars and until recently travelled in his own private jet, with most of those listed as company assets.”

    I wondered what kind of liability that company and had, and whether he would have been so happy to trade without the shell of a company (or for investors to have been so ready to hand him the cash)…

  7. I was just about to mention rationing and the bloke in Spain beat me to it . Pricing doesn`t allocate railways very efficiently either , for example or the building of roads where it also used . Pricing alone is not good at allocating health resources it would seem and most developing economies require levels of protection. State tariffs are common for Insurance Premiums so as to ensure consistent availability.
    Pricing does not provide for apprenticeships and skill required in the future ..I could go on , pricing is not the universal answer some people think it is

  8. “I wondered what kind of liability that company and had, and whether he would have been so happy to trade without the shell of a company (or for investors to have been so ready to hand him the cash)…”

    Ah, I understand. Yes it is plenty of grist for my mill that limited liability companies are a fraudsters charter.

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