Quotulatiousness

May 7, 2019

Arthur Chrenkoff relates his own economic “a-ha!” moment

Filed under: Australia, Economics, Europe, Italy — Tags: , , , , — Nicholas @ 03:00

He says he’s never had a religious or spiritual revelation, but he did have one that was pure economics:

By way of background, you have to remember that I grew up under declining communism. As someone has once wryly remarked, in a planned economy everything is planned except for the economy. In Poland of my childhood and early teenage years virtually everyone was employed by the state and so virtually all the income was derived from the state, except, of course, for the rampant black market. Shops were few and generally poorly stocked. Some goods were unobtainable, others required queuing and a lot of luck (or connections) to get, and either way most were of inferior quality to that in the West. Even if you have managed to save enough money, you had to get onto a waiting list to acquire an apartment, car, or household goods. The wait could take decades. Life’s necessities were more widely available but quite haphazard in their distribution. During the crisis years of the 1980s, most food items required ration cards. People literally had to scheme and plot to get their hands on toilet paper. Sure, the Eastern European socialism for most part managed to provide everyone with a bare minimum of subsistence so that no one starved anymore, but beyond that the economic system was shambles, never managing to produce the sufficient quantity and quality of what people needed and wanted. We all knew that the West, by comparison, was a kingdom of plenty, thanks the workings of that scary capitalism, but as a kid I wouldn’t be able to explain to you how, by contracts to our socialism, it somehow managed to produce in abundance all those cars, toys and oranges and bananas. We were told by the authorities that it was all a sham, built on exploitation of workers and resulting in widespread poverty. But we knew enough to know that everything is relative. When the Jaruzelski regime in the early 80s trumpeted in the government-run media (there were no other legal ones) its charity initiative to send sleeping bags to the homeless of New York, an anonymous wag somehow managed to place and ad in one of the papers “Will swap a two bedroom apartment in Warsaw for a sleeping bag in New York”.

I was 15 when I left, unbeknownst to me two years before the fall of the Wall, and spent 16 months in Italy before finally arriving to start a new life in Australia. For a kid from Eastern Europe, Italy was a revelation; I didn’t know enough about anything then to realise that the country we thought was a paradise has always in reality been somewhat of a hot mess. Australia at the end of the decade of wide-ranging economic reforms, which really opened the country to the world and unleashed its creative potential, was even more of contrast to the drabness, shortages and absurdity of the “real socialism” I grew up under.

The story of my economic experience is very brief: one day, not long after settling in Australia, I was in a car, being driven somewhat off the beaten path, through what can be described as a light industrial area. Then, all of a sudden, among all the rather anonymous sheds and buildings I saw a large, free standing store. I can’t remember its name but I remember it was selling carpets. And that’s all. I grew up with few shops around, which, no doubt in part because European cities tend to be a lot more condensed, occupied the same space as the living. But here, here was a whole store, a very large store that specialised in one product only – floor coverings – and it was, relatively speaking, sitting in the middle of nowhere. That it was in business, that it somehow managed to operate, indicated to me that people, many people, actually drove over here, from some distances away, for no other purpose than just to buy one thing – a carpet. So strange. So peculiar. This was my revelation, my economic epiphany in a back seat: this whole capitalist system must truly be incredibly complex and magnificent – and superior to all the alternatives – if it means a shop like this can thrive selling one particular type of product to people who don’t live anywhere near it.

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