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February 18, 2009

Russia warns against statist solutions to economic crisis

Talk about living in a topsy-turvy world.

Russian Prime Minister Vladimir Puting, speaking at the World Economic Forum in Davos, has a message for western countries flirting with central planning of their economies: We tried it. It didn't work.

The Wall Street Journal has the complete transcript online. This excerpt is especially interesting:
Excessive intervention in economic activity and blind faith in the state's omnipotence is another possible mistake.

True, the state's increased role in times of crisis is a natural reaction to market setbacks. Instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent.

The concentration of surplus assets in the hands of the state is a negative aspect of anti-crisis measures in virtually every nation.

In the 20th century, the Soviet Union made the state's role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.

Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.
President Obama, are you listening?

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