Fidel Castro says his economic system is failingFormer Cuban president says state-run model 'doesn't even work for us' in offhand remark to US journalist Jeffrey Goldberg.

Rory Carroll, Latin America correspondent The Guardian, Thursday 9 September 2010 12.31 EDT

Fidel Castro, pictured earlier this month, criticised Cuba's state-dominated system. Photograph: Desmond Boylan/Reuters

It was a casual remark over a lunch of salad, fish and red wine but future historians are likely to parse and ponder every word: "The Cuban model doesn't even work for us any more."

Fidel Castro's nine-word confession, dropped into conversation with a visiting US journalist and policy analyst, undercuts half a century of thundering revolutionary certitude about Cuban socialism.

That the island's economy is a disaster is hardly news but that the micro-managing "maximum leader" would so breezily acknowledge it has astonished observers.

Towards the end of a long, relaxed lunch in Havana, Jeffrey Goldberg, a national correspondent for the Atlantic magazine, asked Castro if Cuba's economic system was still worth exporting. The reply left him dumbfounded. "Did the leader of the revolution just say, in essence, 'Never mind'?" Goldberg wrote on his blog.

The 84-year-old retired president did not elaborate but the implication, according to Julia Sweig, a Cuba expert from the Council on Foreign Relations who also attended the lunch, was that the state had too big a role in the economy.

Raúl Castro has been saying the same thing in public and private since succeeding his older brother two years ago. With infrastructure crumbling, food shortages acute and an average monthly salary of just $25 (£16), it has become apparent that near-total state control of the economy does not work.

But for Fidel to acknowledge the fact could be compared to Napoleon musing that the march on Moscow was not, on reflection, a great success.

"Frankly, I have been somewhat amazed by Fidel's new frankness," said Stephen Wilkinson, a Cuba expert at the London Metropolitan University. "This is the latest of a series of recent utterances that strike me as being indicative of a change in the old man's character."

The remark should not, however, be interpreted as a condemnation of socialism, added Wilkinson. "That is clearly not what he means, but it is an acknowledgement that the way in which the Cuban system is organised has to change. It is an implicit indication also that he has abdicated governing entirely to Raúl, who has argued this position for some time. We can now expect a lot more changes and perhaps more rapid changes as a consequence."

Raúl has said Cuba cannot blame the decades-old US embargo for all its economic ills and that serious reforms are needed. Fidel's statement could bolster the president's behind-the-scenes tussle with apparatchiks resisting change, said Sweig.

Agriculture has been a big disappointment. The lush Caribbean island of 11 million people could be a major food exporter but central planning and state-run co-operatives have produced chronic shortages, prompting an old, bitter joke that the revolution's three biggest failures are breakfast, lunch and dinner. Raúl's reforms are not going well: food production fell 7.5% in the first half of the year.

Once propped up by the Soviet Union, Cuba's lifeline is now cheap oil from Venezuela, where President Hugo Chávez considers Fidel a mentor.

Chávez swiftly followed another surprise statement of Castro's – accusing Iranian president Mahmoud Ahmadinejad of antisemitism – with an announcement that he would meet Venezuelan Jewish leaders. The move was "a direct result of Fidel's statement", according to Goldberg.

• This article was amended on 10 September. Headings on the original characterised Fidel Castro as saying that communism does not work. This has been corrected.

Marxist reforms?

The remarks about Cuban economic policy are not the only surprise statements made recently by the former Cuban leader. Others include:

• He feels responsible for the "great injustice" of the persecution of Cuban homosexuals in the 1970s.

• He laments Jewish suffering over the centuries, defends Israel's right to exist and accuses Iran's president Mahmoud Ahmadinejad of antisemitism.

• He appears to regret urging the Soviet Union to nuke the US during the 1962 missile crisis. "After I've seen what I've seen, and knowing what I know now, it wasn't worth it all."

http://www.theguardian.com/world/2010/sep/09/fidel-castro-cuba-economic-model

CUBA – DOES COMMUNISM REALLY WORK HERE?October 11th, 2012

Wages are very low in Cuba, about $15 to $20 per month. However, as a Communist nation, almost all services are free, i.e. housing, transportation, basic foods, education and books. The universities and art schools, which are free to Cubans, do allow some paying foreigners to enroll.

Every adult works and has a ration book which entitles him/her to a certain monthly quantity of eight basic foods, including rice, beans, oil and flour. Children also receive their own food ration.

Fresh fruits and vegetables are purchased at the local markets, and the papaya, guayaba, pineapple, coconut and avocados were excellent. We saw meat being sold at small store counters in unrefrigerated conditions in the heat of downtown Havana. Although there are a few supermarkets, they are not large and carry some canned goods that would be too expensive for the average Cuban.

Cuban cigars are a big part of the economy, and the leaves are hand wrapped by a work force of men and women sitting side by side at work stations in several small rooms at the factory. Each person has a certain daily quota to produce, which does not appear difficult to maintain.

In the countryside near the cigar factory we toured, we were also able to visit a tobacco plantation, talk to the owner, see tobacco leaves being dried, and sample his cigars.

The thatched hut where the tobacco leaves are dried must also be carefully maintained. Most of the owner’s production goes to the state, but he is allowed to keep a small amount for himself. He lives modestly but contentedly in the country.

There are also some enterprising individuals, such as the farmer above who sold rides on his steer for $1, looking to augment their low income.

Although most businesses and restaurants are owned by the state, which employs all of the workers on its wage scale, the government has recently allowed private restaurants known as paladars to open in former residences. This is a first initiative for private enterprise, but the new restaurants seem to be developing a following. As with all new ventures, they are still learning how to accommodate groups of people, but are strongly motivated by being able to run their own businesses.

We were shocked to learn one dramatic economic fact. The medical system in Cuba is considered very good, and there is an abundance of doctors in the country. However, contrary to what a doctor earns in the U.S., our guide told us that the income he receives from working with one foreign tour group is equal to a doctor’s salary for 10 years. It is hard for us to imagine someone willing to spend so many years of his/her life studying for a career with such low financial compensation, since we are more likely to embrace the idea of additional work being rewarded with higher pay.

As far as maintaining a financially and socially equal society, Communist Cuba seems to have succeeded, at least on the surface. No one seems to have very much, and yet all seem to have enough to survive. We saw several children with toys, which their parents would not have been able to afford, and assumed that money was being sent back to Cuba from family members who had emigrated to other countries. A lottery exists that allows a limited number of Cubans to emigrate permanently to the United States and still travel back to Cuba for occasional family visits.

Cuba is an interesting country to visit at the moment and will continue to evolve economically, as their political situation changes in the next few years. I just hope they will continue to keep their fabulous old cars!

http://gobonvoyagetravel.com/cuba-does-communism-really-work-here/

The Myth of Communist China

Saturday, 12 September 2009 06:54

On one forum I visit frequently, there are more and more threads started about "Communist China", "Red China", and of course, Rush Limbaugh's favorite term, "ChiComs" (short for Chinese Communists). When most conservatives learn that I - a radically right-wing conservative - live and work half my life in "that hell-hole of Communism" they are shocked. And when I state "I like it" well, let's just say the floor has many different jawlines imprinted.

But the capper is when I tell them, in fact, China is not Communist, the look of confusion, the assumption that I must be insane is quite obvious. No, my friends, I have not been brainwashed by Maoists, I do not wear my grey uniform, practice Tai Chi at 6 AM, and salute the red flag! However, I do live in Shanghai, travel extensively within this country, and have learned a thing or two (and yes, I love the you tiao for breakfast, and the food in general - it's quite good!)

First and foremost, we must define what is Communism. Communism is, in the best explanation I've found:

a family of economic and political ideas and social movements related to the establishment of an egalitarian, classless and stateless society based on common ownership and control of the means of production and property in general, as well as the name given to such a society. The term "Communism", usually spelled with the capital letter C, is however often used to refer to a form of government in which the state operates under a one-party system and declares allegiance to Marxism-Leninism or a derivative thereof, even if the party does not actually claim that the society has already reached communism.

In practical terms, it can be summarized by Marx's statement:

From each according to his ability, to each according to his need

Essentially, what you produce is given to the State; what you have, the State gives to you. Your house, car, job, clothes, food, health care, all are appoprtioned by the State for you. You live to serve and "feed" the State, and the State - in its "beneficence" returns back what you need. Of course, if you and your neighbors don't produce enough, or the State doesn't really recognize your real need, we have a problem.

Probably the best example of Communism on Earth was the old USSR, or China before ~1983. In each case, the State decided what your job would be. Where you would live. How much you would be paid. When and where you can see the doctor. How much food you get, what clothes you can have, and basically everything about your life. In exchange for becoming an automaton, the State promised to let you at least live (provided there were enough resources to meet your needs, and you didn't speak up or develop an identity of your own).

Now, we all know that the USSR collapsed in 1989, and since then has broken into dozens of independent nations. The Western States are free, and joining the EU; the Southern nations are going their own way, thriving off their oil reserves. And mighty Russia is still drinking itself to death with vodka.

What about China, though? It has not crumbled; on the contrary, China has gained territory! Macau and Hong Kong are now Chinese owned, their Portuguese and British masters fled to the comfort of "the Continent". And China is flexing her muscles regularly in regards to North Korea, Taiwan, and Vietnam. Clearly things have not fallen apart, they must still be Communist, right?

Well, actually, wrong. You see, Deng Xiaopeng started something 25 years ago, a movement towards capitalism. Yes, that evil scourge of socialists and communists alike, the bane of human existence, the "free market". Twenty years after Mao's Great Leap Forward, China was still a virtual 3rd world nation, with nary an asset save fields, rice patties, and some inefficient, ineffective State heavy industries. Little progress, little hope.

Deng changed that when he opened up China to foreign investment. Suddenly money started flooding in. China's three natural resources - people, coal, and land - were in high demand as capitalists with a need to build product, and Chinese laborers tired of the farms or steel mills decided they could work together and make a buck (or RMB) to share. And thus it began.

What is China now, is it not still Communist? Doesn't the CCP - the Chinese Communist Party - still run things? Well of course the CCP still controls the Government, and as a result much of China. But Communist? Let's look down the list:

- China does not guarantee you a job; if you can't find work on your own, tough - you don't work- China does not guarantee you a home; if you can't afford a house or apartment, then the street is your bed- China does not guarantee you food; no job, or lost your money? Time to starve or pick through the trash- China does not guarantee you health care; broke your arm? Well, pay your copay first and then the doctor will see you

And so on. In fact, most of what we in the US take for granted, or assume that the Government will give us (or in the case of health insurance, should give us) is not guaranteed for the average Chinese "Communist".

In the US, if you lose your job, you get unemployment insurance and the Government will retrain you; in China, you go find your own and learn your own skills, no coddling here.

In the US, if you lose your house or cannot afford one then there's always section 8 housing for you; in China, better find a friend or family member to take you in or you're out on your own.

In the US, if you cannot afford food, we give you food stamps and Government cheese; in China, it's the grace of friends and family or you're eating grass.

In the US, if you need medical treatment, walk in to any hospital and you get treated, even if you cannot afford it; in China, they'll gladly see you right after you pay the cashier your initial copay to see the doctor.

In the US, if you risk your funds and it pays off, the Government demands a share of the profits via the capital gains tax (of course, they didn't take any risk in the investment initially); in China, you get to keep the profits of your wise investments.

And so on. In fact, much of what one would think of as a Communist nation doesn't exist in China. You get the house you can afford, you get the car you can afford, you get the food you can afford. If you make dirt, you live in squalor; if you make millions, you live like a king. And everywhere in between.

Now, it is true that the CCP still runs things politically; however, they are less a "Communist" group than a fascist oligarchy. Fascist in that the CCP still maintains a lot of control over several industries (health care, banking, heavy manufacturing like cars - sound familiar?) and the party loves the grand, miliaristic television productions; an oligarchy in that it's the same small group of families and friends who have run things for the last 50 years.(again, sound familiar with the long-term political families in the US?). Communist? No,. Democracy? No. Fascist oligarchy? Yes.

In terms of dissent, you still need to be careful in China; if you try dissenting or demonstrating without first acquiring the proper permits, you will end up in jail for 48 hours and fined 1000-2000 RMB (about $150 to $300). That's the extent of it. You read in the newspapers - both in Chinese and English - editorials critical of the Government's policy in one way or another. But at least the media is generally free to do what it wants, and all pretty much have the same access (unlike the Obama Administration's approach to Fox News).Here is where it gets interesting... Above I made some comparisons between the US and China, with regards to jobs, housing, food, medicine. What we see is that the US is further along the scale of "freedom - to - communism" than China! And it's not just in those areas.

Consider business. In China, you can just set up a shop and start - no license needed if you don't plan on hiring someone else, or don't sell to another business (where your transaction would be B2B, and taxed). Buskers, no problem. Street

vendors - have at it. Good luck trying that in the US!

How about taxation? China taxes you nominally on your income, with a high "standard deduction"; but it is on salary only. It is NOT on all forms of income! If most of your income is in bonuses - even monthly - then you pay no income tax. No capital gains tax for gains made outside of China. Heck, if you earn a lot for another company, then that company must withhold for you, and you don't even have to file tax forms.

China makes most of its taxation on the VAT/Business-to-business tax. It's 17% on reported invoices between businesses. I say reported, because there isn't really any enforcement here in China. You don't have to report your sales; of course, that means the purchaser doesn't receive an "official" (reported) invoice, so they cannot use it for tax deduction purposes. But if that's OK with both sides of the transaction, it goes "free" - not reported.

For exports, China sets the B2B tax rate at 6%, thereby encouraging companies to export, since they can make 11% more on the same product sales. And people wonder why the Chinese are so fixated on exporting - it's a "free" 11% additional income for them!

Overall, China's not the Communist hell-hole most Americans think. In many ways, it's much more capitalistic and free-market and libertarian than the US! In other ways, it is still pretty controlled. Big industries are still dominated by the Government; of course, with the US Government controlling GM, Chrysler, and half a dozen of the biggest banks, that's not so different now, is it? China doesn't have the prosperity of the US yet, but they have learned from our past, and are rapidly correcting their mistakes.

Unfortunately, it seems we in the US did not learn from their past, and are rushing headlong to repeat their mistakes.

http://www.simplyshrug.com/index.php?option=com_content&view=article&id=64:the-myth-of-communist-china&catid=31:general&Itemid=50

How Communist Can China Be With All Those Billionaires?

The country’s leadership might need to do something before the proletariat sees red.

By Scheherazade Rehman Apr. 30, 2013

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View of the high-end residential apartment buildings of Tomson Riviera at the bank of the Huangpu River in the Lujiazui Financial District in Pudong, Shanghai, China, 11 March 2009. Tomson Riviera, a luxury waterfront residential estate in Shanghai, is again claiming the record for the most expensive flat on the mainland after a unit on the 28th floor was sold for 160,844 yuan (US$23,561) per square meter. Tomson Group said it sold the 597.41 square metre unit for 96.09 million (US$14 million) yuan on November 3. Tomson Riviera is at Lujiazui next to Citigroup Tower, a prime business complex in Pudong. It comprises two 40-storey and two 44-storey residential towers.

Scheherazade S. Rehman is a professor of international finance/business and international affairs at The George Washington University. You can visit her homepage here and follow her on Twitter @Prof_Rehman.

Much has been made of the record China recently broke: it houses more billionaires in its government than any other country in the world. They make up the so-called "Red Aristocracy." So the central question of this blog is: How can you create the world's largest such collection of billionaires in a communist system?

Communism, you recall, is an economic and political ideological system in which everyone is considered equal. Its ultimate goal is to create a classless and stateless society. A simple explanation of how communism works is as follows: There are no individual property rights and all citizens collectively own the land. The resources derived from the land are centralized. The government then makes sure that the profits from the resources are equally distributed amongst all its citizens, as everyone is considered equal. Thus there is an equal distribution of wealth by the state no matter how hard or little you work because the "means of production" are publicly owned. The primary goal of communism is to prevent the dark negative side effects of capitalism – income inequality.

Ironically, the largest communist country now has a government with more billionaires than any other – it sounds to me like all Chinese are equal but some are more equal than others.

[See a collection of political cartoons on the economy.]

Many of the super-rich Chinese have gained in a system where there is a strong link between politics, business and corruption. It's difficult to tell you exactly how many Chinese billionaires there are because they do not want to be found. Chinese billionaires must have political connections to keep their wealth safe, become politicians themselves or acquire foreign citizenships. For example, it is not very surprising that the Chinese parliament has 83 billionaires (comparatively the U.S. Congress has not a single billionaire).

In essence, the Chinese claim of officially being a communist country is only half true. Politically, China is a one-party system that represents all the people, but economically it is rapidly moving away from Karl Marx's ideal – capitalism is in fact alive and thriving.

Political power and wealth are extremely delicate issues in China and the country's leadership is well aware that if the current income inequality continues to widen, it can be a seriously disruptive catalyst in a country were approximately 800 million (out of 1.35 billion) Chinese live on less than $15 a day. The average per capita income is approximately $6,000 (in nominal terms) and $9,000 in purchasing power parity.

[Read the U.S. News Debate: Should Congress Interfere with China's Currency Policies?]

Recent graft and embezzlement scandals and the viral social media tweets about the children of the super-rich Chinese crashing their Lamborghinis and Maseratis have deeply embarrassed the Chinese leadership. The new government under Xi Jinping has "launched a campaign against extravagance and corruption immediately" upon taking office, according to the Financial Times. President Xi is fully aware that if he cannot contain the widening income gap in a population of 1.35 billion, any displays of economic extravagance by the billionaires is perilious, especially in a system were everyone is supposed to be equal.

It will be interesting to see where Chinese communism goes from here. It might be time to call this metamorphosed ideological system something else.

http://www.usnews.com/opinion/blogs/world-report/2013/04/30/chinas-communist-billionaires

How China is ruled: Communist Party

Communist Party

The Chinese Communist Party's more than 80m-strong membership makes it the biggest political party in the world. Its tight organisation and ruthlessness help explain why it is also still in power.

The party oversees and influences many aspects of people's lives - what they learn at school and watch on TV, even the number of children they are allowed.

It is made up largely of government officials, army officers, farmers, model workers and employees of state-owned companies.

It is unrepresentative of China as a whole. Only a quarter of its members are women, for example. It is also obsessive about control, regularly showing itself capable of great brutality in suppressing dissent or any challenge to its authority.

Joining the party brings significant privileges. Members get access to better information, and many jobs are only open to members. Most significantly in China, where personal relationships are often more important than ability, members get to network with decision-makers influencing their careers, lives or businesses.

Pyramid structure

To join, applicants need the backing of existing members and to undergo exhaustive checks and examination by their local party branch. They then face a year's probation, again involving assessments and training.

The party has a pyramid structure resting on millions of local-level party organisations across the country and reaching all the way up to the highest decision-making bodies in Beijing.

In theory, the top of the pyramid is the National Party Congress, which is convened once every five years and brings together more than 2,000 delegates from party organisations across the country.

The congress' main function is to "elect" a central committee of about 200 full members and 150 lower-ranking or "alternate" members", though in fact almost all of these people are approved in advance.

In turn, the central committee's main job is to elect a new politburo and its smaller, standing committee, where real decision-making powers lie.

http://www.bbc.co.uk/news/world-asia-pacific-13904437

Comparison of Chinese and North Korean Communism up to the 1980sby James Graham

China's and North Korea's communist parties came to power at similar times, in nations though distinct with a great deal of shared history and culture. While their specific paths to power were very different the form of communism they implemented during their first two decades of rule bared great resemblances to each other. Both also conducted political experiments and developed personality cults around their leaders in this time. Only in the 1970s did the versions of communism the two practised begin to diverge dramatically.

China and Korea share long and deep rooted histories of Oriental Despotism, Confucianism and Buddhism. This history of centralised rule by an emperor lasted up to the late nineteenth century. It was destroyed in Korea and weakened in China only by foreign conquest. The resultant Japanese domination was complete in Korea and widespread in China and created lasting influences on the countries. Both combined these historical legacies with Marxism-Leninism to develop unique versions of communism. China's health system was often a mix of western medical procedures and ancient Chinese medicines. The two nations shared history of centralised rule and collective effort not only made them susceptible to communism but ensured that when they tailored it to local conditions the resulting regimes and societies were similar in nature.

The Chinese Communist Party (CCP) and the Korean Workers Party (KWP) had very different though linked paths to power. The origins of both parties can be traced back to the First World War. The CCP was however able to grow much faster and was a significant force in Chinese politics from the mid 1920s. Through a long internal struggle and the allied defeat of the Japanese in World War Two the communists were able to triumph over both the Japanese and their domestic opponents the Chinese nationalists. Conversely the already communist Soviet Union occupied North Korea in the final days of the war and immediately set about developing an indigenous communist regime. Though significant numbers of Korean communists, many fighting in China during the war did exist the North Korean regime initially relied heavily on the Soviet Union and on large numbers of communist Chinese-Koreans and Soviet-Koreans. In comparison the People's Republic of China was not founded until 1949 when their internal victory was almost complete. To achieve this victory the Chinese needed to ally themselves in a united front with many non-communist elements, the petty bourgeoisie and some of the richer peasants. From this start the PRC gradually nationalised industries and collectivised agriculture. Private firms were turned into joint state and private enterprises, taxed heavily and finally bought off by paying fixed interest at increasingly nominal rates to the original owners. This gradualism allowed the Chinese economy to recover rapidly as vital people and methods of work were phased out rather than simply eliminated. Under Soviet military protection North Korea had no such restraints and acted quickly to implement core socialist policies. Due to the extensive Soviet presence these closely resembled the Stalinist practices dominant in the Soviet Union at the time.

Until the 1970s the CCP and the KWP in general espoused a similar general ideology, that of Marxism-Leninism. The communist principle of democratic centralism was applied in the two counties. Economically this meant that the state not only owned the means of production but also centralised economic planning, investment and distribution. Power was concentrated in the hands of the respective parties with all party members and party organisations expected to unconditionally support and carry out the party line. Comparable political structures were also erected in the two countries. The highest organs of state the North Korean People's Assembly and the Chinese National People's Congress were run along the same lines. In principle membership of these organs and almost all party positions were elected. In reality they were anything but as there was usually only one candidate to vote for on the ballot paper. Therefore far from representing the proletariat and peasants the parties became totalitarian regimes run by select groups of people. These groups did not allow other political ideas or ideologies to circulate except for the government line. The struggle

for power within the ruling cliché was intense in both parties, resulting in factions developing and clashing. Factionalism died down only when one man in each country held absolute power, Mao Zedong in China and Kim Il Sung in North Korea.

They used this power to implement their own versions of Marxism-Leninism rationalising them as adaptations to suit local conditions. Mao developed his theories collectively termed Maoism largely before the CCP came to power. This meant they were more pragmatic than orthodox Marxism-Leninism. Once securely in power Mao felt free to attempt a number of political experiments with the aim of advancing China closer to communism. These included the Great Leap Forward in agriculture and the Cultural Revolution both extensive attacks on the last bastions of bourgeoisie society in China. Neither policy achieved positive results with economic disaster the most common outcome. Likewise once his power was consolidated Kim too set about putting into practice his theory of Juche or self-reliance. He reasoned that being surrounded by so many major powers each with histories of invading North Korea the country had little choice but to become as internally self sufficient as possible. The logical conclusion of Juche was the almost complete closing of North Korea both economically, political and culturally from the rest of the world.

Democratic centralism and the two nation's history of despotism allowed both Mao and Kim to implement their policies and create personality cults centred on themselves. Mao's personality cult reached its peak during the cultural revolution of the mid 1960s to the early 1970s. Even at this height his cult was however nothing compared with that of Kim's. For a start Kim's cult was always more of a family cult one in which even his mother Kang Ban-suk was given the honorary title of the "Mother of Korea". Kim through the manipulation of history, North Korea's education system and mass media also set himself up as a role model for all age groups in the country. Strong personality cults allowed Mao and Kim to dominate the politics and pervert the communism of China and North Korea respectively.

Chinese and North Korean communism began to diverge significantly only in the 1970s. In 1971 during the Sino-Soviet rift China announced an intention to normalise its foreign relations. A policy change epitomised by Richard Nixon's visit to China in 1972. Economic change followed gradually and only as a means to recover from the ravages of the Cultural revolutions. This was until the death of Mao and the rise to power of Deng Xioping. Deng's economic reforms initially included market style reforms, de-collectivisation and an open door to foreign investment. The first reforms were a dramatic success with efficiency in agriculture increasing rapidly in subsequent years. These significantly and permanently changed Chinese communism to a point where the Party's main newspaper the People's Daily declared in 1981 that Marxism-Leninism did not provide a problem to every economic, social and political problem in the world. This was anathema to the North Koreans and the vast majority of communists the world over. The KWP did make some limited attempts to attract foreign investment but with little success. They were thus further convinced that Juche was North Korea's most appropriate form of development. Since Deng's reforms Chinese communism has come to look more and more like communism in name only and created a deep divide with the strand of communism the North Koreans continue to practice.

The two countries geographic proximity, shared history and ideology have meant the significantly smaller of the two, North Korea has been heavily influenced by what has occurred in China. This "echo effect" has meant that North Korea has often copied a change in policy or innovation by China though this has by no means all been one way. North Korea's Flying Horse movement is comparable to China's Great Leap Forward movement and some elements of the North Korean collectivisation were copied by China. Up to the late 1980s North Korea did however have the Soviet Union as a strategic counterweight to limit Beijing's influence. Having fought to protect North Korean communism once it has always been unlikely that while China remained communist it would let communism come to an end in its neighbour. Thus to a certain degree North Korean communism has been supported by its Chinese neighbour ever since the Korean War.

Chinese and North Korean communism has a shared past and birth and indeed developed along similar lines and with comparable levels of success until the mid 1970s. Deng's reforms dramatically changed communism in China and have made it contrast sharply with the Juche inspired communism of North Korea. Throughout the 1980s a booming China and a stagnating North Korea have made the superiority of China's distorted communism abundantly clear.

Dreyer, Jane Teufel. China's Political System: Modernisation and Tradition. 3rd ed., Houndmills, Macmillan, 2000.

Elegant, Robert. 'Chinese Communism Turns Seventy', National Review, v.43, n.13, 1991, pp.31-36.

Lankov, Andrei. From Stalin to Kim Il Sung: The Formation of North Korea 1945-1960. New Brunswick, New Jersey, Rutgers University Press, 2002.

Paige, Glenn D. and Dong Jun Lee. 'The Politics of Communist Korea', China Quarterly, v.0, i.14, 1963, pp.17-29.

Wang, James C. F. Contemporary Chinese Politics: An Introduction, 7th ed., Upper Saddle River, NJ, Prentice Hall, 2002.

Yang, Sung Chui. The North and South Korean Political Systems: A Comparative Analysis. Revised edition, Elizabeth, NJ and Seoul: Hollym, 1999.

Yang, Sung Chui. 'Understanding the North Korean Political Framework' in Kim Soong Hoom and Chung-in Moon (eds.), Understanding Korean Politics: An Introduction. New York, State University of New York Press, 2001.

http://www.historyorb.com/asia/chinese_korean_communism.php

What is life like inside North Korea?By Andrew Salmon, for CNN

Korean peninsula divided at end of World War II

Kim Il-Sung, first leader of the North, passed leadership to his son in 1994

N. Korea is one of the world's most destitute countries, with per capita GDP at US$1,900

Analysts believe Kim Jong Un, the third son of Kim Jong Il, is going to be named successor

Andrew Salmon is a Seoul-based reporter and the author of American Business and the Korean Miracle: US Enterprises in Korea, 1866 - The Present; the battlefield history To the Last Round: The Epic British Stand on the Imjin River, Korea, 1951; and the upcoming Scorched Earth, Black Snow: The Commonwealth Versus Communism, Korea, 1950.

Seoul, South Korea (CNN) -- Why are there two Koreas?

Korea was colonized by Japan in 1910. At the end of World War II in 1945, the peninsula was divided along the 38th parallel by the great powers, with the Soviet Union installing leadership in the North, and the United States placing leadership in the South. Designed to be a temporary arrangement at the time, it ossified during the Cold War and still pertains more than six decades later.

Who was Kim Il-Sung?

A communist guerilla leader who resisted Imperial Japan in North Korea and Manchuria, then fled to the Russian Far East, where he became an officer in the Red Army. After World War II, he was installed by the Soviets as the leader of North Korea.

How did the Korean War begin and end?

After left-wing rebellions in the South had been put down, Kim launched a conventional invasion with his Soviet-equipped army in June 1950, aiming to re-unify the peninsula under his rule. The United States leapt to the defense of the South. In October, the United States, with the United Nations and South Korean allies, smashed the North Korean army and counterattacked into North Korea. China came to its communist ally's aid, and fighting raged until the armistice of July 1953. The war, which left millions dead and the peninsula divided along the 38th parallel, was never formally ended by a peace treaty and remains unresolved to this day.

What path did North Korea take after the war?

The North -- the Democratic People's Republic of Korea, or DPRK, to use its official name -- had only half the population of the South, but had most of the industrial and natural resources. The country remained firmly in the communist bloc and successfully rebuilt. It remained more prosperous than the South, until the latter's "industrial miracle" kicked off in the late 1960s. While the Cultural Revolution was underway in neighboring China in the late 1960s, North Korea's propaganda apparatus wove a personality cult around Kim.

How dangerous is North Korea?

Looking at recent history -- very. North Korean assassins attempted to kill the South Korean president in 1968, bombed the South Korean cabinet -- on a visit to Yangon, Myanmar -- in 1983 and blew up a South Korean airliner in 1987. In 1968, North Korea seized (and still holds) an American spy ship, the USS Pueblo. Moreover, it admitted to kidnapping Japanese citizens, allegedly as language trainers in its spy schools, in the 1970s and 1980s. It has defied the international community with ballistic missile tests and with two nuclear tests in 2006 and 2009. It also stands accused of torpedoing the South Korean warship Cheonan in March 2010, killing 46 sailors. The incident took place on the flashpoint Northern Limit Line, the tense maritime border between the Koreas in the Yellow Sea.

Who is Kim Jong Il?

Kim Il-Sung's son and chosen successor. When Kim Il-Sung died in 1994 he was made Eternal President, while Kim Jong Il assumed control of the nation -- the first dynastic power handover in any communist state -- as Chairman of the National Defense Committee, his official title to this day. His father's guiding policy had been Juche ("self reliance"); the son's is Songeun ("military first"). Although he appears to lack his father's charisma -- the only time he has spoken in public was to praise the military -- Kim Jong Il has inherited his father's personality cult and enjoys near god-like status. His health, however, is in doubt: He is believed to have suffered a stroke in 2008, and recent photos show a frail man.

Video: A new leader for North Korea?

Video: North Korean after Kim Jong Il

What caused the famines of the 1990s?

With the fall of European communism in the early 1990s, North Korea's economy spiraled downward, as preferential trade relationships collapsed. This, combined with a series of bad harvests, resulted in devastating famines that may have killed as much as 10 percent of the population, known today in North Korea as the "Arduous March." Many analysts expected Kim's North Korea to go the way of Nikolae Ceausescu's Romania, but it defied expectations and still exists -- albeit in a more decrepit state now than at any time since the Korean War.

Why did Kim Jong Il never launch China-style economic reforms?

Experts say that for him to have done so after Kim Il-Sung's death would have shown disrespect to his father's legacy. Since then, Kim Jong Il's leadership and system has calcified, meaning that any significant reforms launched would be highly risky for what some now consider a brittle regime.

What is the nature of North Korean society today?

In state propaganda, the Kim personality cult, the anti-Japanese struggles of the 1930s and the Korean War of the 1950s (which North Korea insists was started by the South) are central to national identity and explain why the state sinks so many resources into its military. Communism was officially struck from the Constitution in 2009; today the state's characteristics lean more towards fascism: intense nationalism, socialism and a "military-first" policy.

Is Kim Jong Il firmly in charge?

Politically, yes: He controls the armed forces which, at 1.2 million (among a 23 million-strong populace) makes North Korea perhaps the world's most militarized state. But economically, many experts believe that regions outside

Pyongyang -- Kim's showpiece capital and the home of the favored elite -- have become increasingly autonomous, due to the failure of centrist distribution policies.

What is the economy based upon?

Since the state releases no economic date, this is a statistical void, but the Organisation for Economic Co-operation and Development estimated the North's economy in 2009 as being worth US$40 billion, roughly the same as that of Panama. North Korea was one of the world's most heavily industrialized nations, but due to power shortages and chronic underinvestment since the 1990s, most of this capacity lies silent. However, the country is known to produce military hardware -- notably missiles -- and chemicals; it also exports high-value added foodstuffs (seafood, mushrooms, etc.). The service sector earns some foreign currency with tourism, animation and software. The nation boasts veins of coal, iron ore, limestone, magnesite, graphite, copper, zinc, lead and precious metals. Finally, there is strong evidence that a secret directorate channeling money to Kim Jong Il earns hard currency through sales of military goods, contraband tobacco and narcotics. Money is needed for Kim to buy the allegiance of the elite, and these are the sectors U.N. sanctions are designed to impact.

Are there any signs of free market economics?

Some. Low-end cross-border trade with China has expanded since the late 1990s. Black markets and farmers' markets have always been permitted in limited forms, but since the 1990s have expanded as the state-run distribution sector faltered. Few consider this real reform, however; most analysts see official tolerance of markets as being less about reform, more about acceptance of essential economic survival mechanisms. Central authorities periodically crack down upon market activity to reassert the primacy of central distribution, but such efforts have been increasingly ineffectual in recent years, indicating a weakening of central control. A currency re-evaluation at the end of 2009 was reversed after reported unrest: The move wiped out the savings of a nascent entrepreneurial class and led to hoarding of goods and produce.

How do North Koreans live?

If not members of the elite or the privileged military, poorly. The country is one of the world's most destitute, with the CIA estimating per capita GDP at US$1,900, meaning that many North Koreans survive at the subsistence level. With the state industrial sector largely idle, many citizens reportedly rely on state asset stripping, hoarding, trading and personal farm plots to survive. Amid economically booming Northeast Asia, North Korea is, literally, a black hole: At night, due to power failures, the lights go out.

Who are North Korea's investors and partners?

Primarily China, though there is limited investment from Southeast Asia and Europe. South Korea operates the Kaesong Special Industrial Zone, a border enclave where North Koreans work in southern factories. With Beijing maintaining strong political ties with Pyongyang -- which it sees as a buffer on its northeast border -- and investing heavily in the dilapidated state's natural resources, some South Koreans worry that North Korea is becoming an economic colony of Beijing. Many nations -- including most of Western Europe -- have diplomatic representation in Pyongyang, though key players Japan, South Korea and the US do not.

What do North Koreans really think of their leadership?

One demonstration of the effectiveness of the personality cult is the surprising number of defectors who are loath to speak ill of Kim Jong Il himself, blaming the country's problems instead on those around him. In the 57 years since the end of the Korean War, fewer then 20,000 defectors have fled to South Korea.

How serious are North Korea's human rights abuses?

The country keeps the doors of its labor and "re-education" camps firmly closed, but from the testimony of defectors who escape, it is clear that due process is largely absent, internees' family members suffer incarceration alongside internees, and near starvation diets and brutal treatment at the hands of guards are commonplace. Public executions have been filmed, and some who have fled the country have made allegations of torture, forced abortions and even the

testing of chemical or biological weapons on prisoners. Organizations as diverse as Amnesty International, the UN and the US State Department are highly critical of Pyongyang on the human rights front.

Is North Korea a military threat?

The country's military suffers from outdated equipment and fuel shortages but possesses significant asymmetric capabilities -- notably massive special force units, biological and chemical weapons and heavy artillery dug into bunkers and ranged on Seoul. The country possesses both atomic materials and long-range missiles, although it is believed to have neither a nuclear warhead nor a missile with the range to reach the continental United States -- yet. While many analysts say North Korea would never launch another war, which would spell the end of its regime, some fear that a pressured Pyongyang might lash out as a last resort. Another worrying scenario is of internal chaos, collapse or civil war, with factions competing for possession of fissile materials. With the country threatening both South Korea and Japan, any military action could have catastrophic effects on global capital markets.

Who is Kim Jong Un?

He is the third son of Kim Jong Il and the man who, analysts in the South believe, is going to be named his father's successor, though there has been no official confirmation from the North. Being a scion of the most secretive family in the world's most secretive state, virtually nothing concrete is known of him. He is believed to have studied in Switzerland, and to share many of his father's personal characteristics. His older half-brother, Kim Jong-nam, was expected to take power but today resides in Macau, where he is believed to operate businesses; he has told Japanese reporters that he has no interest in taking power. The middle brother is Kim Jong-chul, but according to the memoirs of one former regime insider, he is regarded as "un-manly" and not a potential successor.

Are there other power personalities among North Korea's elite?

Jang Song-thaek, Kim Jong Il's brother-in-law, is widely considered Kim's right-hand man. He has accompanied Kim to Beijing, and many analysts expect him to guide the widely anticipated succession of Kim Jong Un. Jang's wife -- Kim's younger sister, Kim Kyong-hui -- has also been photographed widely with Kim on visits to military bases and factories, a strong sign of official favor.

Is North Korea on the verge of collapse?

There are no such signs, though -- unusually -- reports of public unrest following last year's botched currency revaluation have leaked out. Whether or not the populace would support a third Kim seems irrelevant, as the nation is still so tightly controlled that revolution appears unlikely. But would Kim Jong Un wield real power -- as his father and grandfather did -- or would he be the puppet of powerful figures in the party or the military? This is unknown.

http://www.cnn.com/2010/WORLD/asiapcf/09/26/north.korea.explainer/

‘Hello world’: First tweet sent from a cellphone in North Korea as Pyongyang offers mobile Internet service to foreigners

Jean H. Lee, Associated Press | February 27, 2013 7:52 PM ET

Jean H. Lee / Instagram / APA man walks in Pyongyang, North Korea, under a new roadside banner referring to North Korea's controversial Feb. 12 nuclear test on Monday, Feb. 25, 2013. Tweeting and uploading to Instagram is pretty ordinary stuff in the world of social media, but revolutionary for North Korea.

“Hello world from comms center in #Pyongyang.”

That Twitter missive, sent Monday from Koryolink’s main service center in downtown Pyongyang using my iPhone, marked a milestone for North Korea: It was believed to be the first tweet sent from a cellphone using the country’s new 3G mobile data service.

Later, as we were driving through Pyongyang, I used my iPhone to snap a photo of a new roadside banner referring to North Korea’s controversial Feb. 12 nuclear test while AP’s Chief Asia photographer David Guttenfelder shot an image of a commuter walking beneath a bridge at dusk. We uploaded these images to Instagram geotagged “Pyongyang.”

My first tweet using #Koryolink's new mobile #Internet service. Hello world from comms center in #Pyongyang.— Jean H. Lee (@newsjean) February 25, 2013

Pretty ordinary stuff in the world of social media, but revolutionary for North Korea, a country with an intricate set of rules designed to stage manage the flow of images and information both inside and beyond its borders.

In the past, rules were strict for tourists visiting North Korea. On a bus journey across the Demilitarized Zone into the border city of Kaesong in 2008, we were told: No cellphones, no long camera lenses, no shooting photos without permission. The curtains were drawn to prevent us from looking outside as we drove through the countryside, and through the cracks we could see soldiers stationed along the road with red flags. We were warned they’d raise those flags and stop the bus for inspection if they spotted a camera pointed out the window. As we left North Korea, immigration officials went through our cameras, clicking through the photos to make sure we weren’t taking home any images that were objectionable.

In 2009, I did not offer up my iPhone as we went through customs. But to no avail. The eagle-eyed officer dug deep into the pocket where I’d tucked the phone away, wagged his finger and slipped the phone into a little black bag. No phone,

no address book, no music: It was as though I’d left the modern world behind at Sunan airport and stepped back in time to a seemingly prehistoric analog era.

David Guttenfelder / The Associated PressA poster showing a model of North Korea's Unha-3 Rocket hangs in the lobby of a Pyongyang hotel on Feb. 15, 2013.

Eventually, Guttenfelder and I settled into a working routine. We’d leave our cellphones at the airport but use locally purchased phones using SIM cards provided by Koryolink, the joint Egyptian-North Korean cellphone venture that established a 3G network in 2008, but without data. We brought iPod Touches and connected to the world, including Twitter, using broadband Internet that may be installed on request at our hotel, which is for international visitors.

We knew in January that change was afoot. “Bring your own phone next time,” a Koryolink saleswoman told me at the airport as we were departing. The next day, the longstanding rule of requiring visitors to relinquish their phones was gone.

But we were waiting for the day when Koryolink would begin offering mobile Internet, and hounded the Egyptians posted to North Korea from Orascom Telecom Media and Technology for news.

“Soon,” they kept telling us.

David Guttenfelder / The Associated PressA North Korean portrait photographer instructs North Korean soldiers to pose for a picture under a mosaic of the late leaders Kim Il Sung and Kim Jong Il at an exhibition in Pyongyang on Feb. 17, 2013 where Kimjongilia flowers, named after Kim Jong Il, were on display.

Last week, they called with good news: 3G mobile Internet would be available within a week – but only for foreigners.

All we had to do when we arrived in February was show our passports, fill out a registration form, provide our phones’ IMEI numbers and pop in our Koryolink SIM cards. It’s a costly luxury: SIM cards are 50 euros, or about $70, and while calls to Switzerland are an inexplicably cheap 38 euro cents a minute, calls to the U.S. cost about $8 a minute.

After reporting last week on the imminent availability of 3G mobile Internet, we turned up at the Koryolink offices Monday to be among the first ones to activate the service.

After paying a steep 75-euro fee and sending a text to activate the service, we waited for the 3G symbol to pop up on our phones.

David Guttenfelder / The Associated PressA North Korean traffic policeman on a motorcycle patrols a street in central Pyongyang, North Korea on Feb. 22, 2013.

Moments later, I sent the inaugural tweet, which was queued up and ready to go. There was a little celebration that morning in the Koryolink office among the Egyptians who labored to set up the service, and their North Korean partners.

Our North Korean colleagues watched with surprise as we showed them we could surf the Internet from our phones.

Koreans, North and South, love gadgets.

Not all North Koreans have local cellphones. Those who do use them to call colleagues to arrange work meetings, phone and text friends to set up dinner dates, and ring home to check in on their babies. They snap photos with their phones and swap MP3s. They read North Korean books and the Workers’ Party newspaper, Rodong Sinmun, on their phones.

But they cannot surf the “international” Internet, as they call it. The World Wide Web remains strictly off limits for most North Koreans. North Korean universities have their own fairly sophisticated Intranet system, though the material posted to it is closely vetted by authorities and hews to propaganda. Students say they can email one another, but they can’t send emails outside the country.

http://news.nationalpost.com/2013/02/27/hello-world-first-tweet-sent-from-a-cellphone-in-north-korea-as-pyongyang-offers-mobile-internet-service-to-foreigners/

Vietnam: Where Capitalism Thrives, Communists Rule And Dissent Whispers From The Walls

Twenty-five years of “doi moi” reforms have unleashed Vietnam’s economy and solidified one-party rule. Yet in Hanoi, a rare few offer the first signs of rebellion.

HANOI - Nguyen Duc Vinh, the ambitious director of a private bank with holdings of $2.5 billion, says he has the “heart of a communist.” Pham Xuan Ly, a confidante of former Vietnam Army chief General Giap, is perfectly comfortable with his personal fortune and party membership: “It is not a problem at all for me," he says. "Nor for them.”

After 25 years of doi moi, a policy of renewal and progressive liberalization of the economy, Vietnam is glaring paradox: a one-party communist regime overseeing a Wild-West style of capitalism. In the streets of Hanoi, red is still omnipresent, with banners of propaganda celebrating the party’s 11th Congress, which concluded this week. “Vietnam is communist only once every five years, during the season of this political ritual,” a French businessman says dryly.

“No one believes in communism any more, though the entire country pretends to," Dao Anh Kanh, a surrealist artist, explains. “Vietnam is a theater. Regular people stage small plays of their own, while the leaders put on a grand spectacle.”

Before the opening of each Congress, the party delegates receive each other in full force, with briefcases in hand and the hammer and sickle on the heart, in front of the embalmed body of revolutionary leader Ho Chi Minh. But in cafés saturated with the strong aroma of syrup-flavored coffees, one learns how belonging to the party is a stepping stone to power and wealth. People discuss how much it costs to purchase a ministry, with jokes that bagging the prime minister post would be a jackpot for any aspiring clan. The experts do not disagree. “Fighting to replace political leaders is even more bloody than control for economic power currently in play,” notes Benoît de Tréglodé, director of the Research Institute on Contemporary Southeast Asia.

Communists by name, capitalists by nature

As the Communist Party grew to 3.6 million members, or 10 percent of the population, Hanoi residents developed a saying: “Communists by name, capitalists by nature.” The 87 million citizens, hungry consumers, have thrown Marxism-Leninism to the sidelines.

Today, the pursuit of money is a national obsession. And consumption is ostentatious. The Louis Vuitton store in Hanoi currently boasts the highest sales per square meter within the company’s global chain. Luxury cars have joined the buzz of traffic in what, 25 years ago, was an austere capital of people rolling on bicycles down avenues bathed in faint light, flanked by stores of the most humble merchandise.

“We think about money from morning to night,” said Ngoc, a student born the same year the doi moi reform policies took effect. In a country that has long symbolized the resistance to a Western vision of the world, Pham Xuan Ly, a formor bo doi (North Vietnamese soldier), who has become a restaurant owner, explains that “success is a beautiful house, a car and studies abroad for the children.”

“In 25 years, we have won the freedom to make money,” adds banker Nguyen Duc Vinh, 52. In his three-piece suit, the former soldier, who manned the trenches along the Chinese border in the 1980s, went on to attend the prestigious HEC business school in France and learned to be a banker in the United States.

This is the new face of Vietnam: dynamic, open to the outside world, optimistic. A United Nations index of happiness in populations around the world puts Vietnam in third place. Like Vinh, the majority of Vietnamese wonder little, if at all, about the country’s political structure. “As long as the Communist Party maintains a satisfactory level of development, people are not interested in getting involved with politics,” he said. For artist Dao Anh Kanh, who for 15 years worked as a censor for the cultural police: “doi mo saved the Communist Party. The leaders are clever and know how to adapt.” Being decidedly cautious at all costs, the Vietnamese, despite the many corruption scandals at the top, are for the most part confident in their political institutions, especially the Communist Party and the National Assembly, according to a study by Transparency International.

There is currently no viable, organized opposition. “There is no room for dissent. The state apparatus owns the turf,” said Matthieu Saloman, Transparency International’s Hanoi representative.

“Few artists dare to question power”

Still, the first rays of rebellion can be found. Over tea in her living room cluttered with paintings illustrating the reign of darkness, the writer Vo Thi Hao discussed her “revolt against a regime that has never loosened its grip over political life.” She is one of a dozen dissidents closely watched by the regime. She jokes that the walls have ears. “In East Germany under the Stasi, there was one spy for every 50 people. Today in Vietnam, the ratio is one for every 40.” As beautiful as she is courageous, Hao is one of the rare Vietnamese to challenge the single-party system. “The majority of Vietnamese are happy with the current regime. They’re satisfied with the improvement of their finances.”

Some young contemporary artists are starting to push back against this “fear hidden within people that prevents them from questioning power,” said Hao. They present a Vietnam torn between doctrinal communism and liberal economic policies. Watched continuously, one of them holds meetings on a sidewalk and confides secrets amidst the din of a crowded café. “Today, word no longer comes from above. It’s no longer necessary to be a member of the Artists’ Union to get paint and brushes, but few artists dare to challenge power,” he said. The cultural police watches them groping through the dark. “In Vietnam, demanding subjectivity and invention is a political act,” he sighs, after telling of his weariness over taking down his paintings judged at each art exposition as being “out of step with cultural and moral values.”

Lost in the maze of winding streets in south Hanoi, there is a residence as closed off as it is insignificant – and yet it is home to the most incendiary cultural works in Vietnam. Writer Nguyen Qui Duc holds an eclectic collection of censored art. “Out of love for painting, intellectual resistance and the spirit of contradiction,” he says. He stands in front of a greenish canvas inspired by pop art. A lascivious woman ignores a man in a suit who stands upright behind her. “Who is more vulgar, the woman, the businessman or the leaders who have absolute power?” he asks. The painter Nguyen Van Cuong works on the theme of dictatorships, which is why he is forbidden from showing his work in Vietnam.” With an amused smile, Duc shows a series of vases that the censors failed to appreciate in which “uniforms, bodies and bank notes intertwine ad nauseum.”

“After the doi moi, or the opening in 1985, contemporary art began to truly bloom. But today it still is cautious about approaching sensitive subjects,” says Duc, the collector. He cites just four artists taking such a bold approach: Nguyen Van Cuong, who plays with the obscenity of women for sale and dictatorships, the artist Truong Tan and his gigantic diaper that takes the form of a police officer’s jacket pocket, ready to absorb under-the-table payments. Le Hong Thai, attempts to draw a parallel between leaders and bottles – which make much noise when they clink together but remain empty. Le Quang Ha and his characters have hideous, uncouth traits that wear the uniform of leaders.

In a darkened hallway in Duc’s home, a spiral of incomprehensible words eats a blue face. It is a forbidden canvas by Nguyen Quang Huy. The most perceptive could discern the silhouette of a young Ho Chi Minh, the father of the country’s independence. Behind the flies’ feet, betrayed ideals, the individual chewed up by the machine.

But in Vietnam, the sayings and poems of Uncle Ho have been thrown at people for so long that the cult of personality is now internalized. Daring to shake the image of a deified hero is unimaginable, even if he is systematically surpassed by

Bill Gates, the model of American capitalism, in popularity polls. So when asking Nguyen Quang Huy whether this poll result is healthy, he says soberly: “I will not say yes or no.” Insolence against this regime has its limits.

http://www.worldcrunch.com/vietnam-where-capitalism-thrives-communists-rule-and-dissent-whispers-walls/world-affairs/vietnam-where-capitalism-thrives-communists-rule-and-dissent-whispers-from-the-walls-/c1s2352/

Why Didn't Communism Work in Eastern Europe?Article Details

Originally Written By: Michael Pollick

Last Modified Date: 11 January 2014

Communism failed in Eastern European countries for the same reasons it routinely fails in others — corruption and mismanagement of goods results in the needs of citizens not being met, which usually leads to a civil uprising, and eventually the end of communist rule. While the economic system known as communism may have worked well on paper, the political form forced on Eastern European countries brought little more than oppression and hardship to the working class citizens it exploited. Many of the Eastern European governments were puppet regimes handpicked by communist party leaders working remotely from Russia; communications between Russia and its Eastern European satellites were rarely two-way streets.

Mismanagement

One main reason why communism failed in Eastern Europe was due to the human nature. Under economic communism, control over production is supposed to be given to the workers, ostensibly with the guidance and oversight of a strong central State. Communist farmers who produced corn, for instance, would donate the vast majority of their yearly crops to the government; in exchange, the government would provide each farmer with a supply of corn for personal use, along with a portion of all the other goods produced by other self-controlled communes. Unfortunately, the timely distribution of goods was severely hampered by corruption and mismanagement, a common problem in communist countries. Many citizens felt the provisions they were given were fair and satisfactory, while many others felt restricted and did not have enough means to survive.

Civil Uprising

When any form of government, whether capitalist or communist, fails to meet the basic needs of its people, civil unrest is bound to follow, and this was especially the case in Eastern Europe after World War II. Tyrannical communist leaders, such as Joseph Stalin, used economic communist rule as a means to support their own agendas, while millions of civilians were systematically imprisoned or summarily executed. The message to Eastern European countries became clear — dissension would simply not be tolerated. During the 1950s and 1960s, country after country in Eastern Europe began to revolt against the oppressive Soviet system that sought to keep them enslaved to a corrupt form of political communism.

Appeal of a Free Market Society

By the time of the Soviet Union's disintegration in 1991, economic communism was fast becoming a failed experiment in the eyes of the Western world. Many collective companies in Eastern European countries discovered the advantages of a free market society, including the right to deal directly with buyers. Under economic communist rule, there were very few incentives offered to more industrious workers; the idea of profit through increased production proved to be one of the strongest arguments against communism. Many Eastern European countries were eager to move towards a freer economic system.

End of Soviet Communist Rule

Some historians credit former Soviet leader Mikhail Gorbachev with implementing the policies leading to the end of communist rule in Eastern Europe. Gorbachev's policy of glasnost, meaning openness, allowed eastern European countries the freedom to replace Moscow-controlled governments with local leaders. Once free of Soviet rule, the individual countries

were free to create their own economic systems, many of which still retain some elements of economic communism while embracing capitalism and socialism as well.

http://www.wisegeek.org/why-didnt-communism-work-in-east-europe.htm

Why Communism FailedMARCH 01, 1991 by BETTINA BIEN GREAVES

Three years after the Russian Revolution, an Austrian economist, Ludwig von Mises, argued that Communism would fail and explained why. Communism, or socialism, couldn’t succeed, Mises wrote in 1920, because it had abolished free markets so that officials had no market prices to guide them in planning production. Mises was relatively unknown when he made his controversial forecast, but he acquired some international renown later as the leading spokesman of the Austrian (free market) school of economics. Since his death in 1973, his theories have gained new adherents, some now even in Eastern Europe.

The Soviet Union was launched with high hopes. Planning was to be done by a central committee, insuring plenty for everyone. The state was to wither away. But things didn’t work out that way. The Soviet state soon became one of the most oppressive in the world. Millions of Russians starved in the 1920s and 1930s.

As Mises pointed out, the raw materials, labor, tools, and machines used in socialist production are outside the market. They are owned by government and controlled by government planners. No one can buy or sell them. No market prices can develop for them because they aren’t exchangeable.

Modern production is time-consuming and complicated. Producers must consider alternatives when deciding what to produce. And they must consider various means of production when deciding how to produce. Raw materials, tools, and machines must be devoted to the most urgent projects and not wasted on less urgent ones.

Consider, for instance, the planning of a new railroad. Should it be built at all? If so, where? And how? Is building the railroad more urgent than constructing a bridge, building a dam to produce electricity, developing oil fields, or cultivating more land? No central planner, even with a staff of statisticians, could master the countless possibilities. Machines might be substituted to some extent for labor; wood, aluminum, or new synthetic materials might be substituted for iron. But how will the planners decide?

To make these decisions, planners must know the relative values—the exchange ratios or market prices—of the countless factors of production involved. But when these factors are government-owned, there are no trades, and thus, no market prices. Without market prices, the planners have no clues as to the relative values of iron, aluminum, lumber, the new synthetics, or of railroads, oil fields, farm land, power plants, bridges, or housing. Without market prices for the factors of production, the planners are at a loss as to how to coordinate and channel production to satisfy the most urgent needs of consumers.

More than 70 years have passed since the Russian Revolution and 45 years since the end of World War n. Why then do the Russian people still lack adequate housing and many everyday items? Why does agricultural produce rot in the fields for lack of equipment to harvest and transport it? Why are factories and oil fields so poorly maintained that production declines? Because the raw materials, tools, machines, factories, and farms are not privately owned. Without the bids and offers of private owners, prices reflecting their relative market values cannot develop. And without market prices, it is impossible to coordinate production activities so that the goods and services consumers need will be available. That is why Communism fails.

In a competitive economy, where factors of production are privately owned, these problems are solved daily as owners calculate the monetary values of the various factors and then buy, sell, and trade them as seems desirable, As Mises wrote in 1920, “Every step that takes us away from private ownership of the means of production and from the use of money also takes us away from rational economics.”

Today, even Communists are coming to recognize that Mises was right. The U.S.S.R., a socialist society without private property and monetary calculation, is still “floundering in the ocean of possible and conceivable economic combinations,” as Mises foresaw in 1920, “without the compass of economic calculation.” Will she now take the important step Mises recommended of introducing private ownership of the means of production?