As the U. S. lurches towards a planned economy, it might be interesting to look at the experiences of countries which have already adopted this approach.
Unfortunately, few professors will discuss central planning in anything but rhapsodic terms. One of the notable naysayers is Alex Tabarrok, an economist at George Mason University.
In an appearance at the Cato Institute last month, he pointed out that:
- In Spain, the laws require 45 days severance pay for each year of service of a fired employee. As a result of this distorted incentive, businesses never want to hire or fire people, which contributed to the high unemployment rate of young Spanish people (and hovers around 50%).
- The European Union is seeing that politics and policy have their limits. Just as people realized “you can’t print gold” during the days of the gold standard, the euro zone “is having the same problem.”
- Nevertheless, Tabarrok argued that both the euro and gold standards are “archaic” and said, “Bitcoin is the way to go.” Advocates of Bitcoin claim that “Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.”