| Kasz216 said: In smaller strokes yeah. For example... in my Consumer Psychology class my proffessor talked about a big McDonalds opening in Moscow. it was one of the first McDonalds there, and it was HUGE. Had 5 Cashiers so there would be no wait. It did poor buisness and they had to cut the cashiers down to 2.... and then the strangest thing happened. Buisness greatly increased. Due to how the USSR used to be, there used to be LOOOOOOONG lines that would take hours to get to the end of, they were so long it often wasn't worth it to go to the front of the line to see what they were giving away because so many people would end up lining up ahead of you.
As such that developed an consumer culture opposite of ours, IE "Long lines = Good because it's a sign of a quality product." There willingess to spend time was greater then ours, where often we're more then willing to spend money so we don't waste time.
I'd say Keynsian economics doesn't work in the West because people know the goverment is doing it. When the government says "We're going to spend all this money to fix the economy." I think the general person's thought is "Great, so if all goes well, we've only got to tighten our belts a little longer. " "This might go on for a long time, so there is no point in putting off my big purchase unless I want to never get it." (IE: big screen TV, videogame system whatever.)
To the people in North Korea, they'd just think "Hey things are getting cheaper/better, we don't have to worry as much." |
I find the Moscow anecdote fascinating, but it actually adds fire to the bottom-up argument of the Austrian School, on two levels. The first being that Austrian Economists often vouch that there is more to life than money. They realize that different people hold different things to different values (like, for example, the value of a person's time), it's the Keynsians who often view money as being the only important thing - they vouch for equality, but only equality of money, nothing else is important to them. It's like an obsession.
The second point is that Austrian Economists always argue for a bottom-up approach to running economies. Had the Soviets created a burger restaurant in Moscow, and gave it lots of resources, enough to staff 5 cashiers, it would have taken a lot longer for the restaurant to change its business plan to reflect the cultural differences, as it would have had to wait for political decrees from the top-down.
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The Chinese/North Korean example.... I dunno how much I believe that. There are many issues with both the Chinese and North Korean economies. The Chinese may not be aware that the Government are artificially stimulating the economy, but the businesses are - small businesses are having a lot of trouble getting loans in China (much like the US/rest of the world) because the Chinese banks are putting all of their capital into state companies. The banks know that the state companies offer no risk, as they're backed by the Chinese Government. The Chinese economy would probably grow faster if their Government slashed spending. Poor decisions among the Chinese officials, combined with the public becoming too over-reliant on Government assurance have created some massive bubbles. You thought the housing bubble here was bad? There is something like 80 million uninhabited homes in China, which all need to go onto the market at some point.
I think you're right in the sense that, because there's less transparency, certain consumer behaviors under typical Keynsian/top-down economics do not come into play. However, those consumer behaviors are not the only problem with those economic schools.
