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taw comments on A potentially great improvement to minimum wage laws to handle both economic efficiency as well as poverty concerns - Less Wrong
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Comments (74)
Here's the paper which many people cannot even get themselves to read.
This is actually totally unproblematic, because GDP was not one of the ways communist countries measured their economies. They used primarily industrial production statistics, and GDP was the competing Western system of measurement they didn't like because it wasn't exactly putting them in the best light (with their economies being relatively more industry-focused and Western economies being more services-focused).
And the paper uses OECD data, not any official data.
And you get the same result with GDP proxy studies like life expectancy as with GDP.
So the data is solid no matter how you look at it. There's no way to tweak the data to make communist China grow more slowly than non-communist India, or communist Poland to grow more slowly than non-communist Peru.
Thanks for the link. I skimmed Kenny's paper, and it uses "income" statistics, which are certainly problematic for the reasons I mentioned. The industrial output numbers it cites are also problematic for the same reasons: if reporting unfavorable census figures was enough to get you shot, do you think it was much better when it came to production statistics? (Also, a lot of Kenny's figures are of that comically absurd nonsense-on-stilts variety where "real" GDP statistic for countries from a century ago are calculated to four and more significant digits.)
I don't know what exactly you mean by "OECD data," but as false as the official statistic were, it's naive to think that anyone outside the communist countries had an accurate idea on what the real numbers were. (And again, it should be obvious that comparing income based on purchasing power between a market and a command economy is inherently meaningless.) It's also naive to think that respectable Western economists didn't have strong pro-Soviet biases. A good example is the almost comical story about Samuelson's Orwellian revisions of his Soviet growth predictions in consecutive editions of his textbook.
As for comparisons with non-Western countries, I'll certainly agree that various Third World regimes often messed things up even worse than the Soviet Bloc. After all, many of them were equally ruthless and violent, and most were explicitly socialist to at least some degree. (By the way, it seems like both you and Kenny underestimate the intensity of both socialism and violence in the 20th century Third World.) I'll also agree that communist countries did make some advances in public health and education, as reflected in life expectancy, literacy, and other statistics, though it's also pretty clear that similar, if not greater advances would have been achieved by their realistic historical alternatives. On the other hand, it's also important to understand how much they were free-riding on global public goods produced by Western countries.
On the whole, the paper isn't really making much more than a trivial point that communist countries didn't look so bad in comparison with the Third World.
Calling Peru or India during the relevant period non-communist is certainly debatable.