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THE BATTALION
MONDAY, FEBRUARY 16, 1981
Page 3
Economist says central-planned economy will fail
By COLETTE HUTCHINGS
Battalion Reporter
Centrally planned economies are destined to become
failures. Dr. Fred R. Glahe, president of the Economics
Institution for Research and Education said Saturday at
Texas A&M University.
Glahe spoke at the closing presentation of Texas A&M’s
Student Conference on National Affairs to about 200 SCO-
NA participants in The Memorial Student Center.
Glahe, also a professor of economics at the University of
Colorado at Boulder, addressed the topic of world econo
mic growth and the capitalist and socialist roles in it.
“Not until the 18th century was there material well
being of the average Western man,” Glahe said.
The per capita real income in the United States has
increased an estimated 15 times since 1880, he said. He
attributed the economic improvement of this nation to its
economic philosophy.
Karl Marx and Freidrich Engles were two economists
who believed that socialism or government ownership as a
means of production was the only way for an economy to
survive.
“But they didn’t think how the system would work,” the
professor said.
Ludwig von Mises, another economist, questioned
Marx’s and Engles’ socialist views. Mises, Glahe said,
questioned how a society would know what to produce,
how to produce and who would receive what is produced.
Oscar Lange was an economist who fought for socialism
and sought to devise a planning board which would admi
nister prices of capital, labor and land, Glahe said.
A former student of Mises, he argued that a “planning
board” could not tell consumers and producers what to
produce and how to consume, Glahe said.
Glahe said that these arguments for and against a plan
ned economy are over 50 years old.
“It is easy to see the mistakes of having centrally-
planned economies by looking at Eastern Europe, the
Soviet Union and China,” he said.
The Soviet economy has stopped growing and is declin
ing, he said, partly because of an extremely low labor
productivity and cited widespread alcoholism as the direct
cause of this decline.
He said this “plague” has caused a death rate increase in
the Soviet Union and that the rate is now equal to the
so-called underdeveloped countries.
“Many prominent economists today still argue that
material well-being is found in planned economies,” Glahe
said, “but an increase in material well-being does not imply
an increase in individual well-being.”
“It is a dangerous myth that economists are able to
forecast the future,” Glahe said.
If socialism is the wave of the future, the conclusion is
that “we have seen the future and it does not work,” he
said.
Kuhn gets Johnston memorial scholarship
Photo by Carolyn Cole
Western aid to Third World countries was debated Friday by a
leading economist, Peter T. Bauer (right) and Douglas J.
Bennet, a former U.S. aid administrator. The debate was
featured as part of the Student Conference on National Affairs
hosted last week by Texas A&M University.
Economist says aid
should be stopped
By PHYLLIS HENDERSON
Battalion Reporter
Western aid to Third World countries should be stopped, a leading
iconomist argued in a debate Friday with a former administrator of
United States aid.
The administrator, in turn, called for inqjfeased aid to face the
levelopmental challenges of these countries.
Peter T. Bauer, chairman of the Department of Economics at the
London School of Economics and Political Science at London Univer
ity, debated Douglas J. Bennet, former administrator of the U.S.
Agency for International Development, in Rudder Theater as part of
the Student Conference on National Affairs.
“Far from accepting the proposal for massive wealth transfers, we
hould work towards their demise,” Bauer said to an audience of about
350 people. Foreign aid policies are based on several inconsistent
rguments, he said, and can have serious repercussions in both the
lonor and recipient countries.
The argument that aid is needed to develop these countries “patro-
lizes the people ... by suggesting that they crave for material progress,
lut unlike the West cannot achieve it without external doles,” Bauer
said.
“Economic achievement has depended, and still depends, on peo-
ile’s own faculties, motivations and mores, their institutions and the
lolicies of their rulers,” Bauer said. “External donations have never
been necessary for the development of any country, anywhere. ”
Bennet disagreed: “Aid, when used properly, can facilitate econo-
nic policy choices by the recipient governments which are not only
ippropriate and desirable in the interests of development, but which
vouldn’t occur in the absence of the assistance.”
Foreign aid does not help the poor of a country, Bauer said, because
Hie money is put into the pockets of the recipient governments. “It is
Hot true,” he said, “that to make the rich poorer makes the poor
richer. ”
Aid increases the power and patronage of the recipient government
over its subjects, Bauer said. “Indeed,” he argued, “to support rulers
\on the basis of the poverty of their subjects encourages policies of
jgdoifi impoverishment.”
e specif Bauer said because of these dangers, he favored untied cash grants
and bilateral aid “to enable a modicum of control by the elected
e( ] jk representatives of the taxpayers. ”
5 jedl 5 h uman rights performance of recipient governments is a major
5C1 consideration in the giving of U.S. assistance, Bennet said. Bilateral
. aid is a good way to gain more control, he agreed, but grants tied to
jCnM f Specific projects allow the donating governments to retain much more
,0tW§ control than untied cash grants.
re of tl' The idea that aid helps the economies of the donors simply ignores
, oll st),t j the cost of the resources given away,” Bauer said. “Humanitarian relief
{lieptf nee d should be left to voluntary agencies.”
Bennet said: “I find Professor Bauer’s argument extremely interest-
g, highly theoretical, over-generalized, elegant, entertaining and
wrong.”
He added: “The capital investment required to train people, who
through their lifetimes, as a result of their training, will be more
effective producers and earn money ... is a very hard thing to get from
private sources.”
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By COLETTE HUTCHINGS
Battalion Reporter
A $350 memorial scholarship
was awarded to Sharon Kuhn,
SCONA public relations commit
tee chairman at the Student Con
ference on National Affairs closing
presentation Feb. 14.
The Cyrus M. Johnston Memo
rial Scholarship was awarded to
Kuhn by H.W. “Bud” Whitney,
manager of European Manage
ment Information Systems for
Texas Instruments, Inc., France.
“Cyrus M. Johnston was vice-
chairman of SCONA I and worked
very hard to get SCONA going,”
Beecroft said. When Johnston
died of cancer last year, his wife
wanted to set up a memorial be
cause of his high regard for
SCONA.
This is the first year for the
memorial scholarship. It will be
awarded yearly to the SCONA
member who exceeds in his per
formance, intently assists SCONA
members and provides leader
ship.
Kuhn has worked with SCONA
for three years and has served as
vice-president for publicity. She
was selected as the outstanding
SCONA member last year.
SCONA Chairman Tom Beec
roft said the organization will be
gin raising $50,000 for an Olin E.
Teague endowment fund to be
used yearly to pay for SCONA
speakers.
Teague, who died Jan. 23, was a
Texas’ 6th district representative
for 31 years and attracted well-
known national speakers to the
SCONA conferences.
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