Atlanta, GA -- (SBWIRE) -- 08/24/2009 -- Dr Isola, a business professor in Atlanta has compared the current rush to implement sweeping changes to the US economic environment to what happened in Russia under Mikhail Gorbachev. Perestroika is the Russian term for the political and economic reforms introduced in June 1987 by the Soviet leader Mikhail Gorbachev. Glasnost was the policy of maximal publicity, openness, and transparency in the activities of all government institutions in the Soviet Union, together with freedom of information, introduced by Mikhail Gorbachev in the second half of 1980s.
Najvnostv is the English transliteration of the word naïve in Russian language. When Russia collapsed, it was a combination of these three factors that brought Russia to her knee even though the third term was never afforded its right place in reporting the whole saga. Reverse glasnost is trying to conceal what should be made known to the public while pretending to be transparent. What was naïve about Gorbachev’s approach is his gross underestimation of the power of glasnost, he did not realize that the only string that kept communism together was secrecy and once that secrecy was unveiled, the empire had no choice but to disintegrate fast.
Economic systems are of three main types worldwide. Capitalist economies leave factors of production in the hand of private owners who make decisions about allocation of resources based on the dictates of the invisible hand. At the other extreme are centralized economic systems which consist of a few government employees deciding for the rest of the populace how to allocate resources. The system is regarded by many as fostering excessive concentration of power which has never worked for any country. In between the two economic systems subsists the mixed economic system practiced by many countries at various levels along the resource allocation continuum.
Restructuring an economic system should be done with a good understanding of what works and what doesn’t based on global statistics gathered over several years in many places. Economic restructuring based on youthful exuberance fuelled by lack of experience and normative ideologies proposed by frustrated college professors is not only naïve but reckless in the light of our present economic realities. Most experts suggest that change should always be approached cautiously with the goal of maintaining some level of stability. Attempting to turn a capitalist economy into a socialist one in the middle of a deep recession in the name of health care reform or any other pretense is not only myopic, it is extremely marsupial.