Thu Jun 14 04:27:37 EDT 2001
Greetings from Romania !
There has been some journalistic debate in Romania
in the early 1990's about what is to be constructed in
Eastern Europe after the fall of communism:
'capitalism', pure or with modifications, or a
'market economy'.
My personal belief is that 'capitalism' described well
the developed world economy in 19th century to just about
1950; _capital_ was the main scarce factor of growth
and it justified profits.
'Market economy' describes better the current state
of the world: capital can be obtained plentifully through a
well-developed market; but the scarce factor to make it
work are favorable _markets_, i.e. intense consumer desires
and/or cheap, organized resources (technology, labor, nature).
They generate intangible values of corporate and brand
names, that allow permanent oligopoly positions and profits
better explained as _marketing rents_. Profit becomes
something temporary (compared to expectations), due to
unusually good leadership, technological advance and public
relations. The fine art of propaganda becomes crucially important.
My Professor (Gh. Ruxanda) argues that 'market economy'
is not enough to describe the ideal concept; the correct one is
'free market economy'; after all, socialist exchange was based
on a market, but not one in which agents were free-deciding.
My questions:
- Was 'capitalism' defined before Marx ?
- When were 'market economy' and 'free market economy'
introduced, first in scientific, then in popular language ?
- Is there a shift of connotation in the Western world between
them ?
Best Regards,
Mircea-Valer Pauca (mpauca at fx.ro), Bucuresti, Romania
Preparator, Academia de Studii Economice Bucuresti
teaching: Microeconomics and Economic Simulation