Echoes Dispatches From Economic History
John B. Taylor
This week's discussion on the economic impact of democratic change in the Middle East reminds me of the upheaval that transformed Poland from a centrally planned economy to a capitalist one two decades ago.
After Lech Walesa and the Solidarity trade-union movement triumphed politically over the communists, the new Polish government quickly developed economic-renewal plans that were ready to go by December 1989.READ MORE
Joseph J. Thorndike
What sort of taxes should follow a revolution? Flat ones, if the history of Russia and Eastern Europe is any guide. After the fall of communism, nations of the former Soviet empire flocked to the flat tax. Estonia led the way in 1994, followed quickly by Latvia and Lithuania. Russia itself adopted one in 2001, and other countries followed.
Today, more than 30 jurisdictions rely on a flat tax of some sort, including most of the former Eastern bloc.READ MORE
The past is the news. That's what some of us have concluded as we've watched markets grapple with big events. Looking at history has helped us make sense of current movements, both economic and political.
Sometimes the experience seems almost auditory: listen hard enough and you hear echoes from preceding crashes, or preceding elections. We can’t always agree on the importance of what we hear. But we can’t afford to shut the sound out.READ MORE
"The only way to help the new republics build free markets is to stimulate private investment. The main magnet is oil."
This advice sounds like it comes from inside Hillary Clinton’s State Department, part of a confidential file set aside for the day when the Jasmine Revolution succeeds in the Middle East. Or perhaps from the notes for President Obama's strategic Middle East speech, delivered May 19. Actually the words were written two decades ago, in reference to Russia and Eastern Europe.READ MORE