“A Billion Lives Are at Stake!”

Every few years I teach a class at OU called Comparative Economic Systems. One of the things that often surprises students is the fact that many countries still have industrial planning, and that this wasn’t solely the reserve of the communist world.  Advocates for this type of planning (called indicative instead of command) argue that it is the process of creating the plans that is important, that there is value in having prolonged discussions between government, employers, labor unions, and farmers about the state of the economy and where it should go.  The claim is that whether the economy actually moves in the direction of the plan is somewhat irrelevant.  I’m not convinced by this argument but it came to mind when I saw the following video from the Chinese government about their new 5 year plan:

This video is amazing in so many ways that it is hard to know where to start, so here are just a few thoughts:

a.  The Chinese 5 year plan is much more indicative than command like it was in the past.  You can see how they trumpet the participation of all levels of government and all types of people in the discussion process. The big question is who they are trying to convince.  Anyone who knows about 5 year plans is already pretty cynical about how they really work (or don’t as the case may be).  This video, with its animation, upbeat music, and breathtaking idealism, seems aimed at young students, but again, which students?  The video is in English, so are they trying to create a gentler, softer image of industrial planning among the minds of American students (and do American students have any image of industrial planning to begin with?)

b.  I’ve seen communist countries promote 5 year plans with brutal slogans about the Year of Working Hard, etc. but I’ve never seen a country try to take this route:  of making economic planning seem both fun and totally successful and also vitally important.  There is an actual line in the video about how a billion lives are at stake with the planning process. Wow, that is some hubris!

c.  While the video is easy to mock, it is at least a lot more catchy and slick than the ham-fisted and embarrassing promotional video the Mexican government aired recently.

The Perks of Pemex

I’ve written before on some of the problems of Pemex (see, for instance, “Not everything is perfect, perfect, perfect“).  A recent WSJ article about the company’s attempts to renegotiate terms with the union help to explain some of these issues.

Under the current contract, union workers:

1. Retire at age 55 with “at least 80% of the average salary during the past year worked.”  Pretty sweet deal.

2.  Get 30 vacation days annually and those days aren’t merely a paid holiday; they receive three times their pay for those vacation days! (if they have worked at Pemex for at least 10 years)

3. Receive low interest rate mortgages if they want to purchase a house

4.  Enjoy extensive health insurance benefits, including “cosmetic surgery for employees and their relatives.”  Their relatives too?  Wow, was there any actual contract negotiation going on by Pemex management before now? Did they even try?