Tuesday, March 27, 2007

THE BOOK OF THE YEAR

Nearly two weeks ago I received an email message from my friend, saying that the new book written by Mićo Mrkaić entitled "To so bile svete krave" (in English: The Holy Cows) was published. I did not hesitate and read the book in a few days starting by the day I got it in the mailbox.

Mićo Mrkaić is a first-class economist. He graduated from Carneige Mellon University and obtained a Master Degree in Physics and Economics and a PhD in Economics. Hence, he was awarded by Alexander Henderson Award for Excellence in Economic Theory - a university award given for the best written PhD thesis in the field of economic theory. When the author came back to Slovenia, he started to write weekly columns in a daily business newspaper Finance where he emphasized an unavoidable need to liberalize the markets, deregulate the economy, privatize the rest of it (in Slovenia private sector composes only 65 percent of the GDP) and to let individual and civil liberties flourish. The author soon realized that newly elected government did not intend to implement very much needed economic and structural reforms. His scientific articles can be found here. The Growth of Total Factor Productivity in Slovenia is also an important contribution to the nature of economic growth where the author came to conclusion that, in Slovenia, TFP is growing too slowly.

In the book, the author sets a question why Slovenia, situated in the heart of Europe, never experienced a spontaneous order, a strong rule of law, individual liberty, entrepreneurial freedom and a limited government which Robert Nozick would call a minimal state. In that sense, the author continues a noble legacy of "Scottish Enlightenment" and a tradition of classical liberalism in Slovenia started by dr. Ljubo Sirc, a Slovenian immigrant and an economist who escaped communism and achieved a tremendous international success in Great Britain as a leader of the Center for Research into Post-Communist Economies. The author also analyzes the brutal continuation legacy of marxism and communism in Slovenia, the ideologies that ruined the productive grounds of Slovenian society and stuck to it for never-ending decades.

The book is also an economic masterpiece. The author explains the basic features of modern economic theory and policy and thereby unmasks the painful outcome of gradualist economic policy that has been intensively exercised by the economic policymakers in the early stage of Slovenian transition to market economy. The author highlights the question of central bank's inflation policy which in turn led to the depreciation of Slovenian tolar in order to stimulate the export sector through exchange rate depreciation and excess money supply which resulted in an unusually high inflation rate. The author reveals the true reason behind the depreciation policy of the central bank through several articles and analytical insights. He shows that the makers of such policy lied to the public as they were repeating that inflation is not (?!?!?!) a monetary phenomena. In normal countries, such insane statements would have a serious consequence. Can we imagine how it would be if FED, Ben Bernanke or Alan Greenspan lied to the public and exercised discretionary features in monetary policy through exchange rate depreciation? Or if they said that inflation is not a monetary phenomena - Well, everyone - I hope that now you see what kind of affairs have been happening in Slovenia.

The book also focuses on several other issues such as health-care, culture, classical liberalism, public finance, and economic policy. The author showed that cultural lobbies exercise a brutal policy of public subsidies for their activities in astronomic amounts. However, the policymakers never questioned the right to outlay such subsidies on the basis of cost-benefit analysis and neighborhood effects. The book also entails a closer analysis of the inefficiency of public health-care providers in Slovenia where the author emphasizes the problem of low efficiency and enormous differences in the rates of productivity in the health-care sector. The analysis is one of the most striking of all.

The next chapter of the book is dedicated to a closer look at economic policy and public finance. The author reveals how he swam into the sea in search of successfully implemented structural reforms and greater market liberalization, surrounded by socialists of all colors and parties, trade unions and corrupted journalists from socialist newspapers, which personally dishonored him. The author describes how journalists made fun of him and how explosively the mainstream media, many opinion leaders, trade unions and Keynesian economists did everything possible to persuade the public that economic and structural reforms were bad though, in reality, the nobility and high quality of the author's economic program Benchmark offered a long-term perspective through which Slovenia, if the program were fully implemented, achieved comparably high rate of economic growth, reformed its pension and social security systems and made them sustainable in the long run, stressed its booming potentials and increase the level of global competitiveness. It could become a global reform superstar and after Ireland, Estonia, Iceland and Slovakia, the next economic success story in a global arena and Europe but thanks to Slovenia's countless socialists of all parties and its exponents, the abovementioned success story has been made impossible.

I warmly recommend the book to everyone because it's a "must-be-read" book with lots of striking facts, thorough analysis, theoretical explanations and detailed views on Slovenian society by an author, a brilliant economist and a noble classical liberal who succeeded abroad and with no fear unmasked the image of the society in which we (in Slovenia) live.

Link to the book.

3 comments:

Shelly said...

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Rocks said...

Hi Shelly,

of course. You can add my blog to your blog directory.

That would be great.

Enjoy the rest of the day and thank you for visiting my blog.

Regards,
Rocks

Anonymous said...

I am looking for some info for an assignment.

Economically we are moving into non monetary profits. I think it is a bad idea because it increases taxes and the control of the state.

I am hoping you might have some information on this. I will look around. Great blog.