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A One Day Plan for the Soviet Union

The recent resignation of the Soviet Foreign Minister Eduard Shevardnadze is only the latest step in the internal destabilization of the Soviet Union. Shevardnadze's stated reason for leaving points to more ominous problems on the horizon: "In the end it became clear to me that if the destabilization of the country continues, and the process of democratization is halted, it will be impossible to follow the current course in foreign policy." Shevardnadze maintains that the chaos spreading through the country may very likely lead to an internal military crackdown.

Gorbachev's much touted "reforms" have so far produced no genuine economic improvements. Yuri Maltsev, former member of the Gorbachev reform team, summarizes the situation: "Now the West knows what we radical economists in the Soviet Union knew all along: perestroika was just another attempt to improve socialism."

None of the official Soviet reform proposals sufficiently approach the needs of the Soviet economy. Such plans either fail to link private property with completely free prices or they establish monopolistic cartels. Whatever the case, the result of the Gorbachev agenda is not a free market economy but a destabilizing mixed economy which can only promise more unrest across the republics.

Yuri Maltsev, now a fellow of the U.S. Peace Institute and senior adjunct scholar at the Ludwig von Mises Institute has proposed the following "One-Day" plan to rescue the Soviet Union by genuine reform.


The Maltsev One-Day Plan

I. The economy shall be privatized

(A) This includes all industry, agriculture, housing, construction, communication, the social infrastructure used by the Nomenklatura, and all other sectors of the economy.

(B) The public shall be able to homestead state-owned resources, with preference given to workers and farmers closest to those resources. Where this isn't possible, certificates can be distributed to the entire public which can in turn be exchanged for homesteading rights, as suggested by Czech finance minister Vaclav Klaus.

(C) In health care, education, and transportation, entrepreneurs shall be allowed to provide unregulated alternatives to the dilapidated state system.

(D) If the state needed revenue, it shall sell such remaining non-privatized assets as military and space equipment and buildings, as well as the private asses of the Nomenklatura (e.g. limos, summer residences).

(E) Publicly provided services, which will naturally be replaced over time by private provision, shall be the exclusive province of local government.

(F) All hospitals, clinics, and sanatoriums used by government officials shall immediately be given to the public.

(G) Revenues deemed necessary for funding remaining public services shall be collected and spent only at the local level. Their imposition shall be subject to local referendum.

II. The state budget shall be drastically cut.

(A) The cuts shall start with the elimination of such bloated an destructive bureaucracies as the committees on state security (KGB), planning, prices, foreign trade, wages, safety, science, and technology.

(B) Drastic cuts in military spending and foreign aid shall not be exempt from the process.

III. Prices shall be freed

(A) Free prices will govern the distribution of consumer and capital goods and services, so that prices reflect relative scarcities and consumer demand.

(B) There shall be no controls on wages or other prices.

(C) No official distinction shall be made between staple and luxury goods.

IV. The monetary system shall be drastically reformed

(A) All restrictions on the free exchange of currencies shall be eliminated, and currency speculation shall be legalized.

(B) Through the elimination of these restrictions, the ruble shall become freely convertible into other currencies.

(C) All currencies shall be legal for monetary purposes. The privatization of the capital stock, housing, land, etc., and the resulting growth in their value, will increase both domestic and foreign demand for rubles, helping to eliminate the ruble "overhand".

(D) The State Bank of the U.S.S.R., and other government bodies, shall be constitutionally prohibited from expanding the supply of money and credit.

(E) A new financial sector should be allowed to develop according to the dictates of interested private parties.

V. To secure this program, a judicial system shall be established based on the rule of law, the security of private property, and the enforcement of contract.

(A) The judiciary shall be independent of the state's legislative and administrative bodies, both of which shall be subject to judicial review.

(B) Private parties shall have the option to settle their disputes through private arbitration.


Copyright © by Covenant Community Church of Orange County 1991
1-17-96 tew
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