Peron made the most ambitious effort to redirect existing wealth, but not in a sustainable fashion. From 1946 to 1955, he drew on the cornucopia fallacy to restructure wealth, but ignored the need to create it. He did so through wage and prices controls that turned basic elements of an economic system into political tools. Peron did not create an innovative fluid economic environment able to develop momentum. State-directed development became inflexible as political considerations made it impossible to shift resources around as economic needs changed. Any substantial redeployment of resources became a political decision. Insufficient investment in wealth creation failed to create new pools of resources available for economic expansion and social needs. What little surplus emerged often had been politically committed already.
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"He did so through wage and prices controls"
ReplyDeleteWell, yes, it does sound familiar, but isn't it a little late to be ragging on Nixon for what he did back in 1971?