New models of socialist economy

Somewhere about three months ago when "onion incursions" were made on warehouses, we wrote that Turkey was standing on the verge of transition to the socialistic economic system. Failing to cope with ever growing inflation at the market, the authorities had first ascribed the blame to the opposition, then markets to finalize that chief culprits of the inflation were intermediaries between purveyors and retailers of fruits and vegetables.

Six days ago President Rejep Erdogan commissioned appropriate bodies with delivering agricultural produce directly to consumers without any intermediaries. To fulfil the instruction, municipalities created the so-called "stabilization markets". Note that these markets began operating since February 5 at some places of Istanbul and thus resembled situations in large cities of the former Soviet Union in the 1970-80s.

It is worth pointing out that municipalities are functioning in Turkey like Soviet "kooptorgs" of that time. But one must allow that municipalities are government institutions. In considering that once agricultural produce from suppliers is sold to consumers by means of municipalities and thus rise in prices is prevented, this means that the state is directly engaged in managing trade relations.

Why was then the Erdogan"s government proud of Turkey"s escape from remnants of socialism? Failing to cope with the inflation, the 17-year old Erdogan"s regime focused on the given method to thus prevent further rise in prices.

Note that President"s recent statements testify that he has been heartily satisfied with his find. Erdogan exudes joy when reporting that it was "stabilization markets" that decreased prices for fruits and vegetables by 50%.

During the "onion incursions" I asked a top functionary of the ruling Party of Justice and Development (PJD-AKP): "How many thousands of tons of the product should be consealed from market to redouble onion prices? What can you say about 100% rise in prices for soap as vitally important item for a man? Who takes a soap away from market?"

An answer said that it is possible to buy one soap a year to wash up while a need in onion is routine. The top functionary realized absurdity of such an explanation. To justify "onion incursions", he was ready to give an illogical answer. However, it was not illogical at all. The point is that Erdogan declared that following the agricultural produce the measures would be taken to reduce prices for cleaning sets. It became evident that methods of control and regulation typical for socialist economic system will be used till March 30. But will these methods reduce inflation? It"s rather challenging, for:

• At the secondary level though, principles of market economy in Turkey are still in effectc, so such an open interference of the state with market prices is contrary to the rules of the market economy.
• Notable for his harsh criticism of the past experience, especially as "stabilization markets" previously arranged by the government of social-democrat Bulent Ecevit failed to become panacea for all woes, Mr. Erdogan falls into the same trap.
• Once the inflation is curbed through the use of socialist methods, would they be adapted to secure a foothold in the market?
• If the inflation fails to be curbed through these methods, especially in terms of election results, how is the ruling Party going to regulate its economic policy?
• If the matter fails in the context of demand-supply of free market, will the government try to seize control over all prices? And finally, if there is a shortage of goods at the market, will the government resort to the notorious "coupon system" of socialism? Maybe, the open treasury policy on the eve of the elections makes up the most difficult sphere of economy, for it upsets the equilibrium on the first attempt.