Monday, May 03, 2004

Magnitogorsk experience

"Consumption is the sole end and purpose of all production." - Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. Anno 1776. . People should know this and never forget. To produce something when no one is asking is a recipe for disaster as History shows us. If someone decides to invest a great part of his or his nations wealth in a single project, then there is no room for failure.

Magnitogorsk plant. This is the result of Stalins first 5 year plan. The original 5 year plan. The mother of all the other year plans, Hitlers 4 year plan, Icelandic 3 year plans and all the others.

Among the projects covered were ones such as Magnitogorsk, which was intended to be manned only partly by forced labor and was originally publicized as the greatest of steel works and a model city for prosperous proletarians. The steel works emerged, but the model city failed to follow. Economists pointed out that this “Largest Steel Mill in the World” would be located where fuel had to be delivered from afar, that the deposits might give out (as they did eventually), and so on. This ill-considered crash planning became a feature of the Gulag. Robert Conquest, The Economics of Forced Labor: The Soviet Gulag

The Soviet emphasis on steel is not surprising, given the governments agenda.

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