Black Economy


Lately I was discussing on a closed forum of professionals about our old country when the subject of ‘black economy’ was introduced by one of the discussants. He brought this up mainly in telling the story about inefficiencies in the health delivery system. No, no– the black in this case has nothing to do with race or ethnicity but everything to do with the darkness of socialism and its economy.

In the socialist health system that I grew up in, the government owns and operates all hospitals and major clinics as well as delivered health care in the rural areas through health assistants. The latter acted in place of fully qualified doctors and were trained similarly to nurse practitioners in the hierarchy. They are not surgically trained but are able to dispense medications after an examination.

Many of them served the rural population and though they are government employees some of them are rewarded well by the grateful patients. When the socialists came to power they nationalized all the private hospitals and a great majority of doctors had to serve in the government’s health service. Even though my father had served previously and was then in private practice, he was conscripted into government service taking a severe cut in pay.

Government delivered health care was supposed to be free and the hospitals had only one class of patients because everyone was equal. Large wards were the rule rather than the exception and the patients or their families had to make the beds and feed them and if they wanted care to be delivered in the way of those services normally performed by the hospital staff they had to bribe them in the way of gratuities under the table or bed as the irony may be.

Surgical operations were also free but those with money can have special care by paying the senior surgeons under whose care they were assigned. Senior internists also enjoyed similar perks and it is expected that the patients’ families pay out of pocket for the necessary medications from the pharmacies which were called Peoples’ Pharmacies and the quantities obtainable were rationed.

Many essential medications usually ended up on the black market where they were resold for many times the prices in the Peoples’ Pharmacies. Since the government was the only  importer and seller of medications whatever of those that ended up on the black market sometimes arrived there from the warehouse, bypassing the pharmacies. Frequently they may have been smuggled into the country under the noses of customs agents who were paid to look the other way.

Since government salaries were low and controlled, corruption was rife and a thriving black economy existed in everything from food and fuel to clothing and other essential goods and even sundries such as toothpaste and toilet paper. Over a period of time the black market becomes a way of life and becomes totally integrated into the socialist economy which would not survive otherwise– a form of malignant symbiosis.

Once I had a professor who came from communist-ruled Poland and the day after he arrived he wanted to go to the black market. Mind you this market does not really have a set place or location but it is ubiquitous and has a protean existence; but the people in need always seem to know where it is and how to find it almost instantly. When I demurred, he said to me in a friendly way that he knows of its existence since as he stated “it is an essential part of socialist economy.”

He was right, socialist economies cannot survive without a thriving black market, because it serve the people for the needs which the socialist government cannot provide and provides a livelihood for a huge part of the population and frequently augments their meager incomes.

A government which gives you everything can take everything away is a saying that I have heard and a reality which I have lived through. But in my instance it was a government  which pretended to give everything and succeeded in taking everything away.

A week ago I was watching the ABC evening news when Diane Sawyer reported that  there is currently a shortage of some essential cancer medications in the USA. The cause is not completely clear but it is surely a case of demand exceeding supply. In this case supply restrictions are occurring because of lack of incentives by manufacturers to increase supply, problems in production standards partly because of regulatory pressures, lack of profit, emergence of a ‘Gray Market’ and theft. What! a gray market only a shade away from black?

I learned that some 283 types of drugs are in short supply and when I heard it my ears perked up and my head bowed in a silent prayer: God please don’t let this happen here.

I honestly thought that I had left all that behind when I escaped from socialist health care and its devastating economy of shortages, rationing, limitations of opportunity as well as goods and services. But then came Obamacare and if you want to learn more about it you should visit this site and view what is in store for all of us–perhaps with a lucky or privileged few being excepted–like in a socialist system.
The truth about Government Health Care Bill

There is another type of black economy and that involves the service sector and I shall be discussing that in my next installment.


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