]]]]]]]]]]]    WHY DID THE QUAKE TAKE SUCH A TOLL?      [[[[[[[[[[[[[[
                                                            (1/6/1989)
                        by Paul Craig Roberts
     Paul Craig Roberts, an economist at the Center for Strategic and 
International Studies, is a columnist for The Washington Times.
                From the WASHINGTON TIMES, 12/14/1989

     The earthquake in Soviet Armenia that claimed up to 100,000 lives 
[this was the estimate at the time of the article, now roughly halved, 
P.B.] is testimony to the Soviet economy's utter neglect of the 
consumer.  Measuring only 6.9 on the Richter scale, the earthquake was 
far more catastrophic in its effects than the more powerful back-to-
back earthquakes measuring 8.1 and 7.5 that hit Mexico City on Sept. 
19 and 20 in 1985.
     The weaker Armenian quake has caused five times the loss of life, 
and the damage is immeasurably greater.  Entire villages and towns  
have been totally destroyed, and two-thirds of Leninakan (the second-
largest city) and half of Kirovakan (third-largest) are rubble.
     According to Gerald Wieczorek of the U.S. Geological Survey, a 
6.9 quake cannot explain the Armenian catastrophe.  The fault lies in 
unbelievably shoddy building construction.  It didn't take much to 
collapse multistory buildings made of unreinforced concrete, low-grade 
masonry and prefabricated concrete sections haphazardly hooked 
together.
     Other experts support Mr. Wieczorek's professional judgment.  
California's state geologist, Brian Tucker, estimates Armenian deaths 
to be 100 times greater than a similar earthquake could cause in 
California.  Roger Bilham of the University of Colorado agrees that 
Armenians were killed by poor building construction and not by the 
earthquake.
     The explanation of the disaster is not simply that the people are 
poor and cannot afford to do things properly.  Rather, the more the 
government regulates, the fewer the standards in practice.  This may 
seem to be a paradox, but the explanation is simple. 
     Central planning in the Soviet Union has given plan managers more 
incentives to use labor and materials to add to the number of 
buildings under construction than to finish existing construction.  If 
a manager focuses on completing buildings, he will divert resources 
from meeting the plan to put new space under construction.
     Consequently, when a building is finished, it is done in the most 
slap-dash way possible.  Building inspectors have to cooperate in the 
rushed process or be regarded as obstacles to plan fulfillment by 
higher officials.  Since the buildings don't have to be sold and 
consumers have no voice, people have to take what living space they 
can get.
     The same separation between production and use that produces 
shoddy buildings results in shoddy building materials.  The building 
constructor has to make do with the materials the state supplies him, 
and the same pressure to fulfill an output plan affects the quality of 
the concrete.  And so on down the line.
     American professors and Central Intelligence Agency "experts" who 
have estimated the Soviet economy to be 60 percent as large as ours 
have misled the American people and U.S. government about the prowess 
of Soviet central planning.  If Soviet output had to be sold in our 
markets, a great deal of it would be valueless.  What could be sold 
might amount to less than 20 percent of U.S. gross national product.
     Americans are subject to hourly depreciations of their fabulous 
economy from media "reports," university professors and politicians 
seeking more power.  Only those few Americans who have been in the 
Peace Corps or who have lived in China or the Soviet Union have any 
idea what life is like in a totally regulated economy.
     In the United States, each stage of production adds to final 
value.  Concrete is turned into blocks and prefabricated sections, 
which in turn become buildings.  Similarly, steel becomes sheet metal 
and then cars or appliances.
     In the Soviet Union, however, this "value-added" process often 
becomes one of "value-destroyed."  Salable steel is transformed into 
shoddy consumer appliances that rust unsold in warehouses, into 
roofing metal that is too thin or too thick to do the job, and into 
tractors that rust in the fields for lack of spare parts.  By the time 
it is finished, the Soviet production process has poured enormous 
effort and resources into turning valuable steel and labor into 
valueless products.
     This is the difference between a socialist planned economy and 
capitalism, and this difference explains Soviet leader Mikhail 
Gorbachev's efforts to change the way the Soviet economy operates.
     Faced with the Armenian disaster, Mr. Gorbachev said he is shaken 
to the depths of his heart.  He should be.  The 100,000 dead are the 
latest installment payment for Soviet socialism.  They give Mr. 
Gorbachev poignant new ammunition for his campaign to restore private 
property and market processes.

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