Greater Opportunity Through Innovative Change


(Nowa Huta, Poland) Critics consistently underestimated Republican President Ronald Reagan, and underestimate George W. Bush today. In their repeated attempts to marginalize conservatives these critics are confronted with the collapse of socialism in the former Soviet bloc--one of Mr. Reagan's greatest triumphs--and the emergence, a decade later, of Mr. Bush's 'New Europe,' a trade bloc with important ties to Arkansas.

The 'New Europe' that Mr. Bush referred to in nearby Krakow earlier this month imported more than $10 million in goods from Arkansas last year. But their important to trade will increase as the European Union (APF, June 2003, "Arkansas' 3rd Largest Trading Partner") expands to the East. In Poland, a market of 38 million, EU entry was approved by voters in early June. The Czech Republic, a market of 10 million, approved entry the following week. The other nations of Mr. Bush's 'New Europe' are likely to eventually join the 15-member EU. These are the "EU candidate states" of Hungary; Slovakia; Slovenia; the Baltic states of Estonia, Latvia and Lithuania; Bulgaria; and Rumania.

These nations of Central and Eastern Europe were all once part of the defunct Soviet bloc, which imported $370 million in Arkansas goods in 2002, making it the state's second largest trading partner. The Russian Federation and Kazakhstan, an ally in Mr. Bush's war on terrorism, account for more than three-fourths of this trade, importing $289 million in goods from Arkansas. Exports to the Russian Federation are overwhelmingly food and kindred products, while goods imported by Kazakhstan are largely aircraft and spacecraft produced in Arkansas.

British entrepreneur David Ricardo's economic insight (APF, June 2003, "Trade Benefits Arkansas") that trade is beneficial is expressed in this growing relationship where goods-not troops-cross borders, and add to expanded employment, income levels and growth in both regions.

"Mr. Gorbachev, Tear Down This Wall!"

Conservatives can take great pride in the EU's Eastward expansion. Mr. Reagan's political career revolved around the struggle against socialism in the Soviet bloc, whose rulers tyrannized the region for decades, murdering millions. Mr. Reagan, much to the chagrin of his critics, repeatedly challenged the ideological premises of socialism as an idea..

In a Brandenburg Gate speech in a divided Berlin in 1987 Mr. Reagan demanded, "Mr. Gorbachev, open that gate!" Another time he insisted, "Mr. Gorbachev, tear down this wall!" Mr. Reagan's strategy, which occurred against the backdrop of a U.S. military buildup and spiritual resolve behind the Iron Curtain, was ultimately successful. On Nov. 9, 1989, the Gate opened and the Wall was later torn apart by jubilant crowds enjoying new freedoms after decades of socialist dictatorship. Soviet-era museums of the Wall and Stasi (East German State Security) provide a chilling reminder today that bad ideas lead to horrible consequences. Socialism as an idea was defended by Western intellectuals and journalists despite the loss of tens of millions of lives.

Mr. Reagan's deeply-held conservative principles gave him the means to confront socialism as an idea. Unlike many politicians, who flit from one faddish idea to another to appease those attempting to shape popular opinion, he was resolute in his support for the market system as an idea. Mr. Reagan's intrinsic optimism and masterful communication skills allowed him to reach the American people with his message, and in the end he triumphed despite the critics: socialism as a system collapsed.

Market Systems Serve Consumers

A monument to socialism's sweeping failure stands not far from the Krakow site where President Bush spoke. Soviet dictator Josef Stalin (1879-1953) decided to build the massive Nowa Huta (translation: New Industrial Works) on the outskirts of Krakow, Poland precisely because it was the conservative cultural center of Central Europe. Nowa Huta incorporated government housing into a sprawling industrial complex.

Stalin's material support to Nowa Huta was purely in the realm of ideas. It was meant as a premier socialist experiment, according to the late Polish communist leader Wladyslaw Gomulka. Nowa Huta was meant to convey Soviet strength and socialism's power as an idea.

ndustrial complexes are built in market-based systems to satisfy consumer demands. In socialist systems they serve ideological ends.

Stalin, the 'Man of Steel,' had the massive V.I. Lenin Steelworks--named for the first Soviet leader--constructed at Nowa Huta to prove socialism's alleged superiority as an idea. But in the end it was only a great failure. After the imposition of martial law in Poland on Dec. 13, 1981, the underground Solidarity trade movement organized massive strikes in the port of Gdansk and at Nowa Huta's steelworks. Workers turned against the so-called worker's state. Solidarity leader Lech Walesa was among those supporting Poland's entry into the EU in the recent referendum. On the train to Nowa Huta one sees pro-EU billboards and Galerie NAFTA.

Conservative Victories

The defeat of socialism and the EU's expansion into Central and Eastern Europe are victories for conservatives and their ideas. They are also personal triumphs for Republican presidents Ronald Reagan and George W. Bush. Entrepreneur David Ricardo's economic insight that trade is beneficial is evident in the growing ties between Arkansas and these newly-free nations. These ties will grow if private property rights and the rule of law are established in those nations without long-standing democratic institutions. Market advocates will play a role in this process.