(5 of 13)
Proprietors will be facing even tighter restrictions if several social-democratic governments go ahead with plans to give workers a major voice in management. Although employee representatives already sit on boards of directors and management committees in Denmark, West Germany, Sweden and other Western European states, their powers could be expanded considerably under some pending proposals. One model for these schemes is Yugoslavia's Workers' Self-Management system, in which employees technically own their factories and, through workers' councils, have a voice in setting wage levels, dividing profits, planning investments and firing executives.
There are, however, increasing fears that social democracy's near confiscatory tax policies, by reducing rewards, already have begun to discourage incentive and innovation. They seem to be undermining the Calvinist work ethic in The Netherlands, spurring absenteeism and creating what sociologists have derisively labeled Afwezigheidsbehoefte—literally, the need to be absent (from the job).
Emerging from colonialism, many Third World states turned to socialism as much from necessity as ideology, because it seemed the only way to solve their economic problems. There was, for example, only a small Arab and Berber middle class to replace the French as an entrepreneur force after Algeria had gained independence. In any case, most Third World socialists have insisted on nationalization of manufacturing, mining and agriculture, and have placed economies under centralized controls. But the results have often been disappointing. TIME Correspondent Lee Griggs, who has reported from developing countries for most of the past two decades, writes: "The socialist regimes have made some contributions to economic growth. Somalia has built ports and Iraq's Baathists are installing an extensive irrigation network. But government management of production has been poor and in many cases corrupt; without material incentives, productivity has plummeted. While a population explosion has led to a net decline in the living standard for nearly all African states, it has been most pronounced in those espousing socialism."
Guineans, for instance, face constant shortages. Much of what is produced is smuggled into neighboring countries and sold for more than double the price permitted by Guinea's unrealistic controls. In Zambia, under what President Kenneth Kaunda calls "humanistic socialism," a severe housing shortage has developed. Reason: laws have made land-holding so uncertain that there is no incentive to invest in real estate.
No Third World country has fared worse under socialism than Burma. Its 16 years on the "Burmese Way to Socialism" have turned what was once the lush rice bowl of Asia into an international pauper.