Economics Lesson

For the impassioned young men who led Burma's struggle for independence in the 1930s, "capitalism" was an ugly word, almost as bad as "colonialism," with which it was inextricably associated. In 1950, after the erstwhile rebels had become the rulers of an independent Burma, Premier U Nu bluntly defined their goal: "the constitution of a socialist state."

With the same enthusiasm that they had once devoted to demonstrating against the British, Burma's new bosses set about achieving U Nu's dream. They adopted a $1.6 billion economic development scheme, drew up ambitious plans for a steel mill, textile industry, housing developments and hundreds of other state-operated projects. But somehow, through inexperience and the complicated task of coping simultaneously with half a dozen rebellions, they failed to achieve most of their targets. Early this year, after almost a decade of independence, Burma's gross national product was still less than 90% of what it had been under British rule in 1939. Exports of rice, the nation's main source of foreign exchange, were less than two-thirds the prewar average.

Last week, in an emotional speech in Rangoon's City Hall, ascetic, chubbily handsome U Nu, just turned 50, publicly surveyed Burma's progress under socialism and found it bad. The government, with himself as "principal offender," declared U Nu, had made "terrible mistakes ... a series of blunders that resulted from putting the cart before the ox." The new solutions: 1) concentrate on the basic governmental task of establishing peace and order, 2) open up industrial enterprises to people with "profit motives," and 3) suspend all nonessential economic projects, including government projects that had encouraged "thievery and pilfering." "I do not wish," said U Nu firmly, "to see the government having a finger in all sorts of economic pies."

When his three-hour speech ended, U Nu sent his ministers off to revamp Burma's Four-Year Plan.

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