Those who never accepted the verdict of the Cold War are interpreting the current financial crisis as a verdict against capitalism in favor of socialism. They should be careful what they wish for.
The verdicts of all the socialist experiments of the 20th century were decisive and unequivocal. But younger generations aren’t being taught the facts, and older generations don’t want to know them, or know them too well to want to talk about them. The following is a timely reminder of what socialism meant in practice.
Socialism is a political system based on the principle that society is sovereign, rather than the individuals who make it up. At the dawn of the 20th century it was the ideology whose time had come. Even the 19th century pro-capitalist philosopher John Stuart Mill had conceded in his later years that: "We are all socialists now." By the 1930s socialism was the “wave of the future”. In 1948 the economist Ludwig von Mises lamented that:
Marxism was contradicted by reality from the start. Proletarians never did spontaneously erupt against capitalist masters, certainly not in Russia. By no stretch of any rationalization was Russia a capitalist country when Lenin’s Bolsheviks seized power in 1917. Despite the emancipation of the serfs in 1861, Russia was basically feudal. In an attempt to modernize the country foreign investment and private ownership of farms and industries was being encouraged, but the essential class divide was still between the peasantry and the aristocracy rather than between the proletariat and the bourgeoisie. Nevertheless, the Bolsheviks inherited the modernized industries and infrastructure, and a vast empire rich in minerals, forests, rivers, farmland, an enormous workforce, and the greatest potential of any European power.
The Russian aristocrats could by no stretch be considered enlightened champions of individual rights - but as repressive tyrants go, they were amateurs compared with the Bolsheviks. Between 1825 and 1917, Czarist Russia executed 3,932 political prisoners - in 1918 Communist Russia executed over 10,000 political prisoners in a single purge. It was the first of many slaughters to come. But "you can’t make an omlet without breaking eggs", explained Western intellectuals, if they acknowledged the carnage at all. The Soviets, they said, were conducting a “noble experiment”, and they would soon surpass the capitalist West, without its alleged exploitation of the workers.
With massive Western aid supplied during its famines and wars, and wholesale expropriation of the capitalists’ technologies, both overtly and covertly, the Union of Soviet Socialist Republics became electrified and industrialized, and for a while it seemed to be winning the space and arms races. But while it was being portrayed on the world stage as the morally superior and historically “progressive” superpower, what was happening back on the farm?
During the 1930s, while the USSR was being championed by Western intellectuals as the model society, the Soviets were systematically purging millions of aleged disidents and starving, enslaving and brutalizing many million of Ukrainians to death for the crime of owning means-of-production such as plots of land or cows. During the 1940s, while Joseph Stalin was cozying up to Adolf Hitler, British intellectuals, and Franklin D. Roosevelt, he was starving, enslaving and brutalizing millions of his subjects in the Siberian gulags for crimes such as absenteeism or anti-Soviet utterances, and herding millions more into cattle trains for “relocation”, due to their class, religion or ethnicity. During the 1950s, while all the Soviets’ atrocious failures were being blamed on Stalin in order to exonerate party doctrine, cycles of amnesty-uprising-purge-repression were entrenching a “psychology of fear” as the “stabilizing factor” of society. During the 1960s, while the Sputniks and Yuri Gagarin were being hailed as proof of Soviet superiority, the Soviet consumers were waiting in queues for scarce groceries, or for their name to come up on the list for their own family apartment, or for a privileged few: a motorcar. At a time when there were 100 million cars on American roads, the Soviets boasted they had doubled the number on their roads to 3 million. (They had caught up with America on one statistic, however: the road toll.) During the 1970s, while the Soviet Union sponsored communist terrorism and revolution on every continent and stockpiled nuclear missiles, hundreds of dissidents were show-trialed and sent to asylums or labour camps; free speech was equated with anarchy; and food shortages were, in Brezhnev’s words, “the central problem”. During the 1980s while the Soviets spied and armed and fought and bargained and propagandized their Cold War objectives, an average Soviet worker was earning as much buying power in a year as an average welfare mother in the United States received in a month.
In the 1990s, when the USSR imploded and the propaganda curtain was raised, Western analysts were astonished to discover how gullibly they had overestimated the potency of the communist economies. The productivity of East German workers was not 20% lower than the productivity of West German workers but 66% lower, and East Germany had been one of the more prosperous communist states. As for the respective productivity of the world’s two superpowers, Alan Greenspan notes an astounding statistic:
The verdicts of all the socialist experiments of the 20th century were decisive and unequivocal. But younger generations aren’t being taught the facts, and older generations don’t want to know them, or know them too well to want to talk about them. The following is a timely reminder of what socialism meant in practice.
Socialism is a political system based on the principle that society is sovereign, rather than the individuals who make it up. At the dawn of the 20th century it was the ideology whose time had come. Even the 19th century pro-capitalist philosopher John Stuart Mill had conceded in his later years that: "We are all socialists now." By the 1930s socialism was the “wave of the future”. In 1948 the economist Ludwig von Mises lamented that:
Socialism is the watchword and catchword of our day. The socialist ideal dominates the modern spirit. The masses approve of it. It expresses the thoughts and feelings of all; it has set its seal upon our time….As yet, it is true, socialism has not created a society which can be said to represent its ideal. But for more than a generation the policies of civilized nations have been directed towards nothing less than a gradual realization of socialism.The purest form of socialism was communism - its architects, Karl Marx and Freidrich Engels, used the two terms interchangeably. The communist Utopia was a world without private property, or private enterprise, or private aspiration; all values were to be the product and property of the amorphous intangible collective called society. It was this purest and consequently most revered form of socialism that produced its most terrible failures everywhere it was tried.
Marxism was contradicted by reality from the start. Proletarians never did spontaneously erupt against capitalist masters, certainly not in Russia. By no stretch of any rationalization was Russia a capitalist country when Lenin’s Bolsheviks seized power in 1917. Despite the emancipation of the serfs in 1861, Russia was basically feudal. In an attempt to modernize the country foreign investment and private ownership of farms and industries was being encouraged, but the essential class divide was still between the peasantry and the aristocracy rather than between the proletariat and the bourgeoisie. Nevertheless, the Bolsheviks inherited the modernized industries and infrastructure, and a vast empire rich in minerals, forests, rivers, farmland, an enormous workforce, and the greatest potential of any European power.
The Russian aristocrats could by no stretch be considered enlightened champions of individual rights - but as repressive tyrants go, they were amateurs compared with the Bolsheviks. Between 1825 and 1917, Czarist Russia executed 3,932 political prisoners - in 1918 Communist Russia executed over 10,000 political prisoners in a single purge. It was the first of many slaughters to come. But "you can’t make an omlet without breaking eggs", explained Western intellectuals, if they acknowledged the carnage at all. The Soviets, they said, were conducting a “noble experiment”, and they would soon surpass the capitalist West, without its alleged exploitation of the workers.
With massive Western aid supplied during its famines and wars, and wholesale expropriation of the capitalists’ technologies, both overtly and covertly, the Union of Soviet Socialist Republics became electrified and industrialized, and for a while it seemed to be winning the space and arms races. But while it was being portrayed on the world stage as the morally superior and historically “progressive” superpower, what was happening back on the farm?
During the 1930s, while the USSR was being championed by Western intellectuals as the model society, the Soviets were systematically purging millions of aleged disidents and starving, enslaving and brutalizing many million of Ukrainians to death for the crime of owning means-of-production such as plots of land or cows. During the 1940s, while Joseph Stalin was cozying up to Adolf Hitler, British intellectuals, and Franklin D. Roosevelt, he was starving, enslaving and brutalizing millions of his subjects in the Siberian gulags for crimes such as absenteeism or anti-Soviet utterances, and herding millions more into cattle trains for “relocation”, due to their class, religion or ethnicity. During the 1950s, while all the Soviets’ atrocious failures were being blamed on Stalin in order to exonerate party doctrine, cycles of amnesty-uprising-purge-repression were entrenching a “psychology of fear” as the “stabilizing factor” of society. During the 1960s, while the Sputniks and Yuri Gagarin were being hailed as proof of Soviet superiority, the Soviet consumers were waiting in queues for scarce groceries, or for their name to come up on the list for their own family apartment, or for a privileged few: a motorcar. At a time when there were 100 million cars on American roads, the Soviets boasted they had doubled the number on their roads to 3 million. (They had caught up with America on one statistic, however: the road toll.) During the 1970s, while the Soviet Union sponsored communist terrorism and revolution on every continent and stockpiled nuclear missiles, hundreds of dissidents were show-trialed and sent to asylums or labour camps; free speech was equated with anarchy; and food shortages were, in Brezhnev’s words, “the central problem”. During the 1980s while the Soviets spied and armed and fought and bargained and propagandized their Cold War objectives, an average Soviet worker was earning as much buying power in a year as an average welfare mother in the United States received in a month.
In the 1990s, when the USSR imploded and the propaganda curtain was raised, Western analysts were astonished to discover how gullibly they had overestimated the potency of the communist economies. The productivity of East German workers was not 20% lower than the productivity of West German workers but 66% lower, and East Germany had been one of the more prosperous communist states. As for the respective productivity of the world’s two superpowers, Alan Greenspan notes an astounding statistic:
Throughout the late nineties the [US] economy grew at a better than 4 percent annual rate. That translated to $400 billion or so of prosperity – equal in size to the entire economy of the former Soviet Union – being added to the U.S.economy each year.
The American economy was the product of people free to choose their employment or business and consume or invest what they could earn in pursuit of their personal aspirations. Its power was derived from their free minds, fueling free enterprises, competing in free markets. The Soviet economy was the product of people subordinated to the needs of society, in which the accumulation of private property was tantamount to theft, and an instrument of exploitation. Its power was derived from their service and sacrifice for the good of society, as embodied by the communist party, pronounced by its leaders, and prosecuted by systematic surveillance, denunciation, intimidation, imprisonment, enslavement, torture and slaughter of its citizens. The American system produced the richest country in history. The Soviet system produced an economic basket case.
The results of the USSR experiment turned out to be repeatable. The same cause, communism, produced the same effect, brutality and failure, in: Lithuania, Latvia, Estonia, Albania, Bulgaria[1], Yugoslavia[2], Romania[3], Poland[4], Czechoslovakia[5], East Germany[6], Hungary[7], Vietnam[8], Laos[9], Cambodia[10], Afghanistan[11], Tanzania, Mozambique[12], Angola[13], Ethiopia[14], Benin, Guinea-Bissau, Madagascar, Cape Verde, Grenada and Nicaragua [15]. When Castro came to power in Cuba it was the second richest nation in Latin America, but depite assistance from the USSR and the West he turned it into the third poorest, and well over a million Cubans “voted with their oars” to escape his dictatorship - and still it is praised by America-haters for “standing up” to a superpower and for its universal health care system. In the same breath they will claim that the Cuban economy is superior, that its dismal failure is due to the exploitation of American capitalists, and that its destitution is due to sanctions that prevent American capitalists from trading in Cuba.
The results of the USSR experiment turned out to be repeatable. The same cause, communism, produced the same effect, brutality and failure, in: Lithuania, Latvia, Estonia, Albania, Bulgaria[1], Yugoslavia[2], Romania[3], Poland[4], Czechoslovakia[5], East Germany[6], Hungary[7], Vietnam[8], Laos[9], Cambodia[10], Afghanistan[11], Tanzania, Mozambique[12], Angola[13], Ethiopia[14], Benin, Guinea-Bissau, Madagascar, Cape Verde, Grenada and Nicaragua [15]. When Castro came to power in Cuba it was the second richest nation in Latin America, but depite assistance from the USSR and the West he turned it into the third poorest, and well over a million Cubans “voted with their oars” to escape his dictatorship - and still it is praised by America-haters for “standing up” to a superpower and for its universal health care system. In the same breath they will claim that the Cuban economy is superior, that its dismal failure is due to the exploitation of American capitalists, and that its destitution is due to sanctions that prevent American capitalists from trading in Cuba.
The largest experiment of all, conducted by Mao Zedong, whose helmsmanship included the exhortation that his “true communists” grow food in the morning and make steel in the afternoon, cost the largest deathtoll of all. .
The present plight of the North Koreans is no anomaly; their society is an archetypical result of communism – it may legitimately be compared with South Korea, which, for all its mixed-economy woes, is a paradise in comparison. http://www.theaustralian.news.com.au/story/0,,25217258-25837,00.html
The above is an overview of an epochal evil of staggering proportions; the following is one tiny detail. In 1949 the Romanian communists embarked on a “reeducation” program that, according to the philosopher Virgil Ierunca, involved “the most vile tortures imaginable”. Reeducation involved four phases. The aim of the first phase, “exterior unmasking", was to get the “student” to admit to anti-communist activities and links with anti-communist friends outside the prison. The aim of the second phase, "interior unmasking", was to get him to name people who had helped him inside the prison. The third phase, “public moral unmasking" was to get him to curse everything he had held sacred, his friends, family, lover and God if he had one. The fourth phase was to get him to join the torturers in the “reeducation” of his best friends. “Torture was the key to success. It implacably punctuated all confessions, between sentences. You couldn't escape the torture. You might perhaps be able to shorten it, if you admitted the worst horrors. Some students were tortured for two months; others, who were more cooperative, got away with a week."
The above is an overview of an epochal evil of staggering proportions; the following is one tiny detail. In 1949 the Romanian communists embarked on a “reeducation” program that, according to the philosopher Virgil Ierunca, involved “the most vile tortures imaginable”. Reeducation involved four phases. The aim of the first phase, “exterior unmasking", was to get the “student” to admit to anti-communist activities and links with anti-communist friends outside the prison. The aim of the second phase, "interior unmasking", was to get him to name people who had helped him inside the prison. The third phase, “public moral unmasking" was to get him to curse everything he had held sacred, his friends, family, lover and God if he had one. The fourth phase was to get him to join the torturers in the “reeducation” of his best friends. “Torture was the key to success. It implacably punctuated all confessions, between sentences. You couldn't escape the torture. You might perhaps be able to shorten it, if you admitted the worst horrors. Some students were tortured for two months; others, who were more cooperative, got away with a week."
The suffering in the gulags, which wern't confined to Siberia but were fixtures of most communist states, lasted much longer.
But there is a dimension to the communist atrocity that is missed by descriptions of torture regimes, maps of gulag archipelagos, chronicles of famines, statistics of mass murder, and analysis of dysfunctional economies. It is the billions of lives ground down and wasted in hopeless, cynical resignation and dependence on a system dictated by the omnipresent state. A typical attitude of middle-aged Russians during the 70s was: "give us food, a roof over our head, and work, and do whatever you want politically. Give us the material minimum. We won't ask for more."
Some communist experiments in non-communist countries escaped the brutality that characterized state communism, but not their economic frustrations and failures. Of these the most venerated were the kibbutzim, which cost Israeli taxpayers billions in subsidies, until they were privatized. In Australia taxpayers disregarded the billions they paid to support communally owned Aboriginal settlements, but the result, hidden for decades by vested interests, restricted access to the settlements, and politically-correct censorship, was: squalid degradation, drunken violence, child neglect, sexual brutalization, and hopeless despair.
Not every failure of the 20th century was the fault of communism, but every communist experiment was, by any human-life-based measure, a terrible failure. The communist world made some advances in weaponry and space travel, but of all the startling advances of that most inventive century that improved life on earth it is hard to think of one that was pioneered in any communist country, they were all pioneered in the more capitalistic countries, most of them in the most capitalistic country, the United States of America. The same goes for the more fundamental advances made during the 19th century. The vast sacrifices made in the name of communism were in vain - no human lives were sustained, no human values gained by communism, only despite communism.
But there is a dimension to the communist atrocity that is missed by descriptions of torture regimes, maps of gulag archipelagos, chronicles of famines, statistics of mass murder, and analysis of dysfunctional economies. It is the billions of lives ground down and wasted in hopeless, cynical resignation and dependence on a system dictated by the omnipresent state. A typical attitude of middle-aged Russians during the 70s was: "give us food, a roof over our head, and work, and do whatever you want politically. Give us the material minimum. We won't ask for more."
Some communist experiments in non-communist countries escaped the brutality that characterized state communism, but not their economic frustrations and failures. Of these the most venerated were the kibbutzim, which cost Israeli taxpayers billions in subsidies, until they were privatized. In Australia taxpayers disregarded the billions they paid to support communally owned Aboriginal settlements, but the result, hidden for decades by vested interests, restricted access to the settlements, and politically-correct censorship, was: squalid degradation, drunken violence, child neglect, sexual brutalization, and hopeless despair.
Not every failure of the 20th century was the fault of communism, but every communist experiment was, by any human-life-based measure, a terrible failure. The communist world made some advances in weaponry and space travel, but of all the startling advances of that most inventive century that improved life on earth it is hard to think of one that was pioneered in any communist country, they were all pioneered in the more capitalistic countries, most of them in the most capitalistic country, the United States of America. The same goes for the more fundamental advances made during the 19th century. The vast sacrifices made in the name of communism were in vain - no human lives were sustained, no human values gained by communism, only despite communism.
But must we decide between a pure form of socialism and a pure form of capitalism? Doesn't “democratic socialism” offer a middle-of-the-road, mixed-economy “third way”? After all, none of the democratic states who won the Cold War and triumphed over communism were pure laissez faire capitalist states. They had all, to a greater or lesser extent, nationalized industries, regulated markets, redistributed wealth through taxation and welfare policies and generally intervened into the economy to further socialist agendas. So wasn't it one form of socialism that triumphed over another form - the evolving impure form, over the revolting pure form?
This much is true, less pure forms of socialism failed less. Or, to put it another way, the more socialism was contaminated with private enterprise, from Lenin’s “New Economic Policy” of 1921 to Tony Blair’s “New Labour” of 1995, to the “economic conservatism” of Australia’s post Whitlam Labor politicians, the more success was achieved in its name. Or, to put it another way, the triumph belonged to the ideology that dared not speak its name.
By the end of the century, reality checks had pushed everyone with eyes to see and minds not corrupted by their PhDs to overtly or covertly recognize that if human well-being was the goal, capitalism was the system that delivered. Anyone genuinely concerned with: the banishment of famine, the prevention and cure of disease, the relief of poverty, the maximization of pleasure and minimization of pain, the opportunities for and of affluence, the freedom to pursue happiness on earth, was pushed by experience to advocate capitalistic rather than socialistic means. It was not only conservatives like Thatcher and Reagan but liberals like Blair and Clinton who were pushed in that direction; not only John Howard and Peter Costello but also Bob Hawke and Paul Keating.
Last year Allan Greenspan summed up the verdict of the 20th century as follows:
While central planning may no longer be a credible form of economic organisation, it is clear that the intellectual battle for its rival - free market capitalism and globalisation - is far from won. For twelve generations, capitalism has achieved one advance after another as standards and quality of living have risen at an unprecedented rate over large parts of the globe. Poverty has been dramatically reduced and life expectancy has more than doubled. The rise in material well-being - a tenfold increase in real per capita income over two centuries - has enabled the earth to support a six-fold increase in population. Yet for many, capitalism still seems difficult to accept, much less fully embrace.
The economic crisis has brought the anti-capitalists out of their bunkers. But it is not capitalism's crisis, it is a crsis of the mixed economy, and its root cause is the interventions of the government. Nevertheless, to the extent that free-enterprise has been allowed to operate it produced a level of prosperity that surpassed the socialists' wildest Utopian dreams. The semi-capitalist economies have a long, long, long way to fall before they descend to the highest level of prosperity ever achieved by socialism.
But “we simply don't have to choose between Friedrich von Hayek and Leonid Brezhnev” declared Kevin Rudd last August, we can move beyond the “straitjacket” of such “paradigms”, our “reforming centre” government can impose just the right controls that will curtail CO2 emission but not productivity, and allow the capitalists just enough freedom to produce the wealth socialists need to redistribute to “working families”, and impose just the right controls on financial activity to solve the crisis. But Rudd is wrong. We simply do have to choose between centrally planned dictatorship and economic freedom. Because "decisive action" to solve problems can either decrease or increase dictatorial controls over economic activity; and while controls create dislocations in the economy that breed more controls, freedoms create opportunities and demands for more freedoms; and in any mix it is the freedom part that improves our ability to live on earth and the dictatorship part that diminishes it. It is the freedom part that is moral and the dictatorship part that is immoral.
[1] The first act of the "people's tribunals" set up when the communists seized power in Bulgaria in 1944 was to dispose of more than 40,000 community leaders such as judges, journalists, priests, teachers and employers.[2] When Tito took over where the Nazi’s left off he dispatched 31,000 suspected opponents to Goli Otok, one of his many gulags, where they suffered unspeakable brutality.[3] After a communist reign that would impress Count Dracula, Romania’s agony finally ended when Ceausescu was shot in 1989.[4] Five variations of the intensity of the surveillance and brutality were tried in Poland between 1944 and 1989 in attempts to salve the economy.[5] During 40 years of communist rule, 400,000 Czechs fled the country.[6] The Berlin Wall had to be fortified with watchtowers, armed guards, barbed wire, guard dogs, vehicle trenches, and electric alarms to keep Germans from fleeing their workers state.
But “we simply don't have to choose between Friedrich von Hayek and Leonid Brezhnev” declared Kevin Rudd last August, we can move beyond the “straitjacket” of such “paradigms”, our “reforming centre” government can impose just the right controls that will curtail CO2 emission but not productivity, and allow the capitalists just enough freedom to produce the wealth socialists need to redistribute to “working families”, and impose just the right controls on financial activity to solve the crisis. But Rudd is wrong. We simply do have to choose between centrally planned dictatorship and economic freedom. Because "decisive action" to solve problems can either decrease or increase dictatorial controls over economic activity; and while controls create dislocations in the economy that breed more controls, freedoms create opportunities and demands for more freedoms; and in any mix it is the freedom part that improves our ability to live on earth and the dictatorship part that diminishes it. It is the freedom part that is moral and the dictatorship part that is immoral.
[1] The first act of the "people's tribunals" set up when the communists seized power in Bulgaria in 1944 was to dispose of more than 40,000 community leaders such as judges, journalists, priests, teachers and employers.[2] When Tito took over where the Nazi’s left off he dispatched 31,000 suspected opponents to Goli Otok, one of his many gulags, where they suffered unspeakable brutality.[3] After a communist reign that would impress Count Dracula, Romania’s agony finally ended when Ceausescu was shot in 1989.[4] Five variations of the intensity of the surveillance and brutality were tried in Poland between 1944 and 1989 in attempts to salve the economy.[5] During 40 years of communist rule, 400,000 Czechs fled the country.[6] The Berlin Wall had to be fortified with watchtowers, armed guards, barbed wire, guard dogs, vehicle trenches, and electric alarms to keep Germans from fleeing their workers state.
[7] After a 1956 uprising against communist rule in Hungary was crushed, 200,000 fled the country.[8] After the Vietnam war more than half a million people were sent to "re-education camps" where many were starved or beaten to death.[9] After the communists seized power in 1975, over 10% of the population fled Laos.[10] At least a million Cambodians were executed or tortured to death between 1975 and 1979, a similar number were starved or worked to death.[11] 1.5 million Afghanis, 90% of them civilians, were killed between 1979 and 1989, and a staggering 5 million refugees, nearly one third of the population, fled the country.[12] Relocation and collectivization was brutally enforced by the Mozambique communists resulting in 600,000 deaths by starvation between 1975 and 1985.[13] Communist rule in Angola from 1975 was ruinous, but the human cost was kept hidden until 1987 when UNICEF announced that tens of thousands of children had starved to death during the previous year.[14] Ethiopia was belatedly recognized as a true communist state by the Soviets in 1984 despite their displeasure that the Ethiopians had accepted Western aid to feed their starving people.[15] After wining a bloody civil war in 1979 the communists nationalized half the Nicaraguan economy, relocate Indian tribes, and brutally suppressed dissents, until resistance mounted into another civil war which lasted from 1983 to 1990.
