Memory Hole: Socialist Failures
Tea Party Economist
by Gary North: $72
Billion of Tax Money Spent on Global Non-Warming
What is the
longest-running socialist experiment? What has its success been?
asked you to defend the idea that socialism has failed, what would
you offer as your example?
modern socialism begin?
in the land of the free and the home of the braves. On Indian reservations.
invented to control adult warriors. They had as a goal to keep the
native population in poverty and impotent.
Did the system
work? You bet it did.
Has the experiment
been a failure? On the contrary, it has been a success.
When was the
last time you heard of a successful Indian uprising?
Are the people
poor? The poorest in America.
Are they on
the dole? Of course.
the U. S. Department of Agriculture allocated $21 million to provide
subsidized electricity to residents on the reservations whose homes
are the most distant from jobs and opportunities.
You can read about this here. This will keep them poor. Tribal
power means tribal impotence.
are dependent. They will stay dependent. That was what the program
was designed to achieve.
For some reason,
textbooks do not offer a page or two on the corruption, the bureaucratization,
and the multi-generation poverty created by tribal-run socialism.
Here we have a series of government-run social laboratories. How
successful have they been? Where are reservations that have systematically
brought people out of poverty?
The next one
will be the first.
Union lasted as a socialist worker's paradise from 1917 until 1991.
As a direct result of that experiment, at least 30 million Russians
died. It may have been twice that. China's experiment was shorter:
1949 to 1978. Perhaps 60 million Chinese died.
failed to deliver the promised goods. I can think of no topic more
suitable for a class in economics than a discussion of the failure
of socialism. The same is true of a course in modern world history.
A course in political science should cover this failure in detail.
of course. They do not begin with the fundamental challenge to socialist
economic theory, Ludwig von Mises' 1920 essay, Economic
Calculation in the Socialist Commonwealth. Why not? Because
most social scientists, economists, and historians have never heard
of it. Among people over age 50, the few who did hear of it heard
about it from some pro-socialist or Keynesian advocate, who wrote
what he had been told in graduate school in the 1960s, namely, that
the article was totally refuted by Oskar
Lange in 1936.
They are never
told that when Lange, a Communist, returned to Poland in 1947 to
serve in several high-level posts, the Communist government did
not invite him to implement his grand theory of "market socialism."
No other socialist nation ever did.
For 50 years,
the textbooks, if they mentioned Mises at all, said only that Mises
had been totally refuted by Lange. The Establishment academics dropped
Mises down Orwell's memory hole.
10, 1990, multimillionaire socialist author-economist Robert Heilbroner
published an article in the New Yorker. It was titled "After
Communism." The USSR was visibly collapsing. In it, he recounted
the story of the refutation of Mises. In graduate school, he and
his peers were taught that Lange had refuted Mises. Then he announced:
"Mises was right." Yet in his best-selling textbook on the history
of economic thought, The
Worldly Philosophers, he never referred to Mises.
failure of twentieth-century socialism began from the opening months
of Lenin's takeover of Russia. Output declined sharply. He inaugurated
a marginally capitalist reform in 1920; the New Economic Policy.
That saved the regime from collapse. The NEP was abolished by Stalin.
decade, Stalin murdered people. The minimal estimate is 20 million.
This was denied by virtually the entire intelligentsia of the West.
Only in 1968 did Robert Conquest publish his monumental book, The
Great Terror. His estimate today: closer to 30 million.
The book was pilloried. Wikipedia's entry on the book is accurate.
during the Vietnam War and during an upsurge of revolutionary Marxist
sentiment in Western universities and intellectual circles (see
The Sixties), The Great Terror received a hostile reception.
to Conquest's account of the purges was heightened by various factors.
The first was that he refused to accept the assertion made by Nikita
Khrushchev, and supported by many Western leftists, that Stalin
and his purges were an aberration from the ideals of the Revolution
and were contrary to the principles of Leninism. Conquest argued
that Stalinism was a natural consequence of the system established
by Lenin, although he conceded that the personal character traits
of Stalin had brought about the particular horrors of the late 1930s.
Neal Ascherson noted: "Everyone by then could agree that Stalin
was a very wicked man and a very evil one, but we still wanted to
believe in Lenin; and Conquest said that Lenin was just as bad and
that Stalin was simply carrying out Lenin's programme."
The second factor (1918) was Conquest's sharp criticism of Western
intellectuals for what he saw as their blindness towards the realities
of the Soviet Union, both in the 1930s and, in some cases, even
in the 1960s. Figures such as Beatrice and Sidney Webb, George Bernard
Shaw, Jean-Paul Sartre, Walter Duranty, Sir Bernard Pares, Harold
Laski, D. N. Pritt, Theodore Dreiser and Romain Rolland were accused
of being dupes of Stalin and apologists for his regime for various
comments they had made denying, excusing, or justifying various
aspects of the purges.
The Left still
hates the book, still attempts to say that he exaggerated the figures.
Then came The
Black Book of Communism (1999) which puts the minimum estimate
of citizens executed by Communists at 85 million, with 100 million
or more likely. The book was published by Harvard University Press,
so it could not be dismissed as a Right-wing fat tract.
The Left tries
to ignore it.
of academia has been to dismiss the entire experiment as misguided,
but not inherently evil. The cost in lives lost is rarely mentioned.
Before 1991, this was even more rarely mentioned. Prior to Solzhenitsyn's
Archipelago (1973), it was considered a breach of etiquette
for an academic to do more than mention it in passing, limiting
it to Stalin's purges of the Communist Party in the late 1930s,
and almost never mentioning forced starvation as a matter of public
policy. "Ukraine? Never heard of it." "Kulaks? What are kulaks?"
state of all socialist economies from start to finish is not mentioned.
Above all, there is no reference to critics in the West who warned
that these economies were large-scale Potempkin villages
fake towns created by the government to mislead the Leftist faithful
who came to see the future. They returned home with glowing accounts.
There is a
book about these naive, trusting souls, who were taken in completely,
Paul Hollander's Political
Pilgrims: Travels of Western Intellectuals to the Soviet Union,
China, and Cuba, 1928-1978. It was published by Oxford University
Press in 1981. It was ignored by the intelligentsia for a decade.
The best description
of these people that I have ever read comes from Malcolm Muggeridge,
who spent the early 1930s as a reporter for The Guardian in
Moscow. Everything he wrote was censored before it was sent to England.
He knew this. He could not report the truth, and The Guardian
would not have reported it if he had. This is from his volume 1
of his autobiography, Chronicles
of Wasted Time.
resident foreign journalists in Moscow the arrival of the distinguished
visitors was also a gala occasion, for a different reason. They
provided us with our best almost our only comic relief.
For instance, when we heard [George Bernard] Shaw, accompanied by
Lady Astor (who was photographed cutting his hair), declare that
he was delighted to find there was no food shortage in the USSR.
Or [Harold] Laski singing the praises of Stalin's new Soviet Constitution.
. . . I have never forgotten these visitors, or ceased to marvel
at them, at how they have gone on from strength to strength, continuing
to lighten our darkness, and to guide, counsel and instruct us;
on occasion, momentarily abashed, but always ready to pick themselves
up, put on their cardboard helmets, mount Rosinante, and go galloping
off on yet another foray on behalf of the down-trodden and oppressed.
They are unquestionably one of the wonders of the age, and I shall
treasure till I die as a blessed memory the spectacle of them travelling
with radiant optimism through a famished countryside, wandering
in happy bands about squalid, over-crowded towns, listening with
unshakeable faith to the fatuous patter of carefully trained and
indoctrinated guides, repeating like schoolchildren a multiplication
table, the bogus statistics and mindless slogans endlessly intoned
to them. There, I would think, an earnest office-holder in some
local branch of the League of Nations Union, there a godly Quaker
who once had tea with Gandhi, there an inveigher against the Means
Test and the Blasphemy Laws, there a staunch upholder of free speech
and human rights, there an indomitable preventer of cruelty to animals;
there scarred and worthy veterans of a hundred battles for truth,
freedom and justice all, all chanting the praises of Stalin
and his Dictatorship of the Proletariat. It was as though a vegetarian
society had come out with a passionate plea for cannibalism, or
Hitler had been nominated posthumously for the Nobel Peace Prize.
did not end in the 1930s. It went on to the last gasp of the Soviets'
economic deception. The long-term moral and intellectual bankruptcy
of the West's intellectual leaders was finally exposed in 1991 by
the acknowledged economic bankruptcy and tyranny of the Marxist
regimes that the West had accepted as a valid alternative to capitalism.
No better example
of this intellectual self-deception can be found than the case of
Paul Samuelson, economics professor at the Massachusetts Institute
of Technology, the first American to win the Nobel Prize in economics
(1970), former Newsweek columnist, and the author of by far
the most influential economics textbook of the post-war world (1948-present):
at least three million copies, 31 foreign languages. He announced
in the 1989 edition of his textbook: "The Soviet economy is proof
that, contrary to what many skeptics had earlier believed, a socialist
command economy can function and even thrive."
found that gem. He also found this one, far more damning.
records in his autobiography a discussion he had with the economist
Joseph Schumpeter and the sociologist Max Weber in 1918. Schumpeter
was an Austrian economist who was not an Austrian School economist.
He later wrote the most influential monograph on the history of
economic thought. Weber was the most prestigious academic social
scientist in the world until he died in 1920.
expressed happiness regarding the Russian Revolution. The USSR would
be a test case for socialism. Weber warned that this would cause
untold misery. Schumpeter replied: "That may well be, but it would
be a good laboratory." Weber responded: "A laboratory heaped with
human corpses!" Schumpeter retorted: "Every anatomy classroom is
the same thing." (Felix Somary, The
Raven of Zurich [New York: St. Martin's, 1986], p. 121.)
was a moral monster. Let us not mince words. He was a highly sophisticated
man, but he was at bottom a moral monster. Anyone who could dismiss
the deaths of millions like this is a moral monster. Weber stormed
out of the room. I don't blame him.
in 1920. That was the year in which Mises' essay appeared: Economic
Calculation in the Socialist Commonwealth. Weber gave it a footnote
in his masterpiece, published posthumously as Economy
and Society (p. 107). Weber understood its importance as
soon as he read it. Academic economists did not. Even today, there
are few references to it.
analytically why the socialist system is irrational: no capital
markets. No one knows what anything should cost. He said that the
systems would either violate the commitment to total planning or
else fail totally. He has never been forgiven for this breach of
etiquette. He was right, and the intellectuals were wrong. The socialist
commonwealths have collapsed, except for North Korea and Cuba. Worse,
he was right in terms of simple market theory that any intelligent
person can understand. That article is a testimony to the West's
intellectuals: "There are none so blind as those who refuse to see."
PROOF OF THE PUDDING
that the proof of the pudding is in the recipe. If it adds salt
instead of sugar, it will not be sweet. But academia is committed
officially to empiricism. It thinks statistical tests should confirm
theory. But the tests came for decades. The socialist economies
failed them and then published fake statistics. But still the West's
intellectuals insisted that the socialist ideal was morally sound.
They insisted that the results will eventually prove the theory
was famous for saying this to Nixon in the famous "kitchen debate"
of 1959. He had been a bureaucrat who survived under Stalin by overseeing
the murder of tens of thousands of people in Ukraine. He told
Nixon, "We will bury you." He was wrong.
are not informed of either the theory of socialism nor the magnitude
of its failures, both economically and demographically. In the pre-1991
era, this was easier than it is today. The intelligentsia now has
to admit that capitalism is more productive than socialism. So,
the tactic now is to say that it is morally deficient. Worse, it
ignores ecology. This was Heilbroner's recommended strategy in his
1990 article. He said that socialists would have to switch from
charging capitalism with inefficiency and waste to charging it with
nature of the failure of socialism is not taught in college textbooks.
The topic is glossed over wherever possible. It was easier to impose
sanctions against anyone in the related worlds of academia and journalism
Xiaoping announced his version of Lenin's New Economic Policy in
1978. But that did not get much publicity.
In 1991, Humpty-Dumpty
fell. All the kings horses and all the king's men could not put
him together again. Gorbachev presided over the final gasp in 1991.
He received "Time Magazine's Man of the Decade" in 1990.
In 1991, he became an employed ex-dictator. Socialism failed . .
. totally. But the intelligentsia still refuses to embrace the free
market social philosophy of Mises, the man who predicted the failures
of socialism, and who provided arguments to support his universal
That is why
it is a good idea to predict the demise of bad economic policies,
along with your analysis. "I told you so, and I told you why" beats
"I told you so."
North [send him mail]
is the author of Mises
on Money. Visit http://www.garynorth.com.
He is also the author of a free 20-volume series, An
Economic Commentary on the Bible.
2012 Gary North
Best of Gary North