The USSR was bust from the start, but through suppression of its people the myth lasted seventy-two years from the revolution in 1917. The softer, western socialist version has been running now for over ninety years, and it’s in trouble…
From Alasdair Macleod:
One of the saddest things about Britain’s recent general election was the level of ignorance displayed by all parties on the broad subject of political economics. I use the term to include both political philosophy and pure economic theory.
Labour, the Liberal Democrats and the Scottish Nationalists seem to think free markets are right-wing. The Conservatives appear to have lost all compass, most government ministers believing free markets without government regulation are chaotic, with unscrupulous traders free to rip off consumers. But then all politicians are elected to intervene, so by default they are likely to think that government can improve on free markets.
It is an issue that bedevils politics in all the developed nations, but the roots go back a hundred years. Political extremes in the last century were both socialist. On the left there was communism, a political system where the state takes possession of the means of production for the common good. It was an attractive idea for those who thought of themselves as underdogs in society, envious of their richer neighbours, and who feared the effects of economic change on their own future. They were encouraged to think that the profits capitalists made could be theirs, owned by the state in trust for themselves. The state would organise production and guarantee employment.
On the right, there was fascism. Fascists allowed individuals to own property so long as they produced what the state commanded them to produce. Fascists regulated the means of production, in a manner like today’s governments, except that today’s regulation is nominally in favour of the people, rather than for the state itself. In practice, though the intent is different from communism, the result is the same.
Both systems are economic failures. We saw that with the end of Soviet and Chinese communism, which eventually revealed the full horrors perpetrated in the name of the state, tens of millions having been killed or starved to death. Strict control of information and its replacement by state propaganda concealed these terrors from a gullible west. This contrasted with the European fascist movement in the 1930s, which led to a flood of Jewish refugees with their evidence of anti-Semitic nationalism. And if you were an intellectual at a British university, fully aware of the horrors of Fascism, you were very likely to turn to the left, given that Russian propaganda portrayed communism as a political and economic system that worked, having successfully concealed its true inhumanity.
Left-leaning followers of Karl Marx misrepresented free markets as the peoples’ enemy. This is not so. In free markets, the customer is supreme, however humble he or she may be, and the producer must dance to his or her tune. All progress in standards of living have come from free markets. When communism in Russia and Eastern Europe finally collapsed, we witnessed a static time-warp. Farmers were still ploughing with horses, and these countries were still populated with long-suffering peasantry. The difference between economies where free markets prevailed and where they were suppressed was remarkable.
Whole populations had been duped. Would they now turn the clock back to those bad old days? Yet the capitalist countries still flirt with these ideas. Politicians on the left are particularly persuasive, because they believe fervently in socialism. There’s nothing so convincing as an orator, or preacher, who holds firm beliefs to the exclusion of anything else. The appeal goes far beyond die-hard Marxists. The principal of distributing money from the rich to the poor appeals to a wider Christian morality, and many Christians do not stop to consider whether the state is the right medium for redistribution.
Despite the clear evidence of socialism’s failings, Jeremy Corbyn in the UK’s general election managed to enthuse the young, as well as a good number of those in the 30-40-year age group. He did this because he is an evangelist for Marxism. In comparison, Teresa May failed to communicate any beliefs, appearing instead to be evasive.
She abandoned free markets entirely, leaving the Conservatives without any political philosophy, and it showed. Consequently, there was no attempt to refute Corbyn’s Marxism.
Modern democracies are not run on reason, but on belief. Politicians need to argue cogently why the beliefs they oppose are mistaken, instead of ducking the issue, as did Mrs May. Comparisons between her and Mrs Thatcher are incorrect, because Mrs Thatcher believed in free markets, and was prepared to argue her case.
The fact is that free markets are politically neutral. They are without politics. They are just the freedom between buyers and sellers to agree to exchange goods for money, which is the temporary agent between other purchases. We are all buyers and sellers, buying what we need, and selling our productive skills to pay for it.
The state, as agent for redistribution, cannot act on our behalf and achieve what we actually want. It is less efficient than we are as individuals, so ends up destroying a portion of our wealth. The difference between a poor community and a rich one is wealth. If wealth could be transferred from the rich to the poor without friction, there might be a case for redistribution by the state. But this is not so. On government figures, anything between forty and sixty per cent of a modern European economy is transferred to the state from those that earn a productive living. None of this transfer is demanded by free markets. This level of intervention in ordinary peoples’ affairs goes far beyond that needed by Christian morality, the belief-basis for most caring voters who elect socialist governments.
Yet these high levels of intervention are still not enough. Demand for free healthcare, it turns out, is infinite. Any student of Carl Menger, the Austrian economist who rationalised price theory in the 1870s, could have told us that this would happen. Equally, free government money, either obtained by the state from taxation or by borrowing or printing it, has infinite demand. And surely, Christians expect the unfortunates, those fallen on hard times, the sick unable to earn for themselves, pensioners with insufficient savings, to benefit from state welfare. Yet the system, bureaucratic in its protection of financial resources, consistently fails to deliver support where it is needed.
Modern socialism is communism-light. Who can draw a line between the economic principles that bankrupted the USSR, and those espoused by the Jeremy Corbyns of this world? Who can draw a sound theoretical distinction between the USSR, which commanded everyone’s’ property for the benefit of the state, and the half-way house of European social democracy?
The essential difference is time. The USSR was bust from the start, but through suppression of its people the myth lasted seventy-two years from the revolution in 1917. The softer, western socialist version has been running now for over ninety years, and it’s in trouble. Yet no free-marketeer seems to have the wherewithal to challenge the simple fact that modern anti-market beliefs will in time prove as destructive as the communism of the USSR.