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Chapter 33 of 115 · The Freeman 1982 by Foundation for Economic Education

Teachings of Soviet Experience; M. Hendrickson

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Spiritually and morally, the beliefs that the state ~s supreme and that the end justi~es the means have taken human beings to the depths of depra vity, as many have become willing to betray, enslave, and even torture any number of innocent vic tims. Is it any wonder, then, that "Whoever can ~votes with his feet,' simply fleeing ifrom this mass vio lence and destruction"? Economic Les.ons Economic laws, like· the laws of physics, are di~covered, not devised by men. The Gommunist rulers of the Soviet Union have tried to rennn 230 THE FREEMAN April peal those inexorable laws, and, in spite of their repeated failures, they persist in issuing bureaucratic de crees that attempt to revise the way the world works. In their self-delud ing hubris, they act as though all action will conform to socialist plan ning. It is a fact of life that human beings value more highly and will husband more carefully what they own than what they don't own. That is why the small, privately owned garden plots which have been permitted in the USSR account for 62% of the po tatoes, 32% of fruits and vegetables, 47% of the eggs, and 34% of all milk and meat produced in the country, even though these private plots con stitute less than one per cent of the country's agricultural land.! Yet, in spite of this impressive record and the chronic problem of food short ages in their country, the Kremlin refuses to heed the sound advice of Russian exiled dissident Alexander Solzhenitsyn to "give up the forced collective farms and leave just the voluntary ones."

The productivity of industry also languishes under its socialist direc tors. One major reason is the lack of incentive for workers and managers when all profit goes to the state. "Technological improvements de veloped in costly research institutes are ignored because no one will profit directly by introducing them." Rus sians naturally want to profit as do all human beings. However, they don't stand much chance of profiting by honest means, so they sometimes resort to dishonest means for per sonal gain. Dishonesty, of course, occurs in all countries, but Yankee ingenuity would be hard put to du plicate this mind-boggling fraud re ported in a recent article: When senior party officials dedicated a long-awaited, badly needed tractor-re pair plant last year, "Pravda" (which means "Truth") extolled it as "not a fac tory (but) a beautiful work of art," and the responsible comrades awarded each other the usual round of medals. No such factory existed. 2 Soviet experience has conc1u sively demonstrated that socialist production is inherently inferior to capitalist production. Lack of incen tive is a major reason. But even if workers were uniformly motivated around the world, the socialist coun tries would be poorer because eco nomic calculation is outlawed (de facto if not de jure).

In a CapitalistOrder In a capitalist order, each individ ual demands what he values most in the marketplace. He indicates ap proximately how much he values different products by how much he is willing to pay for them. These ap proximate objectifications of value called "price"-are the signals which communicate to producers what they need to produce, and at what cost, if 1982 TEACHINGS OF SOVIET EXPERIENCE 231 they are to attract customers and stay in business. As consumers' hierarchies of values change mo ment by moment, these changes are transmi tted through the pricing network. Entrepreneurs then seek to re,organize scarce factors of produc tion so efficiently that they can offer a good that 'consumers want at a price which they are willing to pay, and still end up with a profit. Because goods which are valued highly cost dearly (depending on the available supply) they tend to be conserved and used efficiently, and so greater satisfaction (greater pros perity) results than would be the case under socialism where the value sensitive pricing mechanism has been rejected. Production under so cialism is grossly uneconomical be cause the decrees of state officials supplant and suppress the economic values of individuals as reflected in prices freely arrived at in the mar ket.

Socialist planning is uneconomi cal also because it is totally un suited for coping with change. Whereas the prices of commodities in the United States fluctuate mo ment by moment on the commodity exchanges, reflecting shifts ·in sup ply and demand, and so enabling each commodity to go to where it is most valued in the economy, in the Soviet Union, commodities are allo cated by state officials who are in capable of perceiving what the most urgent needs for any given good are at any given Jnoment. Politics su persedes economics. When consider ations of valu¢ are supplanted by considerations of power, chaos in production ensues. The only reason why the blind planning of the social ist commissarsi in the USSR has not resulted in total chaos and much more severe pqverty has been that the Soviet leaders have been able to observe the allocation of resources in the non-sociailizedeconomies of the world.

Copying Mark~t Gains Since Soviet industry is so notori ously unprodu~tive, one may won der why the USSR is nonetheless known as an in~ustrial power boast ing awesome n).ilitary might and a leading role in space exploration. First of all, since the individual in the USSR has rio rights, it has been relatively easYi for the state plan ners to build l!Jp the military and space industries at the expense of consumer-oriented industries.. Sec ondly, the Krem~in has imported vast amountsoftechnicalequipmentand knowledge from ~ore productive (i.e., capitalist) coun~ries, most notably, the United States. The Soviet rulers have.purchased~often on credit, and on terms more favorable than Americans caniobtain-everything from the miniajture ball bearings which are essential for the accurate guidance of intercontinental mis232 THE FREEMAN April siles to the capital, technology, and managerial expertise used at the Kama River truck factory (the larg est such factory in the world) where the tanks which have been used in Afghanistan were manufactured.

Thirdly, Soviet agents have suc ceeded in pirating technology from the West. Solzhenitsyn eloquently summa rizes the pathetic performance of production under socialist planning in his homeland: What kind of country is it, what kind of great power, with tremendous mili tary potential, that conquers outer space but has nothing to sell? All heavy equip ment, all complex and delicate technol ogy, is purchased abroad. Then it must be an agricultural country? Not at all; it also has to buy grain. What then can we sell? What kind of economy is it? Can we sell anything which has been created by socialism? No! Only that which God put in the Russian ground at the very begin ning, that's what we squander and that's what we sell.3 SociologicalLessons The social structure of the Soviet Union is an egalitarian's night mare. Far from eliminating class distinctions, the socialist system deepens and perpetuates them. Ob servers differ as to how many strata or "ranks" (to use a term which is apropos for the militaristically regi mented social order) but they are unanimous in acknowledging a class structure that is so rigid that Russian critics refer to "caste expe diency" and a "boss class." Favors are bestowed by the state; favors are taken away by the state.

Tremendous tensions must inevi tably exist because of the way the social organization, the USSR's body politic, is presently constituted. The idea of class exploiting class, which is little more than a fantasy in a capitalist system where individuals are free to excel in the competition of servicing the needs of their fel lows, is a cruel, ugly reality in the USSR. The elite minority plunders the masses, and the masses know it. Certainly, some of the victims are fatalistic about their plight, but many others bitterly resent their exploitation. The present system may endure, or it may not, but one way or the other, violence remains the central characteristic of the USSR's social organization. The use of forced labor in Soviet Russia is as characteristic of social ism as is the impossibility of calcu lating value. If the 40% of the Soviet population which are forced to work the collective farms as virtual serfs cannot feed the Soviet Union's pop ulation, and managers will take credit for the construction of facto ries which don't even exist, one can scarcely imagine how unproductive, or even counterproductive, the labor of the zeks (the prison camp in mates) is.

1982 TEACHINGS OF SOVIET EXPERIENCE In The Gulag Archipelago Two, Solzhenitsyn included several ex amples of the deliberate destruc tiveness ofzek labor, and concluded, in something of an understatement, that the Soviet state (Le., the peo ple) is poorer as a result ofusing slave labor than it otherwise would have been. He also dispels the myth of the glory and honor of working in a so cialist state, asserting, "The labor of the zeks was needed for degrading and particularly heavy work, which no one, under socialism, would wish to perform." Special Privileges Granted the Ruling Elite Many amenities which a citizen can procure in the marketplace in the West, a Soviet citizen can re ceive only through the state. The greatest perquisites are, of course, reserved for ranking officials of the Communist Party. Solzhenitsyn tells us that they have country estates and that they ban the noisy maneuvers of the Soviet Air Force over those estates.

Reporter David K. Willis writes in the Christian Science Monitor (Jan uary 14, 1981) of special stores stocked with imported treats, ofparty tailors, travel privileges, spacious apartments, private lanes on the highways for official cars (which are chauffeur-driven luxury models, of course) and an entire "network of exclusive polyclinics, hospitals, and health resorts" ("It's rather like liv ing in the West, only you're still here," explains Qne client) which the average citizen never even sees. The doling out of privileges has been one of the major Pavlovian tools-the "carrot" to go along with the "stick" of pqson camps-used by the Communist! rulers of the Soviet Union since the Bolshevik coup to further their designs. That they have been successful in winning alle giance (however precarious it may be in some cases) is apparent to all. Solzhenitsyn cynically writes of sci entists who "are rewarded with a life of plenty and p~y for it by keeping their thoughts at the level of their test tubes."

The antisoci~l (Le., anti-individ ual) acts ofplun<ler and robbery-of institutionalized class exploita tion-have prevented a genuine so ciety, based on i voluntary coopera tion, from deve~oping in the USSR. The present social organizationborn and bred in violence, and maintained by violence-will ulti mately perish ill violence. After decades! of having their ba sic rights of lif~, liberty, and prop erty restricted,: attacked, and de nied, the variolls ethnic groups masses of angry, abused individu als-may very well over-react, lash out in a fury of pent-up resentment, and try to seize i what they, in self righteous rationalization, believe to be theirs. That is why Solzhenitsyn 234 THE FREEMAN April believes that the Communist dicta torship in his country needs to be succeeded by an authoritarian gov ernment, which would keep various elements of the population of the USSR from killing each other off. By keeping the peace-that is, by pro tecting the life, liberty, and property of all individuals-a strong govern ment would protect those conditions which are necessary for the devel opment of a true society comprised of individuals freely cooperating so as to promote their mutual well being.

The most important sociological lesson to be gleaned from Soviet ex perience is this: when individuals band together with the intent of wringing natural individual ine qualities out of the social structure by unequal applications of force, the inevitable result is a command sys tem, a. system which is necessarily ruthless to the degree that it insists on trying to undo what nature has done. Such a system destroys natu ral social cooperation, sows the seeds of future violence, and, in a perver sion of its stated objective, eventu ates in a social organization in which class divisions are more pronounced and less flexible than is the case in a free society. PoliticalLessons In a system of free men, any indi vidual who excels at satisfying the needs of his fellowman is rewarded by an impersonal market for his achievements. In such a system, ser vice to one's fellowman determines wealth and privilege. In a socialistic command system, on the other hand, the way to privilege is to help keep one's fellowman under the subjec tion of Caesar. Personal favor deter mines wealth and privilege.

"In a country where the sole em ployer is the State, opposition means death by slow starvation. The old principle: who does not work shall not eat, has been replaced by a new one: who does not obey shall not eat." With those grim words, Leon Trot sky described the totalitarian grip which the communist rulers of the USSR hold on the populace of their vast territory. That is the reality of the political. order in a socialist sys tem-a system which Karl Marx viewed as progressive. As economist George Reisman has observed, "The complete and utter powerlessness of the plain citizen under socialism can hardly be exaggerated. Under so cialism, the plain citizen is no longer the customer, 'who is always right,' but the serf, who must take his ra tions and like it."4 In the Soviet Union, the individ ual citizen is virtually without rights. This has been so ever since the Com munist takeover. What the state (i.e., the ruling elite) wants, it takes.

Those who once resisted the expro priation of their property in Com munist Russia were liquidated. Those 1982 TEACHINGS OF SOVIET EXPERIENCE 235 who object too vocally today are banished to Siberia or otherwise si lenced. That is the nature of politics in a socialist state. The public ownership of the means of production includes the public ownership of labor. Solzhenitsyn writes, "We are slaves there from birth." The ultimate form of slavery in the USSR is the zek, who is sub jected to treatment far worse than that endured by most of the slaves throughout history. Most slaves in ancient Greece and Rome, and in pre Civil War United States were re garded as private property. As such, their owners at least had an incen tive to keep them healthy. The zek, on the other hand, belonging to the state, is in a position in which none of his supervisors finds it in his self interest to be concerned about the zek's well-being, and so millions of zeks have found their prison term tantamount to capital punishment.

PeopleAre Expendable The experience of applied social ism in the Soviet Union demon strates that the welfare of the prop ertyless citizen is of little concern to the state authorities. Subjugation is all that matters to the bosses. This has always been the case. Solzhen itsyn relates that the Volga famine of 1921 illustrated "a typical Com munist technique: to struggle for power without thinking of the fact that the productivity is collapsing, that the fields ~re not being sown, that the factories stand idle, that the country· is sinking into poverty and famine." In other words, the people are expendable. What had been her alded as the "dictatorship of the pro letariat" has in r~ality become a dic tatorship over those proletarians who manage to survive. For decades, the official rhetoric has assured Ivan that his grandchil dren would enjjoy unprecedented prosperity, yet that promise is still far from fruition, and the achieve ment of affiuenice remains in the ever-receding future. The modus operandi of thelpolitical leaders of the socialist state is to plunder its subjects in the present and offer them a rosy picture ofia distant future as compensation.

The despotism iofthe Soviet rulers is not an esoteric!matter for political scientists in thei We8t to debate as an academic issue. Rather, it is a phenomenon of tremendous import to every single Westerner, for the objective of the ~oviet Union's over lords is to exteJ)d their hegemony over the entire g~obe. Is it logical to suppose that tyrants who have shown no compunction~ about brutalizing and enslaving their compatriots would respect th~ life and property of peoples of fore~gn lands? Solzhenitsyn :las repeatedly re minded Westerners of one of histo ry's oft-repeated, seldom-learned lessons: that the evil of tyranny 236 THE FREEMAN April grows ever more aggressive until it is bravely confronted and defeated. Those who try to appease tyranny will eventually find themselves at tacked by those very tyrants, and if they are fortunate enough to be able to vanquish the aggressors, it will only be at a cost far greater than would have been necessary had an unflinching moral stand been taken against the tyranny at the outset.

Of the present incarnation of tyr anny known as Communism, Solz henitsyn writes, "... a concentra tion of world evil is taking place, full of hatred for humanity. It is fl;llly determined to destroy your society." That may sound like melodramatic hyperbole to the average American, but it corresponds completely with the stated nature and objectives of the Communist movement, and, more importantly, it corresponds to the anti-human reality of life in the USSR and other Communist-domi nated lands. Any thought that this menace will go away if it is ignored is wishful and dangerous thinking. It must be confronted. Moral and SpiritualLessons The well-documented villainies which characterize Communist rule are vivid examples of the destruc tiveness that results from accepting the relativity of morality. The es sence of moral behavior between in dividuals is a reciprocal respect for rights, upon which basis free individuals may enter into voluntary associations (contracts) with others.

On this moral basis, society and cul ture develop. Communist ideology claims to be a substitute for moral ity and rejects individual rights, traditional social bonds, and estab lished cultural mores. The goal of communist ideology is to bring om nipotence to earth in the form of a socialist state. Just as the Jacobins used appeal ing promises of liberty, equality, and brotherhood as an ideological justi fication for lawless violence, so also do the Soviet leaders use their ide ology-that Communism will result in the "most radiant, most happy so ciety" -as a justification for any act, including arbitrary mass murder. Part of Lenin's ideology was that traditional rights must be violently eliminated. When Lenin encouraged the Russian peasants to seize land for themselves in the early months of his reign, he achieved his objec tive: to plunge the countryside into anarchy. This anarchy, of course, paved the way for Lenin and his co horts to "save the day" and restore a sense of order. It is this divide-and conquer technique (the destruction of social bonds and subsequent ab sorption of weak, isolated groups) which has been the Communists' primary method of enslaving the Russian people ever since the days of Lenin. This is what the Commu nist rulers must do if they are to 1982 TEACHINGS OF SOVIET EXPERIENCE 237 achieve their goal of replacing a so ciety of individuals with a collective.

As Ludwig von Mises explained in his definitive work on Socialism (1922): To make Collectivism a fact one must first kill all social life, then build up the collectivist state. The Bolshevists are thus quite logical in wishing to destroy the social edifice built up through countless centuries, in order to erect a new struc ture on the ruins. The Marxian Religion The ideology that asserts that mo rality is relative, that materialism is the only truth, and that the state is supreme, is a religion. This Marx ist-Leninist ideology is not yet per ceived as a religion, but that is what it is. Like Christianity, it preaches a Savior-the socialist state-on the path to heaven-a stateless Com munist world; it teaches that man's purpose in life and his present and future salvation depend on how well he serves this master, and it con stantIy appeals to faith, for many of its prophecies have not yet been ful filled. Seen in that light, it is ironic that the thoughts of Jesus of Naza reth cannot be taught in the schools of the United States because of the separation of church and state, while the teachings of Karl Marx are sub ject to no such sanction.

The Soviet leaders do not tolerate any questioning of Marxian dogma. The official line is "He that believeth shall be saved." The problem is, when such major prophecies as: the workers of the West will sink stead ily into total poverty; Communist revolutions will break out in the more advanced iindustrialized coun tries; wars occur only in capitalist countries-when all these major predictions are contradicted by the historical record of Soviet experi ence' nobody believes in the old Marxist-Leninist religion any more. However, the priesthood (the Cen tral Committee lof the Communist Party) retains tl).e outward form of the religion, bec~use it dares not re linquish its powet and privilege. And so, like the Aztec priests of Tenoch titIan, who sacr~ficed human lives on the altar of th~ sun god, the Com munist Party leaders sacrifice hu man Iives on tla.e bloody altar of Marxist-Leninist ideology, and so maintain their r¢ign of terror.

In addition to iteaching the West the nature of the iCommunist threat, Solzhenitsyn te~ches us the most important lesspn of all: how to triumph over it. lie explains: We, the dissident~ of the U.S.S.R., have no tanks, no weappns, no organization. We have nothing. Our hands are empty. We have only our: hearts and what we have lived through in the half century under this system. 4nd whenever we have found the firmness within ourselves to stand up for our rights, we have done so. It is only by firmness of spirit that we have withstood. And if I am standing here 238 THE FREEMAN before you, it is not because of the kind ness or good will of Communism, not thanks to detente, but due to my own firmness and your firm support. They knew that I would not yield an inch, not a hair's breadth. And when they could do nothing they themselves fell back. Unceasing resistance is the lesson he would have us learn. And how, specifically, can the West resist the advances of Communism? Certainly by military means, but more impor tantly, by affirming a consistent moral position-practicing and pro moting freedom of individual eco nomic activity; not assisting the Kremlin through trade and aid; not signing treaties (such as the Hel sinki accords) which legitimize So viet aggression; refusing to live at the expense of one's fellow man; re jecting the insidious teaching that morality is relative and the end jus tifies the means; affirming in word The Lawyer's Duty and deed that all individuals have certain inalienable rights; being concerned with more than mere ma terial ease, for liberty, if not vigi lantly guarded, is lost. This is the message of Alexander Solzhenitsyn.

If we heed his warning and emulate his courageous stance against Com munist tyranny, the West shall in deed prevail against this aggressive, worldwide attack against individual liberty. ® -FOOTNOTESIHedrick Smith, The Russians (New York: Quadrangle/The New York Times Book Co., 1976), p. 201. 2George Feifer, "Russian Disorders," Harp er's, February 1981. 3Alexander Solzhenitsyn, Warning to the West (New York: Farrar, Straus and Giroux, 1976). 4George Reisman, The Government Against the Economy (Ottawa, Ill. and Thornwood, N.Y.: Caroline House Publishers, Inc., 1979), p. 164. IDEAS ON LIBERTY THE LAW is a "department of conservation," and you are one of its offi cers. Everything you do for a client, in your office or out, that is honor able and ethical, will be done to preserve his rights under God and the law. Your profession, therefore, is a conservative profession, because you are trying to keep this client as you found him, trying to preserve him, his person and his property and his liberty. The lawyer who is on the other side, who represents the state, in a criminal case, is trying to preserve the liberty of the man who was defrauded, or the man who was maimed, or murdered perhaps. From the beginning to the end of every lawsuit you are in the process of conservation. Consequently, I think that the division of our population into right and left, and conservative and liberal, is a fragmentation of the proper meanings of words.

CLARENCE MANION, "Right and Wrong-Not Right and Left"

The Freeman 1982

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