Book Reviews

132 BOOKS The Soviet Tragedy: A History of Socialism in Russia, 1917-1991 by Martin Malia The Free Press. 1994 • 575 pages. $24.95 Russia Under the Bolshevik Regime by Richard Pipes Alfred Knopf. 1994.587 pages. $35.00 Reviewed by Ralph Raico O n December 25, 1991, the Red Flag over the Kremlin was lowered for the last time. Yet many of us still find it hard to absorb the fact that Soviet Communism has ceased to exist. It will take some time to get used to the glad tidings. Meanwhile, we are now in a position to begin to answer the question: What was it all about? As Martin Malia, of Berkeley, puts it: "Soviet history is now for the first time really history, and this closure permits us to see the pattern or 'logic' of its life course." Malia does not mince words in his forthright and illuminat ing book: what Soviet history-" seventy years on the road to nowhere" -was about was socialism. The key to understanding the doleful Soviet experience is the Marxist dream: to construct a free and prosperous society by abolishing private property and the market. But that task, Maliaasserts, was and is inherently impossible. Releasing a blast offresh air into the musty, left-oriented field of Soviet studies, he pronounces so cialism to be nothing more than an "assault on reality."

Malia stresses the crucial significance of the period up to 1921, later-deceptively termed "War Communism." As free-mar ket scholars Paul Craig Roberts and Peter Boettke have demonstrated, War Commu nism was no mere make-shift, occasioned by the Civil War. Instead, it constituted the Marxist project: abolition of private property in the means of production, prohibition of exchange, suppression of money, etc. The results were so catastrophic that Soviet power itself was in jeopardy. Hence, Lenin's temporary retreat to a mixed.econ omy with the New Economic Policy, NEP. But NEP was not what the Communists had' seized power for. With Stalin in charge, the effort to achieve socialism was renewed. The first Five-Year Plan was announced, collectivization of agriculture begun. And terror and famine-already prodigious un der Lenin-reached staggeringproportions. Malia's figures for the victims of Stalin jibe with those of Robert Conquest and most other scholars of the period: around 20,000,000dead, from the Ukrainian terror famine, the Gulag, the Purges, and the ceaseless executions.

Stalinist planning, unlike War Commu nism, involved money, wages, and prices; thus, it represented a temporary deviation from the socialist ideal. So did the legal private plots and small markets for the peasants, as well as the de facto black market, or "shadow economy." Still, the Soviets were able to achieve real success in only one area: militaryhardware, into which enormous resources were poured. Malia mentions Ludwig von Mises and his argu ment against socialist planning, and he re fers to Peter Boettke' s book on the subject. Yet he seems unaware that this was the very heart of the matter, the essence of social ism's impossibility. As Mises showed, ra tional economic planning cannot take place in the absence of prices for producer goods, and no such prices can arise where all producer goods are owned by the state. Hence, the constant lurching from one eco nomic program to the next, always with the same result.

Malia is particularly harsh on the band of Sovietologists, who, for the most part,' apol ogizedfor the Soviet system. It represented, they averred, merely a variant form of modernization, one which had proved, by and large, successful. They banned the term "totalitarian" from discussion, as fueling the Cold War. As for Stalinist terror, it was an aberration. Some professors even minimized the number of victims to the point where, if they had been writing about the Holocaust, their works would have been banned in half a dozen democratic coun tries. When Khrushchev boasted of over taking the United States by 1970, Western media like The New York Times and Le Monde took him seriously. Similarly, up until the moment it fell, East Germany was rated an economic success by many West ern economists and journalists. Gorbachev understood that the shabby socialist economy was incapable of sustain ing a world power. Perestroika was intro duced, and with it glasnost, a limited open ing up of channels of criticism. Glasnost proved suicidal. The surrealism of Soviet society could not survive the light of criti cism. Inevitably, the ideological house of cards erected by the Party propagandists and disseminated by foreign fellow-travel ers over seven decades collapsed.

In 1989-that marvelous year-the Red regimes toppled one after the other. In the Soviet Union, the ruling class lost faith in its right to rule, and with it "the willto coerce." Today Russia is in an incomparably worse position than, say, Spain after Franco, or even West Germany in 1945. Despite dicta torship, civil society in those nations had never been pulverized, as it had in Soviet Russia. Above all, the principle and values of private property had been more or less preserved. In Germany, an inspired leader like Ludwig Erhard could build a new mar ket economy on the basis of what had survived. In Russia, three generations of Communist rule, as Malia points out, anni hilated civil society and created a vacuum. An "envious egalitarianism" and the vilifi cation of all money-making as "specula tion" are rampant. Malia's pessimistic prog nosis for Russia, unfortunately, rings all too true.

There are minor but surprising errors: Malia confuses the German socialist Karl Liebknecht with his father Wilhelmand the Franco-Russian Alliance with the Triple Entente, misquotes the first line of the "Internationale, " and states that Franco was aided by Germany and Japan, rather 133 than Germany and Italy. More seriously, he adheres to the outdated interpretation of the Industrial Revolution, whereby the masses impoverished by industrialism were only rescued by labor unions and a mysterious "safety-net" (which did not exist until de cades after workers' living standards had risen in all Western countries). Most strangely of all, Malia states that classical Marxism "had not made a central and ex plicit issue of the anarchy of market" -an interpretation directly contradicted by well known passages from Engels' Anti-Duhring and other classical Marxist works. All in all, however, this is an excellent work, and a much-needed antidote to dozens of apolo gias for the Soviet regime.

Richard Pipes' Russia under the Bolshe vik Regime takes a different approach. This sequel to the Harvard historian's The Rus sian Revolution, completes the trilogy he began some twenty years ago with his Rus sia under the Old Regime. The book covers the period from the outbreak of the Civil War to the death of Lenin (1918-1924). Some interesting new material recently re trieved from Russian archives is included, and some stimulating ideas are advanced. Pipes suggests, for instance, that the attrac tion felt by so many Western intellectuals for the Soviet regime is traceable to the fact that it was the first government since the French Revolution in which intellectuals like themselves-Lenin, Trotsky, and the rest-held the reins of power. Thus, "in Soviet Russia, intellectuals could expropri ate capitalists, execute political opponents, and muzzle reactionary ideas." But Pipes' work suffersfrom a fundamen tal flaw. Consistently with his previous views, he states that ideology was merely a "subsidiary factor," one that neither "de termined [the Communists'] actions," nor "explains them to posterity." Traditional Russia, not Marxism, is the key to under standing the regime's history, because' 'no where in the West has Marxism led to the totalitarian excesses .of Leninism-Stalin ism." Here Pipes overlooks the small fact that, in the West, socialist parties aban doned Marxism, starting with the German 134 THE FREEMAN • FEBRUARY 1995 SPD after the First World War. And how explain Bolshevik discipline and fanati cism-crucial to seizingpower and winning the CivilWar-without Bolshevik ideology?

How explain the final relinquishing of power, without the fading of faith in Com munism in the ruling class? In fact, contrary to Pipes, the Soviet experience taken as a whole is a classic illustration of the Misesian philosophy of history: in the end, it is ideas that, for good or evil, rule the world. D Dr. Raico is professor of history at the State University of New York College at Buffalo, and the author of Marxist Dreams and Soviet Real ities, published by the Cato Institute. Classicsin Austrian Economics, 3 volumes Edited by Israel M. Kirzner London: William Pickering and Chatto Publishers, Ltd., 1994 • xxxii + 355 pages; xx + 340 pages; xviii + 312 pages Reviewed by Peter J. Boettke W hen Carl Menger published his semi nal book on economic theory in 1871 he established a tradition ofeconomic schol arship that is still attempting to come to terms with his revolutionary insights into human action and the exchange process. As Mises reports in Notes and Recollections, it was upon reading Menger's Principles that he became an economist. From 1871 to the 1930s,this was figuratively true of all those within the Austrian School of Economics, including such well-known economists as Eugen von Bohm-Bawerk, Friedrich von Wieser, Franz Cuhel, Richard von Strigl, Hans Mayer, Paul Rosenstein-Rodan, Gott fried Haberler, Leo Schonfeld, Fritz Mach lup, Oskar Morgenstern, and, of course, F. A. Hayek. The 1930s, however, saw the destruction of the intellectual base for the Austrian School of economics, Vienna, as most of the remaining scholars within the tradition fled Austria to escape Hitler. Hab erler, Machlup, and Morgenstern launched successful academic careers in the United States at Harvard (Haberler) and Princeton (Machlup and Morgenstern). However, their Austrian roots-while forever present -were not emphasized in their economic scholarship during their professional period in the United States. Mises and Hayek, of course, continued to refine the Austrian tradition with their brilliant work on the trade cycle and on the problems of socialist economic and political organization, as well as their work on the philosophical founda tions of economic science. But, by the late 1930s, early 1940s, the Austrian School of Economics was thought to be either fully incorporated into the mainstream or soundly defeated in scholarly debate. This assessment has been subsequently proven wrong on both counts.

One of the difficulties with the Austrian tradition was plainly and simple translation difficulties. For example, Austrian capital theory formed the core of both the trade cycle theory and the critique of socialist calculation, yet economists trained in the English-language tradition did not see the point of the Austrian notion of a time struc ture of production, and therefore, were not particularly impressed with the Mises Hayek demonstrations of either the prob lems with malinvestment caused by mone tary manipulation or the inabilityof socialist planners to rationally calculate the alterna tive use of scarce capital goods amongst various investment projects. Certainly dur ing the period between 1940 and 1970 there were some prominent theorists who argued against inflationary monetary policy and the advance toward socialism, but they did not base their argument on the reasons associ ated with Austrian economics.

In the 1970s that was to change. First, in 1974 Hayek won the Nobel Memorial Prize in Economic Science, which brought with it renewed attention to the economic theory, as opposed to political theory, work he had done in the 1930s and 1940s. Second, be ginningin 1973, Israel Kirzner had started a resurgence of interest in the Austrian theory of the market process with his seminal Competition and Entrepreneurship. Kirzner also worked to establish an Austrian Economics Program at New York University, which supported both post-doctoral schol arship and student training in the Austrian tradition-the first institutional home for Austrian _School scholarship since the 1930s. Kirzner was a tireless champion for the Austrian cause. Since then he has published four additional works and edited two other collections of articles in the Austrian tradi tion. Now, he offers us a three-volume "sampling of a tradition" -as the subtitle states. Classics in Austrian Economics in cludes contributions to economic scholar ship made by all the individuals I listed above beginning with Menger. Volume 1 is devoted to the early contributions. Some of the chapters are available in other works, such as Menger's Principles or Bohm Bawerk's Capital and Interest, but many are not. In fact, as is the case with all three volumes there are original translations from the German that were produced for this project.

Volume 2, which covers the interwar years when Austrian economics flourished as a scientific body of thought, includes the an originaltranslation of the classic paper by Hans Mayer on genetic-causal explanation within economic science. In addition, Rich ard von Strigl's discussion of the relation ship between economic theory and eco nomic policy is translated. Volume 3 is devoted to the age of Mises and Hayek and contains many of their seminal articles on methodology, money and capital theory, and the nature of the market process (including the critique of socialism). Israel Kirzner must be thanked for bringingtogether such a fine" sampling" of the Austrian tradition. The price of the volumes (around $300) will preclude indi vidual consumption of these volumes . . . that is too bad, though understandable given the publisher's purpose in producing this volume, which is to supply the reference market within libraries. But, it would be good if word-of-mouth advertising helped the publisher place these volumes in as many libraries as possible.

Not only did Kirzner organize this BOOKS 135 project, but he provides substantive intro ductions to each volume. His introduction to volume 1, for example, is quintessential Kirzner. With careful scholarship, Kirzner demonstrates the unity between Menger's visionof economic science as emanating out of the human choice problem and Mises' project in Human Action. Moreover, his history of the rise, fall, and then resurgence of the Austrian School is, I would be tempted to say, worth the price of the book-though given the price of the vol umes this market is obviously what we economists refer to as very "thin." Never theless, Classics in Austrian Economics is an indispensable collection of material for scholars and students committed to serious study of the Austrian tradition. Hopefully, these volumes will make their way onto the library shelves at a large number of univer sities and colleges so that many will have access to their wealth of material. D Dr. Boettke teaches economics at New York University.

The Index of Leading Cultural Indicators: Facts and Figures on the State of American Society by William J. Bennett Simon and Schuster. 1994 • 138 pages. $8.95 paperback Reviewed by Wesley Allen Riddle W illiam J. Bennett, bestselling author of The Book of Virtues, has produced another dandy little volume, this one geared towards fast, easy consumption and future reference. The Book ofVirtues is an implicit companion, if only to indicate what's been missing in our society. Leading Cultural Indicators, however, stands alone. Its strength lies in the explicit message of chill ing statistics. Bennett's new book is a compendium of charts and graphs extracted from various government and private research sources 136 THE FREEMAN • FEBRUARY 1995 and is divided into five chapters: Crime; Family and Children; Youth Pathologies and Behavior; Education; and Popular Cul ture and Religion. There are also appendices on social spending and related economic indicators. The twelve-page introduction is perhaps the best and certainly the most succinct critique yet written on the destruc tive legacy of the Counterculture.

One of the salient points, easily drawn from data in the book, is that government solutions compound social problems. For instance, the growth of social ills literally parallels the growth in government social spending. While welfare gets 630 percent more money today than in 1960, long-term static dependency has actually increased. Of course, escalating welfare and social spending costs have translated into real tax burdens on working families with children. The hardest hit are the working poor and the dependent poor themselves. The data indicate that, by co-opting or undercutting individual responsibility, government pater nalism not only breeds dependency but depresses the economy and precludes the kind of long-term economic growth that would provide permanent solutions. In deed, it is clear that the staggering tax burden increases all kinds of stress on fam ilies, and many households have simply been unable to survive.

The divorce rate has more than doubled since 1960 and is the highest in the world, although down slightly from its peak in the early 1980s.There is a smaller percentage of households with married couples in the United States today than there has been for two centuries. Nearly one in two U.S. households is headed by single parents or involves some other non-traditional living arrangement. Abortions have skyrocketed since 1972,while one-third of all births in the United States today are out of wedlock. Fully seventy percent of African-American births in the United States are illegitimate. Moreover, the linkage between the break down of the American family, poverty, and the incidence of social pathologies is well established in the data. Government has failed miserably its primary function of protecting law-abiding cit izens from criminals. There has been a more than 500 percent increase in violent crime over the past thirty years. Yet the data show crime increasing and punishments declining both qualitatively and quantitatively. Public toleration, however, must also share the blame. The s~d fact of the matter is that many in society doubt they even know basic right from wrong, or if they do, their own self-esteem is so low as to mute public demand for retribution.

Leading Cultural Indicators includes some legislative proposals in the introduc tion, and while they strive to be "main stream," rather than representative· of a partisan political agenda or particular phi losophy, they belie Bennett's own compro mise with big government solutions. In each case his solutions may represent improve ment in policy over the status quo, but the people only get a more benevolent master. The apparatus of the State is the problem, and it is hard to imagine the imposition of federal sentencing guidelines, national edu cational standards and a national core cur riculum, federal tax incentives (conserva tive social engineering), IRS-directed garnishment of pay for deadbeat dads, and government identification of fathers by So cial Security number are the kinds of things that are needed. They offer no long-term solace from Leviathan; worse they are likely to be the wellspring of present and future bureaucratic abuses and myriad govern ment intrusions.

The book does, however, successfully issue a clarion call to concerned citizens. The data are highly useful and indicate that we are a society in crisis. The trends chart a decline of our civilization over some thirty years. Bennett acknowledges that govern ment alone cannot arrest the negative social trends he identifies; indeed, only individual responsibility and appropriate voluntary collective action can do so. We should add that it would be most prudent to do so. D Mr. Riddle is a faculty member at the U.S. Military Academy, West Point, where he teaches American History.