Rebirth of Reason


Machan's Musings - The U.S.S.R. Didn’t Fail Because of The U.S.
by Tibor R. Machan

I took part in a panel discussion recently, following a screening of the movie Crash at the college where I teach. After much talk about who should be blamed for racism, sexism, poverty, and the rest of the ills of the world—pop answer: "the class system"—we touched on how different political systems compare in solving socio-economic problems.

At my turn, I said that although there is much that can be improved about the U.S., in the main its semi-capitalist, mixed economic system tends to solve problems better than such alternatives as socialism, fascism, theocracies, monarchies, and other regimes found in recent history and around the globe today. I argued that in the main in the U.S. people are still required to look out for themselves via voluntary institutions, and this approach to problem-solving is more effective than top-down government management.

One panelist responded to this by claiming that, while Cuba (which is ostensibly a socialist dictatorship) and other centralized systems are cruel and mean—to, say, gays and journalists—their main problem is the U.S.; this country just will not allow them to flourish. Then he added that this was the problem with the Soviet Union—countries of the West would not permit its socialist dictatorship to succeed as it would have, had it been left to its own resources.

I took a bit of umbrage at this, having myself lived under the Soviet system in Hungary—which was its satellite country from the late 40s and early 50s until the late 1980s—and having witnessed the economic devastation their system wrought. We had no decent food, no appliances, no housing, dilapidated apartments everywhere, collective farms that failed to produce anywhere near enough food for the population, and, of course, near martial law day and night. People were being deported to Siberia for voicing criticism or dissenting views, and many committed suicide before they were picked up to be sent there. There was no free press, religion was nearly squashed; the place was basically a prison.

Back then the U.S. had virtually nothing to do with Eastern Europe and the Soviet Union. In fact, if anything, because the U.S. and U.S.S.R. were allies against Nazi Germany for the latter part of the Second World War, the U.S.S.R. had U.S. economic support back then. That support continued for many years thereafter.

In the ensuing time, until its collapse, the Soviet Union was not impeded economically by the U.S., but mostly left to its own resources. True, they spent an inordinate amount of money on building up their military during these times; the rulers told the people this was because of imminent dangers from the West. But, in fact, it was all a ruse. The West mostly took precautionary measures, mounting what was a defensive military posture and doing nothing much to threaten the Soviet bloc. Even when a huge majority of the people in some of the satellite countries rebelled, as in Hungary in October 1956, there was no military support offered from the West.

In fact, what happened was predicted by the eminent chief of the Austrian School of Economics, Ludwig von Mises, back in his 1920 book, Socialism. That is, a country with a socialist, top-down managed economy will sooner or later come a cropper. This is because one cannot plan what people want and what people can produce—this must be discovered in the free market system, in which freely-chosen buying and selling, via the price system, send signals to all concerned parties and manage most effectively to coordinate economic activities. Once the top-down socialist system of the U.S.S.R. went bust, even famous American socialists like John Kenneth Galbraith and the late Robert Heilbroner publicly admitted that von Mises’s analysis was correct. As Heilbroner put it in The New Yorker on September 10, 1990, "... Ludwig von Mises ... had written of the ‘impossibility’ of socialism, arguing that no Central Planning Board could ever gather the enormous amount of information needed to create a workable economic system .... It turns out, of course, that Mises was right ...."

Despite the historical evidence and theoretical analysis predicting that socialism is an economic dead-end, various dreamers continue to yearn for the system right here in the U.S. And their efforts are paying off in failed federal programs, to which they respond by asking for more. This is the result of thinking magically—some stuff will be made and some saints will distribute it just right, without letting free men and women do so.

It is very sad that this sort of thinking promotes the very measures that my fellow panelist laments and blames on the foresighted critics of socialism.

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