2009-11-09

Why didn't it work?

Marge, I agree with you -- in theory. In theory, communism works. In theory.
- Homer Simpson.
Communism failed for many reasons, not least due to the effects of Stalin's dictatorship. Yet modern communists are quick to point out that Communism as a theory doesn't exclude free and fair elections, nor does it by nature result in a dictatorship of the sort we saw under Stalin. And you know what? They're right. But there's no point protesting and saying "True Communism has never been implemented" when the simple fact is that a massive long-term communist experiment was tried in Russia between 1917 and 1991 and, while it did lead to many notable successes (Nuclear weapons, Space Program, recognised superpower) we need to remember that it did collapse.

One of the more interesting subjects I studied at Macquarie University was "Modern Russian History", taught by David Christian. Christian was a communist in his youth and did his post-grad work in Leningrad in the early 1970s. Over time he became a critic of communism - not so much because of an ideological shift but because he came to realise that, as an economic system, it failed to deliver what it promised. He pointed out that whenever the Soviet Union wanted to increase the production of goods (eg wheat, tractors, AK-47s) it would simply increase the amount of factories or farming land to achieve it. To put it mathematically, if x is the amount of land set aside for growing wheat, and y is the output of wheat, then the path to 2y is to 2x - doubling the output meant doubling the means of production. The problem arose when there was no more room for increasing output - short of felling Siberian forests and forcing women to have lots of babies.

Capitalism, by contrast, (and this is Christian's argument), sought to increase production by increasing efficiency and productivity - and the way this was done was through profit driven innovation. Rather than being content with 2x = 2y, capitalism sought to change the equation to read x = 2y, to increase production without increasing labour or space or equipment by the same proportion. Christian therefore concluded that, in the "war of ideologies" that typified the post-war world, Capitalism had won because it was able to (eventually) deliver better and cheaper goods and services for people. Christian did not embrace capitalism, though - he still saw within industrial capitalism the exploitation and suffering of workers and thus the seeds of dissent that Marx saw. (note: this is my summary from memory of what Christian argues in his book Imperial and Soviet Russia).

Christian's arguments are very cogent because he steers away from the Stalinistic dictatorship / loss of democracy line of argument that so many people today use to explain Communism's failure. While it is no doubt true that Stalin and the lack of democracy were serious blights upon communism, their presence alone did not lead to communism's collapse. There are three nations today which espouse communism - China, North Korea and Cuba. Of those three, only one (North Korea) has remained ideologically true. China and Cuba abandoned Communist principles decades ago, and these nations have essentially become undemocratic societies with varying degrees of free market activity and private ownership of wealth (anathema to pure communism). By contrast, North Korea continues to be the beacon of hope for the workers of the world, and what a terrible, inefficient, controlling and frightening beacon that has turned out to be.

So all hail capitalism? Not quite, of course. I have often in the past compared the misguided ideological purity of the communist party to the ideological purity of conservatism - especially political conservatism in the United States. This is one of those times.

Modern American Conservatism (modern) can be traced back to the election of Ronald Reagan in 1981. For the past 28 years, US political discourse has been dominated by conservative beliefs and ideals. Yet in that time we have not only seen lower GDP growth than the previous period, but also a massive shift of wealth to the rich. Real median household income growth since 1981 has, according to the Krugmeister, been around 0.7% per year. Moreover, US Census figures clearly show that median income has stagnated since 2000, while the top 5% of wage earners have increased their income by 25% over the same period.

Then we add to this the ridiculous level of credit market debt as a percentage of GDP, which shows just how much of America's current wealth is illusionary. Also add the massive expansion of public debt under Reagan and both Bushes, the financial corruption of conservative politicians in recent years, the FEMA debacle in New Orleans and, of course, the housing bubble and credit market collapse which has led the world into the worst economic downturn since the great depression. Not to mention the conservative controlled Federal Reserve Bank (Alan Greenspan and Ben Bernanke were both appointed by conservative Presidents. Alan Greenspan was a disciple of conservative philosopher Ayn Rand).

Conservatives will, of course, offer all sorts of retorts to these problems. Conservatism doesn't condone corruption; conservatism demands fiscal prudence; conservatism demands good government. Yet there is no doubt that conservatives held onto political power during the period of history in which corruption, fiscal stupidity and government incompetence occurred. Arguing that conservatism and free market capitalism wasn't really applied during this period is pretty much the same sort of argument as those who say that the USSR never practised "real" communism.

Nevertheless, I am sympathetic to those who do argue that conservatism and free market capitalism wasn't really applied. I am also sympathetic to those who say that the USSR never practised real communism too. Yet there is no doubt that the conservatives who today complain that conservatism wasn't really tried are the same conservatives who enthusiastically voted for conservative politicians over a long period of time and supported the conservatives in power when things appeared to be going well. When asking the question "why didn't it work?", conservatives need to examine themselves and their own failures rather than blaming others - in short, they should take responsibility for their own actions (or lack of them) rather than threatening civil war if they don't get their way.

Ultimately the answer, I think, lies in two areas:

  1. No pure ideology can be practised, so we should embrace a more centrist political position (which is why I describe myself as an Ordoliberal).
  2. Politics corrupts, so stricter anti-corruption policies should be initiated on politicians at all levels (which is why I like the idea of Demarchy).

4 comments:

BLBeamer said...

This reminds me of the joke which I think originated in France, "Oh, yes, capitalism works very well in practice, but it would never work in theory."

Noni Mausa said...

I would add:

3. Whenever power/wealth is aggregated, some bastard will co-opt it.

Ron Lankshear said...

Only 3 nations still communist? What happened to Vietnam?
Very much in my thoughts at the moment as of the 19th October, 2009, Assemblies of God Vietnam have received legal recognition
from the Government. When I visited in 1998 we could not meet with local pastors as they were not legal.

My view on collapse of Soviet Union is all to do with morale over Afghan War and lack of material goods/lifestyle. A long while after Stalin died anyway.

BL that is a wonderful quote

Ron Lankshear said...

Some amazing survey results

World revolts against capitalism, BBC survey shows