Thursday, October 13, 2005

Column on What Ailed the USSR

USSR Didn?t Fail Because of USA

Tibor R. Machan

I took part in a panel discussion recently, following the screening of
the movie Crash 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 economic
systems compare concerning solving socio-economic problems.

At my turn I said that although there is much that can be improved about
the USA, in the main its semi-capitalist, mixed economic system tends to
solve problems better than such alternatives as socialism, Fascism,
theocracies, monarchies and others found in recent history and around the
globe. I argued that in the main in the USA 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 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
USA; 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 back in 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 didn?t
produce nearly enough for the population, and, of course, near marshal law
day and night. People were being deported to Siberia for voicing criticism
or dissenting views, many of them committing suicide before they were
picked up to be sent there, and there was no free press, religion was
nearly squashed; the place was basically a prison.

Back then the USA had virtually nothing to do with Eastern Europe and the
Soviet Union. In fact, if anything, because the USA and USSR were allies
against Nazi Germany for the latter part of the Second World War, the USSR
had US economic support back then. It even lasted for a lot of years

In the ensuing time, until its collapse, the Soviet Union was not impeded
economically by the USA 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 that 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?it requires 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
USSR 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 he put it, in The New Yorker, 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 showing and the theoretical analysis
predicting that socialism is an economic dead end, various dreamers
continue to yearn for the system right here in the USA. 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

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