TG Moses,
The problem with the communism is that it cannot work. Following the Communist Revolution, Lenin faced compounding problems behind economic planning. Lenin later wrote, “In attempting to go over straight to communism we, in the spring of 1921, sustained a more serious defeat on the economic front than any defeat inflicted upon us by Kolchak, Deniken or Pilsudski. This defeat was much more serious, significant and dangerous. It was expressed in the isolation of the higher administrators of our economic policy from the lower and their failure to produce that development of the productive forces which the Programme of our Party regards as vital and urgent.”
In February 1921, Lenin secretly wrote, “The greatest danger is that the work of planning the state economy may be bureaucratized . . . . A complete, integrated, real plan for us at present equals ‘a bureaucratic utopia.’ Don’t chase it.”
Trotsky admitted to similar problems. In his literary work, The Revolution Betrayed, Trotsky wrote that while “the obedient professors managed to create an entire theory according to which the Soviet price, in contrast to the market price, has an exclusively planning or directive character . . . . The professors forgot to explain how you can ‘guide’ a price without knowing real costs, and how you can estimate real costs if all prices express the will of the bureaucracy . . .”
In Socialism (1922), Mises demonstrated the logical flaws of communism because of the system’s inability to provide knowledge about which production projects are feasible and which ones are not. Without private ownership in the means of production, rational economic calculation is unknowable. Once economic planners are in power, they must find some rationale to base their decisions on. As a result, those who have an advantage in exercising one’s power will rise to the top of the planning mechanism. In this case, Stalinism becomes a logical consequence of Marxism. It grand failure lies in the decline in economic productivity because of state overcentralization and the deterioration of the bureaucratized social welfare system, a supposed benefit of Communist rule.
It is common practice today to criticize the deformed, egalitarian socialism built in the 1930s. But that criticism sidesteps the structural reasons for a communist barracks-style approach. And it avoids the central question: Can a conformist, democratic socialism be built on a noncommodity, nonmarket foundation? Why is it that in most cases, efforts to combat the market and commodity-money relations have always led to authoritarianism and encroachments on individual rights?
What has more government centralization brought to the United States? Less than 2 percent of Americans are farmers, yet the Department of Agriculture adds still more bureaucrats. Before 1950, the government largely stayed out of the housing business. Now we have housing projects in all of our major cities, and the government, an absentee landlord, couldn’t care less. The private sector can build housing more cheaply, with an incentive to maintain the property and screen tenants. During the 1980s, the “decade of greed,” charitable contributions by corporations and private citizens increased by at least 30 percent. Why? People had more disposable income, paid fewer taxes, and therefore gave more away. Americans are among the most generous people on Earth. But people want their money to go to people and organizations that they choose and trust.
