A Third Way

I haven't posted in a long time - I've had thoughts for posts, but lacked the motivation to flesh them out. I can only be brief, but I have a little French man in my gut* saying that Gary Johnson should and maybe even possibly could have a chance, simply because the political frontrunners in the Democrat (Obama) and Republican (Romney, Gingrich, Santorum) are so utterly cookie-cutter identical political drones, and because Paul's support could be channeled into a viable candidate, in a third party. As far as I can see, that offers the one and only opportunity for an actual step in the right direction.


Starting on an obvious public-opinion, or political, rather than strictly policy (emotional, more than rational, perhaps) point, it should be obvious that everybody hates Newt Gingrich. This is true today - those who once loved him for his reforms in the early 1990s are wised up to him by now - his positive numbers are fleeting at best. He is a pork-filled lobbyist not a radical reformer. The radical reformers are distinguishable from the Newt, today. This is the kind of thing that makes this season so interesting; it is driven by the internet, where, right now - but not for long if we don't get this real change, information has made us all much more aware of who the candidates are, and what they've been up to.

All this gives me some very innocent ideas about the possibility of a third-party win. Sure, perhaps it sounds far-fetched, but clearly it is not impossible, it is simply the kind of the thing that requires change; it is a social event, the kind you create on the internet. So, incredibly I have a possibly rational optimism about the actual possibility of a third party win: i.e., Gary Johnson. This is founded, first of all, in my optimism that most Obama supporters can see that he has not only failed to come through on his promises, but actively worked for the opposite policies in most critical areas.

But, why Johnson? Well, because the Republicans are as bad as Obama, and Johnson is actually different. Nobody likes Newt but he's a contender because nobody likes Romney either. Romney is a robot, with a 'liberal' record in Massachusetts that makes conservatives hate him, both the social-cons that like Santorum and the libertarians who like Ron Paul. Of course, the probability of a majority of any party liking Ron Paul once they read his newsletters is slim to none at best. Now, here's the catch: Nobody likes Rick Santorum either. It is clear that he is so big government, and a bit scary even for conservatives socially, that he would shrink and split the Republican party vote too, giving a third party libertarian like Gary Johnson more than just the core Ron Paul supporters - he'd get any sane Republican, who wants more than rhetoric on the economy, and less bible-thumping and preaching - though certainly all of them too.

Any of the pathetic and bizarre group of contenders would split the party, though Santorum perhaps especially, giving Gary Johnson a real chance. And he should appeal to a good many Democrats who care about civil rights and liberties: from free speech, to Empire, corporate power (corporatism) and bailouts of banks and politically connected or funded corporations, corporate subsidies and tax breaks, the federal reserve, copyright, lobbying, campaign finance, guantanamo bay, executive power, the drug war, military-industrial-prison complex, gay rights, and other liberties... basically, anyone who can see that Obama has failed them on all that, and wants actual substantive change - and from a nice guy who doesn't seem at all like the usual sleazy politician, but who was also a successful two-term governor in a blue state who was fiscally conservative (balancing the budget) and socially liberal.

So, I have a strange hope. Let's turn these sausages we're making into something edible, for a change. We the people are the chefs, and we can do better than the bought-and-paid-for circus we've been letting entertain us for so long.

* Somewhere I learned that when your socks go missing it is because they are stolen by a little French man who lives in your washing machine (or visits) and I am pretty sure they sometimes also visit your gut to stand there, hands on hips, and have unnerving but sometimes interesting insights.

Call For Papers

Reminder: I am putting together a collection of papers on the policy of a basic income guarantee, with the aim of bringing together Austrian economists and market socialists (and other libertarians, and others on the left). Here is the CFP.

The Aging of Power

It has been said that the responsibilities of the US Presidency tends to rapidly age those who hold office. What about other leaders? Lenin not only became ill after taking office due to health problems; he aged very fast, and it has been pointed out that in his case it was likely due to the stresses of his office:

The pace of work was taking its toll. Lenin continued to fall ill when under pressure and the cycle continued. He complained more and more frequently ... Clara Zetkin painted a grim picture of him: 'his face before me was all shrivelled up. Countless wrinkles, great and small, furrowed deep in it. And every wrinkle spoke of a heavy sorrow or a gnawing pain. A picture of inexpressible suffering was visible on Lenin's face.' ... According to Gorky, the methods of rule he was forced into caused him great anguish.

It occurred to me that the responsibilities of the head of state in a planned economy would tend to be far greater than those of the US President. This may have aged Lenin faster than any US President. However, Stalin signed thousands of decrees per year during his long reign, taking on an even more stressful role, and with even harsher methods of rule than Lenin, yet Stalin seemed not to age as fast or become sick as quickly as Lenin. (And what about Kim Jong Il?) Why this discrepancy?

Two possible answers come to mind: (1) Lenin's stress and suffering were due to his humanity - he did not like to use harsh methods and see the suffering of the people caused by his policies. Perhaps Stalin had no such qualms (he didn't seem to!) (2) Stalin used body-doubles, and he doctored photographs. Perhaps Stalin aged much faster than is known.

Thoughts on the 2011 London (UK) Riots

Although relatively few observers admit to fully condoning the riots and looting that took place (or are still perhaps taking place) in England, many have argued that (in addition to protest against the police shooting of Mark Duggan and others like it, and those doing it for fun or due to crowd psychology) they are a result of economic disadvantage in the affected communities. (See, for example commentary like these: The Guardian, The Telegraph, Euronews). I have even heard some say that although they may not condone them they also do not condemn them or blame the perpetrators. One striking fact about the riots, looting, and destruction (including the burning of vehicles and shops, which frequently also took nearby homes), is that they took place in the poorest neighborhoods, generally the same neighborhoods where the perpetrators reside. Why would they their own neighborhood?

Imagine the following conversation:

Observer, to looter: "What do you think is the cause of these riots? Is there any justification for the looting?"

Looter: "It's obvious. It's because we don’t have opportunity. We have no opportunity or ability to open a business; we can’t find work; the rich have millions but we can’t even afford a car or home, or any of the nice stuff sold in the stores we looted..."

Observer: "So you hit the businesses, cars and homes of those who have succeeded in your neighborhood? You’re thieving from the ones who have succeeded in your own area..."

Looter: "Come on - we've mainly targeted big multinational chain stores - the super-rich! They can afford it, and they're the ones making millions off the backs of the poor and working class!"

Observer: "But, by hitting big companies aren't you also making it harder for those who don't have work to find any work at all? At least they offer some kind of job..."

Is there any sense to the looter's rationale? They complain they have no jobs, opportunity to open a business, or property of their own - cars, or homes. Perhaps, rather than just opportunistically thieving from the rich, there is a political point: perhaps what they are trying to say is that they are willing to sacrifice the successful from their neighborhood, and the opportunities that do exist, to declare that it’s not enough. It's like saying "look, you can keep your petty offering, it’s an insult."

Of course, if what kids today have still is not enough, with all the social programs and opportunities of England in 2011, the high living standard of even the poorest, then what will ever be enough? It seems more likely to have emanated from a cultural or political (but non-economic) issue - parental, council-estate (public housing, drug wars etc), a bad entitlement/consumerism mix, a sense of being in a police-state, crowd-psychology of course, a problem of too much leniency, or a sense of having no voice. Most likely some mixture, I'd guess. Here is an interesting discussion of some.

There are also important lessons from Tsars in Russia, and other imperialist rulers: responding with more police, cracking down on protesters as a policy solution, often only makes it worse, even when combined with some concessions. This is a major reason for the collapse of the last Russian Tsar.

For much the same reason, CCTV might help find the perpetrators this time, but that would likely be the first thing to go next time - rioters would be sure to take the cameras out at the very start - and the public would likely be made more terrified when they are taken out, seeing it as a portend of doom, while the rioters might be further energized, infused with violent or chaotic energy, responding to the police-state atmosphere.

The experience of the Russian Tsars teaches us that you can’t quell riots by cracking down, increasing police response and reducing freedom and privacy - unless you take it to terrible extremes. You have to change the conditions that caused the riots somehow. However, it seems you cannot just buy people off with concessions of social programs. They will have to continually expand, because the people become accustomed to every new level. Then any reduction, no matter how high the baseline rises to, is a travesty. Social programs create a sense of entitlement, and when they are no longer entitled to something, no matter how small a thing it is, and no matter how well off they remain, they may becomes incited to riot.

Final thought: I was genuinely surprised and interested in the idea of banning gangs from public housing - can government actually help reduce such violence through their provision of public housing? Could it offer an opportunity unavailable if housing is only private (whether subsidized or not)?

Judging the Effects of Policy

Can we know if a policy has succeeded? Some have argued that we never can, but most economists and policymakers at least act as if we can - whether through economic or statistical analysis, through simple observation, or in some other way. However, confirmation bias and ideology may also blind us. The US stimulus package is a case in point. Those who advocated for it contend that it succeeded, at least to ward off a worse crisis - and say that it should have been bigger, but at least it was something. Those who argued against it contend that it failed. How can we know?

Many who contend that it failed observe that the advocates of the policy cited a report by the administration's Council of Economic Advisers which predicted 9% unemployment without the proposed stimulus, and not more than 8% with it; whereas with the stimulus package in place unemployment actually exceeded 9%. Defenders of the stimulus program have replied that without the stimulus it would have been even worse. How can we know?

It is not possible (nor likely to be morally justifiable) to perform laboratory tests on social systems. Some economists argue that one can only use logical theory and deduction to make broad observations and predictions about economic behavior - that we cannot use models or statistics to predict precise outcomes or prove or disprove theory. However, it makes logical sense that if there is a situation in which a choice is to be made about whether to enact a policy, especially one introduced to avert a major crisis and which is expected to have a dramatic effect curtailing that crisis, and most else remains the same (something approximating "ceteris paribus"), observers should have some idea whether the policy was successful. If a prediction is made about the differing outcomes with and without that policy, we should look closely at the actual outcome and conclude whether or not the policy in fact achieved its intended results.

In 2009 many economists and policymakers argued that a massive "stimulus" package, a ramping up of government spending, was needed to avert economic crisis and turn the economy around. In 1917 before taking power Lenin made a similar prediction about his policy. The policy of swift nationalization of banks and major industry was argued by its supporters to be critical for avoiding crisis.

Lenin described what he saw as "the chief and principal measure of combating, of averting, catastrophe and famine." He said that it was well known, but "these measures are not being adopted only because, exclusively because, their realisation would affect the fabulous profits of a handful of landowners and capitalists." Lenin argued that the answer was state control of the economy:

This measure is control, supervision, accounting, regulation by the state, introduction of a proper distribution of labour-power in the production and distribution of goods, husbanding of the people’s forces, the elimination of all wasteful effort, economy of effort. Control, supervision and accounting are the prime requisites for combating catastrophe and famine.

Did it work? It is clear that it did not. Hardly anyone disagrees with this analysis. The economy slid into severe famine and ruin. Markets disappeared, as indeed Lenin intended, but nothing of use replaced them. The state found it near-impossible to even feed the people of the cities, let alone construct a production and distribution system that would alleviate the hardship the people already faced.

Of course, civil war replaced the war with Germany, and this did not help the government in its tasks. Other factors ensured there was nothing like a true "ceteris paribus" situation. Yet even Lenin understood that he had made a mistake. His belief in Marx's economic and social framework convinced him that the problem was that the policies were introduced too soon and too rapidly, but he did concede that his policies were to blame for the failure to avoid crisis, and that in fact his policies had exacerbated the crisis Russia had been facing when he took power.

Why? Because our previous economic policy, if we cannot say counted on (in the situation then prevailing we did little counting in general), then to a certain degree assumed—we may say uncalculatingly assumed—that there would be a direct transition from the old Russian economy to state production and distribution on communist lines.
...
Our Mistake

...we made the mistake of deciding to go over directly to communist production and distribution. We thought that under the surplus-food appropriation system the peasants would provide us with the required quantity of grain, which we could distribute among the factories and thus achieve communist production and distribution.

I cannot say that we pictured this plan as definitely and as clearly as that; but we acted approximately on those lines. That, unfortunately, is a fact. I say unfortunately, because brief experience convinced us that that line was wrong

What did Lenin do when he realized his mistake? He "retreated." He reversed the bulk of the policies which he saw had produced the negative results. "In substance, our New Economic Policy signifies that, having sustained severe defeat on this point, we have started a strategical retreat."

When restrictions on trade were lifted, there was an immediate blossoming of market activity, which resulted in an end to shortages and an improvement in living standards of all the people. Writer Mikhail Bulgakov described the change that NEP brought. "On Kuznetskii Most [a main street in Moscow], the painted faces of toy figures made by artel [co-operative] craftsmen smile. In the former Shanks store, ladies’ hats, stockings, boots, and furs gaze out at the clouds..... There is a confectioners shop at every step." Most importantly, the food shortages and famine were left in the past. "The luxurious displays at the gastronomes are startling. Mounds of crates with canned goods, black caviar, salmon, smoked fish, oranges." They were affordable enough that even the poorest Russians were made far better off.

This was obvious to all, regardless of ideology, and is not debated today by historians. It was clear that it was the wrong policy - whether it was because it was the wrong time to enact the policy or whether the policy would always produce these results*, at least all agree that Lenin's assertion that only his polices of nationalization and a swift advance toward a fully socialized economy could avert crisis was wrong and worsened, rather than alleviating, the hardships facing Russia when at that time.

I contend that the same method can be used to judge any major policy enacted to avert crisis. If the policymaker asserts that it will fend off a crisis, and the potential crisis is predicted to be of a certain magnitude, and the alternative path is anticipated and described, the policy should be judged accordingly. If the outcome is equal or greater than the expected level of the crisis path, the policy should be assumed to have failed unless a very good explanation is given to explain this discrepancy; this is simple common sense, and use of plain observation. Few citizens subjected to policy would disagree, and even given the complexities of society and economy, the ordinary citizen is right in this case.

--

* Trotsky, although not at first, also conceded the policies of that period were a failure, and although like Lenin he contended that they were simply enacted too soon, his descriptions of why they failed suggest otherwise. In 1924, Trotsky defended a return to use of markets, and economic independence of enterprises, explaining that, "With the liquidation of the market and of the credit system each factory resembled a telephone whose wires had been cut." In other words, there was no information being channeled from or to each factory or enterprise. Information that normally travels via the market through the medium of prices and profit and loss calculations had vanished, and the factories did not know how to produce efficiently, leading to chaos in production, shortages, and massive waste.

Book Review of Rediscovering Fire

The book review by Barkley and Marina Rosser of Rediscovering Fire is finally out in print, and citable to the April issue of JEBO. I would like to make a few comments here in reply to it, since it is not altogether flattering.

First, although the reviewers spend a fair bit of time criticing the missing bits from the index and other relatively minor (but annoying) flaws in the final edit, I would note that their final book review managed to get the title of my book wrong (they wrote 'experience' not 'experiment'), so perhaps we'd both do better to stick to content and not criticize minor mistakes.

Second, the reviewers complain that I do not treat the industrialization debate or discuss the fact that a different outcome in this debate might have led to a different sort of system. However, this misses the central point of the book, which I make over and over again: collective ownership over "the means of production" (over investment, factories, farms, etc) requires planning, and whole-economy central planning is inevitably going to be inefficient and the society will lack freedom. If the debate had "gone the other way" as the authors of the review suggest it might, that would simply have meant that the leadership would have chosen not to return to common ownership over the means of production. (Bukharin was arguing for a longer period--but not indefinite!--of private ownership in some areas of the economy, known as the 'New Economic Policy', so that the market could help develop the economy, while the public sector could more slowly expand.)

Hence, this was irrelevent to the book's purpose. The book discusses what happens when there is common ownership of the means of production, not what happens when there isn't. A more in-depth discussion of this debate would have been interesting to be sure, and would have supported my other arguments, but there simply was not room for it. The book focuses on the lessons that planners learned about common ownership, rather than the debates that the leadership had about whether planning or markets would better help them industrialize.

Third, the authors criticize the frequent references to Barack Obama and his policies, and argue that the Soviet lessons do not apply to the moderate policies I critique. They also wonder why I don't compare the policies of different mixed economies. Again, I think they have missed the point of the book. I do reference Obama's policies more often than policies of other places and periods. (Although I do also discuss, for example, British, French, German and Japanese policy, as well as policy from the 1600s, the 1930s, 1970s, the Bush era, and other eras, and in fact lay blame for the housing crisis and the financial crisis upon earlier decades' policies.) But I reference Obama's policies more than earlier eras because they are current policy. The point is to take the lessons that the Soviet planners learned during their experiment with common ownership over the means of production and apply them to current policy debates. Although historical policy in the US or other counties is interesting (and I do mention some of them), and comparison between different mixed economies is valuable, this is not the central focus of the book.

Finally, in their discussion about my use of the planners' lessons regarding production, distribution, and middlemen, they argue that the US healthcare system spends more and has worse outcomes than European systems. They mention this because they find it frustrating that I did not compare the pre-Obama-reform US system to European systems. There are two mistakes in the reviewers' discussion. First, I was not arguing in the book that the US system was good; I was arguing that the proposed reforms would not necessarily produce the intended results. The US system might be worse than the European systems that the reviewers mention and it could still be true that the proposed reforms would not produce the intended results. So, the reviewers evidence on this count is irrelevant. Second, as a side point, the reviewers use the US ranking in infant mortality and life expenctancy as evidence that the US system is worse. Not only are such high level indicators fairly unreliable without controlling for e.g., immigration levels, but one of them is highly misleading. It is well known that the rankings of infant mortality are highly skewed because the US counts all infant deaths while many other countries count only deaths of infants who were born of a healthy weight and size, and also because the avilability of fertility treatments in the US has led to a higher average maternal age and births by mothers with other risk factors. Either the reviewers are citing statistics that they do not understand, or they are citing statistics they know to be misleading. Either way, I expect some of the readership to see the error.

In any case, I am grateful for the review. I hope that readers of the journal will recognize that much of the review is colored by the reviewers' own opinions and tastes, and that they may find the book more balanced and cogent than the reviewers did.

On Rights and Liberties Protected by a Constitution

Jesse Jackson Jr. is apparently even more astounding in his speeches than his father. On the House floor he recently called for an amendment to the constitution to assert the right of every American citizen to housing, medical care, education and even an iPod and laptop! Probably more astounding was his assertion (or rather, rhetorical question suggesting) that enumerating these "rights" in the constitution would create jobs! "How many jobs would such a right create?" he kept asking...

Well, Jesse, I have an answer for you. None. Having government spend on such things or publicly provide them does not create jobs and does not improve living standards. Government must tax, borrow, or inflate the currency in order to purchase these goods and services. Taxing means the money comes from someone else who otherwise would have used that money in another way ("creating" just as many jobs); borrowing may "bring the money from the future" but it must eventually be paid for and in the meantime it will crowd out others from borrowing from the future and hence again not "create" more jobs than without it; and printing money to fund these purchases will only fuel inflation: government will buy the goods but the price will go up and you and I won't be able to afford as much on our own. No, Jesse, it's a nice thought, but asserting a 'right' to something does not create jobs.

But won't it help the poor? Well, despite all the calls for these 'positive rights', they have not proven to be helpful for the poorest in the given country either. Asserting a right to something also does not make it exist where it does not exist. If the only medicine that a country can afford is aspirin, it won't matter whether the constitution asserts a right to first-class medical care. And in fact the more that constitutions assert rights to this and that necessity, the less that natural rights to freedom, life, and property seem to be respected.

There is a good reason for this. If the state promises a right to medical care, then it might just try to come through on this promise - but this may be very expensive if the state would just give everyone a voucher that could cover existing costs. Hence, the state may then try to 'control costs' by setting the prices on medical products and on wages (which is allowed by a constitution which promises such positive liberties - after all, the government needs the power to achieve its promises). So, the state sets prices and wages, and tells the companies how they must provide care, and does the same for housing and for the other industries enumerated. And the more that is promised the more that is regulated and decided by the state - often spiralling out of control (to the extent that it is difficult for the state to afford everything--i.e., to the extent that the state faces an issue of scarcity*).

Of course, if enumerating rights in a constitution could magically create jobs, and if scarcity were completely eliminated, then sure - it would be lovely to have all these rights enshrined in our constitution. But, sadly, Jesse, that ain't the case.

* Scarcity is the fundamental problem of economics. If there were no scarcity, any economic system could work. Because there is scarcity, some systems work better and some worse in handling the forces and limits created by scarcity. Yet, very often people blame the system for something that scarcity has caused, and often suggest a remedy that could only work if there was no scarcity. One example of this is the call to eliminate money, which I discuss in Chapter 7 of Rediscovering Fire (draft version, buy the final book here).

Mushrooms and Toadstools

In the introduction to my book, I address the fact that many people think that what existed in the Soviet Union, especially under Stalin, was not Marxist socialism at all but rather Stalin and others simply used Marx as a cover for tyranny. The section reads in part:

[Many people] subsequently became disillusioned by Stalinism, but a good number of them retained their belief in socialism, believing that Stalin hijacked the movement and maliciously turned it against the people. ...

One Marxist used the following metaphor to make the case:

Like mushrooms, you go out and pick the right kind and you can cook a tasty dish. But if you gather up the kind commonly known as toadstools and call them mushrooms, you will poison yourself. Stalinist “socialism” is about as close to the real thing as a toadstool is to an edible mushroom.

Yet was Stalin’s socialism different from that suggested by Marx? Lenin and Stalin were not just ambitious men conniving to push through their schemes; they were attempting to implement the theories of socialism, based on Marx. They had a specific set of institutions that they believed would bring prosperity and happiness based on public ownership of the means of production. The 1918 and 1936 constitutions outlined rules that enforced collective property rights, the duty to contribute, and the right to social proceeds.

My discussion in the book is apparently not very convincing. The other day a friend of mine quoted this toadstool metaphor back to me, explaining that Stalinism has nothing in common with true socialism. Many academic Marxists have made this case as well, frequently citing the "backwardness" of Russia, the lack of simultaneous international revolution, or simply asserting that the fact that the USSR did not retain democracy and freedom proves that it deviated from Marx's vision. (Some also argue that Marx would not have supported violent revolution because his theory was "evolutionary" and socialism was inevitable, but one need look no farther than a biography of Marx, or his Communist Manifesto, to see the error in this argument.)

This isn't a small matter. If Russia was a test bed for Marx's ideas, there is a huge amount that can be learned from the case study. But, if Russia did not implement Marx's ideas, or did not implement them appropriately, then one cannot draw those kinds of lessons. Since I seem not to have made the case well enough in my book (at least in the introduction) I will attempt to address these arguments here.

First, as for the "backwardness" of Russia at the time of revolution, it is not at all clear that Russia fell short of the necessary level of development called for by Marx. Russia in 1917 was in many respects at or above the level of development that countries such as Germany or France were in 1848 when Marx deemed them ripe for revolution. In The Revolution Betrayed, Trotsky argued that it was the underdevelopment of Russia that caused socialism to take the brutal form it took there.

Two years before the Communist Manifesto, young Marx wrote:

A development of the productive forces is the absolutely necessary practical premise [of Communism], because without it want is generalized, and with want the struggle for necessities begins again, and that means that all the old crap must revive.

This thought Marx never directly developed, and for no accidental reason: he never foresaw a proletarian revolution in a backward country. Lenin also never dwelt upon it, and this too was not accidental. He did not foresee so prolonged an isolation of the Soviet state. Nevertheless, the citation, merely an abstract construction with Marx, an inference from the opposite, provides an indispensable theoretical key to the wholly concrete difficulties and sicknesses of the Soviet regime.

Yet, Russia’s development was not at such a low stage compared with the Germany of Marx’s time. Trotsky admitted this and responded to this point by arguing that it is the relative, and not the absolute, level of development which a country must obtain before socialism will produce the desired results. He wrote:

The Soviet Union, to be sure, even now excels in productive forces the most advanced countries of the epoch of Marx. But in the first place, in the historic rivalry of two regimes, it is not so much a question of absolutely as of relative levels: the Soviet economy opposes the capitalism of Hitler, Baldwin, and Roosevelt, not Bismarck, Palmerston, or Abraham Lincoln. And in the second place, the very scope of human demands changes fundamentally with the growth of world technique. The contemporaries of Marx knew nothing of automobiles, radios, moving pictures, aeroplanes. A socialist society, however, is unthinkable without the free enjoyment of these goods.

By demanding an economy that has the innovations of capitalist countries on which to build socialism, Trotsky is admitting that socialism cannot produce the growth and innovation to advance an economy to meet those needs. Yet there will always be new needs and new demands. How then could socialism ever succeed if it cannot create this development on its own? Socialism is "unthinkable" without the inventions and innovations of the capitalist world: "automobiles, radios, moving pictures, aeroplanes." Yet since Trotsky wrote those words, we have added color televisions, computers, digital music players and recording devices, and cell phones to the list, along with a world of Web technology and Internet commerce, to name just a few more obvious inventions. The list of new medicines would be perhaps more significant. Now, socialism is "unthinkable" without those.

"This obvious underestimation of impending difficulties is explained by the fact that the program was based wholly upon an international perspective," Trotsky continues. But, if at any point many or all countries adopt socialism, this problem would just extend worldwide. Not only would Russia not have mobile phones or advanced cancer techniques and MRI scanners, but neither would Germany or France or Britain.

Now, what of the claim that Russia was not democratic or free, as Marx promised communism would be? In a book called Marx and Soviet Reality, Daniel Norman argued that a close reading of Marx will reveal that Stalin’s Russia had absolutely nothing in common with Marxism, and simply used Marx’s name to hide a system which was in fact the opposite of what Marx advocated. "There is at least one point on which Soviet propaganda and the opponents of Marxism – and of Socialism in general – agree," Norman begins, "both describe the USSR as the embodiment of the Marx – Engels conception of a Socialist society." However, he asserts, "Nothing could be wider of the mark."

His first evidence of this vast gulf? "Under its Marxist veneer of Bolshevik terminology, Soviet reality can be easily identified with everything abhorred, criticised and fought against by Marx and Engels all their lives."

Although this might sound like a reasonable argument, it is in fact no argument at all. At least, if by "embodiment of the Marx-Engels conception of a socialist society" Norman does not simply mean whether the USSR lived up to the wildest hopes and dreams that Marx and Engels might have had—surely it did not, but no one is likely to deny that. Few would impart sinister motives upon Marx and Engels, or imagine that they had the desire for millions to die of famine. This simply means that the results were not what Marx would have wanted.

But this is presumably not what Norman means. Norman seems to be asserting that what was implemented in Stalin’s USSR was not what Marx and Engels would have liked to see implemented--that somewhere along the line the system was hijacked and the policies diverged from what Marx had advocated. Now, it is true that Marx and Engels, as well as Bukharin, Lenin and Trotsky, were against the "leviathan" of state capitalism and favored democracy and freedom. However, they prescribed certain distinct policies to achieve what they deemed "true freedom" and "true democracy." If these policies were put in place and they resulted in a system very much like state capitalism, then it matters not that they were against such a system.

The fact that the results of implementing Marxist policy did not turn out in the way envisaged by Marx is irrelevant. Marx may have desired a democratic and free society, but if his policy prescriptions could not produce a democratic and free society, then any society which implemented them would still be Marxist, even though it did not live up to these ideals. If a religious leader calls for all citizens to be made to pray every day, and argues that it will make all men angels, and the policy of mandatory prayer is then enforced, then his policy has been enacted whether or not the men become angels as a result. One cannot argue that the system was never implemented simply because the results were not those expected.

Norman goes on to make several complaints regarding the rhetoric in the Soviet Union.

a British worker, employed in a nationalised factory (whose economic, social and political situation has undergone so great an improvement as to amount to a revolution since Marx and Engels’ day, and who still retains the means to fight for the maintenance and further improvement of his situation) is a ‘wage-earner’ in the Marxian sense of the word, and still ‘exploited’; but in the Muscovite ‘Marxist’s’ eyes he is only a ‘slave’.

His opposite number in the USSR (where ‘the system of wage labour and exploitation has been abolished’, as Stalin pretended) earns less, works longer hours, has much less variety of goods on which to spend his money, has trade unions which exist only to squeeze more and more work out of him, is tied to his particular factory, and has the prospect of being sent to a forced labour camp if he makes a mistake or protests against his lot; yet he, according to Muscovite ‘Marxism’, represents the most ‘advanced, emancipated and free’ worker in the world.

To admit the justice of this, one must first accept the anti-Marxian Soviet distinction between an amount of unpaid labour which is ‘surplus value’ when it is the British state which is the beneficiary, and the same amount of unpaid labour which is not ‘surplus value’ when the Russian state is on the receiving end – a subtlety that would perhaps not have been very well received by the author of the theory.

First of all, Marx did call workers under capitalism wage-slaves. But, how could Stalin argue that the workers of the Soviet Union were not exploited when made to work for the Soviet state? Easy. Norman forgets the distinction made by Marx about the class ownership of the state. Indeed, it is not "exploitation" to Marx if the workers have taken power. In the lower phase of communism (known since Lenin as "socialism") the workers run the state: the dictatorship of the proletariat. Only later can the state "wither away." And the people will indeed work for the state for wages: to each according to his work. To Marx this is not exploitation, it's the first step on the road to communism.

Then, again, Norman complains that the workers do not have direct control over production, and it is a complaint about results not policy. He argues:

In Russia, it is true, there is no private ownership of the means of production, and it is the state which is the owner. But state property is no more Socialism than are the rationalisations under liberal capitalist regimes, for the workers are still not the masters of their labour conditions and remain separated from the production process.

He quotes Marx: "State ownership of the productive forces is not the solution." But he does not quote the entire passage which makes clear that first the workers' state must employ the people, and then this will eventually lead to their ability to take direct ownership in such a way as to become masters, and no longer alienated from the production process:

The modern state, no matter what its form, is essentially a capitalist machine, the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more does it actually become the national capitalist, the more citizens does it exploit. The workers remain wage-workers — proletarians. The capitalist relation is not done away with. It is rather brought to a head. But, brought to a head, it topples over. State ownership of the productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution.

This solution can only consist in the practical recognition of the social nature of the modern forces of production, and therefore in the harmonising of the modes of production, appropriation, and exchange with the socialised character of the means of production. And this can only come about by society openly and directly taking possession of the productive forces which have outgrown all control except that of society as a whole. ...But with the taking over by society of the productive forces, the social character of the means of production and of the products will be utilised by the producers with a perfect understanding of its nature, and instead of being a source of disturbance and periodical collapse, will become the most powerful lever of production itself.

This was a prediction about how relations of production would change when workers took control of the state. The prediction turned out to be wrong. But this is again an argument only that the results did not coincide with what Marx predicted, not that Marx's policy prescriptions were not implemented in the Soviet Union.

It would be tedious to continue picking apart all of Norman's arguments, but think twice before assuming that because the Soviet Union did not look like Marx's promised utopia that it was not in fact Marxist. And if I have whetted your appetite on this subject, please find more in my book.

Rediscovering Fire to be assigned at UNC

Breaking News: Steven Rosefielde will be assigning Rediscovering Fire in a course on Russian History at the University of North Carolina, Chapel Hill.

Ever-expanding expectations

In about 1926, the old Bolshevik and leader of the All-Russian Central Council of Trade Unions Mikhail Tomsky visited Britain. Despite his Marxist understanding of capitalism and the inevitability of socialism, and all his years of struggle for revolution for the Russian people, Tomsky was so impressed with the high living standard of the average British worker that he declared:

"I cannot see why your western European workers should be Communists. I do not see any possibility of revolution in the west."
(p. 402, Stalin: a political biography, Isaac Deutscher, my emphasis)

The goal of communism was to bring a better life and a higher standard of living for the regular worker - this had already been achieved without communism in Britain. Why should the British worker be a communist? Yet, it was just at this time that the Labor Party came to power in the UK -- perhaps the majority of Britains electorate were not communists, but they were advocates of some sort of socialism, and today in Britain, Europe and in certain pockets of the US, people demand that government give them more.

Yet, what was this standard of living that so impressed Tomsky that he would essentially argue that capitalism (read: markets) was giving the worker so much that he need not demand that government (read: socialism) give it to him? Well, the GDP per capita was $6,947. The average worker's income was probably less (GDP per capita would be an average of all income including the very rich, and does not represent a median but a mean).

But, to be generous, lets say it was $7,000. Can working people make $7,000 today? $7,000 per year is about $3.50 per hour. Even in the worst recession since the Great Depression, even the lowest skilled high school dropout can easily find a job at that wage (if state minimum wage laws have not killed off those jobs!) In fact, even illegal immigrants make more than $7,000/year on average.

Yes, I know that nobody is calling for communist revolution in America, and I know that this is a low bar of comparison: but still, think of it. One hundred years before Tomsky visited Britain only the wealthy elite had many of the things that he saw workers have in 1926, and when he saw how well off they were, he understood why they would not fight for communism and demand of government the redistribution of wealth along egalitarian lines. Today even those unprotected by any law, illegal immigrants, can expect immediately and without any skills, without even speaking the language, to earn more than those workers did. The median American worker earns more than three times that, and the median household income is seven times that.

Yet, if Americans and western Europeans do keep demanding more and more of government, in the way of entitlements, labor laws, bailouts and so forth, we may ruin the economy which has given us this high living standard and leave ourselves worse off in the end. (And in a tragic and ironic twist, probably see a radical turn afterward.) Why do we demand so much - and why are our expectations so ceaselessly expanding?