By: Michael Baumann
This portion edited by: James Ricks
With the fall of the Berlin Wall in 1989, all of the secular word-wielders – the print journalists, the television anchormen, the college professors, the intellectuals, the politicians, and the public policy experts – rushed to explain why this miraculous event had happened and why none of them had predicted it.
We heard much about the failure of the communist economy, the people’s desire for Western-style material goods and a better standard of living. And, of course, we heard about Gorbachev’s daring bid to revitalize communism though glasnost and perestroika. Add to that some explanations about the "proletariat’s" agitation for free elections, cultural decline, and diplomatic/military pressure from the United States, and there you have the sum total of wisdom the secular world-wielders had to impart on the occasion of the biggest, most dramatic revolution in our times.
I have no quarrel with most of these explanations – they are insightful and important, but they all fall far short of telling the whole truth about why worldwide communism is, like the Berlin Wall, apparently, but about to come tumbling down. Undoubtedly, the state-controlled economies of communist nations have been complete disasters, in theory and in practice. But if this is so, why has it taken more than 70 years for the people to rebel successfully against state ownership, the abolition of private property and the brutal, grinding poverty of communism? And if communist economies have always been bankrupt, why the collapse now?
Political and sociological explanations are also less than compelling. If repression, purges, imprisonment and wholesale violence were enough to drive the oppressed to action, then wouldn’t the era of the 1930s to the 1960s have been the time when mass demonstrations would evolve into mass revolutions? True, there were demonstrations and attempted revolts throughout those years, but none on the scale which we have seen in the late 1980s and early 1990s, with millions of people in the streets determined to overthrow communism, whatever the cost.
What has been the cause? Why now? I will give you an answer that the secular word-wielders have been either completely ignorant of or unwilling to consider: It was faith that brought the Berlin Wall down, that led Chinese students to face down tanks in Tiananmen Square, that overthrew the Sandinistas in Nicaragua, and that is liberating the Baltic republics an the Soviet Union itself.
Borrowing from the great anti-communist writer, Whittaker Chambers, I submit that two faiths have been on trial in the twentieth century. One is communism, the creed that exalts Man as the center and creator of the universe, able to achieve Heaven on earth through the institution of the state.
The secular word-wielders have never fully understood why so many thousands of men and women have been willing to live and die for communism. This is because, unlike Chambers, the word-wielders see it only as an economic system, or a political ideology or a historical consequence of class conflict. Similarly, they have been unable to explain why many millions more have been willing to die in order to fight or escape it.
The real story is that in the last years of the twentieth century the power of communism to move men and to substitute for belief in God has been all but extinguished. Like a candle which has nearly burnt out, its faint flame no longer illuminates or gives warmth.
Dr. Ricks thinks that even those brain washed on communist propaganda can no longer believe in its promises. The evidence against state run economies was so overwhelming that even powerful propaganda could not inspire them anymore.
"…the mysterious dynamic of history resides in man’s choice of gods. In the service of his god – or gods (they may be legion) – a man expends his energies, commits his sacrifices, devotes his life. And history is made. Understand communism, then, as a religion; or miss the secret of its power!" -- Lester DeKoster, Communism and Christian Faith
"…look what the grounds and causes of a single happiness to one man, the same you shall find them to [be for] a whole state." -- John Milton, Of Reformation.
"A noble nature desires to be instructed, and will not endure to be coerced. Merely to use coercion is for tyrants; merely to suffer it, for donkeys." -- Erasmus, epistle 1153.
The proof is not hard to find. One need only look as far back as World War II to discern that the free market greatly outperforms the command economy in any and all of its partial or plenary manifestations. Japan, for example, was on the losing side of the war effort and suffered nuclear destruction twice. Its land area and population are both comparatively small. Its natural resources are significantly limited. Nevertheless, Japan’s economy and its standard of living far outstrip those of the Soviet Union. Like Japan, it did not rise from the ashes like a phoenix – despite the fact that it was on the winning side of the war, despite the fact that it was given all of Eastern Europe as a gift (a gift its primitive economic system could neither sustain nor retain), and despite the fact that it has more people, more land and more natural resources than Japan.
A similar comparison could be made between North and South Korea, mainland China and either Hong Kong or Taiwan, East and West Germany (while they were divided), and India and South Africa (the largest and second largest examples of apartheid in the world). Both the production performance and the standard of living of First World free market economies consistently dwarf those of Second World socialist systems.
Even if one were to focus only on countries of the Third World, where the problems of poverty is most acute, the evidence is unambiguous: those nations that place greater reliance on the market process, such as Malaysia, Hong Kong, and South Korea, embarrass those nations that rely on state-directed production and consumption, such as India, Tanzania, and Mozambique. One cannot attribute the unmatched Third World prosperity of free market nations to the foreign aid they have allegedly received from the West.
Nor can one blame the backwardness of those nations that do not flourish on the lingering effects of colonialism. Some of the most well-developed nations of the Third World are former colonies – Singapore, Hong Kong and Malaysia – while some of the very poorest nations of the Third World – Ethiopia, Nepal, Tibet and Afghanistan – were never Western colonies at all. In fact, some of the wealthiest nations in the world, the United States, Canada and Australia among them, are themselves former colonies. Furthermore, massive amounts of Western aid have been poured into countries that remain resolutely poor, like Kampuchea, Uganda, Pakistan and Nigeria. They remain poor because most of the reasons for national poverty are domestic and systemic. Until the underdeveloped nations unleash the productive forces of the marketplace, they and the millions of poor whose wretched lot it is to live within their borders will continue in unrelenting want.
But market economies are not so. As Brian Griffiths observes,
It so happens that as a matter of history it was the market economy which brought about the transformation of the Western world from widespread poverty to the level of prosperity which it now enjoys. In the mid-eighteenth century, life in England was comparable to that in many Third World countries today: low real income, little education, poor housing, widespread disease and short life expectancy. By the end of the nineteenth century, the situation had changed dramatically. Real incomes had quadrupled, education was widespread, the housing stock had grown dramatically and life expectancy had increased. In no small measure this was due to the ability of the market economy to harness the inventiveness and entrepreneurial resources of ordinary people…. [M]arket economies create wealth more efficiently than either state-owned or state-planned economies. It is true in developed countries; it is also true in developing countries. (Griffiths, pp. 11, 13).
But through democratic capitalism flourishes, the human past in general has by no means been a story of unrelenting prosperity and freedom; it is a litany of tyranny, famines, illiteracy, plagues, war, oppression, infant death and mere subsistence. For most of the people who ever lived, life is exactly what Hobbes said it was – nasty, brutish and short. The life we enjoy in the modern Western world is a rare commodity in human history. It is a blessing of immense magnitude, seldom given, and never so lavishly as now.
Democratic capitalism succeed where other systems fail because it is more firmly rooted in the inescapable facts of economic scarcity, of incomplete knowledge and of human imperfectability. That is, among the various competing systems of governance and production, democratic capitalism takes the fullest account of reality. It understands that human desires will always outstrip the supply of goods available to satisfy those desires. It understands that none of us knows all we need to know in order to make the very best use of the means and the goods available to us (much less to make the wisest possible economic decision for countless thousands, perhaps millions, of people with whom we are utterly unfamiliar, as must be the case in any system of central planning). It understands that we humans are an incorrigibly selfish lot. Democratic capitalism has learned to take these factors into account by devising a system of exchange that harnesses human self-interest in the service of others and in the satisfaction of their desire and needs. Most than 200 years ago, Adam Smith captured this fact so memorably:
As every individual, therefore, endeavors as much as he can both to employ his capital in the support of domestic industry, and do so to direct that industry that its produce may be of the greatest value; every individual necessarily labors to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that is was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. (Smith, p. 456).
Marxist do not seem to realize that human institution arise from human action; that human action arises from human nature; and that human nature is notoriously intractable. The problem of the human heart is at the heart of the human problem. They seem not to know what Alexander Hamilton knew: They science of public policy is the knowledge of human nature. Try as they may, the Marxists cannot succeed so long as human nature remains what it is: marginally (sometimes extensively) unloving, ungiving and untamed. Marxism cannot succeed because it has no way to harness human depravity for the service of others. Instead, it depends upon altruism where little or none exists, and it supplies no incentive for that altruism to be cultivated.
But democratic capitalism is not so. Unlike Marxism, democratic capitalism enjoys unprecedented success because it takes into account the undeniable fact of human nature. People, being what they are, respond to incentives. Democratic capitalism succeeds where other systems fail or flounder because within its sphere of influence the interests of the individual coincide with, and serve, the interests of others, by means of incentives. In democratic capitalism, one does not normally succeed without first serving the needs and interests of others in a way that others find acceptable and at a price those others deem fair.
Within Marxism, however, the needs and desires of the private individual are cut loose from those of society at large. In Marxism, the individual’s incentives toward productivity and creativity are vitiated, if not eradicated, because no matter how hard he works he will not get further ahead, and no matter how poorly he works, he will not loose.
Because it ignores human nature, socialist production falls off; needs are not met; people are not satisfied; poverty is not reduced. If understanding the nature and limitations of human beings is the beginning of political wisdom, then the Marxist have yet to begin.
By: Michael Baumann
This portion edited by: James Ricks
The Marxist do more than ignore that which cannot be ignored, they also confuse cause and effect by believing the fallacy that economic conditions and the social and political circumstances that attach to them serve to shape everything and everyone. They have never stopped to ask themselves what (or who) changes economic conditions and why.
Public policy and political theory are enacted only by real and identifiable human beings, not by any alleged impersonal forces of change set loose in the world at large. Individual human beings are the true movers and shakers in political affairs, not "the spirit of the age," not "the winds of freedom and equality," not "historically determined class struggle," not even "ideas whose time has come."
Classes, as such, do not exist. Only fallen individual human beings exist. Classes are a sociologist’s fiction, a shorthand method of identifying and interpreting the great many billions of individuals who now live or who have lived upon this planet. In that way, Marxist theory is the political and sociological equivalent of philosophical realism and, as result, has most of philosophical realism’s attendant strengths and weaknesses, reification among them. I cannot explain it any more plainly than has Rose Wilder Lane:
In the human world there is no entity but the individual person…. So far as Society has any existence, it exists when boy meets girl, when Mrs. Jones telephones Mrs. Smith, when Robinson buys a cigar, when the motorist stops for gasoline…when the postman delivers the mail and the labor bosses discuss a strike…and the dentist says “Wider, please.” Human relationships are so infinitely numerous and varying every moment, that no human mind can begin to grasp them…. To call these relationships Society, and then discuss the welfare or progress of Society, as if it existed as a bee swarm does, is simply to escape from reality to fairyland. (Lane, pp. 5-6)
Marxists seem subject to the same delusions as the sociologists described in C.S. Lewis’s That Hideous Strength.
…whose education had had the curious effect of making the things he read and wrote more real to him than things he saw. Statistics about agricultural laborers were the substance; any real ditcher, ploughman, or farmer’s boy, was the shadow. Though he had never noticed it himself, he had a great reluctance, in his work, ever to use such words as “man” or “woman.” He preferred to write about “vocational groups,” “elements,” “classes,” and “populations”: for, in his own way, he believed as firmly as any mystic in the superior reality of the things that are not seen. (Lewis, p. 87).
Such ideas are not new. Centuries ago Aristotle understood that those with money and those without were likely to be mentally and socially crippled by the distorted way the viewed each other as only either rich or poor, rather than as individual human beings. Modern Marxists are subject to the same ancient interpretive delusion to which Aristotle alluded. Marxist taxonomy binds Marxists – and those over whom they rule – in the chains of error. The Marxists not only see aggregates where only individuals exist, they also see only imperialists, revolutionaries, the bourgeoisie and the proletariat. That is, the Marxists not only fall afoul of the fallacy of aggregation, they apply laudatory or pejorative labels to the aggregates they have created, and thereby applaud or condemn millions of individuals happen to fall into one or the other artificial category. For such “offenses” millions of people, quite literally, have died.
But, though people rule the world, and not impersonal forces or faceless masses, one must not conclude that therefore ideas are either unimportant or inconsequential. As University of Chicago Professor Richard Weaver properly observed, ideas have consequences. But ideas do not have consequences independently of the people who conceive them, refine them and apply them. Thus, on their own, ideas do not lead us places, we take them somewhere. Only to the extent that people act upon their beliefs do ideas have consequences. People do not always do so; but when they do, they themselves are the active agents in history, not their mental conceptions.
The Marxists mistakenly believe that justice is synonymous with equality. It is not. Justice is not having the same as your neighbor, regardless of differences in skill, investment, effort, ownership, worth and chance. Nor is justice the same as confiscating the personal property of some in order to give it to those who have no moral or legal claim upon it. Justice is not synonymous with either equality or coercive redistribution. Justice is having what is rightfully yours by inheritance, by hard work, by legal purchase and by good fortune. Justice is the same as equality only for those people and in those circumstances that are truly equal. Such people and such circumstances, however, are exceedingly rare. We human beings, and the varying circumstances in which we find ourselves, are not equal. Whatever else they may be, things that are all the same are not human. Things that are not the same are not equal. To misunderstand this fact is to misunderstand justice. To misunderstand justice is to set a course for political and economic failure. As Brian Griffiths explains,
To aim for after-tax equality of income as a major objective of economic policy has three basic difficulties associated with it. By blunting the incentives of economic life to start with, it would discourage enterprise and reduce the real income of the society as a whole. Next, it would seem to many unfair not to allow differentials in wages based on such things as training costs, risk, mobility, hard work, and innovation. Finally, the kind of society which typically decides to abolish inequality of income and wealth ends up creating inequality based on political power because of the discretion it invests in government. (Griffiths, p. 78).
By abolishing private property rights, Marxism has cut economic rewards loose from risk taking ,from effort and from saving. Human beings simply cannot be relied on to make the careful and painstaking evaluations necessary to assess the real possibilities for success or failure before taking entrepreneurial risks when neither the profits gained from such risks nor the losses incurred from such risks are theirs. Nor can investment capital be accumulated except from the profits of prior endeavors, the use of which has been sacrificed for the present in order to make possible (but not certain) greater prosperity in the future. In a low-efficiency system like Marxism, where profits already tend to be very small, workers will be unwilling to work harder to raise a company’s profit margin or to endure intensified deprivation for the purpose of funding future endeavors that are not likely to be successful, or, if they are successful, will not yield profits to them but to the state. A socialist economy does not permit people to reap for themselves the rewards of their hard work, shrewdness and abstinence. For that reason, if for no other, socialism will never be as successful as democratic capitalism. When private property rights disappear, so does the entrepreneurial spirit. Incentive is tied inextricably to ownership.
Marxists seem to focus more on the egalitarian redistribution of wealth than on the most effective means of producing that wealth. They seem not to understand that one cannot redistribute what has not been produced. If one’s system of production does not create the goods, then no matter how one slices the pie, the economic status of the nation will not be raised. Marxists seem to understand that some of the most fertile repositories of wealth are not susceptible to reallocation and redistribution, such as inventiveness and know-how. A great deal of Western wealth (especially the means to future Western wealth) resides not in material things but in the technological brilliance and innovativeness embodied in so many of its best and most valuable workers. That brilliance and innovativeness cannot be appropriated by the state and reassigned and redistributed at will.
The market rewards those who serve and those who give, not those who do not. Capitalist prosperity hinges not upon our selfishness, but upon our successfully focusing upon, analyzing and satisfying someone else’s needs. We succeed in the marketplace only insofar as we advance the cause of our fellows and invest our resources and our efforts in that advance. If you neglect your neighbor’s needs; if you refuse to put your time, talent and treasure to work providing for his convenience; your enterprise comes to nothing. If you nurture your neighbor’s needs you will enjoy the fruits of your labors. Whatever else we may call this attention to meeting the needs of others, it is not selfishness. The marketplace is a school for virtue, not a subsidy for vice.
The critics of capitalism do not understand this because they do not understand either the market-wide beneficial effects of economic competition or the inescapably civilizing effects of the marketplace. Nor do they understand that after a freely entered market exchange both parties are better off, otherwise no exchange would have taken place. Competition is a struggle for excellence that results in better products at lower and lower prices to the consumers.
This was also a time when Ronald Reagan was denounced by intellectuals for his alleged clumsiness and bellicosity when he made a moving speech in Berlin urging Mikhail Gorbachev to tear down the Wall. But, in 1989, when those self-same intellectuals least expected it, the Berlin Wall came tumbling down, and with it began the collapse of the worst tyranny that has ever plagued humanity and all of humanity’s enterprises.
The next day I sat with Hungary’s new President, Arpad Goncz, once imprisoned for his dissident activity. We talked instead about Soviet and American foreign policy.
Make no mistake, President Goncz told me, Hungarians are the beneficiaries of the Gorbachev era. But, like a great sailor, a great “harnesser of wind,” Gorbachev is reacting to history, not directing it. Much more than that, President Goncz added, his countrymen were the beneficiaries of the Reagan era. They, along with other “middle Europeans,” as he refers to them, were liberated by two Reagan salients in the 1980s.
First, Ronald Reagan made it possible for the West to win in the marketplace; though only minimal, deregulation and tax-cutting gave such a boost to the American economy that communist nations could not hope to compete. Second, Reagan made it impossible for the Soviets to keep up militarily by placing Pershing II missiles in West Germany and by his singular persistence in promoting the Strategic Defense Initiative.
What? Central and Eastern Europe liberated by a combination of crass capitalism and macho militarism? When I reported back to my American companions what the Hungarian president had said, they reacted in disbelief, as if I had teased or even coerced this sort of repugnant Reaganism out of one of Hungary’s national heroes. How unlike anything these journalists – themselves candidates for a New York Times Magazine profile – had ever advocated at home.
- Chamberlain, John. The Roots of Capitalism. (Indianapolis: Liberty Press, 1959/1976).
- Gider, George. Wealth and Poverty. (New York: Batam, 1981).
- Griffiths, Brian. The Creation of Wealth: A Christian’s Case for Capitalism. (Downers Grove: IVP, 1984).
- Lane, Rose Wilder. The Discovery of Freedom. (New York: The John Day Company, 1943).
- Lewis, C.S. That Hideous Strength. (New York: Macmillan, 1946).
- Mises, Ludwig von. Money, Method, and the Market Process. Edited by Richard M. Ebeling (Norwell, MA: Kluwer Academic Publishers, 1990).
- Muggeridge, Malcolm. Confessions of a Twentieth-Century Pilgrim. (San Francisco: Harper & Row, 1998).
- Sayers, Dorothy L. Creed or Chaos? And other Essays in Popular Theology. (London: Methuen & Co. Ltd., 1947).
- Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. (Indianapolis: Liberty Press, 1976/1981).
