Making Economic Sense
Making
Economic Sense
by Murray Rothbard
(Contents
by Publication Date)
Chapter 99
The Collapse of Socialism
In 1988, we were living through the most
significant and exciting event of the 20th
century: nothing less than the collapse of socialism.
Before the rise of the new idea of socialism in the
mid and late 19th century, the great
struggle of social and political philosophy was crystal-clear. On one
side was the exciting and
liberating idea of classical liberalism, emerging since the 17th
century: of free trade and free
markets, individual liberty, separation of Church and State, minimal
government, and
international peace. This was the movement that ushered in and
championed the Industrial
Revolution, which, for the first time in human history, created an
economy geared to the desires
of and abundance for the great mass of consumers.
On the other side were the forces of Tory statism,
of the Old Order of Throne and Altar,
of feudalism, absolutism, and mercantilism, of special privileges and
cartels granted by Big
Government, of war, and impoverishment for the mass of their subjects.
In the field of ideas, and in action and in
institutions, the classical liberals were rapidly on
the way to winning this battle. The world had come to realize that
freedom, and the growth of
industry and standards of living for all, must go hand in hand.
Then, in the 19th century, the onward march of
freedom and classical liberalism was
derailed by the growth of a new idea: socialism. Rather than rejecting
industrialism and the
welfare of the masses of people as the Tories had done, socialists
professed that they could and
would do far better by the masses and bring about "genuine freedom" by
creating a State more
coercive and totalitarian
than the Tories had ever contemplated. Through "scientific"
central planning, socialism could and would usher in a world of freedom
and superabundance for
all.
The 20th century put this triumphant idealism into
practice, and so our century became
the Age of Socialism. Half the world became fully and consistently
socialist, and the other half
came fairly close to that ideal. And now, after decades of calling
themselves the wave of the
future, and deriding all their opponents as hopelessly "reactionary"
(i.e. not in tune with modern
thinking), "paleolithic," and "Neanderthal," socialism, throughout the
world, has been rapidly
packing it in. For that is what glasnost and perestroika
amount to.
Ludwig von Mises, at the dawn of the Socialist
Century, warned, in a famous article, that
socialism simply could not work: that it could not run an industrial
economy, and could not even
satisfy the goals of the central planners themselves, much less of the
mass of consumers in whose
name they speak. For decades Mises was derided, and discredited, and
various mathematical
models were worked out in alleged "refutation" of his lucid and elegant
demonstration.
And now, in the leading socialist countries
throughout the world: in Soviet Russia, in
Hungary, in China, in Yugoslavia, governments are rushing to abandon
socialism.
Decentralization, markets, profit and loss tests, allowing inefficient
firms to go bankrupt, all are
being adopted. And why are the socialist countries willing to go
through this enormous and truly
revolutionary upheaval? Because they agree that Mises was right, after
all, that socialism doesn't
work, and that only desocialized free markets can run a modern economy.
Some are even willing to give up some political
power, allow greater criticism, secret
ballots and elections, and even, as in Soviet Estonia, to allow a
one-and-one half party system,
because they are implicitly conceding that Mises was right: that you
can't have economic
freedom and private property without intellectual and political
freedom, that you can't have
perestroika without glasnost.
It is truly inspiring to see how freedom exerts its
own "domino effect." Country after
socialist country has been trying to top each other to see how far and
how fast each one can go
down the road of freedom and desocialization.
But much of this gripping drama has been concealed
from the American public because,
for the last forty years, our opinion-molders have told us that the only
enemy is Communism. Our
leaders have shifted the focus away from socialism itself to a variant
that is different only
because it is more militant and consistent.
This has enabled modern liberals, who share many of
the same statist ideas, to separate
competing groups of socialists from the
horrors of socialism in action. Thus, Trotskyites, Social
Democrats, democratic socialists, or whatever, are able to pass
themselves off as anti-Communist
good guys, while the blame for the Gulag or Cambodian genocide is
removed from socialism
itself.
Now it is clear that none of this will wash. The
enemy of freedom, of prosperity, of truly
rational economics is socialism period, and not only one specific group
of socialists.
As even the "socialist bloc" begins to throw in the
towel, there are virtually no Russians
or Chinese or Hungarians or Yugoslavs left who have any use for
socialism. The only genuine
socialists these days are intellectuals in the West who are enjoying a
comfortable and even
luxurious living within the supposed bastions of capitalism.
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