Making Economic Sense
Making
Economic Sense
by Murray Rothbard
(Contents
by Publication Date)
Chapter 101
How to Desocialize?
Everyone in Soviet Russia and Eastern Europe wants
to desocialize. They are convinced
that socialism doesn't work, and are anxious to get, as quickly as
possible, to a society of private
property and a market economy. As Mieczyslaw Wilczek, Poland's leading
private entrepreneur,
and Communist minister of industry before the recent elections, put it:
"There haven't been
Communists in Poland for a long time. Nobody wants to hear about Marx
and Lenin any more."
In addition to coming out solidly for private
ownership and denouncing unions, Wilczek
attacked the concept of equality. He notes that some people are angry
because he recently urged
people to get rich. "And what was I to propose? That they get poorer
perhaps?" And he was
rejected by the Polish voters for being too attached to the Communist
Party!
East Europeans are eager for models and for the
West to instruct them on how to speed
up the process. How do they desocialize?
Unfortunately, innumerable conservative institutions
and scholars have studied East European Communism in the past 40 years,
but precious few have
pondered how to put desocialization into effect. Lots of discussion of
game theory and throw
weights, but little for East European desocializers to latch onto.
As one Hungarian recently put it, "There are many
books in the West about the
difficulties of seizing power, but no one talks about how to give
up power." The problem is that
one of the axioms of conservatism has been that once a country goes
Communist, the process is
irreversible, and the country enters a black hole, never to be
recovered. But what if, as has indeed
happened, the citizens, even the ruling elite, are sick of communism
and socialism because they
clearly don't work?
So how can communist governments and their
opposition desocialize? Some steps are
obvious: legalize all black markets, including currency (and make each
currency freely
convertible at market rates), remove all price and production controls,
drastically cut taxes, etc.
But what to do about State enterprises and agencies, which are, after
all, the bulk of activity in
communist countries?
The easy answer--sell them, either on contract or
at auction--won't work here. For
where will the money come from to buy virtually all enterprises from
the government? And how
can we ever say that the government deserves to
collect virtually all the money in the realm by
such a process. Telling individual managers to set their own prices is
also not good enough; for
the crucial step, acknowledged in Eastern Europe, is to transform State
property into private
property. So, some people and groups will have to be given
that property? Who, and why?
As Professor Paul Craig Roberts stated recently in
a fascinating speech in Moscow to the
USSR Academy of Sciences, there is only one way to convey government
property into private
hands. Ironically enough, by far the best path is to follow the old
Marxist slogan: "All land to the
peasants" (including agricultural workers) and "all factories to the
workers!" "Returning" the
State property to descendants of those expropriated in 1917 would be
impracticable, since few of
them exist or can be identified, and certainly the
industries could be returned to no one,
since they (in contrast to the land) were created by the Communist
regime.
But there is one big political and economic
problem: what to do with the existing ruling
elite, the nomenklatura? As the Polish opposition
journalist Kostek Gebert recently put the
choice" "You either kill them off, or you buy them off." Admittedly,
killing off the old despotic
ruling elites would be emotionally satisfying, but it is clear that the
people on the spot, in Poland
and Hungary, and soon in Russia, prefer the more peaceful buying them
off to pursuing justice at
the price of a bloody civil war. And it is also clear that this is
precisely what the nomenklatura
want. They want free markets and private ownership, but they of course
want to make sure that
the transition period assures them of coming out very handsomely in at
least the initial
distribution of capital. They want to start capitalism as affluent
private entrepreneurs.
Interestingly, Paul Craig Roberts, whom no one
could ever accuse of being soft on
communism or socialism, also recommends the more peaceful course:
"Historically in these
transformations ruling classes have had to be accommodated or
overthrown. I would recommend
that the Communist Party be accommodated." In practice what this means
is that "ownership of
the state factories should be divided between the ruling class and the
factory workers, and stock
certificates issued." His solution makes a great deal of sense.
Alternatively, Roberts says that a national lottery
could determine the ownership of the
means of production, since whoever initial owners may be, an economy of
private property will
be far more efficient, and "resources will eventually find their way
into the most efficient and
productive hands." But the trouble here is that Roberts ignores the
hunger for justice among most
people, and particularly among victims of communism. A lottery
distribution would be so
flagrantly unjust that the ensuing private property system might never
recover from this initial
blow. Furthermore, it does make a great deal of difference to everyone
where they come out in
such a lottery; most people in the real world cannot afford and do not
wish to take such an
Olympian view.
In any case, Roberts has performed an important
service in helping launch the discussion.
It is about time that Western
economists start tackling the crucial question of
desocialization. Perhaps they might thereby help to advance one of the
most welcome and
exciting developments of the 20th century.
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