The Rise and Fall of Soviet Communism

0:00Well, I think it's really, I'm very excited to be a part of this celebration of truth of Austrian School of Economics. Just two days before the birthday of Ludwig von Mises and the 15th anniversary of the Institute, it really shows who won and for me, interestingly enough, after my studies in the University of Marxist-Leninism, and Socialism, to get this wonderful license plate called L.V. Mises, and you can see Dr. Gordon is approvingly inspecting this license plate. Well, Austrian School is definitely the most anti-socialist school of economic thought.

0:45It completely demolished the intellectual foundations of socialism, starting with Carl Menger, actually, publication of his book in 1870 he made and I believe that that's really so he made Karl Marx completely speechless Marx never wrote anything in economic theory after 1870 then Boehm-Bawerk he completely smashed the objective theory of value at the end of the 19th century and von Mises and Hayek and Murray Rothbard continued this work of dismantling the pretense of socialism as as being a scientific teaching. Well, all the predictions of Austrian School of Economics came absolutely true.

1:31And the whole history of the 20th century was the history of human suffering when the people were trying, as Ludwig von Mises said, to revolt against economics, to revolt against economics theory. 20th century is what two and a half years left only. In the 20th century it probably will be considered by the humankind, by the future historians, as one of the most bloodthirsty, one of the most criminal centuries in the history of humankind. Over 170 million people were slaughtered during this century by their own governments. Not in the war, but in a peacetime situation. The governments were trying to impose all kinds of social utopias, all kinds of socialist social utopias, no matter of what color, whether it was Soviet communism or German Nazism, the whole idea is the same, the idea of the same socialist idea.

2:34I was listening to Dr. Gordon's description of Edward Bernstein, of that German social democrat. And I recollected kind of personal encounter with Bernstein. I came from Kazan, I was born in, it's Republic of Tatarstan, one of parts of Russian Empire. And in 1938, Joseph Stalin declared a campaign of purges against something he called Bernsteinian sleaze. and Sleaze. And by Bernstein and Sleaze, he meant some kind of, he described this half-baked socialism based on immoral principles. And in Kazan, which is predominantly Muslim part of this former Soviet Union, 700 peasants were physically slaughtered because they were considered to be this Bernstein and Sleaze.

3:31I think this logic was very well described today in the morning by Dr. Levin who, the socialist logic was that Muslims are the same as Jewish and peasants are the same as Bernsteinian intellectuals. But when I was thinking about that, I realized that most governments today, I think, both here and in Western Europe, can be, from Stalin's perspective, called Bernsteinian sleaze. in the sense that it's again the same combination of half-baked socialism and I would say being very far from morality. And today's socialism, I think in the United States, except academia when it is alive and thriving and open and proud, but outside of academia, I think socialism takes forms of different social movements, of different social movements.

4:23And those social movements, what's common of all of them with socialism, as Murray Rothbard put it, that private property is eliminated, individualism goes by the board, individuality is flattened, all property is owned and controlled communally, and the individual units of the new collective organism are in some way equal to one another. And it kind of also occurred to me that these new social movements are the most, I would say, lively today form of socialism we experience today. What's common between them is again the hatred of private property.

5:10Well, the rise of communism, say, in Russia, was due mostly to the attacks on private property which were conducted even before the bloody revolution of 1917. In Russia, the cost of socialist experience was over 60 million people. Over 60 million people were slaughtered in the dreadful Gulag. The attacks were again on everything the people would cherish. On private property, which was considered to be a crime, it was attacks on family. In 1920s, the Soviet government openly unleashed a campaign against family by suggesting so-called communal families, meaning that all children should be socialized, Socialized, that people should not see each other on a permanent basis and all children should believe that all adults are their parents and all parents, all adults should consider all children to be of their own.

6:14And I remember I was in San Francisco about a year ago and attended a meeting with Hillary Clinton. She was promoting her book, It Takes a Village. Yes, and one person in the audience asked her whether, and she said, well, the government, the community, the business leaders, they're all responsible for children. And one person in the audience said, what about family, what about the parents? She said, oh, parents as well, parents as well. She kind of permitted parents also to be included in this process. In the Soviet Union, I think this campaign against families resulted in the sanctification and glorification of 11-years-old Pavlik Morozov who reported to KGB about his father who was storing grain, who was hoarding grain.

7:04and his father was immediately murdered by the KGB squad in the backyard of his own house and this young boy, he was axed by his grandfather who was also then shot by the KGB squad so it's a very tragic, I would say, very dramatic story of completely confused morals, completely confused young boy But then they named all, practically every second high school was named after Pavlik Morozov as well as a lot of streets, a lot of community centers were named after him and he was considered to be the most good example for all young people. It also brings me to thoughts, I think, best described by Murray Rothbard that communism was not a system of scientific thinking at all.

7:59It was a religion. It was a religion. And in his brilliant essay, Karl Marx as a religious discatologist, Murray Rothbard is writing that the bottom line about Marx is that he was a communist. In the same way as the return of the messiah in Christian theology will put an end to history and establish new heaven and new earth, so the establishment of communism according to Marx would put an end to human history. And this end they really tried to put in a very hard way. There were streams of blood going from Russia to Kampuche, from China to Yugoslavia. The number of people slaughtered, the number of intellectuals gone, was overwhelming.

8:50The whole idea of communism was to impose the new men, the formation of the new person who would obey his intellectuals leaders, who would be completely and complete compliance, He was kind of an ideal person who would not ask anything for the labors of his work. He would not. He would be in full compliance with what these intellectuals as striving for power would do of him. Grigory Malenkov, who was close associate to Stalin and later became a general secretary of the Communist Party, He called it that this permitted costs of introducing this eternal happiness on people. So those people who would not comply with this idea of eternal happiness should go.

9:39So the socialism in, say, in Soviet Union, in China, in all other communist countries, and there were 33 of them, can you imagine, there were 33 countries in the world with So the population of 1.4 billion people were professing communism until practically five years ago. And most of these countries, those at least which were not suffering from this Bernsteinian sleaze, which was kind of a mild diversion of communism, most of them were in the process of this holy war War against any kind of rethinking, and this holy war resulted both in skimming the milk and throwing the cream away all the time, skimming intellectuals, skimming the best people, and because of that today in Russian philosophy, a lot of Russian philosophers and sociologists are talking even about the complete thinning of the genetic fund of Russian people, because for the last 70 years, the best, the entrepreneurial, the free, they were all being consistently removed, murdered, could not reproduce themselves at all.

11:00And only people who would be conformed, people who would try to actually to drown their desires, their qualities in heavy drinking and alcoholism, it's not a coincidence that Russia consumption Drinking of alcohol in Russia is four times, even today, four times higher than in the United States, four times higher than in the United States, so, and the United States is also becoming more and more drinking, drinking country, I think maybe, maybe someone would even do a correlation analysis, will put econometricians to good use, maybe they can, they can see how the amount of socialism correlates with, with, with drinking. And Ludwig von Mises, in 1918, his essay, Economic Calculation of the Socialist Commonwealth, it proved complete impracticability of socialism.

11:56So socialism, today I'm teaching at the University of San Diego, unfortunately it's not a state university, it's a catholic school, but the University of San Diego and I'm all the time discussing the issues of so-called comparative economic systems, comparative economic, it's taught in most American universities. But there are no comparative economic systems. Von Mises proved that socialism is not an economic system. It's not an economic, it's a non-economic system. It's a revolt against economics. It's a simple system of management based on coercion, based on violence. It's run, more or less, the command system is more or less run the same way, The same way as, say, army or whatever, the people are ordered to work, that's why, and that's why it collapsed so suddenly and unpredictably for our CIA and other intelligence establishments in Washington, D.C. who never read von Mises, they could predict it very accurately, but the prediction would be based on a simple assumption that when they would start shooting people, then they are gone, and that's exactly it.

13:06And that's exactly what happened. When they, kind of as Soviets would say, ran out of bullets, then it collapsed. It imploded as a courthouse. And that's, I think, that's what Mr. Gorbachev should be credited for, that in his ignorance, he removed violence out of the system based on violence. And the glue, the only glue which kept that nations together, the only glue which actually would be forcing people to go to work and do something there, it was gone. and since 1989 all the socialism is gone and these countries are in free fall. Another prediction of von Mises and especially I would say of Murray Rothbard was that how they should desocialize. How it's, I wouldn't say it's easy to go that way, but they did it.

13:51They did all the way, they murdered all these people. But right now the issue is how to return back from this insanity and how to return back with keeping all the skeletons on the cardboard. Because can you imagine if 60 million people out of 200 million population of Soviet Union were physically slaughtered, how many executioners should be around? Can you imagine how many people were involved in these murders? How many people believed in this? And today, this, I would say, the burden of the past is so overwhelming that I think that But for some countries it's just very difficult even to overcome the shock, overcome the shock to find out that all the modern history was the history of lies and crimes and nothing else.

14:41And for people, especially of older age, it's a very bitter pill to swallow. And that's why we see all the time that communists are bouncing back, because communists are providing people with some comfort. No, it was not all crimes and lies, that we see the same mentality. For example, President Yeltsin yesterday endorsed this decree prohibiting other denominations rather than four so-called mainstream denominations, Russian Orthodox, Jewish, Muslim and Buddhist, which I consider to be right now, government religions in Russia today, which is kind of The pendulum's flying in another direction, but prohibiting a lot of denominations to do it, again, that's the same thing that they still cannot admit that freedom is better than slavery.

15:38Moreover, right now, it's again the newspeak, quite a lot, and private property also formally endorsed in, say, Russia, in Ukraine. It's completely fake. If you read New York Times, Los Angeles Times, you would see that right now the major problem of Russia from the perspective of New York Times and Washington Post is the problem that greedy capitalism has completely dislodged all the social structures in Russia. That people are starving because of this greed, of this capitalist, of this absence of compassion and things like that. and things like that. But what kind of capitalism we can talk about that even today, and nobody would mention that, even today in Russia, all land belongs to the state. I mean, the land is nationalized. I mean, this is one thing. I mean, how you can, what kind of property relations you can talk about if anything you do is on a state-owned land and the state can ask you to move anytime. That's one thing. Another thing that they adopted 270,000 different regulations following our example that

16:44The same we see here in less kind of obvious form, but von Mises in 1929, he wrote a critique of interventionism, showing that interventionist governments are just an extension of socialism, it's just a little bit less of it, but it's not a matter of qualitative difference, it's a matter of quality, it's a matter of quality, it's a matter of quality, it's a matter of quality, it's a matter of quality, it's a matter of quality. It's a quantitative difference. It's a matter of how much of regulations you have. And the more we are regulating economy, the more is so-called artificial need to regulate more and more. Because the more problems you introduce with government regulations of the economy, the more government you need to attend these problems.

17:34And so this is really like a drunk who never can get real drunk. So it's, and that will, that the logic of it as von Mises showed, it will bring us exactly to the same kind of things that the people in Eastern Europe and Asia experienced for the last, from 50 to 70 years. The logic of collective action is to have as much government as you can. And because of that I think that this awful experiment, which that people staged on themselves, that we should learn something from that, we should learn something from that. From that the fate of this 170 million people, 170 million people who are physically slaughtered to make this experiment happen.

18:21I'm on a sabbatical leave from my college and they found a replacement for me and the The chair of my department called me and he said, the person who is replacing you put a big picture of Stalin in your office. Big picture of Stalin in your office. So, wherever you defect, you would have a picture of Stalin hanging in your office, no matter what. And that's why I think that the Institute is doing a great, great work in providing an intellectual alternative, intellectual counter-evolution to the ideas of statism, the ideas of coercion, the ideas of state-endorsed violence against people. And I am so proud to be kind of, I would say, an ambassador of Institute at my college, 11 students of which attended already Ludwig von Mises University.

19:12Right now I'm trying to work on University of San Diego students, and hopefully we'll see many of them attending this, this, I would say, festival of intellectual freedom and freethinking in, moreover, when I came to the United States, I really thought that it's the land of the free and the home of the brave, and then, and then I see that there are not so many brave left, yes, and not so many free left, yes, and I never would think about myself that I would be an object of such ferocious attacks, right now I'm being named

20:18This is an intellectual tradition of immense strength, and the strength of this tradition is that we tell the truth. I was very close to Austrian economist. He kind of deviated all his life. He would go into, or become kind of conservative Keynesian and bounce back. His name was Gottfried Habler. Gottfried died three years ago in Washington, D.C., but I was quite close to him when I was in Washington, in Washington, and he was, at that time, 95 years old, and I kind of asked him, what's the reason that the Austrian economist, the longevity is so, life expectancy is so high, he said, he looked at me, he was very frail at that time, he looked at me and he said, because we'll never lie, that's what he said, we'll never lie, and so, and I think that's the strength of the school, that I think it's kind of almighty because it's true, and it's just a matter of time, that people are trying everything else, and they've tried practically everything else, and it didn't work.

21:20And because of that, I think the future is for Austrian School. And I would think that what we observe today is just such a manifestation of success and strength of us. And for me especially, being kind of only neo-Nazi, neo-Confederate on campus, To be part of this great intellectual celebration, it's so needed to know that you are not alone, that you are not thinking, that you are not so different from all these people, and happily you are different from that people, and that really provides me with a lot of strength. Well, and also I would say that Austrian economics, besides showing intellectual futility of socialism, it also provides us with a lot of, I would say, real-day prescriptions, real-day recommendations what to do with the economy if the economy is in a bad shape.

22:21And again, Murray Rothbard, he developed a very logical system of desocialization, How these countries should desocialize? And the whole idea of this system is that private property, based on very fast, on a fell swoop kind of reform approach, that's what would pay. And those countries which followed his advice, and some countries did, like Czech Republic or Estonia, they are doing much better. And yesterday I was reading the World Bank report, and even the central planners from on the World Bank, they were forced to admit that only those countries which went far enough and fast enough did make it, and those countries which didn't, for example, like Russia, Ukraine, Belarus, which still have the government property on land, which do not respect private property at all, these countries are doing much worse than they would be doing otherwise.

23:22And also another thing is that today we see the revival of Austrian tradition say in Russia. Right now in Russia there are three free market institutions openly proclaiming their allegiance to Austrian School of Economics. The socialism, liberalism, bureaucracy, planned chaos, these books were all translated into Russian language. For socialism they have a second printing, first printing was 15,000 right now it's 25,000. The second printing of Socialism by von Mises, the book which Hayek testified that opened his mind, opened to Austrian economics, that he was a socialist himself before reading von Mises' Socialism.

24:10Just two months ago they started something called Catallactics Institute in Lithuania. There are free market institutions in all Baltic states, in Czech Republic, five or six of them already. So we can see that this intellectual tradition is reviving there. Austrian School of Economics was all the time the most hated school back in the Soviet Union, and rightly from the communist perspective. So Nikolai Bukharin, who was the secretary of the Central Committee of the Communist Party, was a student of Boehm-Bawerk in 1912 in Vienna. And upon his return back, he said, this is the enemy, this is the enemy, the enemy. And all other intellectual traditions, he said, they're not strong enough, they're not sincere enough, and they're not close enough to Austrian school.

25:03And so Austrian School of Economics was considered to be, von Mises was considered to be like the most reactionary, which, hearing from whom we heard it, I think was the best compliment that Soviet Communists could make to von Mises. And so, on this note, I think I would like to congratulate all of you, because I think it's the event which we're all very happy to be part of. Thanks.