Socialism: Utopia and Reality

0:00Well, it's a great pleasure to be here, it's Mises Institute, it's my first lab in the United States and the institute is making such a great difference in thinking of young people using fantastic resources on the website of the institute as well. Yes, I was listening to my kind of bizarre biography. I lived in Moscow, and at the end of my career there, I worked as one of economic advisors to the Soviet government. I wasn't the advisor. I wouldn't take the blame for what happened over there. Can you imagine? Eleven time zones, one-sixth of the world's surface, failed miserably. It was destroyed by ideas of this person.

0:49So when we wrote this book, Franklin from Marx, it's kind of a little bit premature in the sense that today his ideas are still reading supreme in many capitals of the world and it looks like in Washington D.C. as well. So Marxism is a very sad corruption saying that the only lesson of history is that it does not teach us anything. And definitely, what is Marxism? And why I am referring to Socialism? Because what if we will look at it, because that's a lot of confusion, for example, among my students. What is Socialism? What is Communism? And many Socialists are presenting the case like Socialism is pretty good, it's Communism which is bad. It's Communism which made so many errors in the book of human history.

1:45But Karl Marx himself, he was a German philosopher.

1:53However, we don't know interestingly enough that even in Soviet Union, some of his writings were considered to be so horrific that they were kept on the lead. They were classified, they were in archives. There is another wonderful movie, I think Silver Circle is must to see, but there is another movie I would recommend you strongly, called Soviet Story, it's the best inoculation against socialism, The Soviet Story, you can either watch it on the internet or buy a DVD. And they recovered some of these archives. And Marx in 1848, writing in Neue Rheinische Zeitung, that's a newspaper he edited, he's writing that in Europe we have a lot of racial trash.

2:41He was the one who came up with this term first. And by racial trash in Europe he believed that racial trash would be Scottish islanders, would be Basques, would be Serbs and other Slavs. and other Slavs, and these people are so backward that they should be burned, as he wrote, in the fire of the revolutionary holocaust. So Marx came up with two ideas, one socialism and another communism. However, communism is a utopia which, according to Marx, would occur only 400 or 500 years from now. Socialism is exactly what was happening in the Soviet Union, in the People's Republic of China, in Cuba, in North Korea, and in other oppressed countries.

3:35What is socialist revolution? According to Marx, we will go through Marx a little bit, the major goal of socialism is to eliminate private property. So, private property was considered by Marx to be theft, to be a means of exploiting other men. So, the bourgeoisie will fight back. The owners of property will be fighting back. And so, because of that, it's inevitable that the blood should be spilled. A dictatorship of the proletariat, which would be established by this revolution, will follow to weed out remaining capitalist elements.

4:20That's kind of a great design. What is communism? Communism is, in four or five hundred years, there will be a classless society. There will be a classless society. People will choose everything. There will be no money. There will be huge warehouses like Costco, Sam's Clubs, but with no money, no cashiers, you just go and help yourself with anything you like, with anything you like. And you work for that. Again, you work selflessly, not for money, not for anything else. And you will never take more, you will never take more than you really need. So that's the utopia. That's, I think it's worth a reading. So I would say that it is nothing but secular religion.

5:11It's a religious faith because, look, this is heaven and earth, right? In communist society, nobody has one exclusive sphere of activity, but each can become accomplished in any branch he wishes. To hunt in the morning, fish in the afternoon, rare cattle in the evening, criticize after dinner without ever becoming hunter, fisherman, herdsman, or critic. That would be this man of tomorrow, according to Karl Marx. And you can see why these ideas can be attractive. You can see why these ideas would be picked up, especially by intellectuals. Why intellectuals love socialism? Why intellectuals, so many intellectuals, are Marxists? Because it gives them a claim to power, that they know more, they are more educated than everybody else.

6:03And so they should run the world. They know better what should be done, who should live, who should die, and what kind of new men of tomorrow we will have. So his ideas were first implemented by Lenin. Vladimir Lenin was the founder of the first socialist state, the Soviet Union. Lenin was pretty unscrupulous. I'm working right now at the Library of Congress quite a lot on something called Volkogonov Archives. It's a very interesting kind of story of Dmitry Volkogonov, who was a full general of the Soviet Army and he was a member of the Central Committee of the Party.

6:50He was one of the most kind of visible propaganda people in the Soviet Union. When he would show up on TV, I would switch it off right away. in a way, because I just could not stand his lies. But interestingly enough, since 1980, he was secretly making copies of everything going through his desk. And today, there in the Library of Congress, when Soviet Union Talapsky became National Security Advisor to Yeltsin, approached the U.S. Ambassador in Moscow, the U.S. Ambassador Well, what if we move all these archives, 46 huge boxes, huge boxes of secret correspondents of Lenin, Stalin, Trotsky, Dzerzhinsky, Khrushchev, Gorbachev, and the US ambassador said, well, what if we move that to the CIA?

7:42and general documents, no CIA, Library of Congress, if CIA guys want to read that, let them get a reader's card and go there. And it's such a wealth of materials, nobody knows about it, it's not sorted even, it's kind of, I would randomly look at it, It is horrendous, horrific letters by Lenin. For example, Lenin received a letter from another party leader in the Southern Russia. In that letter, that party commissar is asking, Dear comrade Lenin, you sent us a memo that we should fight religion. How can we fight religion?

8:27And Menger is writing just on the bottom of the same page, Dear Comrade Imbecile, kill religious people, that's how, and post script, kill them the way that people will tremble 150 miles around. And they did, and they did. And the argument was very simple of Lenin, the Marxist doctrine is omnipotent because it is true, so we can see it's based on faith, it's based on faith, more than on anything else. That's another serial political killer, Leo Trotsky, he is all covered with blood and minced meat. This is the mega-murderer. Under his auspices, more people were killed than by almost every other dictator of the world combined.

9:26Funny enough, he looked like Borat in 1915. This is kind of a plump and joyful mass murderer Nikita Khrushchev. On his watch, seven million Ukrainians were starved to death in the dreadful winter of 1932-1933. Seven million people, all the food was confiscated from them, and they were starved to death to the point that today Ukrainian people cannot still recover from that awful calamity. Khrushchev came to the United Nations, was banging his shoe on the podium saying, we will bury you, we will bury you. What he meant is that capitalism will be buried by socialism. Now his son, Sergey Sergei Khrushchev, defector to the United States and teaching in Brown University in Rhode Island.

10:27So his father probably is propelling in his coffin. Another kind of dictator, Leonid Brezhnev. Why am I showing you this person? Because interestingly enough, he was so old and frail that he couldn't, at the end of and then his term, he couldn't even walk or talk by himself. We call back in Soviet Union that period a reign of corpses, and a reign of corpses in Kremlin. And the joke was that every working day would begin resuscitation. So they would resuscitate him and he would prop him up. So he would be like a weekend with Bernie kind of character.

11:14I think McCain made the point that if Alan Greenstein would die, he would still prop him up and pretend that he is alive because he is such a great person, a great inflationist. Today, and today is, yes, the sad legacy of communism is, right, so what I want to talk right now about is that most people in the West kind of do not know about horrendous The first crimes committed under the name of socialism, that socialism inevitably leads to mass murder.

12:05That people who were the members of the first Soviet government were also very nice people. For example, Lenin could play piano, could speak seven languages, Trotsky would write poetry in French. But the logic of this utopia, the logic of that system, which was a system of public slavery, nothing else, That made them mass-murderers. Why would that be? Because socialism does not have any incentives to work, many incentives to do anything. So the only way to make people work is to shoot them. And they realized that in a very hard way in the 1920s, when Lenin was writing to Zerzhinsky, I was the first boss of Wechi Kai, that time it was KGB, today, and he wrote to him, Felix, I'm telling people what to do, they don't listen, what if we will take a couple of these absent-minded comrades and shoot them publicly?

13:06And they didn't, people began to listen. And so the only way to glue socialist system together is to shoot people and to shoot as many as you wish. In 1930s, when they had the highest rates of economic growth, they were shooting more people than anybody else in human history, 10-12,000 a day, 10-12,000 a day. In the Soviet Union itself, that was the first order of Lenin to kill members of Tsar's family. In the course of the Soviet history, 11 million children were murdered by the government.

13:57For what reason? Because Stalin used to say that apple doesn't fall far from the apple tree. So if you kill a father or kill a mother, then probably children would not like you. And so his point is, why should we reform these people, why it's easy to make new ones? Can you imagine? It's kind of a horrific idea. And according to all kinds of estimates, according to all kinds of estimates, they murdered in in the Soviet Union, anywhere from 43 to 60 million people, 43 to 60 million people. Not many people in the West are aware of that. And I don't care even whether it's 43 or 60. Both numbers are completely horrific.

14:45Stalin used to say, death of one person is a tragedy. Death of millions is just statistics. It's just statistics. He used to solve all problems. He would say, every problem has a man lurking behind it. No man, no problem. So that would be the death sentence. Ludwig von Mises, he talked about and wrote about two patterns of socialism. One is the Russian pattern. It's purely bureaucratic. That means that the whole country is run like one huge post office.

15:30So it's something called command economy. It's not even an economic system. It's a simple system of management. People are being told what to do, and if they don't, they're being shot. They're shot, being sent to Siberia. So this is one system. Another system is, second system is German system. And the Nazism, another form of socialism is National Socialism. If you remember that Hitler's party, the official name of that was National Socialist Workers' Party of Germany. So the only difference between him and Marx in the thinking or Lenin would be that He would combine socialism with racism together.

16:18He would think that people should be new people of tomorrow, should not only be enlightened, but they should look and act differently from people of today. And because of that, we should discard this racial trash, as Marx referred to in 1848. and, sure enough, there were target groups, Jews, gypsies, and...

16:46This is from a wonderful, this table, from a wonderful book called Death by Government. It's also, I would recommend you to read that. It's Rudi Rommel, a demographer from University of Hawaii. He just now retired. He made a list of databases. You can look at him on Google, he has a wonderful website, DemoSight.org, look how many people were murdered by their own governments in the 20th century. He called them mortocracies, 76, 77 almost million in China, 61 million in the Soviet Union, in Germany 21 million. So these are the most... This number of people murdered by socialists is about 170 million.

17:41It's several times more than 38 million people who were killed on the battlefield in the 20th century. The 20th century was the bloodiest century in the history of human race. And and 38 million people were murdered because of senseless wars in Europe. However, by the Soviet Union alone, they murdered 60 million and 38 million, they just dwarfed all the battlefield. So the Soviet Union is a perfect killer state, according to Rudi Rammel and Stalin, 43 million

18:51Communist China, the worst mega-murderer to illustrate it with today's world. I think that the best inoculation against socialism would be, well, one is to watch Soviet story and to read history of real world socialism. Another is to visit Cuba, Cuba or North Korea. North Korea probably is far away and difficult to get into or get out of because they arrest a lot of people who come to visit.

19:39But Cuba is nearby, and you can see this, for example, this is a Cuban store, Cuban store. That's the result of socialism. It reminded me of Soviet, of Soviet store. In the Soviet Union, there was nothing to, can you imagine, 11 time zones, 11 time zones, all natural resources possible and impossible, and people would have shortage of almost everything. There would be no sausage, no soap, no nothing. So if we can come to that store, I was definitely, when I went to this Cuban store, I was definitely intrigued, what is that, these boxes, what's in that box, is that something you can buy right away without rationing card?

20:24And this is baking soda, baking soda, so there's probably nothing to bake with. This is how Cuban cities look like right now. These are all people waiting for reception in the U.S. Embassy, they want to get out. This is Cuban real estate today. It's very sad to see that since 1959 they didn't have any money, didn't put any money in maintenance of buildings. You can see sometimes buildings, we can see sometimes buildings, high rises without houses because plumbing is not working. Can you imagine? You live on the seventh floor and you need to go and you run down to the middle of the night to the outhouse and the one outhouse was 26, for 26 people, can you imagine? It's just a gruesome thing, yes, and it's very very nice and proud people reduced by socialists to rubble, as well as their housing.

21:31And the last thing I want to say is that maybe you've watched a movie by Michael Moore of the CICO, CICO about the glorious healthcare system in Cuba, and because I travel to Cuba, I have some friends, Cuban friends, friends that I made back in Moscow because a lot of The students studied in Moscow or brainwashed in Moscow and I invited one of them to talk to my students and one young student, she said, well, we see this disaster around, but how about health care? We heard that you have the best health care in the world and she said, sure, we have the best health care in the world, but it would be much better if we would have medicines and we have ambulances and we would have clinics and hospitals and this is an ambulance from Cuba.

22:22This is a person who is driving his father to the hospice. This is a picture from a Cuban hospital given to me by a Cuban doctor. The lesson that we should learn from these millions of people who died is that when government is out of control when government is too big, that's the only marks I like, and I think he was pretty right, yes.

23:22And that's the most important for us to keep in mind that freedom is a very rare and precious gift, that most people today in the world do not live under freedom, a lot of people People still live under socialism, people in Cuba live under socialism. People in Cuba do not have health care, do not have housing, do not have rights, do not have property rights. Amazingly enough that Rodrigo, that friend of mine, when we were already finished this meeting and he speaks Russian, we were getting out of the audience and he said best health care in the world. He said the only health care we have is to swim to Miami regularly. There's no other health care possible.

24:10However, we should keep in mind that for themselves, they did a good kind of health care. For the leaders, they would have a different type of health care. In the United States now, we face a lot of problems. Government is getting bigger and bigger and out of control. Inflation is looming, and socialists, amazingly enough, they hate gold, they hate precious metals, because you have a gold standard, you cannot inflate, you cannot take power from the people.

24:57So the gold standard is the only secure way to preserve people's wealth. And amazingly enough, one Chinese billionaire, yes, he read Lenin. Lenin wrote that in the future society we will make toilet commodes out of gold. Because that's what gold is for. Gold does not have any value, his point is. The only value of gold is to build toilet commons. And this billionaire, he did that. And amazingly enough, the Chinese billionaire, who was communist in his youth, he made this at the cost of $7 million.

25:42Today the cost of this is $32 million already. So some people would say, what an idiot. From another hand, he has a nice reply that, no, that was the best investment probably he made, best investment he made. So, we should, I have, I think, my email is there. If you would, I'm also on Facebook. I would be happy to send you this presentation and whatever materials you need, because it's very important for you to keep in mind that your future right now is being mortgaged by the government because you do not vote, your children, your children and your grandchildren, amazingly enough, would be mortgaged because there was a conference on the Fed about issuing 100 years maturity bonds.

26:39and Bonds. Can you imagine? Bonds was 100 years in its unitive. So that means that not only you will be paying back, but your children and children of your children. So that's the federal government now still saying, well, we are still thinking about that. It's pushed by Goldman Sachs. Goldman Sachs, they want to issue these bonds, to sell them, to get Rich Again, at the expense of the United States tax payers. So I think I kind of depressed you enough before, I know that I'm not last I think, one before last obstacle between you and lunch. So I would like to thank you so much for coming here and definitely it's enjoyable to see so many young people interested in economics, in liberty, in free markets and free minds.

27:32That's very, very nice. Thank you.