After Marx?

“In many…points in Political Economy, men are prone to confound cause and effect. It is not that pearls fetch a high price because men have dived for them; but on the contrary, men dive for them because they fetch a high price.”

Richard Whately ( 1787- 1863) Church of Ireland Archbishop of Dublin. 

In May we noted the two hundredth anniversary of the birth of Karl Marx. The celebrations were muted. But one story hit the headlines. The Chinese government was moved to present the city of Trier, the old rascal’s birthplace, with an immense bust of the great man. There was, apparently, panic among the city fathers when they realised that the bronze concerned would actually have to be erected, and could not easily be offloaded on ebay!

It is indeed easy to laugh at Marx. There are undoubtedly elements of farce in his story, and there are laugh-out-loud moments in Leopold Schwartzschild’s “Karl Marx, The Red Prussian” ( New York, 1947 ). However the boils, the pregnant housemaid, the foxhunting on a drugged horse, and the all too frequent begging letters to his rich friend Engels, are not the whole story. He was, as Anthony Flew said of St Paul, “a first rate intellectual.” “Capital” can be compared with St Augustine’s “City of God.” There is serious intellectual meat in Marx. But we should not forget that the whole thing ended in terrible tears, as anyone who has browsed in (say ) Robert Conquest’s “The Great Terror, Stalin’s Purge of The Thirties.”” ( London, 1968,1971 ) will confirm. It behoves us then to understand at least something of what he said, why he said it, why what he said has proved so poor an explanation of what it purported to illuminate, why his predictions proved so inaccurate, and why despite this the stance he adopted- if not in fact his ideas- still exercises a spell over so many of our contemporaries.

Let’s imagine for a moment that Marx was interviewed by an inquisitive journalist as he made his way home from his marathon labours in the British Museum: “What are you doing Dr Marx?”

What would he have replied? He would, I think, probably have offered to give two answers. In the first place he might have wanted to talk about his revolutionary activity.  But while perhaps significant at the time, all that is of little relevance today. Political extremists, both reactionary and revolutionary, were two a penny in nineteenth century Europe, and there was little to distinguish Marx from plenty of other actors on that crowded stage.

When pressed about his ideas rather than his activity Marx would have wanted to distinguish himself from the Utopian socialist with whom he was surrounded in the revolutionary subculture. Instead Marx would have stressed his militant atheism, ( about which more later ) and emphasised that he rejected all religious and idealistic interpretations of what was happening. He would have claimed that he was interested only in the material factors that were at work. He would have gone to say that he was developing a scientific understanding of the way in which capitalist societies worked and that he planned to show in his writings that the market-based economies were doomed. He would have explained his visits to his favourite desk in the Reading Room of The British Museum by saying that he was using the information that he found there to penetrate into the core of the capitalist economy and to discover the true source of huge wealth that he ( and everybody else) being accumulated around him.

He would have boasted that he was basing his ideas on the writings of classical economists like Smith and Ricardo. They had enunciated what has become known as the Labour Theory of Value. The gist of this was that the value of an object was determined by the amount of time which had been spent making it. This meant that those who made the goods concerned were really the rightful possessors of all the value that they had created. If this was true then it was obvious that the capitalist system which had grown up first in England and then spread across the world was profoundly unjust, as in such societies the bosses removed a proportion of the wealth that the workers had created, called it “profit”, and then used it for their own purposes.

For Marx such societies were not merely unjust-although he would have had objected to the idealistic nature of such a term- but far more importantly they were certain to be overturned by revolutions because were run in a way which was inherently unsustainable. Marx believed that he had discovered the laws that governed the development and dissolution of capitalist society. As the population increased so the wages of the workers would decline, as would the level of profit that the capitalists could take out of the system. In this way poverty would increase at the bottom of the society, the smaller capitalists would be remorselessly driven out of business by the larger, and wealth would become concentrated in the hands of a few super capitalists. Such a society would necessarily be unstable. The point would come when revolution would break out and as Marx famously put it, the expropriators would be expropriated. From the ruins a socialist society would emerge which would itself give way to a glorious  communist future in which all would freely give according to their ability, and all would receive according to their need. The theory, or perhaps rather the vision, is a powerful one. And it is no surprise that it found its adherents across the Globe as it makes sense of suffering and injustice, and the same time seems to suggest a remedy for them.

In getting to grips with Marx’s thought we always need to bear in mind that he was not simply a materialist, but in a profoundly radical way an atheist. He had rebelled against God before he had rebelled against capitalism. His atheism meant that for him the course of causation was truncated. For him, stuff just existed. There was for him no need to look beyond it. In other words the reality that he experienced as a brute fact was all that there was. It was this form of reasoning that Marx exported from metaphysics into the study of how business works.

Browsing in “Capital” I was immediately  struck by the sense that this was a world view only tenuously connected with the realities of the economy that it purported to describe. The gulf between “Capital” and say T.S. Ashton’s “The Industrial Revolution” (1948) or even more pertinently Barrie Trinder’s “Britain’s Industrial Revolution, The Making of a Manufacturing People 1700-1870 ” ( 2013 ), WAS troublingly wide. What was going on?  While it was true that Marx was alert to the sufferings of those at the bottom of society in the way that many were not I still did not feel that I was seeing a real economy at work. It was, of course, obvious that Marx had “done his homework” in the B.M. but there was clearly still something missing from his account. For enlightenment as to what this might be I turned to von Mises’ “Socialism” to find that von Mises seemed at first to have been almost as puzzled as I was. But ultimately  von Mises had put his finger on it. For Marx, Mises said, the businessman is ultimately alien to the process of production.

This is an absolute bull’s eye. The reader of “Capital” is given absolutely no image of what businessmen actually do. It was obvious as I read that Marx had never spoken to a manufacturer- except of course Engels -and rarely to a worker. Indeed Engels pointed out that Marx had no understanding of company accounts. Just as Marx had excluded divine thought from the creation of the universe so he excluded the role of the businessman from the creation operation of a business. As a young man growing up in provincial Germany the businesses which he came in contact with would have been fairly simple, and run along customary lines. Skill would have been needed to run the bakery in Trier- but not much creativity. However, all this was about to change. In the early years of Marx’s life huge economic changes were afoot. The fact that he was born in 1818 is a key to understanding both what he wrote, and explains why his ideas have not proved as insightful as he imagined.

A new character was bursting onto the European stage- the creative entrepreneur, who combined a myriad of previously existing factors into a new whole that was far more productive and valuable than the sum of the parts used to create it. Let one example from a slightly later period suffice. In his classic “The Great Plains” ( New York, 1931 ) Walter Prescott Webb tells ( pp. 295-318 ) the story of barbed wire an invention that had a huge impact on the development of agriculture in the United States. The key moment came when a farmer called J. F. Gladen realised ( in 1873 ) that in order to make an effective and cheap fence it was necessary to hang the spikes on the wire, and then worked out how this could be done by braiding several strands of wire together. It was the need for this sort of creativity in any sophisticated economy that Marx completely missed. Consequently he also failed to understand why and how the economy of the nineteenth century was becoming far productive than any that had previously existed.

This is not, of course, to suggest that this flowering of the creative spirit and the industrial growth that went with it was an entirely benign process. It wasn’t. The first years of what became known as the Industrial Revolution were extremely difficult for much of the working class. And these difficulties misled Marx into thinking that Capitalism was INHERENTLY exploitative The application of science and of rational business methods to the whole process of getting and spending was at the same time liberating and damaging. One the one hand the new methods radically improved the way that people ran their economic lives, and on the other hand they destroyed jobs in the older industries, and created a deracinated working class, concentrated in new and unlovely towns.

This dark side of early British industrial capitalism was all the more sombre in periods of economic difficulty. According to H.B. Acton, the 1840’s- the so called “Hungry Forties” were crucial for an understanding of “What Marx really said.” – to quote the title of his fascinating little book on the subject. ( New York, 1971, p 6)  Acton stresses that this was the decade which provided the experiences which moulded Marx’s ideas about capitalism. It was indeed during this decade of hardship and poverty that he and Engels first enunciated their beliefs about the future of Capitalist society in “The Communist Manifesto” ( 1848 )- a year which saw revolutions break out all across continental Europe, as well as huge protests in England and another rising in Ireland. This is the context in which Marx formed his ideas about the exploitive nature of capitalism.

However he failed to see a host of other factors in the society which largely vitiated his pessimistic conclusions. Indeed the whole history of the LATE nineteenth century tells against his interpretation of events. Just as he blinded himself to the part that businessmen were playing in creating wealth, so too he failed to see the way in which politicians would ultimately react rationally to the deplorable living and working conditions that he and others had drawn attention to by passing  and enforcing appropriate legislation. Nor did Marx show any understanding of the way in which the working class could use the Parliamentary system to advance its welfare. He also completely missed the extent to which the working class would develop its own self-help institutions within the broad framework of the capitalist system.  Far many people it made more sense to save for a rainy day than to hope for a revolution.

Crucially, Marx missed the fact that rising productivity meant that employers could afford to pay their workers more- much more. This in turn meant that far from becoming poorer, the working class was becoming much more prosperous. During the years in the middle of the century when Marx was beavering away in the British Museum an extraordinary transformation was taking place. According to W.H. Mallock, writing in 1894- ( only eleven years after Marx died ) the working class then received an income significantly larger than the income of THE WHOLE OF THE UNITED KINGDOM in 1837! While this improvement was neither universal nor continuous the broad certainty is that in the second half of the nineteenth century the conditions of the working class were significantly better than they had been when Marx was growing up. (This is confirmed by everybody- except Marx- who has studied the period, including such left-leaning historians as Sir Robert Ensor.)

What then are we to make of Marx and his system ? Were his ideas merely a time bound reflection of what was happening in the early nineteenth century? This is probably the correct view. Capitalism, and the liberal institutions it alone sustains, has proved far more successful and adaptable than the left has ever grasped. , But we should recall- how can we easily forget?- that Marxism has proved itself adaptable too. Like John Brown’s, Marx’s body lies a mouldering in the grave, and like John Brown’s soul, Marx’s spirit or rather his thought, have gone marching on although in a strangely transformed way.

The curious fact is that Marxism’s capacity to survive has come not from its inherent credibility, which is low, but rather from the fact that a sect of Marxists levered itself into power in the Russian Empire during the First World War. Marxism was given additional credibility when the Non-socialist economies of the West got themselves into deep trouble after the Wall Street Crash of 1929. And this in its turn produced a fascist/ Nazi wave which, as it turned, out could be dismantled only with the military assistance of the Marxists in Moscow. And then after WW2 came the whole drama of decolonisation, which was successfully exploited by Marxist propagandists.

In the long run however none of these factors could do anything to repair the weaknesses in the original theory or to hide the success of the market based economies. Indeed the car crash that the Soviet economy became provided further evidence for what such critics of Marxism as W.H. Mallock and Ludwig von Mises had been saying in the previous century .However- and here we have an adaptation that Darwin, if not Marx, would have appreciated by the nineteen fifties the left had redrafted Marxism in a daring way. Instead of talking about the labour theory of value, the increasing poverty of the working class, and the wonders that would follow the revolution, the critics of capitalism began to claim not that it failed to produce wealth but that the wealth it created obliged people to live in an inauthentic and alienated way. Indeed some of them got close to asserting that capitalism far from making people too poor, had made them too rich.

Instead then of being a precise (and at least in form, scientific ) critique of capitalist economies, the Marxist cry turned into a vague condemnation of “the system”, and a demand not just economic justice but the transformation of western civilization as a whole. While Marx asserted that everything could be reduced to economics, and claimed that the laws he had discovered pointed inevitably towards a communist future, the middle class radicals who appropriated his name in the sixties and afterwards saw economics as merely one front in their total war on the oppressive structures that they found almost everywhere. For the New Left, there was nothing inevitable about the process. For them activism and the personal sense of satisfaction that it gave them was everything. Thus it was that the “hard” economic teachings of the bearded sage of Maitland Park were abandoned even by those who still claimed to be marching behind the red flag. The newly erected monument in Trier is  then less a shrine to the aspirations of whatever is left of the working class than to the frustrations of a decadent bourgeoisie.

SUBSIDIARY STUFF

Just as I was finishing this piece I found a volume I had long forgotten by Arnold Lunn called “Revolutionary Socialism” ( London, 1939)  jammed into an obscure book case. When I was finally able to extract it, I discovered within it ( p. 237-8 ) the quotation from Archbishop Whately which adorns the start of this piece.

I have tried to keep most of the references to books I have helped me within the main text. But there are a few others that I think I should mention. Schartzschild- the details of which are in the text- is funny but unfair. But he is useful though for his description of Marx’s theory- 318 ff. Also important is Robert Payne’s “Marx” ( New York, 1968) which contains some delightful snippets including the fact Engels was a talented amateur cook- his lobster salad being particularly highly regarded!

I also want to mention C. Northcote Parkinson’s “Left Luggage, From Marx to Wilson” ( London, 1967 ). This is a much more serious book than the author’s reputation as a humourist would suggest. Parkinson points out (p. 45-6) that Marx had  announced his theory before doing the research on which it was allegedly based, and that anyway, at the time he was writing, very little was known about economic history.

E.L. Woodward, “The Age of Reform” (Oxford, 1938) is of interest because he points out (p. 123-4 ) that Marx was by no means alone in using the writings of the classical economists to attack capitalism. Was Marx perhaps less original than his fans have often implied?

Pauline Gregg’s “ A Social and Economic History of Britain 1760-1963, ( London,1965) is particularly good on factory legislation ( p.120 ff ) and self-help ( p. 314 ff). It is important to note that much of the impetus behind factory legislation- hours and conditions of work and so forth came from Tories ( p.125 ). In fact several prominent radicals opposed the Factory Legislation- see Woodward above p.142. It is undeniable that such legislation was introduced much too slowly- although it is worth noting that the first, admittedly modest, piece of factory legislation was introduced in 1802- sixteen years before Marx was born. To start with there was also a serious problem in the enforcement of what Factory Legislation was passed, partly because many of the magistrates charged with doing so were themselves factory owners.

There is no need to further belabour the values of W.H.Mallock’s writings on this site. The place to start is the section about Mallock in Kirk’s “The Conservative Mind.” The snippet included in the text come from “Labour and the Popular Welfare” ( London, 1894)p. 249-250.

The passage from Ensor I am thinking about is to be found on p134-5 of his “England, 1870-1914” ( Oxford,1966).  Ensor also mentions the valuable part played by Friendly Societies in providing assistance to  some working class women when they had children. ( p. 499 )

The point that pure Marxism- grounded in the Labour Theory of Value- was more or less past its sell by date in the late nineteenth century is made by Peter Gay, in “The Dilemma of Democratic Socialism, Edward Bernstein’s challenge to Marx” (New York, 1962/1952 ). Gay’s book contains some good summaries of Marx’s thought which I have found useful.

I have not looked at my copy for ages but anyone who is interested in The New Left should get a copy of “Second Thoughts, Former Radicals Look Back at the Sixties” ( Madison Books, Lanham, New York and London, 1989 )

One of the many great advantages of Barrie Trinder’s book about the Industrial Revolution is that deals with business activities in Ireland. For the part played by Irish radicals in England see Woodward above p.129-130.

For- so to speak- the reverse of what Marx was writing about see J. Mordaunt Cook “The Rise of the Nouveax Riches, Style and Status in Victorian and Edwardian Architecture”( London, 1999.”- the subject matter of which is far wider than its title .implies. R.M.

Robert Wyse Jackson on “Life in The Church of Ireland 1600- 1800.” ( 1 )

One of the great joys of living- as I do- near Gorey in Co. Wexford, is Zozimus Book Shop run by my friend John Wyse Jackson. John is not simply a bookseller, but also a social entrepreneur, and the shop ( which is linked to an excellent coffee shop ) has become something of a social centre. John is an authority on Irish literature, and has written a biography of John Lennon which attracted considerable attention when it was published some time ago. He comes from a literary family, and he has just edited a new edition of a book by his late father Bishop Robert Wyse Jackson entitled “Life in the Church of Ireland 1600- 1800”. This new edition was launched recently at a reception in the Zozimus Book shop.

The markedly convivial gathering was eloquently addressed by:-

FR. CHRIS HAYDEN 

Robert Wyse Jackson ( 1908-1976 ) Church of Ireland bishop of Limerick and Kerry. The picture is by Thomas Ryan P.R.H.A.

When John invited me to speak at the launch of this re-publication of his late father’s book, I agreed without hesitation. It tickled my fancy that a Roman Catholic priest should be asked to launch a book by a Church of Ireland clergyman, about life in the Church of Ireland. I’m not by any means the best-qualified person for the task, but I take comfort from the fact that this book deals with social rather than political history. Not that the two can be separated entirely, but Robert Wyse Jackson set out to chronicle something of life in the Church of Ireland, rather than writing about the bigger and more complex matter of the Church in the life of Ireland.

This is a well-researched book, but it doesn’t read like an academic history. It has a pacey feel that I would associate more with a novel than a history book. It’s not heavy; it doesn’t put the reader on the spot, or demand that we take up a particular position regarding some or other aspect of history. I like how John puts it in his foreword: ‘Today we tend to judge the past harshly, when loyalties, prejudices and social practices do not agree with our own. There are few such retrospective judgments here, however. The clerics and laypeople in these pages are generally viewed according to the standards of their own times. As we read here about their various lives – eccentric, misguided or saintly, as they may have been – it is a relief to know that we are free to make up our own minds.’

And that really is quite a relief, if we think of what a tumultuous time in our history the 17th and 18th centuries were. The Penal Laws were biting hard, even if they weren’t rigorously enforced in every place and at every time. There was the savagery of the Confederate Wars, beginning in 1641, finally put down by a certain Mr Cromwell, who – despite the odd attempt to rehabilitate him (though not, I hasten to add, in this book!) – was surely no stranger, himself, to savagery.

Given that background, it is a relief to read a book about that time that doesn’t leave one exhausted, or suffering the demoralizing effects of moralizing. Truth to tell, there’s more here to entertain than there is to exhaust. Let me share with you the one thing I found most amusing as I read this book – something that left me laughing, not at one of the characters in Wyse Jackson’s story, but at myself and my response to what I was reading.

This is an honest book. There isn’t the faintest hint of an apologetic for the Church of Ireland, or of a denigration of any other faith. And there’s no airbrushing of anyone’s foibles or failings. In the opening chapter, appropriately enough entitled, ‘The Seventeenth Century Opens,’ there’s a description of ‘The notorious Miler Magrath, prelate for more than fifty years and Archbishop of Cashel for thirty-six.’ Wyse-Jackson says that he was ‘quite obviously nothing more than a blackguardly if picturesque ecclesiastical bandit,’ but that ‘At least, to his credit, he does not seem to have attempted to hide his activities under a mask of virtue.’ (p. 10). A contemporary had written that the people in his dioceses ‘scarcely knew if there was a God.’ (p. 11). If he wasn’t much of a theologian, this Miler Magrath certainly didn’t lack shrewdness: he parcelled out the best of Church properties and benefices among his children.

As I, a Catholic priest of the 21st century, read about that gentleman, a bishop of the ‘reformed church’ (to use the author’s own term) of the 17th century, I felt a certain sense of relief. Not pleasure, not gloating, not Schadenfreude… just a faint sense of relief. Why? Well, I suppose I was thinking, barely consciously, of the many historical failings in my own Church, and it’s human nature to derive some consolation from the knowledge that one’s own ‘group,’ whether that be church, country, family or whatever, has no monopoly on sin or stupidity.

But my relief was short-lived. I should have paid more attention to the name of that ‘picturesque ecclesiastical bandit.’ ‘Magrath,’ for heaven’s sake! Yes, he was a former R.C. As our author puts it, ‘This ex-Franciscan was quite without principles and a notorious drunk.’ I enjoy it when that happens, when I’m reading something that inadvertently taps into my own attitudes, anxieties or prejudices, and begins to unpack some of my own baggage. This book, I’m sure, was not written with any such psychological aim in mind, and yet I found that the reading of it brought me one or two subtle moments.

During a period that is associated with the suppression of things Gaelic, I was fascinated to read about the concern with preaching in Irish (cf. pp. 32, 47). Bishop George Berkeley is quoted as asking ‘Whether there be any instance of a people’s being converted in a Christian sense, otherwise than by preaching to them and instructing them in their own language.’ That concern went as far, in 1652, as a grant of a pound a week to encourage preaching in the vernacular in Dublin.

Also, as we might expect, there was some concern in those times with the Crown. I enjoyed the naive triumphalism of a hymn commissioned for a celebration, in St Patrick’s Cathedral, of the Restoration of King Charles II, in 1660. Here are the lyrics quoted by Wyse Jackson:

 

Now that the Lord hath re-advanced the Crown;

Which thirste of spoyl, and frantick zeal threw down,

Now that the Lord the Miter hath restored

Which, with the Crown, lay in the dust abhorr’d:

Praise him ye kings,

Praise him ye priests…

 

Angels look down and joy to see

Like that above, a monarchie;

Angels look down and joy to see

Like that above, a hierarchie. (p. 68)

 

Those charmingly unselfconscious lyrics reflect what today might be called the hegemonic narrative – a narrative long since subverted. Pardon the digression, but imagine: there are people in positions of influence who would remove the study of history from our schools, to make more space for Science, Technology, Engineering and Mathematics. But what have we got to put us in our place, to debunk our grand notions of ourselves and our times, to open our eyes and our minds… what have we got for that task but a sense of historical perspective? How can we critique or revise our thinking about today, except in the light of history? At this remove, the political consensus captured in that hymn seems almost charmingly pathetic. Maybe, just maybe, there are unquestioned aspects of our own consensuses that ought to be exposed as pathetic… or worse!

There’s a lot in this book to entertain and inform, but I’ll draw towards a close with one last topic: the little matter of religious intolerance, which is so intolerably shocking to this tolerant age of ours. Here’s a tidy understatement from our author, about half-way through the book: ‘It must have become quite clear by now that the religion of the seventeenth and eighteenth centuries left little room for toleration… Religious controversy was generally conducted with a violence of language which startles the modern reader.’ (p. 105). Wyse Jackson illustrates that by quoting the Anabaptists of Cromwell’s time, who describe the Lord Protector as a ‘grand impostor… loathsome hypocrite… detestable traitor… prodigy of nature… opprobrium of mankind… landscape of iniquity… sink of sin… compendium of baseness…’ (p. 105).

There have, of course, been people who would say that those Anabaptists were blessed with a flair for objectivity, but sin scéal eile! And of course it wasn’t all bad. There were clergy who fostered a spirit of friendliness between Protestants and Catholics, which, as Wyse Jackson says, was ‘enlightened work in the days of persecution and penal laws.’ (p. 140). In 1786, Bishop Law of Clonfert wrote: ‘Unable to make the peasants around me good Protestants, I wish to make them good Catholics, good citizens, good anything…’ (pp. 140-141). Then there’s the story of a parson somewhere in the west of Ireland who made a good show in front of his visiting bishop by borrowing ‘eighty clean and well-dressed Roman Catholics from his friend the parish priest!’ (p. 141).

At the very end of the book, the author notes, ‘The Church has lived through dark and evil days.’ And yet it moves forward, he says, as ‘a company of loyal and faithful men and women pressing through the gloom towards the Kingdom of God.’ Those are the closing words of Wyse Jackson’s survey of life in the Church of Ireland in the 17th and 18th centuries, and I think they’re an apt description of the challenges, including the ecumenical challenges, that can face Christians in our own day. A book like this helps us not to take any gloom too seriously, but to put it in its place, which is to say, in historical perspective.

NOTES. Fr Chris Hayden is Curate in Charge of Coolafancy Co. Wicklow.

The book by Robert Wyse Jackson is published by Ballinakella Press. It is available from  Zozimus Book Shop ( included in our “Visiting Ireland”  links category ) for E17.50

Capitalist technology saved the Soviet Union!

By Philip Vander Elst.

Despite the central role played by State controlled central banks and financial institutions in bringing about the conditions which led to the global credit crunch of 2008, free markets and ‘capitalism’, rather than government failure, have taken all the blame for that complex crisis, and Marxism and other varieties of socialism are once again attracting the enthusiastic support of many young people in our universities and colleges.

Unfortunately, however well intentioned, this renewed interest in hard-core socialism, and the belief that it offers relevant solutions to our existing problems, ignores the lessons taught by the many failed socialist experiments of the 20th century, some of which are described by two American economists: Kevin D. Williamson, in his recent paperback, The Politically Incorrect Guide to Socialism, and Thomas J. D. Lorenzo, in his equally informative and well documented new study, The Problem with Socialism.

What, in this context, but on a narrower front, I wish to do in this article, is to draw the attention of open-minded left-wing readers to the significant but little known and highly relevant fact that for decades, Western capitalist technology sustained the failed economic experiment of Soviet Communism, rescuing it from the full consequences of its inherent systemic weaknesses, until its final collapse in 1991.

Full analysis, with sources set out in my 1981 IEA study.

This failure of the Marxist model in post-1917 revolutionary Russia, and its subsequent parasitical dependence on Western capitalism, was set out in detail in my paper, Capitalist Technology for Soviet Survival, published in 1981 by the Institute of Economic Affairs. All I have room for here, a generation later, is to provide a brief summary of some of the relevant arguments and evidence presented in that paper. That this should be necessary nearly 30 years after the fall of the Berlin Wall, was recently underlined by the views expressed by Fiona Lali, president of the Marxist Society at London University’s School of Oriental and African Studies (SOAS), during a recent interview on Radio 4’s Today programme.

Asked about the failure of Soviet Communism, following her previous comment that capitalism had outlived its usefulness, “she claimed that it had ‘never had the chance to develop’ because of interference from the West.”  Not surprisingly, British historian, Dominic Sandbrook, from whose article in the Daily Mail (22/1/2018) this quote is taken, commented: “My real thoughts about Ms Lali’s version of history are not fit for publication,” and one can easily understand his incredulity.

To begin with, the widespread belief on the Left that Soviet Communism took over an oppressive society and a backward rural economy that it subsequently and heroically transformed into an advanced and powerful industrial state, improving workers’ rights and the living standards of the mass of the population in the process, is the very opposite of the truth.

The truth about the legacy left pre-revolutionary Russia.

Whilst pre-revolutionary Russia was backward compared to Britain, Germany and the United States, her economy was developing rapidly and her society was undergoing significant liberalization in the last decades of Tsarist rule. During 18 of the last 25 years before the outbreak of the First World War in 1914, Tsarist Russia enjoyed the highest rate of industrial growth in the world, and by 1913 was overtaking France as the world’s fourth industrial power. As for the progress of liberalization, here below is a summary of what had been achieved that will startle many readers, coming as it does from the pen of a great Russian historian and political scientist of Hungarian origin, the late Professor Tibor Szamuely (1925-1972), a former Red Army veteran imprisoned by Stalin,and a former Vice-Rector of Budapest University and Lecturer in Politics at Reading University until his untimely death in 1971.

To quote from his pamphlet, “Communism and Freedom”, published by the Conservative Political Centre in September 1969: “Few people in the West realize to what extent before the Revolution, in the early years of the 20th century, Tsarist Russia had full freedom of the press – no censorship: even Bolshevik papers and books were freely printed – full freedom of foreign travel, independent trade unions, independent courts, trial by jury, a fairly advanced system of social legislation, etc. Tsarist Russia had a parliament, a Duma, with MPs elected from various parties, including the Bolsheviks. This was not a full parliament in the English sense of the word (the executive was not responsible to parliament), but today, on the whole, pre-revolutionary Russia would be regarded as a model democracy, and compared to most of the hundred and twenty-odd countries inhabiting the United Nations Organization, one of the fifteen or twenty most liberal states in the world.”

After decades of Communist rule, by contrast, with its concentration of all power, ownership, and resources in the hands of the omnipotent Marxist State, tens of millions of people had died in internal repression under Lenin and his successors, the seeds of liberty and democracy had been totally stamped out, trade unions had become the passive and subservient organs of the Communist Party, corruption had become universal, and the mass of the population had been reduced to a condition of penury, misery, and serfdom.

A few key facts showing the economic failure of Communism.

Here below are just a few key facts about the material conditions of life under Soviet Communism. According to such scholars as Professor Sergei Propokovich, Dr Naum Jasny, and Mrs Janet Chapman, for instance, the real wages of Soviet industrial workers in 1970 were hardly higher than in 1913. Similarly, the Swiss economist, Jovan Pavlevski, calculated in 1969 that the real wages of Soviet industrial workers attained the level of 1913 only in 1963. Pavlevski also found that the real incomes of Soviet agricultural workers in 1969 were only 1.2% higher than in 1913. In addition, let it be remembered, unlike the pampered Communist elite, with their posh apartments, countryside villas, and privileged access to imported luxury goods, Soviet citizens had to endure the daily misery of constant shortages of the most basic necessities, like washing powder, razor blades, meat and vegetables, and many other items we take for granted in the West.

This picture of the generally low living standards suffered under Soviet Communism between 1917 and 1991, darkens further when one includes the evidence of the widespread poverty that existed among old people and the inhabitants of some of the most backward former Soviet republics. Thus according to Ilja Zemstov, a former professor of sociology at the Lenin Institute of Baku (Azerbaidjan), writing in 1976, one in two retired persons in the Soviet Union lived in poverty, and in the Soviet republic of Azerbaidjan, 75% of the population lived below the poverty line and there were more homes without water, electricity and toilets than in the whole of Western Europe. Other scholars, also writing in the 1970s, calculated that about half of all housing in the Soviet Union was without running water or sewerage, and living space per person was only about half that available in Western Europe.

But perhaps the most telling single fact revealing the economic bankruptcy of Soviet Communism, was the spectacular failure of its inefficient and unproductive collectivized agricultural sector. Despite only representing about 3% of the total agricultural area of the Soviet Union, the tiny private holdings cultivated in their spare time by Soviet collective farmers provided one-third of the country’s total agricultural output.

The inherent flaws and weaknesses of the Marxist model.

Far from Soviet Communism never having “had the chance to develop” because of interference from the West, as Fiona Lali believes, the endemic economic failure and oppressive character of the Soviet Union flowed inevitably from its Marxist model of economic and social development. A society in which the State owns and controls every sector of the economy, and is the sole landlord, employer, doctor, educator, and welfare provider, cannot fail to be destructive of freedom, personal incentives, creativity, and entrepreneurship, whilst monopolistic government central planning, reflecting the limited knowledge and political priorities of the ruling bureaucracy, inevitably stifles innovation and technical progress. That is why the negative experience of Soviet Communism was repeated in every other Communist revolution and country during the last century.

Given these truths, the idea that Western interference hindered the outworking and therefore the success of the Communist experiment in the Soviet Union, is absurd. As will be shown below, the exact opposite was the case. In one form or another, Western capital, ‘know-how’ and technology actually pulled Soviet Communism’s chestnuts out of the fire in nearly every decade of the Soviet Union’s existence, principally by compensating it for its above-mentioned systemic inability to generate significant levels of indigenous technological innovation.

Whilst there was nothing inherently lacking in the quality of Soviet scientific research, the limitations of central planning, and the absence of market mechanisms and incentives, prevented the systematic testing of the fruits of research against competing alternatives. Instead of allowing the dispersed knowledge, opinions and talents of millions of individuals, freely co-operating in the market place, to determine the success or failure of new ideas and discoveries, nearly all economic activity in the Soviet Union was narrowly constrained within the developmental straitjacket imposed by its all powerful Communist rulers; hence the need to import skilled personnel, know-how and technology from the freer and more dynamic societies of Western Europe and North America. And this need, moreover, was all the greater, given the entrepreneurial and skills gap created by the physical liquidation of so many of pre-revolutionary Russia’s most productive and educated citizens, and by the ‘brain drain’ of all those who, by fleeing abroad, managed to escape imprisonment and execution at the hands of Lenin’s killer squads and secret police.

Dr Anthony Sutton’s pioneering study.

The incredible but little known story of the manner and extent to which Western Capitalism came to the rescue of Soviet Communism, was told in abundant and fascinating detail half a century ago, by American scholar, Dr Anthony Sutton (1925-2008), a former Research Fellow of the prestigious Hoover Institution in California, in his massive three-volume study, Western Technology and Soviet Economic Development 1917-1965.

The key finding of this exhaustively documented historical survey, based on literally hundreds of official and unofficial Western and Soviet sources, and abounding in statistical charts, tables, footnotes and appendices, was that 90% of all Soviet technology was of Western origin.

To explain this finding in more detail, Dr Sutton examined 75 major technological processes in such crucial and diverse sectors as mining, oil, chemicals, machine building, aircraft, communications, agricultural equipment, etc, and estimated the percentage that originated in Russia. The startling results were: between 1917 and 1930, 0%; between 1930 and 1945, only 10%; and between 1945 and 1965, a mere 11%.

Whilst there were some indigenous Soviet advances between 1930 and 1945 in the development of machine guns (!), synthetic rubber, oil drilling techniques and boilers, such advances were temporary and later abandoned in favour of foreign designs and processes. Between 1946 and 1965 most of the progress of Soviet innovation depended on the ‘scaling up’ of existing plants and technologies imported and copied from the West. This was particularly the case in iron and steel making, electricity generation and rocket technology.

Famous Western companies flocked to the Soviet Union.

Western capitalism’s breast-feeding of Soviet Communism began in the 1920s, during the period of Lenin’s ‘New Economic Policy’, when more than 350 foreign concessions were employed within all sections of the Russian economy except furniture and fittings. Among the foreign firms that flocked to the Soviet Union with their technicians, machinery and capital were famous names like General Electric, Westinghouse, Singer, Du Pont, Ford, Standard Oil, Siemens, International Harvester, Alcoa, Singer, Krupp, Otto Wolf, and many others, including important British, French, Swedish, Danish and Austrian companies. And their beneficial impact on the Soviet economy was dramatic.

Thus, for example, by the end of the 1920s, 80% of Soviet oil drilling was conducted by the American rotary technique and all refineries were built by foreign corporations. As a result of this transfusion of Western capital and expertise, there was a recovery of Soviet production from almost zero in 1922, in the wake of the civil war provoked by the Bolshevik seizure of power in October 1917, to pre-First World War figures in 1928.

The same pattern carried over into the decade and a half of 1930 to 1945. During these years, the huge industrial plants built for the machine-tool, automobile, aircraft and tube mill industries, were erected by foreign companies, and 300,000 high-quality foreign machine-tools were imported between 1929 and 1940. Throughout the Second World War, moreover, the Soviets (despite their previous treachery in cementing the 1939 Nazi-Soviet Pact) received $11 billion of resources and equipment from the United States under Lend-Lease.

The defeat of Hitler subsequently enabled the Soviet Union to plunder Eastern Europe for her post-war needs. Two-thirds of the German aircraft industry, the major part of her rocket production industry, about two-thirds of her electrical industry, and tons of military equipment were seized by Stalin. The German rocket installations acquired by the Russians, moreover, included the huge underground V-2 plant at Nordhausen, and laid the foundation of the Soviet ‘Sputnik’ programme – so even the much heralded Soviet space effort owed much of its success to the forcible acquisition of Western technology. As an added bonus of the Allied occupation of Germany, the Russians received 95% of the plants dismantled in the American zone, including such strategic goodies as aircraft plants, ball-bearing facilities and munition plants.

The technological breast-feeding of Soviet Communism by Western capitalism continued even during the period of the Cold War. From 1959 to 1963, for example, the Soviet Union bought at least 50 complete chemical plants for chemicals not previously produced in the Soviet Union, and Soviet imports increased ten-fold between 1946 and 1966 – from 692 million roubles to 7,122 million. In addition to all this, two-thirds of the Soviet merchant fleet had been constructed in the West by 1967.

The evidence, then, is overwhelming. Soviet Communism did not fail because it wasn’t given enough time to pursue its totalitarian and murderous objectives free of ‘Western interference’. It failed precisely because of those objectives, and despite repeated infusions of Western capital, know-how, and technology, spanning at least five decades.

The final verdict of Alexander Solzhenitsyn.

As always, the central truth of the matter was stated most lucidly and clearly by Russia’s greatest 20th century writer and dissident, the late Alexander ( 1918-2008 ) Solzhenitsyn, in a speech in 1975 to American trade unionists:

“The Soviet economy has an extremely low level of efficiency…It cannot deal with every problem at once: war, space (which is part of the war effort), heavy industry, light industry, and at the same time the necessity to feed its own population. The forces of the entire Soviet economy are concentrated on war…everything which is lacking…they get from you. So indirectly you are helping them to rearm. You are helping the Soviet police state.”

Let those embracing Marxism in our colleges and universities ponder these things and ask themselves whether the cause they are now embracing is truly worthy of their energy and idealism.

 

Philip Vander Elst (copyright, 2018)

NOTE. Tibor Szamuely’s daughter Helen ( 1950- 2017 ) addressed a meeting of The Edmund Burke institute which was held in Dublin in 1988..