Ayn Rand’s famous novel (which this substack is named after) ends with Atlas shrugging – an iconic metaphor for what happens when those who carry the world on their shoulders are pushed to their limit and forced to say, “No more!”. It is my belief that we are getting very close to experiencing this Earth-shaking shrug. How do we stop it from happening?
In this series of posts, I draw on a variety of sources by those who are much smarter than me and pondering the same issues. My goal is to organize the thought process. I hope that you, the reader, see this series as an invitation to an honest, meaningful discussion that will bring us together to work out a constructive and positive way forward.
In the first five posts, I try to get to the root of our problem, because defining the problem is the first step towards solving it. The rest of this series is devoted to considering possible solutions.
Every now and then, I will follow with a HANDOUT – a succinct one- or two-page summary you will be able to download, print and distribute.
Communism has now been proven NOT to be a viable political or economic system, even though delusional fanatics and self-serving ideologues are still running around with commie ideas.
Communism’s seductive, seemingly “just and fair” concept of ‘from each according to their ability, to each according to their needs’ is the opposite of meritocracy – the only system we know that moves the society forward – and is simply not practically implementable, because at its core is a futile desire to fundamentally alter human nature. Humans are self-interested. You can harness that (as capitalism does: this is why it has been so economically successful), but you cannot change that. This is why throughout history any attempt at implementation of communism and its “little brother”, socialism, has devolved into a destructive quagmire.
“Planned economies” and ‘redistribution of wealth” schemes inevitably lead to unimpeded looting of society’s resources by those who have maneuvered themselves into positions of control. A new ruling class emerges, with near-unlimited opportunities for abuse of the power centralized communist system affords them. They use that power to grab what they can, before it’s all gone.
And it will be all gone – because communism and socialism focus on redistribution of wealth, “conveniently” forgetting that wealth must be created first. You need capital formation to move society forward. When you stop creating wealth, you start using it up until there is nothing left.
One of my favourite quotes on this subject is by Margaret Thatcher:
“The problem with socialism is that you eventually run out of other people's money.”
Throughout history, every attempt to build a communist/socialist economy has ended up in disaster:
Soviet Union resorted to covertly borrowing billions of dollars from the West to try and keep itself going, and eventually collapsed anyway, defaulting on its debt and taking the entire Eastern block down with it.
Cuba is an impoverished island, where people routinely go hungry and drive patched-up 1950s American cars left behind by the departed “bad capitalists”. Hours-long power cuts and food shortages have resulted in recent widespread protests across the country.
https://www.cnn.com/2024/03/18/americas/cuba-protests-food-economy-intl-latam/index.html
North Korea is a horrendous death trap, sustained only by its communist junta’s illegal arms and drug dealing.
Venezuela, which was once a rich and prosperous country, is now a wasteland people flee from by the millions to escape the misery of this “socialist paradise”.
China exists on the back of the prosperous West. I firmly believe that if the Chinese Communist Party hadn’t come up with clever ways of utilizing its slave labor force to flood the West with cheap, substandard goods, China’s “economy” would have collapsed long ago. It’s no coincidence that today, the CCP is very preoccupied with preventing millions of its citizens from fleeing that version of “communist utopia”.
I have recently come across a funny meme that succinctly sums up that particular trend:
“When the Berlin Wall fell, which side did the people run to?”
In what we usually refer to as a “capitalist” society, distribution of advantages is based on merit. We measure merit by the amount of money (a.k.a. capital) generated by one’s hard work, entrepreneurship and ingenuity. People then use the capital they’ve amassed to buy what they want and need in the free market, where the only eligibility criterion for the purchase is that they have enough money. I am fully aware that money is not a perfect measure of merit. But it’s the best one we’ve come up with so far.
The alternative to ‘capitalism’, commonly referred to as ‘socialism’ or ‘communism’, distributes advantages based on a Marxist principle of “to each according to their needs”. This is also often referred to as “redistribution of wealth” – taking from those who have capital and giving to those who don’t. On the surface, such a distribution system appears to be “more fair”. But how could it possibly be fair to take money from someone who’s earned it and give it to someone who hasn’t?
Imagine what both participants in such “redistribution” are thinking. The one that earned the money will say, “Why bother? It will be taken from me anyway,” and work less hard. The one who got free money will say, “Great! I don’t have to work!” Productivity of such a society falls through the floor.
Throughout history any practical implementation of this Marxist principle has run into a three-fold problem:
To begin with, people (who are self-interested, remember?) will simply not contribute according to their maximum ability if they can get away with contributing less in exchange for the same benefits.
The second level of trouble arises when people figure out how to take advantage of the system by dressing up their WANTS as NEEDS, and by claiming a “need” (often falsely or fraudulently) in order to grab what they WANT.
As if all that wasn’t enough of a problem, there is another, much more nefarious level of mess that any socialist “redistribution of wealth” system produces. In such a system, individuals and not economic laws are tasked with the distribution, and for these individuals opportunities for graft, corruption and abuse abound. They will inevitably “distribute” more and more of the collective wealth to themselves and their buddies, and to whoever is willing and able to bribe them in exchange for preferential treatment. In this twisted paradigm, the economy, instead of a free market where you buy what you’ve made enough money to buy, turns into a wasteful and inefficient game of gaining access to those “helpful” individuals. This is exactly what happened in the Soviet Union in the 1970s and 80s. I lived in the USSR during that time and experienced firsthand the bizarro world where who you knew determined what you had, from cars and homes to a pair of boots or a roll of toilet paper.
Cory Morgan formulated this very succinctly in a recent Epoch Times article:
“When a government makes a commodity “free”, access to the goods or services provided becomes the commodity.”
I would add that, for corruption to proliferate, the commodity does not have to be “free”. When goods and services are heavily subsidized and/or distributed on the basis of some contrived, man-made and man-controlled criteria, the same rotten scenario develops. Not to mention the fact that “free” stuff quickly becomes scarce as more and more people devise clever ways to grab more and more of it. Shortages of even basic necessities develop. In the USSR, toilet paper was a scarce commodity and basic food staples like pasta and sugar were hoarded out of well-founded fear they wouldn’t be available tomorrow.
Bottom line is, in a communist/socialist society decay and corruption are built in. The economy devolves into a game of gaining an unfair advantage in order to fill one’s pockets. Non-meritocracy – a society where you are entitled to benefits not because you are smarter, more hard-working or enterprising but for ANY other reason – quickly becomes a society where you are entitled to benefits only if you belong to the ruling class.
The only thing that varies is the magnitude of the stolen wealth, which depends on the checks and balances that may or may not exist. Unfortunately, the very nature of a completely totalitarian regime – which socialist/communist regimes usually are - implies absence of such checks and balances and therefore condones undeterred looting.
And the destructive trends go even deeper. If you put an individual or a group of individuals in charge of “planning the economy”, not only will they attempt to “plan” it to their own advantage (self-interest again!), but they will inevitably botch it. Economic laws, like laws of nature, are so complex that it’s virtually impossible for one individual or even a group, however smart, to fully grasp the magnitude of that complexity and evaluate all implications. Any attempt to be “in charge” of the economic laws, to control or “plan” them, results in what we’ve come to refer to as “unintended consequences”.
Another fatal flaw of communism and socialism lies in their propensity for replacing economic reasons for actions and decisions with ideological ones. We see a glaring example of this trend in the so-called “green economy”, which in its current iteration is no economy at all, as most of the “green” startups are not economically viable and can only exist so long as they are hooked up to the constant IV drip of government subsidies, grants, interest-free or low-interest loans and tax breaks. “Zombie corporations”, which have no pragmatic reason for existence and which in a normally functioning economy would have failed and vanished long ago, carry on, heavily subsidized by governments that hand out printed fiat money and confiscated wealth to supporters of their ideological doctrines.
“Buy from us not because we offer great products and services at reasonable prices but because we are saving the world” – this “incentive” can only go so far. At the end of the day, people will vote with their dollars and buy what they need, not what’s “politically correct” for them to buy, and only at prices they can afford to pay. This is especially true when they are not doing well financially, as usually happens in communist societies where no one but the ruling class is even allowed to do well.
If the mainstream economy, which in communist states is “planned” and controlled by the government and driven by ideology, is not able to provide for people’s needs and desires, a parallel economy inevitably springs up to satisfy real demand with real supply. Black markets proliferate and the “official” economy, left without customers, withers and dies. We saw that happen in the USSR in the 1970s and 80s. I believe that pervasive economic decay was one of the main reasons, if not the main reason, for USSR’s ungraceful collapse in the early 90s.
Is our society headed for the same fate? Do we realize that many ideas that are floating around our world today are communist in nature?
In my next post, I will talk about the striking similarities between communism and the current state of our Western democracies.
Thank you for reading! Stay tuned!
Agreed. Communism is at our front door.
Thanks for this excellent reminder on why communism is evil and can never work. People are going to try to advance their own self-interests ... and meritocracy is the only model that seems to advance society. I look forward to reading your other essays.