Why Communism Failed

[kramerfan86]

Enforce what?

Elimination of private ownership and redistribution of the wealth, outside of ridiculous idealistic land you cant expect many people, especially the exceptionally well off, to just toss out their businesses and hand them over to anyone else. Some force has to oversee that and that force will have exceptional power. Ive never understood why communists seem to think greed will just disappear because capitalism does. People are still people, and they want as much as they can get.

 

[Leonel]

You say this as though corruption is a meaningful metric.

Well I did say "perhaps" so it's merely conjecture.

 

[muhtesem insan]

a quick correction, Communism has not failed, because we haven't tried it yet. USSR was a socialist state. The regime there was not communism.
The problem with the article, it assumes free market is a good tool to determine value of things.
The problem with USSR was not having planned economy but it was trying to plan the economy with "capitalist" approach, it was organized top-down instead of -like a socialist state should been- bottom-up (I'm not sure these terms are what i wanted to mean, if they're not I blame the dictionary I've used ) What this caused is an inefficient bureaucracy whose members were inclined to send problems to upper management rather than taking responsibility. So they made a "dictatorship of high ranking communist party members" instead of "dictatorship of proletariat".

 

[muhtesem insan]

Elimination of private ownership and redistribution of the wealth, outside of ridiculous idealistic land you cant expect many people, especially the exceptionally well off, to just toss out their businesses and hand them over to anyone else. Some force has to oversee that and that force will have exceptional power. Ive never understood why communists seem to think greed will just disappear because capitalism does. People are still people, and they want as much as they can get.

Communists do not think greed will dissapear. It depends on the idea of for an ordinary man it is more beneficial than capitalism.

 

[Winner]

There is no need to overthink this.

The soviet-imposed socialism/communism failed because (in descending order of importance):

a) it was repressive and repression always breeds resentment;
b) it was undemocratic and therefore increasingly corrupt and divorced from social and economic reality;
c) it suppressed competition and therefore fostered structural inefficiency in the economy;
d) it was too focused on producing things for the military, which was a huge drain on the resources;
e) it didn't offer people quality consumer goods they desired (they had money, but little to buy for it).

 

[kramerfan86]

Communists do not think greed will dissapear. It depends on the idea of for an ordinary man it is more beneficial than capitalism.

Ordinary man is such a generic idea though. Sure the ordinary man wants to bring down the 1% down closer to himself, but when its time for the 40% to be brought down to the 60%'s level suddenly the benefit isnt quite there anymore.

 

[Traitorfish]

While Mises had a point about the signaling of the price mechanism

Not really, because the Soviet Union didn't lack price mechanisms. People have this bizarre habit of assuming that it must have done, because that's the model which Mise critiqued, but it has nothing to do with the economic reality of the USSR- or, at least, of the reality beneath the surface image presented by the Soviet government, as if that was something you could trust. There are endless criticisms to be made of the Soviet economy, but they have to begin with what actually happened, and not with a set of purely theoretical criticisms developed before that model was even implemented.

 

[rugbyLEAGUEfan]

What were these price mechanisms? I just assumed they weren't there

 

[Yeekim]

Yes, I agree that the revelations and acceptance of Soviet crimes discredited the State and its "infallible" philosophy, and combined with the bad economic times, it was a devastating mix. As Christopher Hitchens expressed, speaking of the pope, you can't admit to first massacring thousands, persecuting minorities, supporting sadists and genocidal policies, and then expect to go back being infallible. People won't take you seriously.

There is no need to overthink this.

The soviet-imposed socialism/communism failed because (in descending order of importance):

a) it was repressive and repression always breeds resentment;
b) it was undemocratic and therefore increasingly corrupt and divorced from social and economic reality;
c) it suppressed competition and therefore fostered structural inefficiency in the economy;
d) it was too focused on producing things for the military, which was a huge drain on the resources;
e) it didn't offer people quality consumer goods they desired (they had money, but little to buy for it).

I think these two comments sum it up pretty nicely.

 

[Traitorfish]

What were these price mechanisms? I just assumed they weren't there

Well, the same as they were in the West, basically, albeit occasionally shifting from formal currency to internal "shadow prices" to maintain the illussion of a non-circulatory monetary system. They weren't fundamentally different, they just suffered from an exceptional degree of distortion because of the level of state involvement, and the monopolisies and ogliopoloies possessed by certain state enterprises. The same thing has been observed in Western societies, both in their Keynesian-social democratic and neoliberal forms, and indeed the Miseans are usually the first to complain about it. It's really a matter of degrees rather than a fundamentally different way of operating. If that's not true, then the Eastern Bloc states and Yugoslavia, with their visibly "mixed" economies, would have to be placed in the Western "capitalist" camp rather than the Eastern "socialist" camp, which I've honestly never seen attempted, suggesting that the imagined chasm between West and East was ideologically rather than empirically grounded.

 

[Cutlass]

There´s this game called Sid Meier´s Railroads; in it, like in the US at some point, you compete to build railroads. Many US railroads were indeed privately owned.

As

Privately owned yes, but financed almost completely by the government, with many government provided benefits to entice investors to cover the remaining bits.

Looking specificaly at the Transcontinental Railroad (which was probably the largest government project until the Panama canal or the New Deal programs), the government gave land away free to the railroad company if it was within one mile of the surveyed trackage. Funding was provided for tools and supplies (which lead to the Credit Mobiler scandal, where the railroad owners created a shell company to buy the tools at a higher price, get reimbursed by the government, and pocket the difference) by the government, and government established land-grant universities to develop new engineering techniques.
This is also leaving aside the nationalization of the US railways under the USRA where the government poured several billion dollars into shoring up US railways.

was saying, it isn't a matter of the railroads being publicly versus privately owned, it was a matter of them being to a very large extent publicly financed and facilitated.

In many cases the government provided the land. Or used eminent domain to take private land. The private companies never could have afforded the needed land otherwise. And there were many other innovations in public policy that facilitated the privately owned railroads. So it is fair to say that without the government few railroads would have been built in the US.

Not really, because the Soviet Union didn't lack price mechanisms. People have this bizarre habit of assuming that it must have done, because that's the model which Mise critiqued, but it has nothing to do with the economic reality of the USSR- or, at least, of the reality beneath the surface image presented by the Soviet government, as if that was something you could trust. There are endless criticisms to be made of the Soviet economy, but they have to begin with what actually happened, and not with a set of purely theoretical criticisms developed before that model was even implemented.

As you noted in your follow up post, this doesn't really hold. Yes, the USSR had prices and currency. But that does not equal signaling. The producers and sellers of good were told what to produce, and what to sell it for. The price mechanism was not used, nor allowed to be used, to determine what products to produce, what quantities to produce, nor what price to sell for. And that means that money and prices aren't really relevant to the making of decisions.

 

[Josu]

here is an excellent article I found on the subject. Even though it was written over 20 years ago, I found it to be helpful to us today even after the collapse of the Soviet Union.

Is this thread about Communism or about Soviet Union?

 

[Leoreth]

Ive never understood why communists seem to think greed will just disappear because capitalism does. People are still people, and they want as much as they can get.

This is my main problem as well. It's greed that causes capitalism (or the excesses thereof), not capitalism that causes greed.

I've never really understood what actually caused the economic collapse of the Soviet block after 1990. Was it that protracted problems finally took effect because the system that contained them collapsed? Was it that Western corporations outcompeted their eastern counterparts after the markets were opened, because they were not geared up for free market style competition? How much did the Soviet block rely on protectionism then?

I'm only really kinda knowledgeable on the situation of the GDR which is less than representative for the situation of centrally planned economies as a whole, I presume.

 

[Tahuti]

This is my main problem as well. It's greed that causes capitalism (or the excesses thereof), not capitalism that causes greed.

I've never really understood what actually caused the economic collapse of the Soviet block after 1990. Was it that protracted problems finally took effect because the system that contained them collapsed? Was it that Western corporations outcompeted their eastern counterparts after the markets were opened, because they were not geared up for free market style competition? How much did the Soviet block rely on protectionism then?

I'm only really kinda knowledgeable on the situation of the GDR which is less than representative for the situation of centrally planned economies as a whole, I presume.

From what I've gathered, the Soviet collapse was for most part political and not economic. Because of Gorbachov's reforms, the Soviet Republics themselves actually gained some real autonomy, which they used to gain even more autonomy and eventually, independence. Which created insane situations were Soviet republics were actually fighting eachother, despite being part of the USSR, with Armenia and Azerbaijan being the most obvious examples.

 

[Ajidica]

To breifly add to that, Perestroika and Gladnost let people see how jury-rigged the Soviet economy and political system had become by that point. However, they didn't quite manage to see that if the jury-rigged system were to fall apart, it wouldn't be very pretty for the next several years as most of Eastern Europe had become dependant upon Soviet subsidies.

 

[Dachs]

From what I've gathered, the Soviet collapse was for most part political and not economic. Because of Gorbachov's reforms, the Soviet Republics themselves actually gained some real autonomy, which they used to gain even more autonomy and eventually, independence. Which created insane situations were Soviet republics were actually fighting eachother, despite being part of the USSR, with Armenia and Azerbaijan being the most obvious examples.

Not what he was referring to. There was a very real series of economic crises in the former USSR in the '90s, the most prominent coming in Russia on the heels of Yeltsin's coup and whatnot but of course independence didn't exactly breed economic stability for, say, Ukraine either. Not that well versed on the whole thing as a 'USSR' as opposed to 'Russian' phenomenon (did recession occur in formerly Soviet Central Asia as well?) but it was definitely present and an independent (but almost certainly related) development of the political demise of the Soviet Union.

 

[Tahuti]

Not what he was referring to. There was a very real series of economic crises in the former USSR in the '90s, the most prominent coming in Russia on the heels of Yeltsin's coup and whatnot but of course independence didn't exactly breed economic stability for, say, Ukraine either. Not that well versed on the whole thing as a 'USSR' as opposed to 'Russian' phenomenon (did recession occur in formerly Soviet Central Asia as well?) but it was definitely present and an independent (but almost certainly related) development of the political demise of the Soviet Union.

It didn't had anything to do with the Soviet collapse, since Russia could just as well have continued with economic planning. The Russian economic crises of the 1990s had more to do with the way economic reforms were enacted: When businesses were privatized, they virtually always ended up in the hands of the former Soviet elite who became the so-called business oligarchs. On top of that, there was little to no liberalisation of foreign trade, foreign investment and judicial business frameworks (necessary for allowing common Russian citizens to start new businesses), meaning that the business oligarchs would have to face little competition.

So the economic system of 1990s Russia basically was a kleptocracy, and in many ways, it still is today.

 

[Terxpahseyton]

There is no need to overthink this.

But there is a need for spouting the generic one-liners about why the SU sucked (not that they aren't kind of true, but are they sufficient to explain the SU's downfall? I doubt it)
At this point I just wish Cheezy made a (substantial) appearance

 

[Agent327]

Perhaps the cultures Communism tried to take root in may be the reason. Communism took root in Tsarist Russia where there was heavy corruption between the wealthy aristocrats and the Tsarist government. Corruption is extremely difficult to stamp out and perhaps Lenin had a way to stamp it out before he died and Stalin seized control with his more heavy handed methods that most likely exasperated the corruption. I think one might find corruption the reason why communism, as well as other government types, difficult to run.

Maybe if we were to see a country that already had a decent amount of social and economic equality, we may get a better picture on what goes wrong with communist societies.

Unfortunately, countries with a decent amount of social and economic equality have no need for communism.

That apart, communist regimes foster their rate of corruption.

It's always been interesting to me how the US government actually spent more money on railroad construction and lobbying than the Prussian-German government - notorious for ostensibly militaristic, dirigiste policy - ever did.

If you look at the size of the extent of territory of both states, I´m surprised you´re surprised.

3rd world war over Europe, as imagined by the Soviet military theorists.

A worldwar over over Europe would make tanks hugely redundant - but assuming no nuclear weapons are involved, there´d still be an excess of, say, 50,000 tanks. It would be logical to assume that such excessive amounts of weaponry were part of the ongoing arms race. Reducing the number of nuclear weapons after the end of the Cold War was more a matter of prestige than giving up military necessary weaponry.

Not true. It's not like contemporary markets exist outside of the legal and political frameworks that are integral to their operation.

That still doesn´t mean the economy is planned by government.

So when were the people of those republics given the choice, and what were the results?

I´m sorry, did I miss any ´let´s rejoin Russia´ movement in these countries?

 

[Yeekim]

But there is a need for spouting the generic one-liners about why the SU sucked (not that they aren't kind of true, but are they sufficient to explain the SU's downfall? I doubt it)

You can write thousands of pages, but you can really say it all on a single line:
USSR collapsed because nobody wanted to defend it any more.