Property and the Collapse of the Soviet Union

Property and the Collapse of the Soviet

Union

Gregory Harmon

San Francisco

2007

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©Gregory Harmon 2007-8

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Occam’s Razor`Pluralitas non est ponenda sine necessitas.'

(Plurality should not be posited without necessity.)



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Property manages conflict.

Property is about struggle. http://www.printfinders.com/product/artwork.exe?ArtworkID=56382&thumbs=1&productid=29981



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But, while Property manages conflict, it does not eliminate it.



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Eliminating property from society will create chaos…



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More importantly…no property, no rights.



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Whence Property?

• Property has not always existed in all cultures.

• Yet, property emerges in every society that reaches a certain size, typically any group larger than 1,000 people will create some forms of it.

• Why and how does property emerge?



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Two Theories…

Thomas Hobbes

• Property emerges from a conflict-ridden state of nature from the establishment of a sovereign.

John Locke

• Property emerges from natural rights, as a sub-set of rights.



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Thomas Hobbes

• Hobbes argues in Leviathan that property emerges as a consequence of the establishment of the sovereign, as do rights.

• Without the sovereign, society must exist in a state of nature, which is an unending conflict and war of all against all, and in which there are an can be no property, rights, wrong, or law.



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John Locke

• John Locke argues in his second of the Two Treatises of Government that people, as people, have natural rights.

• People’s efforts establish “just claim” based on certain limits (The Lockean Proviso), and these efforts establish real property claims, regardless of the existence (or non-existence) of governments.



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Mutually exclusive analyses…

• While it may not be immediately apparent, these two approaches to property (and rights) cannot both be true.



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Hobbes…The Problem

• Hobbes “State of Nature” hypothesis posits that property cannot exist without a sovereign because people cannot positively know what is theirs and what is not.

• Absent this knowledge, unmanageable conflict necessarily results when competing claims emerge…



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Hobbes…The Solution

• In the state of nature, Hobbes argues that property and rights do not exist in any form.

• This condition creates a social environment in which there is a constant threat of violence and, “Life is solitary, poor, nasty, brutish and short.” An endless war of all against all.

• To escape this condition, people establish the sovereign whose control of power and violence allows him to create property and rights.



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John Locke…The Problem

• While Locke argues in the convention of his time as to there being a state of nature, he asserts that it was not a time of war and conflict. Hence, it is not important to his argument as it is to Hobbes.

• But, he does argue that over time men become “corrupt” and cease to recognize each others rights and claims.

• It is to manage this corruption and defend previously existing (natural) rights and property claims that drives the establishment of governments



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Locke…The Solution

• Locke argues in the Second Treatise that governments are established to defend pre-existing rights and property (just claims).

• Natural rights (and with them justified claims) thus exist with or without governments. And the government that attacks rights and property can be justly rebelled against.



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Implications

• Locke’s analysis ultimately depends on the truth of his assertion that natural rights always exist.

• Hobbes analysis ultimately depends on the truth of his assertion that a rightsless and propertyless condition exists in the absence of a sovereign.



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Short version…

• The “argument,” so to speak, thus must ultimately depend upon whether or not there is or is not such a thing as “the state of nature” in the Hobbesian sense.– IF there is such a condition, then Hobbes

must needs be right.– IF there is no such condition then Locke must

be right.



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You have to choose-- one or the other

• Locke’s analysis excludes the idea, a priori, that the state of nature of Hobbes’ analysis can exist.– IF natural rights “naturally exist” then “just”

property can exist in the state of nature and with them right and wrong.

– IF natural rights naturally exist, there cannot, logically, have been a time when they did not exist, hence Hobbes’ “State of Nature” is, in the Lockean analysis, a logical absurdity and impossible.



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Origins of Property

Hobbes

• Property emerges in society from the creation of the sovereign; with him, rights.

Locke

• Property and rights always exist. There is no “origin” of either property or rights. Silly question.



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So…What IS the answer?

Does (or could) the state of nature, in the Hobbesian sense, ever exist?

Lion and hyena



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An imponderable…

• The choice presented is this:

–The state of nature exists.

–Natural rights exist.



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Proof

• We cannot directly and objectively prove or disprove either statement.

• We believe the one we prefer to believe, whatever the reason.

• It is fundamentally a “religious choice.”



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But…• We can, however, get a sense of the

greater or lesser likelihood of the truth of either assertion in three ways:– We can examine the implications of each, and

with Occam’s razor, strip away what is and is not explained by each approach, and find for the more powerful explanation

– We can look to historical experience– And….



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And…We could conduct an experiment!



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Hobbes’ Implications…• Hobbes argues that property and right are

the creation of the sovereign.

• The sovereign “knows” what is property and right, based on his law.

• The sovereign is established to manage conflict over claim, explicit claim, derived from covenant, and it is these that create the right that the sovereign can defend.

• In Hobbes, property precedes right.



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Locke’s Implications…• Locke posits, with reasonable directness,

that “property” is a sub-set of rights.• That is, he argues that people as people

have natural rights and that property is an incident or subset of these rights—admittedly in his view the most important one.– People engage effort (labor) and from their

natural right to the benefit of that effort derive (within limits) just claim.

– Hence, in Locke, rights precede property.



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What’s important..

• The single greatest effect of Locke’s thought was to introduce this notion that property was, at least theoretically, dispensable to society.



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If…• If property is merely

an incident of rights, then, logically, we should be able to create a “state” that did not have “property” in any conventional sense and yet still have rights, law, social order, etc.



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Interesting…• IF an experiment could be arranged that

eliminated property from society and then rights and social order remained in a meaningful way, this would demonstrate or at least indicate that Locke was correct.

• Such an experiment, if successful, would also serve in large measure to disprove Hobbes. Since Hobbes argues that social order is principally derived from the sovereign’s defense of claims [contract], the successful establishment of a claimless (propertyless) society would speak loudly against his analysis.



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Some risk…!

• The implications of Hobbes’ analysis would suggest that such an experiment would be prone to some risk.

• Specifically, without contracts and agreements to defend, the “sovereign,” in any conventional sense, would be disestablished.

• And, of course, this sort of radical disestablishment of the sovereign would, in Hobbes view, restore the state of nature in society.


http://upload.wikimedia.org/wikipedia/commons/f/ff/Flag_of_Edward_England.svg


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Not to worry!• Marx devoted considerable

attention to the “problem” of property in society.

• Applying a fundamentally Lockean analysis to property’s role in society, he found “private property” to be fundamentally unjust. (As had Rousseau.)

• Relying upon the correctness of Locke’s analysis of “natural rights,” i.e., that property in society was an incidence of right, he concluded that society could disestablish property and still maintain rights, justice, social order, etc.

• It would just be a little different….



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Many objected!• Many thinkers felt that Marx’s ideas would

lead to just the sort of chaos that Hobbes would have predicted.– Society would be ruined!– Violence everywhere!– Production collapsing!

• Marxist Communism, they said, would be the ruin of any nation that embraced it.

Jeremy Bentham, “If property should be…



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Enter Lenin…• Lenin accepted that

Marx was correct, that property could be disestablished, yet right, justice, and social order remain.

• Despite the fact that no social order had ever attempted to do without property, Lenin imagined that the risk was worth the reward.



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The Socialist ExperimentAnd so, we do, in fact, have our experiment.

• The results were rather grim.– 100 million dead– Russia and many other countries ruined for the

better part of a century– Tyranny, murder, rapine, and poverty stalked their

lands—life was indeed, “Solitary, poor, nasty, brutish and short.”

– Hobbes, it appears, was right.



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Why?

• The question becomes, “Why did the Marxist-Leninist regimes fail so spectacularly?”

• Since the absence of property was virtually the only thing that distinguished Marxist-Leninist from mere pirate states, it is likely the best place to start investigation.

• What WAS Lenin trying to do?


In the beginning was the Word…

Lenin and his Bolsheviks seized power from the Russian Provisional government

in October 1917.The Tsar had abdicated in February of that year and the successor government had continued its participation in World War I,

but was badly outmatched by the Germans on the Eastern Front.

Crisis followed crises as shortages and strikes hobbled the productive power of

the nation that might support the war effort. The Bolsheviks ceaselessly agitated for

peace and bread.


And the Word was Power

Possessed of an almost Nietzschean will to power,

Lenin, with significant assistance from the

German Imperial Government, managed the

coup that displaced the Provisional Government in

October, 1917.


Civil WarAfter seizing power the Bolsheviks

began a series of talks with the Germans for a separate peace.

These talks ultimately resulted in the Treaty of Brest-Litovsk. Freed of direct German interference, the

Bolsheviks quickly moved to consolidate their power in a Civil

War with badly fragmented “Whites.” Lacking a common program or compelling appeal to match the

Bolsheviks, the White forces fought for over two years, but were soundly

defeated by the better led Bolsheviks.


Lenin in Power

Although he ascended to power with virtually no

administrative experience of any sort beyond Party factions,

Lenin seized the reins of Russian and Soviet

power with determination,

competence and zeal.


War CommunismThe most pressing problem

Lenin faced, beyond the mere consolidation of power, was maintaining productivity

in the nation while at the same time implementing the

planned reforms of communism. Lenin had

every intention of following the Marxian plan of seizing or

controlling all the means of production and

communication in the nation.


The Bolshevik ProgramNo one can deny that Lenin was as good as his word in his efforts to see communism successfully

established in Russia.

A number of programs were instituted, principal among these

reforms of 1918-1919 were…

•Seizure of Banks•Control of railroads and telegraph•Nationalization of land•Abolition of private property


The Bolshevik GoalLenin’s intention was to create a “Workers’ State” that provided…

•Rights•Justice•Food•Peace•Prosperity•Security•Social order

Things didn’t work out quite the way he planned…

In a phrase, the idea was to create a “Workers’ Paradise”…



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The Bolshevik Effect

• Reintroduction and vast expansion of the death penalty

• Administrative action on anonymous denunciation

• Vast expansion of secret police—Official state policy of terror

• Arbitrary arrest and administrative sentencing, rather than trial—including the death penalty

• Vast expansion of prison system

• Re-enserfment of rural population

• Extensive adoption of slave labor

• Political tyranny• Imposed social uniformity

on an unprecedented scale• Political corruption• Mafias• Black markets• Collapsed production• Ubiquitous poverty

"Moscow does not believe in tears."



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The Bolshevik Effect• Certainly one of the most interesting aspects

of this list of defects is that while they are characteristic of the regime as a whole, all appeared virtually instantly with the Bolshevik consolidation of power and its implementation of program in early to mid-1918.

• In one view, virtually every positive action taken by the regime was in one way or another a reaction to the effects of the abolition of property.

Early 1918/ Dancing to the unheard music of law….Pipes.



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Uniform Effects

• The negative effects of Leninist socialism were consistently most extreme at the time of establishment of such regimes.

• Notably, imitative regimes, from China to Angola, experienced virtually identical effects—regardless of cultural, historical, or social conditions.

• The West generally interpreted this uniformity to a vast, international conspiracy called, “Monolithic Communism.”

Great Socialist Leaders

•Mao•Pol Pot•Stalin•Castro•Y•Z



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The dog that did not bark in the night…

The one and only thing that all Marxist-Leninist regimes did have in common was the abolition of private property.

The absent dog could not bark, but its ghost could bite…even kill.



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Occam’s Razor… applied to our problem

Locke’s philosophy of social order provides little or no insight into why the socialist experiments

would have gone so horribly awry.

We are left with a long series of ad hoc explanations as to why any specific evil might have beset socialist orders….and virtually no overarching explanation.



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Some examples…Bolshevik Effect Explanation

Suppression of civil society Anti-modernism latent in Marxian theory

Reintroduction and vast expansion of the death penalty

Bad men, Russian cultural legacy from Czarism

Administrative action on anonymous denunciation

Imitation of French Revolutionary behavior, driven by Lenin

Vast expansion of secret police—Official state policy of terror

Czarist legacy from Okrana, Lenin’s theories

Arbitrary arrest and administrative sentencing, rather than trial—including the death penalty

Bad men, historical legacy, revolutionary enthusiasm

Vast expansion of prison system Czarist legacy

Re-enserfment of rural population Stalin



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More…

Bolshevik Effect Explanation

Extensive adoption of slave labor Trotsky/Stalin

Political tyranny Cultural legacy Lenin’s theory

Imposed social uniformity on an unprecedented scale

Stalin’s actions

Political corruption Opportunism

Mafias Proscription of markets—Mises/Hayek

Black markets Proscription of markets—Mises/Hayek

Collapsed production Proscription of markets—Mises/Hayek

Ubiquitous poverty Proscription of markets—Mises/Hayek



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Right?• Unquestionably, every effect can have its

own explanation.

• Mises, and especially Hayek, provided compelling explanations for much of the economic failure of socialism & some of the political.

• But much, especially the viciousness of the beginning and the vacuousness of the end still go largely unexplained.



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Some attention…

• Some thinkers, like Richard Pipes, Martin Malia and others, strongly suspect that “communism was a bad idea.” (Pipes)

• And….that its essential badness had something to do with property.



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Well…

• What was that something?



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A Hobbesian view…Bolshevik Effect Explanation

Suppression of civil society The absence of property


The absence of property

Administrative action on anonymous denunciation


Vast expansion of secret police—Official state policy of terror


Arbitrary arrest and administrative sentencing, rather than trial—including the death penalty


Vast expansion of prison system The absence of property

Re-enserfment of rural population The absence of property



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And more…

Bolshevik Effect Explanation

Extensive adoption of slave labor The absence of property

Political tyranny The absence of property

Imposed social uniformity on an unprecedented scale


Political corruption The absence of property

Mafias The absence of property

Black markets The absence of property

Collapsed production The absence of property

Ubiquitous poverty The absence of property



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So….

• Well may you ask,

• “If the explanation is so direct and simple, why haven’t much smarter people than you thought of this?”



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Cryptic answer…

John Locke



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How’s that?• Well, if you believe in natural rights, you

also believe that property derives from rights, not rights from property.

• So, if rights disappeared along with property in socialist states, the absence of property could not be the explanation, since property is an incidence of right.

• Stated differently, there might be problems rooted in the absence of property, but the absence of property could not be the root problem.



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Problem

• IF property were, as Hobbes might be interpreted to say, a prior condition necessary for the emergence of rights, then the absence of property could be the problem.

• But, you cannot see the potential problem or its solution if you begin your investigation with the assumption that property, of itself, could not be the problem…



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That is…

• If you really believe in natural rights, you simply can’t logically accept the explanation that the absence of property as the root problem of socialism.

• Think of it as a murder mystery, if the suspect was out of the country at the time of the crime, he couldn’t very well have committed it, could he?



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LockeAfter a manner of speaking,

through natural rights, Locke made Jacobins and communists of us all.

Except me….

“Natural rights is simple nonsense: natural and imprescriptible rights, rhetorical nonsense — nonsense upon stilts.”

-J. Bentham

…..and Jeremy Bentham...

http://www.mwillett.org/Politics/utility.htm



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Conventionally thinking…• As long as analysts presume that natural

rights exist, they simply can’t—as happens in Pipes’ text—see that the absence of property was more than just a part of a larger “bad idea.”

• To the believer in natural rights, the absence of property cannot be the explanation since property is merely an incident of right.

• And yet, it WAS the bad idea.



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Rights in Bolshevik Russia

• Lenin and the Bolsheviks proscribed property, not rights.

• The Stalin Constitution affirmed that Soviet citizens had a wide range of rights.

• The problem was that in the absence of property, a hundred constitutions of the most sincere creation could not have created any other right in Russia than to be a slave.



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Property is the key to the “riddle locked in a paradox and set in an enigma”

• We look in the most abject sophistry to some clause or other in the Soviet or other socialist constitutions as the unlocked gate that loosed the dogs of terror and tyranny.

• We need only look to the abolition of property to see the roots of every major defect in Soviet life, indeed all Marxist-Leninist socialist systems.



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Suppression of civil society • Lacking property,

people lack distinct social identities.

• Lacking separate identities, everyone looses their individual interests.

No individuals without property, an identity of interests

The long-term hostility of Soviet authorities to what the West calls “civil society” never completely relented, but did hit what was perhaps its apogee during the “Show Trials” in the mid-1930s.

“Trials” were staged and consciously managed as an object lesson to the citizenry in just how defenseless they were and just how aggrandizing the State and Party were.

When Andrei Vyshinsky, the noted Soviet jurist said…

“Under socialism, the interests of society and the individual are identical…there are no individual interests in Soviet society…”

…he was speaking both a literal and logical truth. What interests could a person have who holds no legal property? If the State or Party “owns” all property, only it can have “rights” or interests.

Fundamental Rights in the Soviet Union: A Comparative Approach Thomas E. ToweUniversity of Pennsylvania Law Review, Vol. 115, No. 8 (Jun., 1967), pp. 1251-1274 doi:10.2307/3310959 This article consists of 24 page(s).

In this poster, the hand in the foreground holds an indictment against the “counterrevolutionary” Industrial Party. One of the scientists accused of committing sabotage and espionage in the fictitious conspiracy sits in the dock, a puppet controlled by foreign strings. The faces in the background represent the alleged foreign co-conspirators: industrialists, members of the Polish and Romanian military, and French premier Poincaré.

http://images.google.com/imgres?imgurl=http://media.hoover.org/images/digest19983_p143-bg.JPG&imgrefurl=http://www.hoover.org/publications/digest/3532831.html&h=556&w=400&sz=50&hl=en&start=1&um=1&tbnid=Iii3mQmtL6uytM:&tbnh=133&tbnw=96&prev=/images%3Fq%3DStalin%2Bshow%2Btrials%2B%26svnum%3D10%26um%3D1%26hl%3Den%26sa%3DG



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• Mancur Olson shows us that there are two means of social control—selective benefit or force. (The Logic of Collective Action)

Force

Olson Logic of Collective Action The Black Book of Communism

After making the elimination of the death penalty a major part of their agitation campaign (Roberts, Alienation), the Bolsheviks quickly reinstated it after seizing control of the Russian state.

Lenin quickly found that he needed to use force not only against the bourgeoisie, but even against the workers, leading one wag to comment, “Lenin appears to be the leader of a party that does not exist…” (Pipes, The Russian Revolution).

Lacking formal incentives of any kind (status or property) the Bolsheviks were compelled to rely upon force. The death penalty being its most extreme expression.



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Vast expansion of secret police

• Regardless of any intentions of establishing an equality of economic outcomes in a “propertyless” society, the state claim to control property as the sole manager necessarily led to vast increases in the need to know what people had or did, or even thought of doing.

Force

The use of the security apparatus to ensure the position of the regime and its control of property and “the means of production” led to a heavy reliance on these services from the VCheka under Lenin, to the NKVD under Stalin, and the KGB under later leaders.

Bentham provided an eerily precise description of the sort of social control that would be necessitated by any attempt to establish an “equality of possessions” in his Principles of the Civil Code, (1825)

“The attempt to establish an equality of property must lead to a ceaseless vigilance against every person….”


http://www.answers.com/topic/gpu-jpg


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Official state policy of Terror • Abolishing property

and declaring the state the “owner” and manager disallows selective benefit as a social management tool, leaving only Olson’s second solution – force.

Force

Lenin was certainly inspired by the Jacobin example in the French Revolution of what could be accomplished by terror. But as the range of attempted programs expanded, Lenin was driven to ever greater resort to force. Leading at one point to his order, of August 11, 1918: “1. Hang (hang without fail so the people see) no fewer than one hundred known kulaks, rich men, bloodsuckers. 2. Publish their names. 3. Take from them all the grain. 4. Designate hostages -- as per yesterday's telegram. Do it in such a way that for hundreds of versts [one verst is about one kilometer] around, people will see, tremble, know, shout: they are strangling and will strangle to death the bloodsucker kulaks. . . . P.S. Find . . . truly hard people."

http://www.washingtonpost.com/wp-dyn/content/article/2007/08/09/AR2007080901981.html

Felix Dzerhinsky, Beloved Founder of the VCheka



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Arbitrary arrest and administrative sentencing, rather than trial

• Social control without selective benefits requires resort to force, and implied force, terror.

• Socialist justice, therefore, can only be about power.

• But, who will terrorize the terrorists?

Stalin understood, as few others (including Lenin) did then or now, just how far force and violence could be pushed. Stalin comprehended quite exactly just what it meant that in the absence of property, the use of force was the only hope of control.

Stalin understood that his regime depended for its real success on the “security apparatus”—the NKVD. But he also recognized that this put them in a potentially controlling position over the party and him.

His solution, one of astonishing audacity-- even genius, was to terrorize his terrorists—hence “The Great Terror” of the mid-1930s.

Conquest—The Great Terror



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Vast expansion of prison system • In a system that is

without controlled rewards, everyone will seek their own best benefit, mostly “illegal,” resulting in the criminalization of the virtually the entire population—leaders, citizens, and police. Prisons must be able to accommodate more guests.

Force

Stalin…

Death to the wreckers…

Entering Gulag (a leaf from Eufrosinia Kersnovskaya's notebook)

wikipedia


http://en.wikipedia.org/wiki/Image:Kersnovskaya_Entering_Camp5_54.jpg


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Justice, Rights and Civil Trials• Lacking property, Soviet

citizens lacked any basis for claims—they did not “own” anything beyond personal possessions and perhaps a car.

• Without property, there was little or no need for civil courts.

• Courts and law thus focused on criminal activity—and since everyone was in one way or another a criminal, they had no lack of cases.

“Rights” require a social identity and some claim to which those rights refer.

Lacking claims, Soviet citizens became—from a legal standpoint—a class of persons similar to that which had once held in the West regarding slaves, women, children, and idiots.

The rights asserted in the Stalin Constitution could mean nothing like what they would have in the West, as no one had a basis for their exercise except against the state. And, since the state was an interested party to any dispute, it was, at best, a grantor of indulgence, but never an obliged co-respondent.

The state had simply to assert its right to trump all claims. Hence, with no property, no one could be characterized as having anything that might be called “rights” in any recognizable Western form.

Soviet and socialist rights were like socialist justice—they were whatever the authorities said they were and were subject to change at their convenience, not any claimants.



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Re-enserfment of rural population • With the abolition

of private land ownership, peasants lost any and all claim to their farms and lands—selective benefit.

• Solution: Force them to work.

Force

The immediate effect of Lenin and the Bolsheviks’ “land reforms” and uncompensated crop seizures in 1918-19 was the collapse of rural production. The West saved Lenin’s regime by famine relief managed by none other than Herbert Hoover. The mid-term solution for Lenin was the NEP—limited restoration of property rights to peasants and some city people.

Understanding that the regime could not tolerate property rights for the peasants and survive, Stalin decided that Lenin had just not killed enough of them, and determined to kill as many as it took to achieve control. Solution: Collective farms and re-enserfment.

December 27, 1929, six days after celebrating his fiftieth birthday in what Louis Fischer of The Nation called an "orgy of personal glorification," Stalin formally unleashed a new revolution. The country's grain-producing areas were to be collectivized at once; all kulaks were to be liquidated. "We must smash the kulaks, eliminate them as a class," he said.

Harvest of Sorrow—Robert Conquest

Lih, Lars T. Bread and Authority in Russia, 1914-1921. Berkeley: University of California Press, c1990



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Extensive adoption of slave labor

• The Soviet regime continued to issue “money” that was actually script. And, without real payment, everyone became, in effect, a slave. But some much more than others.

• Without selective benefits in property or status, the regime was compelled to resort to forced labor.

Force

It was Leon Trotsky who first advocated and then administered the original Soviet Labor camps. Their creation was the result of both a lack of willing workers for hard or dangerous work and also a means to using otherwise idle man (and woman and child) labor lying unused in prison camps.

Noted Trotsky,

“Under capitalism workers must work or die, under socialism they…”

Pipes – Russia under the Bolsheviks



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Political tyranny • As the sole possessor

of “property” and claim in a land without property, the Soviet state could not tolerate any dissent without seeing it as an incipient or even active act of revolt.

• One owner means one power, one identity.

Force


Whatever thoughts Lenin might have had about any type of pluralism—and these were few and restricted to begin with—he quickly abandoned them upon assuming power.

It took some time for Lenin to articulate, but he did finally come to see that the Soviet system he established could in fact tolerate no deviation, hence,

“Party is and can only be one voice…”



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Social uniformity on an unprecedented scale

• In the absence of property and selective benefit, everyone loses any basis for individual, social identity.

• Only the State has “interests.”

• Social cohesion under these conditions positively requires the complete suppression of individuality.


The need of complete mass uniformity was not immediately apparent even to the Bolsheviks.

Only with Stalin’s decision in 1929 to fully bring the nation to heel under his regime and rule did the need for complete social conformity become manifest.

Upon the success of the first wave of his commitment to “total force,” Stalin was able to declare,

“Life is better. Life is gayer.”

Some disagreed.Czeslaw Milosz, The Captive Mind



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Political corruption • Lacking formal selective

benefit—even among party members and government officials—drives people to seek whatever benefits they can, in whatever way they can.

• Solution: Literally ineradicable extortion and bribery dominate public life.


Problems with “careerists” began immediately with the consolidation of party power 1918-21. Party members immediately began exploiting their positions for personal gain.

Various stratagems were tried to suppress the effects of “careerism” and opportunism, but, since even those charged with managing or eliminating the problem were engaged in the activities, reform efforts were never more than half-hearted.

So endemic did these problems become that Yuri Andropov’s ascension to power began with a crime ring in which Brezhnev's entire family was involved.



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Mafias • While “legal” claims to

property and benefit may be extinguished, people’s needs and wants will remain.

• Mafias and other criminal enterprises will always arise under conditions where any sovereign refuses to vindicate contracts.

No Markets

Mafias and criminal enterprises addressing “consumer needs” arise in the legal-economic vacuum of any proscription of markets in desired goods.

Boris Yeltsin rose to becoming Mayor of Moscow as an effect of his campaigning against the “milk rackets.” Milk. Rackets.

Over time many local political oligarchies made common cause with both the local security services and criminal gangs as the best solution to having markets in the absence of a government role in managing them.

Comrade Criminal



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Black markets • The proscription of

property necessarily implied the same for markets.

• But, markets will appear wherever supply meets demand—and they did even in the Soviet Union

No Markets from No Property

Mafias’ economic activities occur within black market environments.

Black markets were a feature of Soviet life literally from the first day of the regime’s coming to power.

Estimates are that by the end of the Soviet era, something like 50% of economic all activity was occurring in the “left-handed” markets, as they were ironically called.

As British thinker John Gray noted, the absence of a government role in the market economy led to the Soviet Union being a “Wild West” world, with an

“economic state of nature within….



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Collapsed production • Without property or status

as formally owned selective benefits, even under conditions of force, people will act to minimize their “costs” by becoming free riders.

• In a propertyless/ benefits-less society it is in everyone’s rational interests to become a free rider.

• Further, people will be strongly motivated to produce as little as possible to minimize their “losses” by the inherent diseconomies of ANY work. No Markets

Problems of production and productivity plagued the Soviet leadership from the very beginning—with the first famines occurring in 1919-21.

At the same time as rural productivity collapsed, so did urban; only to be restored by the NEP program in 1922-25.

Stalin’s “All force, all the time” method does seem to have worked for a very brief period, with the German Invasion strongly motivating worker productivity in the early ’40s.

But, as Martin Malia points out in The Soviet Tragedy, the economic survival of the Soviet Union principally depended on key, episodic infusions of capital from the West.

But even these efforts ultimately failed as Soviet non-productivity eventually led to the consumption of the entire capital base of the nation and such profound bankruptcy that in 1991 the Party did not even try to maintain power—nothing was left but the shell of a nation.



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Ubiquitous poverty • A propertyless nation is

inherently a nation of active or would-be free-riders in the absence of any other from of selective benefit.

• With no incentive to work, productivity could be expected to fall to or below starvation/survival levels.

• He who produces least, produces best.

No Markets

There can be little question that the Soviet obsession with national security led to over-investing in military goods and services.

Soviet production data are, of course, virtually useless due to alteration.

But, there can be little doubt that average income in the Soviet Union, particularly toward the end of the era, had fallen well below some of the worst third-world standards—they were only saved from active ruin by black markets



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Why?

• The explanation as to why all these examined evils would result from the abolition of property—and that alone—lies in understanding the nature and logic of property.



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The Logic of Property

See Next Slideshow.



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Just a thought…


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Economy & Finance

Property and the Collapse of the Soviet Union