When surveying the history of communism, we focus on what communists did to pre-existing capitalists–the businessmen, entrepreneurs, bankers, landowners, and other members of the propertied class. Some intellectuals will, even today, find justifications for what communists did, but few still believe that communism is a viable economic system. Therefore, majority of thinkers, even on the left, agree that communists did much harm by destroying the capitalist class and the institution of private property. But, this criticism of communism doesn’t go far nor deep enough. Communism didn’t merely rob the then-existing capitalists but pre-emptively prevented the development of future capitalists who could have done so much for the economy. When Stalin and his henchmen wiped out the ‘kulaks’, they not only killed off the hard working farmers but destroyed the long term future of Soviet agriculture. (This is why ‘progressives’ still wax romantic about Cuban communism. They compare Cuba in the 1970s/80s with Cuba in the 1940s and 1050s, and shout ‘look at the progress!’ They never compare communist Cuba in the 1970s/80s with what Cuba would have been in the 1970s/80s had it remained free.) Unless we recognize this, we cannot fully understand why formerly communist nations haven’t done well following the fall of communism. In the Soviet Union, for example, communism had lasted for over 70 yrs. Communist destruction of capitalists wasn’t just a one-time thing–in order to establish a new regime–but a concerted effort to root them out entirely generation after generation. (As an analogy, consider having to destroy entire towns to win a war. It’s terrible but necessary for victory. Once your side wins, you allow the defeated side to rebuild their cities. Now, imagine another scenario where your side not only destroys towns to win the war but believes that destruction of towns in and of itself is good. So, even after winning the war, you destroy more towns and don’t allow them to be rebuilt. That was the communist approach to capitalism. Of course, it wasn’t as if communists wanted to destroy the economy itself, and indeed they had an alternative or counter-theory of economics which was supposed to work better than capitalism. But, as things played out, only capitalism could build and maintain a modern economy that liberated than enslaved man.) Several generations in the Soviet Union grew up knowing nothing of freedom or capitalism. They understood neither big business nor small business.
The only socio-economic model they understood was top-down statist totalitarianism. Despite the inefficiency and wastefulness of the Soviet economy, it was extensive, powerful, and penetrated into the life of every person. This fact needs to understood and reiterated over and over if we are to understand why ‘capitalism’ has been a catastrophic failure in Russia after the fall of communism.
Imagine if all capitalists in America had their property taken away by the totalitarian state. Though robbed of their wealth, they would still be capitalists. They would still know how capitalism works and go into business again–if given the chance. They would be closet-capitalists living in a non-capitalist nation. If the totalitarian system were to fall, they would go right back to the business of creating wealth, and the nation would economically revive again. (Indeed, consider Japanese-Americans who’d been robbed of everything during WWII. Though materially reduced to little or nothing, they still had the value and knowledge that would help them rise in the post-war order. Or, consider the West Germans after WWII. Though their nation was a heap of ruins and most Germans had lost all their possessions, they still knew how capitalism worked and had solid business sense. It’s no wonder that West Germany revived so fast. But, when East Germany was liberated from communism, it was sluggish and slow to catch up to the West because 50 yrs of communism had sapped the work ethic of East Germans and robbed them of their business sense. We can see such on display in the movie "Goodbye Lenin".) But, suppose a totalitarian system takes over in America and not only takes away the wealth of capitalists but kills the capitalists. Suppose this regime remains in power for 50 to 100 yrs and tries to root out all capitalist instincts in the hearts of citizens from cradle to grave. Such system would could be near-fatal for any civilization. Imagine a system that forbids books but allows the literate to remain literate. If the system were to fall, the literate could go back to bringing back book culture. But, suppose a system bans not only books but roots out literacy itself. It would not only be a war on books but a pre-emptive war on future literacy itself. Suppose no one understands the art of reading for 50 or 100 yrs. Even if the system eventually falls and books are allowed again, there would be no book culture and no literacy since no one understands or appreciates the importance or advantage of reading.
So, the failure of capitalism in post-communist Russia was less the fault of capitalism than of what had become of Russian consciousness under 70 yrs of communism. It was as though books were allowed again, but there was no one who could read. Money was allowed once again in Russia, but no one know how to invest, build, and trade. Therefore, what developed from this crisis was not true capitalism but Soviet capitalism or Sovietalism. Again, there was rule by an oligarchy, concentration of power in the hands of a few, majority of people looking to the government for solutions and answers than dealing with problems themselves. Freedom may be an opportunity to a Western or Asian capitalist, but it was a dangerous drug, obstacle or mystery to those brought up with communist mentality. Worse, many Russians came to understand the West through TV imagery. There was this false idea that the West was rich and powerful because young people listened to rock music, had long hair, and acted trashy. It was as if Russia would grow into a rich nation IF Russians imitated the superficial manifestations of Western(especially American) culture. But, in fact, no economy could be founded upon poor Russians imitating heavy metal rock bands, getting tattoos, snorting coke, or acting juvenile. Yes, the West have long enjoyed hedonistic fun, but that was the gravy than the real meat of capitalism. Real capitalism means determination, hard work, commitment, discipline, and lots and lots of energy. The American Dream was built on American Reality. There was no free lunch nor short cut. (Sadly, this is a truth forgotten by many Americans in the post-work-ethic era, one where entitlementality is affecting ever greater numbers of people, especially as they’ve been taught by ‘progressives’ that (1) they must take care of others (2) government must take care of them. Also, the mindless hedonistic consumer culture since the 60s has directed generations of kids toward whatever offers immediate gratification.)
Capitalism is like a car. You have to be willing to learn how to drive, have respect for the law, stay sober while driving, and pay attention to other drivers/road signs/traffic signals, and be equipped with good maps. Giving a car to a lazy, drunken, irresponsible, clueless, and reckless buffoon can end up doing more harm than good. In a way, Boris Yeltsin was a drunken fool who didn’t know how to drive the newly capitalist Russian economy of the 90s. He drove it into the ditch. Putin is like a sober son who has observed what his father had done, and so, he’s been careful to curtail the freedom of who gets to drive and how and why. But, Putin hasn’t solved the main problem of Russian character which is a crazy mix of boorishness and grey authoritarianism. Russians can be very wild or very tyrannical/submissive. They haven’t figured out the balance between order and chaos that is so crucial to democracy and capitalism. Russia doesn’t have ‘creative destruction’ but constrictive destruction.
It’s amusing to see leftists point to Russia in the 90s and blame its failures on capitalism when the real culprit was 70 yrs of communism which destroyed the entrepreneurial spirit in that country. Plants grow on fertile soil, and fertile soil of capitalism is the enterprising spirit of individualism. But, such consciousness never developed in Russia as a result of 70 yrs of communism. The Russian soul by the early 90s was arid and depleted of the qualities and values that nourish the growth of capitalism. The capitalist seeds in the Russian soil/soul couldn’t grow due the poor quality of the latter. (The problem was not with the seeds). So, instead of capitalist growth, we only saw ‘capitalist’ robbery. The so-called oligarches–former communist bosses–used their connections and trickery to appropriate the big national industries of the Soviet Union. There was little else to grab since mid-sized and small businesses had barely existed in the USSR. The big guys grabbed the big state industries. That was the extent of Russian ‘capitalism’ in the 90s. It was more like piracy or confiscation than investment and development. Even so, individual Russians from all walks of life could have built up small businesses and then expanded them up into mid-sized businesses(which then could be made even bigger) IF they had an entrepreneurial consciousness. But, few Russians possessed that kind of business spirit. Also, Russian banks were corrupt and useless. There was little law and order to protect businesses from hoodlums and gangsters.
It would be nice if Putin and Medvedev could reverse the current economic reality in Russia, but that would require fundamentally changing the way most Russians think about society, work, and entrepreneurship. The problem is that it’s much harder to teach people to be free than to teach them to follow orders. Indeed, we are seeing the same problem in America. Why do majority of Americans prefer Obama over Ron Paul. Obama says ‘I’ll take care of you’ whereas Paul says, ‘I want you to take care of yourself’. Being free in a constructive way is different than merely being free. In raising their kids, parents are preparing their kids to be free and independent. But, freedom and independence are NOT built on freedom and independence. They must be rooted and founded upon a solid bedrock of values, respect for laws, sense of priorities, sense of obligations, and morality. A child who’s given full freedom at the age of 10 will surely make a mess of things. Good parents incrementally allow more freedom in proportion to the increase in knowledge and responsibility among the kids. This is why libertarianism is lacking for it ONLY emphasizes individual liberty and freedom while saying little or nothing about values. This is why conservatism must be the foundation of ALL ideologies. This is also why all ideologies, no matter how radical, become conservative once they gain power. People must be governed by shared laws and morals for there to be any social order. For any social order to exist, most of its values must either be conservative or conservatized–made to function as the new ‘nationalism’ or new set of shared moral values by all.
It’s easy for a government to establish authoritarianism or allow freedom. What is difficult is developing social and moral character in people that will thrive in a free society. Freedom is only as good as the character of the people who have it–which is why freedom for Germans and freedom for Jamaicans produce very different results. The values, morals, habits, characters, and priorities of those peoples are shockingly different. Libertarianism has worked more or less in a nation like Holland because the Dutch are a Germanic people with a long history of discipline, sobriety, and respect for order. Would Dutch style libertarianism produce Dutch-like results in South Africa or Zimbabwe? Of course not.
So, what can Russia do to build the kind of character among its people that can lead to a true economic growth and democratic development? Russians must look to something other than the cult of freedom, cult of capital, or cult of the state. It’s really a matter of shaping the hearts and minds of the people.(The Russian Orthodox Church, though important as cultural and historical heritage, can’t provide the answer in the modern era for it has emphasized little other than slavish devotion to the Official Government–before, during, and after communism. Also, the Orthodox Church emphasizes the spiritual and timeless whereas Russians need moral values closely associated with worldly matters. Protestantism has had an economic advantage over other sects by emphasizing individual conscience, hard work in This World, and thrift and long-term investment than ostentatious spending for the vanity of man or glory of God. Of course, vanity of man and glory of God often went hand in hand in both the Catholic and Orthodox world, with rich people erecting beautiful cathedrals reserved for themselves or wearing expensive jewelry of gold and gemstones in the shape of crucifixes. We can still see the pattern today, with rich people supporting Obama and Obama promoting himself through a perverse combination of socialism and elitism.) How can the Russian government play a role in creating the kind of people’s consciousness and heart that uses freedom in a sensible and constructive way?
This is difficult because it’s almost always in the interest of the state to keep the people as dependent and obedient as possible. Why would any state want the people to be free on their own, develop their own economic power base, and even challenge the state? Also, isn’t it a contradiction to expect the state to exert its power to teach people to gain more power for themselves?
But, such contradictions are sometimes necessary and inevitable. For instance, any state that desires lasting peace needs a strong military to win wars and keep enemies at bay(though the politicians and people must always be careful not to fall victim to the very thing they’ve created to serve as their protector.) Paradoxically enough, in a nation like Russia where most people look to government, only the government may have the power to set the people free–or shape them to be free. Indeed, we mustn’t think that setting something free will inevitably lead to its happiness or welfare. An animal that’s been caged all its life cannot survive if set free into the wilderness. It wouldn’t know how to hunt, how to forage for food, how to survive. It may feel a momentary thrill, but it will soon have to get down to the business of finding food and shelter and spotting, fending off, or running from enemies. The story of "Born Free" is heart-wrenching because Elsa had grown up depending on humans. She was happy but not free. The owner decided to set her free than send her to a zoo, but Elsa didn’t know how to be free in the wild. She had to be prepared and trained to be free. She learn to be free, but even so, died at the age of 6. Again, freedom isn’t born of freedom but from preparation and training. Independence grows out of dependence. Masters start out as students.
Russians were set free into a new free order in the 90s, but none of them had been prepared for freedom. Worse, during 70 yrs of communism, most Russians had come to rely on nothing but the state. Prior to communism, many Russians had connections and links outside the state–family, tradition, community, church, etc. During communism, the state was the church, ideology, family, schools, and etc. Russians were all like caged animals in a zoo or prison. It was a harsh and repressive system, but it gave you a sense of place and took care of you if you accepted it as god. You didn’t have much, but you had basic necessities and a spiritual-ideological pride that you were living in a ‘workers’paradise’.
Leftists always say that success is a matter of economic background. In other words, some kids do better in school because their parents are richer while some kids fail because they come from poor families. But, if this is true, how does one explain the fact that millions of Chinese, who’d lived in dirt poor poverty under Mao, became well-to-do, prosperous, and even very rich after China adopted free market reforms? How is it that Russian Jews who come to the US with little wealth end up making more money than average Americans within several years? If we follow the logic of the left, a nation that is poor should always remain poor since most people are poor and poor people are fated to remain poor. If one must have rich parents to succeed in life, people with poor parents have no chance. But, we know this to be untrue. So, the truly interesting comparison is between children of poor parents who succeed and children of poor parents who fail. Leftists would like to point out that some children of poor parents succeeded thanks to government help, but, as important as public education may be, the crucial factor turns out to be cultural values in which the kids were raised. Almost all successful kids grew up with respect for knowledge and authority. Kids don’t know anything, and they need patience, diligence, and respect for authority to learn from teachesr with knowledge and skill. Of course, only patience and diligence won’t lead to originality and independence, the engines of innovation and progress. The problem of Asia has been its lack in the originality-and-individuality(independence) department though it’s amply supplied with diligence, patience, and respect for authority.
Anyway, the only true way to assess the damage of communism requires us to examine not only what communists did to capitalists but how communists pre-emptively rooted out and forbade the growth of the entrepreneurial spirit. When one looks at China and Vietnam, one sees examples of how formerly communist nations made a successful transition to free market economy driven by work ethic and energy. But, it must be remembered that China was under hardline communism for only 30 yrs, and Vietnam(at least the more vibrant South Vietnam) for only 17 years, before embarking on free market reforms. Russia was under communist rule for over 70 years which means that, by the time communism fell, there was barely anyone alive who remembered how things were like without or operated outside communism. Communism was the only thing that Russians knew. Russians in the 90s boldly swept communism aside and embraced freedom but under the harsh and confused conditions. Imagine a lifelong prisoner who finally smashes the walls and stands free. He’s finally free, but he no longer has a roof over his head nor any idea how to build a new shelter with his free hands.
China and Vietnam also were fortunate because several Asian countries remained capitalist and demonstrated the superiority of the capitalist economic system. Also, nations or city-states such as Taiwan, Singapore, Hong Kong, South Korea, and Japan provided China and Vietnam with a blueprint for economic growth and entering world trading system. If all of Asia had fallen under communism and if Asian communism had lasted 70 yrs, perhaps it might have damaged the entrepreneurial spirit as much as it did in the USSR.