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State Communism was Based in Capitalism and Social Conservatism: 1

A few months ago, I decided to write a short series about how socio-economic problems which plague post-2008 USA are oddly similar to those which brought down ostensibly “communist” countries in the late 1980s. While I did complete and post the first article in that series, a feeling that I was close to uncovering an even deeper basic similarity between the two allegedly different systems made me hold off writing the second part at that time. While I do plan to finish up that one soon, the topic I am going to discuss today is distinct enough to deserves its own separate post or two.

Let me start by making a claim, which might initially sound rather strange to most of you. It is as follows: ‘State Communism, in both, ideology and practice, is just another flavor of Capitalism in combination with a certain kind of social conservatism’. Some will counter by pointing out that state communism didn’t allow official large-scale private ownership of property or money. Others will highlight that countries under state communism were often socially more progressive than their capitalist counterparts. While both are factually correct, neither one addresses the central reasoning behind my claim.

In my opinion, the key to defining capitalism, state communism, socialism or any other ‘-ism’ lies in observing how that ideology functions in real life and what unspoken assumptions are made by its principal practitioners. With that in mind, let me ask you a simple question- Why was the quality of life for the median person living in countries under state communism in eastern Europe always inferior to those in western Europe? While a good portion of blame can be placed on the design of almost all institutions (functional monopolies) in those countries and “professional managers” who ran them into the ground, it is worthwhile to ask ourselves- How, and why, was all of this normalized and “rationalized” by those in power?

In other words, how did those in power within those countries justify their relative inability to provide their citizens with nice apartments, sweet cars and other consumer goodies? To make a long story short, such glaring deficiencies were usually explained away as being the result of “not enough resources” or “other more pressing priorities”. Oddly enough, this is the same reasoning used by politicians and establishment pundits in USA to explain how the “exceptional” country which spend trillions on useless defense related toys somehow cannot afford to provide universal healthcare, inexpensive higher education and a decent social safety net for its citizens.

So how can countries in western Europe continue to provide all of those goodies to their citizens? Also, why were they generally unable to do that before 1945? What changed? Also, why are public services in first-world countries generally of good quality, relatively inexpensive and universally accessible? Well.. the simple answer to most of those questions is that services which are considered and treated as social goods rather than as opportunities to make ever-increasing amounts of monetary profits end up being inexpensive, universally available and of high quality. Conversely, those treated as avenues for the enrichment of a select few end up becoming expensive, scarcer and of lower quality.

But how does any of this work in systems where official accumulation of wealth and property was banned? Under those conditions, shouldn’t all public services be seen as social goods and be therefore universally available and of high quality?

No.. not really, and here is why. Any official ban on private accumulation of property or money has, by itself, little impact on the practice of capitalist ideology. All laws and regulations will be compromised and circumvented by clever crooks- if they are allowed to get away with it. To understand what I am really talking about, we have to first spell out the end goal of capitalism and the ideology beyond it. The end goal of capitalism and many other -isms is to impoverish others by depriving them of resources while simultaneously accumulating resources created by the labor of others for no reason than to deprive those others.

In that respect, the only difference between capitalism and feudalism is that the later uses overt direct force and appeals to tradition and religion, while the later uses the pretense of “liberal enlightenment”, impersonal violence by a “secular” state appeals to the greed of willing idiots. Have you ever noticed that capitalism did not improve the quality of life for the median person in western countries until after WW1. So why did over a hundred years of unbridled capitalism, “free trade” and the industrial revolution have little positive effects on the lives of most people in the “west”? Maybe we should have given it more time? Perhaps it was not “pure enough”?

And this brings us to why the aftermath of WW1 and WW2 witnessed a lot of progressive and sustained improvements in the quality of life. To (once again) make a long story short, both wars and their aftermath destroyed and discredited old institutions, hierarchies and ways of thinking to the point where a lot of the previous status quo was simply unsustainable. It just happened to be the case that ethic nationalism, “free trade” and laissez-faire capitalism was the previous status quo. And that is also why ‘neoliberalism’ (aka recycled liberal capitalism) did not become respectable till the mid-1980s which is almost four decades after the end of WW2.

But, what does any of this have to do with my claim that the ultimate failure of state communism had a lot to do with it being based in capitalist ideology?

Well.. remember how earlier on in this post, I talked about the excuses used by the elite (1%) in countries under state communism to explain their inability to provide enough quality consumer goods to their citizens. You might remember something about how they justified chronic shortages, shoddy products and general deprivation by invoking excuses about “available resources” and “other priorities”. Now tell me, why did they choose excuses that are linked to cost and utility, when the government in those countries was free to create extra money to fund building of new houses, nice apartment blocks, sweet cars and other consumer goodies?

Isn’t that what China did to build up its industrial and consumer base in the last three decades? How could a country like China see the obvious solution and implement it in a manner that eluded all the countries under state communism in eastern Europe? Why did not Russia decide to do something similar in the 1960s and create enough extra money within its border and utilize that to build nice apartments, modern cars and consumer goodies for its citizens? I mean.. they certainly did that for building lots of modern weapons systems and other prestige programs during that time period.

I think that the reason why 1960-ear Russia did not do what 1980-era China did on a large-scale comes down to that counter-intuitive fact that elites in the former believed in capitalism far more than those in the later. The former could not think in ways which violated the sacrosanct beliefs and assumptions of capitalism. The later simply saw capitalism as another make-believe ideology which could be manipulated to facilitate whatever they wanted. And that is why China was able to seamlessly pull off something which the erstwhile USSR failed at, even though it was a far better position to do so.

In the next part, I will write about my thoughts on how the strong urge to enforce conservatism and traditionalism in erstwhile USSR to maintain social harmony and conformity ended up having the reverse effect and contributed to the ultimate failure of state communism in that country.

What do you think? Comments?

  1. P Ray
    March 12, 2018 at 5:12 am

    Sounds like they really took to heart what Deng Xiaopeng said:“It doesn’t matter whether a cat is black or white, as long as it catches mice.”

    Could also be that those party bosses of other countries, knew their position would be doomed if they suddenly put forward a change of opinion … because everybody else invested in the idea-that-wouldn’t-work would remove them to prove that it did.

    Kind of like how women like to be strong and independent only in countries where they are most likely to have generous welfare towards women. One of those things that make you go hmm…

  2. Gp
    March 12, 2018 at 10:38 am

    This is one of the greatest hypothesis I have ever come across. You really need to build on this along with the series on neoliberism.
    Also, it would be nice to have some links reinforce your claim that China didn’t believe in capitalism like the Russians.

  3. Johnny
    March 13, 2018 at 12:08 am

    I mean it is clearly possible to be irresponsible with excess wealth. I don’t see much point in someone using their wealth to wank around with status symbols, which I think should be monitored.

    We are essentially overpaying the wrong people as decided from the general public who don’t seem to know any better about where to place their money.

    Wealth is a key to part of establishing a set hierarchy where others are their bootlicks and they sit on top of them.

  4. barrkel
    March 14, 2018 at 1:20 pm

    You have no idea what capitalism is; or rather, you’re not using the right word.


    Systems and ideologies are defined by how they work in real life, not in the pages of some wretched book written by a shill.

    The reason eastern Europe, and communist countries generally, had such a hard time using their resources efficiently was because they lacked an information distribution system; specifically, prices as signals for both scarcity of resources, and excess profit.


    Is that also why pre-1946 western Europe had such high level of poverty and material deprivation outside the top 10-15%, even after over a century of industrial revolution and “free market” capitalism?

    China succeeded where USSR didn’t because it permits prices to their informational work.

    Capitalism isn’t an ideology. It’s a machine, a higher-level organism whose cells are people, its inter-cell communication mechanisms are prices and profits, and its ultimate goal is elimination of costs, up to and including any people involved in running the organism. The goal of the system isn’t optimal fulfillment of desires for consumers, because the mechanism leads to a tiny number of people eventually accruing almost all the wealth. It works reasonably well for consumers if people start out only slightly inequal, but it degrades the more inequal things get, and inequality is its end state because equality is expensive, and reducing costs is the goal of the system.


    Except that it had never worked for most people in the world until after the end of WW2. Why is that?

    WWII reset inequalities, and the system started working reasonably well for people, but it’s starting to wind itself up now.

    Money is just a mechanism for transferring wealth. The fact that banks create money via lending is completely orthogonal to the wealth in the system. What the money created by loans does do, however, is permit transfer of wealth over time, not just space. Money today is a claim on wealth (and production) in the future. Politicians have been juicing the inequality in the system by mortgaging the future to try and pretend things are more equal in the present, but it just ends up making things even more inequal in the future.


    I can google libertarian talking points, if I want to..

    The debt in the system is like tectonic plate pressure. It’s going to keep on building until the pressure is released somehow.


    Debt to whom? To sovereign national governments which can print their own national currency OR to greedy scum who use the cover of state and law to extract rents on what they have not created?

  5. Johnny
    March 14, 2018 at 3:24 pm

    Capitalism in my opinion is not really any more valid than communism.

    The working class toils around 10 times more than the upper classes, without nearly as much wealth to expend and cannot be trusted to spend their wealth wisely. We have many useless celebrities and figureheads in power solely due to the hoi polloi.

    The money is circulated in the worst manner possible and doesn’t get invested towards higher endeavors besides keeping the hoi polloi happy and satisfied.

    We need to accept that the so called homo economicus model isn’t true at all in terms of consumer buying patterns when it has more in line with homo erectus.

  6. MikeCA
    March 14, 2018 at 9:53 pm

    I think part of the USSRs problem was that their economy was much smaller than the USA or Western Europe, but they tried to be a super power equal of the west. Trying to do that meant that they had to devote a bigger share of production to weapons and a smaller share to providing for their people.

    Capitalism “in principal” is about competition. Companies that produce products and sell them at prices people are willing to pay make money. Those that do not go out of business. Communism believed in planned economy and government ownership and control of all industry. People had to buy whatever product they produced. Some were good but many were not, but consumers had no choice.

    I said capitalism is about competition “in principal” because the goal of every large corporation is to eliminate competition. Business people want effective monopolies because that makes the business more profitable. They are not forced to innovate or reduce prices.

    At the beginning the of 20th century the US adopted anti-trust legislation to force corporation to compete. Those laws are still on the books, but Robert Bork’s legal scholarship effectively destroyed the enforcement of those laws. Bork wrote the 1978 book “The Antitrust Paradox.” In it he argued that merges that created monopolies were frequently good for consumers, and that was all that mattered. He argued enforcement of anti-trust law should only focus on impact on consumers and not worry if it reduced competition. This judicial interpretation has dominated the enforcement of anti-trust laws since the 1980s. The result is many parts of the US economy are now dominated by effective monopolies. These companies may not have raised prices, but the monopolies have vastly reduce innovation. This may also be a factor in the stagnation of wages, since these companies no longer need to compete for skilled labour.

    As to why the USA cannot provide basics like health care to all it’s citizens, I believe that this is the result of the dominance libertarian political philosophy among elites in the USA. They simply don’t want to pay taxes so poor people can get healthcare. These elites have used racism to convince poor whites that government subsidized healthcare is taking money from hard working whites and giving it to lazy, undeserving people with darker skins.

    • bignixon
      March 15, 2018 at 11:40 pm

      the usa doesn’t provide universal healthcare because corporations pay the politicians to keep it that way. that’s it. no other magic tricks.

  7. lalit
    March 21, 2018 at 6:01 pm

    The USA does not have universa health care because White people believe they will end up funding subsiding Black and Latino people. Therefore, it will never have one in the future either. Let’s see how long Canada and Sweden manage to keep theirs. The way it is right now in Canada, it is quite shitty.

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