Investor CAFÉ

Why Communism Doesn’t Work, But Still Has Romantic Appeal

“Communism doesn’t heal all suffering, but only the suffering caused by capitalism.” — Bini Adamczak, “Communism for Kids” (MIT Press, 2017)

I am in Seoul, South Korea, to give a lecture on gross output (GO) at the Mont Pelerin Society meetings. As part of our conference, we visit the de-militarized zone (DMZ) to see the face of tyranny firsthand.

Communism and its ideological father, Karl Marx, is a topic I’ve studied most of my life. My father, Leroy Skousen, was an FBI agent who was part of the anti-communist movement, along with my uncle Cleon Skousen, author of “The Naked Communist.”

There was a time when Communism was a major threat to our way of life, when over two-thirds of the world’s surface was controlled by Marxist governments. During this time, mainstream economists, relying on faulty CIA data, were convinced that the Soviet economy grew faster than the free countries of the West. As late as 1989, in their bestselling textbook, Paul Samuelson and William Nordhaus wrote, “contrary to what many skeptics had earlier believed… the Soviet economy is proof that… a socialist command economy can function and even thrive.”

They were proven wrong when the Berlin Wall came down in 1989 and the Soviet central-planning model was discredited with the collapse of the Soviet Union in 1991. Socialist author Robert Heilbroner wrote a famous article in the New Yorker concluding, “The battle between capitalism and socialism is over. Socialism is a failure. Capitalism has won!” It was the “end of history,” as Francis Fukuyama wrote. The future belonged to capitalism. Socialist countries began to open their borders to foreign investment, cut taxes and reduce regulations.

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