Pieria Article On Capitalism versus Socialism

My latest on Pieria calls for a reconsideration of the simplistic ‘Berlin Wall’ narrative:

In my opinion, this view rests on a highly selective interpretation of events. It requires that we gloss over two major historical points: first, the historical circumstances of existing communism; second, the history of capitalist countries. It fails to acknowledge the fact that existing socialism occurred primarily in undeveloped countries, which we would naturally expect to exhibit lower standards of living than developed ones. It ignores the deliberate campaign of destruction and sabotage toward the socialist states by the capitalist states, a process comprehensively documented by US foreign policy critic William Blum (Blum, 2003). It also requires that we define past and present abuses of capitalist states as somehow ‘outside’ capitalism, in order to place ourselves above the (real or imagined) abuses of the communists…

…given the way the communist ‘laboratory test’ was constructed, how could [things] have been any other way? After all, the USA’s policy of “strangling” socialist states was not limited to the USSR but extended across the globe, taking place in dozens of countries: Italy, Guatemala, the Congo and Uruguay, to name a few (Blum, 2003). Bearing this in mind, what would you expect those who managed to fend off these attacks to look like? Would you expect them to be soft, peaceful and democratically minded, or to be dictatorial, uncompromising and military-minded? The leaders and regimes which were not ruthless – such as Patrice Lumumba, the PKI, Jacobo Arbenz and Salvador Allende  paid a price for their humanity: they were killed or exiled, and their countries were taken over by west-friendly dictatorships. For this reason, evaluating communism or socialism based only on the regimes which survived is essentially a sampling bias.

I have already had someone on twitter charge that I am blaming both capitalism and communism’s problems on capitalism. This isn’t the case: social science is a matter of understanding structure versus agency, and the communist countries were born into a world where structure heavily inhibited their development. Meanwhile, it seems that capitalism retains its undesirable characteristics even when it is unchallenged (pre-1917 and post-1991). Its proponents attribute this more to agency than structure; I disagree. However, I am merely calling for a debate of this sort, so we can move away from disingenuous ‘Black Book of Communism’-style kill count porn.


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  1. #1 by Roman P. on August 1, 2013 - 8:06 pm

    What’s your opinion on Clement Attlee? Sorry for offtopic, just always wanted to ask a Brit about this historical figure. Socialistic PM and all that.

    • #2 by Anti-Imperialist on August 1, 2013 - 10:51 pm

      Attlee was the perfect example of how social democracy sometimes depends on imperialism. When Attlee was in power and started nationalizing the commanding heights of the economy, Britain was the owner of the Anglo-Iranian Oil Company (AIOC). The revenues from AIOC, as well as its strategic position in the world, kept the British empire afloat. When Mossadegh, the nationalist Prime Minister of Iran, dared to suggest nationalizing AIOC in order to benefit Iran, Britain was infuriated. Attlee at one point even said the British economy and the standard of living of British citizens was dependent on Britain’s continued control of Persian oil. Thus, Attlee admitted Britain’s social democracy was dependent upon the imperial system and control over other peoples’ resources.

      What Attlee did domestically was beneficial to the British working class, but it was at the expense of the Iranian people and resulted in the overthrow of the democratically-elected Mossadegh government.

      Source: “All the Shah’s Men” by Stephen Kizner

      • #3 by Roman P. on August 2, 2013 - 7:27 am

        Well, life sometimes is a zero-sum game. Attlee just ensured that his compatriots were not losers in it (and I admire him for that).

      • #4 by Unlearningecon on August 2, 2013 - 11:49 am

        Funnily enough, I just watched Spirit of ’45, a UK-based documentary about the post-WW2 establishment of the welfare state.

        Obviously, I agree with anti-imperialist that even the cuddliest form of capitalism usually has some dirty secrets: Sweden has its arms industry; post-WW2 in general had Guatemala and Iran. Having said that, Clement Attlee had little control over such forces and was undoubtedly a great prime minister. It was amazing watching the people describe their lives before his policies: bug-ridden sheets, doctors with credit collectors, slums. It’s sad watching the modern trend of things being partly privatised, then accused of being inefficient (usually due to the private contractors) and privatised even more.

      • #5 by Jan C on August 7, 2013 - 8:15 pm

        “Obviously, I agree with anti-imperialist that even the cuddliest form of capitalism usually has some dirty secrets.”

        Would not any ideology have faced the choice that Attlee made? If Britain would have become a communist state at that time, the standard of living of British citizens would also have been dependent on Britain’s continued control of Persian oil.

  2. #6 by metatone on August 1, 2013 - 10:53 pm

    Someone should mention to Luis Enrique (in comments on Piera) that given US subsidies for South Korea and the use of both NK and SK by their sponsors (China & USA) as proxy hostility spots, the “levelling of initial conditions” is hardly a conclusive levellling of external factors.

    • #7 by Unlearningecon on August 1, 2013 - 11:35 pm

      Somebody did, I’ve also made a similar argument about east-west Germany. Most people don’t seem to realise that west Germany’s GDP was much higher going in.

      • #8 by Jan on August 4, 2013 - 10:11 pm

        When it comes to planning vs market i think old Ernest Mandel summed it up rather well when he once wrote:

        “We have been using the term ‘planning’. But the concept itself needs to be more precisely defined. Planning is not equivalent to ‘perfect’ allocation of resources, nor ‘scientific’ allocation, nor even ‘more humane’ allocation. It simply means ‘direct’ allocation, ex ante. As such, it is the opposite of market allocation, which is ex post.
        These are the two basic ways of allocating resources, and they are fundamentally
        different from each other—even if they can on occasion be combined in precarious and hybrid transitional forms,
        which will not be automatically self-reproducing.
        Essentially they have a different internal logic.
        They generate distinct laws of motion.
        They diffuse divergent motivations among producers and
        organizers of production, and find expression in discrepant social values.
        Both basic kinds of labour allocation have existed on the widest possible scale throughout history. Both are therefore quite ‘feasible’. Both have also been applied in the most variegated fashions, and with most diverse
        results. You can have ‘despotic’ planning and ‘democratic’ planning (those who deny the latter have never looked at a pre-colonial Bantu
        village). You can have ‘rational’ planning and ‘irrational’ planning.
        You can have planning based on routine, custom, tradition, magic, religion, ignorance—planning rules by rain-makers, shamans, fakirs and illiterates of all kinds. Worst of all, you can have planning directed by generals;
        for every army is based on an a priori allocation of resources.
        You can likewise have planning organized in a semi-rational way by technocrats or, at the highest level of scientific intelligence, ‘by workers and disinterested specialists.
        But, whatever their forms, all of these involve direct
        a priori allocation of resources (including labour) through the deliberate choice of some social body. At the opposite pole is resource allocation
        through objective market laws that a posteriori counteract or correct previously fragmented decisions taken by private bodies, separately or autonomously from each other.
        Similarly, market economies in the sense of ex post allocations of resources have historically existed in the most variegated forms. In principle, there could be market economies with ‘perfect’ free competition: though in practice this has hardly ever been realized. There can
        be market economies skewed by the dominance of powerful monopolies able to control large sectors of activity and so to fix prices over long periods.
        Markets can coexist with drastic forms of autocracy and
        despotism—as they did under eighteenth-century absolutism, nineteenthcentury tsarism, not to speak of various sorts of military junta or fascist
        dictatorship in the twentieth century. But they can also be combined with advanced forms of parliamentary democracy, as they have been in the latter half of this century—if in less than twenty countries out of
        the one hundred and fifty or so that comprise the capitalist world.
        Market economies may worsen the misery of broad masses, by an absolute lowering of their standard of living, as they did in most countries of the West for much of the eighteenth and nineteenth centuries, in Eastern Europe extending far into the twentieth century,
        and as they still do for at least half—if not more—of the inhabitants of the Southern hemisphere”
        – Ernest Mandel- In Defence of Socialist Planning
        New Left Review I/159, September-October 1986

      • #9 by Unlearningecon on August 7, 2013 - 12:26 pm

        Great quote, and thanks!

      • #10 by Jan on August 4, 2013 - 10:36 pm

        And by the way,excellent articles Unlearning!I hope you continue to write more of them in Piera or elsewhere!

    • #11 by Luis Enrique on August 2, 2013 - 10:41 am

      yes the US sent a lot of aid.

      you can all keep adding but this and but that, but I don’t think you can explain away everything and leave no role for the inherent advantages of market based economies over centrally planned economies.

      • #12 by Unlearningecon on August 2, 2013 - 11:37 am

        No offence luis but I think you are showing economist’s tendency to dismiss the importance of politics in favour of the underlying economic mechanics.

        I mean, East Germany was behind West Germany before the split. It is still behind. Yet the only time anyone compares the two as a laboratory test is when communism rears its ugly head.

        I think North Korea’s economic policies leave a lot to be desired, but it has also been completely and utterly isolated, devastated by war and continues to pump disproportionate amounts of money into the military in the face of very real hostility from the US.

        And I said said on Pieria, the USSR as a whole actually performed remarkably well, so much so that it scared the US.

      • #13 by Luis Enrique on August 2, 2013 - 2:49 pm

        no offence UE but I think you are showing the self-styled heterodox warrior’s tendency to dismiss what you regard as mainstream economic points in favour grasping at anything and everything else.

        If you really think that central planning has no inherent flaws, and that experience of actually existing communists states provides no evidence of such, I think you’re barking mad.

        you think the US is the hostile party in Korea? ffs

      • #14 by Unlearningecon on August 2, 2013 - 3:06 pm

        What I’m grasping at are facts, and I have repeatedly referenced the facts about the USSR and east germany, which are far less conclusive than historical caricatures.

        North Korea has repeatedly called for peace treaties with the US, who has vetoed them on the grounds that their nuclear weapons must first be dismantled. Because, you know, the only country that should be allowed nuclear weapons is the only one that’s ever actually used them, right?

        I mean, what the hell is the US doing in Korea anyway? North and South Koreans both just want peace and reunification, but the US couldn’t keep an eye on china without the thousands of troops they have stationed in the south. Imagine if china or even the USSR were occupying the south of mexico and refused to accept peace deals from the north. How does that sound to you?

      • #15 by Luis Enrique on August 2, 2013 - 3:46 pm

        so your précis of the situation is the North and South Korea both only want peace but the belligerent US insists on a massive military presence so it can “keep an eye on China”, which they couldn’t do otherwise.

        And you think the US shouldn’t object to the North getting nukes because that’s just hypocritical.

        And you reference for facts about the USSR claims it delivered:

        “full employment, guaranteed pensions, paid maternity leave, limits on working hours, free healthcare and education (including higher education), subsidized vacations, inexpensive housing, low-cost childcare, subsidized public transportation, and rough income equality … the Soviet Union’s publicly owned and planned economy succeeded remarkably well…. what eventually led to the Soviet Union’s demise was the accumulated toll on the Soviet economy of the West’s efforts to bring it down”

        you are beyond help

      • #16 by Unlearningecon on August 2, 2013 - 4:03 pm

        so your précis of the situation is the North and South Korea both only want peace but the belligerent US insists on a massive military presence so it can “keep an eye on China”, which they couldn’t do otherwise.

        Stated dismissively and as a caricature, but yes, both North and South Koreans ultimately want peace but the main threat to that is the US, which vetoes any attempts to make it so and has done for decades.

        And you think the US shouldn’t object to the North getting nukes because that’s just hypocritical.

        No, I think the US should engage in peace talks with North Korea, and do everything it can to promote reunification.

        And you reference for facts about the USSR claims it delivered:

        “full employment, guaranteed pensions, paid maternity leave, limits on working hours, free healthcare and education (including higher education), subsidized vacations, inexpensive housing, low-cost childcare, subsidized public transportation, and rough income equality … the Soviet Union’s publicly owned and planned economy succeeded remarkably well…. what eventually led to the Soviet Union’s demise was the accumulated toll on the Soviet economy of the West’s efforts to bring it down”

        you are beyond help

        What about this statement is untrue? It may be rose-tinted, I’ll accept that, but it is factually correct.

        Also, how is Russia doing now? How was it doing before 1917? Why do 60% of Russians miss the USSR? Do you think it would have been better or worse off without the socialist revolution? Such questions are difficult to answer, but there is little doubt that the USSR had probably fastest increase in average standard of living, and GDP in general, out of any country in history.

      • #17 by Luis Enrique on August 2, 2013 - 5:00 pm

        would you describe somebody in a forced labour camp as having employment, free healthcare, low cost accommodation etc.? I mean, it’s a “fact” isn’t it?

        not without looking silly.

        Of course most Soviet citizens weren’t interned in labour camps, although far too many were, I use that example merely to demonstrate that if you just list attributes like “full employment, guaranteed pensions, paid maternity leave, limits on working hours, free healthcare and education (including higher education), subsidized vacations, inexpensive housing, low-cost childcare, subsidized public transportation” and call the economy “remarkably successful”, without thinking about the nature of those jobs, what you’re wage could buy you, the quality of housing, childcare, frequency of food shortages (not to mention famines) etc. you are an idiot.

        I visited Russia in the eighties, I saw for myself shops with nothing on the shelves

        here’s a bit of extra information on housing, for instance

        “From the 1920s into the 1950s, a significant number of Soviet families lived in communal apartments, while many lived in worse conditions in barracks or “dormitories” (mass housing for workers) …. People’s access to housing was like their access to consumer goods in that it depended on their position in society and their place of work. …In cities right up to the 1970s, most families lived in a single room in a communal apartment, where they suffered from overcrowding and had little hope of improving their situation.”

        from here

        of course there were slums and overcrowding in the West, so everything is relative, my point is merely that portraying the USSR as a land of plenty where everybody enjoyed “low cost housing” is just bloody silly

      • #18 by Unlearningecon on August 2, 2013 - 10:21 pm

        I agree with you to an extent, although it I have two caveats:

        (1) It is noteworthy an industrialising country had these things at all, even when they were substandard – industrialising Britain certainly didn’t. This aspect of the USSR I think accords it a degree of merit when compared to industrialising capitalist countries.

        (2) To what extent were these ’empty shelves’ a result of the ridiculous amount of GDP pumped into the military? It’s certainly the case that the consumer economy declined during the 1980s as the cold war reached peak cold war.

        Also, I am well aware of that Brainerd paper and find it unconvincing for a few reasons:

        (a) She sees fit to compare the USSR to developed countries directly, even though it had only been industrialised for 30 years. Clearly, we’d expect it to have lower living standards than them. What is Russia’s consumption like now? And how is it distributed? (Genuine question)

        (b) She uses overall consumption rather than just consumption of food, which actually reached roughly US levels by the 1960s

        (c) There is also little doubt that the USSR boosted life expectancy greatly overall. It doubled under Stalin and also under Mao. I’m not a fan of Stalin but neither am I a fan of Khrushchev or any of his successors, and almost all of the negative trends started after Stalin died. Curiously, she doesn’t seem to draw many pro-Stalin conclusions from her data!

        (d) She suggests the decline during the transition to capitalism can be blamed on the USSR, which is absurd – it simply wouldn’t have been as sudden as it was if that were the case.

        (e) The height thing undoubtedly has some weight (no pun intended), but it would need more disentangling than she gives it.

      • #19 by Luis Enrique on August 2, 2013 - 5:04 pm

        also, have a think about where GNP data comes from in a communist economy and whether the relationship between reported GNP and living standards resembles that between GDP and living standards in market economies (or between the distribution of income and living standards, to account for heterogeneity).


  3. #20 by Boatwright on August 1, 2013 - 11:04 pm

    Yippee! I’m getting tired of discussing money with gold-bugs.

    • #21 by Unlearningecon on August 2, 2013 - 11:39 am

      It was indeed a breath of fresh air writing about this.

  4. #22 by thehobbesian on August 2, 2013 - 3:32 pm

    One of the great ironies of Marxism was that Marx believed it would only occur in the most advanced capitalist countries, after capitalism had completed its work of building up an infrastructure. In reality, virtually every single country that experienced a socialist revolution was not capitalist, and used the centrally controlled economy to build up that infrastructure. It really happened in a completely different way from what Marx described, and probably had something to do with why so many violent regimes existed amongst communist nations, when you are developing you economic infrastructure, there will always be some skulls that get smashed, we see it in developing capitalist countries, and we see it in developing socialist countries as well.

    • #23 by Unlearningecon on August 2, 2013 - 4:10 pm

      Yes – Lenin recognised this, and the Russian Revolution in many ways resulted in a “what now?” The conditions to build socialism were simply not in place, so you had various theories, mostly Leninist but with different iterations like Stalinism, Troskyism and Maoism, about how to build things up. Obviously each depended on further context, Stalinism being the result of all-out warfare for example, but the fact is it was never going to be a fairytale.

      • #24 by thehobbesian on August 5, 2013 - 2:22 pm

        Yes, WW2 was kind of like reality setting in for communism, when you have the largest army on earth invading your country promising to turn your population into slaves and establish a racist empire on your land, it becomes a little harder to be Marxist hippies. And even after they won, the USSR had to play the politics game of proxy wars with the US, military spending certainly took a dent out of their economy as well as undermining the equality and anarchy (by anarchy I mean lack of social hierarchy) that Marxism was supposed to bring. And I don’t think Marx was hoping for a socialist society that would be constantly at war or in threat of war (though I remember him saying something about “barracks socialism” where people are forced to go along with a socialist scheme in a crude fashion). Whereas capitalism was built for warfare and imperialism and could balance the private sector/military sector dilemma in a smoother fashion.

  5. #25 by gastro george on August 2, 2013 - 4:37 pm

    So, what’s the opinion about present-day China? Capitalism or socialism? Or both?

    • #26 by Unlearningecon on August 2, 2013 - 4:39 pm

      Definitely capitalism, though state-directed.

      Edit: to elaborate, companies work there for private profit and employ people for wages, then sell the goods on markets, either in China or the west. The state calls itself communist, and has a heavy role in managing the currency and certain institutions, but it’s surely still capitalism overall.

  6. #27 by Jordan on August 2, 2013 - 7:40 pm

    Acctually, the record keeper of 10 year growth is Yugoslavia from 1955-65. From completely devastated country in WWII and being agricultural economy before it grew by astounding speed and some, just some authoritarenism. It had to deffend against west and east at the same time; Trieste stand off with Allies and economic embargo from Stallin. It was a pilitical game that turned out marvelously for Tito providing him with enteernal glory. A president whose funeral attended 90% of presidents, PMs and kings, the most of all politicians in the world. But still they call him a dictator on occasion when it suits kapitalist propaganda. Only dictatorship he exibited was against stallinists in Yugoslavia, he let artists and communists toghether create economic system today called titoizm/ worker cooperatives/ self governing wroker system.
    The economic system that it was established in YUgoslavia was on the trail of Marxist recomendations but not fully developed.

    Full MMT was implemented in Yugoslavia, 100% reserve requierment for banks and state printed as much as needed for projects and developement. ALl accompanied by society unifing propaganda and PR, i must admit in a bit naive way. If they had marketing skills as west had Yugoslavia would still enjoy worker cooperative system and unity.

    • #28 by Unlearningecon on August 3, 2013 - 1:47 pm

      Thanks for your comment. I knew Yugoslavia’s record was impressive, that industrialisation was done fast but relatively equitably, but I didn’t realise that the country practised MMT and full reserve banking.

      Sadly, the US got involved again. I recall that there is a quote floating around from someone who was in the Clinton administration that basically admitted they attacked Yugoslavia because it wasn’t free trade enough, rather than because of the human rights abuses (I also recall somebody saying that the worst of these actually occurred after NATO got involved).

      Do you have any good books or articles on Yugoslavia?

  7. #29 by Jan C on August 3, 2013 - 9:09 am

    I live in Estonia, the ex-soviet republic. I am not an Estonian, I moved here two years ago, started to visit the country regularly 5 five years ago. There is not a lot of nostalgia for the Soviet Union among Estonians, except for the large Russian minority who have lost their social status and are now the most deprived group in society. I have also lived in Poland, where nostalgia for the communist era is also almost totally absent (my experience at least). In Bulgaria, were I have friends, there is much more nostalgia but they suffered (like Russia) much more hardship in the nineties, Estonia and Poland recovered relatively fast. From what I hear from normal middle class people here, who are on average wages, life now is much better than it was in the seventies or eighties. In the eighties my girlfriend would be sent to the shop by her mother to get bread, milk and sausage. It was not necessary to specify which kind of bread or milk, or…. , because there was only one kind. Very easy. This may seem trivial for detached intellectuals but for normal people. People earned a large wage that considering prices would give them a lot of purchasing power but you often had to wait years to get consumer durables, these wages were mostly fiction. Also in the eighties when the parents of my girlfriend started a family, despite all the high rises the Soviets built, there was still a lack of decent housing. My girlfriends family lived for years in one room (one room, not a one room flat) without a bathroom.
    Live was not terribly, you had a job, food, health care, quite good education.

    But the biggest problem for me was the lack of political freedom. I am not talking about fair elections but just about the right to say, write or sing what you want. People were just expected to keep their mouths shut, not think, and just be happy with their meager supply of consumer goods. I think that, if only for the economy, I could have lived there (I am quite detached) but the political oppression would be too much for me. Whatever you can say about the core Western Capitalist economies, you can say almost anything you want, criticize your government and big businesses in very hard words, with very little consequences. You will probably blame this on the constant external pressure exerted on the Soviet Union?

    Another issue is that communism made people very receptive for neoliberalism. In the nineties, because of their hatred for communism, a majority of the people here, even with all hardships caused initially by shock-therapy, people continued to to support neoliberal politics. Even in 2008-2009 when the economy shrank with 20% support for the neoliberal parties was at an all time high. This is something I observe in a lot of the relatively successful ex-communist Central and Eastern European countries. Actually I think it would be good for neoliberals to install a communist dictatorship for some time, makes people much more receptive for capitalism afterwards.

    I am a social-democrat.

    • #30 by Unlearningecon on August 3, 2013 - 1:37 pm

      There’s no doubt the consumer economy of the USSR left a lot to be desired, though I would note that the reason the 80s were particularly bad can honestly be attributed to cold war pressures.

      Whatever you can say about the core Western Capitalist economies, you can say almost anything you want, criticize your government and big businesses in very hard words, with very little consequences.

      I do agree with this massively. That I can even write this is a big plus one for liberal democracies. However, bear in mind that it took a long time for us to develop these institutions, and Russia (and surrounding countries) were still massively underdeveloped at the time of the revolution. When Britain was still peasant-based, heresy was punishable by death.

      Also, bear in mind freedom of speech is still severely restricted at the workplace in capitalist countries. There is also a partial argument to be made for the way big media/business dominates debate with propaganda, and although this is not the same in degree or kind, it is still noteworthy.

      You will probably blame this on the constant external pressure exerted on the Soviet Union?

      I think that would be a bit of a stretch. It is partially true, of course, and the USSR is not the only place: in the US post-revolution, it was illegal to suggest the (British) King should have control over the states. But there’s no doubt I would not have liked to live under such oppressive circumstances, and would not wish them on anyone.

      I am a social-democrat.

      I would be if I didn’t think social democracy was equally dependent on imperialism: see my conversation with Roman and anti-imperialist above. You have to consider the relationship ‘liberal democracies’ have with the rest of the world due to their aggressive foreign policy. I sometimes think of the US, Europe and selected other countries as the ‘eye of the storm’.

      • #31 by Jan C on August 13, 2013 - 5:19 pm

        “I do agree with this massively. That I can even write this is a big plus one for liberal democracies. However, bear in mind that it took a long time for us to develop these institutions, and Russia (and surrounding countries) were still massively underdeveloped at the time of the revolution. When Britain was still peasant-based, heresy was punishable by death. ”

        That sounds almost like Whig history. “Russia/the Soviet Union was underdeveloped and did not go yet through the necessary stages that lead to through the liberal utopia”. I know this is not what you wanted to imply, but the similarity is striking.

      • #32 by Unlearningecon on August 13, 2013 - 5:36 pm

        Hah, that is a fair cop!

        But yes, I didn’t mean to imply that; I attribute the USSR’s paranoia to historical circumstances – both internal and external – rather than seeing them as a necessary passage toward a better life. I can only wonder what the USSR would have looked like if the west had greeted it with offers of aid for, and advice on, expanding free speech and so forth, rather than hostility. Though such navel-gazing is largely a waste of time.

  8. #33 by Jordan on August 3, 2013 - 2:40 pm

    Prety decent analysys is here http://balkanologie.revues.org/681 with some, very little bit of twisted description, but stil very good to give you a whole new perspective on what an alternative to capitalism can look like and why it failed.

    A good book from philosofical standpoint is here http://www.tandfonline.com/doi/abs/10.1080/08854300.2012.754213#.Uf0DPJJ0ySo

    On your coment about US involvement, it happened a long before Clinton. Yugoslavia after 1990 is not what is interesting here, it was not yugoslavia anymore as it was in its glory days. After 1990 it was ruled by a nazionalist and a war criminal Milošević and what US did there after 1992 was prety decent thing to do. Wether the killing became worse after the US bombing it is not a bad thing since Milošević compressed implementation of his plan, so less of killings happened thanks to that.

    Yugoslavia was destroyed by using its external debt, blackmailing it by refinancing on conditions just as Greece is blackmailed today. History repeats itself all the time, in different places and described in different terminology. It was blackmailed into separate krediting, each republic had to guarantee separate loans which intensified importance of money distribution between republics. Milošević made an intrussion into money printing against agreements which provoked Slovenia and Croatia to split away. I really do not know why Yugoslavia did not just default on its external debt, which it had full right to do.

    Major difference and the crucial one that first and foremost divide capitalist from communist banking was full reserve banking and state money printing for the good of people (which buerocratic ellite abused just as elite here abused banking inovation, nothing new in this world.) Why do you think the state capitalism as it was prakticed in Soviet block was such an evil to the west? It was full reserve banking and state money printing.

    • #34 by Unlearningecon on August 9, 2013 - 6:38 pm

      Thanks again for your perspective and the links. I certainly think that the Yugoslavia model is the best way to industrialise the human race has come with so far.

  9. #35 by Magpie on August 9, 2013 - 3:44 pm


    Usually I try to avoid this kind of polemic. But given that Harrison came back with another piece, full of self-righteous indignation, I’ll allow myself a few comments.

    The first thing about the Harrison pieces is that, in reality, they do not compare capitalism with socialism: they compare 20th century capitalism with 20th century socialism. But capitalism is way older than that: a liberal should know that.

    Even if we arbitrarily and _conservatively_ limit capitalism to what came after the Industrial Revolution (leaving, therefore, the mercantilist period out, with the extremely bloody colonization of the Americas), he should account for part of the 18th century and all of the 19th: but he didn’t mention the Irish Potato Famine of 1845-47, nothing about continental Europe; or the Indian Famines (see Davis, M. (2001), Late Victorian Holocausts); he didn’t mention the neo-colonialism in Africa or Asia. Why not?

    What about the depressions during the 19th century? What about the Great Depression, the stagflation, Latin American debt crisis, and the Asian crisis, and the Russian default? And the current beauty?

    And the bloody repression during the 1848 revolutions, weren’t they carried out by governments? And 1871, during the Paris Commune? Was the behavior of the Union and Confederacy up to scratch or weren’t those capitalists governments? No mention of the Indian Wars.

    He says he doesn’t know how many people the Imperial Japanese Army killed in China _alone_. Fair enough; let me give him a hand. The Chinese government claims something like 20-25 million people. Is that figure good enough for him, or will he suggest some revisionism?

    Why didn’t he mention Vietnam, Laos, Cambodia, Algeria, Mozambique, Indonesia, Uganda, Zimbabwe/Rhodesia, Congo, Sierra Leone, and actually, pretty much all Latin America? Or Afghanistan and Iraq? I could point these places in a map for him.

    The second thing that I noticed is that Harrison does not even compare the whole of capitalism: he compares capitalist governments, only.

    But, what about the private sector? No mention whatsoever, which is strange for a liberal. I mean, to forget the private sector????

    No reference to organized crime, for instance. But if someone could claim to embody the ideal of the Randian entrepreneur, as I said before, is the organized crime capo: they actually fight the government, like, with weapons and bombs! What about the Opium Wars and the Colombian and Mexican drug wars? Or the very American mafia? If their motive is profit and they sell stuff, why aren’t these “businessmen”?

    No reference to Bhopal, or Deep Horizon, or Dhaka or to fracking; no reference to financial fraud (from John Law, to Charles Ponzi, to the S&L scandal, to Banco Ambrosiano, to Bernie Madoff, to Goldman Sachs’ shitty deals, to LIBOR fixing).

    What about the narco-right wing Latin American dictatorships, a la Manuel Noriega? The very definition of private/public sector partnerships: the police kill trade unionists and the bosses lower wages and, with the savings, pay the cops kick backs.

    What about sweatshops and Foxconn? Or the United Fruits (creators of the banana republics), or the mercenary armies, or the murder of African and Latin American activists ordered by Royal Dutch Shell and Coca Cola? What about the blood diamonds and arms dealing, and people smuggling, trafficking and slavery (currently some 20 million worldwide, they say). And the latest: organ trafficking!

    I mean, has Harrison ever read a newspaper?

    • #36 by Unlearningecon on August 9, 2013 - 6:47 pm

      Hah, many thanks for your comment. To be fair, I found Harrison’s piece to be better than many anti-communist accounts, but I question some of his arguments (the IMF is a ‘responsible aid donor’!?) and think he failed to refute my central points about sampling bias and under which system atrocities are paradigmatic.

      It is also worth noting that he does seem to fall into the trap of indignantly pointing to all the horrors committed under communism, in gory detail. As you demonstrate so well, we could do the same with capitalism, but we’d be here for a long time, and the thrust of my argument would still remain unaddressed.