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Fighting Statism in a Post-Communist World

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After the seventy-five year experiment with socialist central-planning in the Soviet Union, it has now been demonstrated beyond a shadow of a doubt that there is no alternative to a market economy. And this is reflected in the stated objectives of every one of the former communist countries: to privatize their economies and to set up market institutions. Capitalism is the economic system of choice in this new post-communist era.

In the past three years, during which the communist world and the Soviet empire have been crumbling, political leaders and the popular press in the West have trumpeted the triumph of democracy over dictatorship. After a forty-five year struggle with the Marxist menace, it is said, Western-style freedom has proven its philosophical and practical superiority, both politically and economically.

But there is one major problem in this age of post-communist euphoria: neither socialism nor unrestrained government are in retreat in any part of the world.

In the former communist countries, neither a market economy nor constitutionally limited government is being firmly and securely established. Throughout Eastern Europe the vast majority of the enterprises owned and operated by the state under the old communist regimes remaining government hands. New ministries of privatization assigned the job of selling off state enterprises think up new reasons to delay the performance of their task. Prices and wages remain under state control to one degree or another. Foreign private investment is stymied by rules and regulations that have as their purpose governmental ownership or control of resources and assets. And unprofitable state enterprises continue to be subsidized out of government coffers.

Since tax revenues are insufficient to cover governmental expenditures, the political printing press is resorted to, with the inevitable inflationary consequences. And all of these countries continue to wait for their economic salvation from Western governments in the form of guaranteed loans, subsidized credits and outright financial handouts.

The bubbling caldron of ethnic and nationalist unrest in many of these former communist countries attests to the fact that few people in these new “democracies” truly understand what constitutional government is all about. Separation of powers and limitations on the powers of government are, by and large, unheard of or understood in this part of the world. Ethnic minorities feel threatened in these countries precisely because the power of the state is used (or potentially can be used) to benefit the ethnic or national group that happens to be in the majority.

And the march away from freedom continues apace in the West. In a recent issue of U.S. News & World Report, the writers of an article on global economic trends insisted that capitalism has triumphed over socialism. Whether it be in the form of the “corporate capitalism” practiced in Japan — or the “state-subsidized capitalism” of the East Asian tigers of South Korea and Taiwan — or the “welfare-state capitalism” of Western Europe and the United States, “capitalism,” it is said, is being adopted by one country after another around the world.

This sentiment is the predominate one everywhere in the West. But it merely demonstrates just how far down an Orwellian memory-hole has gone any true knowledge of what capitalism means. A “corporate capitalism” is, in fact, a form of economic fascism. A “state-subsidized capitalism” is, in fact, a form of nationalist mercantilism. And a “welfare-state capitalism” is, in fact, a form of collectivist redistributivism. The tragedy we face is that the economies of the West are peculiar and perverse blends of all three, with varying amounts of real market activity only permitted to operate in narrow ranges and areas of the society.

Nor are governments in the West constitutionally restrained, if by constitutional restraint we mean governments limited to the protection of individual rights. Group rights are the only rights increasingly recognized and enforced in the Western democracies. For example, in France and Germany, the fear of non-European immigration has resulted in debates over what defines a person as a Frenchman or a German and, therefore, having the rights of residence and citizenship (including the right to work and own property). The discussions revolve around the question: Are you a Frenchman or a German because accident of birth placed you there, or because of your “blood,” i.e., were your ancestors, going back several generations, French or German?

And in the United States, every conceivable social issue is immediately politicized into questions about minority rights (meaning ethnic rights), women’s rights, sexual-preference rights, disabled-persons’ rights, smokers’ rights, or non-smokers’ rights.

In this mad rush to claim rights and demand that the state use its power to bestow various privileges on those belonging to various groups at the expense of others in society, it has been forgotten that the only relevant minority — and the only one truly possessing rights — is the individual.

And the use of the word “forgotten” in the last sentence is unfortunately the heart of the dilemma that the world faces in this post-communist era. Communism may be politically dead at the present. But it is important to remember that communism is only one species of a wider genus. And that genus is statism.

Statism is the philosophy that declares that the state is supreme — that in the state resides all ultimate power, authority and right. In this philosophy, the individual is considered to have no existence outside his role within the collective plan. He and everything he owns are the property of the state to which he belongs. Under statism, the concept of private property loses its meaning. Even if property has not been nationalized — even if individuals are not meticulously regulated at every moment in every detail of their economic and social activities — the logic of statism is that, at any moment for any purpose, the individual, his property and his productive energy are at the unreserved disposal of the state.

While communism may have died, statism still rules the world, dominates all of our lives, and cats away at every aspect of our liberty. Stripped of our individual rights and denied our existence as independent individuals, we wait anxiously and with trepidation to be told by the state to which group we belong and what “rights” (that is, privileges) we shall have bestowed on us as members of various and sundry groups. And fearing that the groups to which we belong will receive fewer or less valuable “rights” than others in society, we enter into the arena of political combat to assure that “our” minority receives its “fair share” of the political largess.

In the heat of the continuous and unending political battle over “rights” and “fair shares,” the very idea that we exist as distinct and separate human beings possessing natural and inalienable rights as individuals slowly passes out of our very consciousness.

Statism threatens to win its ultimate victory — over the minds of every individual in society — for each person finds it increasingly difficult to conceive of his existence other than in collectivist categories. If the statists have their way, we will cease to exist as individuals. As Yavgeny Zamyatin and Ayn Rand imagined in their futuristic novels, the “I” disappears, with only the “We” remaining. And it is in terms of this “We” that we start thinking of ourselves as free.

Nevertheless, standing now at the threshold of the 21st century, we can took back at a hundred years during which the world has tried practically every form of statism imagined by man. And each of them has failed — failed politically, economically and culturally. Statism is a philosophy bankrupt of any justification or rationale — other than as a system to satisfy the lust for power and privilege. Its bankruptcy is shown by the fact that no one even tries any more to justify it as a moral principle. Statism has been reduced to a mere emotional wanting for the state to do certain things for certain people.

Statism’s moral bankruptcy opens the door for advocates of freedom to enter the field of battle with that most important of intellectual weapons: moral conviction. Brute force and power have never been able to maintain themselves without a moral justification to make people believe and accept their subservience. The advocates of freedom have the opportunity to rise up from under the rubble of statism and morally challenge the “We.” And to argue and convince our fellow human beings that not only are there no fundamental differences between the various forms of statism, but also that each of us is — and morally has the right to be — an “I”

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    Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).