A Great Idea About Capitalism That Was Wrong

The inequalities of capitalism are real. The limits on it are not. It is not a workable theory because it does not describe what actually happens. It is, in fact, a justification for maintaining and even increasing the inequality of the rich and powerful. Heads they win, tails we lose. Privatize their gains, socialize their losses.

Ian W: ‘I assume DeSoto was sincere (though who knows)….’

De Soto is a neoliberal whose primary influences are von Hayek and Friedman. Von Hayek personally promoted him as someone whom big-money neoliberal sponsors should back, which they did, including those in Reagan-era Washington.

https://en.wikipedia.org/wiki/Hernando_de_Soto_(economist)#Founding_of_the_Institute_for_Liberty_and_Democracy

https://en.wikipedia.org/wiki/Hernando_de_Soto_(economist)#Washington_Consensus

I’m sure he was sincere about the virtues of markets.

At the same time back in the eighties, economists came up with the idea of microcredit to enable poor people to become entrepreneurs and start their own businesses. After all, what does a poor person need? Debt, of course.

There was genuine enthusiasm for a while, with the usual anecdotes of brilliant success. The UN declared 2005 the year of micro credit. Then it became evident that many of the poor, mostly women, got caught in debt traps. There are anecdotes of miserable failure. While there are some success stories, in general, microcredit does not appear positive for most borrowers.

” the great challenge against it (state centralized “communism”) lost (to capitalism)”

Latin America started off several times richer per person than China in 1950. India started off richer per person than China as well. Now China has longer life expectancy and is richer than both those areas.
If Latin America and India are more “capitalist” than China that means capitalisms lost in that comparison.

Though to be fair there isn’t many clear lines between practiced capitalism and communism. One ironic current complaint about China from America is that China isn’t enforcing enough government monopolies (patents) and is instead letting free markets a spot in the sun. Can we also call the government sending trillions and trillions of dollars and euros to fraudster banks as an example of “capitalisms”?

The European countries and America have looted the southern world for centuries, then they pretended their theft is evidence they are “great and worthy”. I’m not aware of any countries (does Tibet count?) China looted to the tune of trillions to achieve their status.

In the last 3 decades has China or America killed more Muslims? America killed half a million Iraqi’s in the 90’s by blocking their purchased of medicine. The killed another million in a war for oil/power. No need to even add in the deaths cause b Americas other wars and actions they already beat China in Muslim killing. China bashing is used to distract the masses from how the powerful are screwing them over.

I was not familiar with Desoto the economist until Ian brought him to my attention, but I think Matt Bruenig’s explanation of properties rights is more enlightening — that property rights are nothing more than a “violence voucher.” Title to property means that the government will use force to defend your property. I.e. if someone owes you money, the courts will issue an order, garnish wages, put a lien on property, send the sheriff to evict, etc.. If someone trespasses on your property the government will issue a citation, and if necessary imprison the trespasser. There’s nothing “natural” about private property — without government and without violence, there would be no private property.

When you look at it that way, capitalism is a system created by government and totally dependent on government for its very existence. Those pro free market, anti-government types have no intention of doing away with the courts and the police that protect their violence vouchers.

Perhaps Hugh can tell us how many future war deads and deaths by American sanctions he’ll spot us, before he’s willing to admit that America and Americans have no business telling any other country in the world what to do, except maybe to tell Israel to stop fucking up American politics further.

Or maybe he and Willy and Plague Species can just migrant their mindless circle jerk to Plague Species’s Substack, where they can tell each other how they are brave moral giants and the rest of us are craven genocidal Chinese Trump supporters.

Ughh, hit post too soon.

The Chinese can take their own government to account if it fails them. They can decide if the CPC is bad enough to overthrow, in fact they’re done it twice in the last 110 years. They don’t need Americans or Anglos or Europeans and certainly not the Japanese to play their rescuers.

They don’t need Americans who don’t understand anything about their history (or even those who do, but hold American passports) to speak for them. This is the case for all the countries in the world that are not US of A. USA has 245 years track record of utter fails and bad faith. Calling a timeout is only fair.

Speaking of Charles Koch being pleasant in person, that is pure Reagan. The big lesson we learned from Reagan is that Americans are fine with fascism as long as it comes in a pleasant package. As far as I’m concerned talking nice and doing evil is just evil with a side of gaslighting.

Here’s what real nice looks like from someone who walks it instead of pretending to be nice to cover their stinking crimes.

https://twitter.com/danpriceseattle?lang=en

Hugh: ‘Who seriously cares how “nice” these dog turds are?’

Whoosh. I’m NOT suggesting we should care how “nice” our enemies are. Rather, I’m saying the following —

[1] Sun Tzu wrote: ‘If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.’

We do not understand our enemies.

[2] We need to grasp that our enemies are NOT necessarily cartoon-evil Daddy Warbucks figures. On the contrary, the most significant are ideologues with a deeply held, absolutely sincere conviction that the “markets-uber-alles” ideology they’ve promoted is The Truth, to which a recalcitrant humanity must be made to submit by any means necessary. (Not least, deception: despite what they say, true neoliberals do NOT believe in democracy, free trade, or the neoclassical economists’ fatuous notion of human individuals as rational, all-knowing utility maximizers.)

[3] Von Hayek’s ideology — of the Market as Supreme Information Processor, whereby through the independent actions of large numbers of individuals, each with limited and local knowledge, coordinated by prices that arise from decentralized processes of competition, there emerges an order beyond the capability of any human agency to achieve — actually is a persuasive, consistent intellectual construct.

Furthermore, the Neoliberal Thought Collective has put serious intellectual work into developing so as to extend it into every realm of human life. Horrifying as this has been, the Left — since the 1980s, anyway — has had no ideology to equal it. The American ‘Left’ is particularly pitiful in this regard.

[4] Finally, while we do not understand neoliberals, they certainly understand us. Thus, for instance, corporations’ current promotion of nominally ‘Leftist’ identitarian agendas of ‘representation’ and anti-racism, which in reality: –
(a) create markets for factions of the proles and underclasses to compete performatively for ‘representation’ and a few corporate bones to be thrown them;
(b) lead to absolutely nothing in the way of actual policies that would promote a more equal distribution of wealth and power.

As the Simpsons’ joke has it —
Homer: ‘Five white men control 60 percent of U.S. wealth.’
Lisa: ‘That’s terrible. It should be three women and two blacks.’

… one of the great thinkers about how to help poor people was a guy named Hernando DeSoto. (Great name, aces on parents!)

Cue Obi Wan and “that’s a name I haven’t heard in a long time … “

There is something called ‘a way of life’. As President Biden said in the July 4, 2021 remarks celebrating the Independence Day: “Each day, we’re reminded there’s nothing guaranteed about our democracy, nothing guaranteed about our way of life. We have to fight for it, defend it, earn it.” Sounds almost Goethe (paraphrasing a bit): only those deserve THEIR way of life who fight for it every day. Of course, being able to live ‘our way of life’ = freedom.

Capitalism is our way of life, and ‘our’ means ancestral, we invented and we live it. My view is this: capitalism is our American way of life. It is (quoting from memory someone else) “our and homegrown”, and we have to fight for it, because of those very reasons. Capitalism and then the American society sprung out of nowhere almost fully formed and has barely changed since the beginning in the fundamentals, e.g., private property, pursuit of individual wealth, etc. We claim on occasion that this is a universal and best economic system that all people should adopt, but this is not really true, because it is ours and no one else’s. My view is that fundamental reforms of capitalism are impossible, because it is equivalent to denying ourselves and because we really do not know and cannot imagine any other way of life. When capitalism ends, the people will end (not physically but economically, culturally, in terms of identity). The new people will have a new way of life, a new name and a new identity. They will have little affinity with us. Where does capitalism come from? Who knows: tradition, unique history, ideology, religion, etc, etc — it could be simple mental representations in our mind driven by our unique and random genetics. There is a fascinating phenomenon in the round worms (nematodes): in the same species, there are worms that live gregariously together in clumps (communism-like) and worms that live individually spread-out (capitalism-like) — the difference between the two varieties is a single mutation in a single gene. Maybe we just happened to have more of the individualistic mutations in us than the rest of world people.

I think the plus of sincere ideologues is that you typically know the rules of engagement and sometimes you can present a sufficiently persuasive case to change their minds. Some people do make it a practice to constantly question their understanding of the world and can truly change their minds. Others might be persuaded if they see a loved one struggle with their sexual identity or go through a personal bankruptcy.

The problem is that people typically wear blinders, especially as they get older and now invested in their ideology. Plus billionaires (and even the American PMC) live such a ratified life that they never get exposed to anything disagreeable. So they never see or hear about any of the damage wrought by their shitty ideas, and what might come through are statistics that can be waived off as acceptable casualty of progress.

As a demographic or social force, nice sincere ideologues are terrible. But they can be pleasant enough company if you steer away from certain topics.

The CCP are great admirers of Desoto as the following article reveals. Marx and Engels are blushing in the great beyond. But hey, at least they’re no longer impoverished agrarian peasants, right?

Come in here dear China have a cigar, you’re never gonna die, you’re gonna make it if you try, they’re gonna love you.

https://rhg.com/research/china-household-debt/

For years, China’s financial system grew rapidly, but most bank credit was allocated to state-owned enterprises. Loans were generally backed by fixed assets as collateral or government guarantees, and the proceeds were invested in new fixed capital rather than consumed. As a result, even though credit expansion was extremely fast, China’s credit growth was thought to be different in nature from the consumer debt bubbles that had produced financial institution defaults and insolvencies in developed markets when they finally burst. Corporate leverage to fund new investment was generally viewed as more stable than household leverage to fund consumption.

What a difference five years makes. From the end of 2014 to 2019, China’s corporates added an astonishing 37.9 trillion yuan in new formal borrowing ($5.5 trillion). But China’s households joined in the party for the first time, adding 32.2 trillion yuan in debt from banks alone ($4.6 trillion). The surge in China’s household borrowing is comparable in size to the runup in US household debt in advance of the global financial crisis (although household debt was not the only factor involved in that crisis, of course). US household debt rose by $5.1 trillion from Q3 2003 to Q3 2008.

Simply put, the structure of China’s debt has changed significantly in the last five years, and risks from both corporate and household borrowing are now prominent. There are already limits to how much new debt corporates can add, given the rise in defaults, the declining marginal returns to new credit and investment, and the rising proportion of credit used to service older debt. The historically underleveraged household balance sheets were the last frontier of China’s historic credit expansion.

Von Hayek’s ideology — of the Market as Supreme Information Processor

That was a critically important idea, according to multiple critics and historians of neoliberal thought.

If you go back and read Hayek’s seminal paper, you will find a highly intelligent and even self-critical treatment. What made it seminal and so powerful were 1.) subsequent acceptance of a cartoon version that failed to acknowledge either subtleties or weaknesses; 2.) the absence of engagement from an intelligent left.

Hayek himself acknowledged that actual observed prices did not have enough info to function as he suggested a theoretical market system could. No one subsequently even noticed the qualification or thought to explore why.

Really bad ideas advance because the nominal liberal progressive opposition acts dumb.

Really bad ideas advance because liberal progressives don’t challenge them, but even if they do, it’s not going to change the minds of anyone advancing them. The object is to sell them regardless because they promote an agenda.

I also have a problem with the CYA hidden in the footnotes. So Hayek puts out this whole grand theory with an Oh BTW, it doesn’t work lost in the verbiage.

And yes, I think the rich and politicians should be forced to live on minimum wage with dicey or no healthcare and treated as they treat us.

I wonder if Chairman Cao, the billionaire leader of Fuyao Glass America, is a member of the Mont Pelerin Society. If not, he should be.

DMC, where do you believe McDonald Trump comes into play with Buchanan’s and Koch’s grand plan for society? An unexpected aberration? An expected feature?

Okay, here’s our proper left-wing analysis contrary to Von Hayek.

https://en.wikipedia.org/wiki/Thomas_Piketty

“Capital in the Twenty-First Century, published in 2013, focuses on wealth and income inequality in Europe and the US since the 18th century. The book’s central thesis is that inequality is not an accident but rather a feature of capitalism that can be reversed only through state intervention.[49] The book thus argues that unless capitalism is reformed, the very democratic order will be threatened.[49] The book reached number one on The New York Times bestselling hardcover nonfiction list from 18 May 2014.[50] Piketty offered a “possible remedy: a global tax on wealth”.[51] “

I don’t know how a global wealth tax would work. How do you get tax havens to give that up? How do you get a globally acceptable value for an asset? Who gets and collects the tax?

In the past I have advocated national wealth and estate taxes. Establish bounties on tax cheats, confiscate undeclared and mis-declared wealth with real jail time, establish an agency to put a value on assets, prohibit or place a heavy wealth penalty on anyone changing their citizenship to avoid the tax, etc.

handful of wolves in a world of sheep
The goal of power players worldwide. What would mitigate them? A global wealth tax? But that would require a respected institution to maintain. And respected institutions are under so many wolf attacks these days that they almost seem disrespectable to even the more respectable folks.

I realize that I repeat repeat myself. I still hope that stirring that pot will bring good ideas to the surface.

DMC, what about the military? The military is the government/state too and its budget is burgeoning and growing. If Koch’s ideal society is proceeding as planned, how does that explain the military which is the state by the way, or a large part of the state.

If Buchanan wanted to do away with the state, then Trump is a feature, not an aberration. Trump equals the end of the state. Being a fascist through and through, the only thing left of the state would be the enforcement of wealth.

Yes, the article linked to has this:

‘I think too many people on the left have really underestimated Koch’s intelligence and his drive, and also misunderstood his motives. There’s been brilliant work by journalists, really good digging on the money trail and the Koch operations, but much of that writing seems to assume that he is doing this just because it’s going to lower his tax bill or because he wants to evade regulations, personally. I think that really misgauges the man. He is deeply ideological and has been reading almost fanatically for a very long time. I see him as someone who’s quite messianic. He’s compared himself to Martin Luther and his effort being like the Protestant Reformation. When he invested in Buchanan’s center at George Mason University, he said he wanted to “unleash the kind of force that propelled Columbus.”

DMC wrote: ‘Then look up the term “Plutonomy” and realize that is what the .001% are striving for.’

Yes, again. Except striving for? I’d say that they’re there, at least in the US.

Upside/down, I mean Oakchair, wonders if China forced the West and Japan to consume all those fossil fuels. Are we forcing China to use all those fossil fuels now?

As for Columbus and Koch, yes, both are driven by genocidal empire-building. Still there is a huge difference in the damage they can do between being a true-believing drunk at the end of the bar and a megalomaniacal multi-billionaire fascist.

Well, considering that a good chunk of the Chinese consumption of fossil fuel goes to manufacturing for export, I would say the West and especially USA certainly played a role in the size of China’s carbon footprint. And even with that expert manufacturing footprint and infrastructure development, China’s per capita carbon footprint is less than half that off the US. And again, the US shouldn’t be dictating what other countries do on climate change, especially when it sabotaged all global efforts to limit carbon emissions.

If Hugh actually cared about pollution and fossil fuel, maybe he could tell us what the hell he’s been doing to lower his personal carbon footprint and how he push for actual green policies in a place with the lowest hanging fruit, the USA. I admit that the latter seems pretty futile to me without a collapse and revolution (that I personal don’t look forward to, because it’ll probably kill me), but I didn’t procreate or fly long distance multiple times a year or demand fresh towels everyday or vote for anyone with a clearly anti-green voting record.

Reinhold Niebuhr in his 1932 Moral Man and Immoral Society observed that our ruling classes spent much of their time coming up with reasons to justify why they merited their bloated privileges, and why the common good just happened to coincide with whatever was good for them.

To make the most important point last, no one can claim with a straight face that what the economy does at this point is determined by markets. If markets actually ruled, all of the too-big-to-fail banks would be good and dead by now. Instead, we have state support of the biggest financial predators at a level that would make the most ardent socialist swoon with envy.

Note the goal of the Chinese propagandists is to ensure no one criticizes China. China is so insecure and fragile in this way. It simply cannot handle criticism of any kind. So much so, it sends out armies of cyber warriors to protect an honor it does not possess and will never possess.

I can’t wait for the Chinafication of the Taliban. This is something I wholeheartedly support considering the Taliban are scum rot knuckle-dragging cave dwellers. Hopefully the fate of the Taliban is the fate being visited upon the Uyghurs.

I thought I should try to detail my disagreement on geopolitics and the USSR.
I am rambling and long-winded here, but hopefully there is something useful.

I am not an expert. My background is after I left the military, I was taking undergraduate courses about the soviet and east European politics and economics from about ’89 through ’94. My view is far from being the last word on anything. If you have an interest in that period, “The Americans” is really good, except for the body count.

I have always wanted to ask the Soviets why they never built a national highway system. Google ‘Amur Highway’ if you like; it’s the only road east and it wasn’t paved until 2004. Resources don’t matter if there are no people there to look for them, and no way to transport them if you find any.

For that matter, in 2011 the U.S. rail system was roughly twice the track mileage of the  Soviets’, for a country a fraction of the size, after many decades of decline. 
You read about the Soviet rail system being stressed by steadily increasing traffic on the same stock of track, as though it were a fixed natural resource, like oil or arable land. As though the premier command economy of world history was helpless. 
 
One thing my teachers didn’t talk about much was the level of coercion in the Soviet system as it existed in the ’80s. They probably figured we were already getting more than enough of that already. What they talked about instead was the abundant evidence that large numbers of people supported the Soviet system because it was delivering for them. A former journalist from communist Poland told me that there were certain subjects you stayed away from, other than that it was a normal life.  By contrast, he indeed loved the land of the free. He would have loved to discuss it more but he had to shut the fuck up and get back to work. He also told me there were no television shows running 24/7 extolling the kindness, heroism, and nobility of the state security organs. No cop shows in other words.

So, overt coercion was less important in people’s daily lives. But I suspect that part of the Soviet answer to my highway question above, would go something like this; how many people do you think want to live on a collective farm?

Historically, Soviet leaders routinely overestimated popular resistance to their policies, underestimated the willingness of the population to endure sacrifice, used a whip when a bullhorn was all that was required. Used a level of violence that was grotesquely disproportionate to the intended objective.

How much of the Soviet system’s failure can be laid at the feet of central planning, and how much to an incentive system incorporating that level of unnecessary, superfluous coercion? In the end not even the people who ran it wanted to live in it.

Left to themselves, corporations grow, diversify, and internalize markets as they do so. You start with a company that makes railroad cars, and you end up the Soviet Union in miniature, in the 19th-century company town. (A chief Marxist criticism of Soviet “socialism” is that since exploitation never ceased, it is better understood as state capitalism.) Point being, if central planning is the culprit, why does it occur as a seemingly natural tendency?
Then there is the unambiguous success of the U.S. experience with a full-on command economy just like the Soviets during WW2. Maybe there is an expiration date.

The U.S. role in Soviet decline;
I have a hard time believing that anything we did made more than a dent in U.S.S.R., while it existed.

So let’s go down the list;
Actually invading the U.S.S.R. was tried, multiple times. Japanese and Chinese border incursions on the other side of the planet, practically, were easily repelled.
When the German army reached the outskirts of Moscow, the Soviet Union should have been finished. If it had been any other state it absolutely would have been. How did they recover? The brilliant leadership of the people who murdered most of their officer corps just before the war started? The Soviets won in spite of their political leadership. What is left other than people, resources and territory?

All U.S. efforts to insert saboteurs or would-be insurrectionists ceased in the fifties because none of them lasted more than a week on the ground. So, subversion, tried.

Not trading with them?
As a rule of thumb, the larger the country, the smaller the role of foreign trade. This is because internal markets are more self-sufficient, and it is harder for outsiders to penetrate those markets. Of all the polities that have ever existed, the USSR probably had the least inherent need for trade. The Soviets bought substantial resources and technology, and easily stole what they couldn’t buy, in terms of technology. I am less knowledgeable about trade, however, problems with Soviet agriculture were surely a product of the Soviet system; Canada harvests wheat at the same latitude, and exports it.

Sanctioning Soviet elites’ access to luxury goods and foreign cash? They weren’t “corrupt” in that sense.
Was there a nomenklatura? A patronage system? In the U.S. we call them “mentors”. The most luxurious dacha of the highest Soviet official barely compared to an upper-upper middle-class McMansion. They got better apartments and got to shop in better stores. They didn’t get palaces and legions of servants. 
If you want to know what the nomenklatura looked like, they looked a lot like people who run things in the United States; the sons and daughters of the people who ran things 25 years ago; the professional managerial class.
“Corruption” wasn’t bankrupting the Soviet system by filling Swiss bank accounts. And there were norms and mores intended to counter this tendency. The Communist Party attempted to recruit bright dedicated people from diverse backgrounds, and membership was a major personal commitment, not a ticket to easy street.
The most significant “corruption,” the systemic stuff like the black market, may have actually been helping–“lubricating” the system–compensating for deficiencies in The Plan.

Harsh language?  Check.

Did we fool the Soviets into over-spending on their military?

Forget secret weapons and commandos. The kind of military capabilities that really matter (for an invasion threat) are how many tanks and ships and aircraft and soldiers you have, and where they are. 
With a little work, the Soviets could walk right up and see everything we had that was relevant. The U.S. wasn’t exactly a challenging intelligence target.
 
But on top of that, the foreign intelligence department of the KGB was simply the best espionage agency in the world. Maybe the best that has ever existed. The KGB consistently out-performed their adversaries by huge margins. They kicked everyone’s ass.

They did it by being good at recruiting, training, and employing spies, decade after decade. In the 50’s the CIA trained infiltrators for weeks or months before parachuting them in to be captured. The Soviets trained their deep cover illegals for ten years before they deployed them.

The only people capable of fooling the Soviets about U.S. military capabilities were the Soviets themselves.

What’s left?

The Soviets knew their system was in serious trouble by the mid-’70s, but made the very ominous decision to continue their high level of military spending. It is possible the Reagan administration’s military build-up deterred the Soviets from doing something desperate.

When the Soviets tried to reform, that is when the U.S. played a role.

After WWII, Hans Morganthau proposed that we demolish Germany’s industrial infrastructure, and plow it under, so that it would never recover. A policy of deliberate externally imposed de-industrialization called pastoralization.
Morganthau was one of the prominent advocates of ‘Realpolitik,’ his book “Politics Among Nations”, is one of Condelliza Rice’s favorites. I stopped reading it after the page where Morganthau contrasts the wimpy idealist Chamberlain, with hard-nosed realist Churchill; Chamberlain gave away someone else’s country to avoid a war he had to believe he could win. Churchill continued a war that Britain had clearly lost.

Ironically, no one else back then thought an initiative to turn a modern industrial country like Germany into a giant potato patch could be described as “realistic”. “Crazy” was considered a better descriptor. This is a common problem with “realist” policy initiatives (see Mearshimer’s nuclear peace). So we did the Marshall Plan instead, the logic being that ignoring the pain of a prostrate former enemy, was what had gotten us the Third Reich.

I don’t have much patience with creative interpretations of the Marshal Plan and it’s results, by either righties (it was an unnecessary waste of money–Milton Friedman). Or lefties–that it was brutal self-serving U.S. imperialism. For the same reason I don’t take the words “the New Deal failed” seriously. The raw evidence of general prosperity before and after. We are now seventy-six years and counting without a significant European war.

Well, who wanted to repeat stunning success? In the case of the former Soviet Union, this time ‘Morganthau’ won.

The first Bush administration decided early on that Soviet reforms were not real, but even if they were, they were irrelevant. Regime type doesn’t matter. All nation-states are the same. This is a fundamental tenant of Realpolitik (It is also simply empirically wrong).

There was an article in the NYT at the time about a Commerce Department initiative to buy Soviet high-tech firms (they were ahead in materials science for one), shut them down so they wouldn’t recover. I don’t know if that went anywhere. But we weren’t really in a position to impose pastoralization, so malign neglect would have to do.

If Gorbachev had offered to make the U.S.S.R. go away, beforehand, for a price, what fraction of our defense budget would that have been worth?

The first and only official discussion of possible aid in the wake of The Fall was of its obvious futility and impossibility. Trillions of dollars, and oceans of blood for the cold war, but now supporting democracy in Russia was just too expensive, and ridiculously unserious. Continuing cold war levels of defense spending, in the complete absence of the original threat, or for that matter, any plausible threat at all, on the other hand, was sensible and obvious.

And it was completely at odds with another “realist” initiative; the opening to China.

The point of Nixon’s opening to China was triangular diplomacy; we partner with China while China was weak and the Soviets were strong to balance the stronger power. Now China was surging economically, and the Soviets were dissolving as a threat, and incidentally, a lot more democratic.

We could have had an ally. As a NATO member Russia would have had the distinction of being the only member facing a plausible external security threat (China). 

We might at least have had a balancing partner against China. Instead, we have a nuclear-armed potential adversary–Oh, wait, I mean a second nuclear-armed potential adversary, taking account of the utter failure of autocratic engagement in China. 

The cleverness of this escapes me.

Clinton supported just enough assistance to pretend we were doing something. Coddling tyranny and snubbing democracy while making pretty speeches about the importance of not doing that. Phil Knight making money by shipping jobs to China was the priority.

Then every libertarian ideologue with a degree went over there to tell the Soviets, not how a modern mixed economy really works in the real world, but their fantasy of how the U.S. economy should work if they were in charge. It was a nightmare.

I think Vladimir Putin was a desired outcome. The limit of the ‘realist’ imagination is a weak enemy.

@ somecomputerguy —

You make intelligent points. Keep commenting here.

As Nihil Obstet points out, the Soviet Union went from a virtually third world country with an impoverished illiterate population in 1916-18 to a world power with an educated population with adequate housing, health care, and the like by the late 1950s.

It was a science and technology leader, too, as Sputnik and Yuri Gagarin and the presence of minds of the caliber of Andrei Sakharov’s testified to. Though, simultaneously, there was nonsense like Stalin’s promotion of Trofim Lysenko, which basically blocked molecular biology in the USSR for a generation and a half (though some of the molecular biologists didn’t get purged, but went underground in the KGB and thought up bioweapons ideas for Biopreparat, when that got rolling around 1970-71).

But, yeah, the Russians had and have a superior education respects in many respects. Nowadays, everyone on the MIT staff who has kids, for instance, sends them to fancy private schools but still hires Russian maths tutors for them, because even US private schools are worthless in that regard.

As far as 90s-era US administration’s mishandling of the post-USSR situation, that’s down to the usual American clownish corruption. When you dig you find out that a lot of Clinton-era policy was driven by things like rich Polish-Americans making campaign contributions.

Likewise, the “every libertarian ideologue with a degree went over there to tell the Soviets, not how a modern mixed economy really works in the real world, but their fantasy of how the U.S. economy should work” was ultimately only a cover for the usual American short-term looting and theft.

I do NOT think Vladimir Putin was a desired outcome from the US POV. I think the US really expected that they’d be able to continue to carry on permanently as they did in the 1990s. Because, yes, they were and are precisely that stupid and short-termist.

The Soviet System in the 80s was not delivering for them and had not been for quite some time. A massive “black economy” had evolved that was largely delivering for them where the Soviet system had failed to deliver. That “black economy” with its psychopathic former Gulag thugs and bandits was in a prime position to capitalize when the Soviet Union finally collapsed entirely.

All Putin did was take the place of Wall Street in the privatization of the states assets and the management of the consequent oligarchs created by that process and created by the legitimization of the former “black economy.”

https://www.washingtonpost.com/archive/politics/1990/09/21/vast-shadow-economy-permeates-soviet-life/25e20e27-c8b5-4031-8d47-8d7f35726ef2/

Let me guess at the response to the WP article. It’s Jeff Bezos propaganda, right? Even though Bezos was a youthful Bozo at the time and merely an aspiring capitalist icon.

Let’s not forget also, the Soviet Union was always helped along as is witnessed by the Kochs and their business in Russia. America’s attitude towards the Soviet Union was much like the Democrats attitude towards the Republicans, at least in the halls of governance if not the private sector and at that time there still was somewhat of a division between the two. They, the Dems, don’t want the Republicans to collapse and disappear. Instead, they want them to be a permanent foil because it helps maintain their power.

Mark, thanks for al the leg work fleshing out my brief little Koch “we’re through the looking glass, here..” post. You go into that expecting it to be bad but it’s just so MUCH WORSE than you would have thought. And on multiple levels.

So while I don’t think the US actions directly caused USSR collapse, I think that there is a competition of systems occurring in the hearts and minds of nomenklature in Communist countries. By 1980 or even 1968, the material difference for their class was clear. They stopped defending and improving their system and easily transferred their allegiance when the break came.

The leadership of the Chinese and Vietnamese communist parties, who were always more nationalist than Marxist, were more pragmatic and lucked into this knowledge earlier in their statehood. They were also strongly anti-imperialist and thus their first interest is to become strong enough to repel traditional imperialists (including USSR for China and China for Vietnam).

Astrid, I don’t think there was a “competition of systems” in the hearts and minds of the Russians. The West had an unusual outpouring of cultural energy in the 60s and 70s, which appealed to young Soviets as much it did to other young people around the world. There was an increasing sense that the Soviet Union and the West could live together peacefully. Soviet leaders relaxed the ban on foreign cultural imports.

What the leaders couldn’t do was figure out how to transition from an industrialized society to a consumer society. We can all see how distribution works through markets, but how are decisions about what to produce made in a centralized economy? The Western model depends on things that the Soviets didn’t want — poverty, employment, rationing of good things by wealth.

The Soviet people weren’t getting the good things they could see. The leaders were caught in always praising the achievements of socialism. The distance between what was desired and what was real produced cynicism throughout the society. Gorbachev was moving to open up the society, but the West jumped in to support the less principled and competent Yeltsin. Then the Harvard boys arrived to help the Russians. It was just one more item on the list of why we ought to destroy Harvard and plow the ground with salt.

I probably projected far too much based on conversation with my Jewish Russian emigre friends and what I saw in China. I tend to forget that immigrants often become superpatriots in their new home and turn against their old country, especially if their previous country treated them poorly or disappointed them in some way.

For the mainland Chinese, I think there was a very real disillusionment during and after the Cultural Revolution. Old timers talk about how much better behaved and publicly minded people were in the 1950s and 1960s, though of course that’s when they were also beating up and killing people for being landlords and counter-revolutionaries.

somecomputerguy,

Thanks so much for this!