Capitalism Makes People Taller

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Capitalism Makes People Taller

The spring sun shone and cherry blossoms fluttered down to the delight of locals as I sauntered through Namsan Park last weekend, a beautifully-kept oasis atop a mountain in Seoul. Beneath me lay the glistening skyscrapers of one of the world’s most remarkable cities: fashionable, frenetic, and constantly evolving. This is the sprawling home to 24 million people, half of all South Koreans, and is the most obvious sign of the country’s astonishing progress.

For this is the Miracle on the Han River. After the Korean War, a three-year tussle between capitalism and communism ending in a stalemate, the South was left shattered with income per head on par with the poorest parts of Africa. Life was such a struggle some people even defected to the North, which under its founder Kim il-Sung and with Soviet backing was more prosperous than its southern rival.

In mere decades, South Korea has gone from poverty to exceeding average wealth in the EU.

Yet, within my lifetime, this place has gone from poverty to prosperity at unprecedented speed, now even exceeding average wealth in the European Union.

Seoul symbolizes this astonishing transformation. Not just in the urban geography; look at the booming plastic surgery sector, the finance houses, and the hordes of fashionable teenagers glued to their Samsung smartphones.

One of the world’s most wired cities, it still manages to retain some hold on the past. This was epitomized by a restaurant I visited where you punched an order into a machine and fed in some notes, only for two elderly ladies to knock up steaming bowls of traditional spicy pork and seafood dishes.

Higher Tech, Taller People

But the real sign of progress and true indicator of the dynamism of capitalism comes not in the mega-city itself but those well-educated people walking the streets. I towered over those old ladies in the restaurant – I’m at least a foot taller than many of their generation.

Yet when I strolled back to my hotel through an area thronged with younger people, many of those in their twenties and thirties didn’t fall too far short of my six-foot-one height (or 1.85 meters). Indeed, I looked straight into the eyes of many of those I passed while walking through Jongo-gu and the Gwanghwamun financial district.

For South Korea has not only grown rapidly richer but rapidly taller. A report last year, led by Imperial College, London, tracked global heights over the past century and found the average for women shot up by a remarkable 20.2 cm, faster than any other of the 200 nationalities studied.

Today the average female height in South Korea is 1.62 meters – only two centimeters smaller than British women and not that far behind Latvians, who at 1.7 meters are the world’s tallest females. A century ago South Korean men were 150th tallest on the planet; today, they are 99 places higher in the global league table.

This has not gone unnoticed by locals. “I used to overlook most other girls,” said Jihee Won, an interpreter in her mid-thirties who is 1.68 meters tall. “Now I see lots who are taller than me.”  But what makes this even more remarkable was seen when the pair of us interviewed defectors from the cruel hellhole of North Korea, a mere 35 miles away. For they are significantly shorter than those born in the south, a legacy of the repressive politics and ruinous economics inflicted on a nation by the appalling Kim dynasty.

Stunting Height with Poverty and Labor

It is difficult to obtain reliable data from North Korea. But a study of male defectors by a Seoul academic found they were, on average, between three and eight centimeters shorter than their southern cousins.

This is, of course, a country led by a despot who sent his chef to fetch fine caviar from Iran and cognac from France while perhaps two million of his people died in famine two decades ago.

The Korean people, living in such different societies, show in their physiques the power of capitalism, consumerism, and freedom to improve lives.

Yet many defectors are from the elite, who have money and means to escape, so may not have suffered more extreme food deprivations of fellow citizens. When I visited the secretive state four years ago my minders routinely stuffed me with vast quantities of food, once following an entire chicken cooked in ginseng with 21 more dishes, as if to demonstrate stories of shortages were false.

Then there are those unfortunate families who fall foul of the regime and are condemned to a lifetime of forced labor in concentration camps. Children aren’t spared this and often grow up in squalid hunger, savagery, and starvation.

“Once I saw about 20 political prisoners working,” said Ji Seong-ho, a defector brought up near one of these grim places. “These prisoners were all in their teens or early 20s but their average height was up to 15 centimeters smaller than usual people. I have two assumptions: first, they did not eat a lot. Second, that from their early years they were forced into extreme labor and this stunted their growth.”

So in a remarkable twist to the Korean growth story, those in the south have shot up as a result of the improved diet and health that goes with greater prosperity.

Genetics play a role in how tall we grow, but significantly less – especially when averaged out across a nation – than nutrition, hygiene, maternal health and environmental factors. Indeed, the Imperial College researchers said most populations would grow to roughly similar levels given the same conditions.

The Korean people, living in such different societies on a finger of land dangling beneath southeast China, show in their physiques the power of capitalism, consumerism, and freedom to improve lives.

Republished from CapX.

Ian Birrell

Ian Birrell is contributing editor to the Mail on Sunday.

This article was originally published on FEE.org. Read the original article.

What the Greatest Catholic Philosopher Had to Say about Private Property

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What the Greatest Catholic Philosopher Had to Say about Private Property

Much of the same misguidedness that turned Church members' attention towards matters too earthly, as we shall see, also applied to Church doctrine and the confused understanding concerning the notion of a “just price” and the banning of interest on a loan.

Like the Greeks and the Romans, Medieval thinkers considered economic problems and questions to be of secondary importance, especially by the Christian Church theologians and philosophers. Man’s pursuit of material ends was to be considered in the wider context of his moral conduct leading to his eternal life, which was considered to be of far greater significance than any “success” in a narrower “earthly” sense.
The questions asked by Church thinkers about economic activities concerned "justice."

The questions asked by Church thinkers about economic activities, therefore, concerned “justice.” That is, had a man acted “justly” towards his Christian “brothers” as Church doctrine proscribed? But what was “just conduct” in men’s “economic” affairs?

The leading Catholic philosopher of the Middle Ages is usually considered to be St. Thomas Aquinas. He is credited with having attempted to reconcile and make compatible the “pagan” philosophy of Aristotle and the Christian doctrines of the Catholic Church. His goal was to integrate “natural reasoning” with religious theology. And in his writings on economic themes, Aquinas followed Aristotle’s views on most issues.

Aquinas accepted Aristotle’s defense of private property in society as desirable because it creates incentives for work and industry. He also emphasized that private property, by distinguishing between “mine” and “yours,” reduces the basis of conflict that common ownership of property is likely to produce. Plus, property and prosperity tends to generate an attitude of generosity and charity.
But for Aquinas, the private owner of property is only God’s trustee on earth of that which really belongs to God, with the responsibility to administer it for the “common good.” This is reflected in Aquinas’s view of theft. Theft is permissible, he argued, in the case of extreme material necessity, for both natural and divine law ordained that man assist his bothers to live. He who had abundance could not condemn a man who, to live, took a fraction of that abundance for his survival and that of his family.

Aquinas and the Meaning of a “Just Price”
Aquinas’s main concern was with “justice” in understanding and judging man’s transitory sojourn on Earth. Aquinas followed Aristotle in arguing that “justice” in exchange required a transfer of equal values. Justice is to give to each what “justly” belongs to them. This led Aquinas to ask, what is a “just price”?

Goods should trade on the basis of their intrinsic values. But what is this “intrinsic” quality in a commodity that determines its “real” value? Aquinas presumed that it was “obvious” that things had an inherent or intrinsic – and, therefore, “true” – value, independent of what any particular person may think or believe.

One interpretation was that goods should trade in terms of their costs, as estimated or measured by the quantity of labor that went into their manufacture. Things of equal costs should trade at equal prices. If their costs differed, so should their value in exchange. But this raised another problem: was it “just” that a pearl carried a high exchange value in the market, while one of God’s own living creatures – a mouse, say – had no exchange value at all?

The "just price" was the judgement of what both users and producers thought a good was worth.

Aquinas gave incomplete answers about the value of such things. He quoted St. Augustine, saying, “The principle of salable things was not reckoned in accordance with nature ... But in accordance with the extent to which things are useful to men.” Thus, the concept of the “utility” or usefulness of goods to men was introduced into the theory of value.

As some later Christian theologians were to a argue, such use-value was not an inherent magnitude or quantity, but a personal or “subjective” assignment or imputation. What is seen here is a “hint” of the “subjective value” or “marginal utility” theory of economic value that transformed economic theory beginning in the 1870s.

These Christian philosophers and all other thinkers failed to solve this “paradox of value” for centuries because none of them discovered the concept of “the margin,” which would have explained why goods have different values in exchange. Goods are not valued in terms of “classes” of goods – water vs. diamonds. Rather, goods are valued in increments. While water may be “essential” to human life, a sufficiently abundant supply of water may make one more additional unit of water have a near zero value to someone, while the value of one more unit of the scarce supply of diamonds may be much higher.

However, over time the “just price” came to mean the “customary price” reflecting the general market consensus of a commodity’s worth. It was argued that only God knows the “real” or “intrinsic” value of all things. But no man has God’s perspective and understanding. Thus, the “just price” was the judgment of what both users (demanders) and producers (suppliers) thought a good was worth. The market price incorporated the “usefulness” of the good to the buyers and the “costs” of producing it for the suppliers.

At first, the notion of a “just price” was taken as a defense of the price and wage structure enforced by the trade and professional guilds in the Medieval towns and cities. But slowly the limited competitive elements provided by the “free fairs” and other such growing influences undermined the system of regulated prices. Eventually the case was made that the only “just price” was one set by market competition, and then the justification for the guild-imposed price and wage controls slowly began to lose all legitimacy.

Aquinas and the “Injustice” of Earning Interest
There was one area where the idea of the “justness” of a market-based price was not accepted among these Christian thinkers like Aquinas: the taking of interest on a loan. Aristotle's position became the Church's position. Said Aquinas:

To take usury [interest] for a loan of money is in itself unjust; for it is to sell what does not exist, which is an inequality, and, therefore, an injustice. To understand this it must be known that there are some things whose use consists in the consuming of it, as when we consume wine ...
In articles of this kind [consumables], therefore, the use of the thing must not be reckoned separately from the thing itself; he who has given the use is thereby giving the thing. And accordingly in lending a thing of this kind, all the rights of ownership are handed over.
If therefore a man wanted to sell wine and the use of the wine apart from one another, he would be either selling the same thing twice (meaning that the use is the wine), or it would be selling what did not exist. Wherefore he would be manifestly committing injustice and sinning.
For the same reason, he would commit injustice who lent wine or corn, seeking for himself two rewards, the restitution of an equal amount of the article and also a payment for its use, called usury [interest]. But money, as Aristotle says ... has been devised for the making of exchange. So the first and chief use of money is its consumption or spending. Wherefore it is of itself wrong to receive (besides the return of the money itself) a price for the use of the money.

The heart of Aquinas’s argument is whether or not the use of a thing can be separated from the object itself. It is possible to use a house without consuming it. Likewise, it is possible to use a boat without using it up. There are durable or tangible objects that a person can sell the uses of without at the same time selling the right to the object itself. The use of the object is separate from the object.
This is the origin of rendita – the original Latin for rent.

But Aquinas argues that there are goods that cannot be separated in this way. Using it also at the same time uses it up. The using (consuming) of bread cannot be separated from the bread. The drinking of wine cannot be separated from the wine. In these cases, selling the use of the object is also selling the object.

To charge someone for the use of a loaf of bread and for the bread itself, Aquinas reasons, would be charging twice for the same thing  – and would, thus, be unjust.  Since money is a medium of exchange, and is “used up” in the spending of it on the market for something else, the use of a sum of money cannot be separated from the money itself. Thus to charge interest on the money borrowed is to demand a double price for its use.

In the year A.D. 325, the Catholic Church declared that members of the clergy were forbidden to take interest on a loan. By the end of the twelfth century, it was forbidden to laity as well. In 1311, interest on loans was declared absolutely sinful and illegal.

A few groups were exempt from the taking of interest on loans, the most prominent being Jews. The Church argued that the Jews were already going to hell for not accepting Jesus, so what more harm could they do to themselves by taking interest on loans? This, of course, supplied a useful safety valve when kings, princes, or the Church itself needed to borrow funds. And since at this time Jews lacked many if not most of the “rights” or privileges of others in society, they could more easily be threatened with financial or even physical harm if the monarch or Church official decided to not pay back part or even all that had been lent to them.

Market-Based Exceptions to Earning Interest
However, over time, arguments were made creating exemptions for Christians under certain conditions. Just as the borrower should not be treated unjustly, neither should the lender.
First, if by extending the loan the lender could show that he had suffered or would suffer a loss by not having the lent sum available to use for some other purpose during the period of the loan, he could insist on an interest payment from the borrower. In other words, here was an implicit notion of “opportunity cost,” that is, that the use of a scarce means to achieve one end or goal necessarily excludes its use for some alternative purpose at the same time.

The one essential reason behind the paying of interest is time preference, but this was never considered by Medieval thinkers.

Second, the lender could demand an amount in excess of the principal if the borrower failed to pay back the borrowed sum at the agreed time, resulting in some lost opportunity for the lender since the money had not been returned when agreed.

Third, if the lender had a legitimate concern that the borrower might not pay back the borrowed sum when it came due, the lender could insist upon a sum over the principal; that is, a “default-risk premium.”

These exceptions to the taking of interest on a loan – regardless of the name given to the premium over the principal – meant that eventually the banning on “usury” would collapse.

But the theological principal against interest remained: in a situation without default risk, or without inconvenience and without foregone opportunities (such a situation in the “real world” being logically impossible), then the taking of interest on a loan would still be “unequal” and therefore a “sin.”

Of course, the one essential reason behind the paying of interest is time preference, that is, the existence of differing valuations of the use and consumption of resources and goods in the present versus the future, and that the future is discounted against the present. But this was never considered or taken seriously by these Medieval thinkers, including Aquinas.

If the issue of time as (opportunity) cost was raised in some form, the reply given was that the proponent wished to “sell time,” but time belonged to no one but God.

However, the correct theoretical understanding of the basis and origin of interest on a loan was not fully explained until the late nineteenth century when the Austrian economist Eugen von Böhm-Bawerk formulated the time preference theory of the rate of interest in his master works, Capital and Interest (1884) and The Positive Theory of Capital (1889). In the meantime, the ethical condemnation of “usury” remained the prevailing position for hundreds of years.

Richard M. Ebeling

Richard M. Ebeling is BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel in Charleston, South Carolina. He was president of the Foundation for Economic Education (FEE) from 2003 to 2008.

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The Ten Things You Can't Say in America by Larry Elder

The Ten Things You Can't Say in America by Larry Elder

St. Martin’s Press · 2000 · 367 pages · $23.95 cloth; $14.95 paperback
Reviewed by William H. Peterson

There is hope yet for America. Larry Elder is a host of a successful talk show on KABC Radio in Los Angeles and a nationally syndicated columnist who wins the imprimatur of a major book publisher to carry a big message. As a black libertarian, he is also a breath of fresh air in his courage and plain speaking.

Elder is even something of a firebrand. Here he daringly takes on the Fortress America of Political Correctness on and off the campus, in and out of the mainline media, from and to the church pulpit. And so he assails ten supposedly unassailable yet monumentally politically correct paradigms.
Here are his topics:

1. Blacks Are More Racist than Whites;
2. White Condescension Is as Bad as Black Racism;
3. The Media Bias: It’s Real, It’s Widespread, It’s Destructive;
4. The Glass Ceiling—Full of Holes;
5. America’s Greatest Problem: Not Crime, Racism, or Bad Schools—It’s Illegitimacy;
6. There Is No Health-Care “Crisis”;
7. America’s Welfare State: The Tyranny of the Statist Quo;
8. Republicans Versus Democrats: Maybe a Dime’s Worth of Difference;
9. The War Against Drugs Is Vietnam II: We’re Losing This One, Too;
10. Gun Control Advocates: Good Guys with Blood on Their Hands.

Those are indeed things that can’t be said in most circles, but Elder argues his points with great assurance. He says out loud what Americans only whisper at the kitchen table, on the shop floor, or at the water cooler. Something has gone wrong.

We have become, he maintains, a nation of whimpering people who won’t take responsibility for our own actions, but furiously rage that the problem is always someone or something else.

Here’s a choice cut of Elder’s rhetoric: “We’ve become a nation of ‘victicrats’. . . . The glass ceiling? Nonsense. Hate crimes? All crimes are hateful. O.J. Simpson? He did it, and his defense team shamelessly used the black victicrat mentality to escape conviction.”

Let’s focus on just two of his “ten things.” First, take his argument that the War On Drugs amounts to Vietnam II—that we’re mired in a bloody and foolish conflict that can’t be won. Why, he asks, is it all right for his next-door neighbor to come home and have a martini—but a serious criminal offense to come home and smoke a joint?

Drugs, he admits, can kill, but so can alcohol. And so does tobacco, in far larger numbers. Ditto for overeating. The moral question is who is accountable to whom? Who should take responsibility—the individual or the Nanny State? Elder, of course, can’t abide the latter.

Second, what about those “holier than thou” gun controllers? For all their talk about child safety locks and “sensible” gun registration and licensing requirements, Elder asks if their ultimate aim isn’t the confiscation of privately owned weapons.

Bare fists or mace won’t do when an attacker has a gun. Elder believes you have the right to decide what sort of personal defense to own and use while the controllers think they are entitled to make that choice for you. He notes that New York has issued concealed weapons permits to Donald Trump, Laurence Rockefeller, and Howard Stern. Well, what about the baker in Queens? Or for that matter, women anywhere who are worried about violence?

Books by talk-show hosts tend to be unscholarly, but not this one. Elder has done his homework. Ten Things You Can’t Say in America is heavily documented, with many graphs and tables.

Larry Elder’s book is a triumph of common sense, with enough nerve to shake up the dreary statist quo. It is a passionate plea for limited government and personal responsibility. Let us hope to hear more from him.

Contributing editor William Peterson is an adjunct scholar at the Heritage Foundation.

William H. Peterson

William H. Peterson (1921-2012) was an economist, businessman and author who wrote extensively on Austrian Economics. He completed his PhD at New York University in 1952 under the supervision of Ludwig von Mises. 

This article was originally published on FEE.org. Read the original article.

The Dystopian Novel that Foresaw the Nightmares of Socialism

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The Dystopian Novel that Foresaw the Nightmares of Socialism

Pictures of the Socialistic Future by Eugen Richter (epub)

Pictures of the Socialistic Future by Eugen Richter (mobi)

In the mid-nineteenth century, a new political movement arose: socialism. Germany was its epicenter. The German Karl Marx was its leading thinker, and the Social Democratic Party of Germany its leading organization. The socialists denounced capitalist inequality and argued that the obvious solution was government ownership of the means of production.

From the outset, many questioned the practicality of the socialists’ solution. After you equalize incomes, who will take out the garbage? Yet almost no one questioned the socialists’ idealism. By 1961, however, the descendants of the radical wing of the Social Democratic Party had built the Berlin Wall—and were shooting anyone who tried to flee their “workers’ paradise.” A movement founded to liberate the worker turned its guns on the very people it vowed to save.

Who could have foreseen such a mythic transformation? Out of all the critics of socialism, one stands out as uniquely prescient: Eugene Richter (1838–1906).[1] During the last decades of the nineteenth century, he was the leading libertarian in the German Reichstag, as well as the chief editor of the Freisinnige Zeitung. Seventy years before the Wall, Richter’s dystopian novel, Pictures of the Socialistic Future, boldly predicted that victorious German socialism would inspire a mass exodus—and that the socialists would respond by banning emigration, and punishing violators with deadly force.
The mass exodus:

Useful people, and people who had really learnt something, went away in ever-increasing numbers to Switzerland, to England, to America, in which countries Socialism has not succeeded in getting itself established. Architects, engineers, chemists, doctors, teachers, managers of works and mills, and all kinds of skilled workmen, emigrated in shoals. The main cause of this would appear to be a certain exaltation of mind which is greatly to be regretted. These people imagine themselves to be something better, and they cannot bear the thought of getting only the same guerdon as the simple honest day laborer.

The emigration ban:

A decree has been issued against all emigration without the permission of the authorities.… Old persons who are beyond work, and infants, are at liberty to go away, but the right to emigrate cannot be conceded to robust people who are under obligations to the State for their education and culture, so long as they are of working age.

The deadly force:

Under these circumstances the Government is to be commended for stringently carrying out its measures to prevent emigration. In order to do so all the more effectually, it has been deemed expedient to send strong bodies of troops to the frontiers, and to the seaport towns. The frontiers towards Switzerland have received especial attention from the authorities. It is announced that the standing army will be increased by many battalions of infantry and squadrons of cavalry. The frontier patrols have strict instructions to unceremoniously shoot down all fugitives.

Lord Acton and F.A. Hayek have inspired the two most popular explanations for the crimes of actually existing socialism. While Acton never lived to see socialists gain power, their behavior seems to perfectly illustrate his aphorism that “power tends to corrupt, and absolute power corrupts absolutely.”[2] For all their idealism, even socialists will do bad things if left unchecked. Hayek, with the benefit of hindsight, suggested a slightly different explanation: under socialism, “the worst get on top.”[3] On this theory, the idealistic founders of socialism were gradually pushed out by brutal cynics as their movement’s power increased.

The great tragedy of the twentieth century is that the world had to learn about totalitarian socialism from bitter experience, instead of Richter’s inspired novel.


Richter’s novel advances a very different explanation for socialism’s “moral decay”: the movement was born bad. While the early socialists were indeed “idealists,” their ideal was totalitarianism. Their overriding goals were to engineer a new society and a New Socialist Man. If this meant treating workers like slaves—depriving them of the freedom to choose their occupation or location, forbidding them to quit, splitting up families without their consent, and imposing draconian punishments on malcontents—so be it.

Richter admittedly presents some of the socialists’ uglier policies—increased work hours, stringent rationing, massive military spending, corporal punishment—as slippery-slope responses to deteriorating conditions. But many of their worst offenses happen early in the novel, and Mr. Schmidt, the book’s socialist narrator, happily supports them. In chapter 6, workers lose the freedom to choose their line of work. Schmidt’s reaction:

What has the Government to do in order to bring their scheme for organizing production and consumption into some sort of harmony with the entries made by the people? Should Government attempt a settlement by fixing a lower rate of wages for those branches which showed any over-crowding, and a higher rate for those labors which were not so coveted? This would be a subversion of the fundamental principles of Socialism.

In chapter 7, the government imposes internal passports to prevent farmers from moving to the greater comfort of the city. Schmidt’s reaction:

It would unquestionably have been better if those regulations which have only just been issued had been issued at the very first. According to these regulations no one can now temporarily leave his place of residence without first providing himself with a leave-of-absence ticket; and no one can make a permanent removal without receiving such directions from higher quarters.

In chapter 15, long before conditions become desperate, socialist Germany bans emigration—and threatens fugitives with death. Schmidt’s reaction:

Socialism is founded upon the principle that it is the duty of all persons alike to labor, just as under the old regime the duty to become a soldier was a universally recognized one. And just as in the old days young men who were ripe for military service were never allowed to emigrate without authority, so can our Government similarly not permit the emigration from our shores of such persons as are of the right age to labor.

What inspired Richter to make these grim—yet uncannily accurate—predictions about the “socialistic future”? The most plausible hypothesis is that Richter personally knew the leading socialists from the German Reichstag, and saw them for what they were.[4] I submit that he repeatedly peppered the socialists with unpleasant hypotheticals, from “Under socialism, who will take out the garbage?” to “What will you do if skilled workers flee the country?” When socialist politicians responded with hysteria and evasion, Richter drew the natural inference: “If this is how these ‘idealists’ deal with critical questions before they have power, just imagine how they’ll deal with critical actions after they have power!” As Richter’s proxy explains in the novel’s climactic speech,

In endeavoring to get rid of the disadvantages of the socialistic method of manufacture, you place such restrictions on the freedom of the person, and of commerce, that you turn Germany into one gigantic prison.… To those in jail there was, at least, the possibility of an act of pardon, which might some day open a path to liberty, even to those who had been condemned to life-long imprisonment. But those who are handed over to your socialistic prison are sentenced for life without hope of escape; the only escape thence is suicide.

Despite their intuitive appeal, the Actonian “power corrupts” and Hayekian “worst get on top” theories of socialist moral decay seem inferior to Richter’s “born bad” account. Power does indeed lead politicians to betray their ideals, but from the standpoint of nineteenth-century socialism, the real “sellouts” were the moderate Social Democrats who gradually made peace with the capitalist system. The worst do indeed get on top in totalitarian regimes. But if the early socialists had not intellectually justified extreme brutality, their movement probably wouldn’t have attracted the many sadists and sociopaths who came to run it. Only the Richterian theory can readily explain why the most devoted surviving child of German socialism grew up to be the prison state of East Germany: self-righteous brutality was the purists’ plan all along.

Decades before the socialists gained power, Eugene Richter saw the writing on the wall. The great tragedy of the twentieth century is that the world had to learn about totalitarian socialism from bitter experience, instead of Richter’s inspired novel. Many failed to see the truth until the Berlin Wall went up. By then, alas, it was too late.

---

[1] For excellent discussions of Richter’s life, thought, and influence, see Ralph Raico, “Eugen Richter and Late German Manchester Liberalism: A Reevaluation,” Review of Austrian Economics 4 (1990): pp. 3–25, and Ralph Raico, “Authentic German Liberalism of the 19th Century,” Mises Daily (2005).
[2] Acton-Creighton Correspondence, Letter 1.
[3] F.A. Hayek, The Road to Serfdom (Chicago: University of Chicago Press, 1994), pp. 148–67.
[4] Bismarck’s Anti-Socialist Laws (1878–90) made life difficult for the Social Democratic Party of Germany, but never imposed an outright ban. The party bottomed out at nine seats in the Reichstag in 1878—and jumped up to thirty-five in 1890 when the Anti-Socialist Laws lapsed.

Bryan Caplan

Bryan Caplan is a professor of economics at George Mason University, research fellow at the Mercatus Center, adjunct scholar at the Cato Institute, and blogger for EconLog. He is a member of the FEE Faculty Network.

This article was originally published on FEE.org. Read the original article.

The Soviet Chamber of Horrors

The Soviet Chamber of Horrors: Reminders on the Ninetieth Anniversary of the Bolshevik Revolution

In 1842 the German poet Heinrich Heine warned that “Communism, though little discussed now and loitering in the hidden garrets on miserable straw pallets, is the dark hero destined for a great, if temporary, role in the modern tragedy. . . . Wild, gloomy times are roaring toward us. . . . The future smells of Russian leather, blood, godlessness, and many whippings. I should advise our grandchildren to be born with very thick skins on their backs.”

November 7 marks the ninetieth anniversary of the Russian Revolution and the beginning of that dark future that Heine sensed was coming 75 years before Lenin and his Bolsheviks came to power. Since the beginning of recorded history the state has attempted to control the economic activities of its subjects, as well as commanding their personal conduct. But nothing in modern history compared to the communist determination to mold man and society for an alleged paradise on earth.

What made this experiment in creating a new man in a new society so diabolical was precisely that many in the first generation of Bolshevik leaders truly believed in what they were doing. For example, Felix Dzerzhinsky, the founding head of the Soviet secret police, loved children and said he wanted to make a better world for all of them. To liberate Soviet society from its enemies and make that better world, he created the vast slave-labor system that became known as the Gulag. As part of his studies of government mass murders in the twentieth century, political scientist R. J. Rummel estimated that up to 64 million innocent, unarmed men, women, and children were killed in the Soviet Union between 1917 and 1986 in the name of “building socialism.”

Sixty-four million is so large a number that it is easy to lose sight of the inhumanity of murder and terror involved. The famous Russian sociologist Pitirim A. Sorokin (who went on to found the sociology department at Harvard University) was a young professor in Petrograd (later Leningrad and now St.Peterburg) during and following the Bolshevik Revolution. After he was expelled from Russia in 1922 as an “enemy of the people” he came to America and published Leaves from a Russian Diary (1924), which contains the following entry from 1920:

The machine of the Red Terror works incessantly. Every day and every night, in Petrograd, Moscow, and all over the country the mountain of the dead grows higher. . . . Everywhere people are shot, mutilated, wiped out of existence. . . . Every night we hear the rattle of trucks bearing new victims. Every night we hear the rifle fire of execution, and often some of us hear from the ditches, where the bodies are flung, faint groans and cries of those who have not died under the guns. People living near these places begin to move away.They cannot sleep.

When Sorokin wrote those words the Soviet state was still in its infancy.As the decades went by, numerous histories and personal accounts were written about the “socialist experiment” by those who had either escaped or defected from the Soviet paradise. Only when the formerly secret archives of the Communist Party and the KGB were partly opened to researchers, just before and then after the collapse of the Soviet Union in 1991, did a fuller and clearer picture come into view about the brutality of the regime.

Demitri Volkogonov, a Soviet general-turned-historian, gained access to many of the closed archives during the last years of the Soviet regime and wrote a biography of Stalin titled Triumph and Tragedy (1991). Volkogonov told an American correspondent:

I would come home from working in Stalin’s archives, and I would be deeply shaken. I remember coming home after reading through the day of December 12, 1938. He signed thirty lists of death sentences that day, altogether about five thousand people, including many he knew personally, his friends. . . . This is not what shook me. It turned out that, after having signed these documents, he went to his personal theater that night and watched two movies, including Happy Guys, a popular comedy of the time. I simply could not understand how, after deciding the fate of several thousand lives, he could watch such a movie. But I was beginning to realize that morality plays no role for dictators. That’s when I understood why my father was shot, why my mother died in exile, why millions of people died.

The Donskoi Monastery and Kalitnikovsky Cemetery in Moscow served as a dumping ground for thousands of bodies. A Russian historian trying to preserve the memory of these evil times told David Remnick, author of Lenin’s Tomb (1993): “In the purges, every dog in town came to [the cemetery]. That smell you smell now was three times as bad; blood was in the air.”

No End with Stalin

The Soviet nightmare did not disappear with Stalin’s death in 1953; it remained at the heart of the system practically to the end. In the 1960s and 1970s Yuri Andropov was the head of the KGB (he later briefly served as general secretary of the Communist Party after Leonid Brezhnev died in 1982 until his own death in 1984). He accepted a view developed by Soviet psychiatry that anyone who opposed the Marxist idea of scientific socialism was by definition mentally disturbed and needed to be “treated” in a psychiatric hospital. This was the fate of Alexei Nikitin, a coal miner who complained about the safety and health conditions in the mines of the U.S.S.R. He was found guilty of subversion and committed to a mental institution in Ukraine.They began using various drugs to bring him back to his socialist senses. His story was told by Kevin Klose in Russia and the Russians (1984):

Of all the drugs administered . . . to impose discipline, sulfazine was at the pinnacle of pain. . . . “People injected with sulfazine were groaning, sighing with pain, cursing the psychiatrists and Soviet power, cursing everything in their hearts,” Alexei told us. . . . “If they torture you and break your arms, there is a certain specific pain and you somehow can stand it. But sulfazine is like a drill boring into your body that gets worse and worse until it’s more than you can stand. . . . It is worse than torture, because sometimes torture may end. But this kind of torture may continue for years.”

Nikitin endured this drug and several equally terrible ones for more than two years before he was finally released on the promise that he would no longer doubt or question the “correctness” of the Party line.

Twentieth-century socialism is an unending story of crushing tyranny and oceans of blood. As Russian mathematician and Soviet dissident Igor Shafarevich expressed it in The Socialist Phenomenon (1980), a history of socialism in theory and practice through the ages: “Most socialist doctrines and movements are literally saturated with the mood of death, catastrophe and destruction . . . . One could regard the death of mankind as the final result to which the development of socialism leads.”

The 64 million killed during the nearly 75 years of the Soviet Union cry out with the truth of this conclusion.

Richard M. Ebeling

Richard M. Ebeling is BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel in Charleston, South Carolina. He was president of the Foundation for Economic Education (FEE) from 2003 to 2008.

This article was originally published on FEE.org. Read the original article.

Socialized Health Care: The Communist Dream and the Soviet Reality

Socialized Health Care: The Communist Dream and the Soviet Reality

The utopian ideal of equality of circumstances has captured people’s imagination since ancient times. If only everybody could have the same of everything the world would be different. There would be no envy, no crime, no poverty, no greed, and no unhappiness. From Plato to Karl Marx, many thinkers looked to the state for the creation of that heaven on earth. In our own times, this dream has remained alive in the form of the welfare state, and today it shows itself most distinctly in the appeal of government-managed health care.

Isn’t it obvious, many ask, that government can supply medical care more fairly and less expensively than the selfish profit-oriented free market? Let us remind ourselves that in the Soviet Union the road to medical-care hell was paved with the same good intentions. In October 1917, the Marxist dreams of coming to political power came true in Russia. Now that everyone was to be equal in all aspects of their lives, people would no longer die in the streets from illness. Free medical care would be available for all, rather than reserved only for the “greedy rich.”

But what did the Bolsheviks destroy and what did they create?

In Old Russia, medical care was a consumer-oriented business. Doctors’ incomes and their standard of living were totally dependent upon professionalism and reputation in the wider community. Patients decided which doctor to use, which hospital to go to, and which pharmaceutical products to trust. Doctors worked hard to establish their reputation, an important part of which came from providing charity care for the poor. As in the West, all Russian doctors upon graduation from medical school took the Hippocratic Oath, in which they swore never to reject anyone who needed medical assistance—and as a rule they were loyal to their oath.

In Russian urban areas, there were charity hospitals and out-patient care for the poor and their families. In rural areas, peasants would often pay doctors with a chicken, potatoes, bread, or in the form of domestic services—or received their medical treatment for free. Under the private medical system in Old Russia, doctors were able to earn a comfortable living and therefore could afford to be generous in supplying charity services to those who were in need.

Expectations of high income, along with the status of being a member of a respected profession, generated strong competition for acceptance into medical schools. The best were accepted as students, and the most qualified were hired as professors. At the beginning of the 20th century, the quality of Russian medical care and medical research was internationally recognized. Was it a perfect system? Of course not. But contrary to the socialist myth-makers, medical care in Imperial Russia was widely available and provided in a fairly cost-efficient manner. Both the profit motive of the competitive marketplace and the spirit of charity assured the provision of quality medical services throughout Russian society.

This, then, was the system the Bolsheviks wanted to destroy. Unfortunately, many Russian intellectuals, including medical doctors themselves, were infected with the socialist disease. Seeing so much poverty in a still underdeveloped Russia, many doctors turned their back on the free market and came to believe that government management could create a better society through planned equality of living conditions, education, and certainly medical care. Thus, guided by wrong ideas, the members of the medical profession helped to destroy with their own hands a health-care system that, while certainly not perfect, provided people with skilled treatment, regardless of their income or social background.

Equality for All

In 1917, like everything else, medical services were nationalized by the new socialist government. Gradually, small medical practices disappeared and a network of big, factory-like hospitals and out-patient clinics were established all around the country. Everyone was registered in both out-patient clinics and hospitals according to their government-assigned residence. Patient choice was completely taken away by the Soviet State, which took full responsibility for centrally planning each individual’s medical expenses and health care.

With the elimination of private expenditures for health services, the form and amount of medical care were now dependent upon the budgetary priorities of the State. All members of the medical industry were put on low fixed monthly salaries and were mandated to examine and treat an overwhelming daily quota of patients. Medical research became dependent upon inadequate annual budgetary allocations from the government. Doctors’ and nurses’ incomes no longer depended on their professional skills or the number of patients they treated. Total unionization of the medical profession made it practically impossible for anyone to be fired. Without markets and prices determining the value and availability of health care, the government imposed a rationing system for medical services and pharmaceutical products.

Specialized services (mammograms, ultrasounds, and so forth) were available only in a few select hospitals where the doctors were supposed to treat patients as well as participate in research. For example, in the case of brain or cardiovascular surgery and treatment, there were only a few specialized hospitals available in the entire country. People sometimes died waiting in line to be admitted for these treatments.

Medical care became a producer-oriented industry, instead of the consumer-oriented market that it had been in Old Russia. But even the State cannot kill the market, just as the State cannot repeal the laws of God and nature. The market was simply driven “underground,” and thus became the black market. The black-market response to State-rationing occurred immediately. Doctors’ services and pharmaceutical products (both domestic and foreign-made), as well as access to medical-testing equipment, became available for bribes. Unfortunately, only the wealthy elite could afford expensive black-market medical services, while the poor majority could no longer count upon charity.
In the world of “free” medical care in the Soviet Union, people often had to have connections to obtain many of the medicines prescribed by physicians to save their family members and friends. Indifferent and often hostile nurses and orderlies had to be bribed to change a patient’s bedpan or to provide ordinary attention that any American would take for granted during a stay in a hospital.
Hospital wards were crowded and far from antiseptically clean. Anesthetics and basic painkillers were frequently unavailable. The crying of patients in pain could sometimes be heard from outside a hospital by passersby.

Some Are More Equal than Others

Not surprisingly, those in the political elite did not want to be treated in the medical system provided for “the people.” One of the greatest myths about the Soviet Union was its supposed equality for all. No society was so divided into privileged groups and classes as was Soviet society. Where an individual stood in the political hierarchy of the Communist Party and the bureaucratic structure of the socialist economy determined his access to all the essentials as well as the luxuries of life.
Special hospitals were created all around the Soviet Union. These were reserved for the members of the Central Committee of the Communist Party, the Council of Ministers, the local and regional Party elites, and so forth. The “servants of the people,” as a result, received a qualitatively different level of medical care than “the masses.” The privileged few had access not only to Soviet-made drugs and medications but also to Western European and American medicines and equipment, which could never be within the reach of the ordinary “proletarian” patient.

Affirmative Action, Soviet Style

The nature and quality of medical education were affected, as well. Bribes and connections determined both the hiring and admission processes in medical schools. Skills and professionalism mattered very little, and service to the community did not matter at all.

This poor medical care was reinforced by the fact that entrance into higher education in the Soviet Union was dictated by a system of affirmative action that had been introduced shortly after the triumph of the Socialist Revolution in 1917. At first belonging to a social class —worker, peasant, or intellectual—determined the entry quotas into colleges, universities, and technical schools. But the Soviet affirmative action system was soon expanded to include gender and ethnic classifications as well. A young person’s professional and career opportunities were greatly influenced not by his individual merit but by whether he was, for example, a Russian, an Uzbek, a Georgian, a Lithuanian, a Jew, or somebody else. Every class, gender, and ethnic group had its own quota for admission and hiring into institutions of higher learning.

Connections, bribes, class, gender, and ethnicity heavily determined who were admitted into and graduated from medical schools throughout the Soviet Union. Thus the supplies of hospitals, physicians, medical equipment, and pharmaceuticals all became victims of socialist central planning and political priorities just like everything else in the “workers’ paradise.” At the end of the 20th century, Russia was infamous for having one of the worst health-care systems in the world.

In bitter situations, Russians often respond with jokes and anecdotes. In one of them, an American and a Soviet doctor are talking. The American says, “Dear colleague, our profession is imperfect. You treat the patient from one disease and he dies from another.” The Soviet doctor replies, “No, dear colleague, this is not the case with me. Mine die from whatever I treat them.”

It is easy to say that the present system is imperfect and a radical change will make it perfect in a relatively short period of time. But there are always lessons from history from which to learn. Sometimes, your neighbor’s history warns you which path never to follow.

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Anna Ebeling was born, raised, and educated in the former Soviet Union. Living much of her life in the heart of what Ronald Reagan called “the evil empire,” she experienced first hand the reality of “the workers’ paradise.” Her stories of the absurdities of life in the collectivist utopia are many. Anna met Richard Ebeling in Moscow in May 1991 and married him later that year. Together they joined the defenders of liberty and faced Soviet tanks at the Russian Parliament in Moscow during the attempted hard-line communist coup d’état.

This article was originally published on FEE.org. Read the original article.

New Australia & other Socialist/Communist Failures by Benjamin V. Hubbard 1915

New Australia and other Socialist Failures by Benjamin Vestal Hubbard 1915

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Utopian and other Socialists have attempted many times to form communities on the Socialistic principles of common ownership and communistic rules. After trial, all of these have been failures.
Scientific Socialism now claims that Socialism cannot be made successful unless practiced the world over.

This is bad logic under the axiom, "that what is a failure in part will be a failure in total." The following is a list of the Socialist communities that have failed:

France—Commune of 1793, Baboeuf Conspiracy, Saint Simonism, French National Workshops, Paris Commune of 1871, Brest Municipality, the Glassworks of Albi, the Miners' Mine.

Great Britain—Owenism at New Lanark, Orbiston and Tytherby Communities, Labor Colony at Laindon, Labor Colony at Hollesby Bay, Labor Colony at South Oakenden.

American—Nauvoo, 1ll. (New Icaria), the Rappites, New Harmony, Oneida Community, Red Bank Social State, Mount Whitney, Communism in Paraguay, New Australia.

Imperial Failures—Murray River Settlement, Alice River Settlements.

The most notable failure was the community, New Australia, established in Paraguay in 1893, having a total of 450 colonists and being granted by the Paraguan government 450,000 acres of land, one-half heavily timbered, a great part of this timber being valuable hardwoods, which could have been sold at a good price, and rafted down the river by cheap water transportation. The balance of the land was prairie land, excellent for pastures. The colonists were relieved from taxation for a long period of time, and were allowed to make importations free of duty. Each colonist contributed $300 or more to the general fund, and they owned their own ship of 600 tons capacity, together with 2,500 cattle. They were allowed to manage their own colony according to their own laws and without any interference from the Paraguan government, and nothing but bad management and the lack of personal motives stood in the way of their success.

Among other rules they adopted the following:

"Ownership and conduct by the community of all land, tools, industries, production in exchange and distribution. Saving by community of all capital needed by the community; maintenance of children by community; protection, education and general well-being of each individual guaranteed by community. After all this has been done, the balance of the wealth co-operatively produced shall be divided equally between every adult member, without regard to sex, age, office or physical or mental capacity.

"Female suffrage and equality of the sexes in all matters.

"Religion not to be officially recognized by the community."

Inside of two years the colony was disbanded, and those colonists who remained abandoned the idea of Socialism and went back to the individual life.

In the latter part of the colony's existence the children who were under the care of the community for their food, clothing and education were fed three times a day a diet of cornmeal, sweet potatoes and mandoica, making a variety by leaving one of these off every meal.

No timber had been cut by the "comrades" because each was too lazy to do the chopping, and as the 2,500 head of cattle had been sold they were deprived of milk and butter.

Thus the greatest Socialistic settlement ever promoted came to disastrous failure.

The following from the past is a vivid summary of Socialism:

"I have consulted our philosophers, I have perused their books, I have examined their several opinions, I have found them all proud, positive and dogmatizing even in their pretended skepticism, knowing everything, proving nothing, and ridiculing one another, and this is the only point in which they concur, and in which they are right. Daring when they attack, they defend themselves without vigor. If you consider their arguments, they have none but for destruction. Where is the philosopher who, for his own glory, would not willingly deceive the whole human race? Where is he who, in the secret of his heart, proposes any other object than his own distinction? Provided he can raise himself above the commonalty, provided he can eclipse his competitors, he has reached the summit of his ambition. The great thing for him is to think differently from other people. Shun, shun, then, those who, under pretense of explaining nature, sow in the hearts of men the most dispiriting doctrines, whose skepticism is far more affirmative and dogmatical than the decided tone of their adversaries. Under pretense of being themselves the only people enlightened, they imperiously subject us to their magisterial decisions, and would fain palm upon us, for the true causes of things, the unintelligible systems they have erected in their own heads; whilst they overturn, destroy and trample under foot all that mankind reveres, snatch from the afflicted the only comfort left them in their misery, from the rich and great the only curb that can restrain their passions; tear from the heart all remorse of vice, all hopes of virtue; they still boast themselves benefactors of mankind. 'Truth,' they say, 'is never hurtful to man.' I believe that as well as they, and the same, in my opinion, is proof that what they teach is not the truth."—Rousseau, as quoted by Gandolphy in his defense of the Ancient Faith.