Why planned economies cannot succeed

In 1964, the general secretary of the Communist Party of the Soviet Union (CPSU) was Leonid Brezhnev. He promised that year that the USSR would achieve "true communism" by 1980. In Marxism-Leninism, true communism was a state in which material production was so great that all human needs were met without shortage. Greed would therefore disappear and the inherent but capitalist-suppressed natural nobility of men and women would emerge. They would be transformed into true communists - altruists who worked each day for the good of the people, not for crass, selfish profit. 

Yes, the idea of true communism is just plain crazy, but it held huge numbers of the world’s people in its iron grip for many decades. Soviet Army officer Viktor Suvorov wrote in his book, The Liberators, of how the fatal flaw in the theory was exposed to him. 

One day as a cadet, as punishment, he was made part of a work detail to service a set of dachas in the countryside near Kiev. The dachas, country estates, were owned by the people, that is by the Communist Party of the Soviet Union, that is to say they were owned personally by the party officials who used them. Suvorov and the others of his work detail were taken under armed guard inside the huge, guarded park where the dachas were.

We all suddenly stopped dead in our tracks without any order being given, we were so staggered by the unprecedented picture before us.

In a woodland clearing surrounded by the young fir trees, buildings of amazing beauty were scattered about in picturesque disorder. Never before or since, either in any fairy tale film, nor exhibition of foreign architecture, have I ever met such a turbulent, passionate and rapturous fantasy of colours, such an amazing intermingling of nature, in light, colour, elegance, taste, simplicity and originality. I am no writer and it is beyond my powers to describe adequately the sheer beauty of that place. . . .

The personal dacha of former Soviet General Secretary Mikhail Gorbachev

It was winter and snow covered the land. The punishment detail was taken to a cesspool full of raw sewage from the dachas. They were ordered to spend the day carting the sewage in wheelbarrows to an orchard and spread it as fertilizer.

The work was cold, wet and very dirty. They found themselves covered in the sewage. Suvorov tried to explain to an artillery cadet that class differences were only a temporary, albeit necessary, condition of the transition to a true communist society, in which human generosity would flower and selfishness would disappear.

"Listen, artillery, life is hard for us now, but the time will come when we too will live in paradise, like this - under communism. That will be the life! Eh? . . .

"What I am saying is that the time will come when we too will live insuch heavenly gardens, in the same beautiful towns with lakes, surrounded by hundred-year-old pine trees, and apple orchards."

But the artilleryman is unimpressed with the vision (I might point out that the native intelligence and common sense of artillerymen around the world is head and shoulders above others’). He responds:

"And who, in your view, will carry the sewage under communism?"

The question [wrote Suvorov] was so simple and it was put in such a mocking tone, it was like being pole-axed. . . . Before, everything had been absolutely clear: everyone works as he wants and as much as he wants, according to his ability, and he receives whatever he wants and as much as he wants, i.e., according to his needs. . . .

You want to be a teacher? Right then, every kind of work is honored in our society. You want to be a wheat farmer? What work can be more honourable than to provide the people with bread? You want to be a diplomat - the way is open!

But who will be busy in the sewers? Is it possible that there will be anybody who will say, ‘Yes, this is my vocation, this is my place, I am not fit for anything better?’

Finally, Suvorov hit upon the answer: "Everyone will clean up after himself!" The other man responded, "Take Kiev, for instance, and see how much of its one and a half million inhabitants arranges his own sewerage system, in his free time, and cleans it and maintains it in good order." He continued,

"Who, under communism, will bury the corpses? Will it be self-service or will amateurs carry out the work in their spare time? There is plenty of dirty work in a society and not everyone is a general or a diplomat. Who will carve up the pig carcasses? And who will sweep the streets and cart off the rubbish? . . . Will there be any waiters under communism? . . .

"And finally, for someone who at present has not the slightest idea about how to set about sewage-cleaning, like Comrade Yakubovskiy himself for instance [the owner of the dacha - DS], has he any personal interest at all in the arrival of that day, when he will have to clean up his own crap all by himself? . . .

"What, exactly, does an ordinary, run-of-the-mill Secretary of the District Party Committee stand to gain from this communism? Eh? Plenty of caviar? But he’s got so much caviar already that he can even eat it through his [rear end] if he wishes. A car? But he has two personal Volga cars and a private one as well. Medical care? Food, women, a country house? But he already has all these things. So our dear Secretary of the most Godforsaken District Party Committee stands to gain bugger-all from communism!

"And what will he lose? He will lose everything . . . . He will lose his country house, his personal physicians, his hirelings and his guards. [So for party officials] communism has long since ceased to be of any interest to them at all."

And that is precisely why planned economies cannot work: when the people of the society are serfs to be told what to do (and they have to be, otherwise the economy cannot be "planned") the directors always keep hold of their power. There is no reason to give it up.

If the sewers are to be shoveled, and the other necessary but dirty jobs done, it can only be done by compulsion or by offering a reward high enough to make it worth someone’s while. That doesn’t mean that the voluntary worker will be paid a lot; I know that the garbage collectors in my town are not driving new Lincolns. It does mean that a true free-market the wage offered will have to be raised until there are takers.

The Soviet state never eliminated poverty. Until its end enormous numbers of its peasantry, the kulaks, lived in conditions barely materially better than under the Czar’s reign. And they were no more free, since the communist government forbade them to leave the land.

Endnote: The federal minimum wage is $5.15 per hour. Would there be any sewer shovelers who would voluntarily accept that wage if true free-market forces prevailed? I am wondering - and some smart readers please leave a comment - whether the federal min-wage law actually keeps the poor down because it sets a legal wage ceiling, not a floor, above which employers don’t really have to pay.