• How Socialism Destroyed Communism & May Well …
  • Socialism leads to communism | Romanticpoet's Weblog
  • Fear the Boom, Not the Bust? | Adask's law

Feb 06, 2010 · A small village in Armenia is clinging to Communism as a way of life, with red flags and a giant bust of Lenin proudly displayed

Statue or Bust: Around the World in Lenins - The Atlantic

What is Biopower? | UTOPIA or: BUST

14/05/2012 · Posts about Socialism leads to communism written by romanticpoet

Onscreen title: Britain, 1979

WORKER: Well, 5 percent's no good to nobody, is it?

INTERVIEWER: Do you think you can win this strike?

WORKER: Yes, I do.

NARRATOR: They called it the Winter of Discontent. It seemed as if everyone was on strike.

MAN: I think it stinks, like all the other damn strikes in this country run by the filthy Socialist Communist unions.

NARRATOR: The garbage men were out. So were the ambulances. And if you died, the gravediggers were out, too.

NARRATOR: With the economy in apparently terminal decline, the people voted for a new Conservative government headed by Margaret Thatcher.

LAURENCE HAYEK : Margaret Thatcher was elected prime minister on the day of my father's birthday, so he sent her this telegram from Freiburg: "Thank you for the best present to my 80th birthday that anyone could have given me." A few days later she wrote back from 10 Downing Street: "Dear Professor Hayek, I am very proud to have learned so much from you over the past few years. I am determined that we should succeed. If we do so, your contribution to our ultimate victory will have been immense. Yours sincerely, Margaret Thatcher."

MARGARET THATCHER: And I'll strive unceasingly to try to fulfill the trust and confidence that the British people have placed in me and the things in which I believe.

NARRATOR: Determined, and some said strident, she would revolutionize the economy.

MARGARET THATCHER (interviewed in 1993): The spirit of enterprise had been sat upon for years by socialism, by too-high taxes, by too-high regulation, by too-public expenditure. The philosophy was nationalization, centralization, control, regulation. Now this had to end.

NARRATOR: Thatcher squeezed government spending and cut subsidies to business. Thousands of bankruptcies and higher unemployment followed. Many saw her as uncaring. Britain had rarely been so divided.

CROWD OF PROTESTERS: Maggie, Maggie, Maggie. Out, out, out!

NARRATOR: Thatcher had no time for conventional, Keynesian economists who urged her to use government money to lessen the pain.

MARGARET THATCHER: Although 364 economists wrote to the and said, "This is outrageous; you'll put us into a deep depression from a recession," 364 were wrong, and the half dozen who supported us were right.

And those who urge us to relax the squeeze, to spend yet more money indiscriminately in the belief that we'll help the unemployed and the small businessman, are not being kind or compassionate or caring. I have only one thing to say: U-turn if you want to. The lady's not for turning.

NARRATOR: In Britain, the battle lines were drawn. In America, the fight was already under way.

Amadeo Bordiga – Dialogue with Stalin – Libri Incogniti

Onscreen title: USA, 1979

NARRATOR: Things were at a low in the United States. President Carter spoke of malaise and loss of confidence in the country. Revolution in Iran had led to a second oil shock and Americans held hostage in Tehran. Despite the beginning of deregulation, inflation was still at record heights. Carter's attempts to follow Keynes's formula and spend his way out of trouble were going nowhere.

LARRY LINDSEY, Assistant to the President for Economic Policy: Jimmy Carter was maybe the high point of Keynesian behavior. And it simply was not working.

GEORGE SHULTZ: Toward the end of the Carter administration, with inflation out of control, Paul Volcker was made chairman of the Federal Reserve. He understood the problems.

JIMMY CARTER: I'm grateful to Paul Volcker for being willing now to accept the oath of office and the responsibilities of the Federal Reserve system of our country. Paul?

NARRATOR: Paul Volcker was steeped in the ideas of Austrian school economics.

PAUL VOLCKER, Federal Reserve Board, 1979-1987: It's obvious to all of you from what's been said today that we're face to face with really unique economic difficulties.

NARRATOR: Volcker believed that inflation was one of the worst of all economic evils.

PAUL VOLCKER: It came to be considered part of Keynesian doctrine that a little bit of inflation is a good thing. And of course what happens then, you get a little bit of inflation, then you need a little more, because it peps up the economy. People get used to it, and it loses its effectiveness. Like an antibiotic, you need a new one; you need a new one. Well, I certainly thought that inflation was a dragon that was eating at our innards, so the need was to slay that dragon.

NARRATOR: Volcker used a blunt weapon: He tightened the money supply. The economy went into a nosedive. Facing a presidential election, Carter was reluctant to back such harsh measures.

Carter's rival was the Republican Ronald Reagan. Reagan shared the same economic philosophy as Margaret Thatcher. For over 20 years, he had been campaigning against the Keynesian orthodoxy and for Hayek and Friedman's ideas of free markets and freedom.

NEWT GINGRICH, Speaker, U.S. House of Representatives, 1995-1999: Reagan knew Hayek personally; he knew Milton Friedman personally. And Reagan was, in a sense, their popularizer. So he was the person who would take these people who were very profound but not very easy to communicate. I don't think you'd ever get Hayek on the Today show, but you could get Reagan explaining the core of Hayek with better examples and in more understandable language.

RONALD REAGAN, U.S. President, 1981-1989: Vote for me, if you believe in yourself, if you believe in your right to control your own destiny and plan your own life, yes, and have a say in the spending of your own money.

The president is going to have more government on the backs of the people and of business and of industry, the working people, in order to try to solve the problems that were created by too much government on our backs.

We can get government off our backs, out of our pockets. This kind of indifference to economic disaster must be ended, and it'll be ended by having a different kind of leadership.

NARRATOR: The American people voted for change, and Reagan became president.

MILTON FRIEDMAN: The situation was this: The only way you could get the inflation down was by having monetary contraction. There was no way you could do that without having a temporary recession.

GEORGE SHULTZ: Obviously, who wants a recession? But I can remember President Reagan using those famous words: "If not now, when? If not us, who?"

NARRATOR: Reagan offered Volcker his moral support in the fight against inflation. As Volcker tightened the money supply, the economy slowed and contracted. Unemployment hit 10 percent. Nobody had realized quite how tough it would be.

All across the heartland of America, ordinary people were hurting.

DARREN SMITH, Farmer: Well, the interest rates, that just eats up your profit. It becomes very difficult to keep your business running right. Nineteen eighties, the interest rates were up to 20 percent or better. It was very interesting times. I remember, you know, cash flows got very tight as things got tighter and tougher. Creditors forced sales -- you know, "Come up with the cash or we're going to have to liquidate you." It's a hole that almost seems impossible that you can get out of.

PAUL VOLCKER: If you had told me in August of 1979 that interest rates, the prime rate would get to 21.5 percent, I probably would have crawled into a hole. I would have crawled into a hole and cried, I suppose. But then we lived through it. (laughs)

NARRATOR: It had taken three years -- three years of growing public anger, three years of real hardship for millions of Americans. But by 1982, the dragon of inflation had been slain.

PAUL VOLCKER: What changed drastically in the 1980s and running through today is the kind of presumption that inflation is bad. The primary job of a central bank is to prevent inflation. That's a very different environment than the '50s and '60s.

ANNOUNCER: Ladies and gentlemen, the president of the United States.

NARRATOR: Reagan and Volcker had set the United States on a new economic course.

RONALD REAGAN: From our very first day, we have been working to undo the economic wreckage they left behind.

NARRATOR: They called his policy Reaganomics. It had four key elements.

LARRY LINDSEY: The first was the concept of sound money. The second was deregulation. The third was modest tax rates. And the fourth was limited government spending. Sounds pretty conventional now, but when Reagan was elected, he was vilified by his opponents as being some radical extremist.

RONALD REAGAN: They just can't accept that their discredited policies of tax and tax, spend and spend, are at the root of our current problems.

NARRATOR: Reagan's tax cuts, the biggest in history, led to huge deficits. But the economy started to grow steadily again.

MILTON FRIEDMAN: There's no doubt in my mind that those actions of Reagan, lowering tax rates, plus his emphasis on deregulating unleashed the basic constructive forces of the free market, and from 1983 on, it's been almost entirely up.


Nearly 400 children rescued 348 adults arrested …

Onscreen title: London, 1973

NARRATOR: Britain's mixed economy, so widely imitated, was in similar trouble. It, too, was facing the deadly combination of unemployment and inflation. In theory, the Conservative prime minister Ted Heath and his Cabinet believed in markets. In practice, like Nixon, they made a sharp U-turn and used wage and price controls to combat stagflation.

KENNETH BAKER, Conservative Minister, 1981-1992: I was a junior minister in Ted Heath's government, and I remember having to attend meetings with three or four other ministers where we would actually decide the level of charges plumbers would charge next week to repair taps and how much taxi drivers could charge for fares and how much hairdressers should get in wages. It was absolutely unbelievable. It all came to a very sticky end, a complete collapse.

NARRATOR: A coal miners' strike and an oil crisis plunged the country into darkness. Voters blamed Ted Heath and voted the Conservatives out of office.

SHOP MANAGER: Well, we're virtually out of business while the power's off. We've got no sets that we can operate at all.

DAVID YOUNG, Conservative Minister, 1984-1989: We were the sick man of Europe, and the English disease was the disease of strikes, which we had all over the place. And you know, it was so bad that Herman Kahn of the Hudson Institute wrote a book called and he saw many things, but the one thing he did see was that the lowest standard of living in Europe in the year 2000 would be shared between Albania and the United Kingdom. Albania!

NARRATOR: A minister in the defeated government, Keith Joseph may have been an unworldly intellectual, but his search for fresh answers would change the way not only Britain but the world thought about economics and society.

KENNETH BAKER: Keith wore a hair shirt, he beat his breast, and said we were to blame; we've got it wrong. And he did beat his breast. He was called a Mad Monk.

KEITH JOSEPH (interviewed in 1975): I thought I was a Conservative. I thought I was a Conservative, but all the time I was in favor of... I was in favor of shortcuts to Utopia. I was in favor of the government doing things, because I was so impatient for good things to be done.

KENNETH BAKER: And when he appeared on television, he had a vein in his head which kept throbbing, and people said, "Oh, you know, this is a very strange figure indeed, this man." But nonetheless, he started to rethink the Conservative policy.

NARRATOR: Keith Joseph's search brought him here, where, with Hayek's encouragement, a group of kindred spirits had set up a think tank called the Institute of Economic Affairs.

RALPH HARRIS: The institute started in 1957, you could say the direct result of the Mont Pelerin Society, of of Hayek's ideas of freedom and competitive enterprise.

NARRATOR: With the zeal of a convert, Joseph began to preach the virtues of free markets. In a series of pamphlets, he went on the intellectual offensive, attacking the mixed economy, making the case for capitalism.

Mark Garnett is a biographer of Keith Joseph.

MARK GARNETT, Biographer of Keith Joseph: From the middle of 1974 Joseph undertakes a crusade to convert the country to his way of thinking, and what he wants to do is take the battle to the heart of the enemy camp, and he believed that the universities were infected with socialist thinking.

KEITH JOSEPH: Because there was a free society in this country....

CECIL PARKINSON, Conservative Minister, 1981-1983, 1987-1989: And he was going right into the lions' den, arguing a case that many people had never heard before.

MARK GARNETT: Joseph felt that it was his duty to fight back on behalf of the free market.

NARRATOR: To revive the economy, Joseph preached that Britain needed more risk-taking, which meant more bankrupts and more millionaires, and less equality.

CECIL PARKINSON: The audience would sort of gasp. They'd never heard anybody challenging the consensus.

KEITH JOSEPH: Mild inflation seemed a painless way of maintaining full employment, encouraging growth, and expanding the social services. So the result is that we're now more socialist in many ways than any other developed country outside the Communist bloc.

RALPH HARRIS: He used to be smuggled in the back door. He was genuinely hurt that the students had reacted to this penetrating argument by chucking flour bombs at him.

MARK GARNETT: It was almost a badge of honor that he would come away from these meetings with egg yolk running down his suit.

NARRATOR: Keith Joseph's most significant adherent was an up-and-coming Conservative politician named Margaret Thatcher. In Parliament and politics, Thatcher's closest friends agree that Keith Joseph's influence on her was crucial.

NIGEL VINSON, Institute of Economic Affairs: She relied on him to give her deep intellectual support. There's nothing wrong with intuition. Intuition is reason in a hurry, and Keith just supported and reinforced her intuition. At the very moment, she needed that support.

NARRATOR: Margaret Thatcher had a gut instinct for market economics. Her father had been a grocer, and when she was a girl, she had helped him in the shop. Hardworking and studious, she won a place at Oxford University, where she became interested in student politics.

While she was at Oxford, she read Hayek's It made a lasting impression on her. Years later, when she became the first woman to lead the Conservative Party, she once slammed Hayek's book down on a table and announced, "This is what we believe."

RALPH HARRIS: (laughs) Thatcher's office came on and said could she come and drop in to see him. And so she called by, and there was a period of unaccustomed silence from Margaret Thatcher as she sat there, intense, attending to the master's words.

NARRATOR: By 1974, Hayek sensed the world beginning to go his way.

FRIEDRICH VON HAYEK (interviewed in 1978): As for the movement of intellectual opinion is concerned, it is now for the first time in my life moving in the right direction.

Onscreen title: Stockholm, 1974

NARRATOR: In the battle of ideas, 1974 was a turning point. Hayek's Nobel Prize came as a surprise, but the balance was now shifting away from Keynes and towards Hayek.

FRIEDRICH VON HAYEK: I like to say when I was a young man, only the very old men still believed in the free-market system. When I was in my middle ages I myself and nobody else believed in it. And now I have the pleasure of having lived long enough to see that the young people again believe in it. And that is a very important change.

Eastern Europe is now under a capitalist regime. The notion that it is democracy or allows “free trade” is an illusion. When communism ended and the capitalists moved in they had one policy, to take the resources, ergo labor. The idea that Eastern Europeans would feel they were better off under communism isn’t surprising. In many ways it probably was. Neither the former communist regimes nor what the West calsl democracy are really great systems. Democracy with control of business not the inverse is where people in any country will thrive. Once we/ people realize this simple truth then living standards can improve.