Economic Theory

A Socialist Carol (Part 2)


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continued from Part 1

The room went dark. When the lights went back on again, the room had changed. People were much less formally dressed. The men had longer hair. Some of them sported beards. The demographic composition of the audience had changed as well. It was more diverse. Less male, and less white. Judging from the students’ style, they had to be in the late 1960s or early 1970s.

They were in the middle of a different event. The speaker said:

“The reason why socialism turned out so badly in the Soviet Union, and its Warsaw Pact allies, is that their leaders tried to impose it in a top-down way. Socialism doesn’t work that way. It cannot be imposed by diktat. It can only be built from the bottom up. It must come from the grassroots. It must be rooted in working-class communities.

And that’s precisely what is happening in China right now. That’s what’s so exciting about it. They are building an entirely new, and completely different form of socialism, which has nothing in common with the perversions of Stalinism. China shows that there is an alternative. And this is something that should give us all hope. Thank you.”

The room broke into roaring applause.

“Let us see yet another socialism”, the ghost said.

Once again, the lights went out, and came on again. This time, not much had changed. They had probably gone only a few years back, or forwards, in time. A speaker said:

“The reason why socialism turned out so badly in the Soviet Union, and its Warsaw Pact allies, is that their leaders tried to impose it in a top-down way. Socialism doesn’t work that way. It cannot be imposed by diktat. It can only be built from the bottom up. It must come from the grassroots. It must be rooted in working-class communities.

“And that’s precisely what is happening in North Vietnam right now. That’s what’s so exciting about it. They are building an entirely new, and completely different form of socialism, which has nothing in common with the perversions of Stalinism. North Vietnam shows that there is an alternative. And this is something that should give us all hope.”

“Let us see yet another socialism”, the ghost said.

“No!”, Owen shouted. “I get the gist.”

Stave 3: The Ghost of Socialism Present

Owen woke up. What had just happened? Had that all been just a dream?

He heard music coming from the kitchen again. But it was a completely different kind of music. It sounded happier. Livelier. Was it Salsa? Merengue?

He went to the kitchen.

A man with a red beret was waiting for him.

“¡Camarada Owen! ¡Ven aquí, amigo!”

“Let me guess”, Owen said. “The Ghost of Socialism Present?”

El Espiritu del Socialismo del Presente, si. Although, from your perspective, what I’m about to show you is not exactamente el presente. Is a few years into el futuro.”

Owen shrugged. “Works for me.”

“¡Excelente!”, the ghost said.

And suddenly, they were in a different place. It was a recording studio. TV, or radio, or both. A TV screen on the wall showed a huge crowd of people crossing a bridge. A presenter said:

“…no end it sight to the humanitarian crisis in this once-rich South American country. The economy has collapsed. Food, medicines and sanitary products are hard to come by. Hyperinflation has destroyed the currency. The government’s response to the crisis is to blame ‘saboteurs’, and to turn to repressive measures.”

Owen creased his forehead. “Is that… no. No, it can’t be!”

It was only then that he noticed the radio presenter, and a guest.

“Hey, that’s Ken!”, Owen said.

“He cannot see you”, the ghost explained.

Ken adjusted his microphone, and said:

“One of the things that Chávez did when he came to power, he didn’t kill all the oligarchs. He allowed them to live, to carry on. I suspect a lot of them are using their power and control over imports and exports to make it difficult and to undermine Maduro.”

“Kill oligarchs?”, Owen said, incredulously. “What’s that about? Why does he sound like Stalin?”

“Please tell me that this is not what I’m about to become!”, he implored the ghost.

“I’m just el mensajero, amigo”, the ghost replied.

“Can’t you show me an alternative present?”, Owen asked.

Bueno, amigo: there isn’t really such a thing as an ‘alternative present’. The whole point about el presente is that it is what it is. I am a bit constrained here. Sure, I can move back and forth a few years, that still counts as el presente. But if I stray too far, it no longer does, ¿entiendes?”

“I suppose you’re right”, Owen said, downbeat.

“Unless…” the ghost said.

“Unless what?”

“Unless by ‘alternative present’, you mean a different version of history.”

“You can do that?”

Claro que si, hombre. If you could change one event in the history of socialism – what would it be?”

“Hmmm… not sure.”

“What was the worst defeat for socialism?”

“Oh, definitely the Chilean coup of 1973, which ousted Salvador Allende. He was a democratic socialist. If he had stayed in power…”

Muy bien. Let’s travel to a parallel timeline, where the 1973 coup never happened.”

They suddenly stood outside, in a run-down neighbourhood, surrounded by grey, dilapidated concrete blocks. A large number of people stood in a queue, in front of a small door. The ones who came out of the door were carrying small food parcels. They looked meagre.

A group of grim-looking soldiers appeared on the corner. The conversations stopped abruptly. It was suddenly silent as a graveyard, except for the stomping of the soldiers’ boots on the pavement.

A poster on the wall showed a cartoon villain figure, smashing machinery with a diabolical grin. Owen couldn’t fully read the slogan, which was in Spanish, but he recognised the words for “sabotage”, “speculation” and “enemies of the working class” easily enough.

“This can’t be right”, Owen said. “Salvador Allende was a democratic socialist. He never wanted that kind of socialism.”

“They never do, do they? And yet, somehow…”

Owen pulled out his phone, and opened the relevant Wikipedia page. He scrolled down, and read:

“…Allende’s expansionary fiscal policies led to a short-lived boom in 1971, followed by a severe recession starting in 1972. In 1973, the budget deficit soared to almost a quarter of GDP, and inflation to over 500%. Price controls had led to widespread shortages of essentials, and nationalisations had led to capital flight. Chile was in crisis.

“The abortion of an attempted military coup in September 1973 strengthened the government’s political position, but it did nothing to overcome the economic crisis.

“In the mid-1970s, the ongoing economic malaise produced a split within Allende’s Unidad Popular coalition. The moderate faction argued that Chile was not ready for socialism yet, because it lacked the material basis. They therefore recommended a return to more conventional, market-compatible, social democratic policies.

“The hardliners, however, claimed that Chile’s problems stemmed from the fact that it was not socialist enough. Allende had been too soft on the bourgeoisie, which was now using its economic muscle to undermine him. They demanded a crackdown on the remaining private sector, and an expansion of the socialised sector.

“Allende tried his best to hold this shaky coalition together, but he was increasingly seen as weak and indecisive. In 1977, he was replaced by José Acerado, who was closer to the hardliner faction.

“In his first presidential address, Acerado claimed that Chile was in a state of war – an economic war, waged by Chile’s oligarchs and their imperialist backers against the Chilean working class. A wave of arrests, and a further round of nationalisations, followed.

“A new constitution, introduced in 1978, placed various restrictions on…”

“OK, I get it”, Owen grumbled, and closed the page. “Can we leave this place now? It’s depressing.”

“But of course”, the ghost replied.

And they were back in the debating hall. A speaker said:

“The reason why socialism turned out so badly in Chile is that they tried to impose it in a top-down way. Socialism doesn’t work that way. It cannot be imposed by diktat. It can only be built from the bottom up. It must come from the grassroots. It must be rooted in working-class communities.

“And that’s precisely what is happening in…”

“Can we leave this timeline?”, Owen asked. “I think I’ve seen enough of the present.”

 

To be continued…

Kristian Niemietz is the author of “Socialism: The Failed Idea That Never Dies”.

Head of Political Economy

Dr Kristian Niemietz is the IEA's Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).


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