Magazines: In the Pink?

The most popular article to appear in a scholarly journal in 1989 was Francis Fukuyama's National Interest essay proclaiming that the collapse of communism meant "the end of history." Fukuyama contended that communism's fall meant that the struggle for the world had ended, leaving humanity with nothing to do except produce documentaries and doctoral dissertations about the glorious days of the Cold War.

One year later it's clear that what has ended is not "history," but a period of history. The demolition of the Berlin Wall concluded the Age of Dictators, that 75-year period between World War I and 1989 when the dominant actors on the world stage were monomaniacal statists who promoted rigid ideologies and attempted completely to dominate their subjects' lives.

Most observers have assumed that in their 15-round bout, capitalism has delivered a knockout blow to the communist cause. Indeed, the editors of Success are so certain of the triumph of the market that they are urging their readers to book flights to Moscow as soon as possible to rake in the cash. "GET YOUR RED HOT OPPORTUNITIES!" they tell readers of their September issue. "AMAZING! American entrepreneurs in Russia wield the power of czars!"

Success writers Richard Poe and Norman Dolph didn't find any capitalists who dream of being the next Ivan the Terrible or Peter the Great, but they found scores of "entrepreneurial wild men." These include the first American fast-food seller in the Soviet Union, a genius with a Nathan's truck who started selling hot dogs three months before McDonald's opened. They also found a software developer who discovered that Soviet computer programmers feel they are being treated like kings if they earn the ruble equivalent of $200 a month.

Success suggests goods that the emerging democracies of Central and Eastern Europe need. Sell 'em paint! Sell 'em office supplies! Sell 'em…motivational tapes! ("The works of Edward de Bono, Dale Carnegie, Earl Nightingale, and others will find an astonished and grateful audience.") Sell like hell!

It was a typical performance. Success has always been more gung-ho about capitalism than any other small-business magazine; this was the publication that once urged its readers to sleep less so they could spend more time crushing their competitors. But although you might wish Success would occasionally tone down the volume of its prose, you can't help but be cheered by the enthusiasm with which the magazine's editors and writers clubbed the socialist monolith.

While Success was giving its usual six cheers for capitalism, some magazines were doubting the conventional wisdom about the triumph of the marketplace. Indeed, two remarkable articles concluded that socialism, not capitalism, had emerged victorious.

In the August issue of Harper's Magazine, conservative historian John Lukacs argues that the last 40 years have not been a struggle between communism and capitalism. What matters in world history is not political systems, he says, but struggles between nation states.

The victor in Central Europe in 1989, Lukacs believes, was not "capitalism," but Germany, which will move into the vacuum resulting from the retreat of the Soviet Union. Furthermore, there is no "contest" between communism and capitalism, because all nations are welfare states. "We are all socialist now, whether we call ourselves that or not," Lukacs writes. "It is only that international socialism is a mirage. The dominant reality is that of a variety of nationalist socialisms."

In the September 10 New Yorker, leftist economist Robert Heilbroner compares two prominent economists of the 1930s: Ludwig von Mises, who argued that socialism could not work because planners could never acquire enough information to effectively replace the price mechanism, and Oskar Lange, who argued that planning would be effective as long as bureaucrats kept close watch on warehouse inventories. Lange's arguments swept the day, but "it turns out, of course, that Mises was right"—central planning doesn't work. Yet even though the classical vision of socialism, "a semireligious vision of a transformed humanity," is dead, Heilbroner argues that environmental problems will ensure that all the discredited forms of socialist economics will nonetheless have to be implemented to save the planet.

Lukacs and Heilbroner are always worth reading. Lukacs is readable because of his depth of knowledge and his independence; he is of the right, but not locked into the thinking of any particular camp. Heilbroner's essay shows once again that some of the best current analysis of America comes from older leftists (Heilbroner, Robert Coles, Eugene Genovese, Christopher Lasch) who realize that the principles of their youth are wrong. We shall see whether they are right this time. But more important are the questions they—and most other writers—are not asking about the Soviet Union and Central Europe.

For it's clear that while most of the leaders of these nations are not yet willing to trade in their hammer-and-sickle pins for Adam Smith ties, Hungary, Poland, Czechoslovakia, and the Soviet Union are moving away from communism toward more capitalistic systems. This process has not been seen since the 1940s, when West Germany moved away from fascism toward somewhat free markets. There have been very few articles on how, or if, de-socialism is working. For example, Gosplan, the Soviet planning agency, employed tens of thousands of workers in the Brezhnev era. By 1994, according to Mikhail Gorbachev's latest pronouncements, planning will be drastically reduced. What will happen to all the planners? Will they all sell apples in Gorky Park?

Journalists and analysts are avoiding stories about the economics of the former Soviet Bloc for several reasons. First is what Nicolai Petro, in the summer issue of The Wilson Quarterly, calls the "Copernican" fallacy, the notion that Gorbachev is the Soviet sun, and everything else that happens in that complex and beleaguered country is but a shadow.

Second is the unfortunate domination of political scientists in American academic discussions of world affairs. The time for discussions about Gorbachev's survival or the composition of the Politburo has ended; what is badly needed is for sociologists and economists to tell us if the Russians are willing to work and if the Soviet economy can create useful jobs for them. Third, most journalists don't talk about Soviet economics for the same reason they shy away from economic reporting in general: For most members of the press, economics is homework, and homework is something to be avoided at any cost.

But some journalists are nonetheless writing intelligent articles on the economic problems of ex-communist countries. The most thoughtful economic analysis of any Central European nation is provided by Norman Macrae in the September Business Month. Macrae flew to Poland, interviewed market-oriented economists there, and discovered that Solidarity is not doing a very good job of moving Poland toward a capitalistic system.

"Excessive" wage increases are heavily taxed, punishing employers in service industries who want to allow their workers' salaries to rise to market levels. Poland has a trade surplus achieved by high tariff barriers that make most imports uneconomical. And the state still runs crucial organizations as inefficient monopolies. For instance, while much Polish agriculture is private, wheat and dairy farmers must sell their products to state-owned distribution firms.

Macrae's prescription for Poland: Sack thousands of workers in inefficient, high-polluting heavy industries; weed out the managers of Polish plants who acquired their jobs because they were relatives of commissars; and arrange for venture capital to allow small private firms to grow.

For a big-picture analysis of the Soviet economy, the best source is an article by Nicholas Eberstadt and Jonathan Tombes in the July/August American Enterprise. The authors summarize papers presented by Soviet economists at an American Enterprise Institute conference. The panelists concluded that most Soviet economic statistics are unreliable, because they simply count production of goods and do not measure whether these products spoil, are sold, or are stolen.

Soviet records of grain production, for example, measure grain before it is dried and sorted to remove chaff and insects, "thus exaggerating the tonnage of usable grain by approximately 11 percent." Between 1971 and 1975, the Soviets claimed to produce 90 million tons of potatoes annually, but "catastrophic" spoilage ensured that 66 million tons—three-quarters of the crop!—never reached the marketplace.

The panelists estimated that Soviet GNP was between 14 percent and 33 percent of America's. Yuri Dikhonov of the Soviet Institute of Economics believes that Soviet GNP in 1985 was one-third of U.S. GNP. Yet in 1912, the last year Russian economic statistics were reliable, the Russian economy was 39 percent to 47 percent as big as the United States'.

So the communist and ex-communist nations of the world, far from "burying" the West, are falling farther and farther behind in the economic race. But are these nations—and the West—doomed to practice a more genteel form of socialism? I think not.

Arguing that we are prisoners of historical forces, that socialism is the West's last meal before civilization dies, is too fatalistic and Spenglerian. Marx and Lenin are dead; the faith they created survives only in reactionary nations whose power rests on the bayonet and the gulag. The world is a better place now that Marxism-Leninism is part of the past.

British scholar Timothy Garton Ash tells the following Soviet joke: Communism shows that you can turn an aquarium into fish soup. But how do you turn fish soup into an aquarium?

I don't know the answer. But certainly Poland, Hungary, Czechoslovakia, and Russia deserve to be freed from the intellectual and economic prisons built for these countries as a consequence of two world wars. The freedom of Central and Eastern Europe is the most important development of our time. To say that these nations, having freed themselves from communism, must chain themselves to socialism, is the worst sort of cultural imperialism.

Martin Morse Wooster is the Washington editor of REASON.