Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

My Thoughts

Lessons we can Learn from the Soviet Union

The Union of Soviet Socialist Republics (USSR) was one of the largest and strangest empires in history.

Oddly, a famous critic of imperialism; Vladimir I. Lenin, founded the USSR or Soviet Union. Yet, the Soviet Union became one of the biggest practitioners of imperialism on Earth.

In addition, they based the USSR on an ideology; Communism, rather than a people or country. Moreover, the Soviet Union was one of the first states built around a political party; the Communist Party, rather than an army, religion, or dynasty.

Hence, the Soviet Union; like the United States, was an empire that claimed not be an empire. Thus, you can call the USSR and the United States, empires built on hypocrisy.

The Soviet Union was one of the worst-led governments in history. Two of its leaders; Lenin and Joseph Stalin, were probably psychopaths. Another prominent Soviet leader, Nikita Khrushchev was apparently an incompetent drunk.

In its 74-year history, the USSR produced only one seemingly competent leader Mikhail Gorbachev. Many Russians; however, will debate Gorbachev’s competence.

Despite that record, the Soviet Union’s accomplishments were impressive. For instance, the USSR won an impressive victory in World War II, launched the first satellite, put the first man in space, and industrialized and modernized Russia.

In addition, the Soviet Union’s military power exceeded America’s in some ways. Despite the lack of a modern capitalist economy.

Consequently, there is much we can learn from the Soviet Union and its failures.

What we Can Learn from the Soviet Union

A few lessons we can learn from the Soviet Union include:

Ideology cannot Nullify Economics

The Communist Party leaders believed their ideology freed the USSR from economic reality.

For much of its histories the Soviet Union’s leaders denied the existence of modern economics. In particular, Soviet leaders refused to admit the necessity of the market because they found markets distasteful. Hence, the USSR lacked a functioning economy after the 1920s.

Likewise, modern American neoliberals completely ignore modern economics. For instance, many American conservatives ignore Keynesian Economics and refuse to contemplate the idea that government intervention affects the economy.

The American conservatives find government economic intervention distasteful, just as the Soviets found the market distasteful. Like some Soviet leaders, many American conservatives prefer economic collapse and poverty to abandoning their economic dogma.

With no markets, Soviet leaders like Stalin and Khrushchev thought they could create a modern industrial and technological economy without the market. Stalin, for instance, thought all he had to do was build factories to create an industrial economy.

Moreover, in the 1950s, Khrushchev became convinced he could create a modern consumer economy by ordering Russian factories to make consumer goods like cars and television. Both efforts failed because Russians lacked the money to buy the goods the factories made.

In fact, Stalin’s industrialization probably made the USSR poorer; because the dictator sold natural resources and bought machinery with the proceeds. This policy enriched machinery salesmen but impoverished Russia.

Strangely, Stalin’s bungled industrialization helped Russia in World War II. To explain, the Soviets had the machinery to build large amounts of tanks, artillery pieces, and other weapons because of Stalin.

Khrushchev created the illusion of a modern middle class society by filling shops with Russian-made consumer goods few Soviet citizens could afford. In addition, the Soviet consumer goods were often so shoddy they could not compete in international markets.

Stalin wrecked Russian agriculture through collectivization in the 1930s leading to famines. Instead, of fixing agriculture by undoing collectivization, Khrushchev sold Russian natural resources and bought food on the international market with the proceeds.

Ironically, Khrushchev and his successors bought much of that food from the United States. Hence, the Kremlin financed the Soviet Union’s greatest enemy by selling off the nation’s resources.

Finally, in the 1980s, Mikhail Gorbachev made another shallow attempt to create a modern consumer economy. Instead of manufacturing consumer goods, Gorbachev imported foreign brands like McDonald’s.

The hope was that Russians could learn modern business methods by flipping burgers. Predictably, Gorbachev’s reforms failed and the USSR finally collapsed in 1991.

In the American version of the Soviet fallacy, politicians keep cutting taxes, slashing government spending (except for the military), and eliminating regulations hoping to create prosperity. When the austerity fails, the Republicans (and some British Conservatives), double down on their deluded thinking rather than face reality.

The USSR teaches us that then ideology replaces sound economics, poverty and catastrophe follow.

Military Might Cannot Save Your Nation

The Soviet Union built the greatest military-industrial complex and largest arsenal in history. Yet that military might could not save the USSR from collapse.

Astoundingly, at its height in 1986, the Soviet arsenal contained 40,159 nuclear weapons, The Bulletin of the Atomic Scientists estimates. By the time of the USSR’s collapse in 1991, the Soviet Armed forces had 3.668 million activity duty personnel and 4.13 million reservists, Wikipedia estimates.

During the 1980s, a few years before the collapse in 1991, the Soviet army had 210 divisions, Wikipedia claims. That military power did not help the Soviets win the Afghan War or hold Eastern Europe.

The massive military industrial complex fatally weakened the USSR by diverting resources from other vital needs. For instance, there was no capital to finance industrial production, consumer goods, modern infrastructure, social programs, or effective agriculture.

Another problem the Soviets faced was that their massive military was unsuited to modern warfare by the 1980s. For instance, the thousands of tanks were of no use in the guerrilla war the Russians fought in Afghanistan in the 1980s.

The Afghan War exposed the Soviet Army’s obsolesce. Heavily armed Russian troops were incapable of dealing with guerrillas. Armored helicopters a key Soviet weapon; for instance, were highly vulnerable to cheap hand-held antiaircraft weapons.

Moreover, the centralized Soviet Army could not inflict a battlefield defeat on the decentralized Mujahideen guerrillas. Thus the Afghan War exposed Soviet military doctrine as outdated and divorced from reality.

During the 1980s, Gorbachev finally tried to cut the military’s size. However, the reductions came too late to prevent economic collapse.

The Soviet Union’s experience shows that assembling a vast arsenal; and a large military will not lead to victory, secure your nation, or assure military dominance. Indeed, the huge Soviet war machine could never force the much smaller American and British forces out of Europe.

Imperialism Creates Enemies and Breeds Insecurity

Bizarrely, the Soviet Union was the last great practitioner of unrestrained imperialism and colonialism.

In particular, the USSR occupied and colonized most of Eastern Europe. The Soviets created several puppet states governed by local Communist Parties. In addition, the Soviets created the Warsaw Act, a fake defensive alliance, as a front for their Empire.

Soviet colonialism was a miserable failure in Eastern Europe. Conditions in East Germany were so bad, citizens risked their lives climbing over the Berlin Wall to escape. Like European colonies elsewhere, the Soviet colonies in Eastern Europe suffered constant unrest. There were notable revolts in East Germany (1953 and 1989), Hungary (1956), Czechoslovakia (1968), and Poland (1980s).

Tellingly, the puppet states; and the Warsaw Pact, collapsed as soon as the Soviets withdrew their support in 1989. Indeed, the collapse of the Warsaw Pact was so swift it caught many by surprise.

Stalin occupied Eastern Europe to secure the Soviet Union’s Western borders. Instead, of security the occupation led to Cold War and insecurity.

The Soviet threat prompted the US to station large military forces in Western Europe and create the North Atlantic Treaty Organization (NATO) alliance. Hence, the Eastern European Empire made Russia less secure.

Thanks to Stalin, there were American, British, and Canadian troops and tanks in West Germany. In addition, there were American nuclear weapons in the United Kingdom, Turkey, and West Germany at various times in the Cold War.

Furthermore, the Soviet presence prompted the French and British to build their own nuclear weapons. Predictably, the British and French aimed those nuclear weapons at Moscow.

The Eastern European Empire hastened the USSR’s collapse because the Soviets ended up diverting more and more resources to counter the NATO threat. However, the NATO threat only existed because of Soviet Imperialism.

Hence, the Soviet Union could have survived had its leaders been willing to tolerate independent countries in Eastern Europe. There is an important lesson for today’s American, Russian, Indian, and Chinese leaders here.

The lesson is imperialism creates enemies and breeds insecurity.

Technology Alone will Not Save You

The Soviet leaders believed that technology alone could create utopia. Hence, acquiring and applying new technology become one of their key policies.

Lenin, for example, had an obsession with electrification. Consequently, the Kremlin built huge hydroelectric dams and power lines even though most Soviet citizens could not afford electrical appliances.

Likewise, Stalin’s obsession was acquiring American and European technology. Stalin bought whole industrial plants from American and European businessmen.

Another of Stalin’s schemes was to buy tractors for every farm even though the farmers could not grow enough food to feed the country’s population. Stalin thought the mere presence of tractors could modernize Soviet agriculture.  

Stalin’s other obsession was creating military technology. The dictators’ pet projects included giant airplanes which were probably defenseless against fighter planes. Notably, the Soviet Air Force could not fight back against the German Luftwaffe in 1941. Possibly because Stalin had wasted its resources building giant bombers.

During the Cold War, Khrushchev, Brezhnev, and Gorbachev mindlessly purchased Western consumer goods and machine tools. Tellingly, the USSR spent untold billions on a space program when it could not meet the basic needs of its citizens.

Notably, the Soviets were importing food at the same time they were launching the first manned space flights. The obvious lesson here is that technology alone will not create utopia or a modern society.

The USSR failed because it did not create a modern capitalist economy or welfare state. There was no infrastructure to deliver the technology’s benefits to the average citizen.

Soviet citizens could look at posters of the Cosmonauts’ latest triumphs while standing in line to buy bread. Ironically, they probably baked the bread from American, Canadian, Australian, or Argentine grain.

Interestingly, both America’s Silicon Valley elite; and the Chinese Communist Party, have adopted the Soviet view of technology. Both groups think technology alone can improve society and create utopia.

American tech millionaires and school administrators; for instance, give students iPads while not paying teachers a living wage. In fact, one third of new American teachers work second jobs, neaToday claims. Meanwhile, the People’s Republic of China spends billions on artificial intelligence while tolerating the fastest-growing level of income inequality in the world, Bloomberg claims.

Similar measures include programs to install 5G wireless and high-speed internet in communities that lack affordable housing. Thus, the poor will have no place to live, but many opportunities to gripe about their troubles on Social Media.

One result of the Soviet technological utopia was a country in which many citizens had no loyalty to the nation or the government. In 1991, not even the military came to the defense of Gorbachev, or the Kremlin coup leaders trying to oust him. The Soviets’ technological utopia was such a failure, nobody; even the army, would fight for it.

Americans and Chinese who think artificial intelligence, internet access, and 5G wireless can build utopia need to examine the Soviet failure. Merely buying and deploying technology will not build a better nation.

Indeed, the presence of modern technology without modern institutions can make things worse. For instance, what use are modern hospitals with the latest medical technology to people with no means of paying for healthcare?

Instead of trumpeting their superiority over the Soviets. Americans and Chinese need to learn from the Soviet Union’s mistakes. I think both countries are repeating the Soviet mistakes of unquestioning faith in ideology, technological utopia, overspending on the military, and imperialism.

If we ignore the lessons the Soviet Union offers, both the United States of America and the People’s Republic of China could join the USSR in the ash heap of history.