The idea of efficient planning in a socialist economy is plausible only if we assume that economic value is an objective feature of commodities, one that can be rationally ascertained apart from the give and take of market competition. Karl Marx (1818-1883) made precisely this assumption. Like David Ricardo and other economists in the classical school, Marx defended a labor theory of value. It is interesting to note that Marx finished only one volume of Capital (1867) during his lifetime, a book that was published as the theory of marginal utility was about to revolutionize economic thought. (The books by Menger and Jevons were published in 1871, that by Walras in 1874.) But this was one revolution that Marx failed to appreciate. By the time Friedrich Engels, using Marx’s notes, pieced together the second and third volumes of Capital (1885, 1894), the labor theory of value had ossified into a sacred relic for socialists and anarchists but found relatively few adherents outside those ranks.
Economic value, according to Mises and others in the Austrian School, is not an objective property of commodities. Rather, value is imputed to commodities according to their perceived utility in serving human wants. As Mises put it in Socialism: An Economic and Sociological Analysis:
Every man who, in the course of economic activity, chooses between the satisfaction of two needs, only one of which can be satisfied, makes judgments of value. Such judgments concern firstly and directly the satisfaction themselves; it is only from these that they are reflected back upon goods.
We compare our preferences by ranking them, not by measuring them. It makes sense, for example, to say that I like apples more than oranges, and oranges more than pears, and therefore that I like apples more than pears. But it makes no sense to say that I like apples twice as much as I like oranges, and oranges three times more than pears, and therefore that I like apples six times more than I like pears.
In other words, since economic value derives from estimates of personal satisfaction, and since there is no invariant unit of satisfaction that can serve as a standard of measurement, it is impossible to measure, compute, or add up the marginal utility of various commodities. We can rank values ordinally, but we cannot measure them cardinally. As Mises pointed out, this creates a problem when we need to make economic calculations:
Computation demands units. And there can be no unit of the subjective use-value of commodities. Marginal utility provides no unit of value…Judgments of value do not measure: they arrange, they grade.
Our subjective estimates of value may prove sufficient when dealing with simple situations, as when Crusoe, alone on his island, is calculating how to provide for his wants in the immediate future. But the problem of calculation becomes insurmountable in more complex situations, especially when a sophisticated division of labor is in place. When lengthy and complicated processes of production are involved, our estimates of subjective use value will fail to give us the information we need for long-range economic planning.
That which subjective use value cannot accomplish in a free market is accomplished instead by objective exchange value. By “objective exchange value,” Mises meant the money-price of a commodity, which serves as the required unit of economic calculation. Money, according to Mises, does not measure value, nor are prices somehow measured by money. Rather, prices are simply amounts of money. Mises called the price of a commodity its “objective exchange value” because that price—which arises from the interplay of the subjective valuations of those engaged in buying and selling—can serve as a practical means of economic calculation.
Calculations of this sort provide a control upon the appropriate use of the means of production. They enable those who desire to calculate the cost of complicated processes of production to see at once whether they are working as economically as others. If, under prevailing market prices, they cannot carry through the process at a profit, it is a clear proof that others are better able to turn to good account the instrumental goods in question. Finally, calculations based upon exchange values enable us to reduce values to a common unit. And since the higgling of the market establishes substitution relations between commodities, any commodity desired can be chosen for this purpose. In a money economy, money is the commodity chosen.
Money prices are necessary if we are to engage in long-range and complex calculations. They enable us to compare different production methods and determine which will produce the desired good at the lowest cost. Mises offered a concrete example of a problem that socialism is unable to solve, precisely because socialism, by prohibiting the private ownership of capital goods, also abolishes the market transactions that are required to generate prices for those capital goods.
Suppose…that the socialist commonwealth was contemplating a new railway line. Would a new railway line be a good thing? If so, which of many possible routes should it cover? Under a system of private ownership we could use money calculations to decide these questions. The new line would cheapen the transportation of certain articles, and, on this basis, we could estimate whether the reduction in transport charges would be great enough to counterweigh the expenditure which the building and running of the line would involve. Such a calculation could be made only in money….We can make systematic economic plans only when all the commodities which we have to take into account can be assimilated to money. True, money calculations are incomplete. True, they have profound deficiencies. But we have nothing better to put in their place. And under sound monetary conditions they suffice for practical purposes. If we abandon them, economic calculation becomes absolutely impossible.
This is why Mises predicted the inevitable failure of central planning. His portrayal of socialism, first made in 1920, proved remarkably accurate, especially in regard to the Soviet Union.
All transactions…will be subject to the control of a supreme authority. Recourse will be had to the senseless output of an absurd apparatus. The wheels will turn, but will run to no effect.
Socialism, far from being more scientific and rational than the free market, actually annihilates the possibility of rational planning.
[I]n the socialist commonwealth every economic change becomes an undertaking whose success can be neither appraised in advance nor later retrospectively determined. There is only groping in the dark. Socialism is the abolition of rational economy.
The arguments of Mises caused some socialists to re-examine the plausibility of their own theories, and even caused some to embrace the free-market principles of classical liberalism. Among those former socialists was a young Friedrich Hayek, who would go on to become one of the twentieth century’s most influential advocates of free markets and limited government. As Hayek said of his generation in Vienna after WWI:
We felt that the civilization in which we had grown up had collapsed. We were determined to build a better world, and it was this desire to reconstruct society that led many of us to the study of economics. Socialism promised to fulfill our hopes for a more rational, more just world.
When Socialism first appeared in 1922, its impact was profound. It gradually, but fundamentally, altered the outlook of many of the young idealists returning to their studies after the First World War. I know, for I was one of them.
Hayek later expanded on the ideas of Mises, applying them in ways that enhanced our understanding not only of why socialism fails but of why capitalism succeeds. Hayek is perhaps best known for his argument that free markets are able to coordinate the dispersed knowledge of millions of people in a way that maximizes economic efficiency. As Hayek wrote in his 1945 essay, “The Use of Knowledge in Society,”
The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate ‘given’ resources—if ‘given’ is taken to mean given to a single mind which deliberately solves the problem set by these ‘data.’ It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.
Thus prices in a free market, in addition to enabling us to make economic calculations, are also a sophisticated method for communicating knowledge. As Hayek put it, “We must look at the price system as such a mechanism for communicating information if we want to understand its real function.” (I would argue that this Hayekian insight is implicit in the Misesian argument about economic calculation.)
When governments forcibly intervene in market transactions, they reduce or distort the information that would otherwise flow through market channels. This will generate various problems, depending on the severity of the interventions, and those problems, in turn, will typically generate demands for even more intervention. Thus as interventions multiply, and despite the best intentions of planners, a country will become trapped in a downward economic spiral that will terminate in a highly regimented economy. This is the Road to Serfdom that Hayek described in his best-selling book. Or, as the title of a book by Mises put it, this is the way to Planned Chaos.
I have presented only a barebones summary of some arguments by Mises and Hayek against a command economy—arguments that will already be familiar to many libertarians. But I know that some libertarians have an allergic reaction to economic theory, so I wrote this two-part series in the hope that it will encourage such people to investigate the ideas and writings of Mises and Hayek in more detail.
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Ludwig von Mises (1881-1973) was a brilliant economist, a leading proponent of the Austrian School of economics, but he was more. He was an interdisciplinary thinker of remarkable breadth who was conversant in history, social theory, and philosophy. His greatest book, Human Action, is a masterful exposition of praxeology (the science of human action); and throughout his many other books—such as Theory and History, The Epistemological Problems of Economics, and The Theory of Money and Credit—we see an original, first-rate mind at work.
Mises is perhaps best known for his early critique of socialism, which convinced many economists, including a young socialist named Friedrich Hayek, that rational economic calculation is impossible in a socialist system. Optimal economic coordination requires a free market in which prices transmit crucial information about the supply and demand of capital goods.
Mises drew on the Austrian theory of value to argue that socialism cannot solve the problem of economic calculation. Thus, before presenting the Misesian argument, I will present some relevant background information on this theory of value.
Central to all economic analysis is the concept of value. In classical economics—whose major exponents included Adam Smith, David Ricardo, and John Stuart Mill—two kinds of value were often distinguished, namely value in use and value in exchange. “Use value” signifies the usefulness, or utility, of a given commodity, such as water. Because water is essential to human life, it was said to have a high use value. “Exchange value,” in contrast, refers to what a given commodity can fetch in the market when it is exchanged for something else. Because diamonds will command a good deal in return, they were said to have a high exchange value.
As Adam Smith put it in The Wealth of Nations, the word value “has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys.” After distinguishing “value in use” from “value in exchange,” Smith continued:
The things which have the greatest value in use have frequently little or no value in exchange; and, on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce anything; scarce anything can be had in exchange for it. A diamond on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.
Although modern economists sometimes refer to this distinction as “the paradox of value”(or “the water-diamond paradox”), this was not how it was viewed by Smith and his many predecessors (going back to Aristotle). Smith was not puzzled by this “paradox,” which he explained in the same manner as it had been explained many times before, i.e., in terms of relative scarcity. As he put it in his Lectures on Jurisprudence, the market price of a commodity depends on three things: first, “the demand or need for it (whether this be real or capricious)”; second, “the abundance of it in proportion to this demand”; third, “the wealth of the…demanders.”
Something for which there is no demand, such as a lump of clay, will not command a market price. But if something is perceived as useful and thereby generates a demand, then “the price will be regulated according to the demand.” Thus even a good which has little use value will command a high price “if the quantity be not sufficient to supply the demand; hence the price of diamonds.” On the other hand, a highly useful good like water, if it exists in superabundance and is able to “more than supply all possible demands, renders water of no price at all.”
Although Smith’s explanation is valid so far as it goes, the positing of two different types of “value” generated some problems for classical economists that they were unable to resolve. A unified theory of value did not emerge until the 1870s, when there occurred what is known as the “marginal utility revolution” in economic thought. This important innovation was arrived at independently by three men: William Stanley Jevons in England, Leon Walras in Switzerland, and Carl Menger in Austria. Although these men differed somewhat in their treatments of marginal utility, their central insights were essentially the same. (The term “marginal utility” was coined by the Austrian economist Friedrich von Wieser.)
As these economists pointed out, when we choose one commodity over another, we do not consider the general usefulness of that commodity. We do not, for example, consider the general utility of water—its role in supporting human life—when deciding how much we are willing to exchange for a specific amount of water. True, if we had to choose between all the water in the world and all the diamonds in the world, then we would choose water over diamonds, but rarely are we faced with this all-or-nothing situation. Instead, we confront commodities as they exist in specific quantities, or units, and how much we subjectively value a given unit of a given commodity depends on how we plan to use it.
Suppose we are deciding whether or not to purchase a gallon of water. How much we are willing to pay will be based not on the general usefulness of water but on the contribution that the additional gallon of water will make to satisfying our “marginal” wants. And this, of course, depends on how much water we already have. A man dying of thirst in a desert will value a gallon of water more highly than he would in normal circumstances, because he will use that gallon to sustain his life—rather than using it, say, to wash his car, which is what he might do in circumstances in which water is more plentiful.
Thus economic value ultimately depends not on the general usefulness of a commodity but on the specific usefulness—or marginal utility—of a given unit of that commodity in satisfying our most pressing desires. If water is abundant—that is, if most of our important wants are easily satisfied by the available water—then we will place a relatively low value on each additional unit of water, because that unit will be used to fulfill a want that we consider relatively unimportant. And if diamonds, while greatly prized, are normally scarce, then we will place a relatively high value on each additional unit of diamonds, because that unit will be used to satisfy a want that ranks high on our scale of preferences.
This is where the discussion of marginal utility by Carl Menger (1840-1921) is especially important if we are to appreciate what Ludwig von Mises had to say about economic calculation. Menger, who is generally acknowledged as the founder of the Austrian School, stressed the subjective nature of use value. The economic value of a commodity, argued Menger, depends ultimately on our subjective valuations, specifically, on how we assess the usefulness of a good in furthering our subjective goals. Economic science does not pass judgment on the true worth, or objective value, of an economic good. It does not, for instance, evaluate the “true” worth of water in relation to diamonds. Rather, economics takes as its starting point what people do in fact value, and it then analyzes the economic phenomena that emerge from this pursuit of subjective goals.
Menger’s distinctive contribution to marginal utility was his extension of this theory to what he called “goods of a higher order”—or what are sometimes called “capital goods” or “the means of production,” in contrast to “consumer goods.” Many economists had contrasted supply (or the factors of production) with consumer demand, as if these elements operated according to different principles of value. But this is incorrect, said Menger; ultimately the value of all higher-order goods depends on their role in producing consumer goods, those things that people use directly to satisfy their desires. “Goods of a higher order”—so-called because they fall higher than consumer goods on the scale of production—are indirect means of satisfying human wants. A steel factory may not produce anything that is directly used by the consumer, but it does satisfy consumer demand indirectly by providing the material for the building of cars and other goods that are directly used by the consumer.
Menger’s discussion of higher-order goods allowed him to apply the notion of marginal utility not only to consumer goods but to the factors of production as well. This insight proved essential to the Misesian argument that planners in a socialist economy will be unable to engage in rational economic calculation. Mises first advanced his argument in a 1920 essay, “Economic Calculation in the Socialist Commonwealth,” and he expanded upon it two years later in his seminal book, Socialism: An Economic and Sociological Analysis.
Pure socialism is a system in which there is no private ownership of the means of production; all production decisions are made by a central planning authority. Unlike a market system, in which capitalists and entrepreneurs can base their production decisions on the market prices of higher-order goods, the planners in a socialist economy have no such prices to guide them. What, then, can these planners substitute for market prices? What rational criteria can they use in determining which higher order goods are needed, and in what amount, in order to produce the desired consumer goods?
Without market prices to guide production, argued Mises, no rational calculation is possible. Thus the supposed rational economic planning of socialism (or any kind of planned economy) leads to economic chaos, to inefficiency and waste on a massive scale.
To be continued…
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George Ayittey is a Ghanian economist and the founder and president of the Free Africa Foundation. He also taught economics at American University and is an associate scholar at the Foreign Policy Research Institute.
In this video from a San Francisco Libertarian Party event in 1989, Ayittey talks about the failure of Africa’s experiments with socialism throughout the 20th century. He tells stories about the inefficiency, waste, and bureaucratic corruption in countries like Ghana, Tanzania, and Zimbabwe, and says that wrangling Africa’s political class is of paramount importance when it comes to African development.
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All socialism involves slavery.
What is essential to the idea of a slave? We primarily think of him as one who is owned by another. To be more than nominal, however, the ownership must be shown by control of the slave’s actions—a control which is habitually for the benefit of the controller. That which fundamentally distinguishes the slave is that he labours under coercion to satisfy another’s desires. The relation admits of sundry gradations. Remembering that originally the slave is a prisoner whose life is at the mercy of his captor, it suffices here to note that there is a harsh form of slavery in which, treated as an animal, he has to expend his entire effort for his owner’s advantage. Under a system less harsh, though occupied chiefly in working for his owner, he is allowed a short time in which to work for himself, and some ground on which to grow extra food. A further amelioration gives him power to sell the produce of his plot and keep the proceeds. Then we come to the still more moderated form which commonly arises where, having been a free man working on his own land, conquest turns him into what we distinguish as a serf; and he has to give to his owner each year a fixed amount of labour or produce, or both: retaining the rest himself. Finally, in some cases, as in Russia before serfdom was abolished, he is allowed to leave his owner’s estate and work or trade for himself elsewhere, under the condition that he shall pay an annual sum. What is it which, in these cases, leads us to qualify our conception of the slavery as more or less severe? Evidently the greater or smaller extent to which effort is compulsorily expended for the benefit of another instead of for self-benefit. If all the slave’s labour is for his owner the slavery is heavy, and if but little it is light. Take now a further step. Suppose an owner dies, and his estate with its slaves comes into the hands of trustees; or suppose the estate and everything on it to be bought by a company; is the condition of the slave any the better if the amount of his compulsory labour remains the same? Suppose that for a company we substitute the community; does it make any difference to the slave if the time he has to work for others is as great, and the time left for himself is as small, as before? The essential question is—How much is he compelled to labour for other benefit than his own, and how much can he labour for his own benefit? The degree of his slavery varies according to the ratio between that which he is forced to yield up and that which he is allowed to retain; and it matters not whether his master is a single person or a society. If, without option, he has to labour for the society, and receives from the general stock such portion as the society awards him, he becomes a slave to the society. Socialistic arrangements necessitate an enslavement of this kind; and towards such an enslavement many recent measures, and still more the measures advocated, are carrying us. Let us observe, first, their proximate effects, and then their ultimate effects.
The policy initiated by the Industrial Dwellings Acts admits of development, and will develop. Where municipal bodies turn house-builders, they inevitably lower the values of houses otherwise built, and check the supply of more. Every dictation respecting modes of building and conveniences to be provided, diminishes the builder’s profit, and prompts him to use his capital where the profit is not thus diminished. So, too, the owner, already finding that small houses entail much labour and many losses—already subject to troubles of inspection and interference, and to consequent costs, and having his property daily rendered a more undesirable investment, is prompted to sell; and as buyers are for like reasons deterred, he has to sell at a loss. And now these still-multiplying regulations, ending, it may be, as Lord Grey proposes, in one requiring the owner to maintain the salubrity of his houses by evicting dirty tenants, and thus adding to his other responsibilities that of inspector of nuisances, must further prompt sales and further deter purchasers: so necessitating greater depreciation. What must happen? The multiplication of houses, and especially small houses, being increasingly checked, there must come an increasing demand upon the local authority to make up for the deficient supply. More and more the municipal or kindred body will have to build houses, or to purchase houses rendered unsaleable to private persons in the way shown—houses which, greatly lowered in value as they must become, it will, in many cases, pay to buy rather than to build new ones. Nay, this process must work in a double way; since every entailed increase of local taxation still further depreciates property. And then when in towns this process has gone so far as to make the local authority the chief owner of houses, there will be a good precedent for publicly providing houses for the rural population, as proposed in the Radical programme, and as urged by the Democratic Federation; which insists on “the compulsory construction of healthy artisans’ and agricultural labourers’ dwellings in proportion to the population.” Manifestly, the tendency of that which has been done, is being done, and is presently to be done, is to approach the socialistic ideal in which the community is sole house-proprietor.
Such, too, must be the effect of the daily-growing policy on the tenure and utilization of the land. More numerous public benefits, to be achieved by more numerous public agencies, at the cost of augmented public burdens, must increasingly deduct from the returns on land; until, as the depreciation in value becomes greater and greater, the resistance to change of tenure becomes less and less. Already, as everyone knows, there is in many places difficulty in obtaining tenants, even at greatly reduced rents; and land of inferior fertility in some cases lies idle, or when farmed by the owner is often farmed at a loss. Clearly the profit on capital invested in land is not such that taxes, local and general, can be greatly raised to support extended public administrations, without an absorption of it which will prompt owners to sell, and make the best of what reduced price they can get by emigrating and buying land not subject to heavy burdens; as, indeed, some are now doing. This process, carried far, must have the result of throwing inferior land out of cultivation; after which there will be raised more generally the demand made by Mr. Arch, who, addressing the Radical Association of Brighton lately, and, contending that existing landlords do not make their land adequately productive for the public benefit, said “he should like the present Government to pass a Compulsory Cultivation Bill”: an applauded proposal which he justified by instancing compulsory vaccination (thus illustrating the influence of precedent). And this demand will be pressed, not only by the need for making the land productive, but also by the need for employing the rural population. After the Government has extended the practice of hiring the unemployed to work on deserted lands, or lands acquired at nominal prices, there will be reached a stage whence there is but a small further step to that arrangement which, in the programme of the Democratic Federation, is to follow nationalization of the land—the “organization of agricultural and industrial armies under State control on cooperative principles.”
To one who doubts whether such a revolution may be so reached, facts may be cited showing its likelihood. In Gaul, during the decline of the Roman Empire, “so numerous were the receivers in comparison with the payers, and so enormous the weight of taxation, that the labourer broke down, the plains became deserts, and woods grew where the plough had been.” In like manner, when the French Revolution was approaching, the public burdens had become such, that many farms remained uncultivated and many were deserted: one-quarter of the soil was absolutely lying waste; and in some provinces one-half was in heath. Nor have we been without incidents of a kindred nature at home. Besides the facts that under the old Poor Law the rates had in some parishes risen to half the rental, and that in various places farms were lying idle, there is the fact that in one case the rates had absorbed the whole proceeds of the soil.
At Cholesbury, in Buckinghamshire, in 1832, the poor rate “suddenly ceased in consequence of the impossibility to continue its collection, the landlords have given up their rents, the farmers their tenancies, and the clergyman his glebe and his tithes. The clergyman, Mr. Jeston, states that in October 1832, the parish officers threw up their books, and the poor assembled in a body before his door while he was in bed, asking for advice and food. Partly from his own small means, partly from the charity of neighbours, and partly by rates in aid, imposed on the neighbouring parishes, they were for some time supported.”
And the Commissioners add that “the benevolent rector recommends that the whole of the land should be divided among the able-bodied paupers”: hoping that after help afforded for two years they might be able to maintain themselves. These facts, giving colour to the prophecy made in Parliament that continuance of the old Poor Law for another thirty years would throw the land out of cultivation, clearly show that increase of public burdens may end in forced cultivation under public control.
Then, again, comes State-ownership of railways. Already this exists to a large extent on the Continent. Already we have had here a few years ago loud advocacy of it. And now the cry, which was raised by sundry politicians and publicists, is taken up afresh by the Democratic Federation; which proposes “State-appropriation of railways, with or without compensation.” Evidently pressure from above joined by pressure from below, is likely to effect this change dictated by the policy everywhere spreading; and with it must come many attendant changes. For railway-proprietors, at first owners and workers of railways only, have become masters of numerous businesses directly or indirectly connected with railways; and these will have to be purchased. Already exclusive letter-carrier, exclusive transmitter of telegrams, and on the way to become exclusive carrier of parcels, the State will not only be exclusive carrier of passengers, goods, and minerals, but will add to its present various trades many other trades. Even now, besides erecting its naval and military establishments and building harbours, docks, break-waters, etc., it does the work of ship-builder, cannon-founder, small-arms maker, manufacturer of ammunition, army-clothier and boot-maker; and when the railways have been appropriated “with or without compensation,” as the Democratic Federationists say, it will have to become locomotive-engine-builder, carriage-maker, tarpaulin and grease manufacturer, passenger-vessel owner, coal-miner, stone-quarrier, omnibus proprietor, etc. Meanwhile its local lieutenants, the municipal governments, already in many places suppliers of water, gas-makers, owners and workers of tramways, proprietors of baths, will doubtless have undertaken various other businesses. And when the State, directly or by proxy, has thus come into possession of, or has established, numerous concerns for wholesale production and for wholesale distribution, there will be good precedents for extending its function to retail distribution: following such an example, say, as is offered by the French Government, which has long been a retail tobacconist.
Evidently then, the changes made, the changes in progress, and the changes urged, will carry us not only towards State-ownership of land and dwellings and means of communication, all to be administered and worked by State-agents, but towards State-usurpation of all industries: the private forms of which, disadvantaged more and more in competition with the State, which can arrange everything for its own convenience, will more and more die away; just as many voluntary schools have, in presence of Board-schools. And so will be brought about the desired ideal of the socialists.
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Never Call Socialism by Its Right Name
By Mary Nicholas
(See also: Socialism, by Any Other Name, Is Still Socialism)
Allen West was the latest to get his knuckles rapped for saying there were "about 78 to 81" members of the Democratic Party who are members of the Communist Party.I His crime, like McCarthy’s, was in raising an uncomfortable subject. We may never know who is or isn’t a communist, socialist, Marxist, Stalinist or Leninist in Congress, since all socialists work by deception, define words with obscurities, and refuse to identify themselves, with exceptions like Dohrn and Van Jones. Even in the heyday of communism, the most influential of its comrades were never "card carrying members" and lying was a way of life, which included obligatory perjury. But regardless of their nuances, deception is an integral part of their political ideology.
We have the guidance of an expert — George Bernard Shaw of the Fabian Society who called Lenin, the "greatest Fabian of them all." He formulated and described the Fabian methodology: it used "methods of stealth, intrigue, subversion, and the deception of never calling socialism by its right name."II What we have unearthed from West’s exchange, Moyers’ ghost story, historical incidents, the Venona documents, and the House Committee on Un-American Hearings is something more important than who is or who isn’t, and more important than differing definitions — it is rule number one of the broad left: deception. Case in point: Shaw would not say that Lenin was the greatest Marxist or communist of them all — but the greatest Fabian of them all. Not so shrill on the ears. And all they cared about was perception.III
Deception is starkly illustrated by the Fabian Society’s famed stained glass window revealed by Tony Blair in 2006 at the London School of Economics. Designed by Shaw, it shows Fabians "Sidney Webb and ER Pease… helping to build ‘the new world’." The most stunning thing to note is the Fabian Society’s coat of arms seen below: a wolf in sheep’s clothing.
Davidson, an American, and his friend E.R. met in London in 1883 to discuss politics and others later joined them. Within a year British intellectuals such as George Bernard Shaw and Sidney Webb also joined. They named it the Fabian Society after Quintus Fabius Maximus, the Roman general whose strategies of wearing down opponents by delays led to the Roman victory over Hannibal. (c.f., National Health Insurance — from Truman to Obama)
Shaw distinguished "the highly respectable Fabian Society" from other radical groups (like today’s ACORN, OWS and communists). "The Fabian Society got rid of its Anarchists and Borrovians, and presented Socialism in the form of a series of parliamentary measures, thus making it possible for an ordinary respectable religious citizen to profess socialism and belong to a Socialist Society without any suspicion of lawlessness, exactly as he might profess himself a Conservative…."
Yet the Fabians’ creed remained radical: Its goal was the "reorganization of society" with the extinction of private property and industrial capital from individual and class ownership, redistributing them to the "community for the general benefit." But the Fabians carefully hid their socialist philosophy saying "it was not desirable to make any change in the name by adding the word ‘Socialist’ to ‘Fabian.’"IV Beneath their respectable sheepskin, however, the Fabians were host to Lenin and his Bolshevik followers holding a revolutionary conference in London before the revolution in Russia, and Bolsheviks were considered "comrades." Shaw, a highly respectable Fabian, called himself a "communist."
Let’s shear off some of the wool and take a closer look at some of the radical Fabian policies. Shaw said that Socialism meant the "equality of income or nothing." You would be fed, clothed, lodged, taught and employed — "whether you liked it or not." If the state discovered that you were not worth this trouble, "you might possibly be executed in a kindly manner." To understand the depth of Shaw’s commitment to socialism, watch a clip of him in the movie The Soviet Story, a film by Edvins Snore. Visiting Russia in 1931, Shaw said that he was able to step into his grave comforted "with the knowledge that the civilization of the world will be saved and …the new communist system is capable of leading mankind out of its present crisis…." Were the Fabians radical? Stuart Chase, an American Fabian, said that socialism could be enforced by firing squads if necessary. Chase wrote A New Deal, which Roosevelt used as a slogan.IV Though the Fabians believed in the same radical goals as the Socialists and Communists, there was a difference in methods. Make no mistake they wanted world revolution also, but, unlike their comrades who believed in attaining power quickly by violence, they worked through patient changes in law, government, morality, economics, culture and education. They worked to spread Socialism through newspapers, Parliament, school boards and by backing candidates of either party in elections — penetration and infiltration. For example with newspapers, Shaw said their "policy has been to try to induce some of these regular papers to give a column or two to Socialism, calling it by whatever name they please." Their chief tool, however, was through the indoctrination of young scholars — intellectuals referred to as "parlor Bolsheviki."
The Webbs and George Bernard Shaw founded the London School of Economics in 1895. Faculty and students have included Bertrand Russell, John F Kennedy, Pierre Trudeau, George Soros, Peter Orszag, Robert Rubin, Harold Laski (a later head of the British Fabian Society), George Papandreou, David Rockefeller and John Maynard Keynes. The Webbs visited the U.S. in 1888, and in 1889 Webbs’ Socialism in England was circulated at Harvard and other schools in the U.S. In 1905 they incorporated the Intercollegiate Socialist Society and by 1908 there were Fabian chapters at Harvard, Princeton, NYU, Columbia and the University of Pennsylvania. But Harvard was considered the "transmission belt" for socialism — and specifically its Department of Economics. The most influential theory within the Department of Economics was that of Keynes. Keynes’ socialism advocates strict control of the means of production through the supply of credit and money rather than ownership advocated by Marx. This way the Fabian goal could change everything while maintaining the outward appearance of the sheepskin.
From these Ivy League campuses the seeds of socialism were planted in Washington during the early 1900′s at the multiplying bureaucracies staffed by Fabian-indoctrinated theorists and professors. Norman Thomas, a Socialist, explained the utility of Keynes: "Keynes has had a great influence …. He represents a decisive break with laissez-faire capitalism." John Strachey, a communist who entered the British Fabian Society in 1943, explained that Keynes’ influence resulted in capitalism being "regulated and controlled by a central authority….The principal instruments of its policy should be variations in interest, budgetary deficits, and surpluses, public works, and a redistribution of personal incomes in equalitarian direction."V
The key Fabians who introduced Keynes’ theories on the U.S. were Felix Frankfurter and Walter Lippman, one of the founders of The New Republic. During World War I They both became friendly with Franklin D Roosevelt. Later in Roosevelt’s new deal they both secured positions and Frankfurter was appointed to the Supreme Court. Over 300 of Frankfurter’s students worked in strategic government posts. One of these was Alger Hiss, a student of Frankfurter’s at Harvard Law School who later clerked for him at the Supreme Court. He also worked at the State Department and played a key role in the New Deal, at Yalta and in the formation of the United Nations. Contrary to the left’s continued denials, the evidence against Hiss is overwhelming, as described by Shelton in Alger Hiss: Why He Chose Treason, –he was a communist and an asset to Soviet military intelligence. Thus we have the perfect elite wolf dressed like a lamb.
Statistics: Posted by yoda — Sat May 26, 2012 8:49 am
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