One of the things I’ve railed against for many years now has been the idea, at least here in the United States, that communism was not really all that bad. It was fairly prevalent in academia in the late 1980s and early 1990s, and it has only gotten worse. There are many reasons for this, but one of the major ones, in my humble opinion, is the fact that most people really don’t understand economics.
A prime example was my interaction with Bryan Young, a free-lance writer for Star Wars Insider and blogger. Amazingly Young, on twitter, asserted that our leaders are sacrificing us for capitalism. He then says that we will “explain that it’s a system that already treated everyone unfairly, and then when the pandemic hit, they still chose to try killing us to save it.” Oh but it gets better. He says the economy IS an abstract thing and that “We don’t live in a world of actual scarcity. It’s an artificial scarcity to create misguided notions of supply and demand for masturbatory capitalist fantasies.”
So much he says is just plain idiocy. First, let’s take on that last part. The world isn’t one in which actual scarcity exists. Seriously? Did this guy pass high school economics? There is only so much water. There is a finite amount of wood. There is a finite amount of iron, etc… But our desires are unlimited. How do we match our desires with resources? Economizing.
This is the basic idea, and when I taught economics it was the first lesson. Even someone as rich as Jeff Bezos can’t buy EVERYTHING he wants. There are trade offs. If you make, for example, $100/week, you have to spend wisely because your desires are unlimited, but your money supply is not.
This leads to the economic problem itself. As a society, how do we decide what goods and services we should produce, considering that we have limited resources at our disposal? Private property solves this problem.
Before we go on, it should be noted that individuals engage in purposeful actions in order to satisfy their desires. However, those desires we satisfy, we do so in order of preference. And preference is subjective. And, by the way, our preferences are not measured numerically. By this I mean that if I pick vanilla over chocolate ice cream, this purposeful action indicates that I prefer vanilla. We can’t determine “how much” I prefer vanilla over chocolate.
Then his ideas about supply and demand. This is so ridiculous I actually don’t even know what to say. This is so crazy that I seriously was at a loss for words. First, Bryan does not understand (and he is not alone in this misconception) that capitalism is simply the market economy. The market economy, to paraphrase the late great Ludwig von Mises, is all about cooperation. “Capitalism means free enterprise, sovereignty of the consumers in economic matters, and sovereignty of the voters in political matters. Socialism means full government control of every sphere of the individual’s life and the unrestricted supremacy of the government in its capacity as central board of production management.” Interestingly the same folks who argue Trump is “literally Hitler” want to give the government (led by Trump) the ability to plan out every moment of our lives.
So what does all of this have to do with history? There has been, for decades, an inability to look at communism and call a spade a spade. As the great American historian Eugene Genovese noted in the mid 1990s, historians in the west, many of whom were self professed communists (and he was one) “knew everything essential and knew it from the beginning.” They knew about the crimes of communism, the gulag, the starvation, the impoverishment of millions of people, the denial of human rights to millions of people, from the start.
Furthermore, Genovese notes the horrors of the system did not arise from perversions of the system. They were inherent in the ideology itself. “We were led into complicity with mass murder and the desecration of our professed ideals not by Stalinist or other corruptions of high ideals, much less by unfortunate twists in some presumably objective course of historical development, but by a deep flaw in our very understanding of human nature… and by our inability to replace the moral and ethical baseline long provided by the religion we have dismissed with indifference, not to say contempt.”
What is sad is that most historians have no training in economics at all. As Thaddeus Russell has noted, the only “economist” he was ever told to read (and he has a PhD in history from Columbia University) was Karl Marx. This is my experience as well. I have a BA and an MA in history and I’ve completed the coursework for the PhD as well. At no point did we actually read any economics, except Marx. It is almost as if there isn’t anything else to read.
However, economics is something historians should understand, and this lack of training in it is a weakness. As Mises said, Economic theory is “the indispensable tool for the grasp of economic history. Economic history can neither prove. nor disprove the teachings of economic theory. It is on the contrary economic theory which makes it possible for us to conceive the economic facts of the past.” A rudimentary understanding of economic theory is necessary if one is to understand the past, as economics is part and parcel of every day life. Human action IS what both historians and economists study.
Sadly, as evidenced by my interaction on twitter, as well as my years spent in academia, economics is not something most people understand.