In fact, the “price” system in the U. S. S. R. has always been chaotic. The bases on which prices are determined by the planners seem to be both arbitrary and haphazard. Some Western experts have told us (e. g., in 1962) that there were no fewer than five different price levels or price-fixing systems in the Soviet Union, while others were putting the number at nine. But if the Soviet planners are forced to fix prices on some purely arbitrary basis, they cannot know what the real “profits” or losses are of any individual enterprise. Where there is no private ownership of the means of production there can be no true economic calculation.
It is no solution to say that prices can be “based on actual costs of production.” This overlooks that costs of production are themselves prices—the prices of raw materials, the wages of labor, etc. It also overlooks that it is precisely the differences between prices and costs of production that are constantly, in a free market regime, redirecting and changing the balance of production as among thousands of different commodities and services. In industries where prices are well above marginal costs of production, there will be a great incentive to increase output, as well as increased means to do it. In industries where prices fall below marginal costs of production, output must shrink. Everywhere supply will keep adjusting itself to demand.
But in a system only half free—that is, in a system in which every factory was free to decide how much to produce of what, but in which the basic prices, wages, rents, and interest rates were fixed or guessed at by the sole ultimate owner and producer of the means of production, the state—a decentralized system could quickly become even more chaotic than a centralized one. If finished products M, N, O, P, etc. are made from raw materials A, B, C, D, etc. in various combinations and proportions, how can the individual producers of the raw materials know how much of each to produce, and at what rate, unless they know how much the producers of finished products plan to produce of the latter, how much raw materials they are going to need, and just when they are going to need them? And how can the individual producer of raw material A or of finished product M know how much of it to produce unless he knows how much of that raw material or finished product others in his line are planning to produce, as well as relatively how much ultimate consumers are going to want or demand? In a communistic system, centralized or decentralized, there will always be unbalanced and unmatched production, shortages of this and unusable surpluses of that, duplications, time lags, inefficiency, and appalling waste.
It is only with private property in the means of production that the problem of production becomes solvable. It is only with private property in the means of production that free markets, with consumer freedom of choice and producer freedom of choice, become meaningful and workable. With a private price system and a private profit-seeking system, private actions and decisions determine prices, and prices determine new actions and decisions; and the problem of efficient, balanced, coordinated and synchronized production of the goods and services that consumers really want is solved.
Yet it is precisely private property in the means of production that Communist governments cannot allow. They are aware of this, and that is why all hopes that the Russian Communists and their satellites are about to revert to capitalism are premature. Only a few months ago the Soviet leader Kosygin told Lord Thomson, the British newspaper publisher: “We have never rejected the great role of profits as a mechanism in economic life.... [But] our underlying principle is inviolate. There are no means of production in private hands.”3
The Communist rulers cannot permit private ownership of the means of production not merely because this would mean the surrender of the central principle of their system, but because it would mean the restoration of individual liberty and the end of their despotic power. So I confess that the hope that some day an idealistic Peter Uldanov, miraculously finding himself at the pinnacle of power, will voluntarily restore the right of property, is a dream likely to be fulfilled only in fiction. But it is certainly not altogether idle to hope that, with a growth of economic understanding among their own people, the hands of the Communist dictators may some day be forced, more violently than Lenin’s were when the mutiny at Kronstadt, though suppressed, forced him to adopt the New Economic Policy.
Yet any attempt to decentralize planning while retaining centralized ownership or control is doomed to failure. As a recent writer4 explains it:
“If the state owns or controls the major resources of the economy, to allow for local autonomy in their utilization invites utter chaos. The Soviet planners, then, are caught on the horns of a serious dilemma. They find that their economy is becoming too complex and diverse to control minutely from above; yet they cannot really achieve the tremendous productiveness of a decentralized economy without relinquishing complete ownership or control of the nation’s resources.”
Henry Hazlitt
March, 1966.
PART ONE: LOST
Chapter 1
PETER ULDANOV had been waiting half an hour. He walked to the window and looked down to the streets thirty stories below, and then his glance wandered higher to the drab buildings opposite, and out over the city, until everything melted into a misty horizon.
It was a picture of unrelieved shabbiness.
So this was Moscow! This was the capital of Won world!
This building itself was new, towering and shiny black. He had caught a moment’s outside glimpse of it when he had entered from the taxi. But from his present point of outlook he could see nothing with the slightest charm or interest, nothing even clean and fresh-looking.
It was Peter’s first day in Moscow since early childhood.
Since the age of eight he had spent his years, isolated with his mother and a handful of servants and instructors, on a small island in the Bermudas. A vivid picture of the white house with its white roof, and of the incredibly blue sea just beyond his garden, now came between him and the sordid actuality below.
Why had his father sent for him? He had not seen him since childhood. He remembered only a dark, towering man from whom he had shrunk in terror.
His father was Dictator of Wonworld, ruler of all the peoples of the earth. The fact would have given Peter himself a tremendous distinction if it had ever been a matter of common knowledge. He took a secret pride in it, overlaid by the hatred and fear which he had caught from his mother. It was a fact, also, that threatened the chief desire of his life—to be let alone, and to work in peace at his music.
What could his father want of him now, after ten long years of silence?
He turned and looked idly at the room in which he stood waiting. The single object on the wall was a large day calendar. Leninsday, April 30, 282 A.M.
A.M: After Marx. Marx was born, under the old, bourgeois calendar, in 1818. If no change had been made in the calendar it would now be the bourgeois year 2100. It had never occurred to Peter to make the calculation. No one was interested in the old, poisonous capitalist world that had been wiped out more than a century ago.
Stalenin’s private secretary, Sergei, entered at last: “His Supremacy will see you now.” Peter followed through an office which he assumed to be the private secretary’s own, and then into an immense paneled room.
Behind a great desk in the far left-hand corner sat Stalenin, Dictator of Wonworld. It now occurred only as a second thought to Peter that this was his father.
The secretary bowed himself out.
The Dictator stood up, and came forward. He was grayer and more tired-looking than in his pictures, which had not been changed for as long as Peter could remember. But he had the same massive strength. His frame was big; his hair cropped close; his head, shoulders and chest solid and square as if hewn out of granite.
He put his hands on his son’s shoulders, gazing at him appraisingly. Peter was surprised to discover, at this nearness, that his father was no taller than he. Peter himself was a little over six feet, but he now realized that he had unconsciously come to think of his father as being
of much more than human dimensions. The enormous posters had no doubt contributed to this impression. It was almost a shock to realize that Stalenin was only another man like himself. Their eyes met on the same level.
Stalenin’s expression, which had been grim, softened a little. “You are handsome,” he said. “Even impressive. That’s good. Important, too.” He looked at Peter again. “They tell me that you are a first-rate pianist and composer. I’m glad to hear it. If a man shows talent even in trivialities, he is apt to show it in important things also.”
Peter flushed. Music a triviality? And how did his father come to know anything about Peter’s music? They had never written to each other. Nor had his mother, up to her death last year, exchanged a single letter with his father since she left him ten years ago. Who had been his father’s informant?
Stalenin smiled enigmatically. “You are wondering why I sent for you?”
Peter was silent.
“For one thing,” Stalenin continued, “I have decided at last to give you an education. You may not know it, but you are the most ignorant man in Wonworld.”
“But, Your Supremacy, I was told I had the very best tutors—”
“I know all about your tutors. Their function was to protect you from any real knowledge of the modern world.”
He went back to his desk and filled his pipe. “I lived with your mother until you were eight years old. After I became Dictator in 268—you were only five—your mother became a problem. She objected vehemently to the Great Purge of 271, which carried away her brother. That purge was absolutely necessary to the security of Wonworld. But she said she hated me and everything I stood for. She even thought you were being ‘corrupted’ by getting the same communist education as everyone else in Won-world! She defied me. No doubt she expected me to torture her, make her confess treachery, have her beheaded—”
He paused. “I asked her to tell me exactly what it was she wanted. She said she wanted to go off somewhere—on an island—anyway, some place isolated from Wonworld, where she could have her son back and where she could bring him up without ever hearing about me or about the ideology or so-called glories of Wonworld.... I agreed to this madness. I sent her off with you to that little island in the Bermudas—how big is it?”
“About three hectares.”
Stalenin nodded. “I stipulated that no one was to be allowed on the island except servants to bring supplies. These supplies, as you know, were carried regularly from the main island in a small launch. Your mother wanted your place preserved, she said, as a sort of oasis in Wonworld. She asked that you be taught only the subjects selected by her. I agreed to supply the best tutors. So you were taught music, mathematics—I understand you know as much mathematics as a first-class engineer. Let’s see—what else were you taught?”
“Physics, chemistry, astronomy, physiology, biology, horticulture, meteorology—”
“And sports, of course,” put in Stalenin. “I’m told you swim like a professional. And that you’re a first-class chess player. That impresses me most of all. It shows a sense of strategy....
“Nevertheless”—he was looking at a dossier in front of him—“it’s time you were told how ignorant you are of everything a modern man should know. I notice, for instance, that you are completely ignorant of history, politics, sociology and economics. Your acquaintance with our great propaganda literature is negligible. You have never been taught Marxist logic... therefore you cannot begin to understand Dialectical Materialism.... There is a tremendous lot to be done on you.”
He looked at Peter closely. “So unless you can convince me that you can be taught to think right, that you can be made into a useful member of society...”
He left the sentence unfinished.
“You are entirely free for the next two weeks,” he continued. “You will go around, see this great city, give yourself an education. You have been well supplied with ration books?”
Peter rummaged through his pockets. He pulled out ration books of all colors and sizes.
“Learn what they are all for,” said Stalenin. His voice became more kindly. “What do you know about that gray uniform you have on?”
“I was told to put it on this morning before I left the hotel.”
“It is the uniform of the Proletarians,” said Stalenin gravely. “A very honorable status. The Proletarians make up three-quarters of our whole population. It is, of course, they who really dictate. Wonworld is a dictatorship of the Proletariat. I am merely their instrument, their spokesman.”
He smiled grimly. “But you must recognize the other uniforms too, so that you will know how to deal with them—and how you can expect to be dealt with. First and foremost, you must recognize the Protectors. Their uniforms are black—unless they are army officers, in which case they wear a bright red jacket. The Protectors, our top-level comrades, are about i per cent of all the people. Next come the Deputies. Uniform—navy blue. About one in ten of the population. They are the intellectuals, technicians, sub-managers—anybody whom we consider capable of eventually becoming a Protector. Protectors and Deputies together constitute what we sometimes call the Steel Frame. They are like the commissioned and noncommissioned officers of the Army.... At the bottom are the Social Unreliables. Unfortunately, they are still about 20 per cent of the population. They have either committed crimes against the Steel Frame, or have shown themselves incapable of becoming good Proletarians. They are assigned to labor camps... or left to starve. They wear brown uniforms—wherever you can still recognize the color. In any case, you will pretend never to see them. But toward the Deputies, of course, you will maintain proper deference. And to the Protectors you will give reverence and love, as well as absolute obedience.... Any questions?”
“Where am I to stay, Your Supremacy?”
“You’ll find an address among your cards. You will have a room to yourself—a privilege granted to few Proletarians.... One more thing. At least for the present you are not to tell anyone that you are my son.”
“But what about my name, Your Supremacy?”
“Oh, give your real name when asked. Outside of the Politburo, probably no one remembers that my own real name is Uldanov; and anyone who did would probably regard your name simply as a coincidence. Anyway, a Proletarian hasn’t much use for a name. Most of the time you will simply be called by your license number. Tomorrow you will apply for one. Any further questions?”
“When do you want to see me again, Your Supremacy?” “I will let you know. By the way, tomorrow is the May Day parade. Of course you will go to see it.”
Chapter 2
THE wind was blowing upswirls of dust, cigarette butts and X tattered newspapers. Peter bent forward against it, constantly turning his head to protect his eyes and throat from the grit.
If Moscow looked shabby from thirty stories up, it was squalid from the pavement. The buildings were in every stage of disrepair and decay. The only relief to this drabness—if it was relief—was the omnipresent posters, displaying either enormous faces of Stalenin or exhortations to Work! Production! Loyalty! and warnings against Wreckers and Spies.
The people, too, were drab. The typical face was as devoid of expression as the back of a baby’s head. The women wore precisely the same shabby gray proletarian uniforms as the men. Why had he expected anything else? Then he remembered. His mother had always worn something she called skirts. It was the first time it had ever occurred to him that she might have been in any way affected or eccentric.
What he was seeing now was the real world. His previous life on his Bermuda island suddenly struck him as a strangely insulated, even sterilized, existence. He was beginning to feel like a freak.
He found himself in front of what appeared to be a small public library. His interest quickened. Could he go in? He decided to chance it.
It was restful inside. He browsed among the shelves.
“Is there anything special I can get you?”
A pretty, smiling blonde stood at his
elbow. She was a Deputy, in a neat blue uniform. She had a soft, sympathetic face, and the deepest blue eyes he had ever seen.
She would understand me, he thought immediately.
“I’m the librarian,” she offered.
There must be something special he wanted. Ah yes. “Where is your music department? I’d like to see the Mozart scores.” “The Mozart scores? Why, they’re in the Old World Department... they’re on the Special Privilege list!”
“What do you mean—Old World Department?”
She looked at him incredulously. Oh well, he was only a Proletarian.
“The Mozart scores,” she said, as if talking to a child, “are among the small list of books held out from the Great Liberating Bonfires when the old poisoned capitalist civilization was destroyed. No book on that list can be read by anybody who does not hold a Special Privilege card. I’m not allowed to read them myself. They are in a special room behind two locked iron doors. My key opens only the first.”
“Where do I get a Special Privilege card?” Peter asked.
She looked pointedly at his proletarian uniform. “Personally I never heard of anybody’s holding a Special Privilege card who wasn’t a member of the Protectorate, and even a Party member.”
“But why shouldn’t anybody be allowed to read any book there is?”
This time she looked at him more sharply. Suspicion came into her eyes. Nobody, even from a collective farm, could be as ignorant as this. Was she dealing with a member of the secret police?
“It would be a pretty state of affairs,” she said mechanically, “if everybody were allowed to read the books kept over from the old poisoned capitalist civilization. Putting all sorts of subversive notions into people’s heads! Only a small trained class can be allowed to read those books—only people whose minds are so disciplined that they will not be upset by every scrap of the old bourgeois ideology that they come across. Even this small class is only allowed to read these books so that they will be prepared to answer the lies that may be brought forward by malicious wreckers.”