The Appeal of Communist Ideology
Harry Gunnison Brown
[Reprinted from the American Journal of Economics
and Sociology,
Vol. 2, No. 2 (January, 1943), pp. 161-174]
I
WE LIVE IN A "CAPITALISTIC" country. And there is, at the
present time, no indication that the Communist Party -- or the
Socialist Party either-has the allegiance of more than a very few
voters. There is, indeed, only one country, Soviet Russia, in which
either communism or socialism can be said to be dominant. To discuss,
therefore, the "appeal" of the ideology of either of these "isms"
may appear to some as altogether ridiculous.
But such discussion might have seemed ridiculous in Russia, too, in
the days before World War I and even during the first year or two of
that war. And even if the Communist Party, as such, is still anathema
in a particular country, yet many of its tenets may be widely, if
nevertheless vaguely, believed in. They may be believed in without
consciousness of inconsistency by thousands or millions of persons who
do not know precisely what communism is-though they are sure that they
are not themselves Communists-and who do not realize that many of the
inchoate ideas which seem to them reasonable and just are of the
essence of the communistic philosophy.
It is worth while to note, in this connection, that communism and
socialism are in many respects the same. Both envisage an economic
system operated by the State. Protagonists of both contemplate an
economic regime in which private ownership of productive goods and
enjoyment of the income from them by their owners are prohibited. And,
indeed, the terms "communism" and "socialism" have
often enough been used interchangeably. Karl Marx has been called "the
father of modern socialism." Yet he was the author (with
Friedrich Engels) of "The Communist Manifesto." Russia
should probably be classed as a "socialist" rather than a "communist"
State, since it has departed from its earlier ideal or plan of
substantially equal incomes for each and now purposely gives higher
pay to skilled workers than to the unskilled and very appreciably
larger income to persons of high technical training. If, thus, the
term "communism" usually conveys an idea of more insistence
on equality of incomes and if, in recent decades, it has had in it
more of a suggestion of the advocacy of radical and revolutionary
change-as distinguished from evolutionary and gradual reform brought
about through the ballot-these differences are nevertheless not
greatly important for our present purpose.
Perhaps one of the conditions favorable to either of these "isms"
is the widespread tendency to rely on government: if there is anything
wrong "pass a law about it" and so "fix it." Under
communism -- or socialism-government operates the entire economic
system. Government owns and manages all productive capital, determines
the amount of new construction of capital, if any, and, in doing so,
dictates the amount of saving. All workers are employees of government
and the terms and conditions of work are dictated by government If one
finds the idea appealing that, whatever is wrong, the government ought
to "fix it," it may not be too hard for him to accept a
system under which government definitely man- ages or runs the entire
economic system.
The believer in a system of free and essentially unregulated
industry, on the other hand, must be ready to put his faith in more or
less automatic and impersonal forces. To do so, he must have some sort
of concept of such forces. The system of free industry, the price
system, what is often called "capitalism," depends for its
operation on such forces. This system of free industry, "capitalism"
or "the free enterprise system," operates through the lure
of price. Higher prices for particular goods and services tempt men to
produce those goods and services as a means of securing larger
incomes. And lower prices in a particular line discourage men from
continuing in it. Higher wages in one area than in another lure men to
the former and higher income on capital in one area than in another
induces savers to invest their savings where the yield on these
savings is thus relatively large. Indeed, the hope of deriving some
income from capital is in many cases the incentive that makes men save
it.
It is through the lure of price, too, that the public is protected
against excessively high prices. For, since relatively high prices for
particular goods lure men into the production of those goods, they
increase the competition to sell them and thus tend to prevent further
rise of their prices and may, even, bring about a reduction.
The believer in the virtues of the free enterprise price system does
not hold, however, that government has no economic functions. He does
hold that the price system cannot operate successfully unless
government maintains the conditions essential for such operation.
There must be a degree of security against robbery and against
violation of contract. There must be-or should be-protection against
monopoly and against unfair methods of competition which tend towards
monopoly or which merely mislead and injure consumers. There must be
provision for highways. There must be standards of weight and length
which are generally recognized. There must be (at any rate, it is very
important that there should be) a stable monetary system. Given such
conditions -- and it is certainly a proper responsibility of
government to see that they are present -- the price system will work
without continual governmental oversight and regulation of each
specific operation.
If one were to compare the State or nation, as a social body, with
the individual, he might liken the operation of the price system --
through which the members of the society are fed and clothed-with the
operation of the alimentary canal and of the arteries, veins, heart
and lungs in the individual body. These organs do depend for their
proper operation on the intelligence of the brain. The individual must
not consume poisonous mushrooms or the germs of botulism, and he must
see that the proper remedial measures are adopted in case a vein or
artery is severed or if appendicitis, pneumonia or cancer occurs. The
conscious mind must try to protect these organs and their operation
from injuries, whether produced externally or internally. The
conscious mind must, indeed, endeavor to secure and maintain the
conditions necessary for the effective operation of this largely
automatic system of supplying the body's needs. But the conscious mind
does not have to direct the flow of gastric juice or bile, the
peristaltic motion of the intestines, the beating of the heart or the
expansion and contraction of the lungs.
This analogy between the individual and the State is certainly not
perfect but it is, I think, close enough to be helpful. In our present
society there is a large area -- the economic one -- in which it is
necessary only that the State provide favorable conditions and in
which, if favorable conditions are provided, the forces of demand and
supply will operate automatically and impersonally, and without
specific State direction in each separate transaction, to bring about
the production and the essentially fair distribution of needed goods.
Why should we not, therefore, rely as largely as may be on this
automatic operation of the free enterprise system rather than impose
the burden of specific detailed direction and control upon government?
But if we are to get anything like the best results it is desirable
that government do its part in maintaining certain more or less
essential conditions. And it is important that we come to understand
just what these conditions are and just what government has to do to
maintain them. Such understanding requires some knowledge of economic
principles. The task of directing every detail of our economic life
may not, indeed, be a simple task, in practice, for government to
assume. But to the minds of the economically naive, it is apparently
much easier and simpler to propose that "government take over the
means of production" than to reach an understanding of just what
conditions are essential for the most successful operation of the
system of free, competitive industry and what, specifically,
government must do to realize those conditions. Here, almost
certainly, is one of the reasons why communistic -- and socialistic --
ideology has so much appeal as, directly and consciously or indirectly
and unconsciously, it does have.
In the same connection it is to be noted that each pressure group (or
its spokesmen and representatives) tries to bend government to its own
purposes of abstracting wealth from other groups. The pressure group
in question may be the beneficiaries of tariff restrictions; or they
may be wheat or corn or tobacco farmers seeking guaranteed prices or
special benefit payments or crop-restricting quotas to hold up prices;
or they may be persons over sixty years of age -- or merely over
fifty! -- seeking tax levies through which they may be supported in
high comfort at the expense of others. The price system or system of
free enterprise is impersonal. In it, when it is operated consistently
with the principles on which it is generally defended, one prospers by
giving goods and services to the community, goods and services that
are wanted, and not by propagandizing and by bargaining with other
pressure groups to win votes for special favors. What, now, if each
interested group is thus to propagandize and to bargain with other
groups, to an increasing extent as time goes on, and with less and
less realization of the advantages of an automatic and impersonal
system! Will not this system, then, which indeed never has been
allowed to operate at its possible best, cease almost altogether to be
either automatic or impersonal? May we not, then, many of us, decide
that we might as well abandon further pretense of maintaining a free
enterprise system and choose to rely exclusively on government for the
managing of our economic life, and so on propaganda and on continual
bargaining between interested and powerful pressure groups,-or,
perhaps inevitably in the end, on dictatorship?
II
ANOTHER PROBABLE REASON for the appeal of communistic -- and
socialistic -- ideology is its apparent simplicity in regard to the
explanation of inequality and to unfairness in the sharing of the
product of industry. Here is an appeal to the discontented and not too
economically well-lettered worker. Such a worker easily and naturally
explains his unhappy state by the claim that his "boss," or
the "corporation" that employs him "doesn't pay me what
I earn." The employer or the employing corporation-the "capitalist"
-- is unfairly withholding something. Therefore, "capital
exploits the workers."
In this view "capital" or "capitalism" is an
inclusive term. No distinction is commonly made between capital and
land. What if A does derive an income from useful capital which his
own labor produced directly; or from capital which his labor produced
indirectly, as in producing (say) food beyond his own needs, thus
relieving another from the necessity of producing food, and enabling
this other to produce that capital? And what if B derives an income
from charging others for permission to make use of material resources
which neither he nor anyone else produced or by charging others for
location advantages that the community produced? To most Communists
and Socialists, apparently, though not, of course, to all, these two
different kinds of income are hardly worth distinguishing. Both are
incomes from "the means of production" and both kinds of
income are characteristic of "capitalism." And it is
probably true that a doctrine of economic reform which does not need
to make any such distinction -- fundamentally important as I believe
the distinction to be -- has a very real advantage in proselytizing at
least the economically illiterate.
Unfortunately, the so-called educated individuals are frequently not
educated in an understanding of our economic life or in the making of
economic distinctions. Nevertheless they have, often, high literary
ability and persuasiveness and are not infrequently persons of
considerable social idealism. And so we have the phenomenon of the
idealistic literary intelligentsia who become enamoured of the too
simple economic philosophy of communism or socialism, who feel that
thus they have become "liberals," and who then use their
literary powers to instruct, in the application of such a philosophy
to current events, the readers of magazines of opinion! Thus the
system of free or unregimented, competitive industry becomes
discredited among many of the readers of our "highbrow"
periodicals as well as among per- sons of less intellectual
pretention. And so instead of help in instituting those reforms which
would make the system of free enterprise work acceptably to the common
advantage, we get a strengthening of the appeal of communistic
philosophy.
III
FURTHER STRENGTHENING THE APPEAL of communism to the common man is
the fact that one or more of its subsidiary doctrines fall in with a
very common -- albeit fallacious -- mode of economic reasoning. Karl
Marx, for instance, writes of machinery as displacing labor and
producing "an industrial reserve army." This he does without
qualification, thus seeming to imply that there is a more or less
permanent displacement of labor and that such displacement is to be
expected under "capitalism." Thus, this philosophy, though
more pretentious and recondite in its formulation and more literate in
its expression, is pretty much consistent with the seemingly cruder
philosophy of those workmen who have smashed newly invented and
constructed machines as the supposed condition making for
unemployment.
The fact is that invention and the use of improved machinery do not
have any inherent tendency to decrease opportunities for employment.
When new and improved machinery makes it possible to produce with half
as much labor and so for $25, clothing formerly costing $50, the
saving of $25 to the consumer (if he does not spend most of this in
buying more clothing than before) enables him to buy more books,
paper, magazines, phonograph records or other desired goods, and thus
enables more persons to have employment in these other lines. If this
happy result does not occur it is presumably because the new method is
so monopolized as to prevent the fall in the price of clothing which
would have come under conditions of competition; and in that case the
consumer does not have more money with which to buy other desired
goods. But this is not an inevitable concomitant of "capitalism"
and is certainly not inevitably associated with a system of free
competitive industry. If government does its proper job of preventing
monopolistic extortion, progress in the mechanic arts may still lead
to a certain amount of individual employment dislocation and require
readjustment to new conditions -- e.g., the change to new lines of
work when more are needed in these new lines and fewer in the old -but
such progress will not bring about large, permanent unemployment.
It is much the same with the socialistic and communistic hypothesis
regarding the causation of business depression. Consider the worker
whose simple but woefully inadequate and misleading philosophy of
exploitation is that "my boss doesn't pay me what I earn,"
or perhaps, more generally expressed along lines of socialistic or
communistic formulation, that "laborers produce all value but
'capitalism' regularly robs them of a part of the product." Such
a worker easily may be persuaded that herein lies the explanation of
recurring periods of business depression. Indeed, there is an
appealing sense of the accomplishment of poetic justice in the thought
that the dull business and bankruptcies suffered by the "capitalists"
come as results of, and so as a sort of retribution for, their "exploitation"
of their "wage slaves."
But the hypothesis is a false one, nevertheless. It is based on the
idea that the wage earners are paid too little to buy back as many
goods as they produce. That, supposedly, is why goods are unsalable
and why prosperity inevitably ends in depression. In considering this
hypothesis, let us assume, with the Communist and the Socialist, that
"capitalism" does "exploit" the workers and that
the latter do not have money enough to buy the goods of their
production. It still does not follow that such goods could not be
sold.
To illustrate, suppose that Smith and Wilcox each earns $4,000 a year
-- a total of $8,000 for both -- but that Wilcox regularly picks
Smith's pocket to the amount of $3,000 a year, so that Smith has only
$1,000 left to spend and cannot buy more than a fourth as much as he
produces. It certainly does not follow that there is any less demand
for goods or any fewer sales or any less employment producing goods or
any reduction in "prosperity." For Smith's decrease of
spending power is balanced by Wilcox's increase of spending power.
Though Smith must purchase less -- because he had his pocket picked --
by $3,000, Wilcox can purchase $3,000 worth more than before.
Now, however, we are told that the "capitalists" do not "spend"
their money but "invest" it in producing more goods. This
means, in terms of our illustration, that Wilcox does not spend for
consumable goods the $3,000 he picks from Smith's pocket but invests
it. But what the protagonists of this view persistently overlook is
that investing normally is spending. If Wilcox builds a barn instead
of buying clothes for himself, flowers, bric-a-brac and curtains for
his wife and toys for his children, his purchase of stone, mortar and
lumber is indeed an investment but it is none the less spending and
there is just as much labor employed in making what he buys for
investment as what he might have bought for comfort and pleasure.
Similarly, if he buys the stock or bonds of a corporation which in
turn buys, with the proceeds, structural steel, brick, glass and
lumber for a factory and hires men to build it, there is as much
purchasing of goods and demand for labor as if he had instead bought
luxuries for personal enjoyment and hired servants to minister to the
members of his household.
In the space which may be reasonably allotted for this discussion of
communist ideology, I cannot present a full and complete and detailed
theory of business depression. I cannot consider every possible minor
aspect of the general principle stated or meet every possible
uncomprehending criticism. But I believe I have gone far enough to
make fairly clear that, whether or not "capitalism exploits the
workers," underpayment of the workers is not the cause of
recurring business depressions.
Any satisfactory explanation of the great oscillations in business
activity which we refer to as alternate prosperity and depression must
give large emphasis to the phenomena of money and of bank credit. This
will not be disputed, I think, by thorough and careful students of
monetary and banking theory. But, if true, it means that the literary
intelligentsia of communistic leanings, or any other persons of
literary ability who are nevertheless untrained in the technicalities
of monetary economics, are more likely to confuse their readers than
to help them understand the causation of depression. The socialistic
or communistic explanation appeals to these literary intelligentsia
not only because it falls in with a very simple theory of exploitation
of the workers but also because it is itself simple-however seriously
fallacious -- and does not require, for its apparent understanding,
tedious study of the complications of money and bank credit,
complications in a technical subject that has little attraction for
the literary intelligentsia type of mind. Lacking any such study and
devoid of any considerable background in the principles of economics
generally, they convince themselves by the seeming plausibility of
their theory; and they can enjoy the pleasant feeling that their
understanding of economic phenomena is superior to that of most of
their readers and that their literary elaborations of this theory are
helpful in spreading such understanding more widely!
IV
AN INTELLIGENT APPROACH to a comprehension of our economic system, to
an appreciation of its shortcomings and to a correlative understanding
of what specific changes or controls or reforms would make it operate
to better advantage, is not so naive as that of the Communist and
Socialist theorizers. The importance of understanding monetary theory
if we would get the best results from a free enterprise system has
just been discussed. To mention here but one other proposed reform in
our economic system (although one which, in my opinion, is at least as
fundamental and important as any other and probably most important and
most fundamental), an understanding of the reasons why the rent of
land should be socialized, involves some comprehension of how and why
land, comprising natural resources and sites, differs from capital. If
understanding is to be at all complete, there must be some
comprehension of how wages are determined, how the rate of interest is
determined, how the sale value of land is related to its rental value
and to the rate of interest, why the value of capital is normally
related to its cost of production or of duplication while the sale
value of land can be arrived at only from its anticipated future yield
or rent and the interest rate by which this is capitalized, how both
wages and rent are affected by the speculative holding of land out of
use, etc., etc.
No doubt if and when any considerable part of the relatively
sophisticated classes come to have a comprehension of these relations,
the prestige of their support for public appropriation of the rental
value of land will carry enough weight with those whose thinking is
less subtle and critical, so that a simple and popular presentation of
the issue will suffice for the latter. Such assertions as that rent is
a geologically and community produced value, that its collection by
private owners amounts to their charging others for permission to work
on and to live on the earth in those locations where labor is
relatively productive and life relatively pleasant, and that private
enjoyment of such an income is inappropriate in a society which makes
any pretense at equality of opportunity or which is defended on the
ground that incomes received are in some reasonable relation to
productive contribution, such assertions seem intrinsically
reasonable. These ideas and others related to them are by no means too
difficult for common understanding, once they have the support of the
comparatively influential and are considered with open minds. They
are, indeed, easy to understand when the mind is not confused by
involved and fallacious but often superficially plausible objections.
Nevertheless, they are not so naively simple and so altogether
unsophisticated as the assertion that the "bourgeoisie," in
general, as owners of the material means of production, exploit the "proletariat"
or workers. Nor is the reform indicated from a study of the land
question so apparently simple and its ultimate implications so little
realized by its advocates as in the case of the proposal that we just
"take over all the means of production and operate them for the
common advantage," or "for use and not for profit."
No doubt an important reason for the strength of socialist and
communist ideology is the fact that we have for so long neglected to
make those reforms in the system of "'capitalism" which
would make this system operate efficiently and fairly, as there can be
no reasonable doubt that it could and would operate if thus reformed.
And just because the victims of its uncorrected faults are, therefore,
for the most part, relatively poor and unsophisticated and uninformed,
their discontent may express itself in the more naive proposals for
reform instead of the more sophisticated ones.
Of course, there would be more hope of adequate reform of the
so-called free enterprise system if such reform were definitely
urged-and not, instead, opposed-by our propertied conservatives who so
often preach the advantages of this system in rewarding efficiency and
thrift. Indeed, a sincere and an intelligent defense of the free
enterprise system must not merely point to its virtues but must admit
its present faults and, in order that this defense of the system may
be both logically convincing and appealing for its fairness, must be
ready to recommend sufficiently radical specific reforms.
At this time, we of the United States of America are engaged in a
desperate war in which our most powerful and effective ally is the
Union of Socialist Soviet Republics, the great socialist nation of
Europe and Asia. And the only party of this socialist nation is the
Communist Party. After we have won this war, with the help of this
great ally, is it reasonably to be expected that prejudice against
socialist and communist propaganda will be as overwhelming as it was
after the last war, when Russia's withdrawal and separate peace were
generally attributed, in part, to the Bolshevik revolution? What if
victory, with Russia's important help, puts Americans generally into a
more receptive attitude of mind toward such propaganda! If, by any
remote chance, matters should work themselves out that way, would not
communist proselytizing inevitably make the greater headway because
the masses of men are not at all trained in an understanding of our
economic system, and least of all in an understanding of how it needs
to be reformed; because conservative beneficiaries of its faults and
their spokesmen darken counsel by arguing fallaciously against the
reforms most needed, and because of the tendency I have considered at
length in this article, for the great majority of the discontented to
accept a naively simple analysis?
Although its system of land tenure leaves something to be desired,
Russia does have the great advantage of collective ownership of land,
including all natural resources. And we may assume, reasonably, that
their appreciation of this fact helps explain the heroic resistance of
the people of Russia against the Nazi invaders who, presumably, would
not allow such ownership to continue. But with this collective
ownership of land there is, in Russia, government operation of
industry, public ownership of industrial capital and compulsory
saving. With us, on the other hand, there is private ownership of
capital, voluntary saving and, in general, a system of free
enterprise. But along with all this there is the payment of billions
of dollars a year to the private owners of the earth in the United
States, for permission to work upon it and to live upon it, for
permission to draw geologically-produced subsoil deposits from it and
for permission to make use of community-produced location advantages.
Cannot men learn to distinguish between capital on the one hand and
natural resources and sites on the other hand? This distinction,
fundamental as it is, clear as it is to those who study it just a
little and who are not unwilling to see, is all-essential for the
reform of our economic system. Must it remain uncomprehended forever
by the great majority of the victims of landlord exploitation? Shall
we have to choose, therefore, between a basically unreformed
capitalism in which landed property control is rampant and tends ever
to grow worse, and a regimented socialism?
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