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EPILOGUE

§ 1 the Failure of Interventionism

Today, many people criticize capitalism, blaming it for various social issues like poverty, wars, and moral decay. Despite being a key part of modern western civilization, capitalist policies have shifted towards interventionism—a blend of capitalism and socialism where the government regulates business activities. This mixed economy is seen as an alternative to both systems but is often misunderstood.

Interventionism involves government control over some enterprises while maintaining private ownership, yet it alters the market's natural functioning. Although interventionists claim not to seek full control over the economy, their measures often lead to failures. For example, enforcing minimum wages above market rates can lead to widespread unemployment because businesses cannot afford the increased labor costs. Similarly, government spending does not create new jobs; it often leads to inflation or shifts jobs from one area to another without a net gain.

Economic history suggests that the real problem is not capitalism failing, but interventionism itself. Efforts to control the economy disrupt the natural market flow, which is governed by profit and loss. These market signals are crucial as they guide businesses to meet consumer demands efficiently. Critics of capitalism often overlook how profits and losses help improve economic conditions. Anti-capitalistic policies undermine the system's effectiveness and do not prove the need for socialism; instead, they highlight the shortcomings of interventionism. Misunderstandings about these economic systems can lead people to mistakenly believe that socialism is the solution to problems caused by government interference.

§ 2 the Dictatorial, Anti-Democratic and Socialist Character of Interventionism

Interventionism is often seen as a way to help those in need, but it can actually lead to dictatorship and the loss of democracy, ending up with forms of totalitarian socialism. Supporters believe they are fighting for social justice and a fairer distribution of wealth to help poor people while wanting to keep capitalism and democratic government. However, the policies they suggest usually do not work as intended, leading to worse situations than before. When the government’s initial attempt to intervene fails, it tends to make even more regulations, which ultimately removes individual freedoms in the economy.

For instance, if the government sets a low price for something essential like milk to help families, it can lead to fewer producers because they cannot cover their costs at that price. This results in less milk available for those who need it, which goes against the government’s goal. Instead of simply fixing one price, the government might have to control the prices of everything needed to produce milk as well. This progressive control eventually transforms a free market into a planned economy, similar to socialism.

When governments try to control prices for just a few goods, it disrupts the market’s natural balance and could cause chaos. In a free market, consumer choices determine prices, wages, and production levels. Each decision made by a consumer affects which businesses succeed or fail, giving people real power. However, when the government tries to override this by making decisions for consumers, it slips into a dictatorship, taking away the freedom that comes with market choices.

Many labor unions have special rights that might allow them to stop non-members from working or to strike, which can lead to violence against workers who want to keep working. If the government does not act against this kind of violence, it could create a chaotic situation that may lead to calls for a dictatorship to restore order.

If arbitration is used to settle labor disputes, it can take power away from the market and put it in the hands of government officials who decide wages and working conditions, rather than letting the market dictate these outcomes. This process suggests the government should have control over what workers earn rather than allowing it to be determined by supply and demand.

The main issue at hand is whether economic decisions should be made by consumers in the market or by government commands. Moving towards a planned economy tends to push towards dictatorship, as it removes the ability of individuals to make their own choices.

Critics of socialism argue that while it seeks to create fairness for workers, it often leads to more poverty and gives too much power to those in charge. The real conflict is about which system better supports human welfare, not about who gets which portion of income. Supporters of economic freedom reject socialism because they believe it takes away individual rights and leads to authoritarianism.

In summary, society must choose between keeping economic freedom or moving toward totalitarian socialism. Interventionism cannot be seen as a middle ground; it complicates the issues without fixing them. Markets work best when people can make their own choices, rather than having the government try to control the economy. Ultimately, people must choose between a system that promotes personal initiative and one that relies on government control.

§ 3 Socialism and Communism

Communism and socialism were seen as the same by thinkers like Marx and Engels, and this view was commonly shared among Marxist groups until 1917. Many political parties that followed Marxism, including the German Social Democratic Party, called themselves socialist parties. Before 1917, nobody made a clear distinction between socialism and communism.

In 1875, Marx wrote about a future communist society, mentioning that it would have two phases: a lower and a higher one. However, he did not specifically label the lower phase as socialism. Marx believed socialism would naturally come from capitalism, as this was seen as an inevitable process due to the laws of capitalism. According to him, capitalism must develop fully before socialism could ever appear.

Despite his ideas, Marx’s political actions contradicted his theory. He wanted to create a political party that would overthrow capitalism through revolution. Marx and other followers believed that they had to act violently and establish a dictatorship of the proletariat to get rid of the bourgeoisie. They viewed the failed Paris Commune of 1871 as an example of what such a revolution could look like.

After 1917, however, many Marxian parties changed their methods. Instead of waiting for an inevitable change, they began to participate in elections and work within existing political systems. Even though they claimed to follow Marxist principles, they behaved more like ordinary democratic parties, working alongside other political groups.

Marx also argued against policies that tried to fix capitalism, claiming they only distracted from the real goal of socialism, which could only arise from fully developed capitalism. In contrast, many socialist parties adopted such policies, aligning themselves with mainstream political agendas.

In Russia, some Marxian leaders changed their approach to justify moving quickly towards socialism without following Marx's outlined stages. The Bolsheviks, led by Lenin, had different tactics than the Mensheviks, as Lenin wanted a small, disciplined group to lead the revolution. This disagreement marked the split between communism and socialism.

Lenin believed socialism was necessary for all countries and aimed to spread revolution globally. He wanted the Soviet Union to be a model for the world and sought power for his party in Russia, often using dictatorial methods to do so.

Over time, the terms communism and socialism began to be used differently, especially under Stalin. He defined socialism as a transitional phase leading to communism, where there could still be wage payments and some inequality, justifying the differences in living standards within the Soviet Union.

Stalin’s changes in definitions were meant to explain why the living conditions of many people were still low, as he could no longer blame capitalism for that situation. Despite this shift in terminology, the key disagreements between communists and socialists remained. This reflected deeper differences in their beliefs and strategies, especially as political situations changed during the 20th century.

§ 4 Russia's Aggressiveness

Nationalists in Germany, Italy, and Japan assert that their aggressive actions stem from a need for more living space, or Lebensraum, due to overpopulation and limited natural resources. They argue that these conditions prevent them from being self-sufficient and that trade barriers from wealthier nations hinder their access to necessary imports. They believe that many fertile lands in America and Australia are denied to them due to restrictive immigration policies, keeping them from improving their situation. They consider the real aggressors to be the nations hoarding global resources, claiming that their military actions were justified in seeking what rightfully belongs to them.

In contrast, Russia is portrayed as having abundant natural resources and being relatively underpopulated, making its aggressive expansion less about necessity and more about ideology. Lenin's motivation for aggression was rooted in his desire to lead a global revolution against capitalism, believing that he could bring about a new social order. Despite initial failures to expand due to inferior military strength, Stalin later focused on building a formidable army, though Russia still faced significant challenges during World War II.

The Allied forces’ role in Russia's conflicts is complex. Initially, their intervention in the Russian Civil War was motivated by military strategies against the Germans, but once the war ended, their interest waned. They sought to disengage, which left Russia unchecked and enabled its rise as a military power in Europe. This power dynamic shifted after World War I and World War II, leading to territorial gains for Russia that other Allied nations did not pursue.

Asserting that their expansion is for self-defense, Russian leaders argue against perceived threats from their neighbors while, in reality, they are seeking influence and control over those regions. This creates a paradox where Russia claims victimhood despite its aggressive posture. The underlying tension lies in the need for the Russian intelligentsia to justify their system and the desire to maintain control over satellite states to bolster the credibility of communism, pushing the nation toward ongoing aggression. The lack of a world revolution challenges the stability of the regime, prompting a push for expansion and influence.

§ 5 Trotsky's Heresy

The dictatorial systems established by Bolshevists, Fascists, and Nazis suggest that there can be no disagreement over who becomes the dictator. Those who oppose the dictator are considered heretics and must be eliminated. In reality, a dictator gains power by defeating rivals through violence. For example, after Lenin's death, Stalin eliminated Trotsky, who had to flee and was eventually assassinated. Trotsky attempted to frame his conflict with Stalin as a principled ideological battle, although their disagreements were largely about tactics rather than fundamental principles. Trotsky's background as a Marxist intellectual did not prepare him for effective political strategy, while Stalin, though less educated, was practical and understood that worldwide communist revolutions had largely failed outside of Russia.

Trotsky was blinded by his beliefs and could not see the failures of Bolshevik methods. He blamed Stalin for the harsh conditions in Russia, while Stalin was aware that new strategies were needed. Both men shared core political goals, such as industrialization and collectivization in Russia. Trotsky's main criticism of Stalin was that he should be the dictator instead. Trotsky's view of communism remained idealistic despite the grim reality under Stalin's rule.

Despite Trotsky's death, his ideas lingered among some socialists who romanticized communism. However, different socialist factions often clash over their visions for society, revealing deep divisions within the movement and illustrating its inherent challenges.

§ 6 the Liberation of the Demons

The history of humanity primarily revolves around ideas that influence people's actions and goals. Major historical events often reflect long-term ideological shifts rather than sudden changes. A significant example is Lenin's takeover in 1917, which, while seen as a pivotal moment, actually had limited impact on the path toward socialism compared to pro-socialist movements in Western Europe.

In contrast to revolutionary Russia, Western industrial nations were already adopting social security measures that paved the way for socialism. The idea of "war socialism" emerged during World War I, with many governments implementing socialist policies. However, the Soviet model did not appeal to the more industrialized countries since they relied on manufacturing for export and could not adopt Russia's isolationist economic strategy.

The essence of Lenin's revolution lay in the embrace of violence and oppression, contradicting the political ideals that guided Western civilization for centuries. While government is necessary to maintain social order, those in power must not exercise unchecked authority. The rule of law is essential to limit government power and protect individual freedoms.

Supporters of the welfare state argue for a government that can act decisively for the common good, often dismissing legal constraints as outdated. This perspective can lead to tyranny, as leaders may become dictators under the guise of promoting welfare. Proponents of the welfare state often disregard differing opinions, seeking to eliminate all opposition and elevate their vision of societal benefit as the only legitimate form of governance.

Historically, the struggle between the rule of law and absolutism has defined Western civilization. Although tyranny was once feared, socialists masked their authoritarian aims with promises of freedom and democracy. Lenin's rise marked a shift from legal norms to unrestrained power, allowing violence to flourish. His philosophy inspired future dictators, blurring lines between various oppressive regimes, including Fascism and Nazism, both of which share roots in socialist ideology and promote authoritarian control over dissent.

§ 7 Fascism

In 1914, the Italian socialist party was split on whether to support World War I. One group believed in sticking to Marxism, saying the war was a capitalist issue and that workers should remain neutral. The other group, influenced by hatred of Austria, wanted to join the war to help their fellow Italians living there. Benito Mussolini, a prominent socialist, initially supported the Marxist view but later changed his mind to promote Italy’s involvement in the war against Austria. This shift helped him gain popularity and led to the creation of the Fascist Party after the war.

Although the early Fascist program was anti-capitalist, Mussolini's government focused more on attracting investment and did not fulfill promises related to freedom of thought or press. Mussolini introduced the idea of corporativism, but it was mostly just a name change without real change in practice. The Fascist government sought to expand Italy’s territory to solve economic problems, using aggressive nationalism to justify their actions. Fascism borrowed ideas from different sources, including German socialism, and its methods were similar to those of Lenin. Even though Fascism eventually fell, the nationalistic ideas it promoted still exist, and if it were to return, it could lead to serious problems.

§ 8 Nazism

Nazism, linked to the German National Socialist Labour Party, represents a form of extreme anti-capitalism and socialism. Its main ideas come from various thinkers who were not German. For instance, the idea of the Aryan race's superiority was first introduced by a French writer named Gobineau. Many influential figures of Jewish descent contributed to Nazi beliefs as well. The Nazis emphasized that public welfare should be prioritized over private profit, similar to ideas found in the American New Deal and Soviet policies.

A key goal of the Nazis was to gain Lebensraum, or living space, so that Germans would have access to more resources than people in wealthier countries. They adopted many methods from the Soviet Union, including one-party rule and violent suppression of their opponents. Hitler was not the founder of Nazism but rather a product of these ideas. He pushed for a dangerous plan centered on eugenics, which aimed at controlling human reproduction to create what they considered a superior population. The brutal actions carried out by the Nazis were justified by them as necessary for their ideology.

§ 9 the Teachings of Soviet Experience

Many people believe that the Soviet experiment proves that socialism works and that criticisms of it are wrong. They say the facts support their view and dismiss the ideas of economists who question socialism. However, social sciences are different from natural sciences. In natural sciences, experiments can isolate one variable to clearly see the effects. In social sciences, many factors interact at once, making it hard to draw clear conclusions. Social facts can be interpreted in many ways, so historical experiences don’t definitively prove or disprove theories.

A major argument against socialism is that private property is essential for civilization and progress. Historically, societies with private ownership have thrived, resulting in advancements in science and culture. Still, some people argue that just because something worked in the past doesn't mean it will work in the future, and that a new way of organizing society is needed.

Different socialist groups propose various plans for socialism, but these plans often conflict with each other. Each group claims to represent the true form of socialism. They argue that socialism's full benefits can only be seen if all countries adopt it. However, critics point out that socialism struggles without market prices, making it hard to calculate economic decisions. This leads to inefficient use of resources and scarcity of goods.

In practice, the Soviet Union showed that living standards were lower than in capitalist countries. Supporters of socialism often blame this on outside factors instead of socialism itself. Critics argue that the Soviet experience demonstrates that socialism has not been successful compared to capitalist countries.

Many claims made by socialists become weak when examined closely. They might suggest that the Soviet Union's military successes prove socialism's effectiveness, but this reasoning is flawed. In reality, the Soviet experience has shown that socialism fails to deliver on its promises, especially regarding personal freedoms and living standards. Overall, the Soviet experiment reinforces the criticisms of socialism rather than proving it right.

§ 10 the Alleged Inevitability of Socialism

Many believe that totalitarianism is unavoidable and that all human affairs will eventually be controlled by dictators. However, most people lack the courage to oppose harmful movements. Criticizing small aspects of socialism does not effectively challenge it, and praising totalitarian regimes for irrelevant achievements ignores their destructive actions. The public often prefers the dramatic spectacles of dictators to serious economic discussions. Socialist ideas spread largely through intellectuals, not the masses, who trust these leaders. The responsibility for the rise of socialism lies with the intellectuals, who can also help restore freedom through reason and moral courage.