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‘New Socialist Man’ was a selfish corrupt cheat

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22 minute read

From the Fraser Institute

By Matthew D. Mitchell

It’s a common trope that capitalism corrupts. Anyone who has spent time with our species knows that we can be avaricious, materialist and selfish. Tempting as it may be to think that socialism would make us better, it seemed to make us worse.

The communist revolution sought to reshape the economy by giving government control over the means of production. But socialist revolutionaries had more than the economy in their sights. They aimed for nothing less than an extreme makeover of human nature. Unfortunately, actual socialism seemed to make people worse, not better.

Why did socialists seek to change man?

Marx believed that “the essence of man” was “no abstraction inherent in each single individual.” Instead, this essence was “the ensemble of the social relations.” And by changing social relations, he believed man could be changed for the better.

For his part, Stalin saw that certain aspects of human nature were stumbling blocks to the socialist dream. In 1935 he told a conference of collective farm labourers that “a person is a person. He wants to own something for himself.” It will “take a long time yet to rework the psychology of the human being, to reeducate people to live collectively.”

But Stalin and others believed that, given enough time, socialism would create what they called the “New Socialist Man.” He would be intelligent, healthy, muscular, selfless and supremely dedicated to the cause. Basically, he’d look like everyone in the socialist “realist” paintings that the government compelled artists to paint.

He would care less about his private life and his family and more about society-at-large. It was in this vein that Soviet education theorists taught that “By loving a child, the family turns him into an egotistical being, encouraging him to see himself as the centre of the universe.” In the place of such “egoistic love” the state encouraged “rational love” of the broader “social family.”

Socialists had a practical reason for remaking man. Without economic freedom, citizens had little incentive to produce. In a capitalist society, Adam Smith’s butcher, brewer and baker serve us dinner because they are incentivized to do so; it puts money in their pockets and food in the bellies of their children. But in a state-run canteen the workers were paid whether they served decent food or not. The socialists hoped that by remaking human nature—by creating a New Socialist Man motivated to serve others and not just himself and his family—they could solve this incentive problem.

How did people change?

As I’ve explained in an earlier post, the incentive problem was never solved. The New Socialist Man never got very good at serving others, so socialist societies were systematically poor.

But what happened to human nature? Did they succeed in changing it? The species evolves over generations so, of course, the seven-decade socialist experiment didn’t alter human genes (when Marx sent a copy of Das Kapital to Charles Darwin, it apparently sat unread on Darwin’s shelf). But socialism did have a profound effect on cultural norms and attitudes. And these changes were almost entirely for the worse.

In my book on Poland with Pete Boettke and Konstantin Zhukov, we quote one Pole from the late-1980s who observed: “one can make a generalization that everybody in Poland who has the chance engages in a good deal of stealing, cheating, and supplementing his or her income by illegal means.”

Another complained: “Why must I so often do things to get a promotion or improve my family’s living standard that run against my conscience? Why and how has it become true that I am a swine? When did I realize it, and when did I stop caring?”

Socialist planners also worried about cultural decline: “What is going to happen to the character of the young generation,” a state planner asked, “if from the very beginning of their working career in the enterprise, they are being taught and morally forced to cheat at the expense of the whole society?”

In our Estonia book, we quote Václav Havel, the poet-playwright-dissident who became Czechoslovakia’s last president. He identified the problem in his New Year’s address of 1990:

We fell morally ill because we became used to saying something different from what we thought. We learned not to believe in anything, to ignore each other, to care only about ourselves. Concepts such as love, friendship, compassion, humility or forgiveness lost their depth and dimensions and for many of us they represented only psychological peculiarities… I am talking about all of us. We had all become used to the totalitarian system and accepted it as an unchangeable fact, and thus helped to perpetuate it. In other words, we are all—though naturally to differing extents— responsible for the operation of totalitarian machinery, none of us is just its victims; we are all also its cocreators.

Even Soviet leader Mikhail Gorbachev complained in his autobiography of “a gradual erosion of the ideological and moral values of our people.”

Why was the New Socialist Man a worse man?

The control problem is one explanation for this gradual erosion of moral values. With no carrots in the form of market incentives, socialist leaders deployed a terrifying array of sticks—mass deportation, widespread surveillance, arrests and slave labour. They even weaponized children against their parents (a topic I plan to cover in a future post). And since the socialist revolution was built around the notion of class warfare, the socialists felt justified in using these sticks against any class that stood in their way: kulaks, capitalists, ethnic minorities, nationalists, internationalists, left deviationists, right deviationists, religious leaders, cultural icons and intellectuals.

In the face of such widespread terror, it’s no wonder that the socialist state bread cultural habits of anger and distrust. But terror was not the only source of cultural rot. The dysfunctional economy, with its everyday contradictions and absurdities, was another source.

Despite the promise of material abundance, shortages were endemic to the socialist economy. Consumers routinely faced shortages of soap, coffee, sugar, laundry detergent, cigarettes, rubber, transportation, household appliances, cars, housing, clothing and—above all—meat. The shortages arose in part by accident. Without market-determined prices, planners were often flying blind. But shortages were also purposefully engineered by bureaucrats to solicit bribes from rationed consumers.

The only legal way that people could get what they wanted was to wait in line—sometimes for weeks on end. And even then, thugs could jump the queue. Those who didn’t want to wait would resort to bribery and the black market. Even socialist planners and factory leaders had to use the black market to meet their targets in the Five-Year plans. People commodified their relationships, using friends and family to supply them with what the socialist economy would not. This gave rise to what was called “an economy of favours” and the saying that “One must have, not a hundred rubles, but a hundred friends.”

The political scientists John Clark and Aaron Wildavsky describe the dynamic:

When the need for social or political contacts to accomplish anything—from getting enough steel in order to meet one’s factory’s plan quota to finding chocolate for a child’s birthday party—become indispensable… human relations suffer. People expect both too much and too little from friends, family, and acquaintances: too much, since almost every aspect of your life depends on what others can do for you; too little, since the instrumentalization of these relations means that they are sucked dry of any inherent pleasure.

The anthropologist Janine Wedel describes the effect on a Polish woman who manipulated her connections to obtain curtains: “[She] feels a kind of revengeful pride—she is happy to manipulate a system that has humiliated her all her life.”

As we put it in our Poland book: “The new socialist man was not the selfless creature of Marxist writing. He was a grifter who had no choice but to make his way by cheating the rest of society, just as the rest of society cheated him.”

It’s a common trope that capitalism corrupts. Anyone who has spent time with our species knows that we can be avaricious, materialist and selfish. Tempting as it may be to think that socialism would make us better, it seemed to make us worse.

The communist revolution sought to reshape the economy by giving government control over the means of production. But socialist revolutionaries had more than the economy in their sights. They aimed for nothing less than an extreme makeover of human nature. Unfortunately, actual socialism seemed to make people worse, not better.

Why did socialists seek to change man?

Marx believed that “the essence of man” was “no abstraction inherent in each single individual.” Instead, this essence was “the ensemble of the social relations.” And by changing social relations, he believed man could be changed for the better.

For his part, Stalin saw that certain aspects of human nature were stumbling blocks to the socialist dream. In 1935 he told a conference of collective farm labourers that “a person is a person. He wants to own something for himself.” It will “take a long time yet to rework the psychology of the human being, to reeducate people to live collectively.”

But Stalin and others believed that, given enough time, socialism would create what they called the “New Socialist Man.” He would be intelligent, healthy, muscular, selfless and supremely dedicated to the cause. Basically, he’d look like everyone in the socialist “realist” paintings that the government compelled artists to paint.

He would care less about his private life and his family and more about society-at-large. It was in this vein that Soviet education theorists taught that “By loving a child, the family turns him into an egotistical being, encouraging him to see himself as the centre of the universe.” In the place of such “egoistic love” the state encouraged “rational love” of the broader “social family.”

Socialists had a practical reason for remaking man. Without economic freedom, citizens had little incentive to produce. In a capitalist society, Adam Smith’s butcher, brewer and baker serve us dinner because they are incentivized to do so; it puts money in their pockets and food in the bellies of their children. But in a state-run canteen the workers were paid whether they served decent food or not. The socialists hoped that by remaking human nature—by creating a New Socialist Man motivated to serve others and not just himself and his family—they could solve this incentive problem.

How did people change?

As I’ve explained in an earlier post, the incentive problem was never solved. The New Socialist Man never got very good at serving others, so socialist societies were systematically poor.

But what happened to human nature? Did they succeed in changing it? The species evolves over generations so, of course, the seven-decade socialist experiment didn’t alter human genes (when Marx sent a copy of Das Kapital to Charles Darwin, it apparently sat unread on Darwin’s shelf). But socialism did have a profound effect on cultural norms and attitudes. And these changes were almost entirely for the worse.

In my book on Poland with Pete Boettke and Konstantin Zhukov, we quote one Pole from the late-1980s who observed: “one can make a generalization that everybody in Poland who has the chance engages in a good deal of stealing, cheating, and supplementing his or her income by illegal means.”

Another complained: “Why must I so often do things to get a promotion or improve my family’s living standard that run against my conscience? Why and how has it become true that I am a swine? When did I realize it, and when did I stop caring?”

Socialist planners also worried about cultural decline: “What is going to happen to the character of the young generation,” a state planner asked, “if from the very beginning of their working career in the enterprise, they are being taught and morally forced to cheat at the expense of the whole society?”

In our Estonia book, we quote Václav Havel, the poet-playwright-dissident who became Czechoslovakia’s last president. He identified the problem in his New Year’s address of 1990:

We fell morally ill because we became used to saying something different from what we thought. We learned not to believe in anything, to ignore each other, to care only about ourselves. Concepts such as love, friendship, compassion, humility or forgiveness lost their depth and dimensions and for many of us they represented only psychological peculiarities… I am talking about all of us. We had all become used to the totalitarian system and accepted it as an unchangeable fact, and thus helped to perpetuate it. In other words, we are all—though naturally to differing extents— responsible for the operation of totalitarian machinery, none of us is just its victims; we are all also its cocreators.

Even Soviet leader Mikhail Gorbachev complained in his autobiography of “a gradual erosion of the ideological and moral values of our people.”

Why was the New Socialist Man a worse man?

The control problem is one explanation for this gradual erosion of moral values. With no carrots in the form of market incentives, socialist leaders deployed a terrifying array of sticks—mass deportation, widespread surveillance, arrests and slave labour. They even weaponized children against their parents (a topic I plan to cover in a future post). And since the socialist revolution was built around the notion of class warfare, the socialists felt justified in using these sticks against any class that stood in their way: kulaks, capitalists, ethnic minorities, nationalists, internationalists, left deviationists, right deviationists, religious leaders, cultural icons and intellectuals.

In the face of such widespread terror, it’s no wonder that the socialist state bread cultural habits of anger and distrust. But terror was not the only source of cultural rot. The dysfunctional economy, with its everyday contradictions and absurdities, was another source.

Despite the promise of material abundance, shortages were endemic to the socialist economy. Consumers routinely faced shortages of soap, coffee, sugar, laundry detergent, cigarettes, rubber, transportation, household appliances, cars, housing, clothing and—above all—meat. The shortages arose in part by accident. Without market-determined prices, planners were often flying blind. But shortages were also purposefully engineered by bureaucrats to solicit bribes from rationed consumers.

The only legal way that people could get what they wanted was to wait in line—sometimes for weeks on end. And even then, thugs could jump the queue. Those who didn’t want to wait would resort to bribery and the black market. Even socialist planners and factory leaders had to use the black market to meet their targets in the Five-Year plans. People commodified their relationships, using friends and family to supply them with what the socialist economy would not. This gave rise to what was called “an economy of favours” and the saying that “One must have, not a hundred rubles, but a hundred friends.”

The political scientists John Clark and Aaron Wildavsky describe the dynamic:

When the need for social or political contacts to accomplish anything—from getting enough steel in order to meet one’s factory’s plan quota to finding chocolate for a child’s birthday party—become indispensable… human relations suffer. People expect both too much and too little from friends, family, and acquaintances: too much, since almost every aspect of your life depends on what others can do for you; too little, since the instrumentalization of these relations means that they are sucked dry of any inherent pleasure.

The anthropologist Janine Wedel describes the effect on a Polish woman who manipulated her connections to obtain curtains: “[She] feels a kind of revengeful pride—she is happy to manipulate a system that has humiliated her all her life.”

As we put it in our Poland book: “The new socialist man was not the selfless creature of Marxist writing. He was a grifter who had no choice but to make his way by cheating the rest of society, just as the rest of society cheated him.”

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Economy

Federal government could balance budget and reduce tax rates with 2.3% spending reduction over two years

Published on

From the Fraser Institute

By Jake Fuss and Grady Munro

If the federal government reduced program spending by only 2.3 per cent over two years and eliminated a host of tax expenditures, it could balance the budget and reduce personal income tax rates affecting most Canadians, finds a new
study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“With modest spending reductions and tax reform, the federal government can create the fiscal room to provide tax rate reductions that would benefit most Canadians,” said Jake Fuss, director of fiscal studies at the Fraser Institute and co-author of A New Federal Fiscal Framework for Canada.

Specifically, if the government implemented this spending reduction—and eliminated 49 federal personal income tax expenditures (tax credits, tax exemptions, etc.), which do little to improve economic growth yet reduce government revenue—it could eliminate the three middle federal personal income tax rates (20.5 per cent, 26.0 per cent, 29.0 per cent) and reduce the top rate from 33.0 per cent to its previous level of 29.0 per cent.

As a result, with only two remaining rates, nearly all Canadians would pay a marginal personal income tax rate of 15 per cent. And the federal government could balance the budget by 2026/27.

“In light of Canada’s dim economic prospects and lack of tax competitiveness, the federal government should move away from the status quo and pursue a pro-growth fiscal strategy,” Fuss said.

“At a time when affordability is top of mind, it’s time for Ottawa to reduce tax rates and restore discipline to federal finances.”

  • Poor government policy has led to a significant deterioration in Canada’s federal finances over the last decade. The introduction of new and expanded government programs has caused federal spending to increase substantially, resulting in persistent deficits and rising debt.
  • Canada also maintains markedly uncompetitive personal income taxes relative to many other advanced economy jurisdictions. This hinders Canada’s ability to attract and retain highly skilled workers, entrepreneurs, and business owners.
  • Canada must make meaningful policy reforms by pursuing reductions in both federal spending and tax rates to address the current fiscal and economic challenges.
  • The federal government should eliminate 49 federal PIT tax expenditures and remove the three middle income tax rates of 20.5, 26.0, and 29.0 percent while reducing the top marginal PIT rate from 33.0 to 29.0 percent.
  • The federal government can introduce a comprehensive tax reform package and achieve a balanced budget by 2026/27 through reducing nominal annual program spending by 2.3 percent over a two-year period.
  • Returning to balanced budgets should be viewed as a starting point rather than the end goal.
  • Imposing a Tax and Expenditure Limitation (TEL) rule that caps growth in program spending at the rate of inflation plus population growth would be the next step for federal finances over the long-term.
  • This would allow for budget surpluses in subsequent years after achieving the initial balanced budget and ensure discipline in government spending for the foreseeable future.
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Economy

Prime minister and premier combine to reduce living standards in B.C.

Published on

From the Fraser Institute

By Jake Fuss

In B.C., the Eby government is following the prime minister’s lead. After nearly two decades of spending restraint  (1999/00 to 2016/17), the province has experienced an explosion in government spending. Program spending will increase from $46.1 billion in 2016-17 to a projected $85.3 billion this year, a nominal increase of more than 85 per cent.

Recently, Prime Minister Justin Trudeau and Premier David Eby had a tête-à-tête and vowed to always “work together on important issues.” While they belong to two different political parties, their visions rely on a larger role for government, which includes more spending, regulation, borrowing and higher taxes. Unsurprisingly, this economic strategy hasn’t worked and has instead led to stagnant living standards in British Columbia and across Canada.

Under the NDP, British Columbians have seen their incomes completely stagnate. B.C.’s per-person GDP, a broad measure of living standards, is expected to be lower this year than in 2018, and decline by an average annual rate of 0.9 per cent from 2022 to 2024—the third biggest drop among the provinces during this period.

This represents a marked departure from the economic results under the previous government. From 2001 to 2017, per-person GDP grew (on average) by 1.4 per cent. And the average British Columbian’s income increased by 27 per cent over these 16 years.

The decline in living standards is also occurring nationally. Canada’s per-person GDP was lower at the end of 2023  than it was in 2014.

Why?

Since first elected in 2015, Prime Minister Trudeau has greatly expanded the federal government’s role in the Canadian economy. Federal program spending (total spending excluding debt interest costs) will increase from $256.2 billion in the final full year of the Harper government to a projected $483.6 billion in 2024-25, an increase of nearly 90 per cent over a decade. The government has financed this spending surge through tax increases and borrowing.

Specifically, the Trudeau government in 2016 raised the top personal income tax rate (which applies to many entrepreneurs and businessowners) and also opaquely increased taxes on middle-income Canadians by eliminating several tax credits (as a result, 86 per cent of middle-income families now pay higher taxes). Federal debt has spiked considerably to finance the government’s insatiable appetite for spending, reaching nearly $2.1 trillion this year, almost double the level in 2014-15.

In B.C., the Eby government is following the prime minister’s lead. After nearly two decades of spending restraint  (1999/00 to 2016/17), the province has experienced an explosion in government spending. Program spending will increase from $46.1 billion in 2016-17 to a projected $85.3 billion this year, a nominal increase of more than 85 per cent.

With Premier Eby’s plan to ramp up spending further in the next few years and incur substantial deficits, B.C.’s net government debt is projected to reach a whopping $128.8 billion by 2026/27—a 227 per cent increase since 2016-17.

The B.C. NDP has also raised one tax after another to feed its appetite for spending. The government hiked personal income tax rates from 14.7 per cent to 16.8 per cent on income between roughly $181,000 and $253,000, and introduced a new top tax rate of 20.5 per cent for top-income earners. And raised the business tax rate from 11.0 to 12.0 per cent in 2018, deterring badly needed investment in the province.

Prime Minister Trudeau and Premier Eby are pursuing the same policies and achieving the same miserable economic results. Simply put, the Trudeau-Eby zero economic growth alliance has reduced the living standards of British Columbians and Canadians.

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