Most people are familiar with the saying: “guns and butter.” It came about when someone suggested that you can conduct a major war and still have enough resources to give the population a decent standard of living. But I know of a story that leads to a different conclusion, one that sat deep in my memory for about fifty years and now seems ready to be told. It is the story not of guns that were pitted against butter but a Sputnik that was pitted against soap.
There was no television where I lived fifty years ago but radio was there and it was doing a lot of drama which, I must say, was good drama in most part. I lived in Egypt when the Russians launched their Sputnik into space and I was so taken by the event, I never tired listening to news and to stories about it. I suppose the only way I would be moved as much today is if intelligent life was detected on another planet.
Fifty years ago I listened to a drama that was broadcast out of France called: “l’Oeil de Moscou” which translates into: Moscow’s Eye. It was the story of an American expedition going to the moon and discovering that the Russians have been there already and where they built an impressive base. The Russians set up a telescope inside the base which they used to spy on the Earth, including the United States of America. The telescope was named Moscow’s Eye by the Americans, which was also the title given to the drama by its author.
A discussion followed the radio play among a number of pundits who were picked from a variety of fields. During the talk, the point was repeatedly made that the Russians were ahead of the Americans by several years if not several decades. And the reason why this situation developed, said the pundits, was that the two countries started out with different priorities. The pundits explained that the Russians were interested in technological and scientific advances which is why they chose the heavy industries over light manufacturing.
By contrast, continued the pundits, the Americans were more interested in perfecting their light industries for consumer products such as the chewing gums and the soaps. And it was predicted that the Russians will get still further ahead of the Americans as time goes by, and will beat them in every field of human endeavor including the overall economy. And the reason why this will happen, opined the pundits, was that a steel mill adds more to the gross national product of a country than a bar of soap or a factory of chewing gum.
We know now how wrong those pundits were and we have the luxury of hindsight to figure out why. They were wrong because an economy runs on money and motivation, something that the Soviets seemed to ignore. By contrast, the American Henry Ford figured out the role that money and motivation play in the economy at just about the same time that the Bolshevik revolution was brewing in Russia. And Henry Ford put his knowledge to good use.
What the man did was to pay his workers enough money so as to give them the purchasing power to buy the cars they were making. So ingenious was this decision that the workers responded by producing the cars in a climate of high morale, working hard as if they owned the company even though they knew they did not.
Standing in opposition to those ideas were the Bolsheviks of Russia who were under the spell of Karl Marx, a thinker of German Jewish descent. This man advocated handing the tools of production to the workers and he inspired the Bolshevik leaders who adopted his mantra. The ideas encouraged the collective to grab the economy and run the show and this is what happened when the revolution succeeded and the Bolsheviks came to power in Russia.
In time, the leaders of the revolution completed the takeover of the tools of production and they came to own and run the economy. Had the Marxist predictions been correct, the leaders should have been able to establish a climate of high morale in the factories since the workers were made to own the companies in which they worked. And the latter should have been motivated to work hard and work happy so as to produce the goods with more zeal and high spirits than the Ford workers in America. In so doing, they should have been able to create enough wealth for their society to swim in money and bathe in luxury.
In fact, the newsreels that came out of Soviet Russia and the other communist countries depicted the happiest of workers producing an abundance of goods. But as we know now, all this was a big lie. The reality was the opposite of that, as the communist dream had failed and was replaced with a fantasy on celluloid. The workers did own the tools of production, at least in theory, but they acted as if they did not. And so the questions were asked: Why did it come to this? And what is it that went so wrong with the Soviet system of economics?
What got in the way of creating a communist Nirvana is encapsulated in another saying: “Everybody’s business is nobody’s business.” This happens all the time because when people own something collectively, nobody feels they work for themselves but everyone feels they work for the collective. And the problem is that the collective soon becomes an abstract notion with which the people cannot bond or develop an affinity.
Under these circumstances the motivation disappears, the zeal and the high spirits deflate, the wealth ceases to be created and the money is not made because the goods are not produced in abundance or if they are, they are produced sloppily. And all these troubles can be traced to the fact that the collective has always failed to take the place of self-interest which is something that is written into our DNA and something that is destined never to be erased with words or removed with theatrics.
Nonetheless, as the Russians have shown, you can still develop some form of pride in the collective and substitute that for self interest. However, as recent history has shown, the effect of this trick will only last for a short period of time as it did in Russia following the launch of Sputnik. But sooner or later the individual will come around to asking the most ancient and most pertinent of all questions: ‘What’s in it for me?”
The question was asked in Russia and this is when the Soviet empire began to erode. The empire then collapsed while Sputnik remained high up in the history books as the first artificial satellite to go into orbit around the Earth. But with the passage of time the Russian pride was transformed into a human pride and a heritage that belongs to all the races. Now, Sputnik is no longer discussed as a Russian triumph and no longer viewed as a Russian exclusive.
And to answer the question: “What’s in it for me?” various attempts were made to show that anything good done for the collective was something good done for every member of the collective. But every philosophical point made in this regard produced a counterpoint that rebutted it effectively and in the end, the clash of ideas always came to a draw.
The back and forth discussions went on until such time that the proof as to which side had the more effective economics came with the proverbial pudding, and the news was bad for the communists. When the puddings were distributed and the tasting began, the Soviet pudding proved not to have a heavenly taste as promised but something closer to a hellish aroma.
The communist soufflé started to deflate as the Soviet Union started to collapse. And it all happened not because of an ill wind that blew from outside the country as originally feared but because of the bad economics that the Soviet regime was pursuing.
The lesson to be learned here is that the Russians were not able to have their version of the guns and butter because they concentrated on the guns, believing that the butter will follow automatically. They neglected to produce both the Sputniks and the goods that consumers crave, and their shortsightedness proved fatal.
By contrast, the Americans concentrated on the butter and this made it possible for the guns to follow. They produced the chewing gums and the soaps but also the powerful military machine that still exists today.
However, the American approach is now coming under strain and the problem is that the Western intelligence agencies which failed to detect the impending demise of the Soviet system are doing very little to help America avoid the same fate as the Soviets.
This last point and a few others will be discussed in Part 2 of this series.