“A society that chooses between capitalism and socialism
does not choose between two social systems;
it chooses between social cooperation
and the disintegration of society.”
Ludwig von Mises
There are two camps of the former Soviets: one of the happy people because they are now free, and the second one of the unhappy, who still think everything back then was basically okay. I belong to the former and I am proud that I also took part in all possible types of anti-Soviet/communist activities.
I have gathered here several short stories to illustrate great lessons for our civilization from the life of Soviet people.
Stalin: A Smart Gangster, a Cold-Blooded Murderer
Now, when I want to describe these stories I hesitate – how to rank them by importance or by influence on the minds of contemporary younger generations who have no idea of what happened. Even in my country, Georgia, young people have very limited knowledge of the Soviet times; what is mostly known is the repressions but only against so-called intelligentsia.
Young people don’t really know who Stalin was – what they may tell you, however, is that he was a Georgian from Gori, nothing substantial. So, let’s start with him.
Yes, he was Georgian, – a smart gangster who financed a terrorist organization called the Bolsheviks. Then he used all his energy and smartness to create unlimited power. For this he employed strong totalitarian traditions and attitudes of the Russian Empire. He knew what he was doing.
Unfortunately, the Westerners decided he was better than Hitler, which helped Soviet and, as a consequence, contemporary Russian leaders, to keep floating around as an important global player. From teh available documents we now understand that the Bolsheviks were the teachers of Nazis and, in fact, killed much more people than their students.
But the world has kept silent about those who were killed from 1917 to 1936 – I guess because it was unpopular to defend the bourgeoisie and aristocrats. This brings me to the second story.
A Double Victim
One morning in 2015, I was strolling with some friends in Bakuriani, a nice Georgian Skiing Resort. I saw an old man who was collecting bottles in the street, but he was truly well-dressed. I was happy to discover this was the Georgian ski jumper legend Koba Tsakadze. He took us to his museum at his home and told us several stories of Soviet discrimination against him and his family.
Koba was a real star. He invented the contemporary way of jumping and could have become a millionaire – if he lived abroad. In the 1950s, he was offered to stay in the United States for 1 million dollars,but he refused because he was afraid of repressions against his mother and sister, who would stay back in Georgia.
He won many prizes – when he was allowed to go abroad. He also won a lot of money in the tournaments abroad, but it was confiscated by the Soviet authorities. Why did I start this sad story with bottles – why was he collecting bottles? He was not poor, all his children were in business in the U.S. and Switzerland.
He was doing this because he was a man of honor, a true believer in social cooperation – as it was described by Ludwig von Mises. He was the son of a kulak who was executed by the Soviet regime (long before well-known intelligentsia repressions), whereas his family was sent to Bakuriani – the Georgian Siberia.
Communism Art Kills!
1937 was a very harsh year – impossible to believe and understand. This was the final stage of the Bolshevik repressions started by Lenin after the 1917 October revolution. Ideologically and practically speaking, the Bolsheviks didn’t need these last repressions – all the real opponents of the regime (property owners and aristocracy) had already been exterminated.
But intelligentsia was still showing their weak but free mind. Henryk Hryniewsky was one of them. He was shot because of his resistance to communist art.
Hryniewsky was of Polish origin, but he was born in Georgia. He studied architecture and art in Europe, but returned to Georgia, where he did many great things in the world of art. Meanwhile, his Italian wife created the Georgian Ballet School. Why then was he shot in the end?
Why did people in Georgia get into such an ugly situation? In fact, this didn’t happen at once, people didn’t lose their freedom, dignity and ethics in one day, – everything happened step-by-step – as David Hume warned in the 18th century.
When it came to the intelligentsia, there was nobody to protest nor fight – the old elite was already dead. The new elites were ignorant, some people decided to follow or obey the Bolshevik rule.
Next story is about my grandma, who died a long time ago, but she was a truly wise woman. She was born in Georgia, Imperial Russia, where the bourgeoisie ethics was creating a strong property rights based society.
I know many other stories describing very good levels of social cooperation, particularly in Georgia, and the economy was doing quite well, especially in Tbilisi and Batumi. But this story is about an event I still remember, even though more than 50 years have already passed.
Once, I found 50 rubles in the street and rushed home to share the happy news with my family. Surprisingly, my grandma ordered me to put the money back in the same place – as it was not ours. For our poor family of two engineers this money could be a good thing, but my grandma’s stance prevailed.
After we returned to the market economy, I understood the lesson, and I thought that without private property ethics and rules, nothing can go forward for anybody – it is the foundation of any ethical society. Only private property can encourage people to cooperate and teach them to respect each other.
This can also teach people to respect necessary common property, resources, and the environment. It is impossible to guard the forests when they belong to nobody and so people may have strong incentives to steal the wood.
Grab Everything Unattended
This also brings me to another example from the Soviet life. Anything that was left laying around on the ground at a Soviet factory for more than an hour could be stolen by a worker – regardless of the value of that thing. The worker could be stopped at the gate by the guards and asked for a bribe (then divided among the guards and managers), though both recognized the unknown character and value of the said item. The worker could simply consider it useful for himself or sell it.
Stealing was a very common practice also on collective farms. In his book Common Sense Economics, Dr Gwartney correctly described that farmers in the Soviet Union could have higher productivity in their small parcels than the collective farms. However, it should also be stated that, in fact, farmers would also steal vegetables or fruit from the collective farms and pretend that they harvested them from their own, small farms.
From Lagidze Waters to Pepsi
Another interesting story is about Mitrofan Lagidze – an entrepreneur who invented Georgian lemondes and conducted his business in the Tsar-period Russia. After the Sovietization, he survived but refused to share his recipes of the lemonades of chocolate, cream, lemon, and other fruits. The lemonades were extremely popular but had limited availability.
Georgia also produced many other types of lemonades, but Lagidze Waters was the best in terms of quality. In the early 1980s, though, Georgia at last tasted cola. By a very odd chance, in 1981, there started a production of Pepsi in Sokhumi (now occupied by Russia). And we came to another discovery of the West, particularly of the U.S., – nobody would question the fact that the West was better in many statistics, but people could still be propagated that our food – though in deficit – was better.
But Pepsi destroyed our last advantage. I still believe Mr Lagidze would have a chance to fight in the global markets if it was not for Sovietization.
Checking the Reality
Soviet Statistics could excite anybody – “Let’s Catch Up and Overtake America sloga in force. The communist party would proudly inform us that we were already producing more than the capitalists – steel, cement, wood, aluminum, etc.
However, the quality of the produced goods was so low that only a small proportion could respond to global market standards. The process of privatization by vouchers in Georgia clearly showed that the factories could be sold at 1/6 of the balance sheet value – the price of the voucher declined from USD 30 to 5.
Soviet authorities at a local level needed to deceive the central authorities for many reasons, but it was not so easy to hide the reality. Georgian tea production is a good example of this situation.
Georgian communist party leadership (Eduard Shevardnaze) wanted to have a good relationship with Politburo – so he was the top cheating expert. You can say that major falsification of statistics was made during his time in the late 1970s and the early 1980s. Georgia reported up to 500,000 tons of harvested tea, but the small print stated that only 1/5 was good quality (and this was also not true).
Understanding that the quality of Georgian mass-produced tea was not possible to be improved, the Soviet authorities decided to blend it with Indian tea. As a result, Indian tea was illegally available in every corner of Tbilisi or other Georgian towns, but other consumers continued to drink awful Soviet Georgian tea.
Soviet Ruble – Currency and Politics
In the early 20th century, everybody knewthat inflation was an unethical policy. Moreover, two giants like Germany and Russia were completely destroyed by the hyperinflation during the World War I. In Russia, the Bolsheviks took thepower exactly in this systemic collapse of the Russian economy, which was at its best before the war.
Lenin first tried to continue the inflationary policy, but he quickly understood the importance of hard precious metal-based currency that circulated before 1925.
Stalin decided to use the currency as another tool for oppression and centralization. There were several devaluations of the ruble during the next several decades and people were forced to deal with that. What is the lesson from the ruble story anyway? Politicization of the monetary system is wrong and can’t bring any good outcomes.
The Soviet currency needed something to back it, to make it stronger. What could be bought with the ruble in the Soviet Union? Raw materials, scrap metal, oil, natural gas, wood, grain etc. So, these commodities were to strengthen the ruble and most of them were located in Russia.
So Russia was strengthening it. But all other republics didn’t have as much of these commodities as the Soviets needed, or their export was simply restricted. Such a situation was, in turn, weakening the ruble. As a consequence, the Russian people were not willing to feed others . Many were left starving in the Russian interior.
All the Unavailable Items
Recently, I was in a small Carrefour chain store in Tbilisi, and while I was paying, I noticed that nothing that was put on several shelves of the shop, on my right side or the left – was available when I was young. It was impossible to find evensimple everyday necessities, like napkins, toilet paper, etc.
The end was coming. Food was available on the basis of food-stamps, foreign cash was in deficit, exporting factories preferred to hide their profits abroad or make barter exchanges of goods. Shelves in the shops were empty…