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Wednesday, May 1, 1985

A Reviewers Notebook: Pattern for Failure

John Chamberlain’s book reviews have been a regular feature of The Freeman since 1950. We are doubly grateful to John and to Henry Regnery for now making available John’s autobiography, A Life With the Printed Word. Copies of this remarkable account of a man and his times—our times—are available at $6.00 from The Foundation for Economic Education, Irvington-on-Hudson, New York 10533.

In A Pattern for Failure: Socialist Economies in Crisis (New York: Harcourt Brace Jovanovich, 175 pp., $22.95), Sven Rydenfelt, a Swedish economist, offers a general proposition endorsed by Milton Friedman in a thoughtful introduction. The general proposition is that wherever there is detailed central economic planning the ordinary man suffers. The reason, says Rydenfelt, is ecological: people are dependent on their economic and social environments, and when individual entrepreneurs are discouraged by oppressive government-imposed constraints the creativity that feeds everybody languishes.

There is some elaboration of Rydenfelt’s general thesis in an opening section devoted to the importance of the entrepreneurial environment. Like George Gilder in America, Rydenfelt thinks the supply of entrepreneurial incentive is more important than the supply of capital. If a man has a good idea, and there are no regulations to prevent him from pushing it, he will get the capital he needs somehow.

Once having established the outlines of his theory of the general importance of the entrepreneurial climate, however, Sven Rydenfelt rapidly shifts the emphasis of his book. What he is really interested in doing is to show how socialist governments mess up their agricultural policies, bringing starvation by their treatment of the peasants.

Formula for Famine

Communist and socialist governments, no matter how they come to power, are impelled by Marxist theory to favor the industrial proletariat. Partly this is due to Marx’s own contempt for what he considered the stupidity of country life. Depending on the city workers to keep them in power, socialist governments fix the price they are willing to pay the peasants at a point that is low enough to guarantee cheap food to the urban masses. It doesn’t matter whether the peasant keeps nominal title to his acres or not—the failure to let farmers sell their crops as they please reduces the incentive to produce. Peasants will normally work hard enough to keep their own families fed, but without market freedom there will be nothing extra to forestall possible famines.

Sven Rydenfelt’s evidence, which is elaborately displayed, is that the famines always come. The pattern was set in Soviet Russia, when there was drought in the Ukraine in the years after the Bolshevik takeover. There wouldn’t have been serious trouble if there had been a stored reserve. But the civil war had emptied the grain bins. Lenin used the weather as an excuse. But he was realistic enough to postpone agricultural collectivism.

Telling the peasants to enrich themselves—i.e., to become kulaks—he proclaimed the so-called NEP, or New Economic Policy. The theory was too successful to please Stalin, who, in the early Thirties, decided to break the power of the kulaks and establish big state farms. The resultwas a forced famine that killed some three million skilled agriculturalists.

Stalin in Charge

Stalin claimed successes for the new collectives, but when Khrushchev decided to expose the excesses of Stalinism, one of the first figures he revealed was that in 1953 Russia had fewer livestock than it had in 1913, when there were 60 million fewer people to feed.

In the long run Khrushchev proved to be no improvement on Stalin as a farm manager. His attempt to bring new acres under cultivation in semiarid areas worked out badly. Rydenfelt says there were crop failures in Russia in nine out of twenty years between 1963 and 1983. The excuse was always that the weather had been bad. The Communist high command solved the problem of the recurrent shortages by importing grain from the capitalist West.

Sven Rydenfelt follows his section on the failures of Soviet agricultural planning with chapters on what has happened to farming in Poland, Romania, Czechoslovakia, Yugoslavia, Hungary, Portugal, China, India, Vietnam, Sri Lanka, Ghana, Tanzania, Cuba and Argentina.

In all cases save that of Hungary the courses followed by communist or “planning” governments have resulted in genera] impoverishment. The Hungarians have saved themselves by letting their peasants sell their produce in the open market. There is a repetitive quality to Sven Rydenfelt’s story, but this is bone and marrow of the central point that he is determined to drive home.

Rydenfelt’s examples do not include Ethiopia, Angola, Mozambique, Chad and the general sub-Saharan region in Africa. But we know from the news stories that there are no exceptions to Rydenfelt’s rule that, where socialism prevails, starvation is just around the corner.

  • John Chamberlain (1903-1995) was an American journalist, business and economic historian, and author of number of works including The Roots of Capitalism (1959). Chamberlain also served as a founding editor of The Freeman magazine.