PART VIII: MUTUALISM AND COOPERATION

Chapter 28: Soviet Capitalism

1. In essence, Marxism was based on the principle that profit is evil because it can only be made by exploiting workers. In keeping with the zero-sum mentality of the pre-industrial era, Marx believed that every gain must come from someone else's loss.

2. This contradicts the bionomic view of capitalism, which sees value created through the voluntary collaboration of efficient, specialized mutualists-- a system where parasites persist only when monopoly power blocks competition and market choice.

3. By defining profit as the result of unconscionable behavior, Marx turned his economic analysis into a moral crusade. The problem with crusades is that when they triumph, their principles must be carried out. In practical terms, the only way to eliminate profit-making is by forbidding market transactions altogether.

4. Change and innovation undermine the stability that bureaucracies crave. Instead of rewarding innovators, bureaucrats strangle them with rules, regulations and red tape. Consequently, bureaucrats actively resist any modification to existing methods.

5. Glasnost and perestroika, Gorbachev's twin campaigns for political reform and economic restructuring, were intended to invigorate the society. Under glasnost, press freedom was broadened and most political prisoners were released. Five years of perestroika attacked symptoms of the economy's disease but left the parasite's "hook" unmolested.

6. If the nomenklatura's monopoly hook were excised, with managers and workers suddenly finding themselves in a market system, the impenetrable Soviet bureaucracy would begin to wither away.

7. Parasitic state socialism and mutualistic market capitalism cannot coexist in the same society. Laws that compel organizations to fend for themselves as productive mutualists cannot be reconciled with laws that create parasitic hooks. In the end, a society must choose.

8. Above all, we must make clear our ultimate objective- that the Soviet Union should join the other major world powers as a prosperous capitalist democracy.

9. The West should strike a new bargain with the Soviets. If the Soviets commit themselves to truly free elections, free prices, and private property, the West must commit itself to an unprecedented package of economic assistance.

10. Unless the true nature of Soviet's economic disease is understood, we will fail to deploy our vast wealth in ways that encourage meaningful economic reform.