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How Capitalism Beat Communism/Socialism Essay

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Updated: Oct 25th, 2019


Nowadays, it would be quite impossible to come up with the exact number of published books and articles that deal with the subject of what was the ultimate reason for Soviet Union’s collapse in 1991. This partially explains why the dismantling of an ‘evil empire’ has been addressed from a variety of different perspectives, which often imply ideological and even incidental nature of such a dismantling.

Even though the majority of researchers do insist on appropriateness of application of namely economic approach to dealing with the subject matter, there are still many people who think that the actual reason, why in 1991 Soviet Union had collapsed like a stack of cards, has to do more with ideology then with economics.

For example, in his book Beissinger (2002) attempts represent the end of USSR as the ultimate consequence of the fact that, despite their Communist rhetoric, Soviet officials never ceased professing Russian imperial values: “As the Soviet Union collapsed, it came to be widely recognized as a multinational empire. In this sense, the real issue that needs to be explained is how a polity once almost universally construed as a state came to be universally condemned as an empire” (6).

Nevertheless, the actual clue as to USSR’s collapse is being contained in the very abbreviation – The Union of Soviet Socialist Republics. Apparently, Socialism as political doctrine based upon the premise of social egalitarianism, simply contradicts the objectively existing laws of nature, which is why everything affected by Socialism becomes short-lived.

It is important to understand the moving force behind universe’s functioning, as we know it, is the disparity between energetic potentials. According to the Second Law of Thermodynamics, the amount of entropy in the universe is geometrically proportionate the extent of energy’s dissipation throughout the cosmos.

Given the fact that human societies are essentially material, The Second Law of Thermodynamics applies to them as well. Therefore, it is namely the differentiation in energetic potentials, which makes life possible. In human societies, energetic differentiation is being defined by the lack of resources (inequality), experienced by its members, which in its turn, serves as the primary force behind civilizational progress.

On the other hand, the ultimate goal of Soviet ‘welfare state’ has always been the equal distribution of resources among society’s members, due to considerations of ‘fairness’. This is exactly the reason why USSR was doomed to collapse – in just about every society, the functioning of which is being concerned with the observance of Socialist principles, the prolonged continuation of social, cultural and scientific progress becomes impossible, as the notion of equality is synonymous to the notion of energetic death.

In truly ‘fair’ society, as Soviet society once was, people are being deprived of a stimulus to indulge in socially productive activities. In this paper, we will aim to explore the validity of an earlier articulated thesis even further by revealing the set of objective preconditions, which had accounted for Soviet ‘classless’ society’s failure in confrontation with its main rival – the Capitalist society of United States.

Analytical part

Even though many political scientists refer to Thomas More’s book Utopia as such that only formally relates to the conceptual premise of Socialism, the close reading of this book points out to something opposite, because in Utopia, More had succeeded in formulating the two most important principles of Socialist state’s organization, which would later be observed by Soviet officials.

These principles can be outlined as follows: 1) Government’s active involvement in managing the economy, 2) Government’s policy of exposing citizens’ strive towards enrichment as something utterly ‘immoral’, because it is namely on the account of citizens’ ‘selfishness’ that the existence of inequality is possible: “The richer sort are often endeavoring to bring the hire of laborers lower, not only by their fraudulent practices, but by the laws which they procure to be made to that effect” (1516, 118).

This is the reason why, even though More described Utopians as people who used to indulge in a variety of economic activities, these activities appear being deprived of any logical sense, whatsoever.

As Shephard (1995) had put it: “The main purpose of Utopian trade appears to be the accumulation of their hoard of gold and silver. Since these precious metals are worthless in Utopia… Utopians’ mercantilistic trading policies seem perverse” (846). Thus, even as far back as in 16th century, the conceptual fallaciousness of Communism/Socialism has been revealed in the very work of this ideology’s initial theoretician.

Nevertheless, it was not up until the demise of Soviet Union in late 20th century that More and Marx’s Communist ideas were exposed as utterly anti-scientific in the realm practice. The reason for this is simple – the idea that economy should the subject of governmental management transgresses the laws of nature.

It is important to understand that the subjects of economy are millions and millions of people – each with its own economic interests. Just as one’s body, economy is an organism, consisting of operational cells. And, just as a particular cell of one’s body cannot ‘steer’ the rest of cells, government cannot ‘steer’ the economy, simply because it itself never ceases to remain economy’s subject. While trying to ‘govern’ economy, socialistically minded politicians simply act as body’s cancerous cells – they destroy the whole body of economics.

The history of Soviet Union (especially during the course of 20th century’s seventies and eighties) proves the full validity of such our suggestion. Just as it was the case in More’s Utopia, the functioning of Soviet economy has been firmly based upon the principle of state’s unilateral ownership of production assets and labor.

For example, up until 1961, Soviet peasants, working in collective farms, were even forbidden to hold passports of their own country – they were essentially state-owned slaves. And, as we know from history, the functioning of slavery-based economies has always been utterly inefficient.

One might wonder what was the actual stimulus for Soviet citizens to even bother to work? Soviet official propaganda answered that question from rather a moralistic perspective. According to it, the reason why citizens were expected to be hard-workers is that they were supposed to be genuinely concerned about benefiting their country, as their foremost priority, at the expense of neglecting their personal economic interests.

As Soviet high-ranking officials never ceased implying – since Soviet citizens were endowed with strongly defined communal-mindedness, it was only natural for them to perceive surrounding realities through essentially communal lenses – hence, making their existence quite incompatible with the Capitalist spirit of individualism. It is turn; this caused the very purpose of Soviet economy’s functioning to be concerned with the issues of morality, as opposed to be concerned with generation of a commercial profit, as it is the case in Capitalist countries.

While referring to the specifics of Soviet life, Horowitz (1989) states: “Soviet Socialism is based on a religious-social ideology… It rests upon a largely, although not exclusively, secular view that communal living would make everything from sexual affairs to child rearing to work patterns simpler and nobler” (110).

Soviet citizens were encouraged to work for peanuts, while deriving an emotional satisfaction out of the fact that in Soviet society there was no ‘Capitalist exploitation’ and while expecting to believe that governmentally designed economic policies were meant facilitate ‘equality’ within the society. Nevertheless, as we have pointed out earlier, there is simply no way to make a particular political ideology functionally effective for as long as such ideology’s very premise violates the laws of nature.

And, the foremost law of nature, regarding economy, insists that there can be only one objective reason for people to indulge in economic activities, in the first place – the prospect of generating a monetary profit. As it was rightly suggested by Geva (2001): “Business is expected to do whatever is necessary in order to succeed, and is not expected to be concerned with abstract morality. Business is a one-dimensional, purely profit-seeking enterprise. Profit is not just prioritized; it is elevated to the exclusion of all other interests” (585).

Therefore, the continuous existence of Soviet Union was only possible for as long as country’s citizens were being spared of an opportunity to compare their highly ‘moral’ but impoverished living with ‘immoral’ but prosperous living of people in Capitalist countries.

Soviet leaders were well aware of this fact, which is why, prior to the outbreak of WW2; they never even tried to keep their agenda of world’s conquering concealed. After all – even right until USSR’s collapse in 1991, Soviet coat of arms featured the Communist symbol of hammer and sickle on the foreground of the globe and Soviet Constitution openly stated that it was only the matter of time before the rest of world’s countries would join ‘workers’ paradise’.

Nevertheless, as time went by, it was becoming increasingly harder for Soviet leaders to keep citizens informationally isolated. In fact, many Soviet leaders, such as Khrushchev, had a particularly hard time understanding a simple fact that it was not the American military that represented the foremost threat to USSR’s existence, but information about the actual realities of America’s Capitalism, to which Soviet people were being progressively more exposed, despite the existence of an ‘iron curtain’.

For example, it is being estimated that at least two million Russians have attended 1959 American National Exhibition in Moscow, which is why it comes as no surprise that it was namely from early sixties onwards that the number of Soviet citizens dissented with regime began to grow rather exponentially.

Apparently, by being allowed an access to the actual information about American way of life, Soviets were becoming increasingly aware of the fact that they were living not in the ‘happiest’ but probably in the most miserable country on Earth.

While referring to the effects of American National Exhibition of 1959, Reid (2005) states: “In the notorious confrontation between the superpowers at the American National Exhibition in Moscow 1959, it was the state-of-the-art kitchen of the model American home that served Vice-President Richard Nixon as the ideal platform from which to challenge Soviet state socialism” (290).

Things got even worse for Soviet leadership throughout the course of seventies and eighties, because it was specifically during the course of this historical period that Soviet economy was beginning to show more and more signs of being ill beyond the point of recovery.

For example; whereas, in 1970 USSR imported 2.2 million tons of wheat from Capitalist countries, the amount of country’s wheat imports increased to 15.9 million tons by 1975, to 29.4 million tons by 1980, and to 45.6 million tons by 1985.

Whereas; as of 1970, the amount of country’s meat imports accounted for 165.000 tons, by 1975 it accounted for 515.000 tons, by 1980 it accounted for 821.000 tons and by 1985 it accounted for 857.000 tons. It is needles to mention, of course, that Soviet Union has been paying for these imports with U.S. dollars. And, what was the source of Soviet hard currency? It was the export of Soviet natural resources, such as natural gas and oil.

When we look at the price-dynamics on international market of oil throughout the eighties (1980 – $66.1, 1981 – $57.6, 1982 – $50.3, 1983 – $45.2, 1984 – $42.2, 1985 – $39.9, 1986 – $19.9) the ultimate reason for USSR’s collapse in 1991 will become perfectly clear – the country simply became a bankrupt, due to the sheer inefficiency of its Socialist economy.[1] As of 1975, in terms of agricultural production, Soviet Union fell behind U.S. by twenty times.

Yet, in the same year, Soviet production of tractors beat that of America’s by six times, and the production of agricultural combines beat America’s production by sixteen times! There was something utterly surreal about the situation – the country that could not feed its citizens, nevertheless kept of spending millions and millions of dollars every year to manufacture useless tractors, which would broke down on the next day, after being put to use.

By the year 1985, even such basic products as salt, sugar, cigarettes, vodka, milk, butter, and sausages had simply disappeared from the shelves in Soviet Union’s state-owned stores. Around that time, even Soviet high-ranking officials were willing to sell country’s top-secrets to the West for as little as few cartons of Marlboro cigarettes, a pair of jeans or few video cassettes with porn.

How was it possible for the country that, before Communist revolution of 1917 used to be referred to as ‘world’s agricultural basket’, to be reduced into essentially huge concentration camp, populated by starving ‘white niggers’?

The answer is – it was nothing but the logical consequence of the fact that, for duration of seventy years, the functioning of country’s Socialist plan-economy did not make any economic sense, because Soviet leaders had never even been concerned with trying to ensure economic sense, in the first place. Instead, they were concerned with ensuring ‘equality’.

In a similar manner, the promoters of a ‘welfare state’ concept in Western countries (read Socialists) had never been concerned with trying to assess what would be the actual consequences of their political activities – all they care about, is gaining a cheep popularity with marginalized masses by the mean of indulging in essentially Socialist rhetoric about importance of ‘fighting inequality’, ‘ensuring affordable Medicare’ and ‘helping underprivileged’. Just as Communist commissars before them, these ‘progressive’ individuals suggest that the pathway to ‘fairness’ is taking money away from the rich and distributing it among the poor.

Here is how one of self-proclaimed ‘experts on equality’, Townsend (1979) discusses the ‘evils’ of Capitalism, while blaming it for the fact that the representatives of racial minorities in Western counties are rarely able to attain social prominence: “Poverty has to be understood not only as an inevitable feature of severe social inequality but also as a particular consequence of actions by the rich to preserve and to enhance their wealth and so deny it to others” (25).

Apparently, it never occurred to this Commie-wannabe that ‘equality’ could only be achieved among equally poor and miserable. To paraphrase George Orwell – all people are equal but some people are more equal than the others are.

As the history of Socialism in different countries indicates, this political ideology is best discussed in terms of a social illness, which simply assumes different forms. For example, today’s Western concept of neo-Liberalism has very little to do with the traditional concept of Liberalism – it is essentially a poorly concealed Socialism.

In its turn, this explains why the hawks of neo-Liberalism think that it is being perfectly appropriate, on their part, to come up with suggestions that industrious and hard-working people should be stripped of a half of their annual income in taxes, so that newly arrived immigrants from Third World would be able to enjoy free Medicare and to ‘celebrate diversity’, while pushing drugs on the streets.

Nowadays, such Western countries as Sweden, Germany, Britain and Finland have been turned into essentially Socialist states, where the hordes of uneducated and unemployed social parasites are being provided with free food and free housing in exchange for nothing. One of the most important principles of Socialism is proportionate presence of representatives of society’s different strata in the Parliament.

This is why in Finland’s Parliament, for example, the number of ethnic Swedes-parliamentarians accounts for 6% at all times, because this is the actual percentage of ethnic Swedes in Finland’s population. Whether these people are being professionally adequate to pass legislations matters very little – ‘equality’ is above all.

The only reason why the economy of an earlier mentioned countries has not yet began rapidly disintegrating, as it was the case with Soviet Union’s economy in seventies and eighties, is that the illness of Socialism there had assumed rather chronic then acute form – after all, the process of industrialization in Western countries was completed as early as the beginning of 20th century.

However, in economically and socially backward countries, with substantial percentage of rural dwellers, such as Cambodia, China, Russia, Cuba, and North Korea, the implementation of Socialism had in many instances placed these countries’ whole populations on the threshold of physical extinction (Cambodia).

It is important to understand that the Socialist transgression of objectively existing laws of economy and history cannot go on for too long, without bringing about the set of negative and often irreversible consequences. Apparently, the ‘progressive’ politicians in Western countries have a hard time understanding this simple fact.

This is the reason why they insist that government should be meddling with economic affairs, as they believe this would increase the levels of ‘equality’ in every particular society. Nevertheless, as the example of Soviet Union in seventies and eighties suggest, it is namely when the hawks of ‘equality’ are allowed to exercise political authority for prolonged period of time, that the society under their management becomes grossly ‘unequal’.

Through eighties and seventies, Soviet society became probably the most stratified on Earth. Despite Soviet official propaganda’s claim that country’s Communist party had succeeded with building semi-classless society, consisted of proletarians, collective farm peasantry and intelligentsia (without bourgeoisie), the actual realities of living in ‘workers’ paradise’ did not correlate with propaganda’s claims, whatsoever.

On one hand, there was a small number of Party’s top-ranking officials, with their own bodyguards, chefs, physicians and even private jets, but on another, there were millions and millions of nothing less than slaves, who had to spend long hours every day in huge lineups, while waiting for their turn to buy even such basic products as milk from state-owned stores. This was the logical consequence of Socialist experiment in Russia.

This is why; those familiar with the history of Soviet Union are being naturally inclined to draw apparels between the promoters of Socialism and mentally inadequate people, who believe that the functioning of their internal organs should be ‘planned’.

However, just as it is being impossible to ensure that one’s liver produces a ‘planned’ amount of ursodeoxycholic acid on daily basis, it is impossible to ‘govern’ the economy. Therefore, the idea that the process of building of Socialism in USSR had simply been mismanaged, because otherwise it would have produced positive results, is best referred to as utterly preposterous.

The utter fiasco of Soviet Socialism became self-evident through eighties, especially given the fact that during this time, America’s economy experienced nothing short of a boom.

When the majority of Soviet citizens experienced a hard time, while trying to buy milk, America’s even unemployed citizens thought of their ownership of at least one car as something most natural. Therefore, the victory of America’s Capitalism over Soviet Socialism was dialectically predetermined and had nothing to do with Capitalists having succeeded in conspiring against ‘workers’ paradise’.

This was nothing but the consequence of a fact that economy cannot possibly serve the purpose of advancing any moralistically charged political dogma, as it used to be the case in USSR. In eighties, all it would take for even Soviet hard-core Communists to begin hating their country with passion, is to be shown a catalogue of Western products, such as Quelle.

Apparently, being able to choose among hundreds of different sorts of grocery products in a Capitalist supermarket, after having arrived there in its own car, is so much better than being nothing short of a staving slave in highly ‘moral’ and ‘equal’ Socialist paradise, featuring state-owned stores with absolutely empty shelves.


The earlier provided line of argumentation as to what was the actual reason for Soviet Union’s collapse in 1991 substantiates the validity of paper’s initial hypothesis – Socialism can never work because of the unnaturalness of its theoretical premise, concerned with the notion of equality.

Once there is ‘equality’, there can be no flow of energy. And, once there is no flow of energy, everything comes to a stall – just as it was the case with the functioning of Soviet economy in seventies and eighties. We can only feel sorry for the fact that the example of Soviet Union had not taught Western socialistically minded political activists a whole lot.

Had it been otherwise, they would not be pushing forward clearly Socialist agenda of ensuring ‘equality’ and ‘fairness’ in traditionally Capitalist White countries. There can be no ‘fairness’ – all that there can be is an ongoing economic, cultural and scientific progress, which in its turn, is being fueled by ‘inequality’. It is only when people realize this simple fact that that the illness of Socialism would be dealt with, once and for all.


Allen, Robert “The Rise and Decline of the Soviet Economy”. The Canadian Journal of Economics 34.4 (2001): 859-881.

Beissinger, Mark. Nationalist Mobilization and the Collapse of the Soviet State. Cambridge: Cambridge University Press, 2002.

Geva, Aviva “Myth and Ethics in Business”. Business Ethics Quarterly 11.4 (2001): 575-597.

Horowitz, Irving “Socialist Utopias and Scientific Socialists: Primary Fanaticisms and Secondary Contradictions”. Sociological Forum 4.1 (1989): 107-113. More, Thomas. Utopia. London: Forgotten Books, (1516) 2008.

Reid, Susan “The Khrushchev Kitchen: Domesticating the Scientific-Technological Revolution”. Journal of Contemporary History 40.2 (2005): 289-316.

Shephard, Robert “Utopia, Utopia’s Neighbors, Utopia, and Europe”. The Sixteenth Century Journal 26.4 (1995): 843-856.

Townsend, Peter. Poverty in the United Kingdom, London: Allen Lane, 1979.


  1. Robert Allen, “The Rise and Decline of the Soviet Economy”. The Canadian Journal of Economics 34.4 (2001): 874.
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