Mises.org November 6, 2021
Yuri Nicholas Maltsev is an Austrian school economist and economic historian from Tatarstan. He earned his BA and MA degrees from Moscow State University and PhD in labor economics at the Institute of Labor Research in Moscow. Before defecting to the United States in 1989, he was a member of a senior Soviet economics team that worked on President Gorbachev’s reforms package of perestroika. He is currently professor of economics at Carthage College in Kenosha, Wisconsin. He has appeared on CNN, PBS NewsHour, Fox News, CBC, and Financial Network News across American, Canadian, and European television. He is the editor of Requiem for Marx (1993) and co-author of The Tea Party and the American Counter-revolution (2012) and The Tea Party Explained: From Crisis to Crusade (2013). He is a Senior Fellow of the Mises Institute.
Jeff Deist: We’re speaking in mid-September, and President Biden just announced executive orders mandating vaccines for many employers. As a former Soviet citizen, what do you make of this?
Yuri Maltsev: That’s awful. In the United States, fascism comes in the very strange form of an elderly dementia patient. Usually fascists are charismatic leaders, look at Hitler or Mussolini, but this one, what he’s doing is just unbelievable. He is a socialist, definitely, that he is mandating the private sector what they should do, what they shouldn’t do. Karl Marx in the manifesto of the communist party, he defined socialism and communism as abolition of private property and that private property can be abolished overnight, like what happened during the Bolshevik Revolution in Russia. But it can also take a gradual kind of process and that’s what is happening right now in the United States. Private property is becoming like having a title to wetlands. You have private property, but you cannot do anything with it.
D: Biden brings to mind another kindly old man, Mikhail Gorbachev, with whom you worked in the late eighties as a Soviet labor economist. In your introduction to the Requiem for Marx book, you go in depth about how Gorbachev managed to absolutely snow the Western media and snow George Bush senior.
M: Yes, he absolutely did. He was portrayed as a great liberator, however, he was a Communist. From another hand, we should give him some credit because he was talking about socialism and giving it a human face, which nobody understood at the time.
There is this joke that James Bond was sent to Moscow to find out what’s happening there under Gorbachev and he goes to the bakery and there is no bread, and he writes in a little notebook “No bread”; he goes to the butcher shop, no meat, and writes “No meat.” There is a KGB officer following him and the officer looked over his shoulder and said, “A year ago, you would be shot for doing that.” And Bond then writes “No bullets anymore.” When there were no bullets, people stopped working, because under socialism, the only way to work is under a threat to your life or to the life of your loved ones, because there is absolutely no incentive to do anything. And that’s what Mr. Gorbachev did not understand.
In the beginning of his reign, Gorbachev sounded confused. For example, he was saying that central planning actually works, the problem is we never had a good plan, and so on. That definitely didn’t show him as he knew what he was doing. But definitely, he played some positive role in destroying that evil empire.
Today, we have Mr. Biden, who is building a new evil empire. I think that his vaccine mandates speech is just telling us that he is right now on a warpath. He is desperately looking for enemies and who those enemies can be. So, he picked up unvaccinated people as his enemies, because he lost the war in Afghanistan so dramatically. He completely screwed up the evacuation and now he needs to attract the attention of the masses to something else. That’s what I’m thinking is going on.
And they are also, I think, trying the water, to see if they can get away with this mandated vaccination, with forced vaccination, with dragging people into vaccination centres, which reminds me of forced abortions in China, then that will be the ultimate goal: your loss of freedom. If you remember John Locke, his major question was who owns you. Do you own yourself? If you do, you are a free man, and if somebody else owns you, you’re a slave. If you don’t own your body, then who does? The government acts as if it owns your body and knows better what to put in it. And now, if they will forcibly vaccinate us that would be the end of whatever we think we are living in and would be the beginning of slavery.
D: Let’s continue this Biden versus Gorbachev comparison, because I like it. You write about glasnost and perestroika being basically fraudulent cronyist schemes in practice, not at all what the Western media reported. You quote Gorbachev saying, “What we want is a planned, regulated socialist market.” That’s essentially what the World Bank types advocate today.
M: Absolutely. We must have this economy which is run by the government, not by the private sector. Everything Mr. Biden has been doing since his inauguration is heading in that direction, more regulations for everything, for industry. People don’t like his predecessor, Mr. Trump, but under him regulations were being removed, 20 percent of them, but Biden has restored everything that was removed. His vice president, she’s just not only a socialist, but kind of a Stalinist. Look at her speeches, most recently in California. This is a very sad time that we are living through, but the people inflicted it on themselves. I don’t know if elections were fair or not, but I think it’s very simple if you are voting for a socialist or you are voting for a capitalist.
D: You mentioned that your time working with Gorbachev convinces you he didn’t know any economics at all. He was completely illiterate on the subject. I suspect that’s equally true of Biden.
M: Yes, yes. In his fifty years in government his working record is just atrocious. When he was the chairman of the Judicial Committee of the Senate, it was unbelievable to listen to him. I don’t know, however, whether he is stupid or he is evil, and I think both. He’s a power-hungry kind of person as well as the people around him.
D: You left the Soviet Union and came to the United States in 1989. A lot of Soviet expatriates in the US became neocons or cold warriors, but you managed to avoid that.
M: Yes, because neoconservatism is just another side of Trotskyism. That we should impose our will on other people against their will. You see what is happening, how we trap people in Vietnam or in Afghanistan or in Iraq or in Syria, trying to start wars which we do not intend to win. It’s to make some people happy and richer and impose all kinds of left-wing social theories on them. It’s like imposing democracy—these kinds of things cannot be done from above or from the outside of the country.
D: In the eighties and nineties, especially, Conservatism Inc. loved nothing more than a Soviet defector willing to denounce the USSR. The Buckleyite right purged the Old Right on the grounds we had to defeat the Soviets above all, so the Cold War justified accepting bigger government at home.
M: It definitely was a threat. I would agree with that part, but from another hand, how did we oppose the Soviets? The CIA provoked the revolution in Hungary, we didn’t support those people as we had promised, so many of them were murdered including the very reformist prime minister, Mr. Nagy, and about three hundred thousand Hungarians fled. We did the same with Czechoslovakia and the war in Vietnam was the same thing. So that’s a problem that we have, that we are engaging in wars, which are designed only to feed some people, to feed the military-industrial complex of which President Eisenhower was telling us back in 1961.
D: As a new arrival in the early 1990s, did you think America was generally capitalist and free at the time or did you already sense there were deep problems here?
M: I worked, if you can call it work, for the federal government in Washington, DC, at the United States Institute of Peace, which is still there. It’s a congressional think tank. It’s huge right now. I could see there were deep problems.
D: They have an enormous building by the Lincoln Memorial. I wonder what their budget is relative to the Mises Institute?
M: Oh, probably several hundred times more if not thousands. And they also built, just maybe four or five years ago, a huge campus in south-eastern Washington, DC, just unbelievable.
D: Apparently there’s no more peace than when they started.
M: No, they’ll never be shut down. And for me, what was amazing was that I was awarded this very prestigious position. I became a fellow of the United States . . . the full title was even more feudal, something like Senator Jennings Fellow of the United States Congress in Peace. I thought that maybe they will study peace. My neighbour with an office on the right was Eugene Rostow. Eugene Rostow was possibly the most prominent warmonger in United States history and he almost single-handedly started the Vietnam War. The chairwoman of the board was Elspeth Rostow, who was his wife. This formed kind of a Rostow dictatorship. There were generals and the like, rather a nursing home for the neoconservatives. The worst thing was not that they were funding these people who didn’t need the stipends because they were already rich, but they were dispensing tens of millions of dollars. Now they are dispensing hundreds of millions of dollars, to poison our academia, to provide so-called grants to study conflict resolution. And how you can resolve conflicts, by accusing everybody of racism or paying the left-wing academia to develop critical race theory and other stuff like this?
D: At this point, in the early nineties, you had already discovered Austrian economics.
M: Well, I was leaning toward Austrian economics since my days in the Soviet Union. When I was a third-year student at Moscow State University I was given a book by Hayek, The Road to Serfdom, and at that time I could be punished anywhere from eight to ten years of imprisonment, just for having the book.
D: Just for possessing it?
M: Just for possessing it. And the person who gave it to me would get fifty years, because he would be accused of disseminating anti-Soviet slander. That was the so-called Article 57 of the Penal Code of the USSR. This is even an innocent book. But it was on the KGB forbidden list, as well as Solzhenitsyn and Orwell.
Because of Hayek’s influence, I changed my major. Instead of studying history and social science, I began to study economic history and history of economic thought. It was at this point that I received a letter through the Lenin’s Library, now the Russian State Library, that since I was engaged in a critique of the vulgar bourgeois political economy, I should be given access to the contents of the library. How can you criticize something without knowing what it is? So I got real access. While there I read a lot of other stuff, as well. You go to a marked room and you sign a pledge that you’ll never tell anyone about what you read there. The unfortunate thing is at that time I didn’t know about Murray Rothbard or Ludwig von Mises and so I was insatiably reading Hayek.
When I came to the United States I was invited to the Shevchenko Jamestown Foundation, which is a very interesting think tank, kind of like the world defectors’ club. They would not pay me anything, but they were very nice in providing me with a computer and office space and a telephone, and while there I wrote an article on perestroika for The Freeman. I was invited to the Mises Institute, to teach at Mises University, at that time at Stanford University, and then I met Murray Rothbard and we became very good friends. He became my real mentor. I met a lot of great people like Tom DiLorenzo, Walter Block, Bob Higgs, and many, many others. It was not a conversion moment, because I was already converted, but I remember Murray, he took my interview from me and he titled that interview “Mises from Moscow.” He was very enthusiastic about the future of Eastern Europe and the former Soviet Union in finding the path to freedom.
I think it was 1990, the Mises Institute organized a conference in Washington, DC, to honour Gottfried Haberler. Haberler was a great Austrian economist, but then he turned more mainstream. He began to teach at Harvard and he was not associated with the Institute at all and the Institute also didn’t like him for his mainstream leaning. I knew him rather well because I had lunch with him every Wednesday in Washington. I advised Murray to lure him back where he belonged, and so the Mises Institute put on a wonderful conference in Washington, DC, and Haberler addressed this conference.
Attending the Washington conference was a delegation of twelve Lithuanian businesspeople and politicians who came to the United States right after Lithuania became an independent country. They were all enthralled, and today we have a very strong Austrian economics kind of school in Lithuania. The Lithuanian Free Market Institute is doing a great job in promoting Austrian ideas and some are very visible in the Seimas, which is the Lithuanian parliament. It was an interesting time because nobody knew what was happening. Murray, he wrote quite a lot on the economics of transition and he had this wonderful slogan: land to the peasants, and factories to the workers, and bureaus to bureaucrats, that was his approach. That was his major message to them. And he praised the Baltic states because they were ahead of the other former Soviet Republics and they are ahead today in promoting freedom.
D: We have the whole history of the twentieth century to see the failure of the Soviet Union. You lived it. But as you’ve pointed out, Mises predicted all of this in 1920, without the benefit of hindsight, in his essay “Economic Calculation in the Socialist Commonwealth.” What an achievement.
M: True, absolutely. I read Ludwig Mises’s “Economic Calculation in the Socialist Commonwealth” and his book Socialism only when I came to the United States, and I was honoured to write an introduction to “Economic Calculation” published by the Mises Institute. A lot of things just became really clear.
When you live in the Soviet Union, especially if you are an economist, you understand that the system does not work. You understand that the prices are all phony, that the prices are made up, that they’re being ignored. But after reading Socialism by Mises, then it all becomes crystal clear. It’s like processing film when the image is already there, it is only after developing the film that the image becomes clear. That was the role of Hayek for me with The Road to Serfdom. And so it was an interesting time.
In the Soviet Union at this time, they came up with the idea of the 500 Days Program. This is how long it would take to make the transition from a socialist slavery to economic freedom. My point was why five hundred days? In five hundred days, you cannot do anything. If you make a transition like this, you should do it immediately in one fell swoop. And sure enough, while I was writing this, Margaret Thatcher made an interesting comment. She said something like, if we in the United Kingdom would decide to move from left-hand driving to right-hand driving and do it in five hundred days, that would be havoc on the road.” So, it is with all economic reforms. I believe strongly, and Murray Rothbard was very supportive in this, that a gradual transition is transition to the third world only. You can either make a transition right away or don’t even try to do it.
D: David Gordon and Gary North also wrote about Marx the man, in your collection of essays. Marx was not necessarily that bright. He wasn’t that accomplished. Gary North tells us Friedrich Engels was a lot smarter and ambitious. Marx lived a fairly pampered and subsidized life, and had far more money than the average Soviet worker. And yet this apparent mediocrity seems to have enduring influence. Why?
M: Because he provides a very good argument for so-called intellectuals to grab the power. Because the whole idea of Marxism is that the proletariat, the great masses, are oppressed. But what should they do? They should follow the people with the vision, the professional revolutionaries. And who would be better for that than the intellectuals. So, that’s the point. Hayek is also saying it in his wonderful essay “Why Intellectuals Love Socialism.” Marx, he was a very power-hungry individual. He never had real power, but from another hand, his writing is about power, how to get power. And today he is popular for what reason?
There is another side of Marxism. It’s not only proletariat and bourgeoisie, workers and capitalists, but it is also oppressors and oppressed. Because if you read Marx, especially Das Kapital, the twenty-third, twenty-fourth chapters, I still remember all this stuff, he’s writing that the whole of human history was a fight between oppressors and oppressed, an influence that would be like slaves and slave owners and feudal lords and peasants and now we have workers and whatnot. That’s easy for the so-called intellectuals of today to put whomever they want, to put any kind of group they believe is a victimized group, and to present them as oppressed. This victimization agenda will be taken up by the intellectuals of the Left. It is important for them to have something to point at, take the so-called environmental crisis, that’s another invented crisis that we have, and also race issues. And these two issues, they believe, can destroy capitalism, destroy the United States, destroy the society that we live in, and provide them with unlimited power, because that’s what it is: if you control energy, for example, you control culture, then you are in charge of everything. Education, today, I’m sorry to say, but I think we are losing this cultural war to these people because they control the mass media, control Hollywood, control the production of culture.
D: Let’s continue with that thought. There’s this concept of cultural Marxism, where the focus on economic class shifted to identity politics because the economic arguments weren’t working. The US middle class, the union workers, weren’t buying it. So the Left shifted its focus. Today we have a lot of loose terms like “woke” and “SJW” and “PC” to describe this phenomenon. As someone who teaches young people on campus, how much have things changed since you arrived in the US?
M: It’s so sad because when I began to teach, and I began to teach almost immediately when I came to the United States, I was teaching first as an adjunct professor at George Mason University on the Arlington campus and then I moved to Wisconsin. I am now in academia for thirty-two years. And at that time, students were very curious, they were way to the right of the faculty. The faculty always was, at least the faculty that I dealt with, very much to the left of centre. They had an agenda to reproduce themselves, because that means that left-wing faculty will only hire left-wing faculty, and now they are a majority. We have very few really free market academics, but a lot of socialists and radical socialists and communists and democratic socialists, so-called, which is an oxymoron. Mr. Bernie Sanders visited my college, Carthage College, and many faculty were sitting there from three in the morning because they were afraid that they will not get in to meet the great leader.
D: Were students camping out overnight as well?
M: Some, yes, those that are already brainwashed.
D: And presumably very few kids at Carthage College are in any way oppressed.
M: [Laughs] True. Except when they are looking for parking in the morning.
D: I want to clarify: Do you think the students in some of this country’s liberal arts schools are actually to the left of their faculty?
M: I would say not very many, but there are some. There are some activists who are just fanatics, who became fanatics because they were screwed up in high school and then they came to Carthage. We have faculty who reinforce their views. I’m not saying all faculty. We have some mild socialists also. We have even on our campus some people who are still on the side of freedom, but not many, the majority is not. What is going on today with this masquerade, if you will look at what the faculty says in their blogs, for instance, “Yesterday I saw a student who was sipping coffee without a mask and he was sipping coffee very slowly, because he enjoyed not wearing a mask.” I can’t imagine that a professor is writing that.
D: One thing that’s changed a lot in the US since you arrived is secularization. There is far less religious observance in the United States today than thirty years ago. Rothbard’s essay in your Requiem for Marx collection compares Marxist theory to the return of the messiah in Christian theology, Marxism will put an end to history and establish a new heaven and a new earth. The establishment of communism marks an end point to human history, a final perfected state of mankind. So the secularization of America is a necessary Marxist goal.
M: True, yes. Murray wrote “The Religious Eschatology of Marx.” Eschatology, that’s the end of history. Marx hated religion, he called it opium of the people, and in the Soviet Union alone they murdered over a million clerics of all religions. I was just reading a gruesome historical article. In Odessa, for example, they were putting boiling lead into the Christians, saying that this is a communion for you. And they were hanging monks and nuns and priests from belfries. Why such atrocities? Because it’s obvious that if you are a believer, you believe in God, no matter what denomination or religion you are, then you don’t have space in your mind for Marx and Lenin and Stalin to be gods. That would be a very unchristian or very non-Islamic or very non-Jewish thing, to believe that there is a god, in the Kremlin or in the White House or somewhere else. That’s why they needed to clean out the place and why religion was prohibited until 1942.
In 1942, the Soviet Union legalized the Russian Orthodox Church. For what reason? Because there were about 3 million defections from the Soviet Army over to the Germans. Stalin was afraid that the whole thing would fall apart without that. And most would believe that Stalin and others were kind of the antichrist. That’s one thing, to destroy religion, then next is the family. When families are destroyed then civil society is destroyed and then you’re naked before them. Then you don’t have any support mechanisms. I’m not a religious person myself, but religion is a very important social institution, because it provides a lot of social support for people.
D: Did the Soviets view religion as a competitor with the state for people’s loyalty?
M: Yes and no because some, for example, the Russian Orthodox Church were just a state institution under Stalin and his successors run mostly by the KGB.
D: So the state co-opts the church like it co-opts other institutions.
M: Yes. Under Gorbachev, when the Union of Soviet Socialist Republics fell apart on the glorious Christmas Eve of 1991, the state collapsed as we know it. If you look at the Russian Orthodox Church today, they are blessing the Russian aggression against the Ukrainians, against others, they’re holding masses to support the Russian troops. They’re blessing tanks and rockets. There are some denominations that are not really statist denominations. There are some Protestant denominations in Russia which believe that you don’t need any intermediaries between you and the God. And that brought the idea even to John Locke that we are all equal before the Lord.
D: Let’s talk about academic freedom. A well-known philosophy professor at Portland State University, Peter Boghossian, resigned yesterday over harassment he’s endured from faculty and the students. Do you worry about your own academic freedom?
M: The only thing I like from Marx’s quotes is that we don’t have anything to lose except chains on our feet. And so, I’m not worried, because I just fight back. I am fighting. Fortunately for me, I was tenured twenty-five years ago and that’s why I’m saying that if you give up on something, then they will take over everything. And that was the greatest message from Solzhenitsyn in the gulag, don’t give up. They survived and they were even respected by their jailers, by the prison guards. Besides that, I would say all my classes are full and I have waitlists! I would say that the great change came with Ron Paul. Especially when Ron Paul was very active, many students were his followers and he was the best ambassador of ideas of liberty on campuses. We definitely need leaders like him for students, to be seen as role models.
D: Dr. Maltsev, I think that’s a perfect place to stop. Thank you.
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