On the invitation of Temba Nolutshungu and his foundation, Dr. Yuri Maltsev visited South Africa, years after escaping the horrors of the Soviet Union.
Nolutshungu, Director of the Free Market Foundation, former anti-Apartheid activist and a contemporary of the late Steve Biko, introduced Dr Maltsev to the audience in Cape Town. The event was co-hosted by the Free Market Foundation, the Friedrich Naumann Foundation and Ineng. The two touched on their mutual goal of freedom and prosperity for all as Nolutshungu set the context for the engagement.
Above: Temba Nolutshungu introducing Dr. Yuri Maltsev at the event in Cape Town.
With socialism as a political system now increasingly called for in South Africa, Maltsev pointed out this European model (developed by political theorist Karl Marx) had led to massacre after massacre, poverty and misery for any who suffered living under the system.
Who is Dr. Yuri Maltsev?
Yuri N. Maltsev is Professor of Economics at Carthage College in Wisconsin, USA. He earned his B.A. and M.A. degrees at Moscow State University, and his Ph. D. in Labor Economics at the Institute of Labor Research in Moscow, Russia. Before defecting to the United States in 1989, he was a Chief Consultant of the Bank for Foreign Trade and then a member of a senior team of Soviet economists that worked on President Gorbachev‘s reforms package.
What is Socialism?
Dr Maltsev said that the essence of socialism could be summed up in a single sentence: the Abolition of private property. Karl Marx believed private property was nothing but theft and that It was a tool to exploit others. The idea of socialist revolution is that the revolution will eliminate private property and put in the hands of ‘the people’.
This is in stark contrast to the recommendations of Entrepreneurs in Public Policy workshops, through the lived experience of people in South Africa. The expansion of private property rights through title deeds and direct share ownership has been a core recommendation to government policy makers at entrepreneur workshops.
Maltsev explained that in many ways Socialism is not an economic system, it is a system of management. Unlike a free society, people have no incentives to do anything. Therefore the only way to make people do what the leaders of their countries want them to do is to threaten them with violence and force. In order to create their vision of a socialist society, great authority and control is wielded by those in power. Socialist governments across the world (including the USSR, China, Cuba, Vietnam, Cambodia and North Korea) jailed and killed millions of people, and millions more died from famines caused by state policies, with notable examples being the famines in Ukraine and China.
Dr Maltsev explained the distinction between socialism and communism. He explained that while today people consider the state-run economy of the USSR to be communist, “communism” as described by Karl Marx, was a theoretical stage humanity would reach after 500 years of living in a socialist society.
Maltsev explained that Marx imagined Communism as a utopia filled with wonderful people who would work as hard as they could and consume as little as they possibly could. According to Marx free labour for others would be the highest of all delights and would dwarf all other pleasures. While the state would be needed initially, the government would wither away because you wouldn’t need to govern people as people would become such angels they would be self-governing themselves. It was envisioned as a great utopia of tomorrow.
Dr Maltsev made the point that Socialism is a form of Collectivism, where a group is seen as more important than an individual. He made reference to other types of collectivism today, including those who that claim that a person’s status as a member of a racial, language, cultural or gender group is more important than their freedom to be an individual.
What is freedom?
While Dr. Maltsev denounced the lack of freedom in socialist states, he also made the point of clarifiying what exactly freedom is. He said that in the United States many people have forgotten what freedom actually means.
“Freedom is nothing but choice. If you have choice you’re a free person. If you don’t have choices you’re a slave, it means someone is making choices for you.” said Dr. Maltsev.
He said that sometimes people neglect the idea that economic freedom, political freedom, religious freedom and cultural freedom are all tied together, and that truly free people have personal control of every facet of their lives.
What it means for Entrepreneurs
Entrepreneurship and innovation create prosperity, when a government creating the correct fair and enabling environment. In order for entrepreneurs to create wealth and innovation, property rights need to be upheld and people should have the freedom to start businesses that provide valuable goods and services for their communities.
A socialist system that bans private property kills the vibrant entrepreneurial spirit, and people become reliant on their government to innovate and to create new opportunities.
Lessons for the Future
Socialism is commonly advocated by many young people today, but Dr. Maltsev argues that the reality of a true socialist system is misery and economic stagnation, and in many cases murder. What Maltsev and Nolutshungu argue from the experiences of different countries through history is that the hindrances to real entrepreneurship and prosperity is government control and manipulation, whether through socialism or the more insidious crony capitalism that is so widespread today.
Each system gives government the power to suppress and support an elite at the expense of the majority of people – whether it be a political or corporate elite tied to the special favours of an over-extended state. Understanding the history of socialism, its ideological basis and its results is vital for policy debates anywhere in the world, and especially today in South Africa.
- Find out more about Dr. Yuri Maltsev
- Find out more about Temba Nolutshungu
- Find out more about the Free Market Foundation
- Find out more about the Friedrich Naumann Foundation
- View event photos on Facebook.
- Joing the Ineng Mailing List