Want a Financial Crisis? Impose ‘Fairness’
I believed the spectacular failure of forced equality in the USSR would serve as a repellent for the rest of the world. I was wrong.
October 15, 2009 - 12:05 am
The money the Americans paid me was a pittance by their standards but it was generous by ours, and I was grateful for it. I didn’t hate them because they were “rich”; I was happy for them. They were lucky to be born in a free country that followed a normal path of development fit for human beings. It wasn’t their fault that I was born in a country that mutilated itself with inhuman social and economic experiments that made us so poor. America didn’t degrade us; our own government did, by throwing our potential into the bottomless pit of an irrational utopia.
The only way to close the gap, I thought, was to abandon the unworkable Soviet system and adopt the American model. It would be a long project but well worth the effort. Certain others believed that the gap should be closed by cutting America down to size. I knew such people; their attitude was a mix of hurt self-esteem, jealousy, and irrational collectivist selfishness, which had been cultivated for generations by the official propaganda. That was to be expected. What I didn’t expect was to find a similar attitude inside the United States.
I had previously believed, in my parochial Soviet ignorance, that the spectacular failure of forced equality in my country would serve as a repellent for the rest of the world, making sure that people would stop solving problems by bringing everyone down to the lowest common denominator. Little did I know.
The self-righteous campaigners for “fairness” use a clever trick to advance their ideas. They shock fellow Americans with statistics of how outrageously low wages in the third world are, without adding that prices on the local markets are low in the same proportion and that people might be able to get by on a dollar a day. That’s what my own family’s budget was at one time — and we weren’t dressed in rags and we didn’t starve. Living was cheap as long as one wasn’t considering imported goods or foreign travel. Of course, a pair of black market Levis equaled a month’s wages.
In the absence of the free market — the only reliable instrument of price creation — prices and wages were determined by the government. Everything was state-subsidized, which may sound like a great idea to all those who don’t realize that state subsidies come from their taxes.
The Soviet tax system was a mystery wrapped in an enigma. Under Stalin, taxes were integrated into the state-run economy by default and the workers didn’t actually “pay” them. The government simply kept everything according to its needs and gave the workers the rest — just enough to eat and buy simple clothes. On top of that, in the 1960s, Khrushchev introduced a flat income tax of about 10 percent, which was deducted automatically, without any need to file tax returns. The exact combined income tax was unknown due to a complete lack of transparency, but according to some estimates, it was as high as 95 percent. Such camouflaged taxation allowed the official propaganda to describe taxpayer-subsidized services — health care, education, and housing — as “free gifts” from the benevolent party and the government, for which the people had to be eternally grateful. I remember that formulation, taught to me in the state-run school named after V.I. Lenin.