ILLUSIONS, HALF-TRUTHS AND MASKS. Keywords: Marx-Engels, Lenin, Mao, brain washing, Cultural Revolution, behavioral conditioning, Joseph McCarthy, Berlin Wall, Velvet Revolution, Vaclav Klaus, Hayek, Friedman

 

The Fall of the Berlin Wall in 1989

ILLUSIONS, HALF-TRUTHS AND MASKS

A meditation about the new rise of communism in America

By Xuan Quen Santos

PART  IV

“The idea of Socialism is at once grandiose and simple…We may say, in fact, that it is one of the most ambitious creations of the human spirit…so magnificent, so daring, that it has rightly aroused the greatest admiration. If we wish to save the world from barbarism, we have to refute Socialism, but we cannot thrust it carelessly aside.”

Ludwig von Mises (1951)

 

Discussing Marxism seriously has become increasingly difficult for several reasons.

The first one is most of its proponents around the world are involved in an act of faith, and not of reason. They are already invested in the political activism of the Marxist idea called “The Praxis”. They believe in the ideological construction that leads to the inevitable stage of revolution, so they are already practicing it. Instead of waiting for the workers revolution to spontaneously start, as predicted, they ignite the bombs, start the urban terrorism, kidnap capitalists and sponsor the strikes. The words luddite, sabotage, boycott, strike and picket line come from “the Marxist Praxis”. They are involved in a self-fulfilling prophecy. Their minds are closed. Job would have a hard time finding the patience to reason them out of their errors. Brainwashing is easy when compared to educating.

You may not be surprised to find out that the origin of “brain washing” dates from the Cold War period of the 1950s. It was first used as a translation into English of its literal equivalent in Chinese of the expression xi nao. The reporter was describing the procedures of how Mao’s People’s Army was treating dissidents to “clean their brains from western capitalist ideas”. It describes what happens at re-education camps with those that are not outright eliminated. It is a vulgar application of the techniques in behavioral sciences developed early in the XX century by Pavlov and Vygotsky in Soviet Russia, and by Skinner in America. The scientific term is “conditioning”. Clinical methods based on the same principles are used today in treatments of addictions, or rehabilitation of prisoners, including those rescued from religious cults or long kidnappings. During Mao’s “Cultural Revolution” (1966-76), more than 2,000,000 people were subjected to the “cleansing” treatment. Most of the victims were elder conservative intellectuals and artists, businessmen, university professors and religious leaders. It is also described as “psychological torture”, a regular tool of all the secret and spying government agencies. Do you remember “water-boarding”?  Another example of how science becomes a tool without moral limits in the totalitarian state. Do you remember “1984”?

Map of the former USSR - The Soviet Union until 1991

The second one is their ignorance of the basic mainstream and current thinking in economics. For a century, most universities and textbook writers, including the holy Ivy League institutions, teach either outright Marxism, or Keynesian Economics. Both approaches center on the control of the economy by governmental institutions. One uses the method of terror to take over. The other preaches as a method the mask of monetary and banking control -inflation- under the excuse of preventing economic crises by financing welfare entitlements -dependency-. On the way to the workers’ paradise, the first one is a short cut through hell; the second one makes a first stop at the entrance to purgatory before getting to the same destination. Torture is the necessary result of inflation, recession, economic disorder and the destruction of capital and morality; all as consequence of Keynesian Economics. The convoluted language and mathematical formulas of the technocrats that both doctrines use to mask their half-truths makes it difficult to carry on any discussion without a translator.

Serious academic Marxists are scarce but run of the mill experts are visible in the academic spheres of the United States and others occupy powerful positions in “the swamp”. Although it seems to be a surprise to many, it is not to those that remember the infamous Senate hearings of the House Un-American Activities Committee, and the investigations led by the controversial Senator Joseph McCarthy (R. Wisconsin). History has not been kind or objective to what these processes really exposed during WW II and the following decade. By admission of many of the witnesses, there were “cells” of the Communist Party in many university faculties and the cultural/arts scene. Some professors had lied about their membership in their applications for immigrant visas, or appointments to teach. A few spent time in jail, many were fired, many resigned. Soviet spies were found in the State Department and later discovered within the Manhattan Project that gave the Soviets the atomic bomb. Unfortunately, McCarthy turned the proceedings into a media circus in the new age of TV for his own personal political gain, but his excesses backfired. The discredit and counter propaganda was such that the term McCarthyism has since then become synonymous of defamation and political accusations with no basis. He died in 1957 after being censured by his colleagues. But the most important consequence of his activities was to discredit any effort that could be labeled as “anti-communism”. Until recently, calling anybody a “commie” was a big no-no, totally politically incorrect. After a few years, many of those that had admitted their political affiliations to international communism went back to teaching at their old posts, others were paid reparations.

Sen. Joseph McCarthy's campaign 

William Bennett, Reagan’s Secretary of Education, expressed McCarthy’s fall in 2007: “The cause of anti-communism, which united millions of Americans and which gained the support of Democrats, Republicans and independents, was undermined by Sen. Joe McCarthy ... McCarthy addressed a real problem: disloyal elements within the U.S. government. But his approach to this real problem was to cause untold grief to the country he claimed to love ... ¨Best¨ of all, McCarthy besmirched the honorable cause of anti-communism. He discredited legitimate efforts to counter Soviet subversion of American institutions”.

The Anti-Trump self-labeled “resistance movement” has now made evident to the general public there has been a Marxist movement festering in disguise for decades. Further study of what the House’s committee and Senator McCarthy activities exposed would show that many of the universities that have promoted riots in recent years are the same that were identified in the 1950s. The scandalous international abuse of AID’s programs to promote anti-American causes abroad is now in the open. McCarthy pointed clearly to the Voice of America, VOA (Precursor to NPR and PBS) as promoting socialist ideas. He even accused the ACLU of being infiltrated. He may have been wrong in his approach and methods, but he was prophetic if we compare his warnings to what has become very visible in 2025.

Map of Occupied Germany  West/East

I, like Fukuyama and many others who have been defending the ideas that make the American system a historical exception for its defense of the rights of individual persons, erroneously thought in 1989 that the implosion of the Soviet Union was the announcement of the end of the Marxist influence and its many disguises in the affairs of the world. I had a rude awakening in 1993. I met Vaclav Klaus.

President Ronald Reagan in Berlin, with the Wall behind
Scene of the famous speech of June 12, 1987

One of the most memorable moments in the history of the XX century took place on June 12, 1987, at the Brandenburg Gate in Berlin. The former capital of Germany was physically split by a tall, concrete prison wall topped with barbed wire and communist armed guards. It prevented East Germans from escaping to the side that had been freed during WW II by the western allies led by the USA. It was the peak of the Cold War. On that day, President Ronald Reagan stood in front of the wall and said: "Mr. Gorbachev, tear down this wall!" And, as the shofars of Jericho made the ancient ramparts collapse, the walls surrounding the entire Soviet Union began to crack and crumble.

The Fall of the Berlin Wall, notice the police and soldiers just standing by

Map of Berlin divided by the infamous wall

The Baltic states began to call for independence, strikes spread across Poland, the soviet republics on the Caucasus rebelled. Moscow began a spin into chaos. On November 9, 1989, the communist wall that divided Berlin was brought down by young people on both sides, just using their hands. The military guards just stood by and some eventually dropped their weapons and moved to the western side. Germany began its yearned unification. Just a few days later, the Velvet Revolution began next door.

Czechoslovakia’s communist government resigned after failing to suppress by force massive peaceful demonstrations of college students that began on November 17 and ended on December 29,1989. The Velvet Revolution was a response to over 40 years of communism. It received its name because of the smooth and speedy transition it made to return to self-rule and a very openly free market economy. It became obvious that a new generation had been preparing for the moment. Among them was Vaclav Klaus. I had the opportunity to visit with him for a long interview on October 17 of 1993, shortly after he assumed the position of Prime Minister.

Finance Minister of the Czech Republic in 1993
Future President in 2003-13

Klaus, born in 1941, studied economics in Prague and worked at economic research institutes and the state bank. In 1989 he entered politics and was one of the leaders of the Velvet Revolution, serving as Minister of Finance from 1989 to 1992, a position he left to become Premier of the Czech Republic. After the separation of Slovakia in 1993, he became Prime Minister of the new Czech Republic and led its economic transition to a free market. Under his leadership, the new country grew more than any other post-communist country. He left government in 1997, but he remained active in politics. He was elected the second President of the Czech Republic in 2003, serving until 2013.

Asked about the speedy progress the Czech Republic had made under his guidance as Minister of Finance, he replied: The country is progressing in every way: political. economic and institutional. “The Czech people have already become accustomed to the lowest inflation rate in the region. We have one of the lowest unemployment rates in the world and a balanced fiscal budget, the only one in the region. This has led to monetary stability, which makes it unnecessary for citizens to hoard foreign currencies. People have already regained confidence in the Czech Krona, our currency, which is a very positive sign that we have been successful. The domestic savings rate begins to grow, which means that people already have a positive view of their future and their country.”

We discussed the European Union and the role the United States and international organizations, such as the World Bank or the IMF could play in the future of his country. His answers were eye openers. “I want to highlight the fact that the rest of the world underestimated the invisible and silent changes that had been going on for many years in the countries behind the Iron Curtain... They went unnoticed outside… Before the Revolution we moved tirelessly, waiting for events any day. Something was already in the air, and we were preparing at full speed for it… Paradoxically, we were much better prepared for the collapse of communism than the West, especially Western Europe, which was moving with the assumption that the Soviet forces were going to be still in power.” “European unification? Yes and No. Our slogan after the revolution was BACK TO EUROPE, which captured a deep-rooted Czech feeling. But that does not mean accepting the bureaucratic, centralized and unifying interventionism of the European Union.” 

Dr. Vaclav Klaus, President of the Czech Republic

Klaus received international attention for his firm stance against international aid programs and for his rejection of advice from multinational finance organizations. He had clearly defended his free market positions and policies usually associated with neoliberalism. I inquired further, and his answers are illuminating: “As an economist and not as a politician, I had studied all the books written by Milton Friedman, Friedrich von Hayek, James Buchanan and others of similar thought that definitely influenced my thinking. However, this influence was not only in economic aspects but also in fundamental political aspects. When the reforms or practical measures that we have adopted are analyzed, they are neither more nor less than the application of what is described as a market economy in any good textbook. There are no longer fundamental differences between the various thinkers. It is in political visions or models that differences appear. I am often asked by journalists what model we will follow in my country; whether it will be Sweden, the United States, England or Switzerland. Models are the product of circumstances. Our model is the Czech model that seeks the fastest way to approach what is neither more nor less than a free market economy.”

 I was surprised by the list of economists that influenced his current thinking, since his education was initially developed behind the Iron Curtain. He unequivocally said: “It is true we were educated in Marxism, but after a few years, no one was a Marxist. Not even our teachers. Our universities had to import Marxist teachers from American universities or send students there to study. We discovered our roots in the old Austrian masters who in their own time had already refuted Marx. Old books were dusted from the attics and students learned in underground classrooms. We had prepared for our return to freedom.”  “If you start anything with cloudy vision, which is the middle way or third way, you don't know where you want to get to or where you want to get out of. This is totally ineffective and does not work. You simply cannot combine incompatible elements, from different worlds. When politicians try, sooner or later they fail. That is why we must be clear and transparent in presenting our vision to the people. Opportunism does not lead to any positive results, and that is true not only in post-communist societies, but everywhere.”  His reference to the middle way or third way means in politics the social democracy/democratic socialism schemes, and in economics the New Economics of Keynes, the Neo-Keynesianism of his disciples, or other forms of government led systems of production and distribution.

I asked about the overwhelming support the Czech people gave to his leadership, to which he answered: “To speak of the market economy and liberal democracy as a platform does not seem right to me. I think it is necessary to go deeper. It is difficult to argue about whether the market economy and liberal democracy are in themselves goals, or whether they are means to achieve higher goals. For me they are means to achieve what we can call a free society, of free men and women. The market and a participatory political system are the means to achieve this, and in this sense, they are the most effective means to lead us in the opposite direction from where communism had taken us. The political platform that we have proposed to our Parliament, and to our people, begins with the individual, then continues with the family, followed by communities and municipalities, and finally the State. That sequence, that ordering vision of priorities is absolutely crucial. We did not promote either the market economy or a liberal democracy per se. We were promoting how to give people back their dignity and their civic responsibility. We believe that there is a delicate equation in every free society, and that is that freedom implies at the same time responsibility. That is the idea that must be communicated, with sincerity and transparency.  Outside of the United States, particularly in Europe, the term “liberal democracy” uses the term liberal as in liberty, from classical liberalism. The term in the United States is commonly used as a synonym of socialist. Democracy in modern times refers to a political system structured on frequent and fair elections by a “universal suffrage” of qualified citizens that vote for representatives. Liberal and democracy are two of the most abused and ambiguous words in today’s language of double-speak.

The story of Vaclav Klaus has in common his early political conversion with many other important intellectuals of our times. Abandoning socialist/communist ideas after studying what modern market economics uncovered over a century ago is shared by many. Nobel prizes Milton Friedman and Friedrich Hayek, cited by Klaus, were socialists by their own admissions at the beginning of their careers. Friedman was converted by his father-in-law Aaron Director, a prominent professor at the University of Chicago. He was finally influenced by Hayek, who himself was taught by Ludwig von Mises. Hayek and Mises belong to the long tradition of the Austrian School of Economics. One of Hayek’s most popular books, “The Road to Serfdom” (1944), was an indirect refutation to Keynes’ ideas of the middle way. He wrote this dedication in the first edition: “I ask my socialist friends, is there a greater tragedy imaginable that in our endeavor consciously to shape our future in accordance to high ideals we should in fact be unwittingly produce the very opposite of what we have been striving for?”

Keynesians are abundant, but since they have been the holy cows for several generations, they often don’t want to come down from their ivory towers to entertain some fundamental questions. The most influential work at the central banks and control the value of the currency. In the United States they don’t have to discuss any theories. They are applying the laws that by their own account are untouchable. They label the legal errors that empower them “quasi-constitutional”.

The Federal Reserve Building in Washington, D. C

                                      The central bank system of the United States of America

Now, in 2025, many voices have appeared questioning the “dual mandates” of the Federal Reserve system. Most criticisms are more political in nature as they accuse the institution of favoring the party of FDR in the inclination of their decisions about interest rates and the financing of public spending. The accusers seem to want a FED that favors their own political interests. The serious voices that would point to the basic theoretical-scientific flaws of the Keynesian ideas that gave origin to the present FED legislation are just discreet whispers. They are not popular in academia. I am waiting for a champion that will loudly voice the need to discard the whole scheme and restore the constitutional function for monetary management which is to have a stable currency and a safe financial system in which the interest rates are what the market forces -We The People- establish. Some of the maverick entrepreneurs behind the crypto movement are on the right track, but they do not seem interested in proposing an overhaul of our Keynesian burdensome baggage. Will Secretary of the Treasury Scott Bessent be the one that opens the floodgates to a more public discussion? The time has come for a new monetary system that protects the people’s property rights, facilitates communications and transactions all over the ever-smaller world we live in, and preserves for posterity the wealth already created.

A sample of the coins representing Crypto currency

The “Denationalization of Money” was already proposed since the 1970s by Friedrich Hayek, the 1974 Nobel Prize in Economics and nemesis of Lord Keynes. He called it just a sketch, in need of more input. Hayek wrote this small book for the Institute of Economic Affairs -IEA- between breaks of his academic engagements in Austria, Scotland and London between 1976 and 1977. At the time, he was mainly occupied completing the final volumes of his magnum opus “Law, Legislation and Liberty”. In the revised version of his visionary monetary proposal, he added the following final warnings.

“I fear that since Keynesians propaganda has filtered through to the masses, has made inflation respectable and provided agitators with arguments which the professional politicians are unable to refute, the only way to avoid being driven by continuing inflation into a controlled and directed economy, and therefore ultimately in order to save civilization, will be to deprive governments of their power over the supply of money.”

It will be necessary that the problem and the urgent need of reform come to be widely understood. The issue is not one which, and may appear to the layman, concerns a minor technicality of the financial system which he has never quite understood. It refers to the one way in which we may still hope to stop the continuous progress of all governments towards totalitarianism which already appears to many acute observers as inevitable. I wish I could advise that we proceed slowly. But the time may be short. What is now urgently required is not the construction of a new system but the prompt removal of all the legal obstacles which have for two thousand years blocked the way for an evolution which is bound to throw up beneficial results which we cannot now foresee.”