WHEN AMERICA BECAME SOCIALIST: Keywords: American communism, Fascism and Nazism, Woodrow Wilson, Franklin Delano Roosevelt, Barack Obama, Keynes, Harvard and Columbia, Lenin, Stalin, Mussolini, Erhard, Hayek, Friedman, useful idiots, Fabian Socialists, Bernie Sanders, Edward Markey.

ARE WE THERE YET?

 WHEN AMERICA BECAME SOCIALIST

A Meditation about the new Rise of Communism

by Xuan Quen Santos

WHEN DID AMERICA BECOME SOCIALIST?

    During the last two decades, socialists have again come out from the dark corners of the college watering holes. From pretending to be community organizers they have taken their masks off and admit they are political agitators. It is no accident that it coincides with the biggest decline in educational standards at all levels, led by the formerly respectable Ivy League centers of academic snobbery where “grade inflation” is prevalent. The useful idiots are out led by influencers on Tik Tok. To my dismay, they have been able to make a crack, not a dent, on public opinion only because the language used for political discourse has been altered. It is a plan. I use the word “idiots” in the classical Greek ἰδιώτης (idiōtēs) meaning those who participate by voting irresponsibly in total ignorance and may even exchange their votes for a pittance. The adjective “useful” was added by Lenin who used the Russian word for “simpletons” простаки (prostaki). Other communist leaders used the word “innocent” meaning naïve or sucker in American English.

DOUBLE-SPEAK AT PLAY

    Eric Arthur Blair (1903-1950), the Fabian socialist “Father of Double-speak” who himself wore a mask as George Orwell, said it clearly: “Political language is designed to make lies sound truthful and murder respectable, and to give appearance of solidity to pure wind” (Politics and the English Language, 1946). He was “the” expert. He had been an ardent supporter of Soviet communism after WW I until he saw and experienced the violence and brutality of its actual operation. Blair-Orwell was not alone.

    Like the British Fabians, thousands of disenchanted literati around the world withdrew their enthusiasm for Soviet style of revolution, but most remained convinced “socialists at heart” and continued their activism without admitting their true color. The takeover of western culture and the disguise of a “middle-way” became their new strategy. Cultural change implies a change in the basic beliefs and values of the people. It changes slowly through education, formal and informal. It aims at changing the objectives of the institutions that educate: the traditional family, the community controlled schools and universities, the media, the arts and the churches. What is changed through cultural change is the basic conception of how a community provides its needs and how it is kept together; meaning in “college style” words, its economic and political systems.

    Marxism was flawed from the beginning in 1848. It was only an attempt to transform “history” as an academic discipline into a new science. It was based on an erroneous concept of human nature and on the basic errors of what then was just a beginning exploration into the science of economics. Its historic and contemporaneous data were only Euro-centered when they were in the middle of an era during which political and economic ideas and institutions were in flux; the mercantilist-colonial economies and the ancient regimes of the divine rights of monarchs were collapsing.  What was really taking place in the young United States of America as a new political and economic order was assumed to be a clone of Old England’s decaying system. It was not.

    The exceptional qualities of the new nation across the Atlantic were ignored by the European elites, but not by the common people. At the same time Europe was degrading and losing population, the new United States was experiencing annual population growth rates as high as 16% per year and becoming a super-power. After the Civil War, the re-writing of American history under the Marxist lens had begun spreading in academic circles, fitting the selected facts with the new language into the mold of socialist dialectics. From one generation to the next, the Giant Captains of Industry became the Robber Barons. Revolution became a popular mantra, not only in the labor movement, but among students and academics in the leading colleges and universities.

CALL IT WHAT IT IS

    Marx and Engels are usually pointed as the “modern” starting point of socialism after they cleverly added the adjective of “scientific” to their socialist scheme. They were very clear in their proposal. Socialism would emerge out of the economic conflict between the oppressed proletariat and the oppressor capitalist minority. The conflict -the revolution- would spontaneously end triumphantly in a new form of political and economic system called communism. In their scheme, socialism is the path to the end goal which is communism. This was the design. Any other interpretation is an error believed by useful idiots or a deflection made by cunning comrades in disguise.

There is no difference. There has never been.

 Socialism is not a mild form of a welfare society of free people. It is clearly another path to a totalitarian state where a few manage the lives of the many. In the words of a famous refugee from the Soviet Union, “There is no difference between communism and socialism, except in the means of achieving the same end: communism proposes to enslave men by force – socialism by vote. It is merely the difference between murder and suicide”. Her name was Alissa Zinovievna Rosenbaum (1905-1982). The world is more familiar with her pen name, Ayn Rand. Her novels and movies gave birth to the American Libertarian movement and inspired the generation of the Reagan Revolution.

REVOLUTION BECOMES THE BACK DOOR

    When Marxists around the world came to their epiphany after the Soviet terror, two changes took place. Those that still believed in the religion of violent change by revolution as a method had to devise ways to get it started. The spontaneous Marxist revolution would not happen. Instigation of social conflicts, violence and terror, became the way to “create the conditions for the revolution”. They are the true heirs of the French Revolution’s Reign of Terror. The mobs were unleashed. Their work begins with labor agitation and economic demands at the lowest end of the social structure. In their lingo, they are in the stage of “praxis”; it simply means putting the theory into practice, practicing the revolution. The absurdity of a self-fulfilling prophecy.

    The revolutionaries are pariahs in the moderate system. Their visibility represents a danger to the end-goal. To cohabit, the revolutionaries are usually in disguise, in the shadows and the underground; many of their activities are clearly illegal. But they are always there and will act in support of the fake moderates. The fake moderates nurture and protect the mobs that “spontaneously” support their gradual advances in policy with riots and demonstrations, bombings and even assassinations. The moderates cover up for them; they deny their existence as organizations; they bail them out of jail.

ELECTIONS BECOME THE FRONT DOOR

    Those who accepted that revolutions would not happen saw an opportunity opening in the new castrated constitutional monarchies and new experimental electoral republics that appeared all over Europe expanding the voter rolls. Marxists in disguise began to form political parties and participate as candidates in elections. New labels mask their identity with words such as popular or peoples, democratic, social, liberal, republican (as opposed to monarchies), national, workers or labor, and others that are still in use. In some countries, even the label communist appeared. The combination of social and democratic seem to have been favored in its two forms: democratic-socialists, and social-democrats. The electoral path was open. Gradual adoption of policies that expand the role of government (the political system) in the lives of the people (the economic system) became their platform to promote greater dependency.  

MODERATES IN APPEARANCE ONLY

    The apparent “moderation” of the socialists is not totally fake. It is in the interest of the individuals that act “socialist”. They became “rent-seekers”, as the new Public Choice Theory of economic behavior of politicians would call it. As they became part of the political establishment, their leaders received some respectability and resources. They couldn’t look too radical to appeal to the average voter that does not like radical changes. Gradualism was their method and the best way they could milk the system until “the conditions for revolution appear”. National emergencies and crises, such as war or a natural disaster, provide these opportunities. Socialists were paid and shared in the benefits of power. They were corrupted by bribes and adulation. It should be no surprise they always deny they are on the path to communism through false promises made to the voting masses. I will just mention the cases of Senators Bernie Sanders and Edward Markey; both have become multimillionaires during their decades-long activities as elected politicians representing the socialist camp of New England.

    Do you remember when ANTIFA was in the news and US Congressman Jerry Nadler (NY) denied their existence? He categorically stated that it does not exist as an organization, but it is only an idea. That was the party line. Jerry Nadler was member of the Democratic Socialist Organizing Committee shortly after college. He continued as an activist once the Democratic Socialists of America were established, which he conveniently withdrew from in 1999 as his seniority in Congress began to weigh in his public visibility as a Democrat. He is now DSA “in pectore”.

    Do you remember that at the same time when US Senator Tim Kaine (VA) was campaigning as the VP candidate of Hilary Clinton, his son Linwood (AKA Woody) Kaine was detained by the Minneapolis police for throwing bombs at a Trump rally? He was part of a group of eight masked men wearing black uniforms. The incident disappeared quickly from public view.  There is history behind. Tim Kaine says his Harvard sabbatical year in Honduras in the 1980s as a volunteer with the Jesuit missions in the northern rural area was a defining moment in his life of service. That area is where the large banana and coffee plantations operate. He says he spent a year teaching carpentry and welding to boys. Dr. Andrés León Araya, a professor of anthropology at the University of Costa Rica, in his 2015 dissertation at CUNY, describes the work of the Jesuits in the Aguan valley of northern Honduras as “…oriented mainly around organizing and supporting peasant cooperatives.”  He adds “These were all priests influenced by Liberation Theology”. “They were particularly active in the area of political training, especially through their radio schools – teaching reading and writing as the basis for political organization.” They were organizing the communist anti-American labor unions.

A NEW MODEL IS IMPOSED

    The most interesting case is what the British socialists/communists did. They changed the language and continued their true nature operating in disguise. Their logo is still “a wolf in sheep’s skin”. I am referring to the Fabian Society, cradle of the disguised “labor” party, home of Lord Keynes and 3^rd Earl Bertrand Russell, and EVERY British Prime Minister of the Labor Party. It has been the hub of propagandist literati like Sidney and Beatrice Webb, H. G. Wells, Bernard Shaw, and of course George Orwell and Harold Laski, that they have taken over “culture”. The Fabians designed the constitutions used as the models for de-colonization. As such India, Pakistan, half of the Middle East and half of Africa were born socialists in disguise. This explains much of their failure to move forward. The main countries of that list created the non-aligned movement, playing for favors between the Soviets and the USA. They still do even if the brands have changed. Another pretended “middle-way”.

    The British socialists had been early supporters of the Soviet revolution, but became disenchanted once Stalin’s policy of terror was impossible to hide. They had supported the German socialists also. The Fabians had promoted “eugenics” and “social-Darwinism”, which became the “scientific” justification to the German national socialists’ racial policies (NAZI party) that resulted in the Holocaust. The British royals are German, and they had to change their names adopting the name of their castle in the first decades of the XX century. King Edward VIII was a known Germanophile, which may have been another contributing factor in his abdication, lasting as a monarch for less than a year in 1936. WW II changed their alliances. The British socialists took distance from the Germans shortly before WW II began, but acted more discreetly with the Soviets when they became allies during WW II, all the way into the Cold War.

    The British scheme reflects their effort to be in the middle of the road between Stalin’s USSR and Hitler’s German nationalistic (anti-Soviet) socialists. To achieve this, they had to redefine political language with a new model. They began to call the nationalist-socialists Axis powers (German and Italian) with the term “fascist” for extreme right. They intentionally omitted their socialist origin and their anti-Soviet internationalism. It was Mussolini who made the Roman Fasces the Italian brand. On the opposite end of the model, the Soviet communists became the extreme left, representing the internationalist socialists. Where did the Fabians place themselves as the British socialists? In the middle. They have claimed to be the “middle-way” and adopted the “moderate” label of social-democrats.

THE NEW MODEL OF LEFT-RIGHT

EXTREME LEFT

    The Soviet Marxist regime, THE COMUNIST INTERNATIONAL-COMINTERN. Now the heads are New Russia and the Chinese state. The state owns and manages the resources, operates production, and distributes what people need. Private property does not exist. Revolution, war and terrorism are not discarded. Elections and the monetary system are staged only for the existing external public opinion. Lenin explained how he destroyed in Russia any trace of capitalism in a few years: intentional hyperinflation. Aims at a new world order.

Stalin and Hitler were partners as long as Hitler went stayed south

THE MIDDLE WAY

    Proposed in England and Germany after the failures of the Soviet Revolution and the National Socialist regime. It rejects revolution and recognizes the benefits of what they called “capitalism”. It was viewed as a gradual and moderate path to communism. It does not seek total state ownership of the means of production and aims at a “democratic” form of government combining the efficiency of a market economy in production with the states total planning and distributing what people need. A center-left version is Democratic Socialism that aims to a more equal and just society managing the economy "democratically" by worker’s self-management.  A center-right version is Social Democracy that has state intervention in the market economy to reduce inequality, promote social welfare, operate public services, and ensure wealth redistribution through progressive taxation. Any of the many versions that have appeared aim at establishing a “welfare state” as an electoral vote buying scheme. The Middle Way eventually can only be financed by monetary expansion. The most famous Fabian Socialist was Baron, Lord John Maynard Keynes who proposed to better manage inflation to stimulate the economy.

EXTREME RIGHT

    Originally the label applied to the National Socialism (NAZI) of Germany and the Italian socialism labeled Fascism by Mussolini. Their key commonality was their rejection of the Soviet plan of a new global communist order governed by Moscow. Thus, ultra-nationalism was a response that marked their independence. Hitler and Mussolini were thrown into wars by the conditions created by the victors of WW I and the Soviet threat. Both countries established authoritarian governments ruled by a dictator. Both created a war-driven economy but without taking ownership of the industrial base; the government co-managed the system with the leaders of industry. In both countries, socialists existed long before and had been governing. The differences from the left were a clear recognition of the failure of the Soviet economy that resulted from the destruction of what they had called capitalism. Both countries veered to “right” as a result of the failed socialist policies that collapsed the Weimar Republic and the chaotic socialist constitutional monarchy of the Italian Risorgimento.

Mussolini first, then Hitler, began as socialist hardliners, until they chose nationalism
 as opposed to Soviet international domination

THE CLUES ARE IN THE DETAILS

    In the case of Germany, much of the welfare state had previously been created during the agonizing constitutional monarchy and the socialist Weimar Republic. Germany had already invented Social Security. Hitler also inherited a destroyed monetary system with one of the highest recorded hyperinflations in history. Mussolini was still fighting the Middle Ages. Italy as a modern state did not exist as a unit until the US left after WW II in 1946. Rome and the central region had been known as The Papal States for a millennium. Its remnant after a pact in 1929 with Mussolini is a much reduced Vatican City. In the south, the influence of the Spanish royals of the House of Bourbon had continued into the XIX century. In the north, the Royal House of Savoy had become the head of a more or less unified Italy just in 1870. By 1880, long before the Soviet Revolution, the government of the constitutional monarchy had been taken over by socialists. In the chaos that followed WW I, Mussolini, who had been a communist guerrilla, fought against the pro-Soviet socialists and launched his own brand, the "Italian Combat Leagues" (Fasci Italiani di Combattimento). He fought the Soviet promoted industrial riots and in 1922 ended up in control of the government appointed by the king. A few years later, he joined at the last minute Hitler’s forces that were about to defeat France under the condition that he would recover for Italy the northern Alpine and Adriatic territories that had been invaded by Austria and taken from Italy.

QUESTIONS THAT NEED ANSWERS

    From this model, several obvious questions immediately appear. Where are all the other ideologies in the model? Where are the traditional monarchists? Where are the conservatives, classical liberals, liberal-democrats, libertarians and free-market entrepreneurs (Labeled capitalist exploiters by socialists)? Do socialists make a distinction between different FORMS of government, such as tribalism, monarchies, federations, republics, dictatorships, etc.? Do the particular forms of government have their pertaining characteristic economic system?

    None of the other non-socialist political ideologies contemporaneous to Marx, Stalin or Hitler are included. THE IDEOLOGIES INCLUDED ARE JUST DIFFERENT INTERPRETATIONS OF SOCIALIST IDEOLOGY. There is a reason: Marx created an erroneous explanation of the causes of history. He was neither historian, economist nor statesman or politician. He was a student of philosophy that became agitator. He never proposed a form of government. The final formula for organizing that Marx and Engels proposed four decades after evading the questions raised by the Communist Manifesto (1848) simply assured socialists around the world that the state would disappear, would vanish, would wither away…! The emphasis of all the Marxist versions of socialism is on controlling the economic system. They are indifferent to the political system in power. They will infiltrate and take control of whatever there is and lead it to its self-destruction. In the cases of Lenin, Hitler and Mussolini, they took over the agonizing constitutional monarchy that was becoming a parliamentary republic. Elections were the vehicle and then a coup d’etat. 

Keynes "New Economics" of inflation paved the way to war
 as a way to promote the economy and increase the power of government

    England, even today, is a constitutional monarchy with a parliamentary government. Monarchy and socialism would seem an oxymoron to anybody. The king is for the tourists and the useful idiots. The parliamentary government is the state. The last two English governments have been led by the Fabian socialist government under the mask of Labor Party.  This is not new. During the emergence of Lenin, Stalin, Hitler and Mussolini, to the end of WW II (1908-1951), Old England had eleven changes of party in government. Of those 43 years, the crucial years from 1908 to 1922 gave rise to the communist USSR and the Socialist Weimar Republic; liberal socialists were in power. During the next crucial years of Hitler and Mussolini consolidating power (1929-1936) the Fabian socialist Labor party was in power. They were also in power during the partition of Europe and the beginning of the Cold War (1945-1951). The socialists Prime Ministers of those periods lasted several years in their role, while numerous Conservatives lasted less than a year in the periods in between. The Brits parade their royal family as a distractor. They really are under the “big tent of ill-defined socialism”. For decades since the interlude of PM Margaret Thatcher, there is no significant difference between conservatives and labor. They all pretend to manage their socialist economy. During the 43 years between 1908 and 1951, socialists governed for the crucial 27.

A MARXIST DIALECTIC SCHEME

    The new model is simple enough to be implanted in political language. Perfect for useful idiots! But there is more. It is a good example of “dialectic-materialism”, the analytic tool Marx applied to how humans respond as a collective to economic conditions. It was derived from F. Hegel’s dialectic method for studying the changes in ideas. You have probably heard about its components: A thesis is contradicted by its antithesis; from solving the conflicts of the opposing ideas, a synthesis is found that will take the discussion to a higher level. Hegel was an idealist.

    Marx, who was a radical Hegelian in college, applied the method to his analysis of historic material conditions, hence, he gave it the name of “dialectic materialism”. Marx described his times as the beginning of the final stage of history when capitalism would implode. The thesis: Capitalists (The Oppressors) become rich by the systemic exploitation of the proletariat laborers (The Oppressed). The anti-thesis: The proletariat will increase in number and in poverty, becoming alienated. The synthesis: 1) Capitalists will become a few monopolies that will continue to lower wages. 2) The proletariats will organize and rise in revolution that will destroy capitalism by taking over the means of production to be administered by a new form of collective organization called socialism. 3) The next stage appears when the state is no longer necessary. Marx and Engels made such promise in Anti-Dühring (1876): “The state power becomes superfluous, and then ceases to exist of itself. The government of people is replaced by the administration of things and the directing of the processes of production. The state is not abolished, it withers away.”  That stage was given the name of communism.

A LENINIST REVISION OF HISTORY

    Lenin was the master at making facts fit a narrative. The EXTREME LEFT-EXTREME RIGHT model promoted by the deceiving British Fabians required a lot “making the facts fit the narrative”. For the Marxist method of opposites synthesizing into a new and improved system, they had to create the opposites. It was easy to place the Soviet regime on the left. To place the antagonists of the Soviets on the right, they had to alter their description. The first erasure was their origin as Socialists/Marxist political movements; it is never mentioned. The terms NAZI and Fascist were always highlighted. As the NAZI atrocities became identified with Jewish and other minorities for reasons of racial supremacy and hate, the nationalist focus (as anti-Soviet internationalism) disappeared. The new narrative: The Soviets were fighting capitalists for the people, while the NAZI and Fascists were fighting against the people with the capitalists. Because the term NAZI became trapped in the anti-Jewish image, fascist was chosen as the generic insult for the extreme right. 

    If you consult the many definitions of “fascism” and “fascists” you will see that they are an effort to create a category that fits a narrative. It is even used to label historic authoritarian dictators that existed long before Mussolini was born. It is also used to tag any authoritarian leader that fights against communism, or even the “middle-way” commonly described as “democracy”. Not surprisingly, Socialists today refuse to tag Putin as a fascist but they don’t use the term communist. He is now described as a “reactionary” leader of “Putinism”!

In the new language, Fascism is just an insult to anyone that opposes communism or socialism

    For the new model of political language to work, the old occupants had to be evicted (erased from history, eliminated from the common mindset, discredited…). Ultra-right capitalism has to be on the right. Prime Minister Margareth Thatcher, President Ronal Reagan and President Donald Trump have been referred to as fascists.

MONARCHS ARE OUT

    In 2026, there are only twelve European states nominally ruled by a monarch.  The six that count for anything are: The United Kingdom, Belgium, the Netherlands, Denmark, Norway, Sweden, and Spain. All are “toothless” decorative constitutional kings or queens, and some oddities. The oddities that appear on some lists include Luxembourg, Lichtenstein, Monaco, Andorra, and the Vatican. There had been about 60 just two centuries before. Conclusion: the age of European Emperors, Kings and Queens has been over for a long time. They all navigate for their survival the “middle-way” socialism, which includes the Popes since Leo XIII, with the exceptions of Popes Walesa and Ratzinger who lived and suffered the terrors of Stalin and Hitler. Monarchies and their conservative parties were clearly on their way out by 1848. Anarchism, terrorism and revolution did spread in Europe in 1848, but Marx had nothing to do with it. At that time, he was a totally unknown young agitator that was learning from the Paris revolts. By 1848, a third revolt was taking place in France, wrongly identified as a revolution. Marx was one of many useful idiots that got caught in the chaos of the Post French Revolution that was the first revolt. Non-Marxist socialists claim the French events of 1789 as their birth, which is just French propaganda. A real revolution had started in 1776 and had outlined the design of a new and different political system, that even many Americans don’t understand.

Mao Zedong resisted the Soviet expansionism and created his own
version of Chinese Socialism. Is Xi Jinping a fascist?

REPUBLICS ARE IN

    When a lady asked Ben Franklin at the end of the Constitutional Convention in 1789, “What kind of government are we going to have”, his answer was, “A republic madam, if we can keep it”. The follow-up question should have been, “What kind?”. Republicanism can be presented as an ideology only as opposed to monarchism of the absolute kind. When kings are out, republicanism as a political ideology is also out. All modern monarchs are really a monarchic constitutional parliamentary republic. Consider also the name of communist China: PRP, the People’s Republic of China; or the original USSR: Union of Soviet Socialists Republics. The United States of America is a federal republic. The Democratic People’s Republic of Korea and the Republic of Korea are different countries. Can you identify what ideology corresponds to each of them? If you go down the list of about 200 countries that exist today, a large majority claim to be republics. If you try to identify their political ideology from their name you will not be successful. Count how many are using the terms democratic, people’s or popular and you will have included the rest of the declared communist states in existence: Algeria, China, Congo, North Korea, Laos, Sri-Lanka, Ethiopia, Bangladesh, Timor and Nepal.

The USSR did little in WW II, but gained much as gift of the western allies.
On what side was the US State Dept?

    For the EXTREME LEFT/EXTREME RIGHT political model to be confirmed, CAPITALISM had to also disappear into the MIDDLE-WAY, just at the Marxist Soviet system had synthesized into “moderate” socialism. The death of capitalism was one of the many predictions of Marx’s "scientific" socialism that never happened, although it was announced around the world at the initiative of the self-serving Fabian socialists of England. The Fabian model concludes that capitalism has also disappeared and blended into the middle. It was said to happen in the USA.

THE PROPHECY OF 1848 FULFILLED IN 1929

    Marxism forecasted the end of capitalism “by its own internal contradictions” in 1848.  The frequent European wars of the second half of the XIX century culminated in WW I. Each war brought its own monetary and economic crisis. Marxists declared it an inevitable crisis caused by “the business cycle”. This obvious lie has spread. Inflation and destruction have consequences that are not the result of productive business activities but the result of flawed governmental policies that businesses and savers fall victim to. The sequels of WWI came not only with the disappearance of powerful nations, empires and kingdoms; their currencies disappeared too. It came also with the disappearance of political ideas and organizations. The royalists, conservative and classical liberal parties went into oblivion. Revolution, democracy and socialism under many names and masks became fashionable. Monetary inflation was abused to finance war and growing entitlements introduced by a growing electorate of manipulated idiotes. The triumphant powers were the Soviet Union with its international reach of terror, and the United States of America with the strong US Dollar and its peculiar federal constitutional republic. The period from 1848 to 1929 can be viewed from the perspective of stability as a death of capitalism from a thousand cuts. The turning point was 1929.

    On Black Monday, October 28, 1929, the New York Stock Exchange listing of the major US corporations dropped 13% percent. The following day, Black Tuesday, it dropped another 12%. By mid-November, the market value of the corporations had been reduced to half. Panic spread. A liquidity crisis became a banking crisis by the inaction of the monetary authorities of the time.  The decline continued through the summer of 1932, when the Dow Index closed at 41, its lowest value of the twentieth century. The Roaring Twenties wild ride of easy money and expansive government programs that accompanied the WW I effort and the rescue of Europe were over.

    The USA emerged victorious from WW I, even if it was not an American war. The war-effort economy was exuberant. For the USA, the war was short (1917-1919) and limited in cost and extent. The USA entered the war as an "associated power" the year in which Russia (Just transformed into the USSR) withdrew from the front. Internally, victory produced unlimited enthusiasm for a promising future; easy credit and erroneous changes in monetary policy followed, leading to over-speculation and over-investment in some areas which resulted in overproduction and a crash of agricultural prices. A boom had been promoted stimulating what turned out to be over-production, such as in agriculture. Prices fell. The late correction created a liquidity crisis, a credit crunch, insolvency and bank failures. The Dust Bowl appeared in the farmland. Because of the new influence of the US Dollar in the international economy, as the European industrial base and their monetary systems were financed with dollars, the crisis spread around the world. The boom of the Roaring Twenties ended in a record bust. The Marxist prophecy seemed fulfilled.

MARXISTS AROUND THE WORLD PROCLAIM THE DEATH OF CAPITALISM

    On March 6, 1930, The Daily Worker newspaper, founded in Chicago by communists, socialists, union members, and other activists in 1924, described the massive demonstrations that took place in 30 major cities of the USA.  It had been called by the Communist International from Moscow and was organized by the communist parties in many affected countries. Labeled “International Unemployment Day”, it took place as unemployment reached over 7,000,000. The Roosevelt administration expanded the Keynesian tricks to manage the economy, in effect impeding the quick recovery that the free market forces would have launched. The editors, among calls for the final revolution, had this vision of the impending future: “The workers of the whole capitalist world will show the capitalist bosses today that their system of capitalist wage slavery, which has already condemned 7,000,000 American workers to unemployment and hunger, will not much longer be tolerated by its millions of victims. Capitalism has no remedy for the breakdown of its own system of pillage, exploitation, murder, and starvation of the useful members of society. Only the working class, by its own revolutionary action against the capitalist class and government, can and will solve this problem”.

KEYNES COMES TO SAVE THE UNITED STATES

    Declaring Keynes the economist that took the world out of the Great Depression, or calling him the savior of capitalism, or of the United States economy, was a common occurrence until the 1980s. He commanded respect, and his opinions developed a cult-like following among economists until recently. Reflecting what many economists and politicians believed, the historian Steven Pressman named him “the pragmatic savior of capitalism” in his book Fifty Major Economists (1999), reflecting what the economics establishment had been reciting for six decades. The iconic historic figure of Keynes needs to be exposed as a fraud.

    Keynes was not a defender of the market economy. As a good socialist, he always used the term “capitalism” coined by Marx as an insult. He came to bury the very free market economy of the United States and transform it into the “middle-way” socialism he really believed in and supported.

    By the time the Great Depression arrived, Keynes was already a celebrity. He had forecasted correctly the failure of the treaties that ended WW I which led to Hitler’s regime, and would lead to another war. He had been feeding the academic circles with bits of a “new theory” that would debunk the assumptions of the Classic economists about money and prosperity, and the failure of Stalin’s and Hitler’s forms of socialism. 

    As a notorious member of the Fabian Society, he was looking for socialist alternatives to Stalin and Hitler in stealth. His ideas and details kept changing and led to many criticisms. At the same time, the economic crisis became bigger, and the establishment economists were at odds and unable to agree on solutions. Keynes offered hope with a different and new method to solve the crisis. In 1931, he was invited to participate in the famous Harris Conferences at the University of Chicago, then the academic center for new economic views. His presentations and discussions received considerable support for his ideas on counter-cyclical public spending, particularly with economists already influenced by socialist ideas.

    In a speech in Dublin in 1931, Keynes presented his sketchy ideas for what he described as fixing the "decadent international but individualistic capitalism". That year was the peak of the Great Depression; a background he used to publish The Means to Prosperity with specific policy proposals for tackling unemployment in what by then had become a global recession. The book contains many ideas supporting public spending and job creation with one of the first mentions of the “multiplier effect”. Copies were sent to many world leaders, among them the recently elected President Franklin D. Roosevelt. In the desperate moment, his proposals received total attention. Keynes personally met with FDR in 1934. The age of “New Economics” was launched. The cult spread quickly among the New England academic admirers and followers. In 1936, he published The General Theory of Employment, Interest and Money, regarded by many as his most important work.

    The Fabian socialist John Maynard Keynes came from England and saved American capitalism. That is the history fabricated to implant the Middle-Way in the United States of America. He gave us the poison pills of socialism: an ever increasing welfare state financed with monetary inflation.

    The “savior of capitalism” never believed in it. Keynes told the truth about his position before he became a celebrity. On the same year The Daily Worker was established in Chicago, Lord Keynes was clear that his ideas were a way to terminate the defective capitalism his generation had described as being on its deathbed. Marxists had labeled it “capitalism” defining capital as originating in stealing the value of labor. Others had described it as “unbridled selfish individualism” with the French phrase “laissez-faire”. In a lecture he first delivered in 1924 titled The End of Laissez-Faire, Keynes gave birth to the idea of a “mixed economy”, part market, part government control. An excerpt follows: “A time may be coming when we shall get clearer than at present as to when we are talking about Capitalism as an efficient or inefficient technique, and when we are talking about it as desirable or objectionable in itself. For my part, I think that Capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any other alternative system yet in sight, but that in itself it is in many ways extremely objectionable…”

Keynes (L) and Keynes (R)
A debate between the Father of Inflationary Socialism and his
nemesis who proposed a return to sound money out of the hands of government

THE ANSWER TO KEYNES AND HIS THURIFERS

    There are simple ideas to cut through the smoke of incense the Keynes cult has used to cover the naked truth of their intentions and errors.There is an essential contradiction in the idea of a mixed economy, where the government is expected to manage the market. Nobel in Economics Friedrich A. Hayek, who became the academic nemesis of Keynes, and was also his friend and colleague, explained the conflict in the 1940s: the more government plans and decides, the less the citizens can plan and decide. Personal freedom can’t exist in that scheme. In the 1980s, Nobel in Economics Milton Friedman who had become the recognized authority on inflation demonstrating the flaws of Keynes ideas, explained the same contradiction to the leaders of Communist China: The market is a decentralized system that works from the bottom up without anybody directing it; your government operates centrally directed from the top down. There is no reconciling.

Milton Friedman and Zhao Ziyang in 1988 discussing
the market economy as opposed to a state managed economy.

WHERE DO THE MIDDLE-WAY SOCIALISTS PLACE THE USA?

    Beginning with the pro-Soviet and League of Nations policies of W. Wilson during WW I, followed by FDR’s New Deal policies during the Great Depression and the Atomic accommodation with Stalin after WW II, and ending by adding the Nobel for Socialism to Obama before he launched the Great Recession, it became obvious to the world that the socialist establishment of Europe was under the impression that the United States of America had already joined the socialist Middle-Way on the path to communism.

What do you think?

EVIDENT EVIDENCE: Keywords: Communism in America, Lenin, Stalin, October Revolution, Mao Zedong, ROC in Taiwan, The PRC Peoples Republic of China, Economic Freedom Index, Franklin D. Roosevelt, Winston Churchill, Yalta Conference, West Germany and East Germany, Ludwig Erhard, Price Controls, Keynes, Marcuse, Samuelson. TSMC and Morris Chang.

 

Modern Taipei, capital of the Republic of China in Taiwan

EVIDENT EVIDENCE

A Meditation about the New Rise of Communism in America

By Xuan Quen Santos

At the end of World War II (1945), millions of socialists around the world were confronted by events that became too numerous, too gross and too visible to hide, deny or spin. At the same time, two living laboratories became the most devastating proof that their political and economic system (Marxism-socialism-communism) would not work, even without revolution or violent opposition. One was in the center of Europe and the other in the Asian Pacific.

THE NAKED TRUTH CAME OUT

The truth about the October Revolution’s government of the former Russian Empire was exposed, even if decades late. Stalin’s Soviet Union, an ally in victory during WW II, was a worse totalitarian regime than Hitler’s. Every crime against humanity the German National Socialists had committed, the Soviets had tripled, only to be surpassed shortly after by communist China, their main ally in Asia. Germany surrendered in May, and Imperial Japan in September. Despite the victory of the Grand Alliance (made again possible with the mighty economic power and determination of the free people of the United States of America), the re-arranged map showed a lop-sided monumental victory for the Soviet Union and China, the new communist super-powers.

The Soviet state promoted itself as the leader of a future world order, and its international agenda for exporting terrorism was developed from the start. In 1916, Lenin wrote “the aim of socialism is not only to abolish the present division of mankind into small states and all-national isolation, not only to bring the nations closer to each other, but to merge them”. After all, Marx’s Communist Manifesto (1848) begins with the phrase “Workers of the World, Unite!”. In German Ideology (1845), Marx and Engels defined “the proletariat” as the “expression of the dissolution of all classes, nationalities, etc. within the present society”. In 1922, the USSR imposed a treaty on Ukraine, Belarus and Transcaucasia (Today’s Georgia, Armenia and Azerbaijan) that formed the Union of Soviet Socialist Republics (USSR). At the end of WW II, it had enlarged the dominion controlled by the Communist Party to the Baltic countries, Polland, the remnants of the Austro-Hungarian Empire and half of Germany with half of Berlin. This de-facto annexation became known as Eastern Europe. The COMINTERN, The Communist International, then based in Moscow, had a clear vision of the future it pretended to shape. When a feeble and dying FDR and the aging and alcoholic Churchill faced Stalin in full strength in Yalta, they were too anxious to conclude the peace and gave away the victory of the west.

The 1945 Yalta (USSR) Conference that divided Europe.
FDR died a few months after. Churchill was an aged 71.

Compare the maps. What about the “other allies”? They had already been defeated when the US entered the war. If anything, the US was able to stop the war before the Soviets went all the way to Spain. The European former powers were broke, and some of them had suffered extensive destruction. Their currencies were worthless and inflation was rampant. Almost immediately, they began to shed their remaining colonies. The COMINTERN had been ready. Almost every country in Africa and Asia that obtained its independence after the war was taken over by a Marxist inspired regime, not in a totally peaceful way. France shed Indochine (Vietnam, Cambodia, Laos), Algeria, Tunisia, and Morocco. Belgium shed Congo, Rwanda and Burundi. Holland lost Indonesia, Surinam and six Caribbean islands. Denmark lost Iceland. Italy could not hold on to Libya, Somalia, Eritrea and Ethiopia. The UK lost India (Pakistan and Bangladesh, Burma), Cyprus, Malta and Cameroon. Eventually lost Hong Kong. But through the Commonwealth, Canada, Australia and New Zealand remained close and are quasi-independent today. The list is longer, but the conclusion is easy to grasp. The global reach (power) of the “other allies” was greatly diminished.

THE NEW ORDER TAKES SHAPE

The United States understood this process and its risks. The Cold War was hot in a different way from the start. War would continue against the former ally, the enlarged Soviet Union. Europe was not ready besides being broke. The truth is that most countries had already embraced different versions of the “middle-way” socialism to hide the truth. They still are. Two American initiatives took form and had lasting results. The Marshall Plan financed the reconstruction of the European allies in proportion to the damage suffered, and it included the new country of West Germany that was occupied by the western allies, really by the United States. The other initiative was NATO; the North Atlantic Treaty Organization was designed specifically as protection from the Soviet Union. As NATO has been tested, it was evident they had ceased to be “equal partners”.

The horrors committed by the Marxist-socialist-communist regime of the Soviet Union and Red China from 1920 to 1950 were buried by a misguided “respect, maybe even gratitude” by the western allies for their participation in the defeat of the German National Socialists. The socialist underground in the west felt vindicated, but many began to admit the truth. The public was occupied by the attention paid, rightly so, to the Holocaust and the post-WW II Nurenberg Trials, aided by the massive propaganda coverup the Soviets financed around the world, supported by the international networks of underground communist parties, local cells and the so called “liberal” media that masks their true color.

The reality of what communism inevitably becomes was evident. Socialist, communist, and labor movements around the world split into three branches. The honest intellectuals began to separate and eventually changed their convictions knowing they would be shunned and even persecuted. The faithful zealots dug in and continued to create the conditions for revolution around the world, following the directives of the COMINTERN. National Liberation Movements were a favorite name of the guerrilla movements that sprang all over the world. The third group, greatly led by tenured Marxist intellectuals, barricaded in the faculty clubs. In their minds, the professors made the distinction between what Lenin and Stalin had unleashed, and a still attainable workers’ paradise that needed different leaders and a revised theory.

The best examples of this last group were the Old England Fabians (Lords Keynes and Russell), the New England Ivy Leaguers (Schumpeter, Samuelson and Galbraith), and Herbert Marcuse’s Frankfurt School of Critical Theory that escaped Germany before the war broke. The German communists re-branded at Columbia University as the Institute for Social Research. Their first book aimed at the non-academic public was “Critical Theory”. A give away about their true color was their choice to re-establish their old institute after the war in East Germany, controlled by the Soviets, but only after having poisoned the minds of an entire generation that is now teaching. Many historians have pointed to Marcuse as the “father of the 60s socialism”.

The first group of former communists that saw the truth mostly disappeared in history, shunned and forgotten, trying to make a living. The second and third groups, the hardliners that believe in violence and the obstinate and conceited professors, have totally ignored what the two living labs exposed to the world.

WEST GERMANY VS EAST GERMANY

The European lab was the post-war divided Germany. As West Germany rebuilt and succeeded by liberating its people to create the “economic miracle”, Soviet controlled East Germany remained in ruins and depression for four more decades. Reconstruction only began after the collapse of the Soviet Union in 1992. Ludwig Erhard, former Chancellor and Minister of the Economy had been Director of Reconstruction during the ally occupation. He clearly points to his sound-money and free-market policies for his success. West Germany was the only recipient of Marshall Plan assistance that quickly came out of the post-war economic crisis. The others kept their war-management socialism that eventually became permanent. Success was not due to the Marshall Plan designed by the Harvard professors.

Vintage cartoon comparing West Germany with East Germany during the occupation

The National Archives describe the origin of the Marshall Plan: “On April 3, 1948, President Truman signed the Economic Recovery Act of 1948. It became known as the Marshall Plan, named for Secretary of State George Marshall, who in 1947 proposed that the United States provide economic assistance to restore the economic infrastructure of postwar Europe.”  The plan distributed assistance towards the reconstruction in the amount of $ 13.6 billion. The sixteen Marshall Plan beneficiary countries in order of the funds received were the United Kingdom (25%), France (21%), Italy (12%), Netherlands-Belgium-Luxemburg (12%), West Germany (11%), Austria (5%), and Greece (5%). The remaining 9% included Iceland, Ireland, Norway, Portugal, Sweden, Switzerland, Turkey, and Denmark. The central European and Balkan countries, as well as East Germany were excluded, except for Austria, as they became occupied by the Soviet Union. Switzerland and Portugal had remained neutral, and Spain, although assisted by Axis powers before the war, had undergone a civil war that reversed a communist takeover.

It should be obvious that in 1948, the country that had suffered the most destruction was Germany. Its territory and its capital, Berlin, were cut in half, making its reconstruction more challenging. At the end of WW II, West Germany was occupied by three different bureaucratic armies, and in the early years, it had to absorb a flood of 12 million refugees from East Germany that were escaping from the communism they knew would come. In 1948, the industrial production was only half of what had been in 1936 before the war. The inflation rate in the final months of the war had reduced the value of the NAZI Reichsmark from 2.50 ℛ︁ℳ︁ = $1US to 10 ℛ︁ℳ︁ = $1US. The National Socialist regime had imposed strict price controls and rationing. This had generated scarcity and an active black market that operated by barter. Unfortunately, after the defeat of the National Socialist government, the occupying Allied forces that had defeated Hitler imposed their own form of centrally directed economy by maintaining Hitler´s price and wage controls. Money was worthless, and Hershey chocolate bars and American packs of cigarettes operated as a more efficient form of money.

Ludwig Erhard, champion of the free market

Ten years later, by 1958, an astonished Europe and a more astonished United States occupying administration, witnessed the headlines: An Economic Miracle in West Germany. Of course, the Harvard designers of the Keynesian Marshall Plan take the credit, and so does the official history of the U. S. Government. Common sense requires the answers to other questions. How come the other countries did not progress at the same pace? How come the most destroyed economy that received less money than others succeeded? Don’t ask them. That is why it has been called a miracle, so you don’t ask the questions. Enough time has passed so that the questions that were already answered can be made public. They are no secret. They are just discreetly archived.

A German resistance group that had not been eliminated by the National Socialists included Ludwig Erhard. He was part of the group of businessmen, intellectuals and other notable economists and legal scholars who shared a vision of a free market economy. He was educated at the University of Frankfurt and had been a disciple of the free market economist Wilhelm Roepke. Erhard wrote drafts of a plan that fell in the hands of the high allied command. The rest is history, but not well known. Erhard was called in to interview with General Lucius D. Clay, the Allied commander and Deputy Governor of Germany and ended up in charge as Director of Economics of the occupied zone. His first assignment was to oversee monetary reform and implement the Marshall Plan.

This is the short story as told by Erhard in private among friends in Guatemala and in London, and perhaps other places. Erhard was confronted with a dilemma. He could attempt to implement the Keynesian Marshall Plan devised in Harvard with the central controls already in place that existed from Hitler’s regime that the allies had tried to continue to drive, or to liberate the economy. He had proposed many changes to the Marshall Plan, but to no avail, until General Clay told him: “You are not authorized to make changes nor I to approve them. But you can trash it. You have the power to implement your plan.” Erhard went ahead and trashed the Marshall Plan, a decision that resulted in the German Economic Miracle. When General Clay informed Erhard that all the American and English economic experts were opposed and greatly concerned about the consequences of eliminating all wage and price controls, Erhard replied, “So are mine.” Americans today have forgotten that “the war effort” created domestically the same type of government controls over the economy that Hitler had imposed in Germany.

A complete description, of course more diplomatic and documented, can be found in his best seller “Prosperity Through Competition: The Economics of the German Miracle” (1958). Erhard went on to be appointed as Minister of the Economy during Konrad Adenauer’s government and was elected Chancellor in 1963.

The black market disappeared overnight. Free prices
and stable currency gave enough security for the economy to re-start

Erhard knew that two key free market policies needed to be implemented immediately: a new monetary system and the elimination of all wage and price controls. He did it overnight, on a Sunday in June, when the bureaucrats were not able to blink. “The black market suddenly disappeared. Shop windows were full of goods, factory chimneys were smoking, and the streets swarmed with trucks. Everywhere the noise of new buildings going up replaced the deadly silence of the ruins. If the state of recovery was a surprise, its swiftness was even more so.”

“In all sectors of economic life, it began as the clock struck on the day of the currency reform. Shops filled up with goods from one day to the next; the factories began to work. On the eve of currency reform, the Germans were aimlessly wandering about their towns in search of a few additional items of food. A day later, they thought of nothing but producing them. One day apathy was mirrored on their faces, while on the next the nation looked hopefully into the future.”

“This measure of the undisputed success of the policy demonstrates how much more sensible it is to concentrate all available energies on increasing the nation’s wealth rather that to squabble over the distribution of this wealth and thus be sidetracked from the fruitful path of increasing the national income. It is considerable easier to allow everyone a larger slice out of a bigger cake than to gain anything by discussing the division of a smaller cake.”

Erhard definitely was what, two decades later, was described as a “supply-side economist”, fully aware that the Say’s Law of The Market is a law of nature, a law that economic science recognizes as its fundamental principle. Under the guidance of free market policies and a new federal system, Germany led the growth of Europe for several decades, until the supra-national socialist policies of the newly expanded European Union began to “manage” the economy with “middle-way” socialist ideals. Germany is now trending backwards, losing population and de-industrializing. The Europeans did not see the success of their own experiment. By the end of the Soviet Union, most European countries had not dismantled the “war-effort” policies established in the 1930s. Prime Minister Margaret Thatcher was the leader in that effort in the 1980s but did not last long.

THE R.O.C. IN TAIWAN VS RED CHINA

In Asia, the living lab was The Republic of China in Taiwan by gradually abandoning the centralized economy brought from China by the National Socialist Kuomintang for an enterprising market economy geared to international trade while becoming a free-elections state. In three generations joined the first world by becoming an international economy on a small island that had been a colony of Portugal (Formosa), Spain, Holland, Imperial China and Japan. Today, Taiwan’s economic and technological development is at the forefront of the semi-conductor and hardware production and an integral part of the AI revolution.

The Japanese army parades in Taipei in 1895, after taking it over as a colony

Taiwan’s success put Mao Zedong’s People’s Republic of China to shame. Red China caused at the same time one of the most disguised human disasters resulting from the collectivization of farmland. Between 1959 and 1961, 30 million mainland Chinese people died of starvation. The communist regime called this period “The Three Years of Natural Disasters”. After Mao’s death, the new leadership seemed open to abandoning communism. Red China had a second thorn in what had been the colonial enclave of Hong Kong. To recover sovereignty over the territory from Grean Britain, Deng Xiaoping formulated in 1980 the policy of “One China, Two systems”. What made modern China since then has been the “other system” besides communism. By reneging of the Hong Kong accord to self-rule and the election of the current totalitarian dictator Xi Jinping, the Peoples’ Republic of China put the modernization button in “pause”. A successful “Fair free-trade” with the US could lead to a re-start, but it would not last until the present form of total control of the labor market is freed. In effect, Red China’s economy is a disguised form of slavery without chains, where most of the value produced by labor is confiscated by the communist party.

Modern Taipei, one of the most modern and beautiful cities in Asia

Once Taiwan abandoned the policies brought from China, during the period of export-oriented industrialization from the 1960s to the 1990s, it experienced rapid economic development. From a poor and backward agricultural society, it became a modern industrialized, high-income economy. It was so obvious that the phrase of success given to Erhard’s West Germany recovery soon was repeated as the Taiwan’s Economic Miracle. Taiwan has a highly developed free-market economy. Despite its small size, it is the 22nd-largest in the world by nominal GDP and 20th-largest by purchasing power parity. Its GDP per capita ranks highly at 8th in the world. Its Per Capita Income is above $ 85,000 per year. As a comparison, the PCI of the USA is just above $ 89,000.

The latest report of the Heritage Foundation’s 2026 Index of Economic Freedom ranks Taiwan as No. 5 in the world. As a reference, the USA has been dropping below 20 for three decades. Taiwan is ranked 3rd out of 39 countries in the Asia-Pacific region. The country’s economic freedom score is higher than the world and regional averages. Red China occupies the 150^th place out of 184 countries included in the Index.

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THE MIRACLE RECIPE EXPANDS ITS INFLUENCE

In Asia, other thorns began to prick China. Japan and South Korea contraposed to China’s surrogate North Korea. Not only did they rebuild, but became driven by international trade and began to move towards more open electoral political systems. Singapore followed and received all the talent and capital fleeing the takeover of Hong Kong. More recently, Malaysia, Indonesia, Thailand and even Viet-Nam are moving towards “the other system” with a careful management of their relationship with the neighboring giant Panda. Time will tell how far they can go if Red China stalls. The Asian Pacific countries seemed to have understood the MIRACLE LESSON better that Old Europe.

The Korean Peninsula. North Korea above. Satellite photographs.
North Korea at night has no electrical power. South Korea beams nightlife and productivity 24/7

FREEDOM WORKS

As a proposed theory, Marxism failed in its fundamental predictions. Predictability is a requisite of any explanation that claims to be a theory. The industrial age did not implode. The working classes did not get impoverished; an unpredicted “middle-class” appeared. Industrial innovation increased productivity and created new jobs and occupations as the old trades and guilds vanished. Consumer products at ever lower prices began to appear. It was because women obtained independence through new employment opportunities they earned their path to their enfranchising as voters.

Revolution never happened spontaneously. It never would. It never does. Freedom works. The living experiments of the two Germanies and the two Chinas should be highlighted as the most evident evidence of the failure of socialism regardless of the mask is hiding under.

BOOKS TO EXPAND ON THIS TOPIC:

Now available at AMAZON and other online bookstores, in paperback and Kindle

A treatise on communism, its roots and its current status around the world. Provides all the answers needed to answer the current questions about the new rise of communism in the United States. Chapters on the totalitarian roots of radical Islam and the current situation in China. Marxism is dead, but not buried yet. The last holdout of Marxist devotees are the formerly respectable American colleges. Guess where the daughter of Xi is going to school: Harvard. Guess where DEI spread from: Harvard.

A treatise on Inflation. What the Bible teaches about inflation. The errors in economic theory that have turned a destructive evil into "monetary policy". The errors of Keynes and the Federal Reserve. The original proposal of Lenin to destroy capitalism quickly was kept a secret until recently. Keynes knew about it. The new Secretary of the Treasury, and the recently appointed Chairman of the Federal Reserve know what needs to be done. Follow the Constitutional directive on monetary policy and abandon the absurd "dual mandate" that is a socialist fiction.