Chapter Nine (Part II): The Communist Economic Trap


Chapter Nine: The Communist Economic Trap (Part II)

Table of Contents (continued)

4. Public Ownership and the Planned Economy: Systems of Slavery
a. Public Ownership: A Totalitarian Yoke
b. Economic Planning: Destined to Fail

5. Marx’s Theory of Exploitation: A Fallacious Inversion of Good and Evil

6. Hatred and Jealousy: The Origin of Absolute Egalitarianism
a The Promotion of Economic Equality: A Stepping Stone to Communism
b. Communism’s Use of Unions to Undermine Free Societies

7. Communist ‘Ideals’: Tempting Man Toward His Own Destruction

Conclusion: Prosperity and Peace Can Be Obtained Only Through Morality


* * *

4. Public Ownership and the Planned Economy: Systems of Slavery

Heaven created man, endowed him with wisdom and strength, and decreed that his life would be one in which he would reap reward for his labor—to be able to obtain enough to secure his life. As the Declaration of Independence says: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” [1]

Naturally, these rights include the power to possess and allocate property and assets.

In contrast, Marx stated in The Communist Manifesto: “In this sense, the theory of the Communists may be summed up in the single sentence: Abolition of private property.” [2] This is a reference to public ownership—of which the planned economy is a mandatory aspect. The essence of this system violates Heaven’s principles, runs contrary to human nature, and is a form of slavery.

a. Public Ownership: A Totalitarian Yoke

The American anti-communist pioneer Fred Schwartz told the following joke in his book You Can Trust the Communists … to Be Communists about two interviews conducted by a visitor at a Soviet automobile plant first and next at an American plant: [3]

“Who owns this factory?”

“We do,” they replied.

“Who owns the land on which it is built?”

“We do.”

“Who owns the products of the factory when they are made?”

“We do.”

Outside in a corner of a large park were three battered jalopies. The visitor asked, “Who owns those cars out there?”

They replied, “We own them, but one of them is used by the factory manager, one is used by the political commissar, and the other is used by the secret police.”

The same investigator came to a factory in America, and said to the workers, “Who owns this factory?”

“Henry Ford,” they replied.

“Who owns the land on which it is built?”

“Henry Ford.”

“Who owns the products of the factory when they are made.”

“Henry Ford.”

Outside the factory was a vast park filled with every make and variety of modern American automobile. He said, “Who owns all those cars out there?”

They replied, “Oh, we do.”

This story vividly displays the consequences and differences between systems of private and public ownership. Under the system of public ownership, resources and the gains from labor are nationalized. Gone are the mechanisms that motivate individual enthusiasm, striving, and innovation, as with the sense of responsibility conveyed by personal property rights. In name, public ownership means that the wealth of a country is shared by all citizens, but in practice, it means that the privileged class monopolizes resources and looks after itself first.

The ultimate factor in economic growth is people. Public ownership chokes people’s vitality and motivation to be productive. It undermines morale, promotes inefficiency, and causes wastage. From Soviet collective farms to the people’s communes in China—including failed collectivization in Cambodia and North Korea—the system of public ownership brings starvation wherever it goes. Tens of millions of people in China died from a man-made famine.

Private ownership accords with the principle that man works for his bread. On the contrary, collective ownership violates this principle. Both evil and kindness exist in mankind. Private property allows man to develop his kind nature and encourages labor and thrift. Collective property, however, encourages the evil in human nature, promoting jealousy and sloth.

Friedrich Hayek writes that the growth of civilization relies on social traditions that put private property at the center. Such traditions spawned the modern capitalist system and its attendant economic growth. This is an organic, self-generating order that does not require a government for its action. Yet communist and socialist movements seek to exert control over this spontaneously arising order—what Hayek called their “fatal conceit.” [4]

If private ownership and freedom are inseparable, then the like applies to collective ownership, wed as it is to dictatorship and suppression. The system of collective ownership nationalizes resources, degrades economic productivity, and turns people into the country’s servants and slaves. All people must obey the commands of the central party, and any ideas and voices inconsistent with the regime can be shut down through economic punishments. People are then powerless against state intervention.

Thus, the elimination of private ownership and the establishment of collective ownership inevitably leads to totalitarian outcomes. Collectivism is a yoke affixed on the necks of man by a totalitarian state. Freedom is stolen—including the freedom to be kind—and everyone is forced to follow the moral commands of the communist regime.

Some people have said that power must not be privatized, and wealth must not be collectivized, or else disaster awaits mankind. That is indeed true.

b. Economic Planning: Destined to Fail

Under the planned economy, an entire society’s production, allocation of resources, and distribution of products are based on a plan established by the state. This is completely different from the organic planning of firms and individuals.

The planned economy has natural and obvious defects. Firstly, it requires the collection of huge data in order to make reasonable arrangements for production. For a country, especially a modern country with a large population, the amount of relevant information is unimaginably large. For instance, the former Soviet Union’s commodity pricing bureau had to set prices for 24 million different kinds of goods. [5] Such calculations are impossible.

The complexity and variability of society and people cannot be solved through a unified planned economy. [6] Even with the use of modern big data and artificial intelligence, human thoughts cannot possibly be inputted as variables, and so the system will always be incomplete.

Economist Ludwig von Mises discussed the relationship between socialism and the market in his article “Economic Calculation in the Socialist Commonwealth.” [7] He notes that without a real market, a socialist society won’t be able to make reasonable economic calculations. Thus, the distribution of resources cannot be rationalized, and the planned economy will fail.

Secondly, economic planning requires coercive state control of resources. This ultimately requires absolute power, quotas, and commands. Moreover, an economics of power is first of all beholden to politics, rather than to the needs of actual people. When the requirements of the real world fail to conform to state planning, then state power tramples on natural economic trends, thus causing mass misallocation of capital and all its attendant problems. The planned economy uses the limited power and wisdom of government to play God. This is doomed to failure.

Economic planning and high-pressure politics are inseparable. Because national plans are inevitably flawed, when there are problems, the plans will be challenged both inside and outside government. Those in power then feel that their authority is being challenged and will fight back with political pressure and purges. Mao Zedong, for instance, ignored the laws of economics and forced through the Great Leap Forward, resulting in a three-year famine that caused tens of millions of deaths. This led to yet further challenges for him, which is a key reason he later launched the Cultural Revolution.

The disastrous effects of the planned economy and collective ownership have been fully exhibited in the current conditions of Chinese state-owned enterprises. In recent years, a large number of Chinese SOEs have stopped or slowed production, have suffered losses every year, or have become insolvent. They rely on government subsidies and rolling bank credit to maintain operations. They’ve essentially become parasites on the national economy, and many are widely known as “zombie enterprises.” [8]

Among the 150,000 state-owned enterprises in China, with the exception of state monopolies in the lucrative sectors of petroleum and telecommunications, other SOEs report minimal profits and suffer serious losses, serially destroying capital. By the end of 2015, their total assets accounted for 176 percent of GDP, debt accounted for 127 percent, and earnings accounted for only 3.4 percent. Some economists believe that the zombie enterprises have essentially hijacked China’s economy. [9]

Meanwhile, economic planning deprives people of their freedom and forces the state to look after them. The essence of the project is about turning people into slaves and machines. All aspects of people’s lives come under the control of the state, which locks people in an invisible prison, seeks to abolish free will, and alters the parameters of human life laid down by God. This is yet another manifestation of the communist revolt against God and natural law.

5. Marx’s Theory of Exploitation: A Fallacious Inversion of Good and Evil

Marx said that only labor creates value. If a company owner invests $10 million this year, and the company’s revenue is $11 million, then this $1 million profit was created by the employees. According to Marxist theory, capital—the company’s storefronts, goods, and other means of production — does not create value, but is only transferred to a part of the cost of goods. The value created by the company’s employees ($11 million) is higher than the company’s costs (including the salaries of employees, which is the cost of their labor). In Marxist theory, the profit, $1 million, is “surplus value” created by employees yet unfairly expropriated by the capitalist.

Marx therefore claimed that he had found the secret as to how capitalists make money and believed that it is the original sin of the bourgeoisie—exploitation. Capitalist investment in the establishment of factories and companies is obviously for profit, so according to Marx, the proletariat will inevitably be exploited. This original sin of exploitation is inherent in the capitalist system, which belongs to the entire bourgeoisie. Marx thus concluded that to eliminate this sin, the entire capitalist society must be destroyed—that is, the bourgeoisie must be eliminated and their assets confiscated, while the vanguard of the party collectivizes property and institutes communism.

The absurdity of Marx’s theory of exploitation is mainly reflected in two aspects. First, it divides people into two opposing classes: the bourgeoisie with capital, and the proletariat without. In fact, since industrialized societies came to the fore, class mobility has increased rapidly. For instance, class mobility in Marx’s era (the early 1800s to the 1850s) was similar to the 1970s in both the United Kingdom and the United States. [10] The interchange between classes is a dynamic process. A supposed member of the proletariat is no longer among the proletariat if he buys public equity in a company. If class assignment can be changed so easily, attempts at dividing people into groups like this have no other purpose than to incite class hatred.

On the other hand, through a set of elaborately designed “theories,” Marxism deceives people into replacing traditional moral standards with its ersatz standards that invert right and wrong. In the Marxian view, whether an individual is good or bad is not judged based on his morality and actions, but his place in the (inverse) hierarchy of capital. One who belongs to the capitalist class is guilty of exploiting the proletariat (the working class), and since the proletariat is the suppressed and exploited, its members naturally occupy the moral high ground. No matter how they treat capitalists, they can hold their head high. This indeed has turned the possession of property into a crime, twisted the theft of wealth into justice, and legalized and justified violent expropriation. This reversal of right and wrong, good and evil, has encouraged evildoing.

In China, the former Soviet Union, and the communist states of Eastern Europe, the communist parties stole land, lynched landlords, and robbed capitalists of their factories. Worse yet, the party even murdered “class enemies,” engaged in arson, confiscated generational wealth, destroyed human nature, and waged an overall campaign of state terrorism against people. All this evildoing was a result of these theories. Meanwhile, traditional moral standards as well as belief in the divine, saints, and other prominent scholars and personages were branded as belonging to “the exploiting classes” and were to be attacked and toppled.

Marx’s theories have been widely criticized in economic and philosophical circles. [11] Following are merely a few examples that illustrate the absurdity of Marx’s theory of exploitation.

Marx argues that labor creates value, and that value is determined by the labor time necessary for production. This is a ridiculous theory. The value of a commodity is not one of its intrinsic properties. Most of the time, humans add a subjective element to each commodity—most saliently supply and demand. Many economists have explored the process of valuation, and unlike Marx’s narrow monism, most economic thinkers believe that numerous factors are involved in the creation of value—including land, capital, labor, science and technology, management, the risk of investment, and so on. Economic activities are a complex system, involving different links in the chain of production. Different factors of production have certain managerial requirements, and different people play different roles, which are indispensable to the whole chain and make contributions to the creation of “residual value.”

For example, a capitalist plans to spend $1 million dollars hiring two engineers to design and produce a certain new toy. A marketer is also hired to promote the new toy. Two years later, the new toy gains in popularity and earns a profit of $50 million. Is it the labor of the engineers and marketer that created the residual value of $50 million? Of course not. The reason the new toy earned millions is because people wanted it. The capitalist’s insight into the market, ability to organize and manage others, and courage to take a risk all contributed to the value of the toy.

Suppose the creativity in the toy came from one of the engineers—then, does the residual value of the $50 million come from the fact that the capitalist exploited the engineer’s creativity without giving anything in return? Of course not. If the engineer thinks his creativity was not being adequately rewarded, he could find another company that offers higher pay.

In a free market, a balance will ultimately be struck in matching skills and ambition with capital. Capitalists who demand unreasonable profits will lose to the competition or be unable to attract talent. In addition, since return on invested capital delays spending or other enjoyment of that capital, the profits are also due to the efforts of the investor. Therefore, it’s normal that an additional sum will be gained in return. The principle is no different to lending at interest.

There are also many “accidental” factors involved in deciding the value of a commodity. Such accidental factors can only be reasonably explained by a frame of reference founded on traditional beliefs and culture.

In certain situations, the creation and destruction of value can be entirely unrelated to the question of labor. A diamond worth $10 million today may have been worthless five thousand years ago because no one wanted it. A barren patch of land inherited from a grandfather could be 100 times more valuable due to the prosperity of a nearby city or the discovery of rare-earth metals underground. Here the increase in value involves no labor. Such vast, unexpected wealth is simply called fortune. Both Western and Eastern cultural traditions recognize that fortune is a blessing given by gods to man.

In order to demonstrate the “rationality” and “necessity” of public ownership, Marx concocted the exploitation theory based on surplus value, which turned the economic activities that people engage in as a normal part of life into negative and unethical behavior. His theory poured hatred and scorn on the existing economic order as part of his attempt to undermine and overthrow it.

The capitalists and the workers, the landlords and the peasants, in fact form a community of shared interests. Their relationship should be one of cooperation and interdependence; each supports the other to survive. Marx deliberately made the contradiction between them absolute, extreme, and absurdly exaggerated—as if they had a hostile relationship of life and death. In fact, there are good and bad people among capitalists just as there are among workers too. In economic exchange, what should really be exposed and sanctioned is neither capitalists nor workers as such, but anyone who undermines normal economic activities. The basis of judgment should be moral quality and behavior, not wealth.

People can change their economic and social status through their own efforts. Workers can become investors through the accumulation of wealth. Investors can become workers due to failures in their investments. Society is constantly changing and flows like a river. The role of labor and investors in modern society often changes. Most people also play both roles—putting the profits they made into future productive capacity, thus creating employment, increasing social wealth, and benefitting the general public. Even a founder of the U.S. trade union movement said, “The worst crime against working people is a company which fails to operate at a profit.” [12]

The absurd “surplus value theory” affixes the label of “exploitation” to the normal activities of landowners and capitalists. It has incited incalculable hatred, muddled thinking, and struggle, and has destroyed the lives of millions.

6. Hatred and Jealousy: The Origin of Absolute Egalitarianism

Communism advocates absolute egalitarianism. Superficially this may sound like a high-sounding term, leading many to blindly believe in its rectitude. However, it also evokes hatred and jealousy. One consequence of egalitarianism is that people can’t tolerate the success of others, with others being wealthier, having better lives, easier work, and more luxurious living conditions. Everyone must be equal, in this reading: I should have what you have, and I can get what you get. In such a universe, everyone is equal and the world is alike.

Absolute egalitarianism is reflected in at least two ways. First, when people are not yet equal, they become dissatisfied with their economic status, which is a fast route for evildoers to incite envy and hatred. People come to covet what others have and even seek it through improper or violent means. In extreme cases, they destroy others’ property and even kill to get rich. The worst manifestation of these tendencies is violent revolution.

In order to provoke dissatisfaction, Marx divides society into two opposite classes: those who own the means of production, and those who don’t. In the countryside, this becomes the landlord and the peasant; in the city it’s the capitalist and the worker. The result is to incite class hatred and use the supposedly disenfranchised to carry out violent revolution. The landlords are rich and the peasants are poor — seize their wealth! Why are the landlords rich? Everyone should be rich. Thus, the Chinese Communist Party called on peasants to engage in “land reform”—that is, attacking landlords and dividing up the land. If the landlords refuse to go along with it, they’re to be killed. The Communist Party first incited hooligans to make trouble, then encouraged the peasantry to rise up and attack the landlord class. The heads of millions of landowners fell.

Second, absolute egalitarianism also manifests within groups that have basically achieved a state of “equality”: If there are benefits, everyone gets an equal share. Anyone who stands out is censured. Everyone is treated the same whether one works more, works less, or even doesn’t work at all.

People appear the same on the surface, but each individual’s personality, intellect, physical strength, morality, occupation, role, education, living conditions, extent to which they can endure hardship and persevere, spirit to innovate, and so on are all different, and what one contributes to society is also different. Thus, why should the same outcome be sought for all? In this sense, inequality is actually true equality, while the equality pursued by communism is true inequality and true injustice. The ancients in China say that the way of Heaven is to reward those who work hard, and that Heaven will reward one according to the effort one puts in. Absolute egalitarianism is impossible in the real world.

Under absolute egalitarianism, you get the same outcome whether you do things well or do poorly, whether you are hardworking or lazy. Under the cover of egalitarianism, the lazy benefit, while those who work hard and are capable are penalized and even resented and viewed with hatred. Everyone slows down their pace to match the speed of the slowest. In actuality, this causes everyone to become lazy, to wait for someone else to contribute so that one can take advantage of it and jump on for the ride, gaining something for nothing, or grabbing from someone something that one does not have, resulting in widespread moral decline.

The hatred and jealousy that motivate absolute egalitarianism are the poisonous roots of communism’s economic perspective. Human nature has both good and evil inherent in it. Western faiths refer to the seven cardinal sins, while Eastern culture teaches that man has both Buddha nature and demon nature. Buddha nature manifests itself as kindness, the ability to endure hardship, and consideration of others. Demon nature manifests as selfishness, laziness, jealousy, malice, plunder, hatred, rage, lust, tyranny, disregard for life, inciting discord and creating trouble, creating and spreading rumors, getting something for nothing, and so on. The economic perspective adopted by communism deliberately stimulates demon nature, amplifying people’s jealousy, greed, laziness, and other evil factors, causing people to lose their humanity and forsake the traditional values held for thousands of years. It amplifies the worst in human nature and turns people into communist revolutionaries.

In “The Theory of Moral Sentiments,” Adam Smith said that morality is the foundation of mankind’s prosperity. Observing these general rules of morality “is required for the very existence of human society, which would crumble into nothing if mankind were not generally impressed with a reverence for those important rules of conduct.” [13]

Lawrence Kudlow, director of the U.S. National Economic Council, believes that economic prosperity must exist alongside morality. He wrote that if the United States can abide by the “foremost principle”—to adhere to the moral values that America was founded on—the development of the United States will be limitless. [14]

The negative consequences caused by absolute egalitarianism in countries around the world are not surprising. Communist egalitarianism uses the authority of the state to plunder private property and wealth belonging to others. On the one hand, this strengthens the authority and power of communist ideology, and on the other, it convinces people that it’s their right to get something for nothing. This is precisely how communism deceives people.

a. The Promotion of Economic Egalitarianism: A Stepping Stone to Communism

Under the influence of absolute egalitarianism, there are vigorous calls in the West for “social justice,” as well as minimum-wage laws, affirmative action, equal pay for equal work, and other demands. What lies behind these demands is a desire for an equality of outcome; behind them are elements of communism. If careless about these matters, man can easily find himself falling into a trap.

From the communist perspective, it doesn’t matter whether these vulnerable groups obtain equality or if their social status improves. They are merely pawns for inciting resentment. If communists get what they demand, then they will simply make new demands for equality, and there will be no end to it. If they don’t achieve their demands, they will wage a war of public opinion, incite resentment, strengthen people’s notions about the justice of equality, and turn these notions into a major platform on which to influence public opinion.

Because communism incites resentment in multiple fields and via so many different means, once all the resentment explodes at the same time, social turmoil and perhaps even revolution will be the result. Communists will always be able to find vulnerable groups and then demand financial equality for them, repeating the process until absolute equality is achieved. These demands for so-called social justice become a stepping stone for the path toward communism. Free countries in the West have been eroded by communist ideology — this is simply the reality.

In reality, the implementation of these policies often results in the opposite of what is intended. Those who are supposed to be protected by these policies are instead discriminated against and attacked. Take the minimum-wage law, for example. On the surface, its goal is to protect the rights of workers, but the effect is that many factories simply stop hiring because it is uneconomical for them to do so. As a result, even more workers lose their jobs.

Skills are not gained all at once. There’s a continuous process of progress and elevation of skill, capability, and work ethic. The result of enforcing a minimum wage is that people don’t get trained and socialized in lower-wage jobs and then work their way toward higher-paying jobs. The one-size-fits-all approach also violates economic theory and results in excessive government intervention in the economy.

People also use the excuse of “equal pay for equal work” to demand social revolution. They cite statistics and claim that the average wage of black males is less than the average wage of white males, that the average female wage is less than the average male wage, and that these discrepancies are the result of racism and sexism. In reality, such comparisons are not appropriate.

When comparing apples and apples, the results are different. Some scholars’ research found that for black families where both husband and wife graduated from college or higher, their income is in fact higher than similarly situated white families. [15] Simply because black families of this type are relatively fewer, there are discrepancies between the races overall in income. Making meaningful and accurate comparisons would appear to be common sense, but when communist elements are inciting discord and struggle, people seem to suffer a selective loss of vision.

Communism does not care about the well-being of vulnerable groups. It is simply interested in slogans that drag people down the road to communism and thus destruction.

b. Communism’s Use of Unions to Undermine Free Societies

The loss of jobs in the manufacturing sector in the United States is a well-known phenomenon. But many people don’t realize that unions are one of the main culprits. Unions claim to help obtain benefits for the working class, but they do the opposite. How? This is clear by tracking the history of unions and the transformation of their mission.

Trade unions were initially founded by members of the working class with few or no skills, for the purpose of negotiating with management. To a certain extent, a trade union is able to broker and resolve conflicts between workers and capitalists. But communist elements took the union and turned it into a tool to promote communist movements and policies.

Friedrich Engels wrote on the topic: “The time also is rapidly approaching when the working class will have understood that the struggle for high wages and short hours, and the whole action of Trades Unions as now carried on, is not an end in itself, but a means, a very necessary and effective means, but only one of several means towards a higher end: the abolition of the wages system altogether.” [16]

Lenin believed that the formation and legalization of trade unions is an important means for the working class to seize the leadership of the democratic revolution from the capitalist class. At the same time, he believed that the trade union would become the pillar of the communist party and a key force in class struggle. In his speech, Lenin proposed that trade unions become “a school of communism” and a link between the communist party and the masses. The daily work of the trade union was to convince the masses and bring them to the transition from capitalism to communism. “The trade unions are a ‘reservoir’ of the state power.” [17]

In the mid to late 19th century, communist and left-wing forces used trade unions to incite workers to go on large-scale strikes, make harsh demands on capital, and even take violent measures to destroy machinery and factories. The trade unions became a powerful weapon for communism to combat capitalism and carry on political struggle—creating chaos for the world so that it could further its goals.

In October 1905, more than 1.7 million workers in Russia participated in a nationwide political strike and paralyzed the country’s economy. During this time, the Petrograd Soviet, an even more aggressive union organization, was formed. Lenin called it the sprouting of a revolutionary government and believed that it would become the political center of Russia. In other words, the Soviet regime built during the 1917 October Revolution originated from the trade union. [18]

Trade unions in Western and developed countries are also widely infiltrated and used by communist elements. Workers and capitalists are supposed to be symbiotic, yet communists try to provoke, expand, and intensify conflict between them. One of its most important tools is the trade union. Trade unions are used to escalate the bargaining process between management and workers to the level of a struggle between classes. They rationalize and intensify the confrontational side of the relationship and use it to legitimize their own existence. From then on, unions inflame the workers’ dissatisfaction, blame the capitalists for any problems, and provoke conflict between the two. This has been one of the unions’ keys for survival.

Trade unions may be able to bring workers profit in small ways for a short period of time, but from a long-term economic point of view, the biggest victim under the union movements led by communists is the working class. This is because when capitalist enterprises crumble, the biggest losers are the workers, who lose their jobs and livelihoods. On the surface, trade unions are fighting for the interests of workers, but in fact they are undermining industrial competitiveness. There are two reasons for this.

First, under the pretext of protecting workers’ rights and interests, unions make it difficult for enterprises to lay off employees who don’t perform and who achieve little. This gives rise to a culture of laziness. Not only is this unfair to employees who work diligently, but it also makes them less proactive. The most important factor in the growth of a company is its workers, but with the union’s umbrella of protection over employees who fail to perform, enterprises lose their competitiveness.

Second, under the pretext of protecting employees’ welfare (including pensions, health insurance, and the like), unions constantly elevate enterprise costs. In the end, it forces companies to reduce their investment in research and development, also reducing their competitiveness. It also results in companies’ having to increase product prices, which also harms consumer interests. Studies show that this is why companies without unions, such as Toyota and Honda, were able to produce high-quality cars at lower costs, and why American automobile factories with labor unions in Detroit became less competitive. [19]

As Edwin Feulner, founder of the American Heritage Foundation, said of unions: “They function like an albatross around a company’s neck—making it less flexible, less able to react wisely to the demands of a changing marketplace.” [20]

All this is aggravated with union monopolies in the labor market. This then exerts deleterious influence over business decisions and results in numerous unreasonable demands, some of them harsh. Enterprises who fail to meet these union demands are then the targets of struggle, including strikes and protests, which further disable business.

The United Auto Workers (UAW) is the union representing the autoworkers in Detroit. The UAW routinely went on strike. Prior to the financial crisis in 2008, the union demanded $70 an hour in wages and benefits. Consequently, the U.S. automobile manufacturing industry was almost on the brink of bankruptcy. [21]

The loss of job opportunities in the U.S. manufacturing industry is now known to all, but many people don’t know that unions are a key driver of the job losses. Unionized manufacturing jobs fell by 75 percent between 1977 and 2008, while non-union manufacturing employment increased by 6 percent over that time, according to the Heritage Foundation. The situation outside the manufacturing sector is also similar. Take the construction industry for instance. “Unlike the manufacturing sector, the construction industry has grown considerably since the late 1970s. However, in the aggregate, that growth has occurred exclusively in non-union jobs, expanding 159 percent since 1977.” [22]

In addition, labor unions are the tools employed by communist elements to promote egalitarianism in enterprises. The Heritage Foundation notes that unions demand that companies pay wages according to the length of service of the employee (equivalent to years of service in socialist countries), without regard to the employee’s contribution to the company or performance. This has the predictable effect of suppressing the wages of more productive workers and raising the wages of the less competent.” [23]

The idea at work here is the same as absolute egalitarianism under communism, which is effectively the redistribution of wealth among employees within the enterprise. The interference with internal decision-making of enterprises and the monopoly of the labor market is an erosion of the free market.

Unions’ aggressive advocacy for what they describe as workers’ welfare ends up favoring some workers over others and puts a drag on individual companies and the economy as a whole. A survey conducted in 2005 showed that “most union households disapprove of American unions,” and that “the main reason for their disapproval is never openly discussed in union media or addressed at union conventions.” [24]

In all respects, those workers who are truly diligent have become victims, and communism has become the biggest winner. Fundamentally, communists use labor unions to destroy the capitalist free economy, subvert the capitalist system, and undermine the normal life of man in a gradual and step-by-step manner.

Labor unions infiltrated by communism and under the guidance of the progressive movement have evolved into a special interest group, similar to a large-scale for-profit corporation. The leadership has huge personal interests in the enterprise, and corruption is common. [25]

In democratic countries, labor unions have largely become a tool for leftists to fight against capitalism. They single-mindedly demand “social justice” and “fairness,” creating a huge welfare burden on society and industry, and becoming an obstacle for reform and attempts to improve efficiency in the manufacturing, service, and education industries, as well as in government administration. When the time is not ripe, they hide, but when conditions are favorable, they come out and mobilize a social movement to promote their ends. Labor unions have thus become a wedge communism uses to divide free societies.

7. Communist ‘Ideals’: Tempting Man Toward His Own Destruction

Despite communist theory being full of loopholes and contradictions, many are still deceived by it. This is because Marx described a communist paradise that people all over the world would enjoy. This is the central fantasy and delusion. His depiction includes “overwhelming material abundance,” much higher moral standards, and “from each according to his ability, to each according to his need.” There would be no private ownership, no gap between the rich and the poor, no ruling class, no exploitation, freedom, and equality for all, and each person would be able to develop his or her particular talents. Life would be wonderful.

This set of deceitful arguments attracted many to fight for it. Many Westerners today have never had the tragic experience of living in a communist totalitarian state. They continue to harbor the illusory hope for a communist paradise, and therefore fan the flames by advocating communist and socialist ideas.

In fact, all the ideas put forward by Marx are simply illusions.

Marxism claims that a communist society will enjoy a superabundance of material goods. However, human desires and human wants are endless. Under the constraints of limited human knowledge, limited working hours, and limited resources, shortages and deprivations are inevitable. This is the most basic starting point for all economic studies. Without these constraints, people do not have to explore which kind of production method is most efficient, as the supposed superabundance will provide for all and can be squandered at will.

Marxism claims that moral standards in communist society will have greatly improved. However, good and evil coexist in each person, and the improvement of moral standards requires the guidance of orthodox beliefs and values, as well as personal efforts in self-cultivation.

What Marxism preaches is atheism and class struggle, which enlarges the evil side of man. People are not allowed to have freedom of belief, and religion is only a political tool of the communist party. What’s more, under communism, religious institutions are used to safeguard tyranny, to mislead the world, to resist God, to oppose God, and to turn people further away from God. Without righteous belief in God and self-discipline, morality can only decline. In addition, all communist leaders were tyrants—arrogant, lewd, and completely unethical. To expect their followers to be so vastly improved in moral standards runs counter to reason.

Marxism also proclaims equality for all. But as discussed earlier, socialism inevitably leads to totalitarianism. Power is the basis of resource distribution, yet the distribution of power under a totalitarian state is most unfair. Therefore, resource distribution under totalitarianism will also be most unfair. In all countries where socialism rules or ruled, people see a privileged stratum form, as well as extreme gaps between the rich and the poor and the suppression of people by the state.

Marxism deceives people with the promise of “from each according to his ability, to each according to his need.” [26] However, socialist economies are beholden to power. Ordinary people do not have basic freedoms, not to mention being able to act at will according to their own ability. Given that human desires are endless, even the richest person on earth can’t get all he or she wants, let alone the average person. It’s impossible to achieve a superabundance of goods in the first place, given the natural scarcity of resources, not to mention their distribution to whoever needs them.

Communism also deceives people by promising that every member of society can give full play to his or her abilities. Marxism says that division of labor creates alienation. But in fact, division of labor is necessary for any society. Adam Smith argues in “The Wealth of Nations” that a division of labor can greatly increase productivity and promote prosperity. The differences created by the division of labor are not necessarily conflicts, nor need they lead to alienation and depersonalization. People from all walks of life can elevate their morals, contribute to society, and bring happiness to mankind.

The communist economic outlook is anti-moral. Its damage has already been seen in socialist and communist countries. The various forms of disguised communist economics in the West have also brought damage to society. Communism inevitably creates totalitarian tyranny, poverty, and famine. It incessantly expands the evil in human nature and destroys human morality. It is the most evil and worst countercurrent in human history.

Looking back at over a century of communism’s history, the ruthless reality time and time again proves that it is a history of inciting hatred, mass murder, and evil. All communist totalitarian countries see the cruelest killing, and people in these countries have the least freedom and human rights. Resources are exhausted for military purposes. People’s belongings are robbed of them to make the privileged class rich with power, while the majority are left to labor in poverty.

The communist movement not only deprives people of their lives but also leads to enormous destruction of traditional values and culture. In particular in communist China, moral standards have already dropped to a horrifying degree, far beyond what one can easily imagine. The harvesting of organs from living people, good people who practice self-cultivation, has become a state-sanctioned industrial operation. Communists have turned humans into monsters. Medical personnel, who are supposed to help the sick, have become demonic murderers. The CCP’s evil has reached across the world. Countries that are supposed to be upholding human rights are enticed to turn a blind eye due to economic incentives.

Over the past century, communists have used the original communist teachings to attract the proletarian general public, intellectuals, and younger generations. After the collapse of Eastern European communist regimes, the remaining communist regimes no longer took on the violent communist images, but instead absorbed the capitalist economic system and morphed into regimes that promote high taxes, a high level of welfare benefits, and wealth redistribution. They claim that they are raising the overall living standards and that everyone will enjoy “the good days” of socialism. Thus, they continue to deceive.

Communism caters to man’s pursuit of goodness while leading him to turn almost into a religious fanatic for communist ideology. It uses the pursuit of goodness as its banner to pull people away from God. It pollutes people’s minds, strengthens people’s evil nature, and leads people to commit all manner of crime. People indulge in material enjoyment, casting aside loftier and nobler beliefs in the higher purpose of life. Communism makes people bleed and sweat. In return, people are poisoned and killed. If the world’s people do not wake up now, they will face even more horrifying consequences.

Conclusion: Prosperity and Peace Can Be Obtained Only Through Morality

Striving for happiness is human nature. A prosperous economy can bring happiness, yet the economy does not exist in a vacuum. When the path of economic development deviates from ethics and morality, an economic crisis may follow. A society that is merely wealthy is not only incapable of bringing joy and happiness, but its prosperity will be short-lived. As the foundation of ethics and morality crumbles, a disastrous outcome may await.

In 2010, People’s Daily reported that despite the economic development, the Gross National Happiness Index has been on annual decline in China. The world’s second-largest economy is plagued with corruption, environmental pollution, and food-safety incidents, making the Chinese people extremely insecure about their lives. In this case, wealth has increased as morality and happiness have declined.

This reflects the fatal flaw in communism: Human beings are not composed only of flesh, but far more of the mind and the spirit. Before man came to the world, God laid down the path that his life would take. The Chinese say “every bite and every sip is preordained,” analogous to how faithful Westerners say grace before dinner to thank God for his providence. People who believe in God understand that wealth is a grace bestowed upon them by God. They have a humble and thankful heart, and hence they are content and happy.

Among those on the Titanic as the ship sank was millionaire John Jacob Astor IV, whose fortune could have built 30 Titanics. Yet when facing death, he chose what he thought was morally correct and protected women and children—he gave his spot to two terrified children. [27] Similarly, Isidor Straus, co-owner of Macy’s department store said, “I will not go before the other men.” His wife also refused to get on a lifeboat, giving her place to Ms. Ellen Bird, their new housemaid. She chose to spend her final moments with her husband. [28]

These people of great wealth chose to put traditional values and faith before the opportunity to save their assets and lives. Their choice of morality and justice manifests the radiance of human civilization and human nature: A noble character is more valuable than life, which is yet more valuable than wealth.

Mr. Li Hongzhi, the founder of Falun Dafa, wrote in “Wealth and Virtue”:

It is the duty of the ruler and officials to bring wealth to the populace, yet promotion of money-worship is the worst policy one could adopt. Wealth without virtue (de) will harm all sentient beings, while wealth with virtue is what all people hope for. Therefore, one cannot be affluent without advocating virtue.

Virtue is accumulated in past lives. Becoming a king, an official, wealthy, or nobility all come from virtue. No virtue, no gain; the loss of virtue means the loss of everything. Thus, those who seek power and wealth must first accumulate virtue. By suffering hardships and doing good deeds one can accumulate virtue among the masses. To achieve this, one must understand the principle of cause and effect. Knowing this can enable officials and the populace to exercise self-restraint, and prosperity and peace will thereby prevail under heaven. [29]

If humankind maintains the aforementioned values for wealth and life, the economic challenges rooted in human beings’ greed, sloth, and jealousy will be reduced considerably. Once mankind suppresses its selfish desires, the ideology of communism will no longer be able to lure the human heart. Then God will bless mankind with high standards of morality. Consequently, we will have the ideal economy for mankind: wealth for the world, calmness in our hearts, and peace in society.

The communist specter has made intricate arrangements to destroy mankind. Its economic arrangements are only one part of the story. To free ourselves from the control of communist “ideals,” we need to unpack the conspiracy, identify the fraudulent messages, and stop putting our hope in this bankrupt ideology. We also need to restore traditional values and recover morality and virtue. Thus, humanity will be able to embrace everlasting prosperity and happiness and have true peace. Human civilization will then radiate with new vitality.


[1] “United States Declaration of Independence,”

[2] Karl Marx and Friedrich Engels, “Manifesto of the Communist Party,” Marx/Engels Selected Works, Vol. One (Moscow: Progress Publishers, 1969)

[3] Fred Schwartz and David A. Noebel, You Can Trust the Communists… to Be Communists (Socialists and Progressives too) (Manitou Springs, CO: Christian Anti-Communism Crusade, 2010), 43–45.

[4] Friedrich Hayek, The Fatal Conceit: The Errors of Socialism (Routledge, August. 2013).

[5] Thomas Sowell, Intellectuals and Society, Revised and Expanded Edition (New York: Basic Books, 2012), Chapter 2.

[6] F. A. Hayek. “The Use of Knowledge in Society,” The American Economic Review, Vol. 35, No. 4. (September 1945), 519–530.

[7] Ludwig von Mises. “Economic Calculation in the Socialist Commonwealth.” Mises Institute. Accessed July 26, 2018.

[8] Shi Shan. “Quagmire in the Reform of China’s State-Owned Enterprises,” Radio Free Asia, September 22, 2015,

[9] Linette Lopez, “Zombie Companies Are Holding China’s Economy Hostage,” Business Insider, May 24, 2016,

[10] Jason Long, “The Surprising Social Mobility of Victorian Britain,” European Review of Economic History, Volume 17, Issue 1, February 1, 2013, 1–23,

[11] John Kenneth Galbraith, The Good Society: The Humane Agenda (Boston, MA: Houghton Mifflin Co., 1996), 59–60; Karl Popper, The Open Society and Its Enemies (Routledge, 2012).

[12] Michael Rothschild, Bionomics: Economy as Business Ecosystem (Washington, D.C.: BeardBooks, 1990), 115.

[13] Adam Smith, The Theory of Moral Sentiments (Philadelphia: Anthony Finley, J. Maxwell Printer, 1817).

[14] Lawrence Kudlow, American Abundance: The New Economic and Moral Prosperity (New York: Harper Collins Publishers, 1997).

[15] Thomas Sowell, Economic Facts and Fallacies (New York: Basic Books, 2008), 174.

[16] Friedrich Engels, “1881: Trades Unions,”, May 20, 1881,

[17] Vladimir Lenin, n.d., “The Trade Unions, The Present Situation and Trotsky’s Mistakes,” Accessed July 8, 2018,

[18] Lü Jiamin, “A History of Leninist Theory on Unions.” Liaoning People’s Press (1987).

[19] James Sherk, “What Unions Do: How Labor Unions Affect Jobs and the Economy,” Heritage Foundation Website, May 21, 2009,

[20] Edwin J. Feulner, “Taking Down Twinkies,” Heritage Foundation Website, November 19, 2012,

[21] James Sherk, “What Unions Do: How Labor Unions Affect Jobs and the Economy,” Heritage Foundation Website, May 21, 2009,

[22] Ibid.

[23] Sherk (2009) Ibid.

[24] Steve Inskeep, “Solidarity for Sale: Corruption in Labor Unions,” National Public Radio, February 6, 2007,

[25] Ibid.

[26] Karl Marx, “Critique of the Gotha Programme,”

[27] Children on the Titanic (a documentary, 2014).

[28] Isidor Straus, Autobiography of Isidor Straus (The Straus Historical Society, 2011), 168–176.

[29] Li Hongzhi, “Wealth With Virtue,” Essentials For Further Advancement, January 27, 1995,

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