and they believed not in revolution but in gradual change , and in private property , and in taxing the rich rather than overthrowing the institutions that produced the rich . They knew Marx , and they understood his limited vision . The most famous of them was Irish playwright George Bernard Shaw , who wrote that Marx was “ without administrative ability ,” and his theories “ generalized the human race under the two heads of bourgeoisie and proletariat apparently without ever having come into business contact with a living human being .”
Marx ’ s ideas were impractical , but they were too appealing to some , and events furnished these ambitious acolytes the opportunity to impose Marxist order on large masses of people . They took control of governments throughout the world in the 20th century : Russia and China most visibly , but other places like Cuba , Vietnam , Cambodia , Tanzania , North Korea , Congo , Venezuela and throughout Eastern Europe . These were places where industrialism was less advanced , and Marx ’ s 1848 ideas could still resonate . In more technologically advanced places like Germany and Italy , the collectivist impulse channeled high tax revenues into garish , cruel , aggressive regimes that rejected the Marxian goal of an international workers ’ paradise in favor of an ethno-centric , “ nationalistic ” socialism .
Looking back on the century , Oxford historian Paul Johnson diagnosed the problem as a fascination with abstract social science which , alas , wasn ’ t science at all . He wrote that “ by the year 1900 politics was already replacing religion as the chief form of zealotry .”
The experience of the ordinary citizen in these Marxist states followed Eugen Richter ’ s novel , although the killing of the noncompliant began even more quickly than Richter predicted . It was horrific . Modernday socialists now busy themselves with re-interpretation of these dreadful places . The killings , the slave laboring , the vast spending on munitions , the industrial inefficiency and pollution and nuclear meltdowns they cleverly dismiss as “ state capitalism ,” despite the fact these countries had no commercial banks or capital markets .
The Fabian Socialists , meanwhile , achieved some political success at the ballot box , notably in Britain and Scandinavia . The post-World War II British Labour governments of Clement Attlee , Harold Wilson and James Callaghan nationalized industries , expanded public services and pushed marginal income tax rates to over 80 % on upper middle-class incomes and to over 90 % on high incomes . Similar initiatives were taken by governments in Scandinavia .
The freedoms the Fabians preserved , however , became a problem . Fabian socialism involved no border restrictions , no limitations on free expression . These freedoms produced a backlash amongst an odd new group the theorists could never have anticipated : the young , self-made rich , creatures our modern age has spawned and endowed with much social significance .
The fabulously successful British rock band The Beatles wrote lyrics in the mid- 1960s decrying Harold Wilson ’ s Fabian state . In “ Taxman ,” the song opens with the taxman explaining to them “ Let me tell you how it will be , There ’ s one for you , 19 for me .” ( This is not hyperbole . One for you and 19 for the taxman is simply a tax rate of 95 %, or as a Beatle might see it : one measly shilling , or “ bob ,” out of every pound of earnings .)
Another British rock star , Mick Jagger of the group The Rolling Stones , explained in a television interview the band ’ s move from Britain to France at about the same time : “ In those days , in England , the high tax rate was 90 %, so that ’ s very hard … You made 100 pounds , they took 90 . So it was very difficult to pay any debts back . So when we left the country , we would get more than the 10 pounds out of 100 . You know , we might get 50 or something .”
Swedes watched their famous movie director , Ingmar Bergman , move to Munich and their star tennis player , Bjorn Borg , move to Monaco to escape Swedish tax collectors . The popular Swedish rock band ABBA wore ridiculous , sequined outfits on stage , because the high cost of such outfits could be deducted from their taxes , but only if the outfits were too outrageous to be of use as street clothing . “ Nobody can have been as badly dressed on stage as we were ,” commented one band member years later .
The young rich were more notorious than numerous , so the harsh taxes paid by those who remained were inadequate to support the increased spending . Britain tried to control the resulting inflation by limiting pay raises . Workers responded by going on strike . ( Fabians also preserved the freedom to strike .) In 1978 , truck drivers and garbage collectors struck to protest the Labour government ’ s proposed pay limits .
Shortages resulted — food , petrol , heating oil — during the bitterly cold winter of 1978 – 1979 . Looking over the piles of uncollected garbage , Prime Minister Callaghan found conditions positively Shakespearean : he called it Britain ’ s “ winter of discontent .”
These unintended consequences caused a political backlash . The Tories wrested control of Parliament from the Fabians in May 1979 and reduced union control over workplaces . Top marginal rates were gradually reduced in Britain and Scandinavia from those 80 – 95 % levels to around 50 % today .
Time and heating oil have healed the chilblains of the 1970s , however . The sting gone , some of today ’ s politicians ignore or disown the unfortunate consequences of those socialist policies . They offer new benefits to be financed by higher taxes on “ the few ,” telling voters theirs is a new idea .
Economic history , unlike politics , has no such recuperative power . Disowning and orphaning these events cannot heal them of their plain meaning .
Dan Munson enjoys reading and writing financial and scientific history and worked for many years as a chemical engineer . His writings have appeared in Barron ’ s , Financial History and other publications .
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Johnson , Paul . Modern Times : The World from the Twenties to the Nineties . London . 1991 . Marx , Karl and Friedrich Engles . Manifesto of the Communist Party . London . 1848 . Marx , Karl . Capital ( Volume I : A Critique of Political Economy ). London . 1867 , 1990 . Owen , Robert D . Threading My Way . London .
1874 . Plant , Raymond . Hegel . Allen and Unwin . 1973 . Richter , Eugen . Pictures of the Socialistic
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Rousseau , Jean-Jacques . Discourse on the Origin and Basis of Inequality Among Men . 1754 .
Webb , Sidney and Beatrice . The Truth about Soviet Russia . 1942 .
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