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Dipak Basu · Victoria Miroshnik
Imperialism
and Capitalism,
Volume II
Normative Perspectives
Imperialism and Capitalism, Volume II
Dipak Basu · Victoria Miroshnik
Imperialism
and Capitalism,
Volume II
Normative Perspectives
Dipak Basu Victoria Miroshnik
Nagasaki University Reitaku University
Nagasaki, Japan Kashiwa, Chiba, Japan
ISBN 978-3-030-54890-2 ISBN 978-3-030-54891-9 (eBook)

https://doi.org/10.1007/978-3-030-54891-9
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer
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This book is dedicated
To the Memory of Bijoy Sen,
The Source of encouragement
Introduction
In this volume, we are describing political systems developed in different

countries in different historical periods, which are attempts towards the
creation of socialist economy.
Maximization of utility is the goal of every capitalist organization.
According to Einstein, this utilitarianism leads to inequality, business
cycles booms and busts in a capitalist society, along with competition
among capitalists, ultimately encourages selfishness. Cooperation is for the
idiots.
The educational system of a capitalist society is composed of profit-
oriented organizations where the students will borrow and try to get
education to earn as soon as possible to pay back the borrowed money.
This can have the result of destruction of human creativity. Competi-
tion in a capitalist society leads to business failures and unemployment,
which ultimately mean a destruction of human spirits, which according to
Einstein (1948) the real evil of capitalism.
Einstein predicted that under such a capitalist society, large companies
with huge funds can effectively bribe most political parties and politicians
and the system “cannot be effectively checked even by a democratically
organized political society”. The solution according to Einstein a planned
economy:
I am convinced there is only one way to eliminate these grave evils,
namely through the establishment of a socialist economy, accompanied by
an educational system which would be oriented toward social goals.
vii
viii INTRODUCTION
Einstein hoped that in a planned economy every person can have a

humanistic facility to develop his or her personality where the state would
take care of all human material needs.
In such an economy, the means of productions are owned by society itself
and are utilized in a planned fashion. A planned economy, which adjusts
production to the needs of the community, would distribute the work to be
done among all those able to work and would guarantee a livelihood to
every man, woman and child. The education of the individual, in addition
to promoting his own innate abilities, would attempt to develop in him a
sense of responsibility for his fellow men in place of the glorification of power
and success in our present society.
However, Einstein said clearly that “a planned economy is not yet
socialism”, since it may mean also the complete enslavement of the indi-
vidual by the “all-powerful” bureaucracy, as it is in China today where
individuals have no right at all.
In a capitalist system, because of the competition among the industri-
alists, there is a tendency to form oligopoly. Where the politicians and the
journalists can be bribed, interest of the poor people cannot be protected
where money determines everything. However, the process of socializa-
tion must be as gradual to avoid grave economic disturbance, which will
affect the poor adversely first. Socialism is a threat towards the security
of private property and of income derived from property and from enter-
prise. A capitalist economy is incompatible with a socialist government.
It is possible to have a socialistic system under different political system
even under a monarchy, as it was in ancient India. In a democratic society,
sufficient protection can be placed to provide socialistic facilities as we can
see today in the Scandinavian countries. In this volume, we have analysed
these issues.
Reference
Einstein, A. 1948. Reply to Soviet Scientists, Special Volume, Monthly Review.
Contents
1 Socialism Within Monarchy: Kautilya in Arthashastra 1
2 Socialism in the Soviet Union 15
3 Socialism Within a Democracy, Fabian Socialism,

Yugoslavia, Scandinavia, India 39
4 Socialist Calculation 73
5 Feldman–Mahalanobis Model of Development Planning 87
6 Contemporary Capitalism and Imperialism 121
Conclusion 153
References 157
Index 159
ix
List of Figures
Fig. 3.1 Trends in GDP per capita (US$, PPP) in SFR

Yugoslavia/successor states, 1947–1993 (Source The
Maddison Project, http://www.ggdc.net/maddison/mad
dison-project/home.htm, 2013 version; GDP per capita is
expressed in Geary-Khamis [GK] dollars, equivalent to the
international 1990 dollar [PPP]) 47
Fig. 5.1 Stochastic optimum capital stock, agricultural sector 111
Fig. 5.2 Stochastic optimum capital stock, industrial sector 112
Fig. 5.3 Optimum agricultural output 112
Fig. 5.4 Optimum industrial output 113
Fig. 5.5 Optimum terms of trade 113
Fig. 5.6 Optimum agricultural labour force 116
xi
List of Tables
Table 2.1 Analysis of economic growth rate (Real GNP at 1987

price) 24
Table 2.2 Average growth rate in the EEC and CMEA (in % pa) 26
Table 2.3 Analysis of economic growth rates and labour productivity 27
Table 2.4 Investment ratio and investment efficiency 27
Table 2.5 A dynamic comparison of the Soviet and US economies
(USSR as % of USA) 28
Table 2.6 USSR: Growth rates of the GNP (av. annual rate) 29
Table 2.7 USSR: Total Trade, 1981–1990 (Billion Current US
Dollars). Annual average* 32
Table 2.8 USSR: estimated hard currency balance of payments
*(Million Current US Dollars) 33
Table 2.9 USSR: estimated hard currency debt to the West (Billion
Current US Dollars) 34
Table 5.1 Annual data from 1950 to 1970 106
Table 5.2 Actual and optimum (stochastic) path for m I /I (in
percentage) 118
xiii
CHAPTER 1
Socialism Within Monarchy: Kautilya

in Arthashastra
Kautilya was a professor at Takshashila university (in Taxila now

in Pakistan) and the intellectual guardian of Emperor Chandragupta
Maurya. Chandragupta came to the throne in 321 BC, the date of
composition of this work is assumed to be the end of the fourth century
BC (McClish 2014).
Kautilya in his Arthashastra (means Economics in Sanskrit) suggested
an economy, which is mainly a public sector based system. Although
he had to work with the monarch, he suggested that a king’s duty is
to uphold the welfare of the subjects and if he fails, the subjects had
the right to disregard the monarch as the ruler (Weber 1919; Weiner
1967). He was the Prime Minister of Chandra Gupta, who created a vast
empire spanning from Afghanistan to Assam and defeated Seleucus, the
General of Alexander, in charge of Babylon, and married his daughter.
The success of Chandra Gupta was attributed to Kautilya, who advised
the king to have a mixed economy with extensive control on every aspect
of the economy with the objective to maximize the welfare of the subjects.
Perhaps that was the first example of a socialist economy of Yugoslav type
in the ancient world. This chapter analysed the detail of that type of an
economy.
The Arthashastra is the main book written by Kautilya is an ancient
Indian treatise on statecraft, economic policy and military strategy,
© The Author(s) 2020 1

D. Basu and V. Miroshnik, Imperialism and Capitalism,
Volume II, https://doi.org/10.1007/978-3-030-54891-9_1
2 D. BASU AND V. MIROSHNIK
written in Sanskrit. Kautilya also completed two other works: Chanakya-

Sutras(Rules of Science) and Chanakya-Rajanitisastra (Science of Govern-
ment Policies).
The Arthashastra was influential until the twelfth century, when it
disappeared due to the occupation of India by the Muslims. It includes
books on the nature of government, law, civil and criminal court systems,
ethics, economics, markets and trade, the methods for screening minis-
ters, diplomacy, theories on war, nature of peace, and the duties and
obligations of a king. The text incorporates Hindu philosophy, includes
ancient economic and cultural details on agriculture, mineralogy, mining
and metals, animal husbandry, medicine, forests and wildlife (Basu and
Sen 2008).
Kautilya said in Arthashastra:
In the happiness of his subjects lies King’s happiness; in their welfare his
welfare. The king shall not consider as good only that which pleases him
but treat as beneficial to him whatever pleases his subjects. (Rangarajan
1987)
He advanced the hypothesis that the pursuit of productive activities was

the key to stabilization of the current income and its rapid growth in
the future. The substitution of the state with the corporation, the king
with the CEO or the board of a corporation, and the subjects with
the shareholders, bring out the quintessence of corporate governance,
because central to the concept of corporate governance is the belief that
public good should be ahead of private good and that the corporation’s
resources cannot be used for personal benefit (Sihag 2004).
Social welfare is the main focal point of Kautilya’s economic notions.
The State was required to help the poor and helpless and to be proactive
in contributing to the welfare of its citizens. Kautilya gave more emphasis
to human capital formation that is relevant in current times because devel-
opment is not possible without human capital growth. Besides these ideas,
there are a number of things in Arthashastra which is very significant such
as conservation of natural resources (Trautmann 2012).
Kautilya’s Arthashastra maintains that for good governance, all admin-
istrators, including the king are considered servants of the people. Good
governance and stability are completely linked. If rulers are responsive,
accountable, removable, recallable, there is stability. If not, there will be
instability(Thanawala 2014).
1 SOCIALISM WITHIN MONARCHY … 3
Kautilya on the Factors Relevant to Creating Wealth. Kautilya stated

in Arthashastra, 2.8.3: The following are the means of increasing the
wealth of the State: ensuring the prosperity of state activities; continuing
well-tried policies; eliminating theft; keeping strict control over govern-
ment employees; increasing agricultural production; promoting trade;
avoiding troubles and calamities; reducing exemptions and remissions;
and increasing cash income (Rangarajan 1987; Kangle 2010).
In Arthashastra, 2.8.4, he wrote: obstruction, misuse of government
property and false accounting by government servants lead to a reduction
of wealth (Spengler 1971). With no distraction, the people will be fully
involved in the work in the fields and there will be an increase in the
supply of labour, money, commodities, grain and liquids to the treasury
(in Arthashastra, 2.1.33-35; Patrick 2013).
Kautilya added, in Arthashastra, 8.4.49 that, “Calamities to the trea-
sury can be any internal or external action which has the effect of reducing
the revenue. Financial health can be affected by misappropriation by
chiefs, remission of taxes, scattered collection, false accounting and
looting by enemies and tribes before the revenue reaches the Treasury”
(Rangarajan 1987)
Nature of the State According to Kautilya

Boesche (2002) interprets that the text is grounded more like the Soviet
Union where the state envisions itself as driven by the welfare of the
common good. Kautilya’s Arthashastra depicts a bureaucratic welfare
state, in fact some kind of socialized monarchy, in which the central
government administers the details of the economy for the common
good. The Arthashastra discusses a mixed economy, where private enter-
prise and state enterprise frequently competed side by side, in agriculture,
animal husbandry, forest produce, mining, manufacturing and trade
(Boesche 2002; Waldauer 1996).
However, royal statutes and officials regulated private economic activ-
ities, some economic activity was the monopoly of the state, and a
superintendent oversaw that both private and state-owned enterprises
followed the same regulations. The private enterprises were taxed. Mines
were state owned, but leased to private parties for operations, according
to Chapter 2.12 of the text. The Arthashastra states that protecting the
consumer must be an important priority for the officials of the kingdom
(Sen and Basu 2006).
Arthashastra stipulates restraint on taxes imposed with fairness and how

increases in taxation should be implemented. The text suggests that the
tax should be “convenient to pay, easy to calculate, inexpensive to admin-
ister, equitable and non-distortive, and not inhibit growth” (Sihag 2004;
Patrick 2004). Fair taxes build popular support for the king, states the
text, and some manufacturers and artisans, such as those of textiles, were
subject to a flat tax. The Arthashastra states that taxes should only be
collected from ripened economic activity, and should not be collected
from early, unripe stages of economic activity (Spengler 1971).
Kautilya’s discussion of taxation and expenditure gave expression to
three Indian principles: taxing power [of state] is limited; taxation should
not be felt to be heavy or exclusive [discriminatory]; tax increases should
be graduated (Gautam 2016).
Agriculture on privately owned land was taxed at the rate of 16.67%,
but the tax was exempted in cases of famine, epidemic and settlement into
new pastures previously uncultivated and if damaged during a war. New
public projects such as irrigation and waterworks were exempt from taxes
for five years, and major renovations to ruined or abandoned waterworks
were granted tax exemption for four years. Temple and gurukul (educa-
tional establishments) lands were exempt from taxes, fines or penalties.
Trade into and outside the kingdom’s borders was subject to toll fees or
duties. Taxes varied from 10 to 25% on industrialists and businessmen,
and it could be paid in kind (produce), through labour, or in cash (Sihag
2004; Kumar 2005).
Fiscal Policy of Kautilya

Kautilya recommended a mixed economy and argued for a very active role
by the government. He explored ethically possible avenues to maximize
the level of wealth in the public sector. He was aware of the limits placed
on governments to raise revenue through taxation. He said “Artha (sound
economics) is the most important; for, dharma and kama are both depen-
dent on it (Arthashastra, 1.7)”. He continued “If receipts and expenditure
are properly looked after, the King will not find himself in financial diffi-
culties (Arthashastra, 5.3.45)”. According to Kautilya, therefore, a king
must carefully manage the financial affairs of the state (Rangarajan 1987;
Albinski 1958). The Chief Controller of State Trading shall ascertain the
profitability of a trading operation with a foreign country. He shall, in
general, trade with such foreign countries as will generate a profit; he

shall avoid unprofitable areas (Arthashastra, 2.16).
Kautilya prescribed that each public enterprise be required to generate
a maximum amount of profit without crossing ethical bounds. Therefore,
accurate measurement of the economic performance of a public enterprise
and the elimination of opportunities for misappropriation of public funds
by government employees were deemed absolutely critical (Sihag 2004;
Trautmann 2012).
The Comptroller-Auditor, who was ultimately responsible for financial
matters, was required to be knowledgeable, efficient and incorruptible.
He proposed the establishment of two very important offices to monitor
and manage the financial health of the state: the positions of Treasurer
and Chief Comptroller-Auditor. Both were to be very well paid, and in
turn they were to be incorruptible and efficient (Sihag 2004; Trautmann
2012).
The Treasurer was responsible for managing assets while the
Comptroller-Auditor handled: the construction and maintenance of the
Records Office, maintenance of Records, compilation of rules, inspec-
tion, audit and preparing and presenting financial reports to the king.
He recommended an income tax on agricultural income and a kind of
occupational tax on non-agricultural income to deny opportunities for
income-shifting to merchants (Boesche 2002; Sihag 2004).
Kautilya confessed the taxation is the main source of revenue. The
power of taxing of the state is boundless but taxation should not be exces-
sive. He supported that tax base should be increased not the tax rate. He
commented the excessive burden of tax on people. Kautilya stated that
King must collect taxes like honey bee, enough to sustain but not too
much to destroy (Sen and Basu 2006; Spengler 1971). He highlights
fairness, stability of tax structure, fiscal federalism, avoidance of heavy
taxation, ensuring of tax compliance and subsidies to encourage capital
formation.
He advocated limiting the taxation power of the State, having low rates
of taxation, maintaining a gradual increase in taxation and most impor-
tantly devising a tax structure that ensured compliance many postulates
of Kautilya’s philosophy of political economy are applicable to modern
times. Preferably, the government should collect taxes and do welfare of
people. Kautilya’s system of taxation involved the elements of sacrifice by
the taxpayer, direct benefit to the taxpayers, redistribution of income and
tax incentives for desired investments (Seth 2015; Waldauer 1996).
He suggested tax holiday as an incentive which means if any one brings

new land under cultivation, he should be relieved from agricultural tax for
at least two years. His conversation on taxation gave an idea of three prin-
ciples that include, taxation power is limited, taxation should not be heavy
and excessive and tax increase should be reasonable. He recommended a
system of tax collection and public expenditure of revenue in such a way
as to build up the permanent revenue yielding capacity of the economy.
He stated that tax base should be increased not the tax rate (Sihag 2004;
Gautam 2016).
He encouraged indirect taxes such as excise and custom duties and
direct taxes as income tax on individuals, wealth tax and profession tax.
He also promoted land revenue, water tax and toll, fines and penalties.
According to him, tax receipts can be divided into three parts; income
earned through taxes on goods produced within a country, income earned
through taxes on goods produced in the capital and income earned
through taxes on imports and exports. He supported that wealthy people
should pay higher tax according to their paying capacity. In this way, he
considers the ability to pay approach. Tax should be levied once in a year
(Sihag 2004; Gautam 2016).
Kautilya supported that most of the revenue generated from taxa-
tion should be spent on creative activities and public welfare. He argued
different items where state should incur expenditure such as on national
defence, public administration and salaries of the ministers, government
departments, maintenance of national store house and granaries, main-
tenance of armies and on the acquisition of valuable gems, stones and
ornaments and whatever was left should be deposited to the treasury
(Shoham and Liebig 2016).
Kautilya emphasized heavily the financial health of the state and under-
stood that a sound treasury was a prerequisite to accomplishing other
goals. He stated, “All state activities depend first on the Treasury. There-
fore, a King shall devote his best attention to it. A King with a depleted
Treasury eats into the very vitality of the citizens and the country
(Arthashastra, 2.8.1-2; Kangle 2010)”. In fact, according to Kautilya, a
King should begin his day by receiving “reports on defense, revenue and
expenditure”.
His analysis, of course, was implicit, not explicit; it rested upon the
assumption that individual behaviour could be controlled in large measure
through economic rewards and penalties, particularly when these were
commensurate with the action to be encouraged or discouraged.
Kautilya on the Role of Ethics

Kautilya added “Artha (sound economics) is the most important; for,
dharma and kama are both dependent on it [Arthashastra, 1.7]”. He
continued “If receipts and expenditure are properly looked after, the
King will not find himself in financial difficulties (Arthashastra, 5.3.45;
Rangarajan 1987)”.
According to Kautilya, therefore, a king must carefully manage the
financial affairs of the state. Righteousness is the root of happiness.
Greed clouds the intellect. Kautilya emphasized the creation of an ethical
climate in the state and also suggested various measures to enhance it.
He argued that bureaucratic organizations were necessary since nothing
can be accomplished without them but was very apprehensive about the
potential for corruption and the difficulty of detecting such practices
(Gautam 2016).
According to Kautilya, a king should uphold the highest ethical
standards and rule through his leadership and not by his authority. Self-
control is the first step for a leader. Kautilya, for instance, advises the king
as follows: “Restraint of the organs of sense on which success in study
and discipline depends, can be enforced by abandoning lust, anger, greed,
vanity…whosoever is of the reverse character…will soon perish, though
possessed of the whole world bounded by the four quarters” (Rangarajan
1987).
Kautilya and Plato

Kautilya and Plato have many similarities in terms of social structure,
belief in autocracy, emphasis on virtues of honesty and favouring the elitist
in the society.
Plato and Kautilya both thought the state should be governed by the
learned and elites while despising the idea of democracy. They thought
democracy would result in anarchy. Plato and Kautilya liked the idea of
a military class and thought that the rulers should come from that sect
of the society. In addition they believed in honesty and just behaviour by
the kings towards their subjects as Kautilya and so did Plato believe in the
state of happiness for the nation (Spengler 1971).
Plato believed in unity and common good central to the state, while
Kautilya thought military to be the focus of the state and a powerful state
can be created only by a strong military. In terms of diplomacy, Plato
has very little contribution towards foreign policy and in fact thought
foreign trade was a negative influence on the state. In contrast, Kautilya
has thought about diplomacy and foreign policy elaborately. Similarly
these two men differ on their economic policymaking where Plato thinks
about the State as a provider of rule of law, Kautilya extracts value from
the citizens through taxes and redistributes wealth (Shoham and Liebig
2016).
Kautilya and ‘Dharma’

According to him, ‘the ultimate source of all law is dharma’. He enticed
in the name of ‘dharma’ to the sense of honour and duty and to human
dignity, to moral responsibility and to enlightened loyalty. It is quite
understandable that the judge in the Arthashastra was called ‘dharmashta’
or upholder of dharma. He said that so long every ‘Arya’ follows his
‘svadharma’ having due regard to his ‘varna’ and ‘ashrama’ and the king
follows his ‘rajdharma’, to sustain social order (Gautam 2016; Weiner
1967).
He comments, “A King who administers justice in accordance with
‘dharma’, evidence, customs, and written law will be able to conquer
whole world”. Kautilya acknowledged the importance of rational law or
King’s law and it’s importance to ‘dharma’, ‘vyavahara’ and ‘charitra’. He
upheld that King’s law was to be in harmony with the injunctions of the
three Vedas wherein the four ‘varnas’ and ‘ashramas’ are defined (Weiner
1967).
Kautilya recommended that any matter of dispute shall be judged
according to four bases of justice. These in order of increasing importance
are:
1. ‘Dharma’, which is based on truth

2. ‘Evidence’, which is based on witnesses
3. ‘Custom’, i.e. tradition accepted by the people
4. ‘Royal Edicts’, i.e. law as promulgated.
If there is conflict among the various laws, dharma was supreme. His
Arthashastra was written for a state functioning according to dharma
(Weiner 1967).
Kautilya’s fourfold duty of a king is to provide:
i. Raksha—literally means protection, in the corporate scenario it can

be equated with the risk management aspect.
ii. Vriddhi—literally means growth, in the present-day context can be
equated to stakeholder value enhancement.
iii. Palana—literally means maintenance/compliance, in the present-
day context it can be equated to compliance to the law in letter
and spirit.
iv. Yogakshema—literally means well-being and in Kautilya’s
Arthashastra it is used in context of a social security system.
In the present-day context, it can be equated to corporate social
responsibility.
Arthashastra talks self-discipline for a king and the six enemies which a
king should overcome—lust, anger, greed, conceit, arrogance and fool-
hardiness. In the present-day context, this addresses the ethics aspect of
businesses and the personal ethics of the corporate leaders.
Kautilya asserts that “A king can reign only with the help of others; one
wheel alone does not move a chariot. Therefore, a king should appoint
advisors (as councilors and ministers) and listen to their advice”. “The
opinion of advisers shall be sought individually as well as together [as a
group]. The reason why each one holds a particular opinion shall also be
ascertained” (Rangarajan 1987).
According to Kautilya, the State had a moral purpose: to bring about
order, and the king at all times has to be guided by dharma. (Kautilya
was also known as Chanakya, which means ‘Moralist’ in Sanskrit.) “Kau-
tilya’s King is, therefore, a respectable, wise and courageous individual
who comes from a well-respected family and conducts himself with abso-
lute dignity. Thus, Kautilya’s King is essentially a doer and not just a
thinker”. The King cannot afford to be disliked by his subjects. He should
be willing to take any step to protect his subjects and protect them as a
patriarchal figure, while guided by the ideas of dharma. The King was
the upholder of the law and could “conquer Earth up to it’s four ends”
(Spengler 1971; Boesche 2002; Patrick 2013).
The King was looked upon an embodiment of virtue, a protector of
dharma. He too was governed by his dharma as any other citizen was.
Thus if any actions of the King went against the prevailing notion of
dharma, associations and/or the individual citizens were free to question
him. He recalls every time that ‘dharma’ alone is guiding star for every
king, or rather every individual and that following ‘dharma’ one shall
have a life of dignity while social order prevailing in society. He remarks,
“A King who administers justice in accordance with ‘dharma’, evidence,
customs, and written law will be able to conquer whole world” (Spengler
1971; Boesche 2002; Patrick 2013).
Kautilya recognized the importance of rational law or King’s law and
its priority to ‘dharma’, ‘vyavahara’ and ‘charitra’. He maintained that
King’s law was to be in accordance with the injunctions of the three Vedas
wherein the four ‘varnas’ and ‘ashramas’ are defined.
In case of conflict among the various laws, dharma was supreme.
The ordering of the other laws was case specific. Rajasasana ordered the
relationship between the three major social groupings—the citizen, the
association and the state. Arthashastra outlines a system of civil, criminal
and mercantile law (now known as business laws) (www.Youthkiawaaz.
com/topic/akshayranade/).
Comparisons to Machiavelli
In 1919, a few years after the newly discovered Arthashastra manuscript’s
translation was first published, Max Weber (1919) stated:
Truly radical “Machiavellianism”, in the popular sense of that word, is clas-

sically expressed in Indian literature in the Arthashastra of Kautilya (written
long before the birth of Christ, ostensibly in the time of Chandragupta):
compared to it, Machiavelli’s The Prince is harmless.
More recent scholarship has disagreed with the characterization of
Arthashastra as “Machiavellianism”. In Machiavelli’s The Prince, the king
and his coterie are single-mindedly aimed at preserving the monarch’s
power for its own sake, but in the Arthashastra, the king is required “to
benefit and protect his citizens, including the peasants”. (Spengler 1971;
Patrick 2013)
Views on Property and Markets

Kautilya was not advocating a capitalistic free market economy. The
Arthashastra states that if someone wants to sell land, the owner’s kins,
neighbours and creditors have first right of purchase in that order, and
only if they do not wish to buy the land for a fair competitive price, others
and strangers can bid to buy. Further, the price must be announced in
front of witnesses, recorded and taxes paid, for the buy-sale arrangement
to deemed recognized by the state. The “call rights” and staggered bid
buying is not truly a free market, according to Trautmann (2012).
The text, states Sihag (2004), is a treatise on how a state should
pursue economic development and it emphasized “proper measure-
ment of economic performance”, and “the role of ethics, considering
ethical values as the glue which binds society and promotes economic
development”.
The text dedicates Book 3 and 4 to economic laws, and a court system
to oversee and resolve economic, contracts and market-related disputes
(1971). The text also provides a system of appeal where three Dharmastha
(judges) consider contractual disputes between two parties, and considers
profiteering and false claims to dupe customers a crime. The text thus
anticipates market exchange and provides a framework for its functioning.
Kautilya asserts in Arthashastra that, “the ultimate source of the pros-
perity of the kingdom is its security and prosperity of its people”, a view
never mentioned in Machiavelli’s text. The text advocates “land reform”,
where land is taken from landowners and farmers who own land but do
not grow anything for a long time and given to poorer farmers who want
to grow crops but do not own any land.
Arthashastra declares, the need for empowering the weak and poor in
one’s kingdom, a sentiment that is not found in Machiavelli; Arthashastra
advises “the king shall provide the orphans, the aged, the infirm, the
afflicted, and the helpless with maintenance [welfare support]. He shall
also provide subsistence to helpless women when they are carrying and
also to the children they give birth to”. Elsewhere, the text values not
just powerless human life, but even animal life and suggests in Book 2
that horses and elephants be given food, when they become incapacitated
from old age, disease or after war (Gautum 2016; Sihag 2004).
The Arthashastra explores issues of social welfare, the collective ethics
that hold a society together, advising the king that in times and in areas
devastated by famine, epidemic and such acts of nature, or by war, he
should initiate public projects such as creating irrigation waterways and
building forts around major strategic holdings and towns and exempt
taxes on those affected. The text was influential on other Hindu texts that
followed, such as the sections on king, governance and legal procedures
included in Manusmriti (Patrick 2013; McClish 2014).
Kautilya’s Arthashastra depicts a bureaucratic welfare state, in fact
some kind of socialized monarchy, in which the central government
administers the details of the economy for the common good. In addi-
tion, Kautilya offers a work of genius in matters of foreign policy and
welfare, including key principles of international relations from a realist

but humane perspective.
Kautilya and Recent World Economic Issues

Recent economic problem of the world can be analysed with the perspec-
tive of Kautilya. The so-called Western institutions like IMF, World Bank
and World Trade Organization still follow and promote the theories of
the Directors of the East India Company, Adam Smith, David Ricardo,
Bentham, John Stuart Mill, the classical British economists, which were
designed to promote the profits of the East India Company disregarding
the interest of the colonies and their people. Their theories caused so
much problems and so many economic and financial crisis. Kautilya did
not believe in the invisible hands of the market, but just like Bismarck of
Germany and the German economist Friedrich List, he thought that the
visible hands of the government should control and direct the economy
to maximize the welfare of the people. Kautilya does not believe in
Free Trade either, instead he suggested a managed trade, directed by
the government for the welfare of the people. Kautilya thought that the
welfare of the community, not of an individual, is supreme. On top of
everything ethical or Dharmic laws should prevail. It will be the duty of
the state authority to create that ethical atmosphere. Thus, he will not
allow the freedom of the financial market to deceive the people which
was the root cause of the financial crisis of 2008, from which the world
has not escaped yet. Thus, Kautilya would stand against the deregulation
and privatization started by Reagan-Thatcher in 1990s and their subse-
quent followers all over the world, which has caused extreme inequality
and deprivations.
Kautilya recommended a system of tax collection and public expen-
diture of revenue in such a way as to build up the permanent revenue
yielding capacity of the economy. Denmark, the happiest country of the
world, has at least 50% income tax and as a result, like other Scandinavian,
has free education at all levels, free medical service, generous unemploy-
ment benefits, almost free housing, free child-care facility and many more
facilities for its citizens. These are financed by taxation but the people are
happy to pay as they derive benefits. The Soviet Union was also have these
facilities but there was no taxation.
He supported that wealthy people should pay higher tax according
to their paying capacity. In this way, he considered the ability to pay
approach. Income tax should be the tool to reduce extreme income

inequality in the world.
The high rate of non-performing loans in the world banking system is
due to the corruption in the private sector companies and their close links
with the government officers and politicians. Kautilya had warned against
these.
Rabindranath Tagore wrote in 1941 in his book, Crisis of Civilization,
“I have the privilege to see in Russia, in just two decades, they wiped
out the tears from the eyes of the people of this vast continent….”. That
was because the Soviet Union implemented a socialist system, which was
followed by Scandinavian countries and to many extents by Japan.
The USA, the UK and the IMF can learn a lot from countries such
as Sweden, Norway, Finland and Denmark. Whereas the welfare state
in the USA is anaemic and limited, it is robust and expansive in these
countries. As a result, poverty rates in Scandinavian countries are very
low compared to the USA. This is largely because the governments
were committed to ensuring full employment. For most of the twentieth
century, Sweden averaged around 2% unemployment—a shockingly low
figure when compared to the US income and wealth inequality are also
much lower than in the USA.
The same is true in most Scandinavian countries. Denmark, where the
people are the happiest in the world, for instance, has the least unequal
distribution of income among all OECD countries and one of the lowest
infant mortality rates. By contrast, the USA is the third most unequal and
has the third highest rate of infant mortality. The economic meltdown
of 2008 and its mutating aftermath has vividly demonstrated; capitalist
growth is an inherently unstable, unplanned process that inevitably gener-
ates crises. India and other third world countries are major victims of
that wrong idea, along with the USA and the UK. If they want to
follow Kautilya, they should bring the means of production under public
ownership and democratic control. Rather than relying on a crisis-prone,
ecologically destructive free market system driven by profit, they should
have a sustainable, planned system dedicated for the promotion of human
values or dharma according to Kautilya.
References
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Internet Reference
Arthashastra: Akshay Ranade, www.Youthkiawaaz.com/topic/akshayranad.
CHAPTER 2
Socialism in the Soviet Union
This chapter explains the success of the Soviet economy from 1953, the
year Stalin died and 1985, the year Gorbachev started his new economic
and social policy and the failure of the subsequent period since 1987. It
analysed the main feature of that system of controls and planning, and
the reason for its decline in the later years.
Market system and planned economy are two opposite ideas of orga-
nization of activity in economics. Market system has no planning in a
real sense. All components are influenced by supply and demands of
various items. Prices are determined by the market. Intrinsic values may
be different.
Alternatively, a planned economy is controlled by a government who is
the owner of all resources, factors of production and means of distribution
and determines prices or entitlements for the citizens. In practice, most
countries use some mixture of market system and planned economies.
Karl Marx argued that a market system, as the owners of capital determine
the results, by definition creates inequality, injustice and instability. Marx
has created the term capitalism (Dobb 1966).
Under capitalism, individuals or companies own the resources and
without any intervention of the government have the freedom to
exchange in a market place, which is the collection of these buyers and
sellers. Scarcity and preferences of the items determine the prices in
the market which has nothing to do with the welfare of the society,
however, somehow this system can uphold the utility of the entire society.
© The Author(s) 2020 15

D. Basu and V. Miroshnik, Imperialism and Capitalism,
Volume II, https://doi.org/10.1007/978-3-030-54891-9_2
Governments do not play any role to direct the economy in any specific
direction.
People can take care of themselves from the business owners who are
responsible people not to commit fraud or form a cartel to cheat the
people. There is no need for the government in that utopian society,
where those who are poor are considered to be rejected by the market
system.
Socialism is exactly opposite to the market economy. There is no
market; instead, the government decides what are the basic requirements
of the people and how best these can be supplied. Requirements include
food, accommodation, education, electricity, water, medical facility, sports
and recreation. These are available from the government as entitlements.
Agriculture and industry also are organized in similar ways. The govern-
ment supplies all factors of production and it expects productions. Foreign
trade is controlled by the government.
The triumph of the Russian Revolution nearly a century ago was truly
a world-historic event. It was the first time in history that the poor
working class was able to reconstruct the market so as to make it work
for the benefits of the society, that is called socialism. It proved that the
oppressed, with their own leadership, their own efforts, could create a
new world where there is no oppression (Dobb 1966; Baykov 1946). As
Rabindranath Tagore (1960) wrote in his book Letters from Russia, after
his visit to the Soviet Union in 1930, that “Little is their material wealth,
but the spirit of their efforts defies any comparison. They are trying to
prove to the world, what they want is genuine, there is no fraud in it”.
Challenges Faced by Revolution

The new Soviet government had some important tasks of defending the
country against the supporters of the old regime and a number of Western
countries and Japan. Their aim was in the words of the infamous impe-
rialist Winston Churchill, the then First Lord of the Admiralty of Britain
and later the Prime Minister of the UK, to “strangle the Bolshevik baby
in its crib” (Baykov 1946; Dobb 1966).
The new government had to provide for the starving population
as the new country was under a total economic blockade imposed
by the Western countries and Japan. For that, a new alliance was
needed to combine the efforts of the workers internationally through
the Comintern, or the organization for the international socialists. The
2 SOCIALISM IN THE SOVIET UNION 17
biggest obstacle to any revolutionary success was the lack of a revolu-

tionary party in any industrialized countries (Davies 1998; Baykov 1946)
at that time. However, contrary to the Western negative propaganda of
a failed economic system in the USSR, the Soviet planned economic
system demonstrated for the first time in history of the world, the remark-
able success of socialism (Baykov 1946). Again, we quote Rabindranath
Tagore from his book, Crisis of Civilization, written in 1941, “Within
twenty years they had wiped out tears from the eyes of the people of this
vast continent” after observing the progress of the Soviet economy until
1940.
Planned Economy: Central Direction

The most famous example of a planned economy was that of the former
Soviet Union, which operated under a socialist system (Baykov 1946;
Ellman, 1973, 1989). Since in a planned economy, all decisions are
centrally determined, although decentralized planned economy also is
possible, the government determines all of the supply and sets all of the
demand as entitlements. Prices may not even exist for most items as these
are entitlements for the consumers and requirements for productive firms.
When these exist, these are determined by the planners. In a planned
economy, macroeconomic targets determine allocation of resources and
capital. Planned economies are concerned with taking care of the people
irrespective of their ability to earn money.
Ludwig von Mises (1981) argued that command economies were
untenable and doomed to failure because no rational prices could emerge
without competing, private ownership of the means of production. This
would lead to necessarily massive shortages and surpluses. However, Mises
could not understand that there may not be any price in a socialist
economy where most items would be available as entitlements.
Milton Friedman (1962) noted that command economies must limit
individual freedom to operate. He also believed that economic decisions
in a command economy would be made based on the political self-
interest of government officials and not promote economic growth. In
a market economy, corruption and frauds determine resource allocation.
Thus, these decisions are also corrupt and individuals are powerless to do
anything about these systems.
Beginnings of the Soviet Planned Economy

The year 1917 saw the Russian czar overthrown by groups of revolu-
tionaries who fought and won a subsequent civil war to create a socialist
state. Five years later, the Union of Soviet Socialist Republics (USSR)
was formed. Starting in 1924, a planned economy would define the
Soviet Union for most of the remaining twentieth century (Baykov 1946).
The Soviet planned economy organized economic activity through the
issuance of directives, by setting social and economic targets, and by insti-
tuting laws and regulations to control the labour forces and organizations.
Soviet leaders planed on the state’s social and economic targets and the
methods to achieve these. In order to achieve these targets, all of the
country’s social and economic activities were controlled by the agents of
the GOSPLAN.
Officials managed to gather the information necessary for the execu-
tion of plans. Hierarchical structures were constructed at all levels of
economic activity, with higher level of officers having influence on the
managerial stages of executions.
Socialism is a system, in transition to communism. Under Socialism, a
contradiction between requirements of centralized planning and class rela-
tions will continue. In 1956, the CPSU (Communist Party of the Soviet
Union) announced its acceptance of the theory of peaceful transition to
socialism (Dobb 1966). The paramount problem was how to maintain
a consistent proletarian internationalism and at the same time conduct
necessary relations (which involved every aspect of its existence) with the
rest of the world (Nove 1993).
The planned economy of the Soviet Union was based on a system
of state ownership of the means of production, collective or cooperative
farming and managerial control. The first major project of the plan was
the GOELRO plan, which was introduced in 1920 and basically fulfilled
by 1931. It included construction of a network of 30 regional power
plants, including ten large hydroelectric power plants, and numerous
electric-powered large industrial enterprises (Ellman 1973, 2014).
The GOELRO plan became the prototype for subsequent Soviet Five-
Year Plans. From 1928 to 1991, the entire course of the economy was
guided by a series of Five-Year Plans. Within about 50 years, the nation
evolved from a mainly backward agrarian society to one of the world’s
three top industrialized countries, manufacturers of a large number of
capital goods and heavy industrial products. The Soviet economy was
developed with the support of Gosplan (the State Planning Commission),

Gosbank (the State Bank) and the Gossnab (State Commission for Mate-
rials and Equipment Supply). The economy was directed by a series of
Five-Year Plans from 1928, with a brief attempt at seven-year planning.
For every enterprise, planning ministries (fondoderzhateli) defined the
technology and the schedule for completion (Dobb 1966; Ellman 1973).
Industry started on the production of capital goods through metal-
lurgy, machine manufacture, and chemical industry. In Soviet termi-
nology, the capital goods were known as group A goods, or means of
production. This aim was a for a very fast industrialization of the Soviet
Union. After the death of Stalin in 1953, importance was on consumer
goods; however, heavy industry was always very important for the Soviet
economy. As a result, the Soviet Union became one of the leading
industrial nations of the world (Ellman 1973; Dobb 1966).
Economic plans performed very well during the early and mid-1930s,
the Second World War-era mobilization, and for the first two decades of
the post-war era. The Soviet Union became the world’s leading producer
of oil, coal, iron ore, and cement, manganese, gold, natural gas and other
minerals (Baykov 1946).
In 1961, a new redenominated Soviet ruble was issued. It maintained
exchange parity with the pound sterling until the dissolution of the USSR
in 1991. By 1970, the Soviet economy had reached its zenith and was
estimated at about 60% of the size of the USA in terms of the estimated
commodities (like steel and coal) (Ellman 1973).
Agriculture was organized into a system of collective farms (kolkhozes)
and state farms (sovkhozes). Organized on a large scale and highly mech-
anized, the Soviet Union was one of the world’s leading producers
of cereals, although bad harvests (as in 1972 and 1975) necessitated
imports and slowed the economy. The 1976–1980 Five-Year Plan shifted
resources to agriculture, and 1978 saw a record harvest followed by
another drop in overall production in 1979 and 1980 back to levels
attained in 1975. Cotton, sugar beets, potatoes, and flax were also major
crops. Impressive growth rates during the first three Five-Year Plans
(1928–1940) are particularly notable given that this period is nearly
congruent with the Great Depression. During this period, the Soviet
Union encountered a rapid industrial growth while other regions were
suffering from crisis (Baykov 1946; Dobb 1966; Davies 1998).
The major strength of the Soviet economy was its enormous supply
of oil and gas, which became a valuable exports after the world price of
oil went up by 400% in 1974. After Mikhail Gorbachev came to power

in 1985, he began a process of economic liberalization towards a mixed
economy and a multiparty democracy that cause chaos and disintegration.
Initial Period of Rapid Growth

The Soviet Union experienced rapid economic growth in the initial
period. The Soviet economy posted an estimated average annual growth
rate in gross national product (GNP) of 5.8% from 1928 to 1940, 5.7%
from 1950 to 1960 and 5.2% from 1960 to 1970. There was a dip to a
2.2% rate between 1940 to 1950 due to the effects of the Second World
War (Ellman 1973).
An intense focus on industrialization and urbanization at the expense
of consumption gave the Soviet Union a period of rapid growth of
the economy. However, the Western critiques would say that once the
country began to catch up with the West, its ability to borrow ever-
newer technologies, and the productivity effects that came with it, soon
diminished (Nove 1993; Davies 1998).
Gains of Socialism
From being the least developed of the big European countries at the time
of the revolution, 40 years later the Soviet Union became the second-
largest economy in the world, only after the USA. This despite the fact
that after barely a decade of initial rapid development in the 1930s, two-
thirds of the industry and much of the agriculture were destroyed by the
Nazi invasion beginning in 1941. It was the Soviet Union that bore the
brunt of the Nazi war machine and destroyed it—but at a cost of 27
million killed. The US death toll in WW II was about 400,000—a huge
toll itself but about 1.5% of the Soviet death toll (Dobb 1966; Baykov
1946).
Before the revolution, much of the population went through life
without ever seeing a doctor. In 1966, a leading US medical journal wrote
that “life expectancy doubling in the last 50 years. …At present time, the
Soviet Union graduates annually about as many physicians as there were
in whole Russian Empire before the First World War. Of all the physicians
in the world today, more than one in five is Soviet … while only 1 person
in 14 in the world today is a Soviet citizen” (Fields 1966).
Not only that, but none of those doctors—three-quarters of whom

were women—paid a kopek for their education, nor did anyone else in
any field of work. Of course, they could not hope to become millionaires.
It was a fundamentally different system than the one we live in, more like
the one in Cuba today.
Every person was guaranteed the right to a job, housing, health care
and education, and also the right to vacations, pensions and culture.
There were many, many nationalities, each entitled to literature, news-
papers and education in their language. Scores of languages that were not
previously written were alphabetized. In the wake of the destruction of
the Second World War, vast industrial, infrastructure and housing projects
were undertaken. The absence of capitalist competition between enter-
prises enabled very rapid scientific and engineering development (Baykov
1946; Dobb 1966, Ellman, 1973, 1989).
In addition to its remarkable internal development, Soviet aid was vital
to national liberation movements and newly independent states around
the world. The victories of the Chinese, Korean, Vietnamese and other
revolutions would have been much delayed or prevented without the
Soviet Union. Without Soviet support, Cuba would have undoubtedly
been invaded by the USA, and Soviet aid was vital to the Palestinians and
many African revolutionary movements.
Slowing Growth and the Beginning of Reforms

The Soviet economy started stagnating as it became increasingly complex.
With average GNP growth slowing to an annual 3.7% rate between 1970
and 1975, and further to 2.6% between 1975 and 1980, the planned
economy’s stagnation became obvious to Soviet leaders (Ellman 2014).
Reforms the Sovnarkhoz implemented by Nikita Khrushchev in the late
1950s attempted to begin decentralizing economic control, allowing for
a “second economy” to deal with the increasing complexity of economic
affairs. These reforms, however, affected adversely the command econ-
omy’s institutions and Khrushchev was forced to “re-reform” back to
centralized control and coordination in the early 1960s. With economic
growth declining partial reforms to allow for more decentralized market
interactions were reintroduced in the early 1970s. The aim of Soviet lead-
ership was to create a more liberal market system in a society whose
core foundations were characterized by centralized control (Ellman 2014;
Davies 1998).
Perestroika and Collapse

These early reforms failed to revive the increasingly stagnant Soviet
economy, with productivity growth falling below zero by the early 1980s.
This ongoing poor economic performance provoked more radical set
of reforms when Mikhail Gorbachev took over the leadership in 1985.
Gorbachev stopped the planning and tried to privatize the economy and
open the economy up to foreign trade and capital.
This restructuring, referred to as perestroika, encouraged individual
private incentive, creating greater openness but also destruction of
the country itself. Perestroika was in direct opposition to the planned
economy. A severe economic contraction characterized the late 1980s and
early 1990s, which would be the last years of the Soviet Union (Davies
1998; Ellman and Kantarovich 1992).
Soviet leaders no longer had power to intervene amidst the growing
economic chaos. With its economy and political unity in tatters, the
Soviet Union collapsed in late 1991, fragmenting into fifteen separate
states. The early strength of the Soviet planned economy was its ability to
rapidly mobilize resources and direct them in productive activities (Ellman
2014). Various piecemeal reforms instead only undermined the econ-
omy’s core institutions. Gorbachev’s radical political liberalization with
multiparty election in 1991 was the final nail in the coffin, when anti-
socialist Yeltsin was elected as the President of Russia and within a few
months he destroyed the Soviet Union.
Causes of the Collapse of the Soviet System

Recently, a number of authors have put forward the idea that the demise
of the Soviet Union is due to the inherent defect of the socialist system
(Denemark 1994; Hausner 1994). Because the socialist economy cannot
calculate efficiently the price signals to divert resources into most effi-
cient uses, the collapse is due to the internal contradictions between the
absence of the market and the desired aim of the planning system to create
a perfectly competitive market. Recently, another line of argument was
provided by some economists, notably Krugman (1994) along with the
World Bank (1993) who argue that the Soviet system was without any
technical progress, the economic growth was the result of increased uses
of capital and labour; due to the lack of technical efficiencies, the system
had started to decline and collapsed. The purpose of this paper is to

critically examine these theories and to provide an alternative explanation.
There are two types of schools within this category: (a) the so-called
Sovietologist‘ school (Nove 1983) who have argued for decades about
the stagnations of the socialist system in terms of the ‘built-in’ defects of
the system; (b) the ‘efficiency’ school (World Bank 1993; Krugman 1994)
of Western economists who are arguing about the lack of productivity in
the Soviet system. Both of these schools are against the socialist system,
so their attack on the Soviet system was from outside; that is, they are
trying to prove the superiority of market system. We can analyse each of
those schools and try to find out flaws in their arguments.
Section 1 (a) Built-in defects school has emphasized the inherent
defects of the socialist system where prices do not reflect market-clearing
signals but are instruments to allocate resources across the economy
according to the prior objectives of the planner. The result can be a
mismatch between the prior objectives of the planner. The result can be
a mismatch between the supplies and demands. When that disequilib-
rium would spread throughout the economy, shortage and bottlenecks
will emerge and as a result growth will be slowed down and the economy
will stagnate.
Another line of argument is that socialism is against basic human
nature. As no one is in possession of productive resources, workers will
be reluctant to perform unless they are forced to; as a result, produc-
tivity will decline and the economy will stagnate. Empirically although it
is not possible to prove the validity of these theories at a specific level
of industry or firms, because a diversity of factors can affect productivity
and performances, the proponents of this theory normally point out the
cyclical nature of the Soviet economic growth and particularly to the
declining rate of growth of the Soviet economy since 1970. These theo-
retical justifications can be negated by saying that the market economy
also cannot derive efficient price because of market imperfections and the
segmented nature of the market, and as a result, we can often have market
failures. The depression during the interwar period and recessions, stagfla-
tions during the post-war decades in the advanced capitalist countries are
enough proofs of the inefficient calculations of price signals through the
market system. At least in the socialist system the planners have the chance
to recalculate their prices again and again and because of the controlled
nature of the economy, disturbances cannot be spread throughout the
economy.
Similarly regarding the incentive of the workers, the socialist planners

can point out to the fact that in the capitalist system workers are alienated
from the fruit of their work and that can lead to increasing dissatisfaction
with their jobs and lower productivity. On the other hand, in a socialist
system because the workers are producing for their collective benefits,
social virtues like voluntary works, patriotism, and communal welfares can
play big roles to motivate the workers to achieve higher goals. Although
in the Western society these social aspects are ignored and as a result
the Western economists put their emphasis only on the self-interest of an
individual which is the foundation of ‘utilitarianism’.
From the empirical points of view, the ‘built—in—defects’ school
argues that the defects of socialism are obvious from the fact that since
mid ‘70 Soviet Union and other socialist countries were on a declining
path and eventually that led to stagnations and collapse. Although this
is the prevailing opinion among the Western writers (McCauley 1993;
Hausner 1994), a comparative analysis of the economic growth perfor-
mances of some of the centrally planned economies and the capitalist
economies show that the reality is more complex than the theory.
As we can see from Table 2.1, although the growth rates of the Soviet
Union declined from the latter half of the 80’s, it was still higher than
that of the USA, UK and Japan. Even the revised figures of the CIA
show higher overall growth rate for the Soviet Union compare to the
USA and the UK. It also shows that the decline of the growth rates is a
Table 2.1 Analysis of economic growth rate (Real GNP at 1987 price)
Economic growth rate Labour force

productivity
1960 1970 1980 1960 1960 1970 1980
—70 −80 −86 −87 −70 −80 −86

Soviet Union 7.9 5.0 3.6 5.4 (3.4) 5.4 3.4 3.0
USA 3.9 2.9 2.9 3.2 2.1 0.5 1.4
UK 2.8 1.3 1.8 2.2 2.4 1.2 2.5
Japan 10.6 4.7 3.4 6.5 9.3 4.2 2.0
Note figure within bracket is the estimate of the C.I.A

Source Comecon Secretariat Publication
natural phenomenon when the economy matures; also it is due to basic

arithmetic.
If a country has one house and decides to build one house every year
for the next five years, the growth rate for the first year will be 50%; in
the second year, it will be 33%; in the third year, it will be 25%; and so
on. The decline in the growth rate does not mean the country is getting
poorer. The decline of the growth rate for Japan during that period is
much more significant than that of the Soviet Union but during the same
period Japan was on the way to be the richest country in the world by
early 90’s.
So the slogan of the so-called Western Sovietologists that the stagna-
tion of the Soviet Economy had set in since 70’s does not make much
sense. The Western Sovietologists have conveniently forgotten that the
purpose of the formation of the Soviet Union was not to set up a more
efficient economic machine than the capitalist system that was always
a secondary purpose. The principal purpose was to establish socialism
throughout the world. Although Stalin had decided to abandon that prin-
ciple in favour of ‘socialism in one country’, Khruschev and particularly
Brezhnev have adapted that doctrine very faithfully.
Since 1955, Soviet Union has started giving substantial support to the
newly independent countries and to the anticolonial wars throughout the
world. Since mid 60’s, it was deeply involved in supporting Vietnam and
(since mid 70’s), Afghanistan in addition to several African, Asian and
Latin American countries.
All these have caused severe strains on the resources of the Soviet
Union. Since early 80’s, as a response to Regan’s ‘Strategic defence initia-
tive’ or ‘Star War’ the Soviet Union had to divert an increasing amount
of her resources for defence-related research and developments; results
of these activities do not show up directly in the volume of net mate-
rial production which was the foundation of calculation of the national
income of the socialist countries. That can be the cause of downturn of
economic growth rate and the productivity.
Section 1 (b): The ‘efficiency’ school (World Bank 1993; Krugman
1994) has based their arguments on the assumption of the law of
diminishing return to scale and the conviction that the Soviet Union
was technically inefficient compare to the West. For the Soviet Union,
according to Krugman “....the rapid growth of output could be fully
explained by rapid growth in inputs: expansion of employment, increase in
education levels and above all massive investment in physical capital…Eco-

nomic growth that is based on expansion of inputs, rather than on growth in
output per unit of input is inevitably subject to diminishing returns ”. The
rate of efficiency growth was not only unspectacular, it was well below
the rate achieved in Western economies. Indeed by some estimates, it was
virtually nonexistent.”
The so-called growth accounting of Krugman (Krugman’s idea is not
original, it is the old C.I.A–World Bank thesis, see Cohn 1987) is simple
arithmetic which I have explained in the Section 1 (a). Krugman (1994)
has provided an arithmetic example which is full of silly errors, in simple
terms it means if we assume constant returns to scale, basic arithmetic tells
us, the rate of growth will decline overtime. So the total factor produc-
tivity in Krugman (1994) is nothing but an index of increasing returns
to scale what he has defined as ‘efficiency’ or ‘technical progress’. From
the historical experience, it is very easy to prove Krugman’s arguments
are nothing but wrong assertions.
Table 2.2 shows the average growth rates of the national income and
industrial production where the CMEA (Council of Mutual Economic
Corporation, i.e., socialist countries in Easter Europe; Cuba and Vietnam
were added later) had performed better than the EEC. However, there
are considerable difficulties in these types of comparisons.
Western countries use standard national income calculations, where
service sector plays a big role and the pricing of the service sector due
to the very high cost of services as a result of higher wages can cause
an upward bias in the national income calculations of the Western coun-
tries. CMEA followed the ‘net material production’ method to calculate
national income, where the service sector is undervalued. There is also
Table 2.2 Average growth rate in the EEC and CMEA (in % pa)
Year National income Industrial production

CMEA EEC CMEA EEC
1961–1965 6.1 4.7 8.3 5.3

1966–1970 7.3 4.5 8.4 4.8
1971–1974 6.6 3.6 8.1 3.4
1975 6.4 −2.5 8.5 −7.6
1976 5.5 4.2 10.2 6.2
Source Kudrov (1976, 1977, 1997)

no way to compare the pricing of essential items (basic foods, energy,

housing, transport, medicines, education) which were available at either
nominal or zero prices in the CMEA whereas the corresponding Western
prices for those items were very high. The only possible way out is to
compare the national income at the ‘purchasing power level’. There is
also the question of quality, A ‘Royal Enfield rifle’ is not the same in
quality as a ‘Kalashnikov’ rifle, a West-Land helicopter cannot operate in
the extremes of Siberia as an Antonov helicopter can.
Even ignoring these considerations in favour of the Western countries,
Table 2.3 shows that labour productivity in a dynamic sense was higher
for the USSR compare to the USA and the UK. The economic growth
rate and the productivity increases slowed down in the USSR, but the
same situation did occur in the USA, in the UK and in Japan. Korea
was the only exception. Table 2.4 shows that the efficiency of investment
was growing at a higher rate in the USSR compare to the USA, in the
UK and Japan. This cannot be explained by the accumulation of inputs
as Krugman has suggested. In the most formative period of the USSR
(i.e. 1960–1970), the ratio of investment to the national income was less
Table 2.3 Analysis of economic growth rates and labour productivity
Economic growth rate (% pa) Labour force productivity (%

pa)
USSR USA UK Japan Korea USSR USA UK Japan Korea
1960–1970 7.9 3.9 2.8 10.6 8.4 5.4 2.1 2.4 9.3 5.7
1970–1980 5.0 2.9 1.3 4.7 8.1 3.4 0.5 1.2 4.2 4.4
1980–1986 3.6 2.9 1.8 3.4 8.3 3.0 1.4 2.5 2.0 6.9
Source Council of Mutual Economic Cooperation Secretariat Publication
Table 2.4 Investment ratio and investment efficiency
Investment ratio Efficiency of investment (% pa)

USSR USA UK Japan Korea USSR USA UK Japan Korea
1960–1970 15.2 22.7 16.5 35.2 24.2 0.520 0.172 0.170 0.301 0.347
1970–1980 27.3 20.2 19.9 33.6 29.8 0.183 0.144 0.065 0.140 0.272
1980–1986 25.8 18.5 16.7 29.4 29.5 0.140 0.157 0.108 0.101 0.281
Source Comecon Secretariat Publication

in the USSR than in the USA, the UK, Japan and Korea. In the later
decades, it was less in the USSR than in Japan and Korea, although only
slightly higher in the USSR than in the USA and in the UK.
Table 2.5 shows the gap between the USSR and the USA and demon-
strates that the gap was narrowing over the year. Particularly significant
were the comparisons in terms of physical units which showed more
productions in the USSR than in the USA. The labour productivity in
industry was increasing all the time disproving the basic hypothesis of
Krugman. In fact, Gomulika (1971) showed (in Fig. 1) that the least
dynamically efficient countries (during the period 1958–1968) were the
UK, Chile, South Africa, all are capitalist countries. Although the Soviet
level of labour productivity was less than that in the USA, it was increasing
at a higher rate. The most efficient country was Japan, which according
to Krugman (1994) has not achieved productivity increases. However,
the Soviet economy could not narrow down the gap since 1975 due to
some extraordinary international political situations which were ignored
by Krugman and by the Western ‘Sovietologists’ (Table 2.6).
There are a number of reasons to explain the decline of the Soviet
economy since mid 70’s which Krugman has conveniently ignored. Since
mid 70’s, the Soviet Union was involved in helping liberation wars in
Vietnam, Mozambique, Angola, Rhodesia, South Africa and wars against
the reactionary forces in Afghanistan, Cambodia, and Nicaragua; it is also
Table 2.5 A dynamic comparison of the Soviet and US economies (USSR as %

of USA)
1950 1957 1965 1975 1985 1989
National income 31 50 59 >66 56 51

Industrial output 30 47 62 >80
Agriculture output 55 70 75 85
Labour productivity
In Industry 30–40 40–50 40–50 >55
In Agriculture 20 20–25 20–25 20–25
Output in physical units
Oil 14 28 63 120
Steel 30 49 75 128
Mineral fertilisers 31 42 69 125
Cement 26 58 111 188
Source Kudrov (1976)

Table 2.6 USSR:

1951–1965 5.5
Growth rates of the
1956–1960 5.9
GNP (av. annual rate)
1961–1965 4.9
1966–1970 5.1
1971–1975 3.0
1976–1980 2.1 (2.2)
1981–1985 1.9 (2.4)
1986 4.0 (2.7)
1987 1.3 (3.7)
1988 1.5 (4.4)
Note Figures within the brackets are the corresponding figures for
the USA
Source COMECON (Council of Mutual Economic Cooperation)
Secretariat Publication
helping a number of developing countries in their economic develop-

ments. All these particularly the wars in Africa and Afghanistan had caused
serious drains on the Soviet economy. On the top of that since 1980
the USA under Reagan has started massive defence spending under the
‘strategic defense initiative’ or Star War. A major portion of the national
income in the Soviet Union was diverted to combat the growing threat of
the Western alliance; the result was lack of investment may still be high.
The result was declining output and shortages. Whereas the USA could
go on borrowing despite serious balance of payment deficits (the IMF
rules are not applicable to the USA), the Soviet Union and the CMEA
as a whole had faced an increasingly hostile financial world controlled by
the West, so their abilities to borrow to finance deficits were also limited.
Combination of these factors can explain the gradual decline in produc-
tivity and the rate of growth of output (see Figs. 2.2, 2.3, 2.4, and 2.5);
however, it cannot explain the collapse of the system.
Krugman has mentioned Solow (1957) to measure the technical
efficiency. Solow has used Divista (1926) indexes to measure ‘Total
Factor Productivity’ (TFP) indexes; the existence of separable aggregator
functions for inputs and outputs g (x) and h(y) is assumed to obtain.
TFP = h(y)
g(x) this presupposes independence between input and output
substitution possibilities. It is a restrictive and unrealistic requirement; it
also needs price data for each input and output, which make the estimate
(Sudit 1995) subjective. Recently, Park and Kwon (1995) have shown
that by using generalized Leontief cost function, it is possible to have
a rapid growth of output with negative TFP growth. An economist’s
(Western) idea of technical progress or technical efficiency is very different

from a technologist’s idea of technical progress or efficiency. According to
the economists, technical progress is expected to reduce costs; as a result,
the economists may disregard scientific inventions or product quality
improvements which may not necessarily reduce costs. That is possibly the
reason Krugman has suggested that there was no technical progress in the
Soviet Union or in Japan, technologists (or even management scientists)
will certainly disagree with this idea. Krugman has tried to implement the
Marshallian Law of diminishing returns (which cannot be empirically vali-
dated even at the firm or industry level) to the national economy and has
failed to provide the empirical validity.
Socialist Explanation: World System School

In this category, we mention the ‘World System’ school (Frank 1988,
1989, 1994; Halliday 1992; Hobsbawm 1991, Chirot 1991). The
authors who subscribe to this school have a similar thought although
they differ in detail. The main argument of this school is that there is
only one world system; that is, the capitalist world and the worldwide
competitive process of capital accumulation is the motor force of history.
The Western capitalist countries are the centre and both socialist and
southern developing countries are in the periphery. The gap between
the rich North/West and the poor South/East has been around for a
long time and growing. The East during the 50’s and 60’s has managed
to narrow the gap. During the 70’s, they were able to maintain or had
narrowed the gap; however during the 80’s due to the deepening crisis in
the world economy the East had missed the technological train and lost
the race. The South also have failed; the economic decline of the Latin
America and the decay of Africa provide the proof; as the economic poli-
cies of the East during the 70’s and 80’s are not any different from the
policies pursued by the South. Thus, the failure of the Soviet system is due
to its participations in the world economic system. The Soviet Union was
affected through its relations and interdependency with Eastern Europe,
through the crisis-driven arms race that began in 1979 and by policy
miscalculations.
We can elaborate the thesis as follows. The socialist countries have
started their industrialization with a strong handicap, and their ability
to catch up with the west was undermined by their inability to receive
the benefits of the world financial system dominated by the capitalist
countries. During the 70’s, socialist countries in the Eastern Europe have
adopted an import-led growth strategy by borrowing from the Western
countries. The accumulation of debts had resulted into their near-default
financial situation, and as a result during, the 80’s they had to adopt defla-
tionary policies which had reduced their ability to buy Soviet exports
or to supply cheap manufactured products to the Soviet Union. On
the top of that came Gorbachev’s economic policy since 1985 which
had delinked economic partner countries in the COMECON and in the
Eastern Europe by demanding dollar payments for trade. Soviet Union
was also affected by the collapse of the international price of crude
petroleum and natural gas since 1984–1985, so it could not buy directly
from the Western countries bypassing the Eastern Europe. Gorbachev
policy of ‘Perestroika’ had allowed some freedom to the industrial and
commercial enterprises to set their prices. The result was a runaway infla-
tion and breakdown of the central planning; the republics within the
Soviet Union had started ignoring the planning directives and started
their own trading; that had led to economic dislocations, chaos and
serious supply crisis. At the same time, the Regan had started his ‘Strategic
Defense Initiatives’ or ‘Star – War’ with the open objective to bankrupt
the Soviet Union. The result was increasing expenditures in the Soviet
Union on defences, increasing budget deficit was financed by printing
money, and the result was a runaway inflation. So they (i.e. the socialist
countries) had lost the race (Chuev 1991; Menshikov 1990).
However attractive the theory may seem to be, it is difficult to accept
that due to some economic crisis the Soviet Union had collapsed. The
Soviet Union had a vast economy with enormous national and techno-
logical resources. It was not difficult on the face growing world economic
depression during the 70’s and 80’s, for the Soviet Union to isolate itself
from the world economy as it did during the Stalin period. Gellner (1992)
has pointed out that “….what had gone wrong economically? The simple
answer is that nothing had. The West does not realize the Soviet Union
isn’t so terrible economically.”
Pragmatic Explanation
If we want to search for the realistic explanation, we will be disappointed
if we restrict ourselves to economics only. There was no economic expla-
nation. As Ellman and Kantarovich (1992) had pointed out, the system
could have survived for a long time if not for ever. We need to look at
the political situations and psychology of the ruling class (‘apparatchiks’)

of the former USSR.
It cannot be said that there were severe trouble in the external finance
before 1985 although much the economy has declined since 1980. In
1985, the net debt to the Western countries (hand currency areas) was
US$15.7 billion. Even in 1990, the net hand currency debt was US$45.4
billion and the net credit to the LDC’s was US$37.76 billion. Thus, the
net deficit in the external asset situation was far from alarming (Tables 2.7,
2.8, and 2.9).
However, the rate of growth of the economy in the USSR was falling,
but that was true for other mature developed economies in the USA,
UK and Japan as well. Even the C.I.A got to admit that during the
period between 1950 and 1975 the Soviet economy outpaced the US
economy. Since 1981, the economy really declines in the international
race—this partly due to the fact that an increasing share of total invest-
ments was going towards the defence production and research which
could not add much to the net material production of the nation. The
increasing hostility of the Western countries and their increased defence
spending had prompted a reply from the USSR particularly since Regan
had started his aggressive posture towards the USSR during the 1980s.
Hostility of the Western alliances had taken the shape of increasing attack
on the Soviet allies in the third world. As a result, the Soviet defence
aids to various third world countries particularly Afghanistan, Angola,
Cambodia, and Nicaragua, went on increasing which was a serious burden
Table 2.7 USSR: Total Trade, 1981–1990 (Billion Current US Dollars).

Annual average*
1981–1985 1986 1987 1988 1989 1990+
Total Soviet exports 87.4 97.0 110.7 110.7 109.3 104.1

Communist 49.4 65.0 71.0 71.0 67.1 52.1
Developed countries 25.2 18.8 22.7 24.6 26.6 38.7
Developing countries 12.7 13.2 14.9 15.2 15.7 13.3
Total Soviet exports 79.1 88.9 96.0 107.3 114.7 120.9
Communist 44.7 59.4 59.4 71.6 71.0 61.4
Developed countries 24.9 22.7 22.1 27.2 33.4 48.6
Developing countries 9.5 6.8 7.3 8.5 10.3 11.0
*Includes both hard currency trade and trade conduction with soft currency countries
Source GOSKOMSTAT
Table 2.8 USSR: estimated hard currency balance of payments *(Million

Current US Dollars)
1975 1980 1985 1986 1987 1988 1989 1990
Current account −4565 1470 137 1383 5118 1183 −4419 −4500
balance
Merchandise −4804 1814 519 2013 6164 2634 −2115 −1300
trade
Exports f.o.b 9453 27874 26400 25111 29092 31165 32931 35500
Imports f.o.b 14257 26960 25881 23098 22928 28531 35046 36800
Net interest −521 −1234 −1482 −1730 −2146 −2551 −3404 −4300
Other invisible 760 890 1100 1100 1100 1100 1100 1100
transfers
Capital account 6981 284 1869 1795 −739 965 6807 7573
balance
Change in gross 6786 −792 6804 6811 5011 1579 8500 2800
debt
Official debt 1482 −280 463 391 480 −1300 6600 NA
Commercial 5294 −512 6340 6420 4532 2879 1900 NA
debt
Net change in −163 −35 1787 1595 −527 1119 −900 −6500
assets in Western
banks
Estimated −22 −411 3248 3322 4977 −2205 −681 −2400
exchange rate
effect
Net credit to 715 950 1700 4100 4800 5500 5656 3775
LDC’s
Gold sales 725 1580 1800 4000 3500 3800 3665 4500
Net errors and −2416 −1754 −2006 3178 −4329 −2148 −2388 −3073
omissions
*Net errors and omissions include hard currency assistance to and trade with communist countries
to finance sales of oil, and other non-specified hard currency expenditures, as well as errors and
omissions in other line items of the accounts
Source GOSKOMSTAT
on the Soviet economy. If less and less were being spent on produc-
tive sectors of the economy, the growth rate of the real economy had to
decline. Even then the economy could have survived given the strength
of the Soviet economy, its non-dependency on external finances or trade,
it’s vast resources of oil and gold (Figs. 2 and 10) and due to the fact
that living standard of the people has already reached an adequate level
with essential consumption items including housing, transport and energy
Table 2.9 USSR: estimated hard currency debt to the West (Billion Current
US Dollars)
1975 1980 1985 1986 1987 1988 1989 1990
Gross debt 12.5 20.5 29.0 35.8 40.8 42.3 50.8 53.6
Commercial debt 8.2 11.0 19.5 25.9 30.4 33.2 39.8 42.3
Government and 4.3 9.5 9.5 9.9 10.4 9.1 11.0 11.3
government-backed debt
Assets in Western banks 3.8 10.0 13.3 14.9 14.4 15.4 14.7 8.2
Net debt 8.7 10.6 15.7 20.9 26.4 26.8 36.1 45.4
Source GOSKOMSTAT
available at a nominal price, absence of unemployment, universal access to

medical care and education and a comprehensive welfare system.
The death blow to the Soviet system was struck by Gorbachev and
Yeltsin, who have declared as early as in 1985 the introduction of
market system and the resultant destruction of the planned economy.
Whole sections of heavy industry were deprived of their investment need
including the working capital; declines were most prominent in the metal-
lurgy and chemicals industries. These declines have spiralling effects on
the rest of the economy (Fig. 3), particularly on the lifeline of the Soviet
economy, the oil industry. Consumers’ goods industries have also suffered
due to the shortages of materials and machineries.
Before Gorbachev, the State Planning Committee, Gosplan, used to
translate Communist Party policies into investment and output targets
country wide and incorporates these info Five-Year Plans and in more
detail in annual plans. Central planning used to operate on the prin-
ciple that if each unit meets or exceeds its plan, then demand and supply
will balance. The government establishes prices for all goods and services
based on the role of the product in the society. Gorbachev’s reform was
designed to do away with these all and establish a capitalist economy. In
July 1987, the state enterprises were freed to determine output levels
based on demand from consumers and other enterprises. Enterprises
became self-financing and insolvent enterprises faced bankruptcies. The
enterprises exercised their recently acquired autonomy to raise wages far
in excess of any increases in productivity. Individual enterprises had started
to refuse ruble payments for output. The consequent barter deals and
payments in US dollars were the norm not only for material inputs to
maintain production but also to supply the workers with the consumer
goods which were no longer available in the state shops. The republics
have banned shipments of goods outside their borders except for the
US dollar payments, disrupting existing trade pattern (see Fig. 12 for
the old interlinks between republics) and destroying the interconnec-
tions between different industries and different parts of the same industry
across the republics. Regions producing key raw materials began to ignore
centrally mandated delivery targets and started dealing with the buyers
from different parts of the Soviet Union and abroad directly. The result
was a sharp reductions in industrial outputs leading to sharp decline in
consumer’s supplies. The republics also have started to withhold their
dues to the central governments. At the same time in order to satisfy
increased wage cost, money supply went up and up. The monetary disci-
pline during the planned economy to support production and distribution
was replaced by the excessive growth of money supplies to finance admin-
istration costs and wage bills. The combined effects of the growth of
personal money income and real shortages lead into inflation in consumer
prices which came into open in April 1991 when retail prices of consumer
goods were raised by 60–70% on average with larger increase in food
prices that were particularly alarming for the low-income population. The
combined effect of all was a reduction in absolute rate of growth of
the economy and real contractions. By 1991, most of the republics and
the Russian Federation itself were showing real decline in their national
output and industrial productions. The effect of that on foreign trade
sector was a continuous increase in imports and foreign borrowings. Hard
currency debt continued to increase from 1987 onward and by 1989 it
was almost doubled compared to the level at 1987.
The crisis of the economy has raised the demand for the removal
of Gorbachev; when the attempt was made by the Gorbachev’s cabinet
colleagues in August 1991, it was crashed by a number of factors which
are purely noneconomic, although these factors have played decisive role
in the destruction of the Soviet Union and the Soviet system. Gorbachev
as a part of his democratization process has released a large number of
common criminals along with political prisoners. The criminal elements
have started smuggling drugs from Afghanistan to Germany via the Soviet
Union sometime in collaboration with the army and have gathered a
considerable amount of wealth and have established a series of private
banks. The privatization of state industries and properties was the declared
aim of the Gorbachev’s reform programme. The privatization was already
implemented in Poland since 1989, and the Soviet ‘apparatchiks’ in the
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Kuollut oli tosin poissa, mutta kun hän kääntyi, näki hän taasen
neiti Potterin muutamien askelten päässä takanaan, hevosella kuten
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kylmästi kauttaaltaan, ja sen jälkeen tunsi hän suurinta
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Cass nojasi välinpitämättömästi lapiollaan maahan eikä vastannut

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"Entä te sitte?" kysyi tyttö.
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Cassin taikausko heräsi jälleen eloon ja hän sanoi, kuitenkaan

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Neiti Potterin oli mahdoton ymmärtää väärin hänen lyhyitä

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"Ettekä tekään ole samanlainen kuin muut idän tytöt, joita olen
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Tyttö nauroi näyttäen kaksi riviä lumivalkoisia hampaita.
"Mitä sillä tarkotatte?" kysyi hän vielä pidättäen hevostaan.
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Hän kohtasi tytön vielä kerran samana iltana. Oikeudenkäynti oli
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Joen asia siirtyi nyt Blazing Starin tilapäiseltä tuomioistuimelta täysin
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Vakavuuden jälleen palattua halusi tuomari selitystä tähän
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toinen sanoo löytäneensä; ja mikäli tiedän, ei sillä asialla ole mitään
tekemistä minun ja rikokseni kanssa. Niin luulen."
Mutta samassa näyttäytyi Caloveran tuomari kynnyksellä ja

salaisuus jäi yhtä selvittämättömäksi kuin ennenkin.
Blazing Starin asukkaiden olisi pitänyt tietää, että tämä uusi

hullunkurisuuden piirre, joka tarttui Cassin persoonallisuuteen, oli
varmaan tuskallisesti koskettanut hänen tunteellista sieluaan, jos he
yleensä olisivat tulleet ajatelleeksi mitään sellaista kuin sielun
herkkätuntoisuutta. Hän menetti hyvän tuulensa ja sen
helläsydämisyyden, joka oli hänet houkutellut aivan liian suureen
avomielisyyteen, ja vähitellen tuli hän yhä särmikkäämmäksi ja
ynseämmäksi. Aluksi hän oli kuin kaikki olisi ollut leikkiä, kaikki mitä
hän oli saanut kadonneista ihanista unelmistaan, ja kätki
pettymyksensä sydämensä sisimpään; mutta heti kuin hän joutui
taisteluun tunteidensa kanssa, ei hän voinut enää elää toveriensa
kera sovinnossa. Pitemmän aikaa tunsi hän itsensä aivan vieraaksi
ja syrjäytetyksi vertaistensa keskuudessa. Mikään kiittämättömyys ei
ihmisiä saa niin tuohtumaan kuin se, että joku, jota suosiollisesti on
pidetty pilanteon esineenä, jonakin hyvänä päivänä kieltäytyy
tekemästä tehtäväänsä. Se, joka hylkää naurajain hänelle
jalomielisesti osottaman suosion ja tahtoo, että hänet otettaisiin
vakavalta kannalta, se ei ansaitse vastaiseksi mitään muuta kuin
vihamielistä kohtelua.
Tällaisissa vähemmän ilahduttavissa olosuhteissa nousi Cass

eräänä iltana postivaunuun ajaakseen poikkitielle. Tavallisesti istui
hän ajajan rinnalla, mutta nähtyään Hornsbyn ja neiti Porterin, jotka
istuivat vaununkatolla, muutti hän mielensä. Hän oli iloinen etteivät
nämä molemmat kiinnittäneet huomiotaan häneen, ja kun hän oli
ainoa, joka istui vaunujen sisällä, asettui hän mukavaan asentoon
tyynyille ja vaipui surullisiin mietteisiinsä. Hän oli lujasti päättänyt
lähteä Blazing Starista ja aikoi nyt tosissaan ansaita rahoja kokoon,
sitte kerran hyvinvoivana miehenä palatakseen toveriensa luo ja
herättää heidän hämmästyksensä kertomuksilla myöhemmistä
vaiheistaan ja menestyksestään. Niin pitkälle ei Cass-parkamme
vielä ollut päässyt maailman tuntemuksessa, että olisi ymmärtänyt
ainoastaan silloin voivansa toivoa tulevaa menestystä, kun onnistui
katkaisemaan suhteensa menneisyyteen. Kuutamo valaisi vaunun
sisuksen heikolla alakuloisella hohteella. Ajopelin verkkaisat
nytkähdykset, yksinäisyys ja rajaton näkö-ala, kaikki oli omansa
antamaan halveksitulle sormukselle yhtä suuren lumousvoiman kuin
Gygesin sormuksella oli ollut. Cass uneksi avoimin silmin, mutta
hänet herätti tarumaisista unikuvistaan äkillinen nytkäys. Postivaunu
pysähtyi. Kuskipukilla kuului kaksi miesääntä olevan kiihkeässä
sananvaihdossa; mutta toisen riidellessä ja kiroillessa, puhui toinen
rukoilevalla äänellä. Ehdottomasti tarttui Cass pistoliin.
"Kiitos! Minä saan kuitenkin luvan astua alas."
Tällä kertaa sanoi neiti Porterin ääni nämä sanat. Taasen

vaihdettiin kiihkeitä sanoja kuskin ja Horsnbyn kesken. Sitte kuului
edellinen lausuvan:
"Jos hän tahtoo istua sisällä, niin antakaa hänen tehdä kuten
tahtoo!"
Neiti Porter kiepsahti alas kuskipukilta. Hornsby riensi hänen

jälkeensä. "Hetkinen vain, neiti", kivisteli hän, puoleksi hämillään,
puoleksi häikäilemättömästi. "Ette ymmärrä minua, tahdon vain —
—."
Mutta neiti Porter oli jo hypännyt vaunun sisälle. Hornsby tarttui
ovenripaan, mutta tyttö piti vastaan sisältä päin, niin että heidän
välillään sukeutui pieni taistelu. Tämä kaikki tuntui puolivalveillaan
istuvasta Cassista unelmalta, kunnes hän vihdoin heräsi täyteen
tajuunsa.
"Ettekö tahdo", kysyi hän äänellä, joka hänestä itsestään tuntui

aivan vieraalta, "että mies tulee sisälle?"
"En!"
Tiikerin voimin tarttui Cass ulkona seisovan ranteeseen. Mutta

hyvää tarkottava ritarillinen palvelus ei kuitenkaan tehnyt tarkotettua
vaikutustaan, sillä samassa sysäsi Cass auki oven, jota neiti Porter
oli suurella ponnistuksella pitänyt sulettuna. Raivoissaan heittäytyi
Cass vastustajansa kimppuun ja tarttui hänen kurkkuunsa, jonka
jälkeen hän näytti suurimmalla tyyneydellä odottavan mihin hänen
vastustajansa aikoi ryhtyä. Ja heti ensi hetkessä oli hän tunkenut
Hornsbyn vaunuista pois ja ulos kirkkaaseen kuutamoon.
"Hei, kuka ottaa ohjakset?" huusi nyt "vuoriston Kalle", mutta

antamatta mitään vastausta hyppäsi kuski alas istuimeltaan ja juoksi
erottamaan taistelijoita.
"Tahdotteko te ajaa vaunujen sisällä?" kysyi äsken mainittu

"vuoriston
Kalle" Cassilta; mutta ennenkuin tämä oli ehtinyt vastata, kuului neiti
Porterin ääni vaunun ikkunasta:
"Niin, tietysti!"
Yhdellä nykäyksellä oli Kalle tuupannut Cassin vaunuun.

"Entä te sitte?" sanoi hän nyt Hornsbylle. "Jollette tahdo kävellä
jalkaisin, niin pysykää siinä vaununosastossa, jonka olette ottanut!"
On enemmän kuin luultavaa, että Kalle rakastettavalla

palvelevaisuudellaan auttoi herra Hornsbyta nousemaan vaunun
katolle, sillä vaunu lähti heti kohta taasen liikkeelle ja ratuutti
eteenpäin.
Mutta nyt oli Kalle kiireissään osunut panemaan Cassin istumaan

neiti Porterin polville. Hän hypähti pystyyn ja oli juuri kapuamaisillaan
väliaitauksen ylitse, kun vaunu jälleen lähti liikkeelle, ja hän jälleen
työkkäytyi takaperin ja kovalla puhdilla paiskautui neidin hattua ja
olkapäätä vasten — joka oli kaikkea muuta kuin sopusoinnussa sen
itseensäsulkeutuvaisuuden kanssa, jota hän oli aikonut osottaa
neidin läsnäollessa. Neiti Porter oli nyt saanut takaisin reippaan,
repäisevän tuulensa. "Hyi, mikä hirveä mies!" huudahti hän solmiten
hatunnauhan leukansa alle, ja sen jälkeen oikoi hän näppärillä
käsillään muutamia ryppyjä keveästä pikkuviitastaan.
Cass oli olevinaan kuin olisi unohtanut mitä oli tapahtunut ja kysyi
hajamielisellä äänellä: "Kuka? Ah, ai niin, niin kyllä."
"Ilmeisesti olen teille kiitollisuudenvelassa", sanoi tyttö nauraen.

"Mutta olen varma siitä, ettei hän olisi tullut sisään, jollette olisikaan
vetänyt häntä kädestä ulospäin. Näytän sen teille. Katsokaas vain.
Tarttukaas nyt ulkopuoliseen kahvaan, niin minä pidän kiinni
sisäpuolelta, ja te ette voi kääntää sitä ympäri." Itse asiassa olikin
laita niin. Hänellä oli luja, mutta samalla pehmeä käsi — Cass oli
tullut sitä koskettaneeksi lukonkahvassa — ja nyt kuutamossa näytti
se Valkoseltakin. Cass ei vastannut mitään siihen, mitä toinen oli
sanonut, vaan vaipui takaisin nurkkaansa; kuitenkin tuntui niin
omituiselta hänen sormissaan, joilla hän oli koskettanut tytön kättä.
Hän istui varjossa ja saattoi huomaamatta tarkastella tämän kasvoja.
Hänestä tuntui kuin ei olisi koskaan ennen oikein tyttöä nähnyt. Hän
oli pitänyt tätä suurempana kuin tämä todella oli. Hänen silmänsä
eivät olleet suuret, mutta niiden teräset olivat mustat ja
sametinvienot. Hänen nenänsä kuosi ei ollut erittäin
luonteenomainen, kasvot olivat jokseenkin värittömät, mutta
muutamat, pienet, tummat kesakot saivat valkoisuuden nenävarsilla
ja suupielissä esiintymään selvempänä. Pieni suu oli
tummanpunainen ja huulet samoinkuin silmätkin alati kosteat. Hän
oli painautunut nurkkaan takaistuimelle ja riiputti kättään alhaalla
ulkona vaunusta; hänen kaunismuotoisen vartalonsa miellyttävät
ulkopiirteet seurasivat vaunujen keinuvia liikkeitä. Hetkeä
myöhemmin näytti hän unhottaneen, että joku istui pimeässä
nurkassa; hän nojasi päänsä taaksepäin, sovittui vähän ulommaksi
istumaan ja nosti molemmat sirosti kengitetyt jalkansa keskimäiselle
istuimelle ja kuvastui siten mitä ihastuttavimpana luonnonraittiuden
kuvana.
Tällä tavoin kului viisi minuuttia. Tyttö katsoi suoraan kuuhun.

Cass alkoi tuntea, että hänen arvokas itseensäsulkeutuvaisuutensa
vähitellen alkoi näyttää siltä kuin hän olisi hämillään. Hänen täytyi
kohdella tyttöä kylmällä kohteliaisuudella.
"Toivon, ettette joutunut pois suunniltanne, neitiseni", alkoi hän,

"tuosta — tuosta — tuon —."
"Minäkö?" Tyttö nousi, heitti koomillisen katseen pimeään

nurkkaan, vaipui sitte takaisin nurkkaansa, lisäten: "Niin, miksi en?"
Kului taasen viisi minuuttia. Tyttö oli ilmeisesti unhottanut

pimeässä istujan. Kohtelias siis olisi hän ainakin voinut olla. Cass
sulkeutui jälleen itseensä, mutta hänen umpimielisyyteensä
sekaantui nyt loukatun tunteen sivumaku.
Siitä huolimatta ei hän voinut olla panematta merkille, että tytön

kasvot saivat paljo vienomman ilmeen kuutamossa. Eipä itse leveä,
kulmikas poskikaan näyttänyt nyt enää niin ylen proosalliselta, eikä
tuntunut nyt lainkaan epämiellyttävältä, kun Cass ei sillä enää nähnyt
mitään halveksumista hänen heikkoutensa tähden. Ja kuinka kosteat
hänen silmänsä olivat — ne todellakin välkkyivät kuutamossa. Mutta
nyt tuli loiste silmäkulmissa pitkien silmäripsien alla vielä
voimakkaammaksi, leimahti nopeasti ja katosi. Oliko se mahdollista?
Ei epäilemistäkään, hän itki.
Se oli Cassille liian paljo — hän siirtäytyi lähemmäksi. Neiti Porter

pisti päänsä ulos ikkunasta, mutta vetäsi sen heti takaisin ja
näyttäytyi Cassille kuivin silmin.
"Jumalani, matkoilla joutuu monellaisten ihmisten kera yhteen!"

sanoi
Cass, joka tahtoi näyttäytyä eräänlaiselta iloiselta mietiskelijältä.
"Mahdollista kyllä! En juuri voi sanoa sitä. En ole vielä koskaan

kohdannut ketään, joka olisi käyttäytynyt niin häikäilemättömästi
minua kohtaan. Olen matkustanut kautta koko maan, aina yksin ja
joutunut yhteen monenlaisten ihmisten kera, niin pitkälle kuin voin
muistaa taakse päin. Mutta aina olen päässyt lävitse ilman
vaikeuksia ja ikävyyksiä. Matkustan yksin tänäänkin enkä käsitä,
miksi en sitä tekisi. Kentiesi eivät muut ihmiset siitä pidä, mutta minä
pidän. Tahdon kokea jotakin, tahdon nähdä kaiken mitä on nähtävää.
Minä en käsitä, miksi en saisi liikahtaa paikaltani ilman 'esiliinaa' vain
sentähden että olen tyttö, miksi en saisi tehdä samaa kuin joka mies
tekee, mikäli se ei ole väärää. Kentiesi te ihailette sellaisia nuoria
tyttöjä, jotka aina vetelehtivät kotona tai rämpyttävät pianoa tai
ahmivat romaneja. Pidätte kai minua liian rohkeana, kun minusta ei
sellainen ole hauskaa enkä myöskään valehtele ja sano, etten pidä
sitä hauskana."
Hänen äänensä sävy oli sellainen, että nämä sanat vaikuttivat

kuten jyrkkä hyökkäys ja selvästi osottivat olevansa vastaus Cassin
huomautukseen hänen käytöksestään, niin että siirtyminen yleisestä
personalliseen hyökkäykseen ei ollut niin odottamaton.
"Te tiedätte aivan hyvin, että teitä suututti se, että minä noudin
Hornsbyn, kruununvoudin, silloin kun löysimme ruumiin", lisäsi hän
aivan tarpeettomasti.
"Hornsby ei ollut suuttunut", huomautti Cass ilkeästi.
"Mitä sillä tahdotte sanoa?" kysäsi tyttö lyhyeen.
"Te olitte hyvät ystävykset, kunnes —"
"Kunnes hän loukkasi minua? Sitäkö tahdotte sanoa?"
"Kunnes hän ajatteli —" sammalsi Cass, "että hänelläkin olisi lupa
käyttäytyä vapaammin, kun te ette ollut aivan niin — niin —
ymmärrättehän — niin varovainen kuin muut tytöt."
"Toisin sanoen, koska minä mieluummin ratsastin jonkun

peninkulman hänen kanssaan nähdäkseni jotakin todellista, jotakin
kammottavaa ja tehdäkseni jotakin hyödyllistä enkä siihen sijaan
ammotellut puodinikkunan edessä Suurkadulla tai kävellyt
edestakaisin hotellin edustalla…"
"Ja ollut ihmisten silmänruokana", keskeytti hänet Cass. Mutta
hänen surkea, tottumaton yrityksensä olla kohtelias epäonnistui jo
alussa. Neiti Porter nousi ja katsoi ulos ikkunasta. "Tahdotteko, että
minun tulee kävellä jalkaisin lopun matkaa?" kysyi hän.
"En!" riensi Cass vakuuttamaan; hän oli tullut tummanpunaiseksi

kasvoiltaan, häntä hävetti.
"Lakatkaa sitte puhumasta tuolla tavoin — ja heti kohta."
Sitte seurasi hetken hiljaisuus, joka lisäsi Cassin hämmennystä.

"Minä toivoisin olevani mies", valitti tyttö katkerasti ja vakavasti. Cass
ei ollut vielä kyllin vanha ja kyynillinen huomatakseen, että tätä
hurskasta toivomusta tavallisesti suosivat sellaiset, joilla ei ole
vähintäkään syytä surra naisellisuuttaan, ja jollei hän olisi juuri äsken
"nolannut" tyttöä, ei hän olisi jättänyt panematta sitä vastaan
lämpimintä protestiaan, joka meillä miehillä on aina valmiina, kun
tuollaisen toivomuksen lausuvat lämpimät, punaiset huulet
pehmeällä äänellä, vaikkemme, sivuitse mennen sanoen, ole
läheskään yhtä kehakoita silloin, kun vanhat naismiehet ylistelevät
naisten täydellisyyttä. Neiti Porterin toivomus oli nähtävästi vilpitön,
sillä hän jatkoi nyrpeänä lyhyen paussin jälkeen:
"Ja kuitenkin juoksin minä aina, kun olin kymmenen vuoden

vanha, jokaiseen tulipaloon Sakramentossa. Olin mukana, kun
teatteri paloi poroksi — kellään ei ollut mitään sanomista sitä
vastaan."
Cass ei voinut olla kysymättä, eikö hänen isällään ja äidillään ollut

mitään muistuttamista tyttärensä poikamaista mieltä vastaan.
Vastaus ei ollut aivan tyydyttävä, mutta sitä luonteenomaisempi.
"Hekö olisivat jotakin muistuttaneet? Senpä olisin tahtonut nähdä!"
Tie oli kääntynyt toiseen suuntaan. Huikenteleva kuudan oli
jättänyt neiti Porterin ja paistoi nyt Cassiin, joka istui etuistuimella, se
levitti lempeän valonsa nuoren miehen sametinhienoille viiksille ja
pitkille silmäripsille ja kalvensi hänen päivänpaahtamat poskensa.
"Mutta mitä teillä onkaan kaulallanne?" kysäsi tyttö nopeasti.
Cass loi alas katseensa ja punastui, sillä hänen merimiespaitansa

kaulus oli kohonnut ylös. Mutta sieltä näkyi vielä jotakin muutakin
kuin hänen valkoinen, pehmeä, melkein naisellinen ihonsa. Paidan
oli punannut veri, joka tihkui esiin lievästä haavasta olkapäässä. Hän
muisti nyt saaneensa pienen naarmun painiskellessaan Hornsbyn
kera.
Tytön silmät loistivat kirkkaasti. "Sallikaa minun", pyysi hän

innokkaasti, "minä ymmärrän haavojen hoitoa. Tulkaa tänne
luokseni! Ei, istukaa paikallanne — minä istun viereenne."
Tyttö astui keskimäisen istuimen ylitse ja istuutui Cassin rinnalle

tyynyille. Uudelleen tunsi Cass hänen magnetillisten sormiensa
koskettavan omiaan; hän tunsi hänen lämpimän hengityksen
kaulallaan, kun tyttö kumartui hänen ylitsensä. "Se ei ole mitään",
sanoi hän vilkkaudella, joka ei johtunut haavan tuskista, vaan
lääkärin käsittelystä.
"Antakaa minulle pullonne", sanoi tyttö välittämättä hänen

sanoistaan. Cass tunsi pistävää kirvelyä, kun toinen kostutti haavan
väkevällä nesteellä, ja palasi sen johdosta normaliseen tilaansa.
"Noin!" sanoi tyttö sitoen taitavasti haavan taskuliinallaan.
"Napittakaa nyt takkinne rinnan ylitse, niin on se hyvä — varokaa
kylmettymistä." Tyttö aikoi itsepäisesti itse napittaa nutun. Miehen
voima ei ilahduta naisia niin suuresti kuin joku hänen heikkoutensa,
jossa häntä voi auttaa. Mutta heti tehtävänsä tehtyään siirtyi tyttö
hämillään Cassin luota hieman loitommaksi. Hän ihmetteli itsekin
hämmennystään, sillä Cassin iho oli hienompi, hänen kätensä
vähemmän kömpelöt, hänen pukunsa siistimpi — ja jottei salaisi
mitään, se ilmakehä, joka ympäröi hänet, oli miellyttävämpi kuin niillä
miehillä, joiden kera hänen miesmäiset tapansa olivat vieneet hänet
yhteen.
Hetken jälkeen kysäsi hän äkkiä: "Mitä aiotte tehdä Hornsbylle?"
Cass ei ollut miestä lainkaan ajatellut. Hänen vihansa oli kadonnut

samalla kuin se syykin, joka sen oli herättänyt. Vaikkei hän
vähintäkään pelännyt vastustajaansa, olisi hän ollut täysin
tyytyväinen, jollei olisi häntä enää kohdannut. Hän sanoi ainoastaan:
"Se riippuu kokonaan hänestä!"
"Oh, luultavasti ette kuule hänestä enää mitään", vakuutti tyttö.

"Mutta hieman lihasvoimia täytyisi teidän hankkia itsellenne. Ettehän
ole väkevämpi kuin tytöt." Hän vaikeni äkkiä aivan hämillään.
"Mitä teen minä taskuliinallenne?" kysyi Cass kääntääkseen

kiusallisen keskustelun toiseen suuntaan.
"Oh, pitäkää se jos teitä huvittaa — mutta älkää näytelkö sitä

jokaiselle, jonka tapaatte, kuten menettelitte sormuksen kanssa."
Hän huomasi heti, että Cassin kasvoille tuli syvän surun ilme, ja
lisäsi sentähden: "Sanoin sen tietysti vain leikillä, sillä jos te olisitte
hitusenkaan välittänyt sormuksesta, ette olisi siitä puhunut ettekä
näytellyt kenellekään — eikö totta?"
Cass tunsi vapautuneensa todellisesta taakasta, kun hän ajatteli,

että asia olisi voinut olla niin, mutta varmaa oli, ettei hän suinkaan
ollut tähän asti katsonut asiaa siinä valossa.
"Oletteko todellakin löytänyt sen?" kysyi tyttö äkkiä sangen

vakavasti.
"Mutta vastatkaa suoraan!"
"Olen!"
"Ketään todellista Mayta ei ollut pelissä."
"Ei minun tietääkseni", vastasi Cass hymyillen sydämessään.
Mutta neiti Porter katseli häntä terävästi hetken, hypähti sen

jälkeen pystyyn ja kapusi keskimäisen istuimen ylitse takaisin
vanhalle paikalleen. "On kai sentään parasta, että annatte
taskuliinan minulle takaisin."
Cass alkoi heti aukoa nuttunsa nappeja.
"Ei! Ei! Tahdotteko tosiaankin kylmetyttää itsenne?" huusi tyttö

kiihkeästi. Välttääkseen tämän hirveän mahdollisuuden, napitti Cass
nuttunsa jälleen, mutta paitsi taskuliinaa kietoi sen ylen suloinen
tunne.
Ei vaihdettu enää monta sanaa, kunnes vaunu keinahduksillaan ja

kolahduksillaan osotti, että lähestyttiin poikkitietä. Pitkällä pääkadulla
näkyi valo valon jälkeen. Kirkkaasti valaistujen ikkunain loisteessa ja
innokkaasti kyseleväin äänten hälinässä laskeutui neiti Porter
vaunusta käyttämättä Cassin tarjoamaa apua, vieläpä ennen kuin
"kukkulan Kalle" ehti hypätä alas kuskipukilta. Neiti vaihtoi muutamia
sanoja hänen kanssaan.
"Voitte luottaa minuun, neiti", sanoi Kalle, jonka jälkeen neiti Porter
kääntyi hänestä ja ystävällisesti hymyillen tarjosi Cassille kätensä,
jolla hän puolittain vastasi tämän puristuksen, heti sen jälkeen
poistuakseen.
Muuatta päivää myöhemmin pysähtyi "kukkulan Kalle"

postivaunuineen Blazing Starin portin edustalla, jossa Cass juuri
seisoi, ja ojensi hänelle pienen paketin.
"Tämän lähettää neiti Porter. Hm, nähkääs! Se on sama mitätön

sormus, josta on kerrottu kaikissa lehdissäkin. Hän ei hellittänyt,
ennenkuin oli pakottanut tuomarin antamaan itselleen sormuksen.
Neuvon teitä heittämään sen pois! Sitte voi joku toinen sen löytää ja
tulla hassuksi. Muuta minulla ei ollut sanottavaa!"
"Eikö hän sanonut mitään muuta?" kysyi Cass huolissaan,

näennäisen välinpitämättömästi ottaen aarteen.
"No, niin — voihan olla mahdollista että hän sanoi jotakin

muutakin. Hän on käskenyt minua, että koettaisin pitää teitä ja
Hornsbyta erillänne. Älkää sentähden häntä ärsytelkö, ja minä pidän
huolen siitä, ettei hän teitä loukkaa." "Kukkulan Kalle" iski
merkitsevästi silmää, sivalsi piiskallaan hevosta selkään ja ajoi
matkaansa.
Cass avasi paketin. Se ei sisältänyt mitään muuta kuin

sormuksen. Ja kun sen mukana ei ollut sanaakaan, joka olisi
todistanut jostakin muistelemisesta, tuntui lähetys melkein
loukkaavalta. Oliko tyttö tahtonut silmiinpistävästi huomauttaa häntä
hänen hulluudestaan, tai luuliko se hänen surevan sormuksen
kadottamista, ja oliko sormuksen lähettäminen olevinaan joku palkka
siitä pikku palveluksesta, jonka hän oli tehnyt tytölle? Ensi tuokiossa
tunsi hän houkutusta heittää pois pikku esineen, joka muistutti häntä
omasta hulluudestaan ja tytön halveksimisesta. Olihan tyttö kaksin
kerroin nöyryyttänyt hänet pannessaan Kallen rauhanhierojaksi
hänen ja hänen vihollisensa välille. Hänen oli mentävä kotiin ja
lähetettävä takaisin tytön lahjottama taskuliina. Mutta samalla hänen
mieleensä ei voinut olla johtumatta se kaikkea muuta kuin
romantillinen ajatus, että hän tosin eilen yksinäisessä ja hiljaisessa
kamarissaan oli pessyt taskuliinan, mutta ettei hänellä ollut
tarpeellisia työaseita sen silittämiseen, ja ainoastaan kuivattuna oli
hänen mahdoton sitä lähettää. Hän ei siis voinut täten ilmaista
suuttumustaan.
Mutta kuinka toivoton hänen harminsa ja kostonjanonsa olikaan,

täyttivät kuitenkin nämä ajatukset hänen sielunsa kokonaisten
päivien, jopa kuukausien ajan. Silloin saapui tieto, että Ranaka Joen
oli oikeus vapauttanut, ja samalla tuli sormusjuttu jälleen puheeksi, ja
muutamia vanhoja sukkeluuksia tästä palasi jälleen ilmoille. Onni oli
jonkun aikaa itsepäisesti kääntänyt Blazing Starille selkänsä, Blazing
Star oli "leikkinyt leikkinsä loppuun", kuten kullankaivajat rohkealla
kielellään sanoivat. Aikainen lumisade vuoristossa ja tulvivan virran
tuhot jättivät ylen vähän tilaa sille alkuperäiselle, raskaalle
leikillisyydelle, joka oli kadonnut samalla kuin nuoruus ja hyvinvointi
oli sanonut jäähyväiset. Mutta ei tämä surkastumisen aika ollut
saapunut kullankaivamisen ja huuhtomisen johdosta, vaan
vuosikauden epäonnistuneet satunnaiset liikeyritykset olivat
aiheuttaneet hyvinvoinnin häviön.
Cass taisteli urhoollisesti kovaa onnea vastaan ja voitti yksin

toveriensa tunnustuksenkin, vaikkei sitä niin helposti voinut
saavuttaa. Mutta hän saavutti vielä jotakin parempaakin,
tyytyväisyyden omaan itseensä, joka johtui lisääntyneestä
itseluottamuksesta, karaistuneesta voimasta ja järkkymättömästä
terveydestä. Hän löysi käytännöllisen vaikutusalan vilkkaalle
kuvitusvoimalleen ja tavattomalle huomiokyvylleen, ja teki pari
keksintöä, jotka saattoivat hänen kokeneemmat, mutta vanhasta
kiinnipitävät toverinsa ihmeihinsä. Mutta nämä keksinnöt eivät olleet
sitä lajia, että ne olisi heti voinut muuttaa kiliseväksi rahaksi, ja
Blazing Star teki sen huomion, että päivittäin kulutettiin joukko
silavaa ja jauhoja, ansaitsematta vastaavaa määrää rahaa. Siten
menetti Blazing Star luottonsa. Blazing Starissa oltiin nälkäisiä, siellä
kulettiin ryysyissä ja kurjuudessa. Blazing Star, "säteilevä tähti", oli
lähellä häviötään.
Cassilla, joka luonnollisesti sai ottaa osaa uudisasutuksen

yleiseen onnettomuuteen, oli oma erityinenkin onnettomuutensa
kannettavanaan. Hän oli päättänyt unhottaa ei ainoastaan neiti
Porterin vaan kaiken muunkin, joka saattoi muistuttaa onnettomasta
sormuksesta. Mutta julma kohtalo vaati, että juuri neiti Porteria hän
ei voinut unhottaa, ponnistelipa hän kuinka paljo tahansa. Hän oli
usein näkevinään tytön notkean vartalon lumoavassa kuutamossa,
joka täytti hänen mitättömän majansa sisustan; tytön ääni helähteli
virran kohinassa, hänen istuessaan rannalla levähtämässä; tytön
ääni pani hänet usein hätkähtämään unissaan. Tämä ynnä se
seikka, että hänen vaatteensa olivat kuluneet aivan repaleiksi, sai
hänet välttämään näyttäytymistä poikkitiellä tai muissa paikoissa,
jossa mahdollisesti saattoi kohdata tytön. Mutta kaikesta
varovaisuudesta huolimatta oli hän nähnyt tämän kerran ajavan
ohitse pienissä vaunuissa, joita veti pieni poni, ja tyttö oli ollut niin
ihastuttava ja hieno ja korea, että hän kiireimmittäin oli pujahtanut
muutamain tienvarteisten puiden suojaan, jotta tyttö voisi ajaa ohitse
häntä huomaamatta. Hän seisoi siellä katsellen tahraisia repaleisia
vaatteitaan ja kuvitteli katkerasti vihaavansa nuorta tyttöä. Hänen
toverinsa mainitsivat tyttöä harvoin; kentiesi he aavistivat siten
säästävänsä häneltä kiusauksen, joka olisi voinut tehdä hänet
spartalaisille tavoilleen uskottomaksi; mutta hän kuuli sentään siellä
ja täällä, että neiti Porter oli nähty tanssijaisissa ja muutamissa
seurapiireissä, joissa hän nyt näytti löytävän ilonsa huvituksissa, joita
vastaan oli ennen niin ankarasti puhunut.
Eräänä sunnuntai-aamuna aikaisin keväällä palasi Cass asiaansa

toimittamatta erään rahamiehen luota, jossa hän oli koettanut
herättää harrastusta Blazing Stariin.
Hän mietiskeli vielä rahamiehen vähä-älyisyyttä, joka ilmeisesti oli

kiintynyt anojan ulkoasuun ja siitä vetänyt epäsuotuisia
johtopäätöksiä kädenalaisen leirin mahdollisuuksiin nähden, kun hän
alkoi tuntea itsensä perin väsyneeksi ja sentähden ilolla suostui
erään ajomiehen tarjoukseen, että saisi kappaleen matkaa ajaa
hänen rattaillaan. Juuri rattaiden hiljaista vauhtia ajaessa uuden
kirkon ohitse, virtaili kansa sieltä ulos. Oli liian myöhäistä hypätä pois
ja juosta syrjään eikä Cass rohennut pyytää ajomiestäkään
kiirehtimään hevosia. Ajatellen ajelemattomia poskiaan ja ryysyisiä
vaatteitaan piti Cass silmänsä katuun kiinnitettyinä. Muuan ääni,
jonka helähdys pani hänet vavahtamaan, huusi hänen nimeään. Se
oli neiti Porter, ihastuttava olento silkissä, pitseissä ja kevätkukkien
kietomana, ja hän juoksi yhä samalla vilkkaudella ja vapaudella
ajopelien rinnalla. Kummastunut ajomies piteli hevosia, ja neiti
huudahti läähättäen:
"Miksi annat minun juosta jälestä näin pitkältä, mikset kohota

katsettasi maasta?"
Cass, joka sanomalehdellä koetti peittää kömpelösti ommeltua

paikkaa housunlahkeessaan, vastasi sammaltaen, ettei hän ollut
nähnyt neitiä.
"Ette siis tahallanne pitänyt silmiänne maahan naulattuna?"
"En", sanoi Cass.
"Miksette enää käy koskaan poikkitiellä? Miksette vastannut

viestiini sormuksen mukana?" kyseli tyttö nopeasti peräkkäin.
"Ettehän lähettänyt minulle mitään muuta, kuin sormuksen!"

vastasi Cass ja heitti samalla punastuen salavihkaisen katseen
ajomieheen.
"Sormushan oli aivan kylliksi — hassu!" Cass levitti silmänsä niin

selälleen kuin voi. Ajomies nauroi. Neiti tarkasti rattaita. "Ajaisin
mielelläni näillä rattailla kappaleen matkaa — ne näyttävät niin
oivallisilta." Samalla katsoi hän veitikkamaisesti ympärillään seisoviin
töllistelijöihin, jotka verkalleen loittonivat. "Saanko minä?"
Mutta Cass pani lujimmasti vastaan. Ajopelithän olivat niin likaiset,

hän ei voinut vastata edes siitä, oliko se terveellistäkään; neiti istuisi
niin huonosti, itsekin ajaisi hän niillä vain muutamia kyynäröitä; ja
sitte saattoi neiti tärvellä pukunsa.
"Niin, pukuni!" sanoi tyttö katkerasti. "Pukuni tietysti on ennen

kaikkea otettava huomioon. Entä sitte?"
"Ihmisistä se olisi niin kummallista ja lopuksi he luulisivat, että olen

pyytänyt teitä siihen", jatkoi Cass epäillen.
"Vaikka päinvastoin juuri minä tunkeuduin rattaillenne. Kiitoksia

paljo! Hyvästi!"
Tyttö viittasi kädellään ja peräytyi ajopelien luota. Cass olisi
tahtonut antaa koko maailman, jos olisi rohjennut kutsua hänet
takaisin; mutta hän istui liikahtamatta paikallaan, ja rattaat vierivät
edelleen heidän molempain ollessa vaiti. Ensimäiselle poikkitielle
tultuaan hyppäsi Cass alas rattailta. "Kiitoksia paljo!" sanoi hän
ajomiehelle, ja tämä vastasi häntä uteliaasti katsellen: "Ei mitään
kiittämistä! Mutta ensi kerran kun sellainen tyttö tahtoo ajaa näissä
vaunuissa, en salli jonkun yksinkertaisen matkustajan asettua sitä
vastaan. Hyvästi nuori mies! Laittakaa, ettette tule kotiin liian
myöhään, muuten voisi joku tyttö ryöstää teidät mukaansa, ja mitä
äitinne siitä sanoisi!" Mitä voi nuori mies tehdä muutakuin heittää
pilkkaajaan sanomattoman halveksivan katseen ja lähteä tiehensä?
Mutta tälläkin kertaa tunsi hän, että hänen arvokas asentonsa
huonosti sopi yhteen sen suuren paikan kera, joka oli niin
silmiinpistävällä paikalla hänen housuissaan, mutta joka sitä ennen
oli kuulunut jauhosäkkiin ja jossa vieläkin saattoi lukea ironiset sanat:
"Parhaita, hienoimpia!"
Tuli kesä lämpimine päiväpaisteineen ja lupauksineen runsaasta

kukoistusajasta, jolleikaan runsaasta sadosta Blazing Starille.
Pitkistä päivistä johtui, että kullankaivajat joutuivat luonnon kera
lähempään kosketukseen, ja uudestaan heränneet toiveet astuivat
entisen tyytymättömyyden sijaan. Tähän aikaan oli rahamiehiäkin
helpompi saada vilkasemaan yksinäisiä vuoria kuin siihen aikaan,
jolloin nousuvesi ja lumi teki kahlauspaikat ja polut kulkemattomiksi.
Illalla ihanan päivän jälkeen istui Cass tupakoiden majansa oven
edessä, kun hän kummikseen näki kymmenkunnan tovereitaan
tulevan häntä kohden. Peter Drummond tuli etunenässä ja heilutti
erästä sanomalehteä päänsä yläpuolella, ikäänkuin se olisi mikäkin
voitonmerkki.

Imperialism and Capitalism Volume Ii Normative Perspectives 1St Edition Edition Dipak Basu Full Chapter

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Imperialism and Capitalism Volume Ii Normative Perspectives 1St Edition Edition Dipak Basu Full Chapter

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Imperialism And Capitalism, Volume II:

Normative Perspectives 1st Edition

ISBN 978-3-030-54890-2 ISBN 978-3-030-54891-9 (eBook)

In this volume, we are describing political systems developed in different

Einstein hoped that in a planned economy every person can have a

1 Socialism Within Monarchy: Kautilya in Arthashastra 1

2 Socialism in the Soviet Union 15

3 Socialism Within a Democracy, Fabian Socialism,

5 Feldman–Mahalanobis Model of Development Planning 87

6 Contemporary Capitalism and Imperialism 121

Fig. 3.1 Trends in GDP per capita (US$, PPP) in SFR

Table 2.1 Analysis of economic growth rate (Real GNP at 1987

Socialism Within Monarchy: Kautilya

Kautilya was a professor at Takshashila university (in Taxila now

© The Author(s) 2020 1

written in Sanskrit. Kautilya also completed two other works: Chanakya-

He advanced the hypothesis that the pursuit of productive activities was

Kautilya on the Factors Relevant to Creating Wealth. Kautilya stated

Nature of the State According to Kautilya

Arthashastra stipulates restraint on taxes imposed with fairness and how

Fiscal Policy of Kautilya

general, trade with such foreign countries as will generate a profit; he

He suggested tax holiday as an incentive which means if any one brings

Kautilya on the Role of Ethics

Kautilya and Plato

Kautilya and ‘Dharma’

1. ‘Dharma’, which is based on truth

i. Raksha—literally means protection, in the corporate scenario it can

Truly radical “Machiavellianism”, in the popular sense of that word, is clas-

Views on Property and Markets

welfare, including key principles of international relations from a realist

Kautilya and Recent World Economic Issues

approach. Income tax should be the tool to reduce extreme income

Socialism in the Soviet Union

© The Author(s) 2020 15

Challenges Faced by Revolution

biggest obstacle to any revolutionary success was the lack of a revolu-

Planned Economy: Central Direction

Beginnings of the Soviet Planned Economy

developed with the support of Gosplan (the State Planning Commission),

oil went up by 400% in 1974. After Mikhail Gorbachev came to power

Initial Period of Rapid Growth

Not only that, but none of those doctors—three-quarters of whom

Slowing Growth and the Beginning of Reforms

Perestroika and Collapse

Causes of the Collapse of the Soviet System

had started to decline and collapsed. The purpose of this paper is to

Similarly regarding the incentive of the workers, the socialist planners

Economic growth rate Labour force

—70 −80 −86 −87 −70 −80 −86

Note figure within bracket is the estimate of the C.I.A

natural phenomenon when the economy matures; also it is due to basic

education levels and above all massive investment in physical capital…Eco-

Year National income Industrial production

1961–1965 6.1 4.7 8.3 5.3

Source Kudrov (1976, 1977, 1997)

no way to compare the pricing of essential items (basic foods, energy,

Table 2.3 Analysis of economic growth rates and labour productivity

Economic growth rate (% pa) Labour force productivity (%

Source Council of Mutual Economic Cooperation Secretariat Publication

Table 2.4 Investment ratio and investment efficiency

Investment ratio Efficiency of investment (% pa)

Source Comecon Secretariat Publication