No mincing words with former USSR economics advisor Yuri Maltsev

FMFIt’s a real shame that former economics advisor to USSR president Gorbachev wasn’t able to make it into the CNBC studios today. Luckily, thanks to modern technology, he and the team were still able to have a chat. The quality of his connection may be a bit iffy, but what Yuri Maltsev had to say on his experiences of the entrapment of a Socialism-driven society was loud and clear, and really offered some fascinating insights into his experiences with socialism versus economics, and the link therein with human freedom. – CH

GUGULETHU MFUPHI:  Joining us now on the line to discuss his views on the demise of the Soviet system and the impact of socialist policies, is Yuri Maltsev, a Serbia defector and former economics advisor to USSR President…  Alec, you might need to help me with that pronunciation.

ALEC HOGG:  Gorbachev.

GUGULETHU MFUPHI:  Gorbachev.  There we go.  Well, we were supposed to have you in the studio with us, but we do understand that you got caught up in some bad Johannesburg traffic.  Yuri, perhaps you could tell us what brings you to South Africa, together with the Free Market Foundation.

YURI MALTSEV:  Yes.  Hello.

GUGULETHU MFUPHI:  Yuri, your visit to South Africa: what brings you here?

YURI MALTSEV:  The Free Market Foundation is a very good think-tank that you have here, which is public policy institution.  They do very high quality economic research.  I’m bringing my students to South Africa as well, to learn a lot from this country and to meet students in South Africa.

ALEC HOGG:  What kind of students are you going to be talking to, Yuri?  I ask this because the level of understanding of economics does leave a bit to the imagination in this country.

YURI MALTSEV:  I agree.  However, it’s a worldwide phenomenon.  We have a lot of people who don’t understand economics in the United States and elsewhere.  Originally, I came from Russia where most people didn’t know economics.  They thought that Marxist slogans were economics.

ALEC HOGG:  So it’s a battle for education.  It’s a battle for the hearts and minds.  How do you change somebody who’s perhaps stuck in a socialist, dogmatic approach to having a more open mind?

YURI MALTSEV:  Well, my function is actually, warning people.  I wish somebody had come and warn Russians about the dangers of socialism in 1917, before they ruined the country – before they murdered 15-million people.  I wish somebody had come to Cuba in 1959 or China in 1948, and warn those people how dangerous and deadly communism is.  That’s why I think it’s very good for us to understand economics.  For me, it’s the only source of wealth – the only source of human freedom, in general.

GUGULETHU MFUPHI:  Yuri, what’s the fundamental flaw with socialism that makes it look good on paper but bad when it comes to implementation?

YURI MALTSEV:  Well, the major problem with socialism is that there’s absolutely no incentive to do anything, and if you don’t have any incentive, then the government wants you to do something for them and they begin to shoot people.  They begin to corrode people.  They begin to remove economic freedom and other types of freedom from human life.  I would say that if you want to have a very short definition of socialism then maybe, its slavery.  It’s public slavery where people are slaves of their own government.

ALEC HOGG:  But why do they vote for it?  Why do so many people around the world see socialism as the answer?

YURI MALTSEV:  Yes, there’s a very interesting saying that the only lesson of history is that it does not teach us anything.  Socialism promises a lot for nothing.  It promises, for example ‘I will take something from another person and give it to you.’  Who doesn’t like that?  That’s how socialism is corrupting human minds, corrupting human character, and destroying the most important thing we have – our society as human individuals.

ALEC HOGG:  What I don’t understand about all of this is that if you look at the anti-socialist country (the United States), which has gone from zero percent of global GDP to 26 percent and then you look at any country that has implemented socialism, which has gone the other way…  Yet, it still occurs.  Yet, you still get people saying ‘socialism is right’.  How do you change that mindset?

YURI MALTSEV:  Well, I think that the most important thing is to return words to their proper meaning.  Many people in the United States will say ‘Well, you say that socialism doesn’t work.  Look at Sweden.  Sweden is working, as well as Denmark or Finland.’  No, they’re not socialist countries.  They’re countries based on private property and market, and radio freedom.  That’s the most important thing for people to understand.  Confucius used to say ‘when words lose their meaning, people lose their liberty’ and he was absolutely right.  For example, sometimes people will say fascism is right wing.  No, fascism is National Socialism.  It’s another type of socialism and all socialism would degenerate in mass killing.

ALEC HOGG:  Yuri Maltsev is a former Soviet defector and previously, Economics Advisor to USSR President Gorbachev.  We know it was 25 years ago, that Gorbachev pulled the wool down at Berlin Wall – and that everybody who thinks about these things, thought that was the end of socialism.  It was an experiment that was attempted and clearly, it didn’t work but it appears as though some people still want to use it – interesting.  The nicest part of that (for me) was ‘if words lose their meaning’.  One needs to understand what it is that you’re saying and to say it more accurately.  I think that too much of the messing around with words and changing of words’ meanings, gets imprinted into our mindsets and of course, then we understand different things from what the reality is.

GUGULETHU MFUPHI:  Maybe we also use those words when they tend to suit us best, Alec.

ALEC HOGG:  It’s a pity that we couldn’t get Yuri in the studio.  It really was.  Anyway, I hope we were able to make out what he was saying on that telephone line.  There was quite a lot of good information.  No doubt, he’s going to be spreading his message to people that he meets here in South Africa and I do think we need it.  We’re not the only country in the world where economic ignorance is high, but every little bit of building on that wall of knowledge is good.

GUGULETHU MFUPHI:  Exactly…bit-by-bit.  Bietjie-bietjie maak meer.  That’s where we leave it for Power Lunch this afternoon.  Do join us again tomorrow at the same time when we’ll bring you more insightful interviews.  From Alec and myself, it’s goodbye for now.


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