by Derek Sheriff

Yuri N. Maltsev worked as an economist on Mikhail Gorbachev’s economic reform team before defecting to the United States. Thankfully, he managed to immigrate to the United States without stopping in Siberia. Today he teaches economics at Carthage College and is a senior fellow of the Mises Institute. In a recent speech he gave in Florida, which was part of The Mises Circle in Naples, the former Soviet economist explained to the audience that in truth, all governments are socialist. Yes, that’s right…When it comes to governments, it’s only a question of the quantity of their socialist content.

Shortly after the midterm elections last year, columnist Gene DeNardo made a similar point in an article that appeared at

“Believing that certain forms of the state or certain forms of governing are socialist and certain forms are ‘free’ is erroneous and a bit ridiculous. All governing states are socialist by nature. The state by definition derives its control and power to enforce its monopoly by confiscating and redistributing the resources of its populace. It cannot survive without acting in this manner. While it may not directly control the ‘means of production’, to ensure its survival and growth it will control the necessary proportion of the product of those same productive means.

Attempting to try to ‘unsocialize’ the state is futile. One political party referring to the other as ‘socialist’ is hysterical. All politics that exist within the state monopoly are only variations on the question of who the wealth will come from and where it will go. This has always been the nature of the state.”

But can a government exist that does not confiscate and redistribute the resources of its populace? In principle, I tend to think so, just as there might exist certain forms of voluntary socialism that redistribute without confiscation. In the broadest sense, governments are simply authorities that establish and maintain order, and (hopefully) justice, according to a system of law. If such a government can perform these functions with the unanimous consent of the governed and without redistributing wealth, then it would qualify as a non-socialist government, in my humble opinion.

But unless you’re are dealing with such a non-coercive government that does not redistribute wealth, you are dealing with a socialist government. You may be dealing with a big “S” socialist government that has a complete monopoly over vast territories, spanning multiple time zones, or you may be dealing with a small “s” socialist government in your state, county, city or town. But because almost all governments are based on socialism, Maltsev asserts that they can’t be reformed, “fixed” or ever made to run efficiently the way a business can in the private (voluntary), sector. The closest we’ll ever get to subjecting governments to market discipline, is by containing them, keeping them weak and dividing them up into as many competing jurisdictions as possible.

If we fail to do so and allow the consolidation of power that Jefferson, Madison and other founders feared, the result can be a dystopian nightmare, like the one Yuri Maltsev managed to escape from. On the other hand, if we succeed in doing so, we may force socialist governments in the U.S. to compete with each other, resulting in a greater number of freer and more prosperous political societies. Such an arrangement is called federalism, and I believe that it would naturally tend to prevent big “S” socialism from becoming a permanent feature of the federal government and gradually diminish small “s” socialism among the several states, as long as Americans remain free to move from one state to another.

Listening to Yuri N. Maltsev’s speech validated my belief that the federal government cannot be “fixed”. It also reinforced my conviction that Americans in one state shouldn’t be in the business of arguing with people of other states, about just how much socialism they ought to embrace or reject. Every state has a different level of acceptable socialism, but they are all socialist to one degree or another.

Now I’m not saying Americans residing in different states shouldn’t dialog with each other or coordinate their efforts when it’s mutually advantageous. But when more populous states choose to use their disproportionate influence in Congress or their greater number of electoral votes to elect a president who they know will usurp the authority of the states and micromanage their affairs, it violates the Constitution and is a recipe for political strife and disunion.

The Constitution authorizes a federal government of strictly limited powers, which are to be exercised for a few, carefully defined purposes. And both elected representatives and a the people the are supposed to represent, need to be reminded that the Constitution is a compact among the states, which are supposed to function as fifty competing laboratories of liberty, as it were.

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