Money Angles: I Was a Teenage Communist

Twenty-six years ago, I was arrested for selling a pair of jeans to a plainclothes Soviet policeman. They weren’t even Levi’s 501s, they were the kind with the zipper, but that’s not why I was arrested. It was a setup, designed to scare a 16-year-old and his 20 teenage fellow travelers into behaving for the remainder of their summer behind the Iron Curtain. And scare me it did, though the authorities allowed me to rejoin my group after a few hours of interrogation.

Despite my arrest, and to the horror of my parents, I returned to New York something of a convert. I was only joking when I flashed my Communist Party card — it was actually a Lenin Library card — but Communism in theory was appealing: everybody works for the greater good, no one is allowed to go hungry or homeless or jobless, no one gets rich at another’s expense. Contrast that with, in today’s terms, millions of homeless in America and television producer Aaron Spelling’s building a $50 million house for himself in Los Angeles.

Yet the thing about Communism is that it doesn’t work. It tries to change human nature. This is its fundamental flaw. People are selfish. Give them an incentive to work, and they will. Give them a low-risk way to cheat on their taxes, and they will. We do, most of the time, what’s in our own selfish best interest.

In a true Communist society (not that there has ever been one, but this is what the Soviets were aiming for), there’s little incentive to produce. The well-known goal is “from each according to his abilities, to each according % to his needs.” That is a noble concept, but because it separates what people get from how they perform — they get what they need regardless of how they perform — it ultimately fails.

Because people are not saints, they often do as little as possible to get by. Not all of them, but enough to cripple the system. Yes, they can earn more rubles by producing more goods. But what good are more rubles when there’s so little worth buying?

People respond to incentives. Reward them for producing the most possible shoes, and they will produce a huge number of identical small shoes — identical, because it’s easier; small, because they can get more shoes out of a given supply of leather. The only way to produce exactly the shoes people want, or close to it, is to place the order through the free market.

What’s so good about the free market is that when subject to reasonable government scrutiny to ensure fair play, it tends to harness people’s selfishness for the common good, so that in pursuing their own greedy little ends they also tend to work toward satisfying the needs of others. Why? Because the more you satisfy other people’s wishes, the more richly you are rewarded. Good waiters get better tips. None of this is new, but it seems finally to have been accepted in large measure throughout the world. Twenty- six years ago, selling your jeans could land you in a Soviet prison. In May of this year, the Soviets put on a trade show in San Francisco to try to attract trading partners and investors like Levi Strauss.

What all this means to capitalists is the prospect of a more prosperous world. The two most obvious benefits:

— A shift from unproductive military outlays to spending on such things as infrastructure and education. Bridges, not bombs. Teachers, not tacticians. Drug rehabilitation complexes, not barracks.

— The prospect of vigorous trade (and not just in black-market blue jeans).

None of this will happen overnight. But it’s not naive or unpatriotic to applaud Mikhail Gorbachev’s courage and to toast his good health. George Bush is not the only one who’d better not catch cold.