Chapter Nine, Part II: The Communist Economic Trap (UPDATED)

Chapter Nine, Part II: The Communist Economic Trap (UPDATED)
The Epoch Times is serializing an adaptation from the Chinese of a new book, How the Specter of Communism Is Ruling Our World, by the editorial team of the Nine Commentaries on the Communist Party.

Table of Contents (continued)

3. The Dystopian Socialism of the Chinese Communist Party

a. The Chinese Economy: No Relaxation of Communist Control b. The Truth Behind China’s Economic Rise c. Consequences of the Chinese Economic Model

4. The Ravages of Socialism in the Developing World

a. Eastern Europe: Haunted by Socialism b. How Socialist Economics Failed Developing Nations

5. Marx’s Theory of Exploitation: An Inversion of Good and Evil
6. Hatred and Jealousy: The Origin of Absolute Egalitarianism

a. Economic Egalitarianism: A Stepping Stone to Communism b. Communism’s Use of Unions to Undermine Free Societies

7. Communist ‘Ideals’: Tempting Man Toward His Own Destruction
8. Morality, Prosperity, and Peace
* * *

3. The Dystopian Socialism of the Chinese Communist Party

In 1978, after planned economics and political campaigns had reduced China to a poverty-stricken disaster, the Chinese Communist Party was compelled to introduce economic reforms to keep its hold on power. Embarking on a process of “reform and opening up,” the CCP introduced elements of a free market. This led many to imagine that the Party had become capitalist.

a. The Chinese Economy: No Relaxation of Communist Control

Out of expedience, the CCP liberalized some aspects of the Chinese economy, such as allowing private business. But the communist cadres have not loosened their grip. Although private enterprises exist, the CCP has never promised the people any fundamental right to private property. By law, resources and land remain ultimately at the Party’s disposal.

At the same time, the CCP imposes strict controls on economic matters, including large-scale national planning. The market is only a means used by the state to stimulate production; it is not truly independent, and neither are there institutions in place to support a free market.

The Chinese communist model is a monstrous combination of socialism, statism, and market economics. There is no independent rule of law or clear system of property rights. The exchange rate is not allowed to adjust itself naturally. The flow of wealth in and out of the country is controlled, and international firms operating in the country are tightly restricted. The CCP uses government subsidies and export tax rebates to boost exports with the aim of defeating competitors in a price war. This has disrupted the normal order of world trade. It is precisely for these reasons that the World Trade Organization has long refused to acknowledge China as a market economy.

Many in Western governments harbored the naive hope that economic development would bring political liberalization and democracy to China. Instead, with greater financial means, the CCP subjected its people to more brutal and sophisticated forms of repression. For example, in order to carry out the persecution of Falun Gong, the CCP greatly expanded and empowered its security forces, pouring funds into advanced surveillance systems and promoting those responsible for “successful” persecution to high-ranking positions.

Inevitably, the instruments used to persecute Falun Gong were repurposed to repress other faiths and the general population. Since 2009, the CCP has spent far in excess of 500 billion yuan (US$75 billion) annually to cover the costs of “maintaining stability,” that is, policing the Chinese population.

b. The Truth Behind China’s Economic Rise

Because of China’s rapid GDP growth over the past forty years, many have come to believe in the superiority of socialist economics. It has made many Westerners, including elites in political and academic circles, marvel at the efficiency of the totalitarian system.

In fact, the economic model the CCP has built can hardly be replicated elsewhere. On the one hand, despite its economic rise, the socialist system has great internal instability. On the other hand, the Party’s model enshrouds an abundance of corruption created by its unscrupulous political system. China’s economic growth has been based in large part on the following factors.

First, the relaxation of the state-owned economy and central planning, and the revitalization of the private sector, gave the Chinese economy a powerful productive drive. The Chinese people, who had had their industrious potential stifled for decades, showed their desire to rise out of poverty and their drive to do business. Moreover, China’s vast population of more than one billion provided an almost inexhaustible pool of cheap labor.

A second factor was the massive influx of Western capital and technology into China during the reform era. Under the command economy, China’s vast expanses of underutilized land, labor, and markets were like gold for which prices were not yet determined. The combination of capital investment and undeveloped resources ignited the blaze of China’s economic growth. Had it not been for the Party’s totalitarian rule, this fire could have started decades earlier and in a much more controllable and sustainable fashion.

The scale of Western investment in China is immense. According to published figures, American annual direct investment in China reached almost $117 billion in 2018, up from $11 billion in 2000. [29] The total value of foreign capital entering China from 1979 to 2015 amounted to about $1.64 trillion, according to China’s Ministry of Commerce. [30]

Western countries gave the People’s Republic of China preferential trade status along with broad market access. In May 2000, the US government granted Beijing “permanent normal trade relations.” On December 11, 2001, China formally entered the World Trade Organization and joined the international market. Consequently, a huge amount of Western wealth and production was transferred to China, making it the “world’s factory.”

However, it cannot be forgotten that the PRC’s economic power was fed on unethical practices: the extreme exploitation of workers, the use of sweatshops and of forced labor in prison camps across the country, the demolition of housing and forced relocation of the occupants, and the like. For the sake of short-term growth, the CCP welcomed environmental destruction and ignored public health hazards in order to squeeze every last drop of profit from its land, people, and resources. The Communist Party took advantage of Western capital, technology, and markets; its favorable trading status; and cheap domestic production costs in order to make vast sums in foreign reserves. The trade deficit between the United States and China rose from about $83 billion in 2000 to more than $345 billion in 2019.

Eventually, the CCP overturned the conventions of international trade and took full advantage of the opportunities available to it, regardless of whether they were legitimate. It adopted a national strategy of plagiarizing intellectual property in attempts to overtake other countries in industry and technology. This constitutes the biggest case of theft in history. A 2017 report by the Commission on the Theft of American Intellectual Property stated that the PRC’s fake goods, pirated software, and stolen trade secrets caused the United States a loss of between $225 billion and $600 billion every year, a figure that did not include losses due to the theft of intellectual property. The report states that over the three preceding years, the United States lost $1.2 trillion due to intellectual theft, the majority of which was perpetrated by Chinese actors. [31] A report by the Office of the Director of National Intelligence stated that 90 percent of cyber attacks on US businesses originated from the PRC and that these had inflicted an estimated $400 billion in total economic damage every year. [32]

The CCP’s economic model utilizes state authority to induce rapid economic development while employing underhanded tactics to increase its competitiveness. It also has encouraged other countries to adopt heavier state intervention. These countries have made the grave mistake of looking to the Party’s model as an example of success while ignoring the human and moral tragedies it created.

c. Consequences of the CCP’s Economic Model

The CCP’s economic model goes hand in hand with the communist specter’s relentless erosion of human morality. Today’s China is inundated with fake goods, poisonous food, pornography, drugs, gambling, and gangs. Corruption and debauchery have become achievements to take pride in, while social trust is virtually nonexistent. The widening gap between rich and poor is accompanied by social strife and abuse of justice. In the PRC’s economy of power, Party officials use their authority to amass wealth. The severity of the corruption increases with rank. The misappropriation of billions is a normal occurrence. There is simply no government as corrupt or morally degenerate as the Chinese communist regime.

Within this environment of corruption, citizens turn a blind eye to the suffering of their compatriots. In October 2011, the world was shocked by the death of Yueyue, a two-year-old girl in Guangdong Province who was hit by a truck. Instead of getting out to help, the driver rode over Yueyue again as he left the scene. Minutes later, another vehicle ran over her legs. Eighteen people walked by without helping Yueyue, until a scrap collector finally moved the crying toddler to safety. She later died in the hospital. International media wondered if China had lost its soul. It might be understandable that people are reluctant to come to the aid of others when there is danger involved, such as in an armed robbery, yet Yueyue did not pose any conceivable threat to anyone as she lay dying in the street.

The communist movement leads to enormous destruction of traditional values and culture, and in communist China, moral standards have already dropped far beyond what one can easily imagine. The harvesting of organs from living people, good people who practice spiritual cultivation and strive for self-improvement, has become a state-sanctioned industrial operation. An unknown number of prisoners of conscience have been killed on operating tables as their organs were plundered for profit. Communists have turned medical personnel, who are supposed to help people, into murderers. The CCP’s evil has reached across the world; through economic incentives, the Party entices countries that are supposed to be upholding human rights to turn a blind eye to its crimes.

Economic growth without morality is chaotic, unsustainable, and disastrous. Under the inhumane policies of the CCP, social conflicts abound, and the environment is on the verge of collapse. The consequences of moral decay are fatal. China calls itself a strong country, but its strength is an illusion. Its superficial prosperity, built upon the reckless pursuit of wealth, is doomed to collapse.

There is no good future in store for China if it cannot escape the snare of the CCP. The specter of communism has no intention of implementing healthy and sustainable growth, as its true goal is to destroy China along with the rest of the world.

4. The Ravages of Socialism in the Developing World

a. Eastern Europe: Haunted by Socialism

Nearly thirty years after the fall of the Soviet Union, communism continues to haunt Eastern Europe, as there has never been a full reckoning of the crimes committed by former communist regimes.
The lingering presence of communism can be seen in various facets of Eastern European politics and economics. Russia and Belarus, for example, retain powerful state-owned enterprises, high welfare, and aggressively interventionist policies. During the transitional period from communism, Eastern European countries experienced crises of slow economic growth and high unemployment. All this encouraged the relapse of communism and socialism in new forms. Left-wing parties were animated with renewed vigor, feeding off a sense of nostalgia for the “good old days” under socialism. [33] The ghost of communism has not been banished.

b. How Socialist Economics Failed Developing Nations

In the developing nations of Asia, Latin America, and Africa, many newly independent countries had declared their allegiance to socialism by the 1960s, with disastrous results. In the early 2000s, Venezuela’s economy collapsed as a direct result of its socialist policies. Once the richest in Latin America, the country is now rife with poverty, crime, and starvation. Zimbabwe was once one of the wealthiest nations in Africa; today, it has sunk into a state of economic catastrophe, with inflation spiraling beyond imagination.

Venezuela: How Socialism Bankrupted a Prosperous Country

Venezuela is blessed with considerable oil reserves. In the 1970s, it was the fastest-growing economy in Latin America, enjoying the lowest level of income inequality and the highest per capita GDP in the region. [34] Venezuela’s relatively free economy attracted skilled immigrants from Italy, Portugal, and Spain. Together with the protection of property rights, these factors enabled the nation’s economy to grow rapidly from the 1940s to the 1970s. [35]

In 1999, when the new president took office, he embarked on an ill-fated program of nationalization that eventually threw the Venezuelan economy into chaos. The president publicly declared: “We must transcend capitalism. But we cannot resort to state capitalism, which would be the same perversion of the Soviet Union. We must reclaim socialism as a thesis, a project, and a path, a new type of socialism, a humanist one, which puts humans and not machines or the state ahead of everything.” [36]

To build socialism, the Venezuelan government requisitioned or nationalized many private companies across industries including oil, agriculture, finance, heavy industry, steel, telecommunications, energy, transportation, and tourist enterprises. This process was ramped up following the president’s 2007 reelection. His government expropriated 1,147 private companies between 2007 and 2012, with catastrophic effects.

Companies in once-productive industries were shut down and replaced by inefficient state-owned enterprises, scaring off investors. As production sank, Venezuela turned to relying heavily on imports. Coupled with a series of government interventions involving foreign reserves and price controls, disaster inevitably struck when the price of oil dropped. Some attributed this tragedy to the oil crisis, but according to data provided by the World Bank, seven countries that relied even more heavily on oil exports than Venezuela continued to experience economic growth from 2013 to 2017. [37]

The root cause of Venezuela’s dramatic failure was the socialist economic system. Venezuela’s economic policy essentially marched to the tune of the ten revolutionary demands Marx proposed in The Communist Manifesto, starting with abolition of private ownership and high taxes and moving to a centralized economy and means of production. [38] Venezuela met its economic fate at the hands of the communist specter.

Zimbabwe: From Africa’s Breadbasket to Land of Famine

After Zimbabwe’s declaration of independence in 1980, it endeavored to build a socialist state according to Marxist-Leninist principles. Its first prime minister was a Marxist believer and his guerrillas, guided by Mao Zedong Thought, received unconditional assistance from the PRC. Unlike other African countries that implemented socialism, Zimbabwe did not immediately impose policies of nationalization.

Zimbabwe’s economic woes began in 2000 following the start of land reform. Land belonging to white farmers was seized and redistributed among landless blacks, as well as politically connected individuals. Many were inexperienced in farming, and the result was a sharp decline in agricultural productivity. In an attempt to evade the crisis, the Reserve Bank of Zimbabwe printed more money, leading to endless hyperinflation. Figures from the central bank indicate that in June 2008, the country’s annual inflation reached 231 million percent. By mid-November 2008, inflation peaked at nearly 80 billion percent, after which the authorities gave up publishing monthly statistics. [39]

In 2008, Zimbabwe was struck by a major famine. Of the country’s sixteen million people, five million were threatened with starvation. Today, malnutrition is chronic and widespread.

Communism plagues the world in ways that can be observed or foreseen across all countries. Developed Western countries are beginning to experience crises brought on by excessive welfare and state interventionism. Meanwhile, the tragedy of socialism is already a reality in the developing world. This is the principle: The communist specter uses economics to promise comfort and satisfaction, then lures people into moral degradation and the abyss of poverty.

5. Marx’s Theory of Exploitation: An Inversion of Good and Evil

Through a set of elaborate theories, Marxism deceives people into replacing traditional morals with its ersatz standards of utility that invert right and wrong. In the Marxian view, whether an individual is good or bad is based not on his morality and actions, but rather on his place in the (inverse) hierarchy of capital.

One who belongs to what Marxists call the “capitalist” class is guilty of exploiting the proletariat, and since the proletariat is supposedly the oppressed and exploited class, its members naturally occupy the moral high ground. No matter how they treat business owners, property owners, and the affluent, they can hold their heads high. Marxism turned the possession of property into a crime and advocated violent expropriation.

In Marxist theory, only labor creates value. If a company owner invests $10 million in a company in a year, and the revenue that year is $11 million, in the Marxian view, this $1 million in profit is “surplus value” created by the employees but unfairly expropriated by the “capitalist” company owner. Thus, Marx claimed that exploitation was the secret to how capitalists made money and, therefore, the “original sin” of the bourgeoisie. Marx concluded that to eliminate this sin, the entire capitalist society must be destroyed — that is, the bourgeoisie would be eliminated and their assets confiscated, while the vanguard of the party would collectivize property and institute communism.

Marx’s theory of exploitation divides people into two opposing classes: the bourgeoisie with capital, and the proletariat without. But, in fact, class mobility has increased rapidly since industrialized societies came to the fore. The degree of class mobility in the first half of the nineteenth century was similar to that in the 1970s in both the United Kingdom and the United States. [40] The interchange between classes is a dynamic process; a supposed member of the proletariat is no longer among the proletariat if he buys public equity in a company, for example. If one’s class assignment can be changed so easily, attempts at dividing people into groups like this have no other purpose than to incite class hatred.

In China, the Soviet Union, and the communist states of Eastern Europe, the communist parties stole land, lynched landlords, and robbed business owners of their factories. They murdered “class enemies” and confiscated generational wealth, waging campaigns of state terrorism against the people. All this evildoing was the result of communism’s hate-filled theories. Meanwhile, traditional moral standards, as well as belief in the divine, saints, and classical sages, were branded as belonging to “the exploiting classes” and were to be attacked and eradicated.

Marx’s theories have long been discredited in economic and philosophical circles. Below are merely a few examples that illustrate the absurdity of Marx’s theory of exploitation. According to Marxism, it is labor that creates value, and that value is determined by the labor time necessary for production. This is a ridiculous theory, because the value of a commodity is not an intrinsic property. For almost every good, there is a subjective human element, resulting in natural and largely unpredictable patterns of supply and demand.

Many economists have explored the process of valuation, and unlike Marx’s narrow doctrine, most agree that numerous factors are involved in the creation of value — including land, capital, labor, science and technology, management, the risk of investment, and so on. Economic activities form a complex system, involving different links in the chain of production. Different factors of production have certain managerial requirements, and different people play different roles, which are indispensable to the whole chain and contribute to the creation of “residual value.”

For example, a business owner plans to spend $1 million hiring two designers to produce a new toy. A marketer also is hired to promote the product. Two years later, the new toy gains popularity and earns a profit of $50 million. Is it the labor of the designers and marketer that created the residual value of $50 million? Of course not. The reason the new toy earned millions is that people wanted it. The business owner’s insight into the market, ability to organize and manage others, and courage to take a risk all contributed to the value of the toy. Suppose the creativity in the toy came from one of the designers — then, does the residual value of the $50 million come from the fact that the business owner exploited the designer’s creativity without giving anything in return? Of course not. If the designer thought his creativity was not being adequately rewarded, he could have found another company that offered higher pay.

In a free market, a balance will ultimately be struck in matching skills and ambition with capital. Business owners who demand unreasonable profits will lose to the competition or be unable to attract talent. In addition, since waiting for a return on invested capital delays spending or other enjoyment of that capital, the profits are also due to the efforts of the investor. Therefore, it’s normal that an additional sum will be gained in return. The principle is no different than lending at interest.

There also are many “accidental” factors involved in deciding the value of a commodity. Such factors can only be reasonably explained by a frame of reference founded on traditional beliefs and culture.

In certain situations, the creation and destruction of value can be entirely unrelated to labor. A diamond worth $10 million today may have been worthless five thousand years ago because no one wanted it. A barren patch of land inherited from a grandfather could suddenly be one hundred times more valuable due to the growth of a nearby city or the discovery of rare-earth metals underground. Here, such vast, unexpected wealth is simply a matter of good fortune; the increase in value involves no labor. Both Western and Eastern cultural traditions recognize that fortune is a form of divine blessing.

In order to demonstrate the “rationality” and “necessity” of state ownership, Marx concocted the exploitation theory based on surplus value, which turned the economic activities that people engage in as a normal part of life into negative and unethical behavior. His theory poured hatred and scorn on the existing economic order as part of his attempt to undermine and overthrow it.

In fact, the employers and the workers, the landlords and the peasants, form a community of shared interests. Their relationship should be one of cooperation and interdependence; each group supports the other to survive. Marx deliberately exaggerated the differences between classes, seeing them as absolutes — like the antagonism between mortal enemies.

There are good and bad people among employers, just as there are among workers. In economic exchange, what should really be exposed and sanctioned is anyone who violates ethical standards. The basis of judgment should be moral character, not wealth.

People can change their economic and social status through their own efforts. Workers can become investors through the accumulation of wealth. Investors can become workers due to failures in their investments. The roles of laborers and investors in modern society often change. Most people also play both roles — putting the profits they made into future productive capacity, thus creating employment, increasing social wealth, and benefitting the general public. Even the founder of the US labor union movement said, “The worst crime against working people is a company which fails to operate at a profit.” [41]

The absurd “surplus value theory” affixes the label of “exploitation” to the normal activities of landowners and capitalists. This has incited incalculable hatred and struggle, and muddled thinking, while destroying the lives of millions.

6. Hatred and Jealousy: The Origin of Absolute Egalitarianism

Communism advocates absolute egalitarianism. Superficially, this may sound like a high-minded aim, leading many to blindly believe it is righteous. In reality, absolute egalitarianism evokes hatred and jealousy, as people believing in it can’t tolerate the success of others, or others being wealthier and having better lives, easier work, or more luxurious living conditions. Believers say, “I should have what you have, and I can get what you get.” In such a worldview, everyone is equal and the whole world is the same.

Absolute egalitarianism manifests in at least two main ways. First, when people are not yet equal, they are encouraged to be dissatisfied with their economic status. People come to covet what others have and even seek it through improper or violent means. In extreme cases, they destroy others’ property and even kill to get rich.

The worst manifestation of these tendencies is violent revolution. In order to provoke dissatisfaction, Marx divides society into two opposite classes: those who own the means of production, and those who don’t. In the countryside, this was the landlord and the peasant; in the city, it was the business owner and the worker. The aim was to incite class hatred and use the supposedly disenfranchised members of society to carry out violent revolution. The peasants are poor, but the landlords are rich — seize their wealth! Everyone should be rich! Thus, the CCP called on peasants to engage in “land reform” — that is, attacking landlords and dividing up their land. If the landlords refused to comply, they were killed. The Party did this by first inciting hooligans to start trouble, then encouraging the peasantry to join them in rising up and attacking the landlord class. During the 1950s, the “land reform” movement turned into a terror campaign that claimed the lives of millions across China.

Second, once groups have basically achieved a state of “equality” — in which any benefits are divided up among everyone — anyone who stands out is penalized. Everyone is treated the same whether one works more, works less, or doesn’t work at all. This fails to acknowledge a universal principle: While people may appear to be the same on the surface, in truth, each individual’s personality, intellect, physical strength, morality, occupation, role, education, living conditions, endurance and perseverance, inventiveness, and so on are all different, and what one contributes to society is also different. Why should the same outcome be applied to all? In this sense, the “inequality” railed against by communists is actually true equality, while the equality pursued by them is true inequality and true injustice.

The ancients in China said that heaven will reward a person according to the effort he or she puts in. Absolute egalitarianism is impossible in the real world.

Under the cover of egalitarianism, the lazy benefit while the capable and the hardworking are penalized and even resented or hated. Everyone slows their pace to match the speed of the slowest. This causes everyone to become lazy, waiting for someone else to contribute so that one can take advantage and jump on for the ride, gaining something for nothing or stealing from another. The result is widespread moral decline.

The hatred and jealousy that drive absolute egalitarianism are the poisonous roots of communism’s economic perspective. Human nature has both good and evil inherent in it. Western faiths refer to the seven deadly sins, while Eastern culture teaches that man has both Buddha nature and demon nature. Buddha nature manifests itself as kindness, the ability to endure hardship, and consideration for others. Demon nature manifests as selfishness, laziness, jealousy, malice, hatred, rage, lust, and tyranny, as well as having a disregard for life, inciting discord, spreading rumors, getting something for nothing, and so on.

The economic perspective adopted by communism deliberately stimulates demon nature, amplifying people’s jealousy, greed, laziness, and other evil factors, causing people to lose their humanity and forsake the traditional values held for thousands of years.

In The Theory of Moral Sentiments, eighteenth-century economist and philosopher Adam Smith said that morality is the foundation of mankind’s prosperity. Observing common rules of morality “is required for the very existence of human society, which would crumble into nothing if mankind were not generally impressed with a reverence for those important rules of conduct.” [42]
Lawrence Kudlow, director of the US National Economic Council, believes that morality must exist alongside economic prosperity. He wrote in 1997 that if the United States could abide by the “foremost principle” — to adhere to the moral values the nation was founded on — the development of the United States would be limitless. [43]

a. Economic Egalitarianism: A Stepping Stone to Communism

Under the influence of absolute egalitarianism, vigorous calls ring out in the West for “social justice,” as well as minimum-wage laws, affirmative action, and other demands. What lies behind these is a desire for equality of outcome, of which communist elements can take advantage. From the communist perspective, it doesn’t matter whether these vulnerable groups obtain equality or if their social status improves. They are merely pawns for inciting resentment, and eventually revolution.

When communists succeed in their advocacy, they simply make an unending stream of new demands. If they don’t succeed, they strengthen people’s notions about the justice of equality and turn this into a major platform upon which to gain more influence. Because communism incites resentment in multiple fields and via so many different means, if it’s allowed to spread unchecked, the inevitable result is social turmoil. Communists will always be able to find vulnerable groups and demand financial or social equality for them, repeating the process until the path toward communism is paved.

Moreover, the implementation of these policies often results in the opposite of what is promised. Those who are supposed to be protected by these policies instead lose out. Take minimum-wage laws, for example: On the surface, its goal is to protect the rights of workers, but the effect is that many businesses simply stop hiring because it is uneconomical for them to do so. As a result, workers lose their jobs. Eliminating lower-wage jobs also means the loss of skill-building, as young people and those new to an occupation then have few opportunities to be trained and work their way up to higher-paying jobs. The one-size-fits-all approach also violates economic principles and results in excessive government intervention.

People use the excuse of “equal pay for equal work” to demand social revolution based on fighting racism and sexism. They cite statistics that, for example, the average wage of black males is less than the average wage of white males, that the average female wage is less than the average male wage, and that these discrepancies are the result of racism and sexism. In reality, such comparisons are not appropriate; when comparing apples to apples, the results are different. Research has found that college-educated, married black couples earn slightly more than their white counterparts. [44] After decades of communist tactics to destroy the traditional family and promote welfare, there are relatively fewer black families of this type, and this is the main reason why there are overall discrepancies between the races regarding income. Making meaningful and accurate comparisons should be common sense, but communist elements, by inciting discord and struggle, lead people to look at things irrationally.

Communism does not care about the well-being of vulnerable groups. It is simply interested in slogans that drag people down the road to destruction.

b. Communism’s Use of Unions to Undermine Free Societies

The loss of US manufacturing jobs in the past few decades is a well-known phenomenon, but many people don’t realize that unions, hijacked by leftist causes, are one of the main culprits. Many of today’s unions claim to help obtain benefits for the working class, but they often do the opposite. This is evident in the history of unions and the transformation of their mission.

Trade unions were initially founded by members of the working class with few or no skills, for the purpose of negotiating with management. To a certain extent, a trade union is able to broker and resolve conflicts between workers and owners. But communist elements took unions and turned them into tools to promote communist policies and movements. The unions became a powerful weapon for destroying free enterprise and carrying out political struggle.

Friedrich Engels wrote on the topic, “The time also is rapidly approaching when the working class will have understood that the struggle for high wages and short hours, and the whole action of Trades Unions as now carried on, is not an end in itself, but a means, a very necessary and effective means’ but only one of several means towards a higher end: the abolition of the wages system altogether.” [45]

Lenin believed that the formation and legalization of trade unions was an important means for the working class to wrest control from the “capitalist” class, and that the unions would become the pillar of the Communist Party and a key force in class struggle.

In a speech, Lenin proposed that trade unions become “a school of administration, a school of economic management, a school of communism,” and a link between the Communist Party and the masses. The daily work of the trade union was to convince the masses to transition from capitalism to communism. “The trade unions are a ‘reservoir’ of the state power,” he wrote. [46]

In the mid-to-late nineteenth century, communist and left-wing forces used trade unions to incite workers to go on large-scale strikes, make harsh demands on owners, and even take violent measures, such as destroying machinery and factories. In October 1905, more than 1.7 million workers in Russia participated in a nationwide political strike that paralyzed the country’s economy. During this time, a particularly aggressive union, the Central Workers’ Group, was formed and became the main precursor to the Petrograd Soviet, a “council” of workers and soldiers that played a central role as the vehicle for the Russian Revolution. [47]

Trade unions in Western and developed countries also have been widely infiltrated and used by communist elements. The relationship between employers and employees is a symbiotic one, yet communists try to provoke, expand, and intensify discord between them. Unions are used to escalate conflicts during the bargaining process between management and workers. Additionally, unions rationalize and intensify the confrontational side of the management–worker relationship and use this to legitimize their own existence. From there, they inflame workers’ dissatisfaction and blame the “capitalists” for any problems. This has been key to unions’ survival.

On the surface, trade unions are fighting for the interests of workers, but in reality, they are undermining industrial competitiveness. There are two reasons for this. First, under the pretext of protecting workers’ rights and interests, unions make it difficult for enterprises to lay off employees who don’t perform well and who achieve little. This gives rise to a culture of laziness. Not only is this unfair to employees who work diligently, but it also makes them less proactive. The most important factor in the growth of a company is its workers, but with the unions’ umbrella of protection over employees who fail to perform, enterprises lose their competitiveness. Enterprises that fail to meet union demands are then the targets of struggle, including strikes and protests, which further hinder business. The powerful United Auto Workers union routinely called for strikes in Detroit. Prior to the 2008 financial crisis, the union demanded $70 an hour in wages and benefits. Consequently, the US automobile manufacturing industry was driven to the brink of bankruptcy. [48]

Second, under the pretext of protecting employees’ welfare (including pensions, health insurance, and the like), unions constantly raise costs for enterprises. This forces companies to curtail growth and to cut their investment in research and development, which hurts competitiveness. It also results in companies having to increase product prices, which harms consumer interests. Studies show that this is why companies without unions, such as Toyota and Honda, were able to produce high-quality cars at a lower cost, and why Detroit-based automobile factories with labor unions became less competitive. [49]

As Edwin Feulner, founder of US think tank The Heritage Foundation, said of unions, “They function like an albatross around a company’s neck — making it less flexible, less able to react wisely to the demands of a changing marketplace.” [50]

While the loss of job opportunities in the US manufacturing industry has been recognized and discussed for decades, many people don’t know that unions are a key driver behind the job losses. Unionized manufacturing jobs fell by 75 percent between 1977 and 2008, while nonunion manufacturing employment increased by 6 percent over that time, according to a report by The Heritage Foundation.

The situation in the construction sector is similar. Heritage Foundation research fellow James Sherk wrote: “Unlike the manufacturing sector, the construction industry has grown considerably since the late 1970s. However, in the aggregate, that growth has occurred exclusively in nonunion jobs, expanding 159 percent since 1977. Unionized construction jobs fell by 17 percent.” [51]

In addition, labor unions are the tools employed by communist elements to promote egalitarianism in enterprises. Sherk notes that unions demand that companies pay wages according to the length of service of the employee (the same is done in socialist countries), without regard to the employee’s contribution to the company or performance. “Union contracts compress wages: They suppress the wages of more productive workers and raise the wages of the less competent,” he wrote. [52] The idea at work here is the same as absolute egalitarianism under communism, which is effectively the redistribution of wealth among employees within the enterprise. The interference in the internal decision-making of enterprises and the monopoly of the labor market erodes the free market.

Unions’ aggressive advocacy for what they describe as workers’ welfare ends up favoring some workers over others and puts a drag on individual companies and the economy as a whole. A survey conducted in 2005 showed that “most union households disapprove of American unions” and that “the main reason for their disapproval is never openly discussed in union media or addressed at union conventions.” [53]

Labor unions infiltrated by communism, and under the guidance of the progressive movement, have often become tools to wage struggle against the free market, rather than pushing for and safeguarding employees’ rightful interests. Corruption and vested interests are common among union leaders. Their single-minded battle against what they call injustice in the workplace creates a burden on industry and productivity, preventing corporate reform and rational attempts to streamline manufacturing, services, education, government bureaucracy, and other fields. Politically, the Left draws support from unions to promote their social movements and drive wedges in society.

7. Communist ‘Ideals’: Tempting Man Toward His Own Destruction

Although communist theory is full of loopholes and contradictions, many are still deceived by it. This is because Marx described a utopian communist paradise that people all over the world could enjoy. This is the central fantasy and delusion. His depiction included “overwhelming material abundance” in a new utopian society. Each person would work “according to his ability” and receive “according to his need.” There would be no private ownership, no gap between the rich and the poor, no ruling class, and no exploitation. There would be freedom and equality for all, and each person would be able to develop his or her particular talents. Life would be wonderful.

This set of deceitful arguments, repackaged in so many ways, has attracted many to fight for it. Many Westerners today have never experienced or learned about the tragedies of life under a totalitarian state. They continue to harbor an illusory hope for a communist paradise, and therefore fan the flames by advocating communist and socialist ideas.

All the ideas put forward by Marx are dangerous illusions. Marxism claims that a communist society will enjoy a superabundance of material goods. However, human desires and human wants are endless. Under the constraints of limited human knowledge, limited working hours, and limited resources, shortages and deprivations are inevitable. The scarcity principle is the starting point for all economic studies. Without these constraints, people wouldn’t have to explore which kind of production method was most efficient, as the supposed superabundance would provide for all and could be squandered at will.

Marxism also claims that moral standards would be greatly improved in a communist society. However, as good and evil coexist in each person, the improvement of moral standards in a society requires the guidance of upright beliefs and values, as well as personal efforts in spiritual cultivation. What Marxism preaches is atheism and class struggle, which enlarge the evil side of humans. People are denied freedom of belief, and religion is twisted into a political tool used by communist parties to distort and persecute true faith. Without righteous belief in the divine and self-discipline, morality can only decline. Moreover, once in power, all communist leaders prove to be tyrants — arrogant, lewd, and completely unethical. To expect their followers to be so vastly improved in moral standards runs counter to reason.

Marxism also proclaims there will be equality for all. But as discussed earlier, socialism inevitably leads to tyranny. Power is the basis of resource distribution, yet the distribution of power under a totalitarian state is most unjust. Therefore, resource distribution under totalitarianism also will be most unjust. In all countries where socialism rules or has ruled, people see a privileged stratum form, as well as extreme gaps between the rich and the poor and the suppression of people by the state. Resources are exhausted for military purposes, and people’s belongings are robbed to make the privileged class more powerful, while the majority are left to labor in poverty.

Marxism deceives with the promise of “from each according to his ability, to each according to his need.” [54] Communism promises that every member of society can give full play to his or her abilities. But in reality, under socialist economies, people are unable to act at will according to their own abilities because they do not have basic freedoms.

Marxism says that the division of labor creates alienation. But in fact, division of labor is necessary for any society. Smith argues in The Wealth of Nations that a division of labor can greatly increase productivity and promote prosperity. The differences created by the division are not necessarily conflicts, nor do they necessarily lead to alienation and depersonalization. People from all walks of life, regardless of their station, can contribute to society, elevate their morals, and help to bring happiness to their families and communities.

However, communism uses individuals’ pursuit of goodness to mislead them into becoming religious fanatics for communist ideology. It uses the pursuit of goodness as its banner to pull people away from the divine. It pollutes people’s minds, strengthens their evil nature, and leads them to commit all manner of crimes. Under this influence, people indulge in material enjoyment, casting aside loftier and nobler beliefs in the higher purpose of life. Communism poisons everything it touches and slaughters people by the millions, as seen in every country where it comes to power. If the world’s people do not wake up now, they will face horrifying consequences.

8. Morality, Prosperity, and Peace

Pursuing happiness is part of human nature. A prosperous economy can bring happiness, yet the economy does not exist in a vacuum. When the path of economic development deviates from ethics and morality, an economic crisis may follow. A society that is merely wealthy is not only incapable of bringing joy and happiness, but its prosperity will also be short-lived. As the foundation of ethics and morality crumbles, a disastrous outcome awaits.

In 2010, People’s Daily, a mouthpiece for the Chinese regime, reported that despite economic development, China had been declining for years on the Forbes’ Gross National Happiness Index. The world’s second-largest economy is plagued with corruption, environmental pollution, and food-safety incidents, making the Chinese people extremely insecure about their livelihood. In this case, wealth has increased as morality and happiness have declined.

This reflects the fatal flaw in communism: Human beings are composed not only of flesh, but, far more so, of mind and spirit. The divine laid down the path that man’s life would take. The Chinese say “every bite and every sip is preordained,” which is analogous to the Western spiritual belief in the concept of fate or predestination. People who believe in the divine understand that wealth is a grace bestowed upon them by their Creator. They value having a humble and thankful heart, and hence they are content and happy.

Among those aboard the doomed Titanic in 1912 was millionaire John Jacob Astor IV, whose fortune was enough to build thirty Titanics. Yet when facing death, he did what he thought was morally correct and protected women and children — he gave his spot in the last lifeboat to two terrified children. [55] Similarly, Isidor Straus, co-owner of Macy’s department store, said, “I will not go before the other men.” His wife, Ida, also refused to get on a lifeboat, giving her place to Ellen Bird, their new housemaid. Ida chose to spend her final moments with her husband. [56]

These people of great wealth chose to put traditional values and faith before the opportunity to save their assets and lives. Their sense of morality and justice reflected the highest state of human civilization and human nature: A noble character is more valuable than life, which is yet more valuable than wealth.

Mr. Li Hongzhi, the founder of Falun Gong, wrote in “Wealth With Virtue”:

It is the duty of the ruler and officials to bring wealth to the populace, yet promotion of money-worship is the worst policy one could adopt. Wealth without virtue (de) will harm all sentient beings, while wealth with virtue is what all people hope for. Therefore, one cannot be affluent without advocating virtue.
Virtue is accumulated in past lives. Becoming a king, an official, wealthy, or nobility all come from virtue. No virtue, no gain; the loss of virtue means the loss of everything. Thus, those who seek power and wealth must first accumulate virtue. By suffering hardships and doing good deeds one can accumulate virtue among the masses. To achieve this, one must understand the principle of cause and effect. Knowing this can enable officials and the populace to exercise self-restraint, and prosperity and peace will thereby prevail under heaven. [57]

If humankind maintains the aforementioned values on wealth and life, the economic challenges rooted in human beings’ greed, sloth, and jealousy will be reduced considerably. The more humanity is able to suppress its selfish desires, the less the specter of communism will be able to lure the human heart, and moral standards will remain inviolate.

The communist specter has made intricate arrangements to destroy mankind. Its economic arrangements are only one part of the story. To free ourselves from the control of communist “ideals,” we need to expose the conspiracy, identify the fraudulent messaging, and stop putting hope in this bankrupt creed. Civilization will regain its vitality when mankind rediscovers traditional values and recovers morality and virtue. Only then will humanity be able to obtain true peace and embrace everlasting prosperity and happiness.

Read Next: Chapter Ten
Updated March 11, 2020
Read the series here: How the Specter of Communism Is Ruling Our World


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49. Ibid.

50. Edwin J. Feulner, “Taking Down Twinkies,” The Heritage Foundation, November 19, 2012,

51. Sherk, “What Unions Do.”

52. Ibid.

53. Steve Inskeep, “Solidarity for Sale: Corruption in Labor Unions,” National Public Radio, February 6, 2007,
54. Karl Marx, “Critique of the Gotha Programme,” in Marx & Engels Selected Works (Moscow: Progress Publishers, 1970), 3:13–30, Marxists Internet Archive, April 20, 2020,

55. Keith Wootton, dir., Children on the Titanic (Marina Del Rey, CA: Vision Films, 2014).

56. Walter Lord, A Night to Remember: The Classic Account of the Final Hours of the Titanic (United States: Henry Holt and Company, 2005), 50.

57. Li Hongzhi, “Wealth With Virtue,” in Essentials for Further Advancement, January 27, 1995,