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When Hubert met Nikita

I’ve written a lot here about the importance of incentives in economics. Recently, I came across a good illustration in Carl Solberg’s excellent biography of Hubert Humphrey.

In December 1958, while on a visit to Moscow, then Senator Humphrey was summoned to see Soviet Premier Nikita Krushchev. They talked for many hours about banning the testing of nuclear weapons, among other things. As the meeting broke up,

…Humphrey told Krushchev he had not asked him all the questions he had wanted to. He had not brought up China. Krushchev, eyes narrowing, said: “You are a subtle man, you are trying to trap me into talking about China”

Humphrey answered: “Let me ask you a question.”

Krushchev replied: “No, no, they’re our ally.”

Humphrey persisted: “Can I ask you about agriculture? I don’t want to get you into the ally business.”

Krushchev’s response was perhaps the long day’s most revealing disclosure: “About the communes they are old-fashioned. They are reactionary. We tried that right after the revolution. It just doesn’t work, not nearly as good as the state farms and collective farms. You know, senator, these communes are based on the principle – from each according to his ability, to each according to his need. Well, you know that won’t work. There is no incentive. You can’t get production without incentive.”

Startled, Humphrey replied: “That’s rather capitalist.”

Krushchev replied: “Call it what you will, it works.”

Out of the mouths of communists…

John Phelan is an economist at the Center of the American Experiment. 

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