Socialism vs. Capitalism – the Russian example

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The Soviet State as a really effective owner cleverly manipulated human resources and assets. Now … It would be funny if it wasn’t scary. A simple example:


Ten coal mines. At each mine – one thousand workers. At five mines the cost of coal is one ruble. Three – five rubles. And two – ten roubles. Average cost – 4 rubles. The coal was sold for 5 roubles = 1 rouble for profit, and the company fed tens of thousands of workers, paid for daycare, school, summer camps, health resorts etc…  The entire city lives, works, and flourishes.


The Soviet Union ended, came the ‘effective’ businessman. Closed two ‘unprofitable’ mines, after a little thought, closed the three ‘less unprofitable’. Five thousand miners – on the street. A lot of human resources – salaries can be reduced. Camps and recreation centers? Unprofitable, staff thrown out into the cold, and the buildings are written off from the balance and sold for pennies to other ‘effective’ businessmen, there will be built profitable brothels, casinos, etc. From five abandoned mines metal construction and precious metals are taken, mines are flooded and are not subject to recovery. The five open coal mines are cutting corners on safety (why? it’s expensive, and miners will work anyway, because there are no other jobs) and generously coat the coal with blood.

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Ten years later, these mines are depleted at accelerated pace and closed. And what do we have? The once thriving city is plunged into poverty and falling apart, unemployment is 90%, crime, drugs and prostitution blossom… And ‘effective ‘businessman deposited his billion bucks in a foreign account and went to the Canary Islands.

PS. If someone didn’t get it – daycares and camps were included in production costs. And the rouble that came from coal paid for public transportation and the like (unprofitable by definition) infrastructure. From after-school programs and activities to hair salons and local newspaper “Red coal”.


There is nothing to add. Soviet Union was a social state: free housing (compare with the mortgage for 25 years), free education (including higher education and daycare), free healthcare, job security. Russia is a capitalist state, another words a slavery system in relation to ordinary citizens.

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