When an influential group of American intellectuals, liberals and neoconservatives alike, unites against one man, a Russian scribbler at refuge in a New England town, there ought to be something big at stake. Their own explanation is that Aleksandr I. Solzhenitsyn is a reactionary, a social conservative, an anti-democrat, a 19th-century romantic or paternalist, a strong statist, a nationalist, and whatever else.

There is an irony about this case, because true social conservatives like Patrick Buchanan, paternalistic statists like George Will, religious romantics like Malcolm Muggeridge, and extreme political right-wingers like James Burnham are not similarly ostracized by the entire intellectual community. Perhaps a simple example can hint at the reason. Jeane Kirkpatrick argued for the comparative advantage of an authoritarian state in some lesser developed, overpopulated countries of Latin America in the 1980’s. Solzhenitsyn argued for the comparative advantage of an authoritarian state in Russia in the 1900’s-1910’s and in the hypothetical transitory period after communism. Yet Kirkpatrick is acceptable, at least to neoconservatives, and Solzhenitsyn is not. The only explanation I can see is that a corporate body of American intellectuals identifies itself with the power-sharing aspirations of Russian intellectuals of the 1900’s-1910’s and 1980’s-1990’s, while most Latin American intellectuals are integrated into their authoritarian political systems. Solzhenitsyn hit where it hurts most: he explored the costs of ideas—the ideologies and social arrangements of intellectuals—to ordinary people.

From an economic perspective, Solzhenitsyn is, contrary to conventional wisdom, an original and distinctive libertarian. He is the only important libertarian who ever published in the Russian language. Libertarianism is, after all, alien to Russian intellectual tradition. Solzhenitsyn noted that the Russian intellectual community was very special in never having understood true classical liberalism. The proof of this is in the modern Russian language itself. With the emergence of the term intelligentsia in the mid-19th century, Russian terms for urban homeowner and petty bourgeois, obyvatel’ and meshchanin—terms of the same cultural milieu as burgher, citizen, and businessman in English, citoyen and bourgeois in French, Burger in German—changed their connotation in the press, literature, and subsequently in the common usage. For over a hundred years these terms have meant stupid, greedy, narrow-minded, anti-intellectual; the modern dictionary translates both terms into English as Philistines. To achieve such remarkable changes in language, the entire Russian intellectual community worked hard for several decades.

A key insight into Solzhenitsyn can be discerned from his comment on his friend, Grigori Samoilovich M-z, in The Gulag Archipelago. M-z was a former powerful Communist official who, during World War II, was sent by his superior to convey an order to a Soviet regiment to retreat. This order, if delivered, could have saved the lives of many soldiers and officers. But M-z was so afraid of being killed on the way to the regiment that he stopped and said a prayer and gave a pledge to Yahweh that if he will just survive he will be a religious follower for the rest of his life. The regiment perished or was captured by the Germans; M-z survived, spent 10 years in the Soviet prison camps, and then years in internal exile. From all conceivable standpoints, says Solzhenitsyn, M-z was guilty of selfishness, of the sacrifice of hundreds of lives for his own survival, and, last but not least, of insufficient hatred for the most deadly enemy of the Jews that had ever existed. But, Solzhenitsyn goes on, there are higher principles than simple cold logic. By these principles nobody has any right to oblige an individual to do anything involuntarily, much less risk his life for the survival of others. By the very fact of his birth, an individual does not belong to any institution or group, but to himself alone, despite all the ideologies that claim otherwise. Ideologies may make a claim for the collective on the individual, but, says Solzhenitsyn, it is not the state that gives birth to man; it is his mother. The man’s transactions with the world outside himself are, therefore, either voluntary transactions and contracts in accordance with his own preferences and decisions—or slavery.

This extreme antistatism led an insightful Israeli author, Emil Cogan, to conclude that Solzhenitsyn is actually an anarchist. Yet I would argue that for Solzhenitsyn the difference between his libertarianism and true anarchism is no less significant than for another Russian anomaly, Ayn Rand. Anarchism discounts the costs of one’s actions for other individuals. Anarchism implies the imposition of one’s preferences over others regardless of their consent; that is, it implies involuntary transactions. In practice, what anarchism would achieve would be another instance of the power of special interests, usually intellectuals. Therefore, anarchism is as anticapitalistic as any other socialist design; it is a nonstate totalitarianism of another breed of intellectuals.

In an essay included in From Under the Rubble, Solzhenitsyn rejects two symmetric concepts of freedom: the collectivist concept of freedom as submission of the individual to group or state preferences, and the anarchist concept of freedom as a free ride at the expense of others. For Solzhenitsyn, as well as for classical liberals, freedom from restrictions on individual transactions is complemented by freedom from imposition of involuntary costs. The latter condition is, of course, the very foundation for the rule of law and for the functioning of the state.

Yet Solzhenitsyn would like to see the state and the courts not only as secondary, but as redundant social contrivances. In voluntary transactions, one party tends to impose additional costs on the other by means of such general contracts as the rule of law or of the majority. But, as Solzhenitsyn suggests, the same things can be accomplished by self-restraint. His concept of self-restraint (roughly translated into English as “self-limitation”) is not, as some critics have misunderstood it, an attack on selfish capitalist profiteering. Rather, it is an attempt to circumvent the multipersonal and impersonal contracts that may require an active involvement of the state and of the courts. In addition to Adam Smith’s Invisible Hand of the market, there is, in the words of Arthur Okun, an Invisible Handshake of human participants. What is important here is that implicit contracts and self-restraint do not abuse individual preferences, while institutional protection of the interests of the third parties may clash with individual freedom.

Solzhenitsyn is neither a statist nor a social conservative. If we check public records, we find that he never spoke on or for any issue on the social conservative agenda, except the role of religion in the family. He always strongly opposed state involvement in private and family affairs. He spoke in favor of voluntary school prayer in public schools in his 1983 Templeton speech, but from a perspective quite different from that of social conservatives. He considers the prohibition of school prayer to be a state-imposed and ideologically motivated violation of the rights of individuals forming the family. (The natural desire of parents to reproduce their own preferences in their children is a basic economic notion associated with Gary S. Becker.) Solzhenitsyn believes that state-guided intellectual development deprives the family of its basic rights and imposes the collective preferences of ideologues on the next generation. For him, this is a fundamental assault not only on human freedom but also on human nature.

Solzhenitsyn is a firm believer in the separation between church and state, believing that the destruction of this separation under Peter the Great spelled disaster for Russia. Judging by his writings on these matters in Russian journals, unfortunately unavailable in English, the Russian Church Schism of the mid-17th century was in reality the Russian Counterreformation. The spirit of Russian Orthodoxy before the schism was, unlike that of Catholicism, the spirit of enterprise, hard work, thrift, and market relations. It was the schism and then the domination of the state over the Church under Peter that converted Orthodoxy to the spirit of communitarianism and ubiquitous statism. (Peter practically abolished private property rights in Russia in 1714; they were restored years after his death, in 1731.) About two million nonconformist Old Orthodox adherents, the so-called Old Believers, were brutally punished, and their faithful descendants were persecuted for over two centuries. Religion was turned into ideology and the Church into a state institution. Yet, as Solzhenitsyn observes, most Russian industrialists, merchants, and entrepreneurial peasants were Old Believers (see, especially, The Oak and the Calf). Solzhenitsyn went so far as to declare that in a Russia of Old Believers the communist revolution would have been impossible.

Solzhenitsyn must have surprised both liberals and conservatives when he candidly admitted to Japanese journalists and academics in Tokyo (September 1982) that he is not a Slavophile nor has he ever been one. Moreover, he said, he was never influenced by the writings of Slavophiles. As a matter of fact, these notorious 19th-century Russian Slavophiles were the only Russian followers of Adam Smith on the issues of free trade and state nonintervention in the economy and private life. This is, of course, fine with Solzhenitsyn, but the Slavophiles also embrace the Russian rural commune—and this Solzhenitsyn passionately rejects.

Solzhenitsyn interprets the commune as a more significant form of serfdom than feudal serfdom itself The commune meant the predominant economic power of the state, not just of landlords, over the peasantry by means of taxes imposed on rural settlements collectively and the abolition of private land. The collectivist system of the commune constrained peasants’ incentives and economic development.

On many dozens of pages of the new two-volume version of August 1914, Solzhenitsyn describes how the Tsarist government, under the premiership of Peter A. Stolypin, worked hard in the period 1906-1910 to create a new class of farmers by abolishing the rural commune as an institution and by establishing private land property for peasants. Solzhenitsyn also describes how most of the parties of the newly emerged Russian parliament, both left and right, and most of the intellectual community, resisted this capitalist reform of Russian history.

The truth of the matter is that the alleged Russian liberals were not liberal at all in the sense of classical liberalism. Solzhenitsyn endorsed, in his preface to Victor Leontowitch’s The History of Liberalism in Russia, 1762-1914, the author’s argument that the only liberal force, however inconsistent, in modern Russian history was the Tsarist government; the most antiliberal, anticapitalist force was the Russian intelligentsia.

Here, of course, is one of the painful points for Western critics of Solzhenitsyn, who have a natural affinity with Russian intellectuals and their fight against Tsarism. When in February 1917 Tsarism was finally overthrown, one of the first acts of the liberals who came to power was the abolition of the Russian parliament, whose rights they had ostensibly championed against the Tsarist government for years. The long-sought dictatorship of liberal intellectuals is known in Western literature as the short-lived Russian democracy. At that time one could really speak out, without fear of pejorative associations, and the first postrevolutionary issue of the Journal of the Constitutional-Democratic Party (Vestnik Partii Narodnoi Svobody) acknowledged in an article by the most sophisticated ideologue of Russian liberals, A.S. Izgoev, that the Russian liberal movement was in effect, in all of its objectives, a socialist movement. Victor Leontowitch noted that the program of the Constitutional-Democratic Party did not mention the right to own private property on its long list of basic rights.

On the laundry list of proofs of Solzhenitsyn’s antidemocratism, a major item is his critique of the February 1917 revolution and of that short-lived Russian democracy. As a matter of fact, this was not a freedom-oriented government, but a system that provided a high degree of freedom exclusively for intellectuals. Socialism with a human face can and did exist; several cases are available, and Russia of 1917 was a textbook example. There was little economic freedom; land property rights were suspended for good; most prices were imposed by the government; grain was virtually confiscated from producers; the country was run by arbitrary committees of competing intellectuals; there was unlimited political freedom for anybody on the left of the center and a tolerable sliding scale of freedom for those on the right of the center; there were political prisoners, though mostly former Tsarist officials, and some were kept in solitary confinement (former Prime Minister Boris V. Shturmer happened to die in jail a few days before the Communists took over: his main offense was that he was of German origin).

The most significant act of the liberal-socialist Provisional government was that of June 28, 1917. On that day the government suspended the Stolypin agrarian reforms, prohibited all land deals and transactions and canceled all previous land contracts. In effect, the government abolished property rights and private land ownership by peasants throughout the nation. The great socialist experiment began months before the Communists seized power. It is no wonder that Solzhenitsyn is less than enthusiastic about this pseudodemocracy.

If Solzhenitsyn is willing to defend Tsarist Russia, that alone does not make him a nationalist. Indeed, he denied the charge in his open letter to President Ronald Reagan in 1983. As George J. Stigler recently suggested, we are in want of a good economic theory of nationalism. While we will have to wait for its development, a few points will summarize the existing literature and my own thinking on the subject.

Nationalism is a modern reaction to capitalism, which destroyed feudal walls between classes and opened equal opportunities for every individual to compete in the market for social and economic mobility. Many individuals, especially intellectuals, would like to avoid too much competition. Those individuals who do not expect or, in fact, do not successfully cope with the opportune but also tough conditions of the market, prefer to circumvent them. This is also true in the case of those who initially succeed in the market but need to turn their success into feudal-type tenure in order to avoid being ousted by new market entrants. In a multiethnic or multiracial country, nationalism establishes a mutual social welfare consensus and network among the members of a homogenous group on the basis of ethnic origin. Nationalism is the movement which switches arrangements from individual competition to competition between groups and communities.

A few implications follow. First, the most effective arrangement for nationalists is reliance on the state against the market. Secondly, the procedure employed by nationalists through the state is special treatment in terms of vertical mobility, privileges, direct and indirect subsidies, quotas, and, last but not least, restrictions imposed on other groups. That is why nationalism sees the best opportunities not in the private sector but in the bureaucracy and works especially hard at monopolizing the state apparatus. And that is why nationalism is especially attractive for intellectuals and is, in fact, their movement par excellence.

Within the bureaucracy, nationalism establishes a network for a protracted arrangement which would guarantee collective privileges and insure collective success. To put it plainly, nationalism is a protection racket and insurance against market failure, insurance for which other groups pay the price of restrictions imposed on them.

While nationalistic arrangements allow individual success to be secured as part of the group’s success, nationalistic sentiments allow the individual to blame his failure on the real or imaginary privileges and communal network of the other group. Both tendencies feed further expansion of nationalism, which is, therefore—in Tsarist Russia, in the Soviet Union, in Africa, in the United States, and everywhere else—a platform for self-generating distribution and redistribution of socioeconomic mobility.

Anti-Semitism in Tsarist Russia, as elsewhere in Europe, including the notorious pogroms of the 1880’s-1900’s, was a typical manifestation of the desire of the Gentile business communities to monopolize rapidly developing markets. Businessmen found assistance in the nationalistic groups in the administration on the local and central level in their attempt to eliminate tough competitors by physical means. On the Russian political scene of that period, pogroms were ideologically instigated by the two extreme parties. The precedent was established by the left-wing terrorists of the socialist underground, “The People’s Will,” who murdered Tsar Alexander II in 1881 and circulated leaflets in which they blamed the Jews, as a capitalist minority, for various Russian economic problems. The line was followed by the ostensibly right-wing “Union of the Russian People,” better known as the Black Hundreds, who carried on general propaganda for Russian blue-collar workers to strike against exploitation by Russian and Jewish capitalists. In the Tsarist government there was a long struggle between nationalistic bureaucrats, who functioned as protection racketeers on the growing Russian markets, and laissez-faire groups who worked hard to eliminate nationalistic restrictions and to curb the anticapitalist lobbies of the right.

For 80 years, historians of pogroms did not pay attention to the fact that the most active in the pogroms were retail and city-market traders, shopkeepers, salesmen, fishwives, street hawkers, and the like. Was it an irrational outburst of Russian spiritual traditions, as some sophisticates would tell you at Ivy League seminars? Rubbish. The times of the pogroms were the periods of the highest degree of civil rights rhetoric in Russian history. What was lacking was a sufficiently rooted laissez-faire consciousness in the local population and effective, nonnationalistic police committed to the preservation of the market. When Solzhenitsyn’s main hero, Peter A. Stolypin, took over the Russian government in 1906 and reorganized the police, pogroms in Russia stopped for good. They reemerged in the summer of 1917 when, under the Provisional government, the police disappeared and anticapitalist propaganda flourished.

Solzhenitsyn in August 1914 developed a key insight that, in his own words, the Black Hundreds and the Red Hundreds shouldered Russian economic development from the free-market path and worked hard to smash it. There is an abundant literature on the feudal right. Less explored is the derivation of the anticapitalist right from the business community, on various stages of economic development, which worked to restrict market access for alien economic forces.

I want to emphasize here that we are dealing with a universal socioeconomic phenomenon. Anti-Semitism did and will exist wherever members of various ethnic groups could employ the institutions to restrict the markets for Jews and monopolize markets for themselves. Pogroms did and will exist wherever these members could secure the protection of the state and of the local administration to beat the Jews out of the market. It takes decades of capitalistic development before people recognize that they are interested in security, equality, and prosperity of the middlemen minorities not so much because pogroms are abominable, but because people will get better prices on the markets with broader competition. Unfortunately, it takes even more decades before educated members of the Jewish community recognize that the security, equality, and prosperity of the Jews derive not from good intentions of the elites of the host countries, but from the developed market instincts of the host populations and from an environment in which the only function of the state is to protect the freedom of the market.

The various kinds of nationalism in the Soviet Union—as well as Soviet anti-Semitism—are obviously not Russian aberrations of socialism, nor the continuity of specific Russian traditions. Soviet nationalisms and anti-Semitism represent logical socialist reactions of more numerous and more powerful interest groups who employ the state in order to compete with each other and with Jews for education, positions, and rewards. This nationalism is, of course, more embittered and aggressive in a country where all well-paid, prestigious jobs and promotions are concentrated in the state bureaucracy.

For Solzhenitsyn, preferential social mobility, ethnic subsidies and privileges, restrictions and quotas, protection rackets and hooligans at the market gates, are detestable and intolerable to the highest degree, not only because they violate the rights of minorities, but also and no less because they corrupt and doom to protracted failure those nationalities who practice them. Such is also the position of Thomas Sowell, who argues that persecution of the Chinese in Malaysia and preferential mobility for the Malaysians actually, in terms of economic development, hurt the Malaysians; and the same argument applies to the Jews and the Russians in prerevolutionary Russia.

A simple and unequivocal test of Russian nationalism is given by the attitude towards promotions within, and monopolization of, the Soviet political system. Real Russian nationalists call for Russian intellectuals and youth to penetrate and overwhelm the state bureaucracy, thus taking the lion’s share of the power market. Solzhenitsyn in his essay, “The Smatterings,” in From Under the Rubble, calls the intellectuals and the youth, the Russian first and foremost, to withdraw from the system, take simple jobs, give up any participation in communist institutions, even at the expense of not receiving any formal education. One can say many things about Solzhenitsyn, but a Russian nationalist he is not.

Even his obvious Russian patriotism has an extreme libertarian coloration. In The Gulag Archipelago he makes an unprecedented statement that it is governments who need military victories, while people need military defeats. Solzhenitsyn argues that prosperity and freedom are preferable to military victories and territorial expansion, and moreover, that defeats and territorial losses are beneficial for national prosperity and development toward freedom. He says that the Russian victory over Sweden in the early 18th century was a catastrophe for Russia and an unmitigated boon for Sweden. For Russia, that victory led to two centuries of expansion, new wars, inefficient allocation of resources, poverty, and restrictions on freedom. Solzhenitsyn rejects Russian national pride in the victory over Napoleonic France: as a result of that victory the abolition of serfdom was delayed for another half-century. He makes a challenging remark that he would have rather settled with the French occupation. He reminds the reader that Russian defeat in the Crimean War in 1855 at the hands of the British and the French led to the abolition of serfdom and to liberal legal reforms. Russian defeat in the war with Japan in 1904 led to liberation of peasants from the collectivist power of the commune and of the state to the spread of private land property and to the establishment of the Russian parliament. From this perspective, for Solzhenitsyn, the Soviet victory in World War II was a devastating defeat for Russian freedom.

Evidently, Solzhenitsyn makes a distinction between the country and the state. His patriotism, based on the criterion of freedom, is antistatist and populist. His patriotism is measured by what is good for the country and for the people, and what is best for the country, in his view, is not the expansion of the country, but the reduction of the state. As far as I know, we do not have a good economic theory of patriotism either, and it seems to me that Solzhenitsyn gives us quite valuable insights for its conception.

So far we have dealt with the issues on which Solzhenitsyn’s theoretical contribution was to some extent marginal. There is, however, a special niche for Solzhenitsyn in modern social theory. It deals with the costs of ideas and the primacy of ideologies in the truncating of freedom and dehumanization of man.

Economists long recognized the crucial role that ideas and intellectuals, as producers and transmitters of ideas, play in establishing restrictions on freedom. The Austrian School economists Ludwig von Mises and Friedrich A. Hayek wrote extensively on the subject. Thomas Sowell said in Knowledge and Decisions:

The despotisms . . . were seen as vehicles for the imposition of intellectuals’ designs on society at large. . . . Freedom is not simply the right of intellectuals to circulate their merchandise. It is, above all, the right of ordinary people to find elbow room for themselves and a refuge from the rampaging presumptions of their “betters.”

John Maynard Keynes wrote in his celebrated dictum:

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by very little else. Practical men who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from academic scribblers of a few years back.

From this perspective, most economists of different schools will be on the side of Solzhenitsyn in his dispute with the majority of Soviet experts on the origins of communist terror and Gulag.

Solzhenitsyn went on at length to elaborate and document his basic proposition: the main source of terror and forced labor on the mass scale is the imposition of ideas on people by ideological states. Solzhenitsyn’s books, and The Gulag Archipelago in particular, are all about the price of ideologies to people. Unlike various precapitalistic economic systems and despotic states in the past, the modern socialist economy is built on the base of ideology. Older systems of a socialist cast, dubbed by the Marxists as the Asiatic mode of production and better known in Western literature as Oriental despotism, regulated already existing economies and life-styles; they did not invent new ones. But on the second day of revolution, Lenin summoned an amateur economist, Yuri Larin, an expert on the German economic model of War Socialism, and ordered him to establish and expand that model in Russia. Within three years, 1917-1920, the system of collective transactions known as War Communism was built. Gross national product declined to the range of 4 percent to 20 percent of the prewar level (estimates vary). Famine began in 1918 and continued through 1921-22, although the system had to be suspended in early 1921. The official Soviet data reported the famine-related death toll in 1921-22 in the range of 4.9 to 5.1 million. My calculations of the human losses during the War Communism period between the censuses of 1917 and 1920 amount to 15.6 million.

The process of socioeconomic implementation of the ideological model requires not only oppression of individual political opponents but, first and foremost, the mass destruction of whole social classes and ethnic groups who do not fit the new system. The older despotisms imposed additional constraints on human activities, but they did not try to impose a new model that would require fundamental changes in behavior itself. Behavior is determined by individual preferences rooted in human nature. Lenin’s error, corrected later by an unappreciated economic whiz of the century, Joseph Stalin, lay in the fact that one cannot change basic modes of human behavior without making a so-called Cultural Revolution that would change human minds and human nature. Until this is done, ideological experiments on human guinea pigs are limited to negative selection, to the mass slaughter of the unfit groups of human raw material. From Lenin’s and Pol Pot’s experience we know that the more ideologues hurry, the more they kill. The era of detente, when the USSR, Romania, Poland, and East Germany began to exchange their undesirable subjects for Western subsidies (instead of murdering them), resulted in an implicit consensus that the slave-trade is a progressive improvement upon uncorrupted, idealistic communism.

That is why a conventional method of historical analogies between communism and various despotic regimes in the past, whether in Russia or elsewhere, yields shallow results. Communists or Nazis may seem to be not much different from past tyrants, or even from Chicago gangsters of the 1930’s for that matter, but this does not explain a crucial difference neglected by all theoreticians of continuity with the past: the old despots’ business was robbery, not murder. Violence was only the means of securing submission from the next in line to be robbed. Institutionalized robbery is an extreme form of taxation. As good businessmen, despots make sure that their benefits exceed their costs, and thus they do not want to waste their taxpayers. Ideologues in a hurry to build a new economic system opt for mass murder even if they destroy their sources of robbery. They allow the costs to exceed benefits and forgo future gains because their main benefits are nontangible and nonmonetary ones. Their business is imposition of ideologies, not taxes. Unlike even most conservatives, let alone liberals, Solzhenitsyn insists that communism is not about power. Power for communists is only a means of imposing ideologies on people.

Intellectuals habitually blame communist massacres on despotic precedents that they can easily find in the historical records of any country. But Solzhenitsyn points out that Russia makes an especially difficult case for these theoreticians of historical continuity. Russia was for all practical purposes a capitalist country, although most peasants did not own their land until the Stolypin agrarian reform of 1906-1910. However, most economic and social relations were based on laissez-faire individual transactions, and the general trend of the development of the country was toward universal freedom.

Like leading neoclassical liberal economists, Solzhenitsyn argued for the preeminence of economic freedom and economic development over the political freedoms of interested groups (compare Solzhenitsyn’s preface to Leontowitch with George J. Stigler’s “Wealth, and Possibly Liberty,” in The Journal of Legal Studies, June 1978). Exactly this approach is at the center of Solzhenitsyn’s analysis of the economic and social policies of the Tsarist government versus those of the liberal-socialist Provisional government of 1917.

Solzhenitsyn suggests that scholars who ignore facts of the history of Russian free market economy, including its destruction under the liberal-socialist government, and derive communism from Tsarism and oppressive Russian institutions, are actually searching for a scapegoat. They want to salvage the general right of well-meaning intellectuals to impose their preferences on ordinary people—the right they confuse with the freedom of expression. In this, intellectuals ignore the costs of ideologies to ordinary people on whom social designs are imposed. Here we are at the heart of the matter. Intellectuals perceive Solzhenitsyn’s case aga