In this chapter, I speak of Marxist regimes rather than socialist or communist governments because the Marxist ideal may have pointed toward socialism, but many of these regimes fell far short of such a goal. Indeed, as I note herein, some so-called capitalist nations achieved certain Marxist goals to a greater extent than some so-called socialist nations.

Marxist economic systems were created and sustained by authoritarian governments that, on the basis of a particular ideology, formed in many countries economic institutions quite different from those found in market economies. As I argue, even though these Marxist economic systems rose and fell primarily for political, not economic, reasons, it is useful to survey them, both to determine how much an ideology can influence a system and how their divergence from a market economic system affected their economic performance. The results also provide some indication of the viability of economic systems different from those examined in the previous two chapters.

My analysis is based on the assumption that the impact of the ideology, rather than the authoritarianism per se, was more important for determining the way these economies functioned. Of course, Marxism in its Leninist garb has few uses for democracy. Indeed, most leaders in Marxist regimes argued that some type of autocracy or dictatorship is necessary to carry out the radical institutional changes they had in mind, even though they knew that some changes had severely adverse economic consequences, at least in the short and middle run.