This paper explores the economics and politics of the tragic Soviet experiment with socialism. Beginning with the period of “War Communism” between 1917 and 1921, the Soviet government’s attempt to implement socialism failed to achieve its stated objectives, namely to create social harmony, eliminate class struggle, and to unleash advanced material production. It attempted to achieve these ends by abolishing private property and market prices in the means of production, eliminating the incentives and information necessary to guide production in an efficient manner. The unintended political and economic results were disastrous, leading to tyranny, famine, and oppression. Failing to achieve its stated objectives, after 1921 the Soviet Communist regime continued to survive only by changing the meaning of socialism. De jure socialism in the Soviet Union continued to mean the abolition of private property and market competition of the means of production. However, de facto, this meant the monetization of political control over resources, via black market exchange, in a shortage economy, and competition for leadership in the Communist Party to control such resources. As a result, the Soviet political system failed to achieve the ideals of socialism on its own terms, not only because central planning eliminated the institutional conditions necessary to allocate resources productively, but also because central planning created the institutional conditions by which the worst men, those most able and willing to exercise force in a totalitarian environment, got to the top of the political hierarchy.