Twenty years ago at the Congress of Prague which was held to speed the entry of Central and Eastern Europe into full membership of the Euro-Atlantic community, Mrs Thatcher made a speech and told a joke. As we shall see, she didn’t tell the joke very well. In particular, she warned the audience in advance that it wasn’t very funny. So nobody laughed. But she had more on her mind than humour. She was trying to describe in suitably apocalyptic terms the comprehensive destructiveness that Soviet Communism had on Russia and Europe.

The smoky, stuttering, unreliable little Trabant is now the object of Ossie nostalgia. But no one would have bought a Trabant if any of its Western competitors, such as the Mini, had been available. 

“Where socialism has left its deepest impression,” she said, “in most of the former Soviet Union – we see not Western-style democracy and free economies, but corruption, cartels and gangsterism. There is a pervasive lack of trust and civility, the breakdown of civil society in matters large and small. A dour Russian parable on the history of Soviet communism says it all:

That’s how it is with a man. He makes a bad start in his youth by murdering his parents. After that he goes downhill: he takes to robbing people in the streets. Soon he sinks to telling lies and spreading gossip. Finally, he loses all shame, descends to the depths of depravity, and enters a room without knocking at the door first.

She then drew her moral: “That’s how it was with Communism. It began in terror and mass murder and it ended in petty corruption, inefficiency, bad service, ill manners, the loss of every social grace, and a society pervaded by rampant egoism. And the social desert thus created was unpromising ground for the economic transition to a market economy.”

It was important to make this point even as early as 1996, when there was as yet very little nostalgia for the ideas of either Communism or socialism. No young people told polls, as they do now, that they favoured ­socialism. When Communism coll­apsed, the entire world could see that it had created an economic wasteland.

Throughout the Eastern bloc the shelves of stores were full of unsaleable goods that nobody wanted – and also full of queues of people waiting for goods that weren’t being produced. There were vast mega-factories employing millions, but they were producing goods for which there was no genuine market because their quality was so low. 

The smoky, stuttering, unreliable little Trabant is now the object of Ossie nostalgia. But no one would have bought a Trabant if any of its Western competitors, such as the Mini, had been available. They had to be exported to other COMECON countries which were, quite literally, captive markets. And because they were captive markets, waiting lists for Trabants stretched into years.

This extraordinary chaos of socialist production should not have shocked us. As early the 1960s Khrushchev had been complaining about the absurdities that arose when production was organised not in response to markets and price signals but to the brute instructions of central planning. He told of one factory making chandeliers which met its ­quotas, expressed in the amount of raw material inputs, by making chandeliers so large and heavy that wherever they were installed, the ceilings fell in. An economic reformer himself, Khrushchev once admitted wryly that when the entire world was fully Communist, the Soviets would still need to keep Switzerland capitalist in order to know what the price of anything was. 

But though he and others talked constantly of such matters for the last 30 years of the system, reform was always slow or ineffectual because it would soon run up against the state’s hostility to private property, private investment, material incentives, “kulakism,” or whatever ideological bugaboo currently ruled. But when we saw the out-of-date factories, the low-quality goods, the drab, dirty and polluted environment, and much else, we understood the legacy of Communism in a much acute and painful way.

Khrushchev once admitted wryly that when the entire world was fully Communist, the Soviets would still need to keep Switzerland capitalist in order to know what the price of anything was. 

And it has taken almost a quarter of a century for nations formerly under the Soviet heel to unlearn the lessons of Communism in order to learn how to flourish in free economies.

These material disasters, however, were much less serious than the human costs – which arose both from the economic failure of Communism and from the banal hypocrisy of its moral claims. It’s well known, of course, that the attitude of ordinary workers under Communism was: “They pretend to pay us and we pretend to work.” They saw Communism as a gigantic conspiracy to defraud them of their proper reward. That led over time to a work culture that encouraged absenteeism, thieving, work go-slows, contempt for skills and efficiency, and a more general cynicism. 

The attacks on religion and conventional morality via a corrupted educational ­system vacuumed decent moral values out of people, but they were not replaced by the supposedly higher moral values of Marxism – propaganda appeals to such values were widely mocked in a great variety of anti-Communist jokes. The result was widespread anomie and self-contempt. 

The general scarcity of material goods, not surprisingly, made people more materialist than ever before – by the end a girl would sell herself for a pair of jeans, alcoholism was rampant, smuggling was a big business, and corruption flourished to meet demands that Communism denied.

Above all, it was a fraud. When the immediate fervour of the October Revolution had faded, leading Communists – indeed, an entire New Class of them – rigged the system to benefit themselves and their children with “special hard currency shops,” country dachas, and privileged access to foreign travel. In 1974 I asked one attendee at a Mont Pelerin conference what he did for a living. He replied: “I will tell you but you will then realise why I can tell you no more.” I suppose I looked puzzled. He smiled and said: “I manage the private hard-currency accounts of Soviet leaders in the West.” 

But those who rose to the top of the Communist system performed none of the social duties that aristocrats and high bourgeois families have often performed in liberal capitalist societies. They founded no universities, commissioned no great artistic works, gave no grants for medical research. The Communist ideology discouraged such giving, of course; the state was meant to have a monopoly on charity, as on everything else. 

The attacks on religion and conventional morality via a corrupted educational system vacuumed decent moral values out of people, but they were not replaced by the supposedly higher moral values of Marxism – propaganda appeals to such values were widely mocked in a great variety of anti-Communist jokes. The result was widespread anomie and self-contempt. 

But accounts of how senior Communist bureaucrats lived and thought do not suggest they would have behaved more generously and imaginatively even if permitted to do so. Most – there were great and heroic exceptions – seem to have exhibited a crude, vulgarian, and coarse sensibility. In short, the moral and human legacy of Communism was hardly less terrible than its economic impact. What began in murder ended in social rudeness.

Twenty years ago Mrs Thatcher said to me in the Green Room: “I’m sorry I messed up the joke. I was uneasy about it.” I said: “I know you were. It was too harsh, too cynical, for your taste.”

She replied: “Oh, no. That wasn’t it. The problem was it was too painfully true.”