THE SECOND SOVIET REVOLUTION OR THE TRANSITION FROM STATISM TO SOCIALISM
The first Soviet Revolution took place in 1917; the second is presently under way. If it succeeds, the Soviet Union will undergo a profound transition from a statist political-economic system to a democratic socialist political-economic
From the 1920s to the 1980s, the Soviet Union had a statist system, that is, economic planning by a one-party dictatorship. Call this system what you will, the name is unimportant as long as one recognizes that it was not capitalism nor was it Marx's vision of socialism.
How shall we define socialism? To me, it means economic democracy, the extension of political democracy to the economy. Socialism is public or collective ownership and control, where the public institutions (the government) and the collectives (or cooperatives) are democratically governed.
There is an enormous literature on the Revolution of 1917; this article does not add to it, but merely highlights a few points that are relevant to the main thesis. The major participants in the Revolution believed in socialism and in democracy, as they defined these words. Lenin advocated a Soviet government as a higher form of democracy--he declared specifically in State and Revolution that there can be no socialism without a genuine democracy. Of course, he also had many questionable qualifications, such as the need to disenfranchise the old ruling class and the need for a more direct democracy rather than a traditional parliament. Yet he clearly envisioned a recognizable democratic mechanism. Why did this noble vision turn into the statist nightmare?
What were the conditions before the Soviet Revolution? Russia was an undemocratic and underdeveloped country. The vast majority had been officially liberated from serfdom only in 1861, the power of the nobility was still great, and most people lived in grinding poverty. Not only were most people poor, but over 80 percent were illiterate. There was no tradition of democracy. Some very limited democracy was practiced only from 1906 to 1917, but the Russian parliament, or Duma, was neither very popular nor very effective.
The Bolshevik party was an underground party, fighting a war with Tsarism, with both sides resorting to violence at times. In order to fight their war, the Bolsheviks developed the tradition of democratic centralism; the idea was a democratically elected leadership, which would be followed in a disciplined way as an army central command is followed by the common soldier. Unfortunately, democratic elections proved to be impossible, but the notion of centralism was followed religiously. The party continued this underground mode after it came to power, with dire consequences. Thus the Revolution began under conditions that both objectively and subjectively made democracy next to impossible.
How was the Revolution achieved? First, it came under conditions of the First World War, when urban workers had no bread, soldiers had no ammunition, and an enemy was slowly taking over Russia. Second, although it succeeded initially with remarkably little violence, the forces of monarchy and capitalism soon organized militarily. Since the army had disintegrated, with some units joining one side and some joining the other, a long and bloody civil war ensued. Third, the anti-communist armies were joined by the armies of 14 foreign countries. Twenty years later, there was again a devastating military invasion in the Second World War, followed by the negative impact of the Cold War.
The needs of survival during the Civil War led directly to the beginnings of dictatorship, the suppression of all anti-socialist parties and news media. By the end of the long Civil War, when there was economic ruin and much popular discontent, all parties except the Communist Party were suppressed. At the same time, as a "temporary" measure (and all of these measures were said to be temporary at the time) factions within the Communist party were banned. Eventually, this meant the ouster and even execution of all factions except that of Stalin. Democracy was then said to mean the power of the working class, but the working class was represented by the Communist party, the Communist party was represented by Stalin's faction, and Stalin's faction was represented by Stalin. Thus, the USSR arrived at a dictatorship, but what maintained and strengthened that dictatorial mode in a country calling itself socialist and democratic?
Marx assumed that socialism would arrive in an advanced capitalist country, in which most of the population were urban workers, that the workers would democratically run the country using accustomed democratic procedures, and that efficient planning with full employment would continually increase wages and living standards, with people slowly achieving a socialist consciousness. Instead, the first socialist revolution took place in a less developed country, with a small percentage of urban workers, little literacy, no strong democratic institutions, little industry, amid a world war, civil war, and foreign intervention, with a low standard of living and mass poverty. "Socialism had to be constructed on the foundation of poverty."(1)
Because it was built on a foundation of poverty, the Soviet state was obsessed (and rightly so) with a need for rapid economic development. But how can a poor country develop overnight? The Soviet Union had insufficient industry and could not get foreign support, so it extracted a large "surplus" from the peasantry (even though this meant starvation for some). These resources were used to build industry, but very little went for consumer goods; almost all of the initial resources were used to build factories to build more factories. Not only the peasants, but most of the urban workers were held to a low standard of living, with no increase in sight for many years. Such a program can be put into operation only against popular resistance and with repressive measures. Thus the perceived need for rapid development and the strategy used to obtain it, as well as the preconditions of the Revolution and the violence with which it survived, led to a repressive dictatorship and to its continuation throughout the 1930s, 1940s, and 1950s.
By the end of the 1950s, the USSR was a developed industrial country with a highly educated population and some possibilities for affluence in the near future. This new economic base allowed Khrushchev to begin the process of reform. But the dictatorship was not merely that of one person, Stalin; it was rather a dictatorship of a whole new ruling class by the 1950s.
It was a ruling class with perhaps four different hierarchies, all meeting and interacting at the top. First, there was the party leadership, self-selected and continued by co-opting those who appeared appropriate to this type of rule. Second, there was the military leadership, all members of the party and all participating in the good life of the top party members. Third, there was the government leadership from prime minister to top bureaucrats. Fourth, there were the economic leaders, from the central planners to the important new group of Soviet managers. All of these groups were in the party and all were eventually represented in the Politburo. Like any other ruling class, they clung to their privileges, tossed out Khrushchev, and resisted any change.
Origins of the New Revolution
The development of Soviet industry and the high level of Soviet education meant there was a potential for rapid advance in the forces of production in the Soviet Union. Yet those forces of production were held back by an obsolete and frozen set of class relations of production. Unlike capitalism, the Soviet mode of production allowed the ruling class to have direct political control of the economy. The ruling class controlled Soviet industry from above through a rigid, overcentralized planning system, within the context of a repressive political system.
Repression and rigid, dogmatic control of science prevented Soviet scientists from following an optimal path of research. The overcentralized planning and the short-run time horizon that mandated immediate results set up an environment in which managers were afraid to risk the use of new scientific understanding to make industrial innovations. The incentive system was distorted so that Soviet managers tended to make choices among existing technology that were not optimal for the society. Workers did not participate in decision-making or in profit-taking, so they had no more incentive than workers under capitalism--but could get away with more because of the system's inefficiency and because of full employment (an otherwise very favorable feature of central planning in the USSR).
Average Soviet citizens grew disgruntled because the system satisfied so few of their needs and because they felt helpless and manipulated by the middle-level bureaucracy. The top leadership grew worried because the system was not functioning well enough to reach their goals. The declining rate of growth became more and more critical. Thus the top leadership eventually came to believe it must make reforms or the system would strangle itself. The middle-level bureaucracy, however, continues to resist the reforms since its own power would be drastically reduced.
The Glasnost Revolution
The top Soviet leadership, including Gorbachev, recognized that economic reform would be impossible without political reform. The purpose of political reform, in their view, was to break the power of the middle-level bureaucrats, who were resisting all reform.
But the political reform process has now gone far beyond what the leadership envisioned. They are now trying to ride the wild stallion. Gorbachev originally proposed a mild policy of glasnost or openness. His intention was to make the masses more aware of the inadequacies of the planning system and those who worked within it. The masses would then put pressure on the middle-level bureaucrats, while acclaiming Gorbachev.
Instead, the ideas of democracy hit fertile ground among a discontented populace and led to a ground-swell of protest. Instead of elections controlled by the party leadership, which would eliminate some useless middle-level persons, the elections were remarkably free and resulted in major political changes. Any election in which 25 percent of the authorized candidates of the ruling party are defeated--even by other Communists--must count as a free election; witness the fact that some party functionaries were defeated even with no opposition, since they did not get the requisite 50 percent of the vote.
The results have been startling. The Soviet press, which used to be the dullest in the world, is now interesting reading. The Soviet congress, which used to be a rubber stamp, now has a fairly clear opposition within it--and even the majority show much independence at times.
The Perestroika Revolution
Far more difficult to carry through for Gorbachev has been a drastic change in the economic structure of the Soviet Union. There is irony in the fact that drastic reforms are only considered when there is an economic crisis of some sort, but the worst time for reforms is when there is an economic crisis. Gorbachev must manage to make meaningful changes that improve the economy before conditions become so bad that he loses power. The worsening economic conditions make it hard to envision improvements from fundamental reforms, which take much time to enforce and much time to show results--while creating considerable chaos in the short run. In addition, the old ruling class has resisted economic reforms even more than political reforms.
What does this word "reform" mean? Many of the reformers take it for granted that the more the market is used, the better will be the economy, so reform to them means more use of the market. Of course, some of us in the United States know the many problems of a market economy. Markets give rise to monopoly power, which may be exercised so as to hurt the majority interest, for example, holding back new inventions (such as a longer lasting light bulb) to protect the profits of existing capital. Markets mean the possibility of severe depression, leading to mass unemployment. Markets mean a lack of attention paid to worker safety or to the environment. Markets mean that some people are very rich and others are very poor.
Yet the Soviet economists and Soviet people mostly favor more use of the market because there has been such extremely over-centralized, undemocratic planning. Over-centralized planning means that raw materials pile up in some places, while there are acute shortages of raw materials in other places. There are also shortages of plant and equipment and well as labor. Such shortages mean that a firm cannot efficiently use its other resources and cannot meet its production target, on which other firms must rely.
Thus, there are real problems with the Soviet economy as it presently stands. The issue is to get rid of overcentralization without obtaining all of the evils of the market. Central planning in the 1930s and in the period of recovery from the Second World War did an excellent job of mobilizing resources. It had full employment and used that labor to build a strong industrial base. It is only in a more advanced and complex economy that central planning loses its efficiency, since no central system can obtain all of the millions of bits of information, do all of the millions of calculations, and arrive at a comprehensive and optimal plan for such an economy.
In a highly complex economy, more freedom must be given to local units to make their own decisions. To decentralize in this way means that more use must be made of the market. There are those who believe that a system can decentralize without making use of the market. But that is a belief in magic. If the economy is not coordinated by a central plan, then it must be coordinated by the market. Aside from conscious planning or the automatic coordination of the market, there is no other mechanism for coordination that exists or that has been the least bit successful.
So at the local level of each enterprise, an efficient economy mostly means use of the market. But if local activities are organized only by the market, then the economy is subject to the traditional evils of unemployment and inflation. How can that be avoided? The only answer seems to be that enough central planning must be retained to ensure meaningful social direction at the aggregate or macro level of the economy. Such planning may include fiscal and monetary measures, but U.S. experience shows that such mechanisms are insufficient to prevent cyclical unemployment mixed with an inflationary trend.
To exercise real control of an economy means to control most new investment. While some local investment can be controlled by monetary and fiscal policies, what must be done in addition is to have central control of enough new investments to exert a very major direct influence. The problem is to combine democratic central planning of the volume of new investment with decentralized, market control of day-to-day production. How the two fit together will be difficult and will be different in every socialist country. But only public planning can prevent cyclical unemployment and inflation; only decentralization can produce reasonably efficient enterprises.
The local unit may be directed either by a state-appointed manager or by a council elected by the workers. Control by the workers is more democratic by definition and it may provide more incentives for the average worker. But individual enterprises may not pay enough attention to social priorities, such as protection of the environment, declining to produce harmful goods, and affirmative action against any discrimination. Local workers' control may also clash with nationwide democratic planning priorities. Again, each socialist country will have to find the proper balance between nationwide democratic decision-making and local democratic decision-making.
The Triumph of Socialism
Many writers, including Robert Heilbroner, have incorrectly interpreted the political and economic crises in Eastern Europe, the Soviet Union, and China as the "Triumph of Capitalism."(2) On the contrary, these events appear to be the final crisis of the mode of production--which one might call "statism" (or any other appropriate name)--that has existed in the Soviet Union since the 1920s. This system consists of an economy centrally planned by a one-party dictatorship, representing a certain type of ruling class.
As this old mode of production is destroyed by revolutions--mostly peaceful to date--it presents a wonderful opportunity to begin the construction of a democratic socialist society. In the Soviet Union, the trend so far is toward a democratic political system with a mixed socialist economy, using both central planning and local collective enterprises. No reasonable social scientist would say that this result would be easy, but neither can it be said that this result is impossible. The same goes for Eastern Europe; though some of those countries may revert to capitalism, those that choose socialism will have done so voluntarily through their own popular revolutions.
From the 1920s to the present, the dictatorial and bureaucratic example of the Soviet Union has poisoned world opinion against socialism and has been the biggest barrier to the spread of socialism. If the Soviet Union and much of Eastern Europe become truly democratic socialist nations--with economies balanced reasonably between central control and decentralized workers' control--the worldwide impact will be overwhelming. Already, people are talking about the end of the Cold War and the positive accomplishments of Gorbachev. If the Soviet Union and Eastern Europe become models worth discussing in a positive manner--rather than terrifying barriers to socialism--then there is a realistic chance for socialism to resume its forward march in many countries. We are thus witnessing an end to statism and the possible--still fragile--beginnings of the worldwide triumph of socialism.
NOTES (1)Keith Griffin and John Gurley, "Radical Analyses of Imperialism, the Third World, and the Transition to Socialism," Journal of Economic Literature, 23 (September 1985): 1089-1143. (2)Robert Heilbroner, "The Triumph of Capitalism," New Yorker (23 January 1989).
Howard J. Sherman teaches economics at the University of California at Riverside.…