PERESTROIKA AND THE FUTURE OF SOCIALISM--PART ONE
Readers have for some time now been asking us to write about developments in the Soviet Union. We have been hesitating to do so because of the lack of information needed for a proper analysis, especially if the reforms proposed and underway are to be examined in relation to the conflicting interests of different classes (or social strata), nationalities, and regions of that vast land. The upsurge of strikes and nationalist movements are clear signs of divisions among the people. But these have not yet congealed into clear-cut differences among class or other social group over the various aspects of the policies advanced under the rubric of perestroika.
On the other hand, divisions are clearly evident within the Soviet ruling elite itself over the kinds of reforms needed and/or the speed of their implementation. Despite vigorous opposition, the reforming faction of the ruling elite has thus far succeeded in achieving remarkable advances toward democracy and open debate. The debates we learn about, however, come from the articulate sectors of society--in other words, from the upper layers.
These free-wheeling debates made public considerable information about the nature of the social and economic crises in which the Soviet Union has become mired. But frankness has not yet extended to the politics of class and ideology. In fact, much of the discussion of economic policy resembles that of bourgeois economists insofar as the diagnoses and proposed remedies are presumed to be value-free. True, the language of socialism prevails, usually as a commitment to "social justice." What this implies appears to be advocacy of special measures for the poorest and least privileged sectors of the population, and recognition that price reforms and the removal of subsidies will cause unusual hardship for the masses. But the central thrust of the reforms is clearly the attainment of a rapid and continuous rise in the gross national product, assuming as do bourgeois ideologists that in the well-worn phrase a rising tide lifts all ships.
Therefore, even though the need to improve pensions, health and educational services, and the like is fully acknowledged, the perestroika debates are essentially technocratic in nature. The subjects dealt with--the optimal mix of plan and market, when and how to decontrol prices, ways to balance the budget, the banking system best suited to finance self-managed enterprises, etc.--are focused, first, on how to shake the economy out of stagnation, and, second, on how to raise the long-run growth rate.
In all of this, critical examination of such fundamental matters as the meaning and purpose of socialism seems to be off the agenda of the policy makers and their advisers. It is with this in mind that we propose to examine the changes taking place, with the emphasis on those aspects which we believe socialists in this country should be thinking about. But as a preliminary, we need to review the background of the restructuring planned and under way in the Soviet Union today.
Although Mikhail Gorbachev has put his personal stamp on glasnost and perestroika, the significance of these projects goes far beyond the man. Of course, individuals at the helm of power can and do make a difference. But it is well to recognize that Gorbachev himself is a product of the Soviet system and that the changes he is presiding over are rooted in social changes and movements that have been germinating for a long time.
The significance of these developments has for the most part been ignored by Western Sovietologists. Their vision has been limited to surface phenomena, resulting in their seeing only an immobile and inflexible society incapable of mounting major reforms. In contrast, a handful of Marxist students of the Soviet Union, having the advantage of looking at the present as history, have been able to see a society in flux. Thus, Isaac Deutscher, shortly after Stalin's death, pointed to the likelihood of a new historical departure in the Soviet Union due to the "profound contradiction...maturing between, to use the Marxian term, the social and economic structure and the political superstructure of post-Stalinist society." (Isaac Deutscher, Russia: What Next? New York: Oxford, 1953, p. 89)
The end of the Stalinist reign of terror did indeed bring closer to the surface pressures of competing interest groups in the Soviet Union as well as the play of factions in the ruling elite. By means of compromise and repression, however, the political superstructure was kept intact for a good many years to come. But even though the dominant faction was able to keep the lid on, the pot continued to boil with vigor. In a prescient and illuminating essay written toward the end of the Brezhnev era, Daniel Singer explained what was in the cards:
The party hierarchy, clinging not just to state property but to all means of control over the population, has presided over a tremendous transformation of Soviet society, its structure changing almost beyond recognition. True, Stalinist mass terror prevented these changes from crystallizing politically, and the more selective repression introduced by his successors still does not allow the open expression of class interests. But below the surface this new social make-up is beginning to exercise pressure on the power structure, especially at the top. A conflict is opening up within the party hierarchy between its bureaucratic and its technocratic wings; still hidden and partly controlled, it may soon alter the nature of the ruling establishment. (Daniel Singer, The Road to Gdansk. New York: Monthly Review Press, 1981, Chapter Two, "The Soviet Union: Seeds of Change," p. 117)
Two features of this tremendous transformation of Soviet society have been the growth of cities and the spread of mass education, each an integral part of the rapid industrialization and related social programs adopted by the centrally planned economy. At the time of the Revolution, about 18 percent of the country's population lived in 800 cities and towns. Since then, many of the older cities have expanded and thousands of new cities and urban settlements have been created. By now two-thirds of the people live in urban centers, a far cry from the pre-revolutionary agrarian society in which over 80 percent of the population lived in the countryside.(*1)
Urbanization is, of course, an outstanding trait of all industrialized societies, along with the slums and ghettos still found in leading cities of countries with a very long history of urbanization. Especially noteworthy about the transformation in the Soviet Union is its unprecedented speed. That would have been remarkable enough if the process had been evenly spread over the 72 years since the Revolution. But that period included foreign intervention, the civil war of the 1920s, and the Second World War when city life regressed, to be followed by years devoted mainly to cleaning up the rubble and rebuilding. Thus urbanization was largely concentrated in roughly forty years, the 1930s and 1950 to 1980. Meeting the requirements of the burgeoning population was no easy matter: shelter, schools, hospitals, retail establishments, transportation facilities, and much more had to be built. But the investment for all this was not forthcoming to the extent really needed because at the same time productive resources were absorbed by the equally unprecedented rate of industrialization. The consequent strains of city life have long been a source of popular dissatisfaction, only to become more so as the gap between promise and achievement widened during the stagnation during the Brezhnev era.
The extraordinary industrial growth brought about not only a concentration of population but also major changes in social structure. What was outstanding, of course, was the formation of a vastly enlarged working class that replaced the peasantry as the largest sector of the population. Moreover, it was a class that changed considerably over the years. At first it grew as a result of migration from rural areas, notably stimulated by the collectivization drive in agriculture. The peasants who then flocked to the cities for jobs in industry and construction were strangers to factory discipline and were by and large illiterate and unschooled. Recall that prior to the Revolution only about a quarter of the rural population was literate. The revolutionary government's devotion to education paid off quickly in a sharp increase in literacy and in the creation of a corps of technicians and engineers. Still, by 1939 only 12 percent of the gainfully employed had more than an elementary school education. That changed dramatically after the Second World War. By 1987 almost 89 percent of the gainfully employed had been to high school: of these three-fourths graduated from specialized or general education high schools.
The working class of recent decades differs from that of the early post-revolutionary days in other ways as well. Many industrial jobs are still filled by rural migrants, but these are not the muzhiks of yore. They have gone to school, been exposed to mathematics and science, and have some familiarity with machinery. More important, by far the bulk of today's working class consists of second- and third-generation employees whose roots are firmly planted in manufacturing, mining, construction, and transportation, where they have experienced a hierarchical command structure of management and a division of labor not noticeably different from that of the West.
Also new and significant in the social changes since the Revolution has been the ballooning of a middle layer (or layers) of the population. It is "middle" insofar as it stands between the working class and collective farmers on the one hand and the ruling elite (members of the central committee of the party, heads of major government departments and economic ministries, and top military brass) on the other. As is typical of middle layers in other societies, this one encompasses a wide diversity of income, influence, and privilege. Here are to be found those in charge of the intermediate levels of the hierarchy of power: the party bureaucracy and the middle managers of government and enterprise. Their interests are generally tied to retaining the existing social structure which provides them not only with job security and a degree of privilege and power, but also a ladder for upward mobility.
A very different component of the middle layer consists of those engaged in medicine, education, culture, art, and science. The influx into these occupations, fed by the increase in the college-educated population from a mere 1.2 million in 1939 to over 20 million today, stands as a testament to the social priorities of the Revolution. Many of those so engaged are little different from industrial workers if judged by status, income, and relation to management. But also included are a large number of privileged professionals and intellectuals--top people in the physical and social sciences, literature, art, film, and the media--who not only benefit from a relatively high standard of living and attractive perks, but have been able to create enough space to give them a degree of independence from the heavy-handed bureaucracy. For the intelligentsia as a whole--including those far from the top--democratic rights are of special importance for job-related as well as personal reasons. And, in addition, they suffer from what is increasingly perceived as a lack of luxuries and comforts that colleagues at equivalent levels in the West enjoy. From these ranks come the economists, sociologists, and political analysts who help design perestroika.
It should be recognized that the social changes just described materialized in a peculiarly rigid political environment. Essentially, Soviet society has been, in Oskar Lange's apt characterization, a sui generis war economy. The goals of rapid industrialization and a strong military defense apparatus dominated the agenda from the beginning. In the given historical conditions, and against great odds, the goals were reached by means of a hierarchical command system that ruled with a heavy hand over most aspects of civilian life as well as over the economy as a whole. With this came an extensive bureaucracy whose outstanding features were rigidity and an ever-present sense of insecurity and the need to protect one's own interest.
Urbanization, the spread of advanced education, and the growth of middle social layers presented challenges to the entrenched bureaucracy. Tensions emerged over such issues as the absence of democracy and democratic rights, the distribution of the social product, and the strategy of economic development.
What needs to be especially emphasized is that although socialist societies are ideologically committed to the elimination in the long run of classes and other insidious differences among the people, the Soviet strategy of development and its accompanying political structure produced new class formations and perpetuated antagonisms among the people. As far as the upper echelons are concerned, their advantages show up not only in higher money incomes. More important are the perks they receive, perks that sharply define the separation between those with power and status and the popular masses. Thus, there are "agency-run distribution centers, polyclinics, sanatoria and recreation facilities, houses, cafeterias, and even laundries that provide high-quality services to the bureaucracy at favorable prices or free of charge but do not serve the man in the street for any kind of money."(*2)
The amount and quality of the perks vary according to the wealth of the institutions handing them out and the status of the recipients. They are made available in various ways to privileged sectors of the intelligentsia as well as to upper reaches of the bureaucracy. All told, they skew the distribution of limited resources in favor of a privileged minority of the population. But this is not the only source of bias in the realm of distribution, for significant differences persist between urban and rural residents, between major urban centers (e.g., Moscow) and outlying districts, and notably between industrially advanced and backward regions.
What needs to be recognized in this connection is not just the existence of differences in living standards as such. Such differences were inevitable in view of where the Soviets started and the development direction they took. What is especially important is that these differences have become entrenched and are regularly reproduced by class, status, and region. In these circumstances, there was no way that conflicts of interest between sectors of the population and between regions over the distribution of the social product and the course of future development could be greatly reduced, let along abolished.
A striking example of conflict of interest is that between advanced and backward regions. Despite its remarkable economic achievements, the Soviet Union has far from overcome many of the obstacles presented by underdevelopment. Thus 70 years after the Revolution the statistical handbook of the USSR for 1987 reports the following about the physical state of the schools:
For the country as a whole 21 percent of pupils are trained at school buildings without central heating, 30 percent without water piping and 40 percent--lacking sewerage. (The USSR in Figures for 1987, p. 254)
The backwardness of the rural areas is particularly pronounced. In his report to the Nineteenth All-Union Conference of the Communist Party of the Soviet Union, Gorbachev had the following to say:
I should like to say a few words specifically about social development in the countryside. Here society has accrued a considerable debt. Housing, social and cultural conditions, and medical services are of a low standard in many districts. And add to this unsatisfactory amenities in village homes, irregular power supplies, difficulties in using domestic appliances, and the poor state of the roads. (19th All-Union Conference of the CPSU, Documents and Materials, Moscow, Novosti Press Agency, 1988, p. 13)
And in some regions, especially the southern and eastern Soviet republics, conditions rival those in the most underdeveloped parts of the Third World. Not only schools and hospitals but whole villages are without running water and sewers. According to a publication by Birlik, a reform movement in Uzbekistan, 50 percent of the villages in the Uzbek Soviet Socialist Republic have no running water and 93 percent have no sewers. (Wall Street Journal, 28 June 1989)
In general, there are considerable differences between republics when judged by such criteria as income per capita, wages of farm workers, meat consumption, housing, health services, etc. It is of course understandable that differences should exist, if only for reasons of history and geography. But what needs to be particularly emphasized in the present context is that these differences reveal a consistent pattern of sharp contrasts between the more and less developed regions. The following from a recent book by two leading Soviet economists highlights the point:
In several regions of the country the per capita consumption of inexpensive state meat is 1.5 to 2 times higher than in the Black Earth Zone of the Ukraine, the Volga region, the Urals, and the majority of the Siberian provinces. The population is barely provided with housing in new regions or in the Central Asian republics, where each citizen has nine to eleven square meters of living space in contrast to fifteen [square meters] in the country overall. In Central Asia the level of medical care is extremely low, especially in rural areas. In Turkmenia more than 60 percent of the maternity hospitals, wards, and children's hospitals have no running water, and about two thirds of the hospitals have no indoor plumbing. Child mortality in the region as a whole is nearly twice as high as the average national level. In Kirghizia child mortality (from age one to two) is three times higher than the national average. (Shmelev and Popov, pp. 189-90)
It would be wrong to conclude that all of this is simply the result of neglect by the authorities in Moscow. The explanation is more complex. Under the Tsars these territories had been, in effect, colonial possessions of Russia, and the social and economic conditions found there were at an extremely low level similar to that of their Third World neighbors across the border. The socialist revolution produced a major turnaround. In contrast to the center-periphery relations in the capitalist world, enough resources were transferred from the more advanced to the less advanced republics to produce a great leap forward in industrialization and the provision of health, education, and cultural facilities.(*3) In crucial ways, the progressive development of the relatively backward areas constituted a model of what socialist planning can accomplish.
The planners, however, had to deal with vast additional demands on the limited resources available. Large pockets of underdevelopment and poverty existed even in the relatively advanced republics. Large-scale investment was needed to develop the productive forces for a long-run increase in living standards. Resources were needed for armaments at first to deal with the German invasion and then to keep up with the arms race during the Cold War. Finally, the solidification of classes (or social strata) within the new social system brought with it conflicting pressures on the direction of economic development--as, for example, whether first priority should be given to raising the living standards of the poorest and most deprived or whether the productive forces that would satisfy the consumption demands of the middle and upper strata should be favored.
Since all needs could not be satisfied at the same time, and since there are long delays between the making of investment plans and benefitting from them, it was inevitable that development would be uneven and that badly needed improvements would be neglected. As a result, despite so much progress, the hurdle of underdevelopment remained, as did poverty pretty much throughout the USSR. The chairman of the Council of Ministers of the USSR recently announced: "The government realizes that almost 40 million people now live below the poverty line." (Nikolai Ryzhkov's report to the Congress of People's Deputies, "On the Programme for the Forthcoming Activity of the USSR Government," in Documents and Materials, May 25-June 9, 1989, Moscow: Novosti Press Agency, 1989, p. 60)
Nevertheless, pressures for reform or calls for a new strategy of development were not especially strong so long as the total national product kept growing at a vigorous rate. It had become an article of faith that rapid growth would in good time cure all ills. For with rapid growth there would eventually be enough productive resources to satisfy all of the people's reasonable needs. Indeed, it was widely believed in the Soviet Union that its economy would before long overtake those of the leading capitalist nations--and surely all the problems of poverty and backwardness would then be overcome. Once wartorn Soviet society was rebuilt and until the late 1950s, the idea did not seem far-fetched.
For a good number of years after the Second World War the Soviet Union's growth rate substantially exceeded those of the United States and Western Europe. But the worship of growth rates was flawed in two respects. First, it narrowed the measure of socialist achievement to the issue of production--how closely levels of output in socialist-style countries resembled those of the advanced capitalist nations. And second, it assumed that the trends in both camps would continue along the same path for a long time to come.
Faith in the permanence of rapid Soviet growth began to weaken as the growth rate started to slip in the late 1950s. It still remained high, but certain aspects of the decline suggested that more was at stake than a temporary relapse. In fact, the growth rate began to decline rather precipitously from one five-year-plan period to the next throughout the 1960s, 1970s, and the first half of the 1980s. Reforms in economic organization and practice were introduced by Khrushchev in 1957 and Kosygin in 1965 in the hope of stemming the decline and improving efficiency. The reforms did have a positive effect in the short run. Yet they soon fell into disuse or were abandoned--in part because they threatened the interests of influential sectors of the bureaucracy and in part because they clashed with rigid administrative procedures of the established planning system.
With the need for reforms on the agenda, however, new avenues of inquiry and debate were opened up of a kind that had not been witnessed publicly in the Soviet Union since the 1920s.(*4) New social studies institutes were formed, scholars became engaged in critical examination of the planning system, and specialists debated what was needed to get the economy back on the fast track. Out of this milieu Gorbachev selected the leading members of his brain trust.
The intellectual ferment plus pressures originating in the privileged intelligentsia and others in the urban middle class prepared the ground for radical political and economic changes. The turning point came with the maturing of an unprecedentedly severe social and economic crisis together with a growing awareness that there was no way out of the crisis within the existing political and economic arrangements. A growing sector of the ruling elite--in both the conservative and reform wings--recognized that partial reforms, such as those initiated by Khrushchev and Kosygin could not overcome the relentless retardation of the economy and the deterioration of social welfare. It now appears that the economy stopped growing in the five to seven years before Gorbachev's ascension to power. The official national income data reveal an almost 50 percent decline in the growth rate between 1966-1970 and 1981-1985 (from an annual average of 7.8 percent to 3.6 percent). Prominent Soviet economists, however, dispute the accuracy of these figures, claiming in particular that the supposed 3.6 annual growth rate for 1981-1985 is seriously flawed because of a failure to take account of a substantial hidden inflation factor. Thus, Abel Aganbegyan, a member of the Presidium of the Academy of Sciences of the USSR and an adviser to Gorbachev, recalculated the national income figures using a more realistic price index, and came to the conclusion that "in the period 1981-85 there was practically no economic growth." He adds further:
Unprecedented stagnation and crisis occurred during the period 1979-82, when production of 40 percent of all industrial goods actually fell. Agriculture declined (throughout this period it failed to reach the 1978 output levels). The use of productive resources sharply declined and the rate of growth of all indicators of efficiency in social production slowed down: in effect the productivity of labor did not increase and return on capital investment fell, aggravating the fall in the capital-output ratio. (Abel Aganbegyan, The Economic Challenge of Perestroika, [Bloomington and Indianapolis: Indiana University Press, 1988], p. 3)
Stagnation of production meant that there was less available for consumption. If in truth there was no growth at all, then just the increase in population would have cut down the availability of consumer goods and services per person. But there were other sources of trouble as well. The arms race and the war in Afghanistan drained resources, leaving still less for consumer use. Furthermore, the reduced efficiency of capital equipment (referred to by Aganbegyan) prompted planners to call for still more equipment to make up for the loss.
There were two ways in which the shrinking availability of consumer goods and services would manifest itself: either a reduction in individual wages or a decline in social consumption (expenditures for health, education, pensions, etc.) Although inflation cut into real wages, stagnation took its main toll in the neglect of public services. An indirect measure of the effect of reduced spending for social consumption is found in the statistics on health. Thus, the death rate per 1,000 people increased from 7.1 in 1960 to 10.3 in 1980. Part of this increase may be due to the aging of the population. On the other hand, advances in medicine have made possible an extension of the life of older people, and no significant rise in death rates has occurred in many other countries with aging populations. It is also noteworthy that despite progress in medicine, there was no increase in life expectancy in the Soviet Union from 1958 to 1985; in fact, the life expectancy of males decreased in those years. Infant mortality also increased during the same period, reaching 26 per 1,000 children under one year old in 1985 and giving the Soviet Union the ranking of fiftieth among nations.
The deterioration of social consumption during the stagnation years naturally intensified the long-standing problems of poverty, insufficient housing, regions of underdevelopment, etc. The pile-up of social problems on top of a moribund economy created strains that challenged the Soviet system. The task facing Mikhail Gorbachev when elected Secretary of the Central Committee of the CPSU was to design a rescue of the system. It was no doubt because of the severity of the crisis that he received, and continues to receive, support from sectors of the ruling elite that otherwise would most likely not have been available for the radical changes he has introduced in the political, economic, and cultural spheres.
In the second part of this essay we intend to look into the causes of the economic decline and then examine the nature of the reforms introduced and contemplated.
(*1)Unless otherwise indicated, data cited in this article are taken from The USSR in Figures for 1987 (Moscow: Finansy i Statistiki, 1988). (*2)N. Shmelev and V. Popov, The Turning Point, Revitalizing the Soviet Economy (New York: Doubleday, 1989), p. 189. (*3)See the useful study on this subject: Alec Nove and J.A. Newth, The Soviet, Middle East--A Model for Development? (London: George Allen & Unwin, 1967). (*4)A stimulating and informative analysis of these debates can be found in Moshe Lewin, Political Undercurrents in Soviet Economic Debates, From Bukharin to the Modern Reformers (Princeton, N.J.: Princeton University Press, 1974).