The Capitalist Transformation of State Socialism

The Making and Breaking of State Socialist Society, and What Followed

David Lane

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781135008802
• Edition: 1
• Topic: Social Sciences
• Subtopic: Ethnic Studies
• Index: Social Sciences

David Lane outlines succinctly yet comprehensively the development and transformation of state socialism. While focussing on Russia and the countries of Eastern Europe, he also engages in a discussion of the Chinese path. In response to the changing social structure and external demands, he outlines different scenarios of reform. He contends that European state socialism did not collapse but was consciously dismantled. He brings out the West's decisive support of the reform process and Gorbachev's significant role in tipping the balance of political forces in favour of an emergent ascendant class. In the post-socialist period, he details developments in the economy and politics. He distinguishes different political and economic trajectories of countries of the former USSR, the New Member States of the European Union, and China; and he notes the attempts to promote further change through 'coloured' revolutions. The book provides a detailed account not only of the unequal impact of transformation on social inequality which has given rise to a privileged business and political class, but also how far the changes have fulfilled the promise of democracy promotion, wealth creation and human development. Finally, in the context of globalisation, the author considers possible future political and economic developments for Russia and China. Throughout the author, a leading expert in the field, brings to bear his deep knowledge of socialist countries, draws on his research on the former Soviet Union, and visits to nearly all the former state socialist countries, including China.

Part I

The making of state socialism and the market socialist critique

1 Introduction

The objective of this book is to set in perspective the socialist project in Europe which began with the Russian Revolution of October 1917 and culminated with the counter-revolution and dissolution of the USSR in December 1991. This quest is not conceived in terms simply of the history of the Soviet Union – though the USSR plays the major role in this book because the evolution of state socialism was dependent on it. It takes into account the expansion of communism to Eastern Europe after the Second World War as well as the rise of communism in China. The causes of disenchantment from the 1960s and the dismemberment of European state socialism 1989–91 are explored. I examine how different countries extricated themselves from state socialism and how it in turn shaped the post-socialist societies.

In Part II, I consider developments in the post-socialist period enabling the scholar to re-examine state socialist society in a new light – a comparison with how these societies have fared under capitalism. The post-Soviet period outlines the major trajectories of change in the quest to build capitalism and to fashion a form of democracy in the European post-Soviet societies. It also takes as a comparison developments in China.

The book has three main themes: the rise of state socialism on the model of the USSR, an account of how it was dismantled in Europe, and an evaluation of the outcomes of the transformation.

The October Revolution of 1917 gave rise to a model of social, political and economic organization in the form of Soviet Russia which was borrowed extensively by a wide range of self-styled communist countries ranging from China to Cuba. The Soviet order provided a challenge to capitalism. In October 1961, Nikita Khrushchev, head of the Communist Party of the Soviet Union, claimed that in conditions of ‘the crisis of world capitalism’, the period of ‘full-scale communist construction’ had begun.

By 1980, self-defined Marxist-Leninist states accounted for a third of the world's population and claimed 40 per cent of its industrial production. In Russia, Mongolia, China, Cuba, Yugoslavia, Albania, Vietnam, Laos and Kampuchea the communists had fought their way to power and had defended the new system at great cost. In the USSR alone, over 20 million people perished at the hands of the Germans in the Second World War. Anti-communist wars in Vietnam and Korea saw losses on a similar scale. In Vietnam there were over a million military casualties and as many civilian ones; in the Korean War 2 million civilian casualties and 1.5 million military deaths have been estimated.

By the mid-1980s, the socialist states had prevailed against enemies which had had superior armaments and resources. State socialism appeared a solid, well-founded system and was a beacon to many (though not all) radicals in the industrialized countries and it gave hope to the oppressed in the Third World.

In February 1986, Gorbachev launched his programme, perestroika (reconstruction), for the reform of the Soviet Union. Its consequences were catastrophic for the communist system. With breathtaking speed, by the end of 1989 a major shift in political power had taken place in Eastern Europe. Following the institution of free competitive elections, an anti-communist President came to power in Poland and anti-communist governments in most of the East European countries. The Berlin Wall, a symbol of a divided Europe, was destroyed and the German Democratic Republic was absorbed into the Federal Republic.

By December 1991, the world's first state socialist society, the USSR, was dissolved into 15 sovereign states. The Communist Party was declared to be illegal and its property sequestrated. The demographic mass of the communist world evaporated: the former European communist countries moved to adopt market economies and institute competitive elections. They aspired to, and are still attempting to create, the forms and processes of the capitalist world. The ‘transition’ to capitalism, markets, electoral democracy and civil society was initiated. In China, Vietnam, Cuba and North Korea the communists still rule but, particularly in the first two, marketization and creeping capitalism erode and undermine the traditional communist system.

These events have led to a major reappraisal of the possibility of socialism as a systemic alternative to capitalism and to the feasibility of revolution as a strategy of change. Whereas at the beginning of the twentieth century, the sociological and political interpretation of socialist revolutionary practice was optimistic – at least from supporters on the left – at its end, pessimism was widespread. Some have cast doubt on whether the events of October constituted a revolution and others have denied its socialist character. The very nature of the socialist project was (and is) clouded in scepticism and rejection.

The costs of revolution have been negatively evaluated against Stalinist oppression and political coercion and the repression of the Cultural Revolution in China. In Eastern Europe popular discontent was widespread as internal economic growth declined and the large ‘socialist intelligentsia’ sought greater independence. By the end of the twentieth century, the Marxist-Leninist version of state socialism, as a creed, as an aspiration, as well as a system of political rule – an alternative to capitalism – was in retreat.

But state socialism in Europe did not fail completely. Considerable advancements socially and economically had been secured, and China had succeeded in transforming the central command system while preserving Communist Party rule. China has risen as an economic and political power and may be considered as an alternative strategy of reform – combining the market with the hegemony of the Communist Party. These developments – the rise and dismantling of state socialism, the market socialist alternative – are analysed in the first part of this book. In Chapter 11, I contend that the collapse of state socialism was not inevitable, and consider how the fall of state socialism could have been prevented.

In 2013, after 20 years or so of transition to capitalism, the time has come for a reappraisal of the state socialist experience. The former Central European state socialist countries and three Baltic states formerly members of the USSR are now members of the European Union, which endorses economically their capitalist, and politically their pluralist democratic, credentials. Other states of the former Soviet Union have lost the institutional features of communist rule, but have made an incomplete transition to capitalism and competitive democracy. In all these states, the question may be posed of the extent to which life is qualitatively better than it was under state socialism.

The People's Republic of China is also considered: would its model of development have been viable for the European socialist states? Have the developments there built capitalism in a different form? I outline different models of capitalism and what the reformers delivered to the post-socialist member states of the European Union, as well as the emergence of a new Russia. Whereas many in the state socialist societies rejected communism, we turn to consider the extent to which capitalism has improved life, and how their publics now evaluate these societies. Finally, I discuss scenarios of future developments.

Revolution and socialism

State socialism was a consequence of revolution. Socialist revolutions, following that of the Russian October Revolution, are characterized as mass revolutions. They have a high mass participation, a long duration involving fundamental changes in the structure of political authority and the social system, and they involve mass violence. ¹ As Theda Skocpol has put it:

Changes in social systems of societies give rise to grievances, social disori-entation, or new class or group interests and potentials for collective mobilization. Then there develops a purposive, mass-based movement – coalescing with the aid of ideology and organization – that consciously undertakes to overthrow the existing government and perhaps the entire social order. Finally, the revolutionary movement fights it out with the authorities or dominant class and, if it wins, undertakes to establish its own authority and program.²

This definition, however, falls short of one other vital component of revolution: the major social, political and economic changes that follow after the insurgents have taken power. ³

The analysis of revolution has concentrated on two major areas. The first is the dynamics of the political capture of power: study of the events immediately preceding the uprising, the actual process of political insurrection and the ideology and organization of the rebels. Second, research has sought to uncover the underlying conditions and motive forces that explain the success of the insurgents' political activity and the failure of the incumbents in power. A less developed area of study is the concern of this book: the happenings that follow the seizure of political power – the extent to which the revolutionaries' social, political and economic policies have been put into effect. Moreover, the transition to capitalism raises the issue of counter-revolution, ⁴ which reversed these developments.

It is precisely the aftermath of the October Revolution – with respect to the countries that set out with the goal of creating a communist society and have since failed – which is now of great importance. To what extent did they succeed in building socialism or have we really witnessed an alternative form of industrialization? If the former, then the collapse of the state socialist regimes at the end of the 1980s may modify significantly our view of the revolutionary process.

If they indeed were a new socialist order, then mass revolutions, which are usually considered to be irreversible, may themselves be overturned. Was their fall a consequence of inherent causes of structural incompatibilities or contradictions, was it the consequence of intended or unintended political policies, or was it contingent on external factors? Another important implication is that if the ‘collapse’ of state socialism was predicated on popular rejection, then it follows that people who have experienced ‘socialism’ do not want it.

An alternative possibility is that state socialism was pushed over by domestic and foreign counter-elites acting on class interest, the consequences of which have only become apparent in the new post-socialist political order.

The ‘transformation’ in turn poses the question as to whether their return (or aspiration to return) to some form of capitalism signals the ‘end of history’ – in the sense that the liberal-democratic capitalist societies of the West represent the ideal of human aspiration. However, the aspiration for capitalism is not the same as the experience of it. With the hindsight of history, we may now discover whether people feel that they were mistaken; whether they regret its passing; and whether the countries in transition from state socialism are any better than what they have replaced. In this context we may also examine the possibilities for a revival of socialism, and consider whether the triumphalism of neo-liberalism over the end of the communist states may be misplaced.

State socialism

What, then, is state socialism? From the point of view of comparative politics and sociology, it is a society distinguished by a state-owned, more or less centrally administered economy controlled by a dominant communist party which seeks, on the basis of Marxism-Leninist ideology and through the agency of the state, to mobilize the population to make a classless society.

Its evolution is discussed in more detail in Chapter 2. While the descriptive elements of this definition are widely accepted, the dynamic and goals are widely challenged. First, world system theorists following the reasoning of Immanuel Wallerstein contend that they are in essence a form of modern industrial society, a part of the global system, a view shared by Western sociologists such as Anthony Giddens an...