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Socialism Between DĂ©tente and Globalisation
Federico Romero
Historians have increasingly connected the demise of Europeâs socialist regimes with late twentieth-century global economic transformations. Several interpretations of 1989 focus on the undermining effects globalisation had on the late socialist economies and, more crucially, on its âideological erosionâ of the regimesâ solidity, legitimacy and self-confidence.1
After the collapse of the Bretton Woods monetary system and the 1973 oil crisis, growing trade competition and market liberalisation redesigned international commercial and financial flows. Multinational corporations connected by new communication and information technologies reshaped productive and distributive networks. The explosive growth of global finance â with international lending rising more than tenfold between 1970 and 1980 â fuelled these processes and built new dynamics of wealth and power.2
With goods and capital moving worldwide in unprecedented amounts and at an increasing pace, the landscape in which socialist economies operated was transformed more quickly and unpredictably than socialist officials could fathom or cope with. Their efforts to make their economies more productive by expanding trade with, and technology transfers from, the West turned sour by the late 1970s, and ever-increasing financial imbalances constrained their options, in a few cases to the point of suffocation. By the 1980s they had fallen victim to âthe kiss of debtâ, and poor economic performance called into question the very rationale upon which their strategies had been built: âif socialism was merely aiming at placating consumers just like capitalism, only not as well, was socialismâs existence even justified?â3
Of course, economic dynamics were linked to ideological and cultural factors that deepened socialismâs predicament, hindering its residual rationale and hollowing out its core meaning. While socialist modernisers were trying to temper the rigidities of planning with limited simulated market mechanisms, the Keynesian consensus was fast unravelling in the West. Rather than the presumed convergence of âmarket socialismâ and Keynesian mixed economies towards rationally planned industrial societies, the 1970s ushered in a free market ideology that eventually dismantled the societal and economic paradigms underlying post-war recovery.4
Individual competition rooted in a market concept was hailed as the foundation of freedom and contrasted with the state as the source of authoritarianism. In this starkly binary logic, âfreedom of choiceâ rose from being a consumerist slogan to an overarching paradigm of pervasive influence.5 Soon dubbed âneo-liberalâ, this paradigm of market individualism in a context of deepening global interconnectedness not only sustained a fierce criticism of communism but also struck at the core of any planning and redistributive policy, disabling social-democratic and Keynesian frameworks, which relied primarily on national policy tools. Tighter interdependence and capital mobility forced adjustments at any level â regional and national, between sectors and within firms.
This major systemic transition was deeply upsetting everywhere and the Western economies underwent difficult, often painful changes. However, they adapted better than those of Eastern Europe. After comparable achievements in the two post-war decades, economic performances diverged markedly. Between 1973 and 1989, the planned economies of Eastern Europe grew 0.7% a year, against 2% for Western Europe. Per-capita income in socialist economies dropped from 49% to 37% of Western European levels.6 State socialism proved to be âa blunt instrument, more suitable for rapid industrialisation⊠than for progressing to a sophisticated consumer economyâ.7
These fast-changing conditions made the national economic strategies analysed in this book far more difficult to implement and ultimately unsuccessful. It was not merely an economic failure to improve productivity and upgrade technology, although this was crucial. The demise of strategies depending on deeper exchanges with the West meant the socialist regimes of central-eastern Europe lost their attempt at overcoming the key long-term dependencies that hampered them and to a large extent defined them.
They were struggling, first, with their historically sedimented condition of âperipheralâ economies subordinated to Europeâs north-western industrial core. Even though Stalinist industrialisation had transformed their domestic economic agrarian structures, their actual and potential trading relations with the advanced industrialised economies of the West remained disproportionally dependent on exporting primary products and low-tech goods. For Poland, Hungary and Yugoslavia, and even more so for Bulgaria and Romania, catching up with the most advanced economies was a long-term national goal no less than a key imperative of socialist ideology.8 Its pursuit might have appeared long and difficult but far from unthinkable in the 1960s and early 1970s, but within a decade it turned out to be an untenable delusion.
Historical âbackwardnessâ was compounded with the relative isolation imposed by the early Cold War partition of Europe in opposite and largely separate camps. Ever since the launch of the Marshall Plan in 1947, Western management of the international economy also aimed to isolate the socialist economies. The institutions, rules and practices of post-war multilateralism ensured they remained fenced in a closed sphere with minimal interchanges with Western capital and advanced technology. No less crucial, of course, was the Stalinist strategy of creating an insulated self-blockaded socialist camp â which operated in paradoxical synergy with Western decisions.
Historical scholarship has debunked, or at the very least seriously qualified, the Cold War myth of an impermeable dour socialist autarky. Excluded from the post-war international economy framed by Western multilateralism, the socialist countries strived to build up trade amongst themselves and a planned division of labour through the Council for Mutual Economic Assistance (CMEA). Although this seemingly complemented the blocâs military and ideological cohesion, it neither functioned efficiently for economic integration nor satisfied the participantsâ key economic ambitions. The Soviet Union gained little economically and soon had to provide its partners with support, while they resisted plans for intra-regional specialisation, strived to maximise their individual shares of Soviet subsidies and usually pursued their own national goals.9
This system was not particularly efficient and certainly unsatisfactory, not least for the central-eastern European socialist countries mired in a âdual dependencyâ10 on the regionâs dominant imperial power and the core economies of the capitalist world, yet it embodied and to a certain extent sustained the post-Stalinist effort to deepen socialismâs transnationalism, connect with the world and build networks of global exchange.
Recent studies investigate the multiple deep expanding connections the socialist world built within its own boundaries and with other societies, particularly in post-colonial settings but also in the West. They make a strong case for a far more plural reading of the various internationalist projects and frameworks that not only competed but often overlapped and got intertwined in the complex transformations from the 1960s onwards.11 They challenge the teleological view of a single inescapable neo-liberal globalisation and replace it with proper historical questions on the goals, pressures and specific terms under which different states decided to open up their economies.12 Above all, they reassess the place and role of socialism in global history, its contribution to a culture of global change in the second half of the twentieth century and its practices to connect with the âthird worldâ in projects of alternative internationalisation.13
Of course, assessing socialismâs contribution to globalisation, or conceptualising an alternative path to globalisation, is a challenging endeavour, not least because the communists purposely âwrote themselves out of the story of globalisationâ with their language of national independence and antagonistic blocs.14 Still, the challenge to global capitalist hegemony inspired socialist views and policies from the mid-1950s onwards, and was sufficiently serious to raise considerable concerns in Western capitals. At least until the mid-1970s, the potential for an emerging compact between socialism and the global South seemed real enough to stoke hopes or fears of an alternative international order.15
This did not come to pass. Instead, a compelling market globalisation under Western hegemony came to define the closing decades of the twentieth century. The transition from the former prospect to the latter reality defined the mutable environment in which the socialist economies struggled, illuminating their predicaments.
Socialist transformation or stabilisation?
The Stalinist model of heavy industrialisation had changed the socialist countriesâ economies, with intense resource utilisation that fuelled their rapid post-war growth. However, their leaders â and particularly Nikita Khrushchev â looked at Western advanced capitalism as their reference point. The aspiration of catching up with the West oriented their compasses for strategic, ideological and material reasons. It was, of course, a Cold War imperative dictated by the need to sustain the antagonism and possibly surpass and outshine the adversary. Furthermore, it was an ideological tenet rooted in Marxist-Leninist views of class struggle and historical progress. However, by the early 1960s it was also increasingly a thrust grounded in more pragmatic goals and implications.
Under Khrushchev, the Soviet leadership embraced notions of accelerated economic growth premised on a shift towards light industry for increased production of a larger range of consumer goods and on expanded trade within the socialist sphere but also with the new post-colonial nations and the West. Above all, it pinned its hopes on a scientific and technological revolution not only to propel the USSR to the role of global superpower but also to project socialism as an alternative superior form of modernity. This entailed a strong emphasis on technological innovation necessitating not only research but also exchanges between East and West â tasks entrusted to a State Committee of Science and Technology created in 1958.16 In 1961, the Communist Party of the USSR published a new programme that associated communism with material abundance and promised socialist consumption policies that betrayed a cultural fascination with Western ideas of societal wellbeing and progress, if not an internalisation of Western superiority.17
This shift of emphasis was shared, albeit unevenly, by the other European socialist regimes (but harshly criticised by the Chinese), and there, as in the Soviet Union, it brought both desired transformations and unintended consequences and tensions. Investment prioriti...
