According to the ruling class press here, what has emerged in the Soviet Union under Gorbachev is chaos: ideological and political confusion, shortages of consumer goods, a loss of tempo in industrialization, a decline in the standard of living, stagflation, the growth of the black market, an increasing tendency towards enrichment of the few, a growing disillusionment of large sections of the population with Gorbachev and his reforms, and a growing inclination of the intellectuals, academicians, scientists and other elite to veer towards Western capitalism.
All these, however, are merely the superficial manifestations of a far more profound phenomenon. It is the slow but gradual emergence of a polarization in the Soviet Union between two class camps, with the bourgeois, pro-capitalist elements on one side and the proletariat and its allies on the other. Almost squarely in the middle stands an increasingly discredited governing group, headed by Gorbachev.
Two class camps
Two class camps! But weren't the old ruling classes, the landlords and the bourgeoisie, abolished and liquidated long ago? Isn't the peasantry as it existed before the Revolution also gone? It was converted into a collectivized peasantry, even though collective property exists side by side with private plots, which continue to produce faster than the collectives.
Furthermore, the proletariat has developed mightily. Just before and after the Revolution it was a small minority of the population, which nevertheless was extraordinarily class conscious and receptive to the boldest revolutionary conclusions of Marxism. As long as it was led by a revolutionary Marxist party, it was capable of organizing society in the building of a new, progressive social order.
Today the proletariat is not a minority of the population. It is the most numerous class in the Soviet Union. It is more educated. It is technologically and culturally decades and decades ahead of where it was in the early period of the Revolution.
It has managed, under whatever leadership, to sustain the new social order in times of war and peace, of famine and purges, and of the threat of atomic annihilation posed by imperialist militarism, headed by the U.S. That's the proletariat of today.
New bourgeois layers
Nevertheless, despite the attempt at wholesale liquidation of the ruling bourgeois elements, there have grown up in the USSR over a period of decades new bourgeois layers which have been nurtured on the basis of economic as well as political exigencies. They have been showered with privilege, flattered for their abilities, and turned into an elitist phenomenon which stands above the proletariat. They have attained this position because of the conciliatory relationship shown toward them by the new governmental apparatus, which of necessity absorbed significant layers of the bureaucracy of the old regime.
Particularly after the death of Lenin in 1924, the new bureaucracy needed to curb the new aggressiveness of the proletariat in its role, together with the peasantry, as the fundamental pillar of the proletarian dictatorship. Thus the bureaucracy took on a centrist stance.
On the one hand, it needed to keep the proletariat in its place, so to speak. To do so, it had to curb the fundamental organs of workers' power, the Soviets, and to throttle workers' democracy there and, far more significantly, in the Party itself.
At the same time, the bureaucracy relied on class elements hostile to socialism in the difficult task of industrialization as well as for scientific and technological advancement. These accommodated themselves to and indeed became servile instruments of the bureaucracy.
Bourgeois behavior under czarism
This role for the bourgeois elements is not unlike the way they conducted themselves much earlier, when capitalism was in its infancy. In general, the new bourgeois class growing up under feudalism at first accommodated itself to the needs of the feudal lords. In Russia, this meant ingratiating themselves with the czarist autocracy. They gained strength this way because czarism, in its struggle with more powerful capitalist rivals in Europe, needed the support first of merchant capital and later of industrial capital to assist its growing expansionist role in world affairs.
The bigger the needs of the czarist autocracy in its struggle for a greater role abroad as well as against the workers and the peasants at home, the more it leaned on the bourgeoisie for support. Capitalism came to Russia late in the day, but its influence on the government grew until the czarist autocracy virtually became its captive. However, this in no way undermined the rule of the landlord class or weakened the autocratic reign of the czar and czarina themselves.
In the writings of Karl Marx and Frederick Engels in the Communist Manifesto, one can find a critical examination of how the bourgeoisie developed on a world scale from the 14th century on, how it started as an oppressed class under feudalism and rose to the dizzying heights of an oppressing ruling class.
All this is significant in evaluating the growth of the bourgeois sector in the Soviet Union. The bourgeois elements have grown steadily and consistently in science, in technology, in the management of enterprises, in all areas where they have received enormous privileges and emoluments--particularly in the operation of the governmental apparatus by the bureaucracy itself.
Purges here and there of both left- and right-wing elements in the Party during and after Stalin's rule have not resulted in the diminution of the influence of the bourgeois social stratum. Rather, it suffered least and accommodated itself to the needs of the successive governing groups after the death of Lenin.
Just as the bourgeois elements found ways and means of not only coexisting with the feudal lords but of serving them while accumulating enormous strength and power, a similar if not identical process has taken place in the USSR.
At a certain point, it is difficult to say exactly when, the challenge by the bourgeois elements grew more impudent and more open. Indeed, they were difficult to deal with during the entire course of development of the USSR, first because of the strategic needs in the early period, and later because of the conciliatory attitude of the bureaucratic apparatus arising out of its need to balance them against the proletariat. The proletariat, even though it had sunk into passivity and was deprived of any organs for independent class expression, was nevertheless becoming numerically ever stronger.
The Gorbachev generation
Everything came to a head and reached a crisis point with the passing of the so-called old guard--Brezhnev, Andropov and Chernenko. A new generation of leaders took over. Much of what then happened is attributed to the generation gap, but that explanation is insufficient. A new generation may usher in a revolutionary development or a reactionary one, depending upon the economic and political situation of the country.
From the first day of taking over the administration of the government, the new generation ushered in by the likes of Gorbachev struck a conciliatory note toward Western imperialism. When Margaret Thatcher, the reactionary Conservative Prime Minister of Britain, recognized Gorbachev with her apparently off-hand remark, "I like him," it was no accident. The U.S. capitalist press seized upon it as a remarkable token that there would be new opportunities in the USSR.
In its broad outlook, the Gorbachev grouping is different from the generation that grew up under Khrushchev, for example. Although Khrushchev has gone down in history as the principal revisionist after Stalin, his generation was nevertheless full of enthusiasm. It was an "up" generation that saw the technological and industrial growth of the USSR symbolized in the launching of Sputnik.
Khrushchev himself challenged the U.S. to a race, not in armaments but in the living standards of the masses. He felt confident enough to boast about overtaking the U.S. on the basis of having an improved socialist economy and moving from what he called advanced socialism to communism.
The Khrushchev generation received renewed strength from world revolutionary developments. Events in China, Korea, Vietnam, Cuba and throughout the colonial world gave the USSR revolutionary prestige and greater respect, even in the imperialist camp, notwithstanding the highly injurious split between China and the USSR which converted an ideological struggle into bourgeois nationalist rivalry.
The Gorbachev grouping is utterly unlike the Khrushchev one in this fundamental respect: rather than being eagerly competitive with imperialism, they have become eager-beaver conciliators and collaborators with it.
The czarist court always had its anglophiles and francophiles. This generation is an updated version of them.
Under the Leninist regime, the Bolsheviks had always promoted the idea of appropriating from the West whatever was necessary for the revolution and socialist construction. "Learn from them," Lenin was always saying, learn their skills and use them to develop our own social system. But it was all in the spirit of the communist struggle against capitalism.
Identifying with the vices of capitalism
This new generation of leaders, precisely because it is based upon a neobourgeois social grouping, identifies with the vices of capitalism rather than with its progressive aspects or its so-called virtues. It's a fundamental difference. They have become tantalized, one would say mesmerized, by the economic and technological successes of latter-day imperialism. They seem not to stop, even for a moment, to ask themselves how and by what means these successes have been achieved, or what the prospect of their duration is.
Their leading economists have become free marketeers, a phrase which doesn't carry opprobrium among them but is rather a symbol of "innovative new thinking."
This stratum which weeps so copiously at the brutal collectivization of the independent peasantry forget entirely that the free market has ruined the independent peasantry worldwide, has ousted them from the land. Millions have been reduced to beggary, or employment at any price. You only have to look at great megacities like Sao Paulo, Mexico City, Cairo and Calcutta to see what the free market does to the peasantry.
And what about the peasants in old Russia who got uprooted from their ancient communes? Did they not form the great army for the industrialization begun by the bourgeoisie, when they weren't being used as cannon fodder?
The new populists, as they are called today in the USSR, differ from West European romanticists and Russian Narodniki, who laid strong emphasis on the process by which the ancient communes were turned into capitalist agriculture. At least that older process had the merit that capitalist agriculture was superior to what Lenin called precapitalist agricultural stagnation.
After the summit, greater crises
Having polarized the country into virtually two class camps with its bourgeois, pro-capitalist reforms, the Gorbachev administration finds itself in even greater crisis after the summit meeting with Bush.
Gorbachev's former ally, Prime Minister Nikolai Ryzhkov, who worked so long and hard on a new economic plan, presumably in cooperation with and at the behest of Gorbachev, now finds that it is unworkable. Moreover, the more bourgeois elements who previously supported him have now detached themselves from his plans and are moving to the extreme right, openly advocating pro-capitalist restorationist measures.
Ryzhkov's plans involved tripling the price of bread and other basic commodities. They received such a hostile response from the broad public, particularly the working masses--imagine the price of bread being tripled!--that the extreme right, those openly for bourgeois restoration, decided to ditch Ryzhkov and play the role of demagogues by coming out against these harsh measures, of which they themselves had been the most enthusiastic supporters.
How quickly, with such ease and facility, these novices in statecraft have learned bourgeois political trickery!
Even before Gorbachev left for his summit meeting, Pravda interviewed two of these economists, one more extreme than the other in pushing the dismantling of the socialized industries. They are Academician S. S. Shatalin and a corresponding member of the Academy of Sciences, N. Ya. Petrakov.
A condensed English text of the April 26 Pravda interview is available in the Current Digest of the Soviet Press, May 30, 1990, Vol. XLII, No. 17. An interview with Petrakov also appeared in the June 10 New York Times.
It is to Petrakov that we draw the reader's attention, since he is the most outspoken of the neobourgeois restorationists. He is a personal adviser to Gorbachev, and his pronouncements seem to reflect not just a personal viewpoint, as he claims, but a grouping. It is quite easy for Gorbachev, or any head of state, to disavow a personal assistant. In this case, however, he has not seen fit to do so.
Petrakov: Dismantle socialized industries
In the first place, Petrakov completely repudiates the entire plan under which the Ryzhkov team has been operating. He calls for a swifter pace to virtually dismantle the socialized industries of the USSR and return them to capitalist control.
That such a shocking proposal could be made in the USSR, and from none other than a member of Gorbachev's inner circle, is positively extraordinary. Could these assertions be made in all seriousness? Has the situation really gone that far? Have the outright bourgeois elements really gotten the upper hand within the councils of the government, and have they gotten the acquiescence if not the support of Gorbachev himself?
Mind you, this comes immediately after Gorbachev returned from the summit virtually empty-handed. At this stage, he has received nothing from his many meetings with the chieftains of the U.S. ruling class, the so-called captains of industry whom he met in Minneapolis and on the West Coast, and the millionaire legislators in Washington.
It is to be remembered that Petrakov is one of Gorbachev's inner circle. His role is akin to that of David Stockman, Reagan's director of the Office of Management and Budget, who in reality was the minion of the bankers and left to join Goldman Sachs at a six-figure salary.
But let us proceed to examine at least the key proposals made by Petrakov. They are not just for the establishment of a free market and all that entails (a capitalist market economy). He gets down to more specific proposals.
He calls for the conversion, or the denationalization, of state-owned industry by creating a stock market and selling the shares to the public. He even goes so far as to give the number of major state enterprises that could be converted to stock ownership in the next year: 2,200.
Democratic promises vs. dictatorial decrees
How does it work? The process is to begin with Gorbachev issuing decrees dismantling these industries and turning them over to private ownership. Note that this involves an extremely authoritarian, dictatorial measure. It is the exercise of personal dictatorship. Even Stalin never issued any decrees without first and foremost getting the support of the Politburo, Central Committee and the Supreme Soviet.
Under this proposal, Gorbachev would use the emergency powers of the president that were established for such situations as floods, rebellions, or other extraordinary events which require immediate action. They have nothing to do with changing the form of the social system from a workers' state to a capitalist state. How undemocratic can they get? Yet this is passed off in silence as glasnost.
The socialist enterprises will be converted to stock ownership. And just exactly how do you do a thing like that in a socialist country?
How stock ownership works
Let us suppose that the Magnetogorsk steel plant, which played an illustrious role in the Second World War and is now undergoing modernization, is to be converted to stock ownership. Who sets its price? Who knows the value? Do the directors set the value of the plant?
Let us arbitrarily say it is worth 100 million rubles. If it is divided into a million shares, each would be worth 100 rubles. Who gets what? Let us say there are 20,000 workers. Would each worker get 50 shares?
Will the director of the Magnetogorsk complex really get the same number of shares as for instance a welder or pipefitter? Assuming that this is the case, which is highly improbable, the next question that arises is, can the workers convert their stock certificates into cash? Can they be bought and sold?
The likelihood of that happening carries considerable danger. In the first place, if conversion into cash is done on a mass basis, it means the issuing of more currency, which in turn causes an inflationary spiral and devalues the Soviet currency.
Furthermore, the conversion into stock company certificates is done basically for the purpose not of selling them to the Soviet public but of floating them abroad in order to obtain foreign currency. This is what the Soviet bourgeois grouping wants most, to convert the plants into private property on the basis of individual stock ownership, letting the stock itself be floated abroad and bought up en masse by capitalists.
Suppose this is done. What do these new rightwing bourgeois extremists have in mind next? They must know that you cannot float Soviet stock abroad without getting the mediation of the principal stock dealers, such as Goldman Sachs and Merrill Lynch in the U.S., as well as the British, the French and the German bankers. It is impossible to float any stock without making them the intermediaries.
As part and parcel of appeasing the Bourse, Lombard Street, and especially Wall Street, the Soviet leaders agreed at the summit to pay up on the Lend Lease from the Second World War. Until now, the Soviet government has consistently refused to do this, and for good reason. Its loss of soldiers, civilians and material goods during the struggle that broke the back of Hitler's armies was enormous, way out of proportion to anything suffered by the imperialist Allies. Why should it owe them anything?
Penetration of imperialist banks
The imperialist banks, of course, will not float the stock unless they in turn get an opportunity to ``examine'' the enterprises (a euphemism for having some control over the companies whose stock is being floated). And this directly brings the banks into the internal affairs of the economic situation in the USSR. It brings to the fore the possibility of imperialist penetration of Soviet industry.
Petrakov calls for the establishment of a free market, an independent banking system (independent of whom?), increased interest rates and the selling of government land.
It is ideas like this which instigated the recent violent struggle between the Uzbek and Kirghiz people. Why? Because the government began talking about putting up land, especially land on the borders of the two republics, for sale.
Petrakov's proposals mean becoming integrated and subordinated to the world capitalist market. The word "free" market is a fraud. It actually means dependence upon the world market, which in turn means world imperialist finance capital, headed by the U.S. You cannot get into the world capitalist market, especially in a serious way, without the bankers having what they call oversight of the companies whose stocks are being floated.
If stock merely remains as paper in the hands of the workers, or is redeemable in Soviet currency only, then it is a form of cooperative ownership. But stock ownership has no significance unless the stocks can be bought and sold. And the buyers are in the world capitalist market, because the internal market is very limited. Once it becomes part of the world market, it fluctuates in price and is subject to the disturbances of the world capitalist market. And the world market is under the hegemony of monopoly finance capital.
Thus the conversion of state-owned property, particularly the huge enterprises, to stock ownership means the subordination of the Soviet economy to the world capitalist market.
Examples of Hungary and Poland
If these people need any example as to how this works, they can look at Hungary or Poland. Wherever there has been a conversion from state to private ownership, especially in the important industrial sectors, the so-called oversight by the big banks constitutes a formidable form of penetration of imperialist finance capital, which dictates how the industry should be run. This has caused havoc for the workers, hundreds of thousands of whom have been laid off, while at the same time inflationary pressures depress the living standards of the masses.
All the progress the Soviet Union has made technologically and scientifically in developing the country has been on the basis of limited intervention in the world capitalist market and limited effects on the Soviet domestic scene. If this situation is reversed, the imperialist monopolies will have the upper hand.
Before launching upon this adventurist scheme of converting socialized industry into joint stock companies, this grouping which is fearful of the masses, knowing how much they hate the thought of returning to capitalism, nevertheless invited none other than the chairman of the U.S. Federal Reserve Board, Alan Greenspan, to Moscow to consult with him. To learn the mechanics of capitalist banking? No, the USSR has a world of experience in this. And any junior executive of a big bank or graduate of a U.S. business school can give them a comprehensive exposition on it.
What they wanted was to get his blessings, his assurance that the big banks he represents would look favorably upon the idea of the Soviet Union floating stock in the world capitalist market.
Will obtaining a new market for exploitation give the capitalist system a new lease on life? Not at all. On the contrary, this flotation of securities, even with the help of imperialist banks, comes at a time when there's a glut in the worldwide securities market. The collapse of 1987 was a harbinger of what awaits the world capitalist market. And if the USSR is a part of it, it will suffer as much if not more than the capitalist countries.
If an empire like that of Donald Trump, just to take a current example, faces the possibility of collapse, then what can happen to plants like Magnetogorsk and others?
Petrakov also wants to legalize private shops to sell caviar, etc. This is so patently calculated to aid the bourgeois elements that it was killed, significantly enough, by the official trade unions, which are again showing some opposition to the government.
Of course, Petrakov's proposals are only in the planning stage. But some inroads have already gone into effect.
Gorbachev opens economy to CIA
Glasnost of course has its progressive side insofar as it enables the working class to raise its own voice (which has yet to happen in a political sense). But it has also meant that hordes of scholars, academicians, technicians, engineers, and above all CIA spies have had an open door to the workings of the Soviet economy and its institutions. They have intensified their activities in the USSR, particularly in the most strategic field--the economy.
Does the CIA announce itself? When it gave the names and positions of Indonesian progressives to the military in 1965 in order to destroy the Indonesian Communist Party, did it come with a signpost, "Here is the CIA"? Now they're in the USSR, promoting the capitalist market, giving publicity to their favorite economists, and laying the basis for a bloody civil war like in Indonesia which will inevitably arise between the two class camps as soon as the capitalist reforms take hold and become familiar to the masses.
For the new bourgeois elements to undo 70 years of life and labor, it will take a lot more than mere tinkering with the currency, causing a breakdown in the monopoly of foreign trade, sabotaging the flow of consumer goods, or hoarding significant commodities used in the daily life of the people in order to discredit socialist planning.
The Gorbachev regime veers from right to left, but its general orientation is to further deepen the capitalist reforms so as to gain entry into the circle of the industrial imperialist powers.
Bourgeois economists like Petrakov think that the easiest route to take is to obtain capital from abroad, meaning loans from the U.S. and other imperialist countries. They hope to avoid instituting the drastic austerity measures that are immediately required if the so-called transition period from a socialized economy to a capitalist economy is to be shortened. The truth of the matter is that they are fearful the masses will oppose them and open up the era of struggle between the working class and the new bourgeoisie.
In the middle is the bureaucracy. Some veer towards supporting an independent workers' struggle. Some are trying to find individual niches among the bourgeoisie. And others seem totally confounded, never having believed that the reforms would so adversely affect the living standards of the masses.
Class struggle ahead
The reforms are mired down, not because of resistance emanating from the bureaucratic apparatus as such, but because of fear that the masses will resist and open up a nationwide struggle. In fact, this is precisely what lies ahead.
It is impossible for the Gorbachev regime to continue with its halfway-to-capitalism measures which have brought neither the modernization of industry that was promised nor a brief dislocation followed by an improvement in the supply of goods. The masses are beginning to understand that the prospects are for the mass dismantling of the socialized economy with long-term unemployment and soaring prices.
The choice is: either go forward with an improved, more democratic socialist planning, free of rigidity, dogmatism, and hierarchical tenure in office, opening the doors wide to the participation of the masses, enlisting their creative energies, their innovative ideas; or face the possibility of the havoc and misery to be caused by the full reintroduction of capitalism. All of this persuades us that the struggle in the USSR between the capitalist roaders and the working class is just beginning. Capitalism as a social system cannot be sneaked into the USSR by fraudulent, imperialist stooges from the managerial, academic and technical aristocracy and the corrupt bureaucratic administrative groupings. They will have to fight it out with weapons in hand and not by sleight of hand.
Such is the real prospect in the USSR today.