At last it is being admitted that the effort to transform the former Soviet Union into a capitalist state has failed. The bourgeois reforms are collapsing despite six years of unremitting efforts by the U.S., its imperialist allies and of course the bourgeois stratum of the USSR, including its economists, its politicians and above all the former leaders of the Politburo, beginning with Mikhail Gorbachev and going all the way down the line to Boris Yeltsin.'Economic reform falters'
This public admission comes in the form of a front-page article in the New York Times on Aug. 2 entitled ``Yeltsin's team seems in retreat as its economic reform falters. Promise of new era after communism is dimmed.'' While written by Serge Schmemann, the article is obviously based on material pulled together by a number of reporters in Russia and the other republics. The Times article conforms to what the press in the former USSR has been saying for some weeks, as for example the article in Nezavisimaya Gazeta of June 2 by Mikhail Leontyev entitled, "Is the Russian reform beginning its death throes?"
The Times report makes these points:
An important development which Schmemann's article does not mention is the recent resignation of Gavril Popov as the mayor of Moscow. This is a serious symptom of the decline of Yeltsin and his most vociferous supporters. Popov, one of the most vicious of the bourgeois restorationists, had expected Yeltsin to move more rapidly in restoring capitalism but instead finds him retreating.
- Yeltsin's team is in retreat as its economic plan falters.
- Acting Prime Minister Yegor Gaidar, who designed Russia's economic reform plan, miscalculated and has lost his authority and bearings.
- The promise of a new era has been lost.
- Russia has lost direction.
- Authority and statehood are eroding.
- The problem is not only the high prices and shortage of goods; there is no political or social course.
- The start toward a market has faltered.
- The current government is at a dead end.
- A steep fall in production and conditions of inflation are leading to disintegration.
- The old power structures are showing new signs of life.
- There's a new challenge from the industrial entrepreneurs and directors of state-owned property.
- There's a huge accumulation of unpaid debts.
- The privatization of land and enterprises has been marginal, disorganized and riddled with corruption.
Popov's resignation statement says he stands for "immediate privatization, the introduction of private ownership in general and of land first and foremost, the development of a market and competition." Obviously he regards the privatization effected until now as merely peripheral. However, he still avows support for Yeltsin.
Popov estimates that the current period is very much like that of February 1917, that is, when the Kerensky government was faced with a growing revolutionary threat from the Soviets and the Bolsheviks were gaining more and more ground. The analogy is absurd. But the one truthful element is that the Yeltsin counter-revolutionary grouping now in control of the government is declining in influence and is facing a catastrophic economic situation.
All of this has to be considered in the light of the fact that there has been a full-scale political counter- revolution in the USSR whose objective was to transform it into a capitalist state.
Gorbachev's historic mission was to initiate and propel the movement towards capitalism, but at a slow pace. Yeltsin's mission was to go for the quick fix. Neither one has brought anything but chaos.
There are important theoretical and political problems that must be dealt with to gain an understanding of the social and political processes in the USSR.
Superstructure vs. infrastructure
The counter-revolution has thus far been in the superstructure. The governing group is now composed of bourgeois politicians, whose fundamental aim is to steer the former USSR in a capitalist direction. But they are unable to come to grips with the economic and social complex of organizations created by decades of socialist construction. This infrastructure of the USSR does not, to their surprise and the surprise of their imperialist mentors, lend itself to capitalist restructuring.
Their beloved privatization schemes are much like attempts to break up giant ocean liners and turn them into small rowboats.
The plan of the counter-revolutionaries, especially the pro- Western economists like Gaidar and others, was to cut up the great industries and farms of the USSR and turn them into little private businesses. This was supposed to be the way to enter the free market. But has any sensible worker or even businessperson ever thought it would be economical to take valuable, seagoing ocean liners and chop them up into rowboats, just to see if they could compete with each other?
Their privatization schemes have met with only peripheral success. The main product of these endeavors has been a whole stratum of crooks, thieves, Mafia-type speculators and mercenaries of all sorts. The Yeltsin-Gaidar leadership still lack a substantial, basic bourgeois reform to be proud of.
The Times report puts the blame squarely on the shoulders of Gaidar, the acting prime minister charged with the responsibility of transforming Russia and its republics into capitalist states. Who brought Gaidar into the government, as prime minister no less? Was he not publicly suggested for the job by U.S. Ambassador Robert Strauss?
The very idea that a U.S. ambassador serving in a supposedly sovereign country should so grossly interfere in its internal affairs is mind-boggling. Yet it seems to have barely caused a ripple of opposition in the bourgeois- controlled press of the former USSR.
Nor was it a personal transgression by the ambassador. He had earlier been summoned home to report to the Foreign Relations committees of the House and Senate, where he testified in both public and classified sessions. He was thoroughly briefed on that trip. His suggestion, therefore, was nothing less than a demand--which the Yeltsin administration carried out in a cravenly fashion.
Now that the bourgeois reforms are collapsing, the aim is to scapegoat and discredit Gaidar, leaving the Bush administration scot-free.
Production falling
Of all the revelations made in the Times article, the most important is that industrial production has fallen precipitously in the country.
But this had been revealed earlier by Arkady Volsky, head of the All-Russia Renewal League and president of the Russian Union of Industrialists and Entrepreneurs--a sort of contradictory amalgam of social and economic forces with a vague program on how to combat the growing chaos in the country.
Volsky's figures, published in the June 2 Rossiiskaya Gazeta, showed that from January to April of 1992 industrial production in Russia dropped 13 percent. By the end of the year, he predicted, the decline will approach 35 percent.
That's an enormous, staggering fact. It is not that production is merely stagnant, or that some technical, organizational problem has temporarily resulted in declining output in this or that industry or group of industries. It is a generalized phenomenon of Soviet industrial economic life.
This is especially significant when one considers that the historic mission of capitalism, in all countries without exception, had been to raise the level of productive forces after their stagnation under centuries of feudalism. The feudal system, said Karl Marx, was based on conserving the old means of production. Capitalism differed from feudalism in this fundamental sense: Instead of merely preserving the stagnant productive forces, it unleashed them to create the miracles which the feudal hierarchies could only promise in heaven.
Capitalism not only raises the level of the productive forces and production in general, but constantly revolutionizes the means of production and thereby forces both social and political changes. That has been its contribution historically.
In old Russia, the bourgeoisie was so subordinated to the feudal czarist autocracy that it only weakly developed capitalism and was unable to move society forward. It took the Bolshevik Revolution to unleash the latent forces of the proletariat and raise the productive forces of the country. Although production declined precipitously during the Civil War (1918-21), the productive forces developed so much in the decades that followed that the USSR became a superpower, industrially and economically.
The proletarian revolution and socialist construction accomplished the industrial, technological and scientific revolution that the Russian bourgeoisie failed to produce. Since that has already been accomplished, what, one must ask, is the historic mission of capitalism in Russia now? It has none, except to vandalize and destroy what is already in existence.
The fall of production cannot long continue. It is one thing for the counter-revolutionaries to be unable to rapidly dismantle the economic and industrial structure of the USSR. It's an even more serious matter for capitalist production to be declining and out of control. This occurs mainly during periods of capitalist crisis as distinguished from a mere recession.
No system can long endure if it cannot raise the productive forces to a higher level than the previous social system. Here, however, production is actually falling. There can scarcely be a more serious symptom of the impracticality of imposing a capitalist system upon a basically socialized, industrial-technological economic system.
It is no wonder that the bourgeois restorationists have reached an impasse. Yeltsin may say that he ``does not take any diktat from the International Monetary Fund,'' but after all, he graciously acceded to Wall Street's demand that Gaidar become the prime minister. Who but a neo-colonialist, a craven, compradore bourgeois would agree to that?
Socialism's potential not yet realized
No new social system ever passes away until it exhausts its potential for development. The USSR introduced a new social system. It had by no means exhausted its potential for the further development of socialism. Indeed, the foundations were barely laid. Its social achievements were restricted and hampered, partly by the lack of experienced proletarian administrators, industrial directors, scientists and the like. The Soviet government had to recruit them from alien class forces which diluted the revolutionary fiber of the Bolshevik Party.
Nevertheless, without going into the details of the vicissitudes of the Soviet Union, particularly in economic, political and foreign affairs, one cannot but be astounded at the extraordinary progress made by this new social system.
It would be different if the potential for socialist construction had reached its acme, but that was not at all the case. It merely laid the foundations. Had there been a freer international environment, it would have faced a future of unlimited progress. But there was never any letup in the imperialist encirclement, imperialist war, imperialist blockade, the ban on exports of technology to the USSR, and the planning and subsidizing of counter- revolution.
When under Gorbachev the USSR decided to stop underground nuclear testing even though it had no commitment from the U.S. to do likewise, it was an attempt to reach an accommodation. But the U.S. saw this as a sign of weakness. And so to this day the U.S. continues to test nuclear weapons. It has not even given up the idea of Star Wars, notwithstanding the collapse of the USSR.
A phenomenon that had its beginning centuries ago is the illegal purchase and sale of goods, the illegal market. This has grown enormously since the Gorbachev-Yeltsin reactionary grouping came into office in 1985. It accelerated as a result of the loosening of restrictions in converting the ruble to foreign currencies and in general laying the basis for the development of a free market.
The enormous significance of the illegal market is that it is extortionate, a symptom of the avariciousness of the bourgeoisie. Its historic significance, if it is not arrested, is that it lays the basis for primitive accumulation which the classical bourgeoisie in the West went through with the robbery, murder, arson, mass extermination and genocide practiced in the plunder of the New World and the slave trade.
The consistent growth of the illegal market in the USSR over the decades played the same function. Only the expropriation of the bourgeoisie itself will also end the illegal market. A precondition for it is the further socialization of all phases of industry and agriculture.
The new phase in the struggle is between the industrial, technological and scientific managerial stratum on one hand against the politicos, the counter-revolutionary cabal that seized power.
In an earlier phase it was necessary to loosen the controls, to allow the managerial group greater freedom from arbitrary orders from the top, which they called undemocratic and which probably were insofar as the managerial group needed greater flexibility and more initiative on their part to perfect socialist planning. That aspect was progressive.
It was necessary to support the managerial group insofar as they struggled against arbitrary impositions upon them by the central government, such as unreasonable quotas and output.
Sound, democratic centralized planning is progressive, of course, but where it turns out to be the arbitrary imposition of directives it is correct for the managers to struggle for revisions to accord with the realities and possibilities within their particular enterprise or conglomerate.
Where, however, this served as a mask to disengage from socialist centralized planning, it was of course reactionary. It became all the more reactionary where the managers sought to supersede the rights of the workers.
Of course, none of this would have become such a formidable problem if the trade union organization of the workers had been an effective force representing their rights. The problem of the trade unions was and remains a most difficult one. They have to serve both the independent interests of the workers and at the same time fight for socialism, which is impossible without socialist centralized planning.
To the extent that the earlier struggle of the managers was against centralized socialist planning, the workers had to fight it. Now, however, the managerial groups are in a struggle, although a confused one, to maintain control of the infrastructure against those who would in reality vandalize it. Instead of great industrial geniuses and a thriving capitalist market, what have appeared are nothing but crooks, thieves, speculators and agents of foreign imperialism, more interested in the quick buck than anything else.
The reformers can't seem to stop borrowing from the imperialists. Inflation and unemployment are growing. Only the awakening of the workers can halt the slide toward utter chaos. The problem for the workers is how to distinguish between the variety of new strata that have grown up and decide who to fight.
The central slogan must be against the counter- revolutionaries: power to the workers, an end to the encroachment of imperialist monopolies, particularly in gas, oil and other forms of energy. The slogan must be power to the workers, not to the Soviets as presently constituted.
A break with the so-called nationalists is a precondition for rallying the workers in the southern republics.
The free market
It should be remembered that all of the bourgeois reformists, beginning with Tatyana Zaslavskaya, A.G. Aganbegyan and Leonid Abalkin, had as their goal the establishment to one degree or another of a "free market."
The free market is characterized by the free purchase and sale of commodities. The free market signifies commodity production for the purposes of sale.
A commodity must have use value and exchange value. In earlier societies commodity production was conducted by individuals. Individual shoemakers made shoes. Bakers made bread. Where there was no monetary system in existence the baker and shoemaker exchanged their products for other products. Where a commodity producing economy was more developed, they sold the commodities for money.
Commodity production has existed in all social systems up to the present time. A free market existed on the fringes of ancient communist society when that society began to disintegrate. It existed under slavery and feudalism. The free market was not basic to these economic systems, but merely peripheral to them. As Marx said in "Capital": the free market existed in the interstices of society, on the edges of it.
As commodity production developed it evolved away from production for personal use or exchange in order to satisfy some individual need. This was replaced by collective production under ownership and control of an individual entrepreneur or capitalist. Simple commodity economy evolved into capitalist economy only when it entailed the hiring of wage labor, which in turn created a class of propertyless, landless workers who could live only by selling their labor power.
The transition from individual production for personal need to collective production by wage laborers employed by individual entrepreneurs marked a qualitative change. It was a great leap forward in the evolution from simple commodity economy to capitalist commodity production. In the latter the individual capitalist appropriates the unpaid labor of the wage earner. As long as this process was scattered and isolated, it had little significance for society at large. But when it became a mass phenomenon, this defined the conversion of simple commodity production into capitalist commodity production for profit.
In order to make this great leap forward to collective production on the basis of wage labor, it was absolutely necessary, indeed indispensable, that there be a class of millions of landless, propertyless and jobless people, whom the capitalist entrepreneur could draw into his enterprise. In Europe a vast number of peasants were forcibly driven off the land, creating the reservoir of wage laborers.
The early pro-Perestroika bourgeois economists in the USSR failed to think through this evolution of the free market to its logical conclusion. They propounded a simple commodity economy but did not reckon with its vast implications. When they considered wage labor, they did not reckon where and how it could fit into the process of commodity production. To establish a reservoir of labor in the USSR, the farmers would have to be driven off the collectives or the workers dismissed from their jobs in the giant industries. Otherwise a commodity economy could not function.
Had the reformers who began under Gorbachev fully confronted their dilemma, they would have known that no fully developed market economy as such can exist in the Soviet Union unless there are landless, propertyless workers or peasants ready, willing and able to sell their labor power. That would make it a free market. Without "free" labor, without propertyless wage workers, there can be no developed free capitalist market.
But to create "free" labor means the destruction, the dismantling, the disintegration of the technological industrial infrastructure of the former Soviet Union. Thus the simple, even naive, assumption that you could have a free market coexist with a socialized, industrial, technological, scientific and military infrastructure turns out to be ludicrous.
Contrary to the prediction of the bourgeoisie worldwide, laborers on collective and state farms chose to remain there. Furthermore, workers refused to leave their jobs in the industrial, technological infrastructure. They refused to give up their social benefits like guaranteed employment, pensions, and health care by voluntarily running to some phantasmagoria of a free market or joining some capitalist enterprise that could fold in six months.
Some were dismissed illegally. But there is no reservoir of wage labor ready and willing for exploitation, except on a peripheral basis. The workers are attached to the infrastructure and to the rights and privileges they enjoy there.
This is the problem for the neo-capitalists. They need millions of workers willing to sell their labor power, unattached to their jobs. All those who are calling for a quick privatization are in reality calling for mass selling off of state and collective property and the dismissal of millions of workers. This even Yeltsin cannot afford to do.
Had these bourgeois economists thought this over before they embarked on their adventure? The bankruptcy of their plans makes it evident they did not. Those who did and were not frightened by the results that would follow were paid agents, mercenaries, avaricious extortionists, thieves and crooks. But entrepreneurs in the classic sense of capitalism they are not.
Why is this so? Historically, capitalism vanquished feudalism as a society not only by developing the productive forces but by constantly revolutionizing them. Marx showed this over 150 years ago. But the capitalism introduced by this new crop of bourgeois economists and their mentors and paymasters abroad cannot even continue production on the same level as the old system. If production itself is declining, there is nothing at all progressive about the economic reforms.
Not long ago an economist named Shatalin said that the whole business of reconversion could be done in 500 days. On paper, it looked fine. But no one, not Gorbachev, not any of his lieutenants, not Yeltsin, is willing to risk that. And that's where the situation stands today.
The struggle actually is between the new nascent bourgeoisie and the working class. And although the six long years of bourgeois reforms have caused only havoc, the decisive battle has yet to be fought. At the moment, the counter-revolutionary usurpers of the workers' state of the USSR are in retreat. But a working class movement has not yet emerged to take advantage of the bourgeoisie's weakness. This movement is still in the making.