Re: the Soviet system and the w-s

Dear Ed and All,

On Thu, 9 Dec 1999, Ed Weick wrote:

( . . .  )

|A market of this general kind is a highly monopolized market.  It is a
|market in which the single capitalist, or a colluding capitalist class, has
|absolute control.  Having such control, the capitalist can absolutely
|determine the character of the market, setting all input and output prices,
|appropriating all surpluses, not allowing any of the free forces that
|determine supply and demand in a competitive market any scope.  I would
|suggest that, in its most essential form, this is what the Soviet system 
|was
|
|
|like. 

Except of course that there was no private capitalist class. That might be a
rather pedantic point, although perhaps crucial from another respect. The
bureaucracy, hungry and parasitic, tightly organized and resilient as it 
was, 
was not a private *ownership* class. These differences do matter.

Of course one can argue, as in essence the global perspective does, that
through the system of international linkages that reemerged with WWII and
onwards, there was a private ownership class, the only one that really
matters anywhere, the global one. 

That involves another twist though, the fact that that would of course
also include you and me (to the extent that we have some kind of a 
retirement
benefit system that invests our savings in global stocks).

| This is how it was intended to operate.  However, there was another
|dimension to it, one which is supposed to be absent in capitalism.  This 
|was
|ideology.  Unlike communists, capitalists do not have this.  They are
|supposed to be motivated by greed and greed alone.  The goal of the Soviet
|leadership was to develop a communist society, one in which the state would
|whither away and ownership and control would rest with the working class,
|and people would no longer have any cause to be greedy.

I beg to disagree. I live in the U.S. and see, hear, sense nothing but
ideology. My students come to class full of ideology. Most of my work with
undergraduates is all about undoing the ideology detritus they bring in.

|My view is that Russia was the wrong place to try to achieve anything of
|this general kind. 

For another person of the same view, Marx thought so too.:-)

|                        It was too disparate in terms of many different
|ethnicities with many different quarrels, and carried far too much
|justifiably paranoid historic baggage about being invaded and sacked from
|all directions.  As well, there was no extensive working class at the time
|of the revolution.  The communist regime therefore slipped into the 
|familiar
|Russian mode of holding the country together by sitting on it,

As opposed to the liberated tendencies of the western capitalist 
governments?
In the first two decades of this century?

|                                                        by imposing
|from the top, by liquidating dissenters or sending them off to the gulags.
|And economically, it behaved like the ultimate textbook monopolist,
|appropriating all surpluses and even the market in order to build mountains
|of capital.

Excuse me, I find this statement of fact incorrect also. One of the key
points (and I think I said this in my previous post) was precisely that
appropriation of the profits did not result in forprofit investment but many
other things: bureaucratic investment, investment into the state bureaucracy
and the armed forces, and, most relevant to this discussion of all, enormous
investments into collective consumption. How is it possible that the country
which was basically a dirt poor agricultural society with a despotic regime,
famines, illiteracy, etc. in 1913 managed to overtake the U.S. in space
research in two generations? To a large extent *because* appropriated 
surplus
value went into resource capacity building done by the Soviet state, 
including education, research, emotional mobilization for the "Soviet way of
life", measures promoting unbelievable processes of social mobility, etc. 
The
fact that it was noncapitalist and operated in the context of an 
increasingly
flexible and competitive global capitalist economy had everything to do in 
my
opinion with the collapse of the USSR.

|Following World War II, it appropriated the surpluses of its eastern
|European satellites much like a textbook imperialist would. 

Actually, yes and no. Immediately after the war, the Red Army basically
plundered the entire region, removing entire production lines, factories, 
and
objects of all sorts, down to wristwatches, eyeglasses and cameras. 
Basically
everything that was moveable. And then there was the matter of the war
reparation payments. Also, arguments have been made that by forcing to sell
their products at depressed prices through COMECON and by interfering with
their economic strategy in general, the USSR restricted the economic growth
of its satellites. Maybe.

During the post-war period, however, quite until about the turn of the
sixties/seventies, the USSR also ended up subsidizing the satellite 
societies
through terms of administered trade within the COMECON. It was not until the
time of the oil crisis that energy shipments from the USSR to central
Europe's state socialist societies came to be on what they called the "world
market pricing basis", i.e., a system of still heavily administered trade
that followed world price movements with a delay (for oil, each year's 
prices
were determined as the moving average of the previous five years' world
market price). Oil and other strategic energy commodities were not taken out
of the soft "transfer-Rouble" accounting system until the mid-seventies.
Also, it is notable, although only remotely connected to the issue of
subsidies, that many countries of central Europe had perceptibly higher
levels of quality of life than the USSR itself. (This partly explains the
relative legitimacy of such regimes as Kadar's who otherwise was not your
most popular man, having been put in power initially by the Red Army as it
quashed the anti-Stalinist uprising of 1956.) Salaries were several times
higher, freedoms were much wider, in some cases including virtually complete
freedom to travel, including "the west" (Hungary, Poland, Yugoslavia, for a
brief while even Czechoslovakia before 68). There was also a really
interesting commodification process, stimulating individual consumption to
the pattern of "the west", particularly in the G.D.R. (whose leadership saw
itself in direct ideological and lifestyle competition with West Germany),
Poland, Yugoslavia and Hungary.

The Soviet subsidization of its satellites can be studied most clearly with
Cuba, whose economy took a blow comparable in magnitude to the imposition of
the U.S. embargo when the USSR stopped supporting the regime due to a vis
maior (as in the collapse of the USSR).

|                                                        It is possible
|that a considerable part of the rebound of eastern Europe since the fall of
|Russian communism can be explained by the fact that countries like Poland
|and Hungary are now able to keep their surpluses and no longer have to ship
|them off to the Soviet Union.

No. Quite to the contrary. Hungary's economy is now, ten years after the end
of the Soviet-centered empire, over 70% foreign owned. You tell me what
percentage of its surpluses Hungary retains. Also, you may want to take into
account that the USSR owed a relatively sizeable debt to all of its central
European former satellites at the end of the state socialist empire. The
former-Soviet debt to Hungary has not been repaid: new and new rounds of
bilateral negotiations are going on concerning how Russia (which inherited
the Soviet debt) will repay it. 

|In my view, the failure of the Soviet Union represents the failure of the
|policy of first building communism in one country and then exporting it to
|others.

You are right, except that the way you put it here suggests that there was a
real choice, which is questionable.

|         Might it have worked better in any other country?  Perhaps.  It is
|probably working better in China, where more of a mix of state and private
|enterprise appears to be emerging and where the benefits of monetized and
|relatively free markets appears to be recognized. 

I hear the two largest private capitalists in China are the People's Army 
and
the regional and municipal organizations of the Communist Party. You tell 
me 
how socialist, communist, etc., those are. They sure have the means of 
direct
coercion.

Jozsef (Borocz)