Histry Rides Again

After the collapse of Stalinism in Eastern Europe at the end of the 1980’s the bourgeoisie were jubilant, one of their ideologists Francis Fukuyama wrote of it being “The end of history”, meaning that capitalism, triumphant, had now demonstrated its superiority over all comers, and could now be seen as the highest stage of human economic and social development, that man’s future development meant not more social upheavals, but steady progress of capitalism, Man’s future was to be simply more of the same. (See reviews here) And, of course, the heroes of this tale with such a happy ending (for the capitalists) were none other than the Hollywood cowboy, Ronald Reagan, and his British partner the Milk Snatcher Kid (Margaret Thatcher). They had sent their opponent off to Boot Hill by their determined policy of wasting vast amounts of the Earth’s resources in an arms race that threatened to destroy mankind, and which forced the Stalinists to waste their even scarcer resources in an effort to keep up. But it appears that the story might have an unexpected twist. As one of those Reagan westerns might have been called, it appears that “Histry Rides Again.”

Its nearly twenty years since the fall of Stalinism. Getting older, it doesn’t seem that long. Put another way it has been nearly a third as long as the period of Stalinism’s existence. Stalinism collapsed 15 years into the down leg of the last Long Wave, and was as much to do with that, and probably more, than to do with the efforts of Ronnie Raygun, and the Iron Lady, as commodity prices, which had helped sustain the Soviet economy’s purchases from the West, tumbled. The huge welfare system – both in terms of the official welfare of state pensions, and benefits, of the high proportion of social production devoted to unproductive areas such as Education and Health, and socialised transport, and in terms of the unofficial welfare system of huge numbers of workers, retained, unproductively, on the books of state enterprises, to maintain the fiction of full employment – together with the huge sums spent on arms, and on supporting the USSR’s fellow Stalinist states in Eastern Europe, Cuba, Vietnam, and its client states in Africa and support for “liberation” movements – swallowed up the potential social surplus that could have gone to investment in the production of much needed consumption goods, and eventually dragged the system under. But nearly twenty years on the tables appear to be if not reversed then in the process of reversal.

Trotsky once said, that a counter-revolution never fully overturns the gains of the revolution it counters. So it seems with the Yeltsin capitalist, counter-revolution. State Officials, brought up in the traditions of a Workers State, albeit a grossly deformed one, have imbibed the ideology that goes along with state owned, industry and planned economy. Western businessmen continually complain that these state officials, still in office, simply cannot understand the principles of private ownership, and the free market. The first effects of the counter revolution were to throw the economy into complete disarray, collapsing production in short order, and rather like Thatcher’s counter-revolution in Britain, undoing the gains for social progress, achieved, at great cost, over decades, within a matter of months. Millions of workers thrown out of the non-jobs the Stalinists had been forced to keep them in, tens of thousands forced out of their subsidised, state provided homes on to the streets, pensions disappeared over night, with more tens of thousands no longer queuing for food from shops, but instead finding it in rubbish bins. If Stalinism was bad for Eastern Europe, capitalism’s return was much worse. Not surprisingly, in many Eastern European countries workers actually responded by voting into power the same Stalinists that had just been kicked out. In Russia the oligarchs created by Yeltsin and Chubais’, Thatcherite, privatisation scams began to turn themselves into a new ruling capitalist class, controlling Yeltsin’s government. But then the Russians put in power Putin, a Stalinist dictator in all but name. In the intervening period Putin has first contained the power of the oligarchs and their ambitions to become the new ruling class. Those that didn’t get it were unceremoniously brought up on whatever charges could be brought against them, and they were forced either to flee abroad or ended up in gaol.

Putin’s regime now has all the hallmarks of the old Stalinist regime, youth movement included. And although, the Yeltsin counter revolutionaries and their western backers had privatised a lot of Soviet industry a lot still remained in state hands, along with the levers of control over the economy. Putin has used that to once again make the state the decisive force. Well known examples, such as Yukos, are just a small part of the process by which the most important, strategic, enterprises have been brought back under state ownership and control. And, even where that ownership and control is not exercised directly, it is exercised, indirectly, through other state companies acting as intermediaries. Gazprom, for instance, now owns a whole range of other industries, including media. One of the latest examples is in aviation with the emergence on to the world market of Russia’s state owned aircraft industry as a new major player having worked in conjunction with EADS.

What the period of the counter-revolution did was to set the conditions under which the idea, first put forward by Lenin, could, actually, be put into practice. Lenin, in the New Economic Policy, recognised that the Soviet economy could not develop, given its resources, through state ownership, and planned economy. There were a number of problems. Lack of skilled workers and management; lack of an adequate accumulation of “Capital”; an inability to effectively plan production. The answer, to the latter, was to retreat to the market. This also went, some of the way, towards answering the second problem of insufficient Capital accumulation, as local capitalists would accumulate. But, the problem, Lenin believed, could only really be solved by the introduction of foreign Capital and know-how. At first, the hope was as a result of European revolution, but when that appeared unlikely Lenin settled on trying to attract foreign capitalists to set up in Russia – the same strategy Trotsky advised for Mexico, in the 1930’s. Lenin was unsuccessful. Other than a few capitalists, like Armand Hammer, of Occidental Petroleum, the capitalists were scared stiff of the Bolsheviks, so there was no way they would risk their capital. But, western capital, once it believed it had won, began to fall over itself to invest in Russia and other eastern European states. And, in China a similar process had been going on for nearly a decade.

Yet, despite the claims that China is now the most capitalist country on the planet, the fact is that 70% of labour and capital employed in China is still in the state or collectivised sector. The fact that a large part of the output does not come from that sector demonstrates the extent of the state subsidy to labour the Stalinists are forced to accept through the underemployment of that labour. The Chinese Stalinists continue to exercise considerable control over the economy through the control of Credit, and many of the large private enterprises in China are, in fact, joint ventures, which the Chinese government is now exercising increasing control over. Similar things are happening in Russia such as with the Russian government’s dealings with BP. In Russia, Putin now has huge support amongst the population. The consequence has been a massive growth of these economies, and of the revenues now at the disposal of their states. Indeed, without the role of China in bankrolling the US, the US economy would have tanked more than a decade ago. Today, it is the economies of the US and Britain that are bankrupt, and kept afloat on a sea of debt – financed mostly by their erstwhile enemies – as the Sub-prime crisis is demonstrating, and the Stalinist states that are dynamic, and increasingly powerful.

This is no reason for Marxists to be jubilant. It would be a brave person to define exactly what the class nature of these states is today. It is not at all clear which class is dominant. Certainly, there are very rich people in them, certainly a growing class of small business people, and capitalists. But are they yet, socially dominant? I think the continuing role of the Stalinist state, at least in Russia and China says, probably not. In China, there was no political counter-revolution, in Russia the Yeltsin political counter-revolution itself seems largely to have been neutered. In both, many of the social transformations achieved earlier have been overturned, whether it is the role of the car replacing Public Transport, the increasing marketisation of social services, education etc., but at the same time the growth of the economy in both, and the concomitant real demand for labour, now puts Labour in a stronger position. If Stalinism originally represented, as Trotsky described it, a form of Bonapartism arising from the state rising up above Civil Society due to the weakness of the working class both absolutely, and relative to the power of the international bourgeoisie, the regimes in China and Russia, today, appear more as Bonapartist regimes arising from the remnants of an ideology based on the working class within the state structure, and the weakness of both the working class, and capitalist class within both states. The jury is out on which class will prevail in the period ahead, but, with the commencement of a new Long Wave upturn, the working class has a better chance than it has had for the last 25 years. Its main problem is the lack of an adequate Workers Party to lead and organise its struggles, and to educate the class about its true interests.