Brian O’Leary on a fatalistic view of Soviet demise
“Why communism failed” by Jasper Becker – published by Hurst
This book crudely sees the command economy of the USSR as synonymous with communism. Its collapse in the 1990’s also damned for the author any other attempted communism….and socialism. Other members of the Soviet bloc, and even China, all suffered from the same ‘…fateful flaw’ that condemned them to the same end. The book stands or falls on the veracity of this claim.
The core argument rests on a resuscitation of the 1920’s economic calculation debate, which revolved around the Bolshevik struggle to organise the post-civil war economy in a socialist direction. The Austrian School economist Ludwig Von Mises claimed, in his ‘Economic calculation in the socialist commonwealth’, that any such attempt to construct a de-commodified planned economy was unfeasible.
He argued that rational calculation and freedom is only possible where there is private property and market prices. Without these price signals planners would be blind and thereby their decisions could only result in a widespread misallocation of resources, waste and eventual failure. Becker reminds readers that there was a lack of prior socialist theorising of the tasks of economic planning and coordination and consequently an underestimation of the information and skill demands of actual decision making and implementation.
Given that the above is supposed to be socialism’s ‘…fateful flaw’, Becker then fails to follow subsequent theoretical exchanges. This includes key debates between Market Socialist (MS) advocates such as Oscar Lange and other free marketeers like Hayek. The latter later conceded that with an objective unit value of account, like labour time, with enterprise level output decisions decentralised using market simulating rules, a coherent plan was theoretically possible in a closed economy. However, they still maintained that practically it was still unfeasible. In a dynamic, complex, open economy coordination problems would still be unmanageable due to the sheer ‘curse of scale ‘.
In the earlier Russian history, any idealism that state direction of resources under War Communism could transition to full communism was shattered by the collapse of the post-civil war economy and recognition that Russia was isolated and still a very underdeveloped economy. Survival and recovery demanded a NEP (New Economic Policy) accommodation with the mass economy of peasants and small traders. Lenin thought this was only a temporary compromise, while hoping for supportive revolutions elsewhere in Europe. In the long interlude, the Left Opposition proposed some form of primitive socialist accumulation to try to fund some economic modernisation.
Ignoring the fact that Marxists had long argued that socialism was only viable in the most advanced capitalist economies, based on the highest technical progress, Becker sees NEP as a pure vindication of the Von Mises thesis. Becker is a Cold War journalist mainly writing on China and East Asia. Therefore in support, he also refers to the post-Mao political shift as an even more contemporary confirmation. Deng’s reform programme was again a NEP type accommodation with a market reality. As a free market extremist, his only gripe was that post-Tiananmen leaders chose the gradualist road to full capitalist restoration rather than the devastating Shock Therapy of 1990’s Russia and Eastern Europe. In this Becker was on the same page as Kornai and other prominent MSs, who now had completely given up on reform within the system.
In late 1920’s Russia, with the increasing stand-off between the state and petty capitalism, the NEP was brutally ended. The peasants suffered forced collectivisation, five year top down planning was imposed, and internationalism was abandoned with the claim that they were going to build socialism in one country; so Russia’s isolation turned into a virtue. With the elimination of private ownership of the means of production, markets and their prices, a command economy was constructed. Henceforth Stalin’s planners attempted to make all of the allocation decisions. At tremendous human cost Russia did industrialise and, according to the then prevailing consensus, managed to achieve unprecedented growth rates until the 70’s. This, Becker admits, confounded the free market critics for decades.
While he doesn’t dispute their surprise at Russia’s survival and its transformation, it did so using coercion, black markets and informal barter to fill the persistent demand and supply gaps, queues and more queues. If all this is true then he argues surely the statistics of its success were grossly exaggerated. Both sides in the Cold War had obvious reasons to embellish the stats, yet autocratic top down target planning had a systemic bias for over-reporting. Additionally, in the absence of market prices, he claims Western academics and the CIA had a phenomenally flawed interpretation of its economic data, leading to an unsurprising gross mismeasurement of Russian performance. This was only eventually seriously successfully challenged in the 1970’s by Birman, an exiled Russian economist. Later reassessments of the size of Mao’s economy came to the same conclusions.
This new accounting now estimated the USSR economy not as half the size of the US but realistically a mere sixth. By then even Russian figures indicated a marked slowdown in growth and even an inability to feed its population. This coincided with the election of Reagan and was music to the ears of the Neocons. Détente had been unnecessary and a wasted opportunity, because, as Becker quotes Reagan: “…if the Western countries got together and cut off credits …we could bring it to its knees”.
Post-Brezhnev, leaders belatedly scrambled to reactivate previously blocked Kosygin era reforms. The final attempt by Gorbachev only worsened the outcome, thereby ending in political and territorial disintegration. Yeltsin’s Shock Therapy followed, throwing the economy and society into complete meltdown and enabling, in the ensuing chaos, the emergence of a new class of capitalist oligarchs from the old nomenklatura.
Was collapse inevitable as predicted by the Austrian School?
Besides the heightened military pressure from the West, the timing and manner of the USSR’s end inevitably involved a number of contingent factors. Becker believes however that the USSR’s implosion was historically unique. Its rulers gave up without a fight. Probably correctly this can only be explained by most of its bureaucrats tired of a project that could not deliver the ‘goods’; so it was an ‘…irredeemable failure’ even for them. They then grabbed for themselves what they could as did each national republic.
Would it have been possible to adopt Chinese type economic gradualism and marketisation, while the CPSU tried to maintain an iron grip of the political sphere? Surely doubtful. Moreover unless one concludes that China still retains more socialist potential than capitalist, then the end result would have been the same, with the oppressed still losing out to a reborn capitalist class.
Of course Becker’s whole TINA argument ignores the failings of capitalism. This is the deception that markets always equilibrate rather than being anarchic, private ownership is the basis of freedom rather than opening the door to monopoly and authoritarianism, distribution is equitable rather than class exploitative and massively unequal, and that capitalist accumulation leads to progress rather than being the driver of imperialism and global environmental collapse.
Is there therefore another feasible socialist and democratic planning model to replace generalised commodity production or the half-way house of MS?
This is of no interest to free marketeer Becker, who believes the ‘…fatal flaw’ of socialism is that it falls at the first resource allocative hurdle. Yet with processing speeds and storage capacities of digitisation, informed by up to date cybernetics, the ‘curse of scale’ calculations of balancing demands and supplies within the constraints of sustainability, should be for the first time really technically feasible even for a centralised alternative. Furthermore, what his calculation debate ignored is that any meaningful socialism necessitates a change in society’s social relations; so ownership, equality and empowerment are also necessary conditions. In a fully wired networked world, the use of a bottom-up participatory decision-making alternative now also appears tractable, which should enable planning itself to be democratised. Of course there would still be major political and other practical issues of how to transition towards any chosen combination of top-down and bottom-up solutions.
It’s ironic that as Becker writes the epitaph of fake communism a real cyber socialism should be realisable….if a self-conscious collective subject can grasp the opportunity!