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Thu

04

Oct

2007

The Red and the Green: Part One - Economic Democracy
Thursday, 04 October 2007 16:30
by William Bowles

If you’ve been reading the excellent cross-section of articles on Climate and Capitalism (‘Ecosocialism or Barbarism: There is no third way’) you will hopefully have come across the exchanges on the ‘Green versus Red’ issue. If you haven’t then it’s time you did. [1]

In a nutshell, the argument goes like this: ‘Real socialists’ are intrinisically green, thus the Green bit is surplus to requirement. All socialists are for a ‘sustainable’ economy, so are the Greens except they don’t adopt the view that you’ve gotta get rid of capitalism if you want to really want to deal with the issue. So basically it comes down to a difference over economics (never mind the politics of it).Unfortunately, the most prominent colour of the ‘socialist’ countries was more a dirty, sooty brown than green, one of the things capitalist and socialist societies had in common (until of course all the polluting factories were exported to the developing world and the former socialist states deindustrialised).

Of course the propaganda extolled ‘green’ thinking, especially in the former Soviet Union, with its roots so close to the land. But as we know words didn’t translate too well into actions, the exigencies of the ‘Plan’ overrode all else.

But are we Reds really Green inside (mix the two colours in equal proportions and you’ll get a dirty, sooty brown, referring back to my art school daze)? Perhaps the Greens should be Red inside? Hey, whatever, far more important is the nature of that dividing line, economics and the politics that makes it work.

My buddy Dave Stratman, over at New Democracy World asked me why I thought ‘Communism’ had failed? A flip answer would be to say they couldn’t lose something they never had, but did they even have socialism, even with a small s? Of one thing we can be sure, they weren’t capitalist, even, as some say, ‘state capitalist’, in other words, the ruling party was also the ruling elite (and conveniently, the only party), except of course, they owned nothing material of any consequence, there were no stocks and shares, no joint stock companies, no private ownership except personal property, but what they did have was power, political power. In other words, how could it be state-capitalist, if the political elite owned no capital? The problem was obvious: the various socialist societies had ruling political elites but unlike capitalist countries, they had no corresponding economic class to represent; in effect they became totally parasitic and disconnected from the reality of life as it was actually lived and finally only really concerned with their own survival and privilege (something borne out with a vengeance after it all collapsed).

On the one hand they presided over an economy which existed only on paper (goals, plans, targets; sound familar?), meanwhile a finely crafted ‘grey’ economy did the real work of actually keeping the real economy going. There were two economies living side-by-side, officially ignorant of each other but the grey economy only worked because the ‘real’ one didn’t, it had to.

At the highest level; sectors, factories, districts etc, it worked mostly by barter but as it worked its way ‘down’, bribery and favours became the common means of exchange. Barter to meet the ‘plan’ and bribes to get the things you wanted because the ‘plan’ had forgotten to put them in the shops.

If this was some form of weird capitalism then I’m amazed it lasted seventy-five years. No, there were definately different kinds of things going on and some of it quite important and useful to all of us (those that care to look that is).

It’s a weird situation for a left which has grown up with knowing/experiencing no other kind of socialism except with variations on a theme, especially when the whole thing collapsed like a house of cards with a barely a whimper from the ruling political elites (in distinct contrast to what’s happened in many capitalist countries). But it does illustrate that in the more developed of the former socialist states, the ruling political elite, had little in the way of real power without the active participation of the people in the illusion (a cruel Soviet aphorism went thus, ‘We pretend to work and you pretend to pay us’).

It left us with an unprecedented situation; we’d had the ground cut away from under our feet and we’ve been thrashing around ever since.

So where or perhaps when, did it go wrong and where’s the Green connection? I contend that this is one of the issues where the failure of the former socialist states and the environment meet, and where any future socialist movement worth its name have to be one and the same thing, that is Red and Green.

But the environment is but one aspect missing from fundamental socialist ideas as they have been practiced, also missing are the issues of race and gender. It’s only when we put it all together that we can appreciate what an immense task it is.

In order to get a handle on the Red and Green we have to go back to 1917 and the Bolshevik Revo. Russia was an undeveloped, largely peasant country only a couple decades out of serfdom and for the most part, piss poor (but with enclaves of development in and around Moscow and St. Petersburg and a few other cities). But industrialised it weren’t.

Thus the primary objective of the Revolution was Development (and under Stalin, at any cost, mostly people). Lenin’s famous slogan, ‘Bread, Peace and Land’ summed up the days leading to the 1917 revo. Later, the slogan was ‘Electrification plus Land = Socialism’.

An aside here; it’s worth remembering that in order for capitalism to industrialise, it slaughtered untold millions of people, the difference being that they were all over the damn planet! Cast your mind back to those ‘Dark, Satanic Mills’ and the slave ships that made capitalism possible in the first place. What makes it different for us is that it’s ‘history’.

To accomplish this the Soviets naturally turned to the most developed of the capitalist countries, the United States for the technology to achieve it with; the factory, assembly lines, mass production and so forth.They bought entire assembly lines, machine tool manufacturing plants, smelters, truck production plants, all the stuff you need when you start to really industrialise a country pretty much from the ground up, plus it had never been done before, anywhere, so there were no guides, no experience upon which to base actions.

And they started to do it under the worst possible conditions; war, revolution followed by a bloody counter-revolution and civil war, famine and epidemics swept the country for over a decade. And all of it presided over by a political elite that was largely clueless, at least amongst its policy-makers, thanks to the interminable left/right battles than were waged until around 1930 when Stalin had pretty well gotten rid of anybody with an original thought in his or her head.

Yet in spite of this the 1930s saw the most incredible development in the Soviet Union especially in housing, education and health and the construction of the basic infrastructure. The ‘Command Economy’ actually worked, at least for basic things (but at what cost?). By contrast, most of the world’s population today do not have these basics even seventy years later, in fact they have less now than they had 30-35 years ago thanks to the ‘neo-liberal’ agenda.

Pollution, awful as it was, was still fairly localised, regional at most, the full, global environmental impact of capitalist-type industrialisation didn’t really become apparent until the 1950s, for the fact is, in the early days of socialist industrialisation, when it was basic infrastructure, roads, rail, electricity grids, housing, schools, hospitals, water and sewage networks, cement, coal and steel production, over time, if left to themselves, these could have become clean and sustainable with the judicious application of scientific and technical knowledge. For it is a fact, that over the entire span of human history, we have always been doing ‘more with less’, it’s one of the things that distinguishes us humans from (nearly) all the other animals.

One problem is that capitalist economies have been at it for over two hundred years, that’s how long the chickens have had in order to reach the roost. The globalisation of the capitalist system has just tipped us over the edge. So the present situation is almost entirely due to capitalism (Chernobyl notwithstanding).

But nevertheless there is a fundamental issue here and one which with hindsight, is obvious, at least to me. The trajectory of capitalist economic ‘development’—whilst there is no doubt that it had its benefits (in the short term) for millions of working people—was based upon the continual creation and appropriation of capital regardless of its impact either on the planet or its inhabitants.

It was assumed by the early socialist economists that the means of production were neutral, that is to say the factory, the assembly line and so forth, would, under socialism, be entirely different animals. There would be no compulsory overtime, no piece-work, no speed-up of the assembly line, workers could not be fired, and indeed in the Soviet Union up until the late 1960s, these were literally the law of the land. Cool, you could go into work and hang out all day and not do a damn thing but still get paid!

Of course such limitations led to an immense loss of ‘efficiency’, at least by capitalist standards, yet the investment in such industrial enterprises was enormous, entailing tremendous sacrifices for workers. The only way ultimately to justify such investments was to make them more ‘efficient’. This meant introducing all the devices of a capitalist economy, overtime, piece work, speedup and so on.

The problem with this was that here we had a nominally socialist economy using capitalist techniques designed to extract the maximum surplus value from labour but all of it taking place within a ‘Command Economy’, with its plans and goals, none of which corresponded to reality because the ‘Plan’ ‘was out of the loop’.

Enterprises lied about production, they lied about raw material needs, in fact they created an entire illusion of perfection so that ‘output’ matched the ‘Plan’ exactly. But given the disjuncture between the ‘Plan’ and the reality, and the inability for the ‘Plan’ to actually allocate resources rationally (remember that all its statistics, how much cement or steel were needed) were based upon information supplied by the enterprises.

Thus enterprises also lied about how much material they needed in order to meet the ‘Plan’, in a word, they hoarded, building up vast stockpiles of raw and semi-finished products, ‘just in case’ (I can’t remember where I read it, but someone calculated how much production was actually hidden away in stockpiles and it was vast, so vast that it impacted directly on the economy, eg no damn windshield wipers or tires etc). All this did was add to the woes of an economy designed to produce perhaps 20,000 unique products but now labouring to produce 20 million! Complexity ruled okay!

Under capitalism, such vast accumulation of surpluses don’t matter, they get crushed and dumped, it’s a total anarchy of production.

But these surpluses also powered the grey economy, for enterprises would barter with each other using these hoarded stockpiles, if one was short of steel and another of cement but had surpluses of steel, they would swap, all of it officially unknown to the ‘Planners’ of course. And it worked, well up to a point.

Interestingly, throughout the 1960s, Soviet economists were well aware of this (you’d have had to be blind not to notice) and all kinds of cybernetic models were developed (the forerunners of the ‘supply chain’) to try and make the economy work in real time (which is what the modern supply chain does) so that it could respond to the demands of the ‘market’ (more on this aspect later).

Which brings me back to the issue of the ruling political elite not representing a corresponding economic class, the class of workers. Basically, the ruling political elite had no vested interest in the process of production as they derived no profit from it, and as long as the targets of the ‘Plan’ were met and their own privileges, ‘perks’ and position were not threatened, everything was ‘A-Okay’, after all the ‘statistics proved it’.

It should surely be obvious that trying to adapt capitalist economic methods to even a nominally socialist economy just didn’t, and doesn’t work. Capitalism for example, is only ‘efficient’ when it impacts on the ‘bottom line’, profits. One need only look at the literally millions of ‘new’ products that hit the market every year, with most biting the dust by year’s end (one ‘new’ product rolls off the Sony assembly lines every few minutes during the working week!). The entire process is totally arbitrary, designed not to satisfy real needs but to make a profit for the shareholders.

But how does all of this relate to the Red and the Green?

One of the basic problems confronting the first real attempts at building a viable alternative to capitalism was one of competition, that is competition between the two systems. The lure of acquisition, consumer products to you and me and the lack of incentive under socialism to ‘innovate’, meant that a socialist economy could never compete if the basis of the competition was the production of an endless flow of consumer products to satisfy peoples’ ‘needs’.

But the political rulers, lacking any real democratic mandate to rule, decided that if ‘socialism’ could produce as many or more, consumer products as capitalism did, this would satisfy the needs of the consumers. We see the end product of this thinking in China for example. But is this development? I think not, it’s just more of the same.

Worse still, there was no incentive for socialist enterprises to ‘innovate’, at best they made inferior (in the sense of construction and design) copies of the original and the obsolete distribution system meant that most never made it into shops and many, if they did, simply weren’t what the ‘consumer’ wanted.

Not so its weapons systems however, which absorbed most of the innovative talent and resources in the competition with capitalism and again, we see here how different the two systems were. Trying to adapt a socialist economy to a war-based economy tipped it over the edge, whereas the leading capitalist economies, most notably the US, are at heart war economies and always have been. The US could pull it off, one because they got their materials on the cheap by ripping of the planet and their working people and two, because it is an economy based on the over-production of goods.

The contrast is obvious. Even today, a poor country like Cuba has a better health system than the US, higher levels of literacy than the US but is poor in the production of consumer products, because it doesn’t have an economy based on endless over-production of everything and most important of all, Cuba has different priorities for its limited resources.

I remember reading, back in the 1980s, an English version of Pravda (the Communist Party newspaper) describing the situation where what in the Soviet Union were called design bureaus, turned out dozens of designs for watches, the end product being warehouses full of watches nobody wanted to wear with the ones they did want being unavailable (here we see how bribery and the informal ‘network’ of relationships steps in to complete the loop between producer/distributor and consumer).

Under developed capitalism, with a surplus of everything, such issues normally never arise, in fact the capitalist ‘market’ is glutted with the stuff, high streets and malls across the land are full of unsold products.

If a product doesn’t sell then a ‘new’ one is produced (if the company doesn’t go bankrupt first) and hopefully it does sell (here, marketing and demand creation steps in). But how would a centralised economy even know what sold and what didn’t if it was operating using incorrect information in the first place? It would argue, ‘look we’ve produced x million watches’, there’s no shortage,’ quantity not quality being the order of the day even if they rotted in warehouses across the land.

Commensurately, how would a decentralised socialist economy work any better if it wasn’t in posssession of information firstly about wants and secondly about needs? It’s an even more complex process than the ‘Command Economy’, relying on vast amounts of uptodate information and all of it in the right hands at the right time.

But cut back on the all the arbitrary production and we still have a complex network to build and run but firstly, resources devoted to arbitrary production can be redirected, and secondly if there is truly a democratic process built-in to the economy, we can collectively decide how resources should be used.

But under capitalism, we have only a formal, political democracy (at best), but we have no control over the economic processes unless as workers we go on strike, an action of last resort and these days, only a minority of working people belong to unions. And in any case, strikes are basically the struggle between capital and labour over how the wealth we produce is shared. In actuality, we are all at the mercy of economic forces that not even the ruling political class have much control over let alone their capitalist masters, and the majority of us, no control whatsoever.

If we are to deal with the threat to the planet’s biosphere, it should be obvious to all that there has to be both political and economic democracy if we are to stand even a chance of stabilising what we’ve totally buggered up. And judging by the concern people are expressing about what’s happening to our Home (let alone how it’s actually impacting on those with no control over anything and what they feel), what’s the betting that if we had the opportunity to directly participate in the economic process as more than damn drones of capital, we would arrive at very different conclusions than our so-called political leaders have as to what steps to take. Nobody’s pretending that at this late date, it’s not an immense task, and one with no guarantee of success, but at least folks if we are truly in charge of our own destinies, if we screw up, we have nobody to blame but our good, collective selves.

In Part Two, I want to take a look at what kind of development we really need.

Note

 I have selected a couple of the debates from C&C that I think are worth reading.

Why “ecosocialism”? Some Comments on a Word by Ian Angus.
Is "ecosocialism" an unnecessary addition to left vocabulary?

Confronting the Climate Change Crisis By Ian Angus
Politicians and oil companies are jumping on the green bandwagon, but they have no solutions to a crisis that is rooted in capitalism

And the response to this: Marxism and Climate Change: An Exchange (Part One) by Paul York, an organizer of Students Against Climate Change at the University of Toronto followed by Ian Angus’s response:
Marxism and Climate Change: An Exchange (Part Two)


Also, see my review of the excellent Ecology Against Capitalism by John Bellamy Foster, ‘Who said Marx wasn’t Green?’ and check out the Monthly Review Website, lots of good stuff on it.
 
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Good article. William Bowles gives a fairly accurate description of the former Soviet/Eastern Bloc economies and political structure--though not entirely.

While it's obviously accurate to say they weren't communist or even socialist, it isn't right to say it "weren’t capitalist, even, as some say, ‘state capitalist’," since what he's describing is to a large degree the similar lethargy, bureaucratic stifling and chaos you find in many major corporate monopoly structures (only not as extreme). Just look at the US military-industrial complex, or the private regulated energy sector and you see some pretty similar situations--not to mention the global banking industry.

And this isn't some coincidence. State capitalism, or more accurately a highly centrally regulated and monopolized version of it, is exactly what the Bolshevik government, including Lenin, both prescribed and recognized as what was developing in post-1917 Russia.

Lenin: Industrial Management under a State Capitalist Monopoly Framework

Progress Publishers, Moscow; Lenin: State Capitalism During the Transition to Socialism (Index)

Lenin and Bukharin on the Transition from Capitalism to Socialism

It was supposed to be a “transitional” economic model designed to allow people the time to become more organized, educated, conscious, etc., to develop a democratic socialist economy.

The rise of Stalinism, of course, made that "transitional" policy more of less permanent (by mostly brute force and oppression).

(Much the same happened in China after 1949—
Mao: State capitalism on Building the Economy-- Conference on Financial and Economic Framework 1953)

Remember that ownership, especially in a corporate framework, means little without the exclusive control that goes with it. Just because, as Bowles points out, the Soviet ruling corporate/party bureaucracies didn’t officially “own” (as in individual title) capital and corporate assets, they did in fact have pretty much the same full legal trust/power of attorney over this wealth as any private elite would.

That’s why when reading successive Soviet economic and business planners and political brokers, like Preobrazhensky, Molotov, Stalin, Trotsky, Bukharin, Fel'dman, Nemchinov, Lieberman, etc., you learn about “socialist” capital accumulation and the key role of profit, “socialist” millionaires, Foreign Trade Corporations and Joint State Stock Companies (how Russia dominated other economies in its sphere of influence, etc.).

Socialism (or communism)—as in the democratic control of businesses and economies by workers and their communities; the primary mode of long-term sustainability and well-being in development; the primary satisfaction of human need and self-improvement; fundamental liberties and inclusive decision-making, etc.—never developed in the Eastern Bloc (other than a few local ventures).

In fact, the impact of these economics and ideals seems to have been much greater in the West than in the East.
 
October 08, 2007
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