TheMeaningofRecentSocialChangesinEasternEurope

TheMeaningofRecentSocialChangesinEasternEurope

byMihailoMarkovi

Source: PRAXISInternational(PRAXISInternational),issue:3+4/1990,pages:213223,onwww.ceeol.com.

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THE MEANING OF RECENT SOCIAL CHANGES IN EASTERN EUROPE

Mihailo Markovic

Dramatic and unpredictable changes took place in Eastern Europe and in the Soviet Union during the years 1989 and 1990. Communist parties lost power and more or less disintegrated in Eastern Germany, Poland, Hungary and in north-western parts of Yugoslavia (Croatia and Slovenia). They were transformed in Bulgaria, Romania and in the remaining four Yugoslav republics; they do no longer exist as Communist parties. Some of them now have modern and democratic programmes, including guarantees for human rights, political pluralism, free press and free elections, independence of courts, and market economy. In the USSR the Communist party is still in power but finds itself in a very deep crisis, especially because of the inability to reform the economy and a complete failure to offer feasible programs for overcoming existing chaos and a deep social crisis. 1. Break down of "real socialism" What happened is indeed a complete and irreversible break down of the system labelled "real socialism". Defining characteristics of that system are the following: (1) One-party system; ie. a complete monopoly of political and economic power in the hands of one ruling party. The ruling oligarchy within the party had full control over the state apparatus. (2) The state, in its turn, exercized complete control over the entire public life: politics, economy and culture. (3) All means of production, including the smallest shops and services, land and agricultural machines - were state property. (4) State planning committees decided to the smallest detail about production and distribution of goods, about all wages, prices and new investments. (5) The entire society was hierarchically organized as in pre-modern society. The expression of hierarchy was the system of nomenklatura which prescribed the position, the obligations and privileges of each official engaged in the decision-making process. The higher echalons in the hierarchy guaranteed privileges and promotion to the lower ones in exchange for absolute loyalty and obedience. (6) Culture was dominated by the official ideology which was a very selected, deformed and vulgarized version of the views of Marx and Lenin. (7) Welfare problems were partially solved through a policy of full employment and state-subsidized prices of basic foodstuffs, of energy, rents and services.
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2. "Real socialism" and the basic ideas of Marx's theory

If we compare, one by one, the listed defining characteristics of "real socialism" with basic ideas of Marx, we shall see that there is a complete incompatibility between them. (1) Marx said explicitly that communists should not have organized into a separate party, that they should stay together in a pluralistic organization of the entire working class which would embrace very different existing socialist orientations. "The Communists do not form a separate party opposed to other working class parties. They have no interests separate and apart from those of the proletariat as a whole. They do not set up any sectarian principles of their own by which to shape and model the proletarian movement" (MER 483).1 In the new post-revolutionary society Marx saw the possibilities of a direct democracy and never mentioned any need for the mediating role of one or several parties. (2) Marx believed that in a (relatively short) transition period there was a need for a workers' state (that he extremely misleadingly called "dictatorship of the proletariat" identifying the coercive role of any state with "dictatorship"). He permanently clashed over this issue with Bakunin and the anarchists. But he agreed with them that after the complete victory over bourgeois counter-revolution and after the radical restructuring of social institutions, the state in the sense of a coercive professional political institution lost any raison d'etre. Thus quite opposite to Stalin's thesis about the need to strengthen the state, Marx believed in a possibility of the transcendence of the state. In Communist Manifesto he said that "public power would, then, lose political character", meaning obviously by politics "struggle for power among professional political elites". In the end of Capital he sees the organization of a new society as a federation of associations of immediate producers. (3) Marx never spoke of nationalization of all means of production. He spoke (in Communist Manifesto, MER p. 490) only about socialization of land, confiscation of the property of all emigrants and rebels, extension of factories and instruments of production owned by the state and the centralization of banks, of means of communication and transport in the hands of the state. Clearly a big sector of the economy would remain private and a "heavy progressive and graduated income tax would be applied". In the Critique ofGotha Program Marx speaks about a first phase of the new society as a mixed society in which there is still division of labor, the conflict between mental and physicallabor, in which labor is still a means of life and right still has a bourgeois character, treating unequal people as equal and thus permitting considerable social differences (MER 530-531). (4) Marx never meant by "planning" rigid, bureaucratic administration of the entire production and of distribution process by state officials. His last word from the volume three of Capital is this: Freedom in the field of material production "can only consist in socialized men, the associated producers rationally regulating their interchange with Nature, bringing it under their common control, instead of being ruled by it as by blind forces of Nature; and

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achieving this with the least expenditure of energy and under conditions most favorable to and worthy of, their human nature." (MER 441). What is in question here is rational regulation exercized in a human and democratic way by the producers themselves - not the arbitrary and undemocratic rule by the Party bosses. (5) In contrast to concentrated lasting dominating power and the corruption of nomenklatura Marx praised the Paris Commune for election of responsible and revocable public officials by universal suffrage and for paying them only workman's wages (MER 632). Thus bureaucracy would be entirely replaced by self-governing councils and assemblies. (6) All ideology was condemned as "false consciousness", reflecting the selfish particular interests of the ruling classes. Rather than being used as ideological means, culture must be an end in itself, a form of human selfrealization and self-creation. And far from being conformist or apologetic, the role of theory with respect to cultural and political activities is bringing to . consciousness the meaning of those activities and ruthless criticism of everything existing. (7) Finally, Marx never even considered the possibility that the worker's state could first deprive workers of their own product, paying them less than capitalist wages, and then giving them gifts in the form of subsidized rents, goods and services. The whole point with the abolition of exploitation in a new society was that workers would themselves dispose with the products of their work and would freely deduct from the total revenue of their collective: "general costs of administration" (which "would be very considerably restricted in comparison with the present-day society") as well as funds for common satisfaction of needs and funds for those unable to work. Huge military expenditures are missing here because abolition of any professional army was one of the very preconditions of the new society.

3. Basic values of the socialist tradition We see from this comparison that there was very little in common between "real socialism" and the Marxian project of a new society. Consequently the break-down of "real socialism" in Eastern Europe and in the Soviet Union does not mean the break-down of the Marxist project -let alone breakdown of the socialist idea. Values characteristic for socialist tradition are deeply rooted in humanist philosophy and emancipatory movements in history. After the great catastrophic depression of the late twenties and the thirties Western society survived and stabilized, implementing some of those ideas. Socialism is, therefore, not just an utopian vision but part of the reality of most developed contemporary societies. Let me mention some of the basic socialist ideas. First of all here belongs the idea of social equality expressed in secular form by Stoa philosophers for the first time. It was revived by the radical Protestant movement led by Thomas Munzer and by English levellers. It was one of the three basic principles of French Revolution. It found its practical

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form in the idea of abolition of class differences within modern socialist movements. Solidarity and mutuality also have deep old roots since early Christian communist communities. Already before Marx they were given socialist form by Proudhon and the anarchists (later especially by Kropotkin). The idea of self-development and self-realization, the so called positive idea of freedom, usually attacked by liberalist philosophers (for example Isaiah Berlin) stems from Aristotle in the sense of the actualization of the potential of an individual, which is the essential condition of personal happiness and any human emancipation. Wealth of needs and life-manifestations, in contrast to the poverty of the existence of a typical homo consumens, has its origins in the Rennaissance, in the principle Nihil humanum a me alienum puto (nothing human is alien to me). In view of the existing and growing threat of irreversible destruction of our natural environment, the very survival of humankind depends on the substitution of a paradigm of social development in terms of a growing variety of cultural and spiritual life manifestations for the existing prevalent paradigm of quantitative, exponential materialist growth. Another example of a very crucial old socialist idea that becomes increasingly relevant today is the idea of participatory democracy, or of selfgovernment. It stems from ancient Athenian and Roman democracy but was formulated in modern form already by Proudhon. All those and other socialist values cannot go down the drain because of the failure of "real socialism" which, in the first place, did not even try to implement them. There are good reasons to assert that just now after the fall of bureaucratic form of socialism that ground has been cleared for the emergence of democratic, humanist socialism in the East. This is an optimal historical possibility but it is far from clear that it will be realized in Eastern Europe and the Soviet Union.

4. Traditional liberalist option

An alternative that now attracts most economists, political activists and intellectuals is a traditional liberalist multi-party laissez-faire model of market economy. Most people in the East do not know that initial nineteenth-century form of capitalism underwent considerable changes in the twentieth century, that after a series of crises it reformed itself, abandoned market anarchy and complete governmental irresponsibility, and stabilized itself only when it became a regulated, welfare, mixed economy. Ignorant of actually existing modern developed society Eastern European and Soviet intellectuals project the same simplified and vulgar picture of capitalism which until recently they condemned for ideological reasons. Now when they changed their ideology almost overnight, and from dogmatic Marxists-Leninists became dogmatic liberals - in the style of "Chicago boys" they, again for ideological reasons accept that same distorted picture of "the modern society". Shatalin wants to privatize 70% of Soviet industry within

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500 days. Yeltsin, who totally changed his identity during one year, supports that plan, which, to say the least, is utterly unrealistic. The darling of Western conservatives, Alenander Cipko, who until recently was a faceless colourless aparatchnik, now demands a return to a healthy normal society, which is a society of Reaganomics and of Mrs. Thatcher's privatization. He informs us that welfare state was only a passing episode of the Western society in the conditions of exceptional prosperity and wealth, which can no longer be taken for granted. This is what now economists and politicians all over Eastern Europe keep repeating like parrots. The same parrots, the same simple-minded thinking as yesterday. Only the terms of reference are now replaced. Blame goes exclusively to the East, uncritical praise to the West. This colossal bankruptcy of intellectuals will produce a pendulum movement from one extreme to the other: (1) From excessive rigid, administrative planning one will swing all the way to a Reagan-type deregulation with all kind of anarchy and social disorder. (2) From excessive nationalization of all means of production including all land, small-scale services and individually run grocery shops, the tendency now is to privatize everything, including large industrial enterprises, mines, energy plants, railways, airlines and banks. (3) From one-party system one switches to the worst possible forms of multi-party system in which one party, with the help of considerable funding from outside, may again have full monopoly of power - at least for four years - and can undo all that bad and good that was built for decades, without any institutional constraints. (4) For decades people were used to an excessively centralized bureaucratic, paternalistic welfare policy which gave rise to various forms of overprotection and parasitism (employment with little work done, highly subsidized rents with no obligation to maintain, repair, improve the quality of apartments, free medical drugs without any participation of patients, etc.). Now there is a tendency to get rid of most welfare as a costly "communist" institution that is incompatible with market economy and with privatization of factories, apartments, pharmacies, hospitals and schools. (5) One false and irrational ideology (of Stalinism, Brezenvism, Titoism) is now being replaced by another false and irrational ideology of obsolete, nineteenthcentury liberalism.
5. What will be the likely implications of those pendulum-type social changes?

To their dismay present-day liberal leaders in Eastern Europe will discover that social forms built for half a century cannot be easily dismantled and that public support won for more political liberty and higher quality consumer goods will be lost once new policies fail to deliver, and elementary existence of millions of people are jeopardized. (1) Mindless deregulation without any opening of a new investment cycle, without a carefully prepared policy of transferring surplus labour from overemploying, inefficient enterprises into new plants and services - would only throw millions of workers to the streets. This could lead to extremely serious social conflicts.

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(2) Polish and Hungarian experience has already shown that offering state enterprises for sale is one thing and actually selling them is another. The exception is, of course, Eastern Germany where everything was taken over or closed down by powerful Western German economy. However, if something comparable could at all happen in any other Eastern European country, the difference would be that where Eastern Germans feel as second rate citizen in their own country, Poles or Hungarians would feel citizen of colonies to Germany, Japan or USA. However, that cannot happen since capital in the developed world is not very interested in investing in countries with poor infrastructure, lack of working habits, non-convertible currency and dubious stability. On the other hand, domestic capital that could buy state enterprises is entirely missing. Yugoslavia is here the only exception. Its citizens have been free since the early sixties to travel and work abroad. Therefore there is nearly $30 billion in private savings. And yet the value of social property is estimated at $300 billion. It follows that only 10% of social property could be sold to individual citizens or cooperatives, unless one decides, for purely ideological reasons, to sell everything for 1/10 of its costs. Thus the idiocy of the Shatalin plan in the Soviet Union would consist in the fact that rather than concentrating on what could be done within 500 days, that is, making enterprising independent of state control, electing the best possible managers and improving internal organization of enterprises, one would waste time in trying to sell state enterprises to a non-existent market. (3) East Europeans will learn that the mere existence of several authoritarian parties and free elections with a large role played by foreign money do not in themselves mean democracy. The fact is that in several Eastern European countries people are already quite disappointed by new ruling parties. They will probably begin to demand more participatory democracy, more separation of powers and institutional checks and balances, a better quality political culture. (4) Loss of social security which they enjoyed for a long time will profoundly shock Eastern European citizen. Out of this experience will probably emerge a demand for a different kind of social welfare, one that would be more decentralized and self-governed, more compatible with a regulated market economy and more responsible on the part of recipients. (5) Traditional liberalism is equally bankrupt as authoritarian communism. Neither of the two ever worked well, although both somehow survived almost for a century. One attempted to build a modern society on the ground of the idea of liberty alone, neglecting social justice. The other tried to modernize traditional rural society on the ground of the idea of social justice and class equality alone, neglecting freedom and already-achieved forms of democracy. Both one-sided projects proved to be impractical and untenable in the long-run. There is a chance that people in the Eastern Europe will eventually understand that the real solution of the existing problems in their societies requires a synthesis of freedom and social justice, of socialism and democracy.

Praxis International 6. Democratic-socialist option

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Democratic socialism is a social system in which both political and socioeconomic rights of all citizen are affirmed and implemented. More specifically, the necessary characteristics of socialism are: social property of the key economic enterprises, a minimum of macro-regulation of social processes and a high level of social security. Democracy in socialism presupposes elementary liberal-democratic institutions: recognition of civil liberties, political pluralism, free election, separation of powers, independence of courts. However, the principle of democracy is extended from the sphere of politics to economy and culture, involving participation of employees in economic enterprises and cultural institutions in the process of decision-making. Thus, in addition to traditional forms of representative democracy it also includes various forms of direct democracy (referendum, people's initiatives, nomination of candidates by groups of citizen, recall of elected representatives). Democratic socialism is different, on the one hand, from bureaucratic "socialism", on the other hand, from a social-democratic society. In contrast to a bureaucratic, state-owned and state-controlled, one-party system, the defining characteristics of democratic socialism are the following ones. (1) There is a true political pluralism, involving the existence of any number of political parties and non-party political organizations. The distinguishing feature of any party is that its primary goal is winning and maintaining power. Power relations characterize its inner organization, therefore it is hierarchical and authoritarian, ruled invariably by an oligarchic elite. In order to win the support of the electorate it comes up with a holistic program which invariably has more or less ideological character (trying to rationalize the particular interest that the party promotes). Non-party organizations and social movements struggle for specific goals (protection of natural environments, peace, women's liberation, improvement of worker's conditions); they tend to be more pluralistic, less authoritarian and ideological. The only constraint to free functioning of a political organization is renunciation of violence and of an activity that arouses national religions and racial hatred. (2) All political decisions are made by the representatives of citizens elected in free, direct, secret elections among several candidates, proposed by political parties, movements and groups of citizen . People's representatives do not enjoy any material privileges and may serve a limited number of mandates. This effectively precludes any of the features of the system of nomenklatura that plagues bureaucratic political systems. (4) Large areas of social life, especially in public communication, culture and micro-economics, are not controlled by the state and constitute an independent sphere of public life ("civil society"). (5) In order to prevent any form of bureaucratic voluntarism, any arbitrary interference of political officials into the decision-making process, democratic socialism commits itself to a very strict rule of law. Bad laws must be changed rather than arbitrary violated.

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(6) In addition to its other necessary roles (such as maintaining social order, enforcing law, protecting human rights of individual citizen, mediation in conflicts among different social groups), the state also has a function of economic macro-regulation. All modern governments are engaged in a necessary minimum of macro-regulation, the means of which are monetary, fiscal, and foreign trade policy. In addition a democratic socialist government will be specially concerned about regulating ecological issues and overall social development. That ecological policy should be such a strong concern of a socialist government follows from the fact that environmental issues can be in principle very seriously handled only in a society that does not identify itself with a maximization of material growth and of material consumption (which is the case with capitalist drive for profits). On the other hand, a socialist government disposes of capital gains from social property, which permits it to have a crucial say in projecting the future. (7) All forms of property are equal before the law. That involves use of citizen's savings for productive purposes, the rise of a private sector of the economy, privatization of argiculture and of some formerly state enterprises. Yet large decisive means of production remain social property. They are the result of the labour of many generations and belong to the society as a whole. In a market economy social property has the form of stock capital, which has a price at the market and can be partly or fully sold for a good price to citizens, employee's collectives or, under legally prescribed conditions, to foreigners. The highest institution of state power, national assembly, lays down the rules that regulate the use of social property and the distribution of revenues. Courts observe the implementation of those rules. The government controls a board composed of competent specialists who decide about the most rational use of social captial. (8) The nature of democratic socialism as a mixed society is not incompatible with the existence of all three markets: of commodities, of capital and of labour. A stock market is indispensable for any market economy. Of course, an appropriate fiscal policy will be one of the instruments to prevent an undesirable increase of social differences. A market of labour is regulated in such a way that surplus labour from some enterprises and branches will move to where it is needed. A necessary part of the government's policy of economic development will be investment to generate new jobs, as well as a general policy of the reduction of working hours in order to maintain full employment. (9) Democratic socialism is committed to efficient production. However, efficiency of social enterprises does not depend on the nature of property but on the quality of management and of the organization of work. As in every other corporation in market economy, the main task of the management is to generate a decent level of gains. The manager is responsible to a board of directors, which has the right of overall control over the operative management. The only difference is that in a private corporation the members of the board are representatives of stockholders. Here members are partly representatives of employees (an element of self-management), partly they are nominated by the state.

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(10) Social welfare is organized as a network of self-governing communities for education, culture, mass-media, scientific research and health. National assembly decides on what percentage of national income goes for various welfare needs. Self-governing communities (composed of the delegates of all institutions in the given field: schools, hospitals, mass media) would distribute those funds according to certain objective rules.
7. Democratic socialism and social democracy

In nineteenth-century social democratic parties were revolutionary organizations following the basic ideas of Karl Marx. They expected to win the parliamentary elections and to gradually restructure society by passing the necessary legislation, but they also were ready for a violent seizure of power in the case of a major economic breakdown of capitalism. Those two different approaches to social change gave rise to organized factions within the party. The international organization of social democratic parties (Second International) split over the issue of whether to support or to rebel against national governments which actively engaged in the First World War. Radical wings of social democracy turned into communist parties and created the Third International. Since that time social democracy has been identified \vith a reformist approach demanding more governmental economic regulation and a decent level of social welfare. In those two respects democratic socialism need not differ much. There is a difference in the conception of political pluralism and democracy. Most social democrats reduce political life to multi-party system and disregard the possible role of social movements and non-party type of political organization, which engage to solve one big issue rather than to win power. Social democrats also neglect the importance of the forms of direct participatory democracy. They tend to stay within the limits of traditional parliamentary system. The main difference, however, concerns the nature of property. Already the father of the present-day social democracy, the leader of the right wing of the German Social Democratic Party in the late nineteenth century, Eduard Bernstein, saw the solution of the problem of capital and of economic exploitation in the increase of the number of stockholders. Instead of abolishing capital-wage labour relations, all workers would become small capitalists. Thus the class conflict would vanish. The fact is that owing to the emergence of numerous and powerful middle classes and of the welfare state, with progressive taxing and the social legislation improving the lot of workers - class conflicts have been considerably reduced in the countries with social-democratic governments. And yet class differences are larger than a truly socialist system can tolerate. Huge capital in the hands of a small number of wealthiest families gives a corresponding political influence - in a world where politics has also become a market place, and where money continues to play a decisive role in the electoral campaigns and in the activities of various lobbies and pressure groups.

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While both democratic socialism and social democracy are mixed societies, socialist elements prevail in the former, and capitalist elements in the latter. To social democrats the privatization of social property is acceptable since they know that state property leads to bureaucratization and they do not believe in economic participatory democracy. Both in Germany and in England during the First World War there were strong mass movements of workers for economic and political self-government and they were crushed by social-democrat party and trade-union leaders. To democratic socialists privatization of social property is acceptable only to a limited degree, to the extent to which society needs capital for new investments and shifts of surplus labour. They also agree that state property involves bureaucratization. However, for them self-government is a part of the very idea of democratic socialism. Social property differs from state property in three important respects. In state enterprises both the managers and the members of the board of directors are nominated by state organs and the entire profit goes to the state. In social enterprises the manager and a half of the members of the board of directors are elected by the employees and the net revenue is shared by the state and by the collective. This element of economic democracy and of social justice is missing in the ideology of social democracy.

8. Conclusion
Eastern Europe is at a cross-roads. On the ruins of the authoritarian statist society, that labelled itself "real socialism" several alternative historical possibilities open up, ranging from traditional liberal laissez-faire market economy to democratic socialism. Which of them will come true depends primarily on historical conditions, which are different in each particular country. Some of them have important democratic traditions (Czechoslovakia 1918-1939, Serbia 1888-1929). Some suffered permanently from very authoritarian regimes (Russia, Poland, Hungary, Romania, Bulgaria). Some experienced genuine popular revolutions which brought communist parties to power (Russia, Yugoslavia). In others communist regimes were imposed from outside, by the force of Soviet tanks. Some had bad experiences with both Tsarist Russia and the Soviet Union (Poland, Hungary, Czechoslovakia since 1948). For others Russia was a friend and an ally (Bulgaria, Serbia). Finally, while Yugoslavia acquired considerable experience in market economy since the break with Stalin in 1948, other Eastern European countries were stuck within Comecon and almost totally isolated from the world economy and culture . .People who were forced to live in a system which they had not chosen are now bitterly disillusioned and ready to, at least temporarily, explore total opposites, no matter how obsolete. Better solutions will be found by people who passed through a more complex learning process and had more say in making their recent history.

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Eastern European intellectuals will play a decisive role in projecting more or less rational and imaginative solutions.
NOTES 1. MER = Marx-Engels Reader, ed. Robert C. Tucker, New York: W. W. Norton, 1978. All page references in the text are to this volume.