Chris Harman

Thinking it through

Things cannot go on like this

(November 1990)

From Socialist Worker Review, No.136, November 1990, p.9.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

‘PRODUCTION VOLUMES are declining and economic links are being broken. Separatism is intensifying. The consumer market has been devastated. The budget deficit and the state’s solvency have reached critical levels. Anti-social phenomena and crime are on the increase. People’s life is becoming increasingly difficult, their interest in labour is declining and their faith in the future is being destroyed.’

Anyone who states such things about the society they govern, as Gorbachev did in mid October, is facing desperate crisis.

A year ago the official statisticians claimed the economy was growing slowly. Today they admit ‘we are witnessing a fall in production in the majority of republics.’ There are reports of food shortages from virtually every part of the USSR.

Hardly a day goes by without another nationality proclaiming its independence. Ryzhkov’s USSR government faces continual challenge from Yeltsin’s Russian Federation government.

In the Ukraine hunger striking students appeal to the factories and succeed in forcing the prime minister to resign. In Moscow and Leningrad, radical city councils battle for control both with conservative party apparatuses and with even more radical district councils.

The ‘radical’ papers claim that troop movements in the second week of September were part of preparations for a coup. After a denial by Defence Minister Yazov, the television tells of ‘dozens of phone calls from officers who had taken part in the events’ saying his statement ‘was a lie.’

The ‘conservative’ papers counter claim that coup allegations are themselves part of the preparations for a ‘counter-revolutionary coup’ by the extreme ‘democrats.’

Everywhere there is a feeling that ‘things cannot go on like this.’ But neither the conservatives nor the liberals have any answer to the economic crisis.

The conservatives would like to hark back to the old command economy, but it is precisely that which led to the present crisis.

It was never in reality a ‘planned’ economy. Central planners would draw up targets for economic growth, which were deliberately ‘taut’ – based on trying to squeeze more production out of the enterprises than could be achieved. Invariably, many of the growth targets would have to be abandoned after a couple of years, and the enterprises working to fulfill them would be redirected towards other, ‘priority’ areas of production.

This economic mechanism worked, after a fashion, from the late 1920s to the mid 1980s.

But it could only work while overall economic growth provided a surplus which could be redirected from one section of the economy to another. As a long term decline in growth rates cut the surplus available, eventually a point was bound to be reached where attempts to make the economy grow too fast led to shortages all round. This is what has been happening over the last few years.

This crisis of the command economy has led most former enthusiasts for it to turn into enthusiasts for the market.

Where they disagree is over the speed of the change and the extent to which it has to be accompanied by a shift from collective nomenklatura control to private ownership.

The ‘liberals’ around Yeltsin have rallied behind the claim by the economist Shatalin that curtailment of the money supply, rapid privatisation and dropping of central economic controls can lead to an economic miracle in five hundred days.

The ‘conservatives’ entrenched in the party apparatus accept the logic of the market, but resent any privatisation which weakens their economic power.

Meanwhile, the crisis grows ever worse until some of the pro-Shatalin economists admit that things are too out of control for his 500 day programme to be implemented.

The crisis in the regime is increasingly matched by a crisis within the liberal opposition.

Shatalin himself stresses the need to prepare the ground for the market with ‘administrative measures’ (i.e. those based on the mechanisms of the command economy), involving ‘harsh measures’ and ‘discipline.’ It is hardly surprising some ‘liberal’ intellectuals are now calling for a ‘left centre coalition’ behind Gorbachev.

But it is already too late for any such coalition to maintain its popularity for long. The unleashing of unrestrained market forces in the middle of an economic contraction will not bring that contraction to an end, but intensify it, with inefficient enterprises pulling efficient enterprises down with them – as happens in slumps in the West.

And the liberal opposition do not have the sort of deep social roots that would enable them to persuade workers passively to accept the suffering involved.

Popov, the mayor of Moscow, warned his fellow liberals in the early summer that they had to move quickly to implement their economic reforms, lest they be thrown off course by the rise of a new workers’ movement with ‘egalitarian’ demands.

Popov did not draw the logical conclusion from his own argument – that those really committed to the market should ditch their commitment to democracy. But it is not inconceivable that eventually we will see a real coup in the USSR – and that some of the liberal intelligentsia will support it as the only way to get the ‘discipline’ they so ardently desire.

There ceased to be a united ‘democratic movement’ once Yeltsin had come to power in the Russian Federation. Part of this movement now looks to the centre left bloc and the Shatalin programme.

But there is another part, with a much more radical approach.

Unfortunately, this genuinely radical and democratic current is much less well organised and influential than those forces pushing for the Shatalin programme. But it alone has any inkling that the crisis of Soviet state capitalism cannot be magicked away merely by copying Western market mechanisms.

Last updated on 29 May 2010