Stalinism: It’s Origin and Future. Andy Blunden 1993
After the death of the ageing Konstantin Chernyenko, Mikhail Gorbachev became General Secretary of the Communist Party of the Soviet Union in March 1985. Gorbachev launched his campaign for glasnost (openness), perestroika (restructuring) and ‘New Thinking’ in international relations, at the 27th Congress of CPSU in February 1986.
Gorbachev’s period in office from March 1985 to August 1991 brought to an end Stalinist rule in the Soviet Union after 70 years, almost 50 years in Eastern Europe. What was the state of the Soviet Union when Mikhail Gorbachev took the helm?
Aggregate economic data do not well reflect the situation in the Soviet economy. The bureaucratic planning mechanisms are oriented to quantity, but its crisis was most sharply expressed in quality rather than quantity, and in the imbalance between quantities rather than in the aggregate. Nevertheless, the stagnation afflicting the Soviet economy during a period in which the majority of capitalist economies experienced a considerable expansion can be measured.
The Left Business Observer published the following growth figures (per cent per annum) which show that, with the exception of the war years, the Soviet Union grew faster than the US until the mid-70s:
|1929 – 1940:||4.5||2.2|
|1941 – 1944:||-2.4||16.0|
|1945 – 1960:||6.5||1.5|
|1961 – 1965:||5.0||4.5|
|1966 – 1975:||4.0||1.5|
|1976 – 1988:||2.0||6.7|
The following table shows the growth rate (per cent per annum) of labour productivity according to official Soviet data, [compared with CIA figures] for labour productivity and per capita GNP at real prices:
|period||labour productivity||per capita GNP|
|1966 – 1970||6.8 [3.2]||3.0|
|1971 – 1975||4.6 [2.0]||4.0|
|1976 – 1980||3.3 [1.4]||3.0|
|1981 – 1983||3.3 [1.7]||2.0|
These figures do not take account of the fact that Soviet industry absorbs a far greater proportion of its output in the production process itself, and consumes far more energy and raw materials per unit output than its equivalent in the advanced capitalist countries. By the mid-1980s, the Soviet economy was at a dead end.
Abel Agenbagyan, one of Gorbachev’s circle of academic advisers wrote that ‘unprecedented stagnation and crisis occurred during the period 1979-82’ and in many sectors of the economy production actually fell, and ‘overall the 1981-85 plan was not fulfilled and the country fell into a serious economic situation.
‘Negative tendencies developed in many sectors, stagnation began and economic imbalances intensified. ...
‘The USSR produces 4.5 times more tractors than the USA. What for? Crop output in our country is a third of that in the USA. But we produce only half as many trailers and mounted equipment as we need.
‘Up to a quarter of the output of many industries is useless. The tractor paradox is also true of lorries. Eighty per cent of them have 4 – 5 tons carrying capacity. This is needed by the Likhachev and Gorky motor works, but not by the national economy. In the whole world only three per cent of automobiles have such a capacity. No wonder Zil lorries run half empty’. 
The 1986 programme drafted by Gorbachev however, aimed for ‘the planned and all-round perfection (!) of socialism, for Soviet society’s further advance to communism through the country’s accelerated socio-economic development’ by means of perestroika.
Gorbachev, in his report on perestroika to the Central Committee of the CPSU on 27 January 1987, promised that the policy of perestroika would double the national income and make the productivity of the economy equal to that of the West by the end of the century. In terms of productivity the Soviet Union was at that time 35 to 40% of that of the USA, 40 to 50% that of other developed Western countries.
But by the end of 1990, national income had fallen by 3% over the year; labour productivity had fallen by 2% and the printing of money owing to inflation had doubled over what had been planned.
On July 22 1987, The Guardian published a document secretly circulated amongst some of the Soviet elite in November 1986 by “The Movement for Socialist Renewal” – ‘desperately worried patriots and socialists who are convinced that the Gorbachev reforms hitherto enacted had not gone far enough’:
‘The Soviet Union lags 10 to 15 years behind the capitalist countries in its economic development and this lag is growing’ ... ‘the Soviet people’s standard of living is one of the lowest in the industrially developed world, including the member nations of COMECON ... Low pay is vitiated by difficult living conditions. Chronic shortage of basic foodstuffs like meat, milk and butter in a number of areas, and frequent stoppages of the products altogether in others, have a bad effect on people’s health, especially children’s, and create an atmosphere of nervousness and uncertainty with people wasting their free time, and even taking time off work to search for food and to stand in queues’. Their conclusion: ‘the USSR is now on the path of becoming one of the undeveloped nations’.
In 1987-88, the Reagan administration in the US launched a massive escalation in the arms race known as ‘star wars’. This policy aimed to put weapons into orbit which would provide an effective shield against an attack by intercontinental missiles. In reality, even for the USA this was a prohibitively expensive strategy. For the USSR it meant that if its nuclear arsenal was to maintain even the appearance of being an effective deterrent, there would have to be a massive increase in investment. The military and weapons sector of the economy was however already absorbing a crippling proportion of the country’s resources.
In January 1988, Gorbachev terminated centralised direction of the economy, and Soviet enterprises henceforth had to be self-financing on the basis of “cost accounting.” While consumer prices remained fixed, the directors of enterprises could set the price of their products. Given that the markets for most industrial products were dominated by a single producer, and were still generally isolated from the world market, this system lacked any mechanism of control or regulation, was wide open to corruption and, in short, was unworkable.
In 1989, the growth rate fell to 2.4% in gross material output but in net material production this amounted to 1.5%, which fell to a mere 0.7% per capita. In 1989, output actually declined in coal, oil, steel, chemical fertilisers, automobiles; agricultural deliveries to the state fell 30% after a fall of 37% in 1988.
TASS, the official newsagency, declared in April 1991 that ‘the consumer market is disorganised, the financial system is unbalanced, the purchasing power of the rouble is diminishing’.
Quentin Peel, Moscow correspondent of the Financial Times reported on 12 April 1991 that:
‘the oil industry is collapsing, with production falling by almost 10% last year. Its leaders warn that the world’s greatest oil producer could be a net oil importer by 1994. And oil accounts for 60% of all export revenues.’ 
By the middle of 1991, the economy had plummeted drastically. Foreign trade was down by 32 per cent. The 1991 budget deficit planned to be 26 billion roubles was now estimated at 125 billion. GNP in the first quarter of 1991 was down by 10 per cent. Living standards were estimated to have fallen by between 15 and 20 per cent.
In other words, all Gorbachev’s efforts to ‘restructure’ the Soviet economy totally failed to resolve the economic crisis. In fact, it got worse.
Nothing in the perestroika programme of decentralisation or the campaign for glasnost fundamentally altered the basis of the Soviet economy. The mainstream economy remained driven not by the needs of consumption, but by bureaucratic direction. The bureaucracy doggedly held on to its power and privileges; bureaucratic planning continued as before, only more disorganised and more corrupted. Without an alternative political leadership, facing an entrenched and repressive bureaucracy, workers’ democracy was never a serious possibility under Gorbachev.
Throughout this period the people were admonished with appeals to improve efficiency and productivity along with the kind of empty cliches which had for decades been stuffed down the throats of people in the Stalinist countries – about “criticism and self-criticism,“ “truthful assessment of our history,“ developing “socialist democracy” and so on. All of which could only serve to deepen the cynicism of the Soviet workers and the arrogance of the bureaucracy.
While the official economy gradually ground to a standstill, the level of graft and corruption escalated. During the Gorbachev period, corruption and illegal trading actually more and more came out into the open as the authority of the state declined.
In his book Secrets of a Corrupt Society, Konstantin Simis described the scandalous relations that developed over decades of Stalinist rule:
‘Massive corruption at the district level of the Party apparatus has forged close ties between it and the system of organised crime that has come into existence in the Soviet Union which has permeated the political power centres of the districts as well as the administrative apparatus, the legal system and key economic systems. Although not conceived as such by its creators, this Soviet variety of organised crime is derived from, and has become an organic part of the very Communist Party of the Soviet Union’. 
He adds that ‘at the very top is the Politburo – those 13-15 people who make up the highest organ in the party apparatus. Without restrictions and completely free of charge, they get anything they want in limitless quantity. A special office exists in the Kremlin devoted to providing the Politburo with their benefits’.
In the Gorbachev era, the nepotism, bribery and other criminal activities developed even further. Bureaucrats built fortunes through speculation, thieving and exploiting the chaos in distribution and shortages. The “mafia” flourished.
In the Moscow News of September 21-26 1990, Alexander Kabakov gave a picture of the Soviet mafia millionaires, operating everywhere in Soviet life with graft and speculation and with a thousand links to the bureaucratic apparatus. ‘Anyone starting a co-op’, he wrote, ‘whether a gentleman or a racketeer, must have a Mercedes, a video, a leather jacket and pack of Marlboro in his pocket’.
By 1989 about 700 ‘joint ventures’ had been set up in the Soviet Union. In The struggle for power in Soviet Society, David Mandel wrote that:
‘most of Moscow’s “joint venture” construction companies are too busy importing and selling computers to put up any buildings. And why should they, when their profits can reach 4000%? As a minister in the Latvian government put it, “cooperatives and joint enterprises are often oriented not toward the production of consumer goods but toward their redistribution. From the state’s pockets into their own. ... Mention must also be made of the party apparatus, many of whose former and current members are using their connections and illegally accumulated wealth to go into business. In Leningrad, for example, the once mighty regional party apparatus has been reduced to 37 people. But they keep busy renting out offices to cooperatives, private banks and foreign companies in the Smolny Institute, an historic landmark and prime piece of real estate that rightfully belongs to the people. They have also turned one of the Committee’s hotels into a joint venture’.
Sections of the bureaucracy have been preparing for years for the day when private enterprise is legal – bleeding public funds, building real financial empires inside and outside the country, and above all controlling the means of distribution.
A fundamental mechanism of this accumulation has been the bureaucracy’s control over distribution. One example: confronted by the terrible shortage of cheese in Moscow markets, the police raided the distribution centre (in the USSR all products go to centres from which they are daily distributed to shops). They discovered that although the cheese factories were producing normally, officials re-sold almost everything that came in, which was in turn re-sold at several times the price fixed by the state.
Thus while breakdowns and delays in the production system meant unparalleled suffering for the vast majority of the people, the bureaucratic mafias were making an excellent profit.
Is it any wonder that the masses of the Soviet Union treated with contempt Gorbachev’s remonstrations to sacrifice, harbouring instead a seething hatred of the elite who continued to enjoy luxuries and privileges equal to those of Western capitalists?
The immunity of the bureaucracy from any kind of political or economic control; their privileged life-style, inherited from one generation to the next; their parasitism – all contributed to a bureaucratic culture utterly remote from the conditions of the masses, arrogant and deeply cynical.
These words of Mikhail Gorbachev in his book, Perestroika published by Fontana in the US in 1987 to the considerable personal profit of Gorbachev show just how sensitive Gorbachev was to the experiences of Soviet workers:
‘To do something better, you must work an extra bit harder. I like this phrase: working an extra bit harder. For me it is not just a slogan, but a habitual state of mind, a disposition. Any job one takes on must be grasped and felt with one’s soul. ...
‘The high degree of social protection in our society. On the one hand it is doubtless a benefit and a major achievement of ours. On the other hand, it makes some people spongers. ... dishonest people try to exploit these advantages of socialism ... they work poorly, shirk and drink hard’.
In 1989 the miners threatened strike action against the price rises and abysmal living standards. How would these words have appealed to them? 10,000 miners had died of accident and lung disease since 1980. Journalist Peter Pringle, interviewed a Ukrainian miner, Igor, in Donbass:
‘The average life expectancy at the Oktyabraskaya mine is 38 years, and each miner who has worked more than 10 has lung disease’. His flat was ‘two small rooms and a tiny kitchen and bathroom for himself, his wife and two children. His boy, 10, dreams of being a pilot or an astronaut, says Igor, “But it’s hopeless. To enter an institute of higher learning you have to bribe a party official and I don’t have the money.”’
The boss of the official steel workers’ union, Mr Kamchanka, who accused the strikers of “unrealistic demands” told Pringle:
“Our equipment in these industries is from the sixties and seventies. Some of it has been thirty years without an overhaul”. Pringle commented that Mr Kamchenka’s office desk ‘would not fit in Igor’s kitchen’.
The Soviet Pacific island of Sakhalin is 10,000 km from Moscow, has a population of 700,000, is rich in raw materials and has been used as a prison from Czarist days until the 1950s. The Washington Post’s David Remnick visited Sakhalin in 1987. He told a story of how he saw a few hundred thousand salmon rotting in shore line nets, while the fishermen were waiting for a telegram from Moscow before they could make a move.
In September 1989, Phillipe Pons of Le Monde visited Sakhalin and saw the first impact of perestroika. A trickle of Japanese tourists were visiting the island, and there were hopes that a deal could be signed with Japanese oil companies for the extraction of the island’s vast reserves. The Democratic Movement had stood candidates in the March elections and got 65% of the vote, with a program of seeking economic independence for the island and environmental protection. 150 CP members had since resigned in protest at the slowness of the reforms.
In 1991, Pons returned to Sakhalin, and interviewed Valentin Fedorov. Fedorov was now president of the Executive Committee of Sakhalin. He called himself the “governor”:
“We’re building capitalism in Sakhalin! We’re using forceps to assist the birth of a market economy on the ruins of collectivism!”
‘The Sakhalin authorities’ laxity allows all sorts of criminals, mainly South Koreans, to operate freely. They traffic in various goods, including secondhand Japanese cars. The traffickers are often better armed than the local militia: with arms factories facing dwindling sales, surplus production has been “recycled” in the private sector. ... drug dealers have moved on to the scene. ... A thriving parallel market has sprung up, and with a new breed of “fixers” ... Many people have set up shop in their own flats. The biggest losers have been those who have nothing to barter, in other words the military and minor officials.
‘But foreign currency is the lifeblood of the new economy. Those who have made arrangements with foreign companies have a head start: with an advance of several thousand dollars, they are able to “generate” enough capital in roubles on the black market to be able to set up in business. They repay their partners as soon as profits start coming in.
‘There are currently 23 joint ventures in Sakhalin, mainly in the seafood processing sector. In most cases, foreign partners chip in only with a small initial stake. What they are really interested in is acquiring the right to exploit the region’s natural resources’.
As inflation undermined the monetary system, Soviet enterprises increasingly resorted to barter. The managers of the Sverdlovsk transformer factory are reported to have supplied the Uralmash tractor factory in exchange for piping, scrap metal, kitchen fittings and rest home passes. Suppliers of consumer goods increasingly preferred to put products on to the “black market,” rather than into state shops who had to pay fixed prices.
A J Sherbakov, one of the leaders of the Social Democratic Party in Leningrad described how the bureaucrats used the system to enrich themselves:
“People who have had leading positions in the apparatus go to say Britain and register a company for 120 British pounds. Then they come back and say “Hello, I am a representative of a British company.” They make contact with bureaucrats they know in some big enterprise, which provides them an office. The state enterprise puts in a few million rubles and the “foreign representative” forks out 20 pounds. The juridically this becomes a 50-50 relationship.
“The new enterprise produces nothing, employs no-one, but it makes its director and his accomplices rich. The tax laws are different for joint ventures, and so other big enterprises hide their assets there. And this new “enterprise” is supplied with sought-after things, such as metals.
“They just steal. When there is a delivery of 10 tons of prime aluminium, a ton is simply classed as scrap. The little “joint venture” gets it. It is then taken abroad by various routes, exchanged for computers or Mercedes, which are brought into the country and sold to bureaucrats.” 
What was the significance of the spread of bureaucratic corruption? And why was it growing? The growth of crime and corruption was rooted in the economic bankruptcy of the bureaucratic system – its inability to develop the forces of production. In fact, the magnitude of the illegal “black” economy grew over the eighties to a point where it was overshadowing the “official” economy. And yet the “official” economy could not operate without the aid of the “black” economy.
Up until the Gorbachev period, private enterprise remained illegal in the Soviet Union, except for a sharply circumscribed legal private sector. This legal private sector amounted to 9% of GNP in 1970, 18% in 1986, almost entirely in agriculture, handicrafts and services.
With the bureaucratic method of economic management, with the total suppression of workers’ democracy and with prices set by the state without regard for supply and demand, economic objectives were determined not by the needs of the economy as such, but by the requirements of “preserving the system” of bureaucratic privilege.
As a result, the economy uniformly declined from the middle to late sixties onwards, after the completion of the post-war period of reconstruction. Gradually the economy became incapable of supplying the elementary needs of the population. Under these conditions an illicit “black” economy grew up in the ‘pores’ of the legal, bureaucratically regulated economy. The bribery and corruption of the officials, their privileged life-style, and their immunity from any kind of social control or restraint, facilitated the growth of organised crime. Indeed, the emergent criminal class merged imperceptibly into the bureaucracy.
In this way, a petit-capitalist economy increasingly flourished underneath the official economy. The nature of the process is typified by the practice of bureaucrats who deliberately created shortages by hoarding or stealing products, and then made a killing selling the products on the “black market.”
Under these conditions, it is hardly surprising that the resistance of the Soviet working class to intensified exploitation remained stubborn, even in the face of a collapse in living standards and economic paralysis.
What was taking place was the birth of a new capitalist class. One is reminded of the period of ‘primitive accumulation’ of the English bourgeoisie described by Marx in Capital. Because of the connection between organised crime and the state bureaucracy, the Soviet police proved unable to check the growth and spread of theft, robbery, drug peddling, prostitution, fraud, protection rackets, and so on.
So much for perestroika. Glasnost, or ‘openness’, was the other side of Gorbachev’s programme of restructuring. What was meant was that the bureaucracy should discuss the crisis more ‘openly’, in order to co-opt the working class, the better to persuade them to ‘work an extra little bit harder’. Glasnost was also essential in order to de-centralise, corporatise and privatise the economy. None of these measures impinged upon the policy of bureaucratic command however. What was involved was the method of implementing bureaucratic direction.
Gorbachev’s policy of openness recognised the fact that the state had lost all authority in the eyes of the people. Like the prisoner who hopes that a full confession and a plea of guilty will elicit a more lenient sentence from the judge, Gorbachev hoped to weather the unavoidable storm. Exposure followed exposure in the Soviet press, but no amount of criticism and exposure could halt practices that were endemic to the economic and social system, nor palliate the hatred of the masses.
But far from being encouraged to take responsibility for regenerating the economy, the working masses were becoming more alienated than ever before. Every autumn since the Revolution, urban workers had gone out to the countryside to help the peasants bring in the harvest. Now that the state was unable to compel people to go, no-one went.
In August 1990, Soviet agriculture was blessed with bumper crops, but these crops were to rot in the fields despite critical food shortages in the cities. Three hundred million tonnes of grain was waiting to be harvested, but there were dire shortages of machinery, fuel, spare parts and storage facilities. One in five combine harvesters and 25,000 railway wagons were standing idle. With the breakdown in regional organisation and the authority of the Communist Party, the usual appeal to workers and youth from the cities to help with the harvest was falling upon deaf ears. Workers in the agricultural machinery factories had been leaving their jobs because they were not receiving wages, and were looking for work in privately run cooperatives. Soldiers had to be drafted in to save what could be saved.
The mainstream economy was grinding to a halt, but already one third of the USSR’s food was being produced on private plots, though these occupied only 3 per cent of arable land. The peasants had no reason to bring in more than they needed to satisfy their own needs, since nothing was available to buy with the proceeds of sale to the state.
During 1990, there was growing disillusionment among Western business people on the prospects for capitalist penetration into the Soviet Union. In December 1990, The Guardian wrote:
‘Nine months ago in the West it became unfashionable to talk of a Marshall Plan to help the USSR. Most businessmen travelling to the Ukraine or Moldavia hoping to reap the rewards of being pioneer investor already faced immense political, legal and cultural difficulties.
‘Small and medium-sized companies have generally fallen by the wayside, and the MacDonald restaurants and Estee Lauder shops in the centre of Moscow are regarded as mere window dressing for a market economy, but multi-nationals able to take a longterm perspective did still offer a chance that the Soviets would move to a market economy.’
But in February 1991, The Economist wrote:
‘The foreign businesses and banks that will have to play a big part in any Soviet revival are busily downgrading their expectations of the Soviet market. Quicker than Western politicians, western businessmen and bankers have realised how bankrupt Soviet economic policy is. ... the push for radical reform now comes not from the central government but from the Republics’.
In the US, there were suggestions for the jettisoning of Gorbachev. Imperialism was discovering that the workers’ state in the USSR could not be taken over, it had to be smashed.
Over the space of several years, Gorbachev’s rhetoric of ‘restructuring’ and ‘perfecting socialism’ became transformed into the call for a complete restoration of market relations. 
In June 1991, Gorbachev claimed to have “confronted the past decisively” and to have initiated a “vast historical period during which the administrative command system is being replaced.” “History is no longer a continuous process of building socialism,” but instead required a “rapid but orderly transition to the market” to construct “the model of an open economy.” No longer were Gorbachev and his academic advisers even attempting to justify in the name of socialism what they were trying to do.
In July 1991, Gorbachev proposed that the Communist Party formally abandon Marxism and Leninism and the USSR apply to join the IMF. The process of formal abandonment of the most basic raisons d’etre of Communist Parties, which had begun in Europe thirty years before, had now come home to the Soviet Union.
The Soviet economy could only extricate itself from crisis by integrating itself with the world market. This was impossible without a convertible ruble, which in turn was impossible without the aid of imperialism. Gorbachev’s Prime Minister, Valentin Pavlov, told the Duma that if nothing was done production would fall by 20 per cent in 1991, and ‘the number of unemployed may reach 18 million, and a social explosion could erupt before the year is out’, but on the other hand a rapid move to the market would lead to a 30 per cent drop in output and unemployment of 30 million. 
Now imperialism began to exert real pressure on Gorbachev for total privatisation of the Soviet economy and withheld food aid and loans to force the pace.
While perestroika was proving ineffective in resolving the economic crisis in the Soviet Union, with a consequent continuation in the decline of the influence of the Soviet Union, the policy of glasnost was sending messages to its ‘allies’.
In May 1989, Gorbachev visited Peking – the first ever visit to China from the leader of the world’s first workers’ state. To the workers and youth of China Gorbachev provided the most powerful symbol possible for the demand for political liberalisation in China. Furthermore, his visit guarantied the attention of the world on the demonstrations that gathered in support of a “Chinese glasnost.”
Since the de-collectivisation of land in 1978, the Chinese bureaucracy had been encouraging the hire of labour power and the accumulation of capital. Between 1979 and 1984 productivity had increased at a rate of 9.5% annually, and the average standard of living of peasants had doubled during this period. Productivity on collective land was only 1/5 to 1/7 that of private plots. During the same period there had also been a rapid growth of non-agricultural enterprises in the countryside. While 200 million peasants still lived below the poverty line, petit-capitalism flourished and the better-off sections had grown. The government opened the way to the import of consumer goods, white goods, televisions, etc, upon which to spend the profits. Inflation reached the level of 30% as a result of the inflationary policies necessary to finance the foreign trade deficit with which the loyalty of the rising petit-bourgeoisie was being bought. Between 1979 and 1985, 20% of the rural workforce either moved to the city or moved into rural industries. Unemployment was now growing and swelling the population of the cities with discontented workers.
After 1985, the clamp down on agricultural trade and sale of land locked agriculture into a system of single family farms which was not productive. The resulting increase in prices forced the government to take measures which then reduced the profitability of agriculture and caused many peasants to leave the land and seek work in industry. This in turn resulted in scarcities of agricultural products. Many rich peasants also moved to the city seeking to further their entrepreneurial ventures. The two-tier distribution system (free market and state-set price) led to rapid growth of corruption which was aggravated by decentralisation of the bureaucratic control of industry.
In China the peasants now constitute 63% of the population. Despite the changes, the average standard of living in the cities is three times that in the countryside, and standards of living vary widely in the countryside.
Workers’ wages are low ($40 pm for railway workers for example), and have hardly improved since the early 1950s however, although the availability of free health care and cheap though scarce (6 sqm/person) housing has improved living standards significantly.
As elsewhere under Stalinism, workers did not have independent unions, but defended themselves against speed-up and loss of job security, for example with strikes and the use of violence against “model workers” and managers. Many of the lowest paid workers had dropped out of the state system and found jobs as taxi drivers or as small traders. These workers were amongst the most militant opponents of the government.
Tens of thousands of Chinese students were now studying abroad, and foreign business people and tourists were coming into China, foreign radio and TV broadcasts were increasingly accessible to people on the mainland, leading to increased consciousness of the conditions of workers in the capitalist world. However, political liberalisation was not a part of the government’s program.
The introduction of the market in China without political liberalisation contrasts to the situation in Russia, where political liberalisation preceded the official switch to the market.
The uprising which took place in May/June 1989 had been in preparation for two or three years, as a myriad of student discussion circles and trade union groups emerged forming a loose network of opposition. There had been continual social ferment among the students since big student demonstrations in 1986. CCP General Secretary Hu Yaobang, who had opposed the repression of this movement was removed from office as a result.
The movement of 1989 began in a debate over education issues in the Universities at the start of the academic year. The death of Hu Yaobang triggered the first student demonstrations on April 17. On April 19, over 100,000 people gathered in Tien An Men Square commemorating Hu Yaobang. Students symbolically sat with their backs to Mao’s tomb.
On April 20, students attempted to invade the Great Hall of the People, and after Hu Yaobang’s funeral on April 22, the movement began to spread.
The following week, students from Beijing University marched the 30 kilometres to Tien An Men Square and back, and were joined by students from the People’s University (an Institute of Technology) and marched through the city carrying torches and chanting slogans and singing The Internationale. They were joined by young workers and small traders – many of whom were ‘refugees’ from low paid industrial jobs – swelling to 350,000.
On May 4, the 70th anniversary of the 1919 student demonstration that initiated the Chinese national movement, a large contingent of young workers joined the demonstration with their own demands, and 1,000 workers joined 6,000 students in Changsha.
A hunger strike by 1,000 students in Tien An Men Square began on May 13, and on May 15 Soviet leader Mikhail Gorbachev arrived in Beijing. Following this time, the students were increasingly joined by workers. Bank workers, public servants and teachers went on strike and marched in orderly columns behind their banners. Over the next couple of days, the demonstrations swelled to 1 million, and were demanding resignation of Premier Li Peng.
On May 17, thousands of workers at the Beijing steelworks (which employs 200,000 workers) went on strike. The works was surrounded by troops, but large contingents of steelworkers managed to join the march. Banners from most of the city’s industrial plants were present. Martial law was proclaimed on May 19, and the Army was called upon to “restore order.”
On May 20 and 21, hundreds of thousands came on to streets of Beijing to block the Army intervention, 100,000 in Shanghai, 300,000 in Nanking, 200,000 in Shenzhen, and 1 million demonstrated in Hong Kong.
The students were supported by the Beijing Independent Workers Union, founded on May 21. Workers came from other cities to Tien An Men Square to contact the leaders of BIWU. The independent union was formed because workers found it impossible to give expression to their aspirations through the official union structures. Nevertheless, the workers forming the independent unions wanted not to ‘break away’, but rather to win the support of the official General Federation of Unions.
According to Trini Leung, a Hong Kong union activist, workers in China had been inspired by Polish Solidarity, despite the fact that Polish Solidarity had never been mentioned in the official media, and had asked her for information on Polish workers attitudes and methods of organisation.
The students and workers condemned the fake unions because the unions did not represent them, but in the main they did not call ‘Down with the Communist Party’, but hoped to reform the Communist Party, and secure the right to organise unions independently.
On May 29, the Statue of Democracy was erected in Tien An Men Square with 1 million demonstrating. The workers came out spontaneously and protected the students, surrounding them with lines of stewards. Army divisions from Inner Mongolia were brought in to replace the Beijing garrison. On May 30 the first arrests of student and worker leaders took place. The Beijing Independent Workers Union claimed 300,000 members by “the end,” but 400 of its leaders were arrested. On June 2-3, the Army clamp-down began. 40 demonstrators were killed in the first attack on Saturday 3 June. On Sunday, people gathered in the streets leading to Tien An Men Square trying to obstruct the Army assault. Some people were shot by snipers; a soldier responsible for the death of a 9-year-old girl was lynched by the crowd; students took 20 soldiers hostage in the University.
Nevertheless, the Army ruthlessly moved into Tien An Men Square and occupied it, though the rest of the city was still seething with defiant demonstrators. The hospitals estimated 1,500 dead and 10,000 wounded.
Street demonstrations occurred in Shanghai after the massacre in Beijing – 500,000 people were involved after a train ran over protesters – but the workers’ and students’ leaders were rounded up and the cities “pacified.”
The demands of the Student Organising Committee, Beijing University, 21 April 1989, were:
The Beijing students formed a union and submitted a petition with 12 demands to the Central Committee. These demands could be summarised as follows: For a substantive dialogue to take place as early as possible, in which elected representatives of the students would speak as equals with the government representatives. The students would not recognise the representatives of the “official” student bodies and insisted on the right to form their own autonomous union. Representatives of other social groups would be invited to observe and the dialogue would be televised and the outcome of the dialogue should be legally binding with guarantees of no victimisation.
The Beijing Independent Workers Union was founded on 21 April 1989. On May 21 they declared:
‘..The task of the moment is for teams of workers’ inspectors to act in coordination with the autonomous associations of the students’ union, in order to protect and defend the lives of the student comrades and the stability of the social order in Beijing.
‘While maintaining political and social peace, they will guarantee the dispatch and transport of necessary products for the civil life of Beijing city, including vegetables and grain as well as everyday manufactured goods’.
The Provisional Committee of the BIWU, made the following Proposals on May 21 1989. (The leaders were arrested immediately after they issued these documents):
‘Since the middle of April, in the democratic movement of all the nationalities led by students, many Chinese workers have shown their desire to participate in political life, while recognising that, until now, they have lacked a truly representative workers’ organisation to express their opinions. For this reason we believe it necessary to set up an independent organisation to speak in the name of the workers and take up the issues that concern them, To this end, we are preparing to organise an Independent Workers Union in Beijing and are putting forward the following proposals for a programme:
This organisation must be totally independent and it must be set up as the result of a democratic process in which workers take part of their own free will. It must not be under the control of other organisations and must have equal status with other mass organisations.
The basic aim of this organisation must be to put forward the views of the greatest number of workers on political and economic questions, and not to be merely a welfare organisation.
This organisation must have a monitoring role over the Communist Party.
In firms and businesses which are the property of the whole people or under collective ownership, this organisation must have the right to use all the appropriate and legal means to monitor the legal representatives and ensure that the workers are really the masters of the firms. In other firms and businesses, it must uphold the workers interests through negotiation with the enterprise directors or through other legal means.
This organisation must guarantee all the legal rights of its members in the constitutional and legal spheres’.
‘The working class is the most advanced class; we must be the shock troops of the democratic movement. The People’s Republic of China is under the leadership of the working class, and we have the right to drive out every tyrant.
‘The workers have understood perfectly the need for knowledge and technology in production. This is why we absolutely reject the outrages suffered by the students and educated people.
‘We must not flinch from our duty to destroy tyranny and dictatorship and promote the democratisation of the state.
‘Unity is our strength; our unshakeable conviction is the guarantee of our success.
‘In the democratic movement, “We have nothing to lose but our chains, and a world to win.”’
There were no discernible economic demands. Both workers’ and students’ demands were overwhelmingly centred on the need for political liberalisation and the right to organise independently of the state, although it is likely that the majority of the young demonstrators believed that economic prosperity would follow naturally from political liberalisation. Demonstrators sang The Internationale, emphasising that the movement was motivated not by capitalist greed, but by the need for political rights and to be ‘part of the world’.
The heroic challenge issued to the Stalinist leadership of China in Beijing and in many other urban centres across China was an inspiration to workers across the Stalinist bloc. Soldiers wheeled from Inner Mongolia were used to crush the rebellion however.
The International Viewpoint headline of May 29, 1989: “Political Revolution begins in China” was typical of the reaction of most revolutionaries at the time.
Communist Intervention was a little more cautious, and commented in its first public statement:
‘It is clearly evident that the movement was essentially and overwhelmingly socialist in character, having as its aim, the renovation of socialist democracy within the framework of socialised property. This was clearly expressed by the singing of The Internationale by demonstrators as they faced the troops.
‘Not a single call for the restoration of capitalism was picked up by the media who were obviously hungry for it. This would indicate that there was absolutely nothing on which any such report could be hung.
‘The movement was political in its aspirations and economic demands were not raised; contrasting with the reform of the economy by the bureaucracy in the direction of restoration of foreign ownership, market relations and capital accumulation. The movement was an urban movement; initiated by the young intelligentsia, supported by the urban workers and those sections of the military that were close to the workers. ...
‘The formulation of democratic demands in opposition to pro-capitalist economic reform is very important. It is the bureaucracy that has been promoting bourgeois economic reform, and the Chinese workers and students gave no support whatever to those reforms. What was demanded was political freedom and an end to bureaucratic centralism. ...
‘It is likely that the movement will re-emerge in the Soviet Union, continuing the process of cross-pollination between the USSR and China. Here it is possible that the more politically progressive character of the Chinese uprising will have a most profound and healthy effect on the very diverse movement in the Soviet Union.
In July 1989, miners in the Siberian coal field of Kuzbass began a campaign of strike action and within a week were joined by miners in the Donbass field, Ukraine. The strike was by far the most serious since the 1920s, and the Siberian miners were demanding a complete re-organisation of management as well as improvements in pay and conditions. A member of the Politburo was despatched to negotiate with the miners.
Meanwhile, the Polish workers tested out the meaning of glasnost for Soviet foreign policy insofar as it applied to Poland. Solidarity had swept the board in a general election, and now Stalinist General Jaruzelski had indicated that he would not run for the Presidency in the coming poll. And there was no sign of any Soviet intention to intervene.
In Hungary, Janos Kadar, leader of the country since 1957, died as a Supreme Court proceeded to posthumously acquit Imre Nagy, a leader of the 1956 Hungarian revolt crushed by Soviet tanks.
Europe was ready to blow. And the Chinese workers and youth had lit the fuse.
Eastern Europe was in the grip of a huge economic crisis. By 1989, all the Eastern European states were in debt to Western banks to the tune of about $100,000 million, as the bureaucracy in each country sought to develop its economy independently of the declining Soviet economy, and help quell the rising dissatisfaction with falling living standards. Trade with the capitalist world now amounted, on average, to about 50% of the value of trade with other COMECON countries. Thus, the full impact of the world capitalist crisis was flowing into Eastern Europe.
By the 1980s Eastern Europe was, like most of the commodity exporting countries, caught firmly in the IMF trap. Jacek Tittenbrun argues in The Collapse of “Real Socialism” in Poland, that the capitalist creditors were in effect the owners of the means of production in Poland, and extracted their profits in the form of the products of labour exported by Poland. By 1980, exports amounted to around 10% of national income. In effect then, the Polish government had been converted into a kind of comprador bourgeoisie, managing the extraction of profits from the Polish working class and exporting them to the West.
“Poland’s debt to capitalist countries increased in dollar terms 23.5-fold over the decade [1970-80]. As early as 1975 the value of debt to capitalist countries was almost twice as high as the annual receipts from exports to these countries .. the debt service to exports ratio amounted then to 32%. ... in 1980 the debt service charges alone exceeded the export value.”
The German Democratic Republic (DDR) was regarded as the healthiest of these economies, and yet it was facing a continual drain of thousands of workers and professional people fleeing to the West. On the other hand, the Rumanian people lived in poverty, as Ceausescu sought to pay off Rumania’s debts while frittering the country’s resources on personal extravagances.
At the same time as blood was being shed in Tien An Mien Square, an historic election was taking place to elect 35% of seats in the parliament in Poland.
Attempts at relaxation of the martial law imposed in 1981 had not succeeded in dampening the resistance of the Polish workers. Nor had it succeeded in dealing with the economic crisis, as Poland slid further into debt to the Western banks.
“Poland’s hard-currency debt amounted to $26.8 billion in 1984, $29.3b in 1985, $33.5b in 1986, $39.2 in 1987 and $41.4b in 1989. The ratio of debt to exports was 4.8:1 in 1985, 5.15:1 in 1986 and 5.5:1 in 1987. With its interests payments amounting to 41% of export earnings in 1985, Poland came third in the league of top debtors after Argentina and Chile ... the total credits extended to Poland during the years 1971 – 87 amounted to $47.5b, while the total of interest and amortisation payments worked out at $50.6b. Thus, Poland repaid over $3b more than it received, and nonetheless, its debt, the world’s fourth largest, approached $40b.”
Formally speaking the bureaucracy defended social ownership, but already, the share of personal income coming from the private sector had increased from about 8% in 1980 to about 10% in 1983 to about 20% in 1988. About half of private sector employment was “illegal.”
The Polish United Workers Party (PUWP) had become more and more remote from its original working class base. In the late 1980s, workers accounted for only 24% of the Party members, while of 2.1 million Party members, 900,000 occupied executive positions in the state administration and the economy.
The leaders of Solidarity had been released from prison and allowed to regroup. Rising food prices in 1988 had led to increased protests, and in April 1989 talks between the government and Solidarity reached an agreement on June 18 1989.
Now confident that there would be no Soviet intervention, Solidarity swept the board.
The new Parliament still contained a majority of Deputies appointed by the old system. General Jaruzelsky was re-elected President, but offered Solidarity seats in a coalition government. Three weeks later General Czeslaw Kiszczak resigned as Prime Minister and Tadeusz Mazowiecki, a founder member of Solidarity, became Prime Minister of a coalition government – the first Prime Minister in Eastern Europe not a member of the Communist Party. Jacek Kuron, who had entered Solidarity as a revolutionary Marxist, and had been associated with the IS and other revolutionary groups in the West, was appointed Labour Minister.
The Finance Minister was Leszek Balcerowicz, a former Polish United Workers Party member who had gone to the US to study economics. His ‘shock treatment’ for Poland began with the blessing of the IMF on January 1 1990, with 2000% pa inflation and a foreign debt of $40,000m. The IMF blessing came with a $1.5b loan and a stay on loan repayments. All state subsidies (formerly worth one third of the nations’ economy) were abolished, price controls lifted, wages frozen by means of penal taxation of wage rises above the norm, interest rates set very high and the zloty made convertible at a bargain price.
The result was an immediate 20% drop in the standard of living with prices rising 80% in January alone. There was however no initial political backlash against this from the working class which had rioted against price rises in 1956, 1970, 1976 and 1988.
Solidarity had become transformed from a mass movement of opposition to Stalinism, to a party of government. In the process, its membership had declined from 10 million in 1980 to 1 million. At the same time, Solidarity had become home to a spectrum of political tendencies from one extreme to the other.
Solidarity’s ‘popularity’ was estimated at 59% in November 1989. By February 1990, it was estimated at 48%. The Communist Party, now called Social Democracy of the Polish Republic, was at 2%.
The impact of the ‘Shock Treatment’ was dramatic. 100,000 car owners handed in their registration because they could no longer afford to run a car. Queues at petrol stations and taxi ranks disappeared, since no-one can afford them. The price of gas and electricity increased 400%. Farmers were now driving into Warsaw to sell their produce direct to the public in the streets, after enjoying free use of the state co-operative equipment. The state-owned stores could not compete, with prices 50-100% above the street price.
In August 1990, The Guardian’s Victor Keegan described Warsaw as like one giant car boot sale. Poles travelled to Germany and Russians came to Poland to cash in on price differences. While inflation fell to 3.4% by June, unemployment had grown steadily from nil to 568,000 in July. The state budget surplus had reached 6% of GDP and the exchange rate fixed in January had been held, and the foreign trade surplus leapt to about half a billion US$ a month. However, industrial output had fallen by about 30% and living standards by about 30% on average. On average, families were now spending 60% of their income on food, compared to 40% before. Virtually the only public spending going on was the building of hundreds of new churches.
80% of agriculture was always privately owned in Poland, and the farmers benefited from the liberalisation of trade. The major manufacturing industries remained public property and there was little interest in purchasing them. The management of these enterprises responded to the loss of state subsidies by sacking workers and upping prices to compensate.
Despite the considerable pressure that the Catholic Church was able to exert, Poles defeated a referendum promoted by the Church to ban abortion. A fierce protracted struggle between the Church on the one and Polish women’s groups on the other, arrived at the passing of an abortion law in February 1993. Abortion was made legal only in the case of a threat to the life of the woman or as a result of rape or incest, and doctors liable to two years’ prison for illegal abortions. 
In December 1990, following the withdrawal of General Jaruzelski, Lech Walesa was elected President in an election marked by an upsurge of anti-Semitism. Walesa’s statements that he was “100 per cent Pole, going back generations” were interpreted as aimed at winning the anti-Semitic vote, and gain a hold over Prime Minister Mazowiecki who was becoming less enthusiastic about the Polish ‘shock therapy’. Mazowiecki later resigned as Prime Minister, and formed the Democratic Union with Jacek Kuron and Hanna Suchocka.
The right-wing parties governed during 1992 under Jan Olszewski, and tore themselves to ribbons in crazy right-wing disputes and conflicts with their natural allies in the Church and business community, while inflation had climbed to 43% p.a.
The privatisation program combined with the organised sabotage of the public sector proceeded apace. The private sector, excluding co-operatives and agriculture employed 13% of the workforce in 1989, 34% in 1992. Agriculture, co-operatives and the private sector jointly employed 60% of the workforce by 1992, producing almost 50% of GDP – a statistic which interestingly demonstrates that even at this stage, the private sector was still less productive than the struggling public sector! 
Hanna Suchocka then formed a government which continued the privatisation of the Polish economy, even if at a slower pace than under Andrzej Olechowski’s and Leszek Balcerowicz’s ‘shock therapy’.
Commenting on the failure of the West to help Poland make a success of its transition to capitalism, in particular the continued protectionist policies of the EEC in relation to trade with Poland, Walesa commented in an interview with Le Monde in September 1991:
‘That’s capitalist philosophy for you. We were naive: we believed all those slogans and were sold down the river. But now everyone is going to have to pick up the bill, including the West.
‘Yes, I am still a capitalist and shall remain so’.
In the October 1991 general election, voter turn-out was only 40%, the worst turn-out in any general election in Europe this century. 18 parties won seats, and no party received more than 14 per cent of the vote. The largest vote was for Mazowiecki and Kuron’s Democratic Union. The main Stalinist party finished second, and the Liberal Democrats, which included all the main architects of the ‘shock therapy’, won only 8% of the vote. Eventually, Jan Olszewski formed a minority government of the ‘centre-right’.
In April 1992, talks aimed at forming a coalition government which would command a majority and end the incessant and unproductive political in-fighting broke down, and the government remained more or less impotent. Walesa dissolved parliament in June 1993 and set elections for September 1993.
The September 1993 elections gave 300 of the 460 seats in the Sejm to the SLD (Democratic Left Alliance) and the PSL (Polish Peasants Party), which between them received 35 per cent of the vote. The Democratic Union received 12 per cent. Lech Walesa’s supporters in the BBWR were the main recipients of right-wing votes, but received only 6 per cent, for 21 seats in the Sejm.
The Democratic Left Alliance (SLD) was an umbrella organisation under which members and supporters of the former ruling Stalinist parties regrouped. The front included the Social-Democratic Workers Party, the Democratic Union of Women, the Polish Socialist Party, the Polish United Workers Party, United Peasants Party.
The Polish Peasants’ Party (PSL), led by the new Prime Minister Waldemar Pawiak was the successor of the ‘party’ set up under Red Army occupation in 1945.
The Democratic Union (UD) led by Jacek Kuron, the newspaper Editor Adam Michnik, Prime Minister Hanna Suchocka, Tadeusz Mazowiecki and Bronislaw Geremek was the principal representative of “economic rationalism” in the election.
The Nonpartisan Reform Support Bloc (BBWR), the grouping most closely identified with President Lech Walesa, was led by former finance minister Andrzej Olechowski.
Prior to the election, Wieslaw Chrzanowski, leader of the right-wing Christian National Union, commented:
“Poland is not threatened by a return of communism, even if left-wing parties win the election,“ in fact opinion polls have shown that the SLD was the most popular choice among Poland’s entrepreneurs. Slawomir Majman of the Warsaw Voice said that ‘people are not afraid of the return of the Stalinist regime because they are disillusioned with the right and the centre. ... the left-wing rhetoric [of the SLD] is now replaced by liberal economic concepts with a small touch of socialism .. they would be kicked out of the [British] Labour Party as dangerous right-wingers’. 
The SLD has promised to increase pensions, assist some state industries and are committed to maintaining legal abortion. Deputy leader of the SLD, Leszek Miller said that ‘We want to even out the sectors of the Polish economy. Until now the private sector was privileged and the public sector was repressed’. Measures would include removal of penalties on state industries paying overtime, and credits to assist export.
The IMF has told the new government that it must keep the government’s budget deficit below 5% to continue receiving assistance and Miller said ‘We will not do anything without prior consultation with the IMF’.
Poland’s economy is already well down the capitalist road. The service sector has grown to 46% of GDP at the expense of manufacturing and agriculture. Unemployment stood at 14% at the end of 1993. Trade with OECD countries increased by a factor of 2.5 over 1990-2.
In the first stage of their struggle, the workers fought simply for democracy. There was not an economic objective at this stage, in fact the government was selling the economy off and putting the country into hock to foreign capital, and where possible workers opposed this privatisation drive. In the second stage, because of the lack of any alternative political leadership, and disillusionment with the kind of “socialism” advocated by the bureaucracy, capitalism presented itself and the masses accepted this perspective as the only alternative on offer. In the third stage, beginning in 1990, the masses realised that what they had got did not correspond to what they had been fighting for. In about mid-1992 a fourth stage began as the workers turned against the government, and since July 1992 strikes began to spread and affect whole branches of industry. Inter-union strike committees began to form, including a national Interfactory Committee. 
The demands of Interfactory were for social welfare, health, housing and education policies and policies to reduce unemployment, an end to privatisation, steps against the take-over by foreign capital, a minimum wage, for those responsible for the economic crisis to be put on trial, and an end to taxes which penalise state-owned enterprises. This was a ‘syndicalist’ phase.
The September 1993 election marked the beginning of a new fifth phase as workers began to look for political solutions. The first beneficiary of this new turn was the Polish Stalinists. But the Stalinists offered no significant alternative to the policies carried out by the right and centre. The only argument between these leaders was over the speed of change and the degree of attention to be paid to social welfare policies.
Neither the IMF, the Polish entrepreneurs nor Polish workers have any fear that the Stalinists will be willing or able to impose the kind of regime instituted under Red Army diktat. The Polish working class has now begun its struggle for a new leadership which has an alternative to restoration of capitalism. The Polish economy is now already predominantly capitalist in character, although many enterprises still remain in state hands. The problem of building a planned, socialist economy cannot be solved in Poland, while the big capitalist powers dominate the world market. However, the Polish state is very weak, and the only barrier to workers’ power in Poland is the crisis of working class leadership.
The Polish working class is seething with political discussion and organisation. Situated mid-way between Russia and Western Europe, the working class of Poland seems likely to continue its role in leading the way for political change in the region.
In May 1988, Karoly Grosz succeeded the ageing Janos Kadar as leader of the Socialist Workers Party of Hungary (CP), and one third of the Central Committee were replaced. In January 1989, multi-party elections were promised for the following year. In April 1989, the body of Imre Nagy was exhumed from its unmarked plot, where he was buried along with other leaders of the 1956 revolt and animal corpses from the zoo. Officially, the reburial was for humanitarian reasons. But at the same time the government established an ‘historical sub-committee’ to review the events of 1956, Nagy’s trial and execution in 1958 and report to the government.
The sub-committee found that the Uprising was a ‘popular uprising’ and that Nagy and the others were ‘victims of illegal show trials’. Accordingly, Nagy was reburied at a ceremony on the 31st anniversary of his execution, attended by returned exiles and current political leaders alike.
With the HSWP losing members rapidly, the top leadership decided to steer the country to a new course in order to avoid the disintegration of the Party. Imre Pozsgay, the leading reformer in the Politburo, closely associated with Gorbachev, told The Guardian: ‘The Party cannot split – it would not be a split, but disintegration’. It was more sensible for the reformers to stay and fight from within, he said. If some sort of consensus could not be achieved, there could be ‘a catastrophe, very precisely and very frankly, like the one in 1956. But dissatisfaction and anger are increasing, as living standards deteriorate. If there is not a peaceful transition, it will come out in rebellion’. He said that the HSWP leadership had drawn the lesson from Poland’s recent experience ‘that a country cannot be made to function by force’.
Hungarian TV broadcast interviews with Dubcek, which could be viewed in Czechoslovakia, much to the annoyance of the Czech leadership. And on May 3, Hungarian troops ceremonially dismantled the barbed wire ‘iron curtain’ along the already fairly porous border with Austria. Pieces of the wire later fetched a good price as souvenirs. The opening of the border placed additional pressure on its Warsaw Pact neighbours, especially East Germany, where the escalating exodus to the West via Hungary, threatened to de-populate the entire country. Hungarian support for the ethnic Hungarian minority in the Transylvanian area of Rumania was also helping to exacerbate tensions in Rumania.
The Social-Democratic Party, forcibly absorbed by the HSWP in the 1940s, was relaunched, as was the Smallholders Party, which had won a majority in the 1945 election, and whose sole policy was now restoration of land nationalised since 1945. The Ferenc Munnich Society, based on the workers’ militia which the government dissolved in October, organised itself to oppose the ‘reform’ process. A majority of the HSWP later joined forces with the Social-Democrats, leaving behind a rump in the ‘People’s Party’. In these combinations, the workers’ organisations remained predominant.
Following elections in May 1990, a ‘centre-right’ coalition government of the ‘Hungarian Democratic Forum’, headed by Jozsef Antall, assumed government with 42 per cent of the vote. The Stalinist rump, which opposed full-on return to capitalism, received less than the 4 per cent required for representation in the Parliament, although the ‘reformed’ Stalinists in the Hungarian Socialist Party received about 10 per cent of the vote. These elections were remarkable for the calmness and equanimity with which they were conducted, given the profound historical questions which were apparently at stake in the vote.
Hungary’s smooth transition to capitalism has helped it to a situation whereby more than half of all Western investment in the former Stalinist bloc goes to Hungary, while trade with former COMECON countries has shrunk from 49 per cent in 1989 to 25 per cent in 1991, and Hungary continued to press its application to join the EEC. Inflation is running at about 30 per cent, and the living standards of workers and pensioners has declined. The benefits of the market economy have gone to the former elite and those who have benefited from the compensation vouchers handed out to farmers and the Church for property nationalised in the 1940s.
Blessed because of its imperial past, with an absence of national divisions within its own borders and a national leadership with a highly developed propensity to flow with the tide, the Hungarian counter-revolution went smoothly. The return to capitalism solved nothing for the Hungarian workers however.
Parliamentary elections were held in June 1994. Following the trend which had been set in Poland, the Hungarian Stalinists, regrouped as the Hungarian Socialist Party, increased from 33 to 209 seats – an absolute majority of 16 seats, while support for the Democratic Forum cut their representation from 165 to 37 seats. The HSP was led by Gyula Horn, who had collaborated in the crushing of the 1956 Uprising and was Foreign Minister in 1989. The election victory was immediately followed by attempts to lure other parties into a “coalition,” in order to share responsibility for the continued impoverishment of the Hungarian working class that would follow from the HSP’s policy of “social market economy.”
Todor Zhivkov was Secretary of the Bulgarian CP from 1956 and loyally towed the Moscow line. Unlike the countries of Eastern Europe for whom Russia was the ‘invader from the East’, historically Bulgaria has always viewed Russia as a friend and liberator, dating back to its liberation from the Ottoman Empire in 1878, courtesy of the Russian Army.
In 1984, Zhivkov initiated a program of ‘assimilation’ of the Turkish ethnic minority which comprised 10 per cent of the population. This involved suppression of their language and customs, backed up by severe repressive measures. Opposition to this repression grew and in July 1989 led to a mass exodus and deportation of Turks across the border into Turkey. The Turkish minority received widespread sympathy from the majority population as the pressure of changes in neighbouring Hungary, East Germany and the USSR encouraged the opposition currents.
In January 1988 Zhivkov began what was claimed to be a Bulgarian version of perestroika, but in reality very little at all changed.
Zhivkov’s Bulgaria had suffered not only politically by the changes in the USSR and Eastern Europe, but economically it had suffered in the redistribution of trade out of COMECON, and the loss of the favourable trading relations Bulgaria had enjoyed with the USSR during the Brezhnev period. By 1989, electricity was available only on alternate hours even in the main cities and all commodities were in drastically short supply.
In October 1989, opposition groups such as the Green group Ecoglasnost held public meetings and rallies under the glare of foreign television cameras, and found to their joy that they were not broken up. Soon, demands for liberalisation escalated, and forced Zhivkov’s resignation in November 1989. The new General Secretary of the Party was Petar Mladenov. An organiser for Ecoglasnost commented on Mladenov’s appointment: ‘Mladenov is certainly the most pronounced liberal of the whole Politburo, which makes his democratic election by them very, very unlikely, unless Mladenov had a strong backer – the Soviet Union’. In other words, the implication was that like Honecker in East Germany the previous month, Zhivkov had been ‘leant on’ by Gorbachev. The alternative hypothesis, that the Bulgarian Stalinists were themselves voluntarily handing over power to a bourgeois opposition still too weak to seize it from them, amounts to the same thing.
The opposition immediately began to organise demonstrations calling for the sacking of the entire government. The speed with which the opposition movement built up with its demands for political liberalisation, showed the strength of the influence of the movement sweeping across the whole Soviet bloc. Bulgaria had never had a democratic tradition, a strong bourgeoisie or an anti-Russian sentiment.
Seizing its opportunity, the opposition grouped itself into Citizens Initiative, led by a long-standing dissident Lyobomir Sobajiev. In January 1990, Zhivkov was placed under house arrest facing charges of corruption, abuse of power and inciting ethnic hatred. Elections held in June led to a victory for the renamed Stalinist party, the Bulgarian Socialist Party. Mladenov, the ‘liberal’, resigned after admitting that he had sent tanks to suppress a demonstration in December.
The BSP tried to persuade the opposition parties to join them in a coalition, but the opposition parties refused. In January 1991, a wave of increasingly violent strikes and demonstrations forced the BSP to resign and Dimitar Popov, a former judge, formed a coalition government without the BSP. The Stalinist deputies still had a majority of seats, but exercised their discretion by not opposing opposition proposals.
Further demonstrations forced a further election. Popov removed price controls, and prices immediately leapt, but the measure did succeed in coaxing the peasants into letting their produce on to the market. Wages were held down with a penal tax against employers granting wage rises, and a bill was passed for the return of nationalised land to its former owners. The currency was floated, eliminating the ‘black market’ in foreign exchange. The result was a blossoming in petty trade, but no noticeable investment in production, which remained the domain of the nationalised economy.
At the elections in October 1991, the opposition grouping Union of Democratic Forces won the largest vote (36%), and formed a coalition government in alliance with the Turkish Movement for Rights and Freedoms (6%). The BSP received about 30 per cent, and the remaining 20 or so parties failed to reach the 4 per cent required for representation.
Gustav Husak resigned as First Secretary of the Czechoslovakian Communist Party in December 1987, succeeded by Milos Jakes. The modest reform programme, emulating Soviet policy, begun during Husak’s later days was ended.
A series of peaceful protests by dissidents in January 1989 was met with such severe repression, meted out to passers-by as liberally as to the protesters, that many formerly loyal citizens were polarised into opposition. It was the last straw. A campaign for the release of the dissident playwright, Vaclav Havel, provided the nucleus around which opposition to the regime could polarise.
A petition calling for his release started with 700 signatures of leading intellectuals collected in a few days, and continued to circulate, collecting thousands of signatures, ‘from the top down’.
Jiri Menzel, a film-maker who had been loyally serving the regime for 20 years said:
‘I can no longer bear to sit here enjoying my creature comforts while someone of greater intellectual honesty than myself is having to pay the penalty in prison. Havel isn’t against the state. He’s someone who is more progressive and more useful to our republic than all those who, in their heart of hearts, are against the regime but accept and even exploit the situation.
‘Havel is a person who is prepared to express his opinions and then take the consequences. ... I’m an opportunist, I prefer to take the line of least resistance ... Havel is more honest than I am.’
Referring to the changes taking place in Hungary, Poland and the USSR, he said:
‘They have demonstrated that change is actually possible. The government’s response to the January demonstrations was terribly hamfisted. It revealed weak points. ... It’s no longer possible to keep quiet. ... It’s like the Middle Ages here’. 
The opposition was predominantly in the Czech republic; the Slovaks were more or less by-standers in this process.
The official May Day parade was joined by protesters waving portraits of Gorbachev and chanting ‘Freedom’. The usual police violence was applied. Inspired by the disintegration of the Stalinist regimes in the neighbouring countries, the protests continued to grow. Eventually, mass protests led by the opposition coalition, Civic Forum, began on 19 November 1989 with 250,000 people on the streets of Prague, and continued until Jakes and the whole Politburo resigned on 24 November. Alexander Dubcek joined Havel before exuberant crowds in Wenceslas Square, and elections were fixed for December.
Vaclav Havel was elected President on 29 December 1989 and immediately arranged a visit to Washington where he addressed both Houses, invited the Pope to visit Prague and applied for Czechoslovakia to join the EEC. Soviet troops stationed in Czechoslovakia took the train home in February 1990.
It later emerged that members of the Czech Security forces, the SDB, were wanting to fight on, but were leant on by the KGB. Walter Komarek, later Deputy Prime Minister, had visited Moscow some months before the overturn, and was invited to speak to the Central Committee, where Gorbachev told him that Milos Jakes was ‘unacceptable’. The army commander, Miroslav Vacek, who afterwards became Defence Minister, had ensured that the army remained on the side-lines.
The election of the playwright Vaclav Havel as President in Czechoslovakia was the most extreme case of a phenomenon which was seen in all of the over-turns which took place in Eastern Europe in 1989. The prominent role of intellectuals in this stage reflected the lack of any perspective in the movement beyond the overthrow of Stalinism – the regaining of national political self-determination.
The masses were fed up to the back teeth with the double-talk, the patronising moralism, cowardice, hypocrisy and stultifying bureaucracy of the Stalinist ‘nomenklatura’. Intellectuals like Havel represented the opposite. Havel did not have any particular economic program, and if he did, no-one was asking him to talk about it.
As soon as the political process was ‘domesticated’, the intellectuals and ‘dissidents’ were sidelined, a process which was most extreme in East Germany.
At the elections held in June, all parties advocated a return to capitalism, with the Czech Civic Forum and the smaller Slovakian Public Against Violence winning large majorities. Already capitalism was getting under way with a 200% increase in pick-pocketing and a boom in pornography and prostitution.
In elections in June 1992 however, both Civic Forum and PAV, which had led the overthrow of Stalinism, failed to receive the 5 per cent necessary for representation in the Federal parliament. The ‘reformed’ Stalinists on the other hand got 14 per cent for their Czech party and 16 per cent for their Slovak party. Tensions between the two republics were exacerbated when the Czechs gave a majority to the right-wing Vaclav Klaus, while the Slovaks voted overwhelmingly for the ‘left-wing’ Slovak nationalist, Vladimir Meciar. The economic reforms instituted by the Federal government under Klaus had led to unemployment three times as high in Slovakia than in the Czech lands, and only 10 per cent of sought-after foreign investment had gone into Slovakia. Meciar’s response was ‘If there are two reform programs, then there will be two states’. Klaus’s reply was in effect “good riddance.”
In January 1993 the two Republics parted, Vaclav Havel being re-elected as President of the reluctant new Czech Republic. With no foreign investment in an economy formerly closely linked to the Soviet economy, Slovakia’s economy has since stagnated with unemployment at 14% in 1994. The Czech economy has enjoyed substantial foreign investment and modest growth.