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Home , Era of Stagnation

POLITICAL ECONOMY

democracy”. These are labels for rather Africa needs a workable complex, sophisticated ideas that would take tens of thousands of words to explain in full.

© Shutterstock.com economic system in the Capitalism is a system of rules, finely tuned to produce certain beneficial twenty-first century outcomes, even if the participants themselves have no interest in the condition of society as a whole. The voters would choose those who had the interests of society as a whole at heart. But, this system can be corrupted, and clearly doesn’t work today in many countries worldwide. Many countries developed regulations for workplace safety, child labour, bankruptcy, and on and on, ideally to prohibit socially damaging behaviour, and channelling activity into socially productive behaviour. The capitalist class owns the commanding heights of a critical part of the economy - the factories, the mines, the large farms and the Trade Unions remain among the best banks. This class of capitalist owners is collectively the ruling class and thrives institutions the continent can rely upon for the off the labour of the working class and the poor worldwide. implementation of socio-economic policies The dissolution of the which can benefit the majority. in 1991 with its has been so dramatic that some critics argued that when government plans By Christopher D. Mlosy the economy, officials and their policy advisors really do not understand what is best for its citizens and the country. eports that say that restore their competitive edge on the A National Development Plan something hasn’t happened back of the working class. In times of requires central planning and “Rare always interesting to me, crisis, they embarked on a long-term monitoring on a national level and because, as we know, there are known campaign to shift the balance of class implementation on a micro and knowns; there are things we know that forces decisively in their own favour. local level. Adequate funding from we know. There are known unknowns; Therefore, capitalist society is the government agencies as well as that is to say, there are things that we first society in which the reproduction support from citizens will allow short, now know we don't know. But there and the class relations of that society medium and long term goals to be met. are also unknown unknowns – there are requires the general circulation of Goals should focus on the micro and things we do not know we don’t know” commodities. This implies that the task macro strategy for national growth. United States Secretary of Defence, of the theory of a capitalist society is This can include the development of Donald Rumsfeld, February 2002. to explain the integration of circulation economic infrastructure, education, and production, how socially isolated social welfare, science, and innovation. Background Information (private) production is rendered Before setting goals, a government Karl Marx observed in 1886 that social. That is, how a social division of should review the current strengths wage levels can only be settled by the labour is affected without a conscious of each sector and articulate room continuous struggle between capital organisation of social production. for growth (both in the long and short and labour, capitalists constantly Within capitalist relations of production, term). The scope of goals will depend tending to reduce wages to their this is obviously achieved through the upon whether a country is a developed physical minimum, and to extend the exchange of products as commodities, or developing nation and should be working day to its physical maximum, and products not only are exchanged tailored to the cultural, economic and while the working man constantly but must be exchanged2. social needs of a specific country. presses in the opposite direction1. The capitalist system of today has Goals should have sustainability In the capitalist system, business elements that go by code words like regardless of what is politically leaders united around a strategy to “free market” or “laissez-faire” or “our popular at the time. Nations should

40 THE THINKER POLITICAL ECONOMY consider advice from well trained and phenomenon and developed countries housing, low-cost childcare, subsidised experienced economists to review are deeply implicated4. National public transportation, and rough national conditions and proposed efforts for sustainable socio-economic income equality. From its creation, strategies to ensure that they are growth and development can only be the government in the Soviet Union sustainable and not just politically effective if they are not contradicted was based on the one-party rule of the expedient3. Monitoring and evaluation by wide-scale corruption at the upper Communist Party of the Soviet Union. are critical components of successful echelons of public life, including at the Sure, all citizens want these benefits. national development planning international level. However, are they achievable/ exercises. We should understand that workable permanently? It is widely planned economies are the opposite The Collapse of the Soviet Union believed that while the Soviet Union of unplanned economies, and the What can Africa learn from the may have produced these benefits, in so-called self-managed economy, collapse of the Soviet Union with its the end, Soviet public ownership and where production, distribution, pricing, planned economy? planning proved to be unworkable. and investment decisions are made by In December of 19915, as the world After the seized power autonomous firms based upon their watched in amazement, the Soviet from the Provincial Government individual interests rather than upon a Union disintegrated into fifteen separate in 1917, Lenin’s grand plan - New macro-economic plan. countries. Its collapse was hailed by the Economic Policy (NEP) was elaborated Marxism-, originating from capitalist major powers as a victory for to bring to . Near the the works of Marx, Engels and Lenin, freedom, a triumph of democracy over end of his life though, Lenin began argues that socialism is the mid-point , and evidence of the to realise that the Communist party between capitalism and , superiority of capitalism over socialism. was moving away from his vision. with the means of production The rise and fall of centrally planned Membership was increasing steadily controlled by the working class but with economies – socialism - was one of and some members were beginning the state guiding the economy on the the most important events of the 20th to abuse their power, straying from workers’ behalf. In a socialist economic Century. The United States rejoiced as the Communist Party’s discipline. system the state plans and produces its formidable enemy was brought to its Corruption began to emerge within goods, and either owns or redistributes knees, thereby ending the the Communist Party, which would resources among its citizens. Socialism which had hovered over these two continue under and relies on government planning, rather superpowers since the end of World increase under ’s than the marketplace, to distribute War II. Indeed, the breakup of the regime. The problem of corruption hit resources. While it is usually possible for Soviet Union transformed the entire its peak when ruled individuals living in a socialist country world political situation, leading to a over the Soviet Union for twenty- to own businesses or offer professional complete reformulation of political, eight years. During Brezhnev’s reign, services directly to consumers, they are economic and military alliances the bureaucracy was huge, going usually taxed heavily on their profits. all over the globe. The dominant directly against Lenin’s vision. It Public services are typically numerous form of socialism, as it existed since became inefficient as officials used and funded by taxpayer money. roughly 1920, had now proved to their positions for their own personnel Africa faces a serious economic be at a dead end. Many communists gain. Brezhnev and his government crisis. By an economic crisis we mean abandoned communist parties for ignored the problem since many Party an interruption or disjuncture in the social democratic ones, or abandoned members were directly involved in it. process of social reproduction that radical politics altogether. This led to economic stagnation, which involves the incomplete reproduction The of 1917, led created a lack of consumer goods6. The of the circuit of capital. In an economic by Vladimir Lenin, deposed the old ideals of socialism, used by the Party crisis, the decline of production and Tsarist imperial autocracy. Lenin was a were seen as lies. This added to the the rise of unemployment continues. revolutionary who refined, developed cycle of decline when disenchanted The capitalists do not care one bit. and gave impetus to the scientific ideas citizens undermined political authority. They want their money. And the only of Marx and Engels. The quality and efficiency of Soviet way left to get it is to impose austerity At its greatest extent the former Soviet production fell. on the working class and the poor. Union encompassed a geographical inherited these problems when he The capitalist system has not been area that covered one-sixth of the became General Secretary in 1985. able to get out of the economic crisis Earth’s landmass. The former Union In 1928, Joseph Stalin7 introduced in Africa. Corruption, toxic debt of Soviet Socialist Republics (USSR) - the First Five-Year Plan for building a and dubious arms deals continue Soviet Union, was a concrete example socialist economy. While encompassing to plague Africa. African countries of what a planned economy could the internationalism expressed by must recognise and realise that true produce: full employment, guaranteed Lenin throughout the Revolution, it change requires transparency and pensions, paid maternity leave, limits also aimed to build socialism in one accountability at all levels and in all on working hours, free healthcare and country. In industry, the state assumed states. Africa's corruption troubles are education (including higher education), control over all existing enterprises and well known, but corruption is a global subsidised vacations, inexpensive undertook an intensive programme

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of industrialisation. In agriculture, be overthrown until it has realised its apartheid-capitalist labour market rather than adhering to the "lead by own complete potentiality. What is which require a well-coordinated range example" policy advocated by Lenin, happening now is the proof of Marx’s of social and economic measures. forced collectivisation of farms was point: capitalism has reached its full implemented all over the country. The potential. The socialism of the Soviet The Growing Problem of Corrupt economy of the then Soviet Union was Union also failed. Lenin was aware and Government in Africa publicly owned and planned, and from condemned corruption and the growth One of the most prominent critics 1928 to 1989 it reliably expanded from of bureaucracy in the Communist of Brezhnev's economic policies was year to year, except during the war Party when he addressed the Central Mikhail Gorbachev who called the years8. From 1928-1973, the Soviet Committee in 1918. In his last years economy under Brezhnev's rule the Union was growing economically at a Lenin was worried about the future of lowest stage of socialism11. When Mikhail pace that had the prospect of catching the Communist Party and socialism in Gorbachev came to power in 1985, up with the United States and Western Russia. The failure of Marxist-Leninist there were many hopes that he would Europe. By the early 1970s, the Soviet socialism in the former Soviet Union try to reform the socialist state, using Union had the world's second largest has done undeniable harm to the Lenin’s ideas. However Gorbachev‘s industrial capacity, and produced more worldwide appeal of socialism. People reforms actually had the opposite effect steel, oil, pig-iron, cement and tractors who oppose the corrupt capitalist of that which was desired. Gorbachev’s than any other country. In 1973, the economic system of any government in openness: known as “”, opened Soviet economy slowed, and began to Africa are in strong position to say, “We the door to the movement. lag behind that of the West due to the need to find a better system which The criticism of where the Communist high-level of expenditure on the armed works in favour of the working people Party had taken Lenin’s socialism grew forces and too little spending on light in both urban and rural areas”. even more strident. The ideals that industry and consumer goods. GNP underpinned Lenin’s vision for Russia in growth rates began to decrease in the Before setting 1917 had clearly not borne the desired 1970s (Era of Stagnation)9 from the outcomes. This can partly be blamed level it held in the 1950s and 1960s; goals, a government on the Communist Party decisions its growth rates began to lag behind should review the in relation to corruption and the Western Europe and the United States. current strengths economy. The problems of the regime’s The GNP growth rate declined to corruption peaked under Brezhnev12 1% to 2% per year, and with Soviet of each sector and causing massive economic stagnation. technology falling ever farther behind articulate room for This is a good lesson for African leaders that of the West, the Soviet Union growth (both in the long and elites of today. Corruption and faced economic stagnation by the early economic stagnation contribute to 1980s10. and short term). social breakdown and the growth of Good governance and strategies parallel markets. to combat corruption are essential for Social democracy is an approach The Soviet Union was by far the the economic and social progress of which has the potential to achieve this largest country in the world and had all countries in the region. Vladimir kind of alternative in a way which can trading partners in Eastern Germany, Lenin was correct on the importance of be completely democratic and which Poland, Romania, Czechoslovakia, the Third World when he committed can offer a decent life to the people Hungary, Cuba, North Korea, China the Soviet Union and the CPSA to of Africa. The essential function of the etc. While capitalist economies supporting the anti-colonial struggles ruling parties according to Marx and plunged into depression and lapsed in Asia and Africa. Lenin was correct Lenin was to articulate the historical into recessions every few years, the when he said that imperialism was the goals of the working class to eliminate Soviet economy did not, expanding highest stage of capitalism. But we have the exploitation and class divisions of unremittingly and always providing moved beyond the stage that Lenin the system. As we enter twenty-first jobs for the majority. The wrong was analysing; capitalism has become century, social democrats generally political bureaucracy and corruption more resilient and we are now in the support reforming capitalism in an during Brezhnev’s time hurt the phase of a rapidly globalising world attempt to make it more equitable Party’s legitimacy, which in turn would economy dominated by the major through the creation and maintenance help weaken the system and move western powers and monopoly capital. of a welfare state. That is where the it towards collapse. Lenin was right We have two forms of capitalism: crucial struggle has to be fought in the when he said that the bureaucracy and one, in which control over labour coming years in Africa after 50 years corruption would threaten the future of power, capital and trade is of the existence of African Union. socialist ideology13, and when he asked concentrated, and the other where this This struggle must culminate in the “What if unscrupulous and malevolent control is absent. Marx was correct on introduction of a Social Democratic men succeeded in capturing these a crucially important point more than System and the establishment of a institutions and manipulated them to 160 years ago, viz. that capitalism working class order to address the cover-up or condone their own abuses will not collapse; capitalism will not worse features of capitalism and the of power?”14.

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The essential function of the party our labour and selling them for profit. lack of respect for the rule of law, according to Marx and Lenin was to This is the system of wage slavery. and human rights violations are all articulate the historical goals of the Profit is the goal of all production reasons for the collapse of the . Another goal of Marxists under capitalism. The capitalist class Union as well as for Africa’s current was to eliminate exploitation and class constantly strives to increase its problems.  divisions within society. By the sixties profits at the expense of the workers. and seventies there was a huge division Since the beginnings of capitalism, between the Party elite and the rest the most effective way to do this has References of society. The party bureaucracy was been to put in new technology that 1 Karl Marx: ‘Value, Price and Profit’ in Karl Marx and Frederick Engels, Collected Works, Vol. 20 also large and inefficient. This went either reduces the need for workers, International Publication, NY 1985. directly against Lenin’s call for a small or speeds up the exploitation of labour 2 Capital Volume 1: Progress Publishers, Editions 1970, 1967, and 1971 for Volumes I, II, and III respectively. but disciplined group within the Party, power. 3 http://www.ehow.com/about_5384740_national- working towards a common goal15. The There is a crying need for a development-plan.html 4 Corruption Perceptions Index 2012 Results assigned elite shopped at special stores and had system that works for the majority South Africa an index of 4.3, ranking South Africa 69th out of 176 countries (tied with Brazil and Macedonia. luxury cars with drivers. They owned of the people. We need an African Corruption in South Africa includes the private use of country dachas and took extravagant socio-economic model which would public resources, bribery and improper favouritism “Tenderpreneur”. Corruption cost South Africa trips abroad. Like Lenin predicated, eliminate poverty, unemployment, taxpayers US$111million (R1bn) in 2012- nearly three these apparatchiks would also defend under development and the huge times the amount lost in 2012. Only 18% of guilty civil servants are sacked. Pretoria News Weekend May 4, these privileges at any cost. They income inequalities. The people 2013. guarded this monopoly of power with should be empowered to be their own 5 On Christmas Day, 1991, the day the USSR officially ended, made Gorbachev wildly popular in the a phony consensus and constitution. liberators. Leaders should care for the capitalist world. were less enthusiastic. Gorbachev said, “We live in a new world. The The actions of the Communist Party at good of all not for themselves and Cold War is finished. The arms race and the mad the time were what Lenin had feared. their cronies. Decisive action should militarisation of states, which deformed our economy, society and values, have been stopped. The threat The Communist Party leadership under be taken against companies making of world war has been lifted”. Contained within Brezhnev had betrayed Lenin’s vision and hoarding billions whilst not paying Gorbachev’s words was the truth about why the world’s first conscious attempt to build an alternative of socialism in Russia. decent wages and employing people. to capitalism had been brought to a close. It was not Indeed, the breakup of the Soviet Why should the rich be the ones because the Soviet economic system had proved unworkable. On the contrary, it had worked better Union transformed the entire world who enjoy life? Everyone should be than capitalism. The real reason for the USSR’s demise was that its leadership capitulated to an American political situation, leading to a change able to. Greed and not competition foe, which, from the end of World War II, and with of political, economic and military is the biggest problem in a corrupt growing vigour during the Reagan years, sought to arms race to death the Soviet economy. The economy alliances. Soviet Union with its planned system because a lot of people will that worked for the bottom 99 %, and therefore, if economy proved to be more a utopia do anything to make the next cent. allowed to thrive, would have discredited the privately owned, market-regulated economies that the top one than a working system as it produced This includes lying, cheating and percent favoured and benefited from. Allen, Robert too many poor people and then the stealing. These corrupt elites have the C (2003). Farm to Factory: A Reinterpretation of the Soviet Industrial Revolution, Princeton University Press, rich bureaucracies. As the Soviet backing of the legal and legislative 2003. 6 Martin Malia, The Soviet Tragedy, Toronto: The Free Union expanded a serious issue was and sometimes executive branches Press, 1994. trying to incorporate many different of government. In other words, in a 7 Note: Under Joseph Stalin's rule, the concept of “" became a central tenet of nations with different languages and confrontation between capital and Soviet society. He replaced the cultures into one country, and one of labour, government almost always introduced by Lenin in the early 1920s with a highly centralised command economy, launching a period of the results of the collapse of the Soviet comes down on the side of capital industrialisation and collectivisation that resulted in Union was many uprisings, revolts and whether or not justice is served. The the rapid transformation of the USSR from an agrarian society into an industrial power. divisions due to nationalism. exception occurs when labour unions 8 During the so called first phase of “World War II”, Soviet Union used the opportunity to acquire begin to agitate at a level that threatens territories in Eastern Europe adjacent to Nazi Conclusion the status quo. Then government, Germany, its satellites, and their occupied territories. Later in 1941, Nazi Germany invaded the Soviet The working class and the poor usually at the behest of capital, brings Union, opening the largest and bloodies theatre of war need access to the means of survival about just enough reform to stabilise in history and violating an eelier non- aggression pact between the two countries of 1938. but cannot get it unless they sell their the system, but not enough to effect any 9 The Era of Stagnation was a period of economic, labour power to a capitalist. Labour real and or more equitable distribution political, and social stagnation in the Soviet Union, which began during the rule of Leonid Brezhnev power is the ability to work, the ability of wealth. Trade Unions remain (1964-1982) and continued under (1982-1984) and (1984-1985). to create useful things or services, the among the best institutions the This period ended when Mikhail Gorbachev, who ability to create new value. Our class, continent can rely upon for the succeeded Chernenko, introduced his policies of glasnost, , uskorenive and demokratizatsiya, the working class, must sell its labour implementation of socio-economic leading to the fall of communism in 1989 and the power every day, every week, every policies which can benefit the dissolution of the Soviet Union in 1991. 10 Service, Robert: History of Modern Russia: From month, year after year, over and over majority. Remember that the legacy Tsarism to the Twenty-First Century (3rd ed.) Penguin again, to obtain from the capitalist of the apartheid-capitalist system is Books, 2009. 11 Bacon, Edwin; Sandle, Mark: Brezhnev Reconsidered. what we need to live, in the form of still extensive, and pervades nearly Palgrave Macmillan 2002. 12 http://en.wikipedia.org/wiki/LeonidBrezhnev wages or salaries. These capitalists, on every aspect of lives of ordinary people 13 Neil Harding, Leninism, Durham N.C.: Duke the other hand, get richer and richer directly or indirectly. University Press, 1996. 14 Ibid. from appropriating the products of Economic and political corruption, 15 Ibid.

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