Market Socialism in Eastern Europe

A Spartacist Pamphlet $1.00

The Bankruptcy of the Yugoslav Model ______PAGE 2 ______Hungary: "Goulash Communism" Goes Bust ______PAGE 9 ______For Central Planning Through Soviet Democracy ______PAGE 16 ______

PAGE 32

July 1988 .. ~~o!.~~;~X523 Spartacist Publishing Co., Box 1377 GPO, New York, N. Y. 10116 2 Part I reprinted from Workers Vanguard No. 444, 15 January 1988

RUVIOW Auto plant in Serbia (left). Serbian chauvinists in anti-Albanian march in Belgrade (right). Economic inequality fueled by "market socialism" has exacerbated regional and national divisions, threatening to tear Yugoslavia apart. The 8ankru ptcy of the Yugoslav Model As of New Year's Day 19S5, a major­ no longer command the productive road to economic chaos. It generates ity of factories and other enterprises in effort of Soviet workers and managers. unemployment and inflation, widens the Soviet Union began operating on Within the Stalinist framework of build­ ineLJualities within the working class the basis of market competition. "Self­ ing "socialism in one country," the bu­ and throughout society, creates depend­ management" is now all the rage in reaucrats see no alternative but to sub­ ency on international bankers. intensi­ Russia. Announcing a radical restruc­ ject workers and enterprise managers to fies national divisions and conflicts, and turing (perestroika) of the economy last the discipline of thc market, putting the enormously strengthens the internal June, Soviet leader Mikhail Gorbachev ruble in command. For leftish intellec­ forces of capitalist restoration. Just look called for "full profit-and-loss account­ tuals in groups such as thc Socialist at Yugoslavia! ing and self-management of the basic Clubs, self-managemcnt is vicwed as a The Yugoslav Road to links of the national economy." A few step toward frceing society from the IMF Austerity months later a manifesto issued by the deadening hand of the apparatchiks, newly formed unofficial Federation of allowing the masses to participate in The ghost of Marshal Tito might find Socialist Clubs called "to switeh the economic decision-making. ironic satisfaction in hearing Stalin's economy to self-management," even However, enterpri~e self-manage­ heirs in the Kremlin voice the same for­ demanding that the state "lease the ment is not the road to workers democ­ mulas he did after breaking with Stalin social means of prod uction, such as fac­ racy and socialism. Socialism means a m 1945. The Yugoslav leader declared: tories and workshops, to collectives of democratically administered, centrally "The transfer of the factories and mines self-managing enterprises." planned, egalitarian and internation­ etc. to management by workers' collec­ tive~ will prt:\ ent the infectious disease What we are seeing in Russia is a ally organized economy. Before the rise known as bureaucracy becoming en­ convergence between reform-minded of Stalinism practically no one who con­ demic in our economy .... Stalinism and the liberal prejudices of sidered himself a socialist disputed these "Well, therein lies our path towards much of the intelligentsia. If Gorba­ fundamental principles. The program of socialism, and it is the only right way since it is a matter of the withering chev renounces what bourgeois Soviet­ "market socialism" is basically a prod­ away of the functions of the State in ologists call the "command economy," it uct of liberal Stalinism. Enterprise self­ the -economy. Let the Cominformists is because the Kremlin bureaucracy can management and self-financing is the [Moscow-line Stalinists] bear in mind 3

that their slanderous uproar cannot " ... Mr. Abalkin points to the reaction ing of workers self-management is, darken our well-lit path of building of Soviet citizens who visit Yugoslavia. indeed, that the workers themselves socialism. " They are awed there, he said, by the vast -Josip Broz Tito, Selected selection of sausages even though they make decisions" (Der Spiegel, 23 March Speeches and Articles cost four or five times more than back 1987). 1941-1961 (1963) home. Do the Yugoslav workers really man­ "'You know, meat consumption per age? On paper the workers councils are Today, after four decades, the "Yu­ capita in Yugoslavia is lower than in the goslav path of building socialism" has Soviet Union: he observed. 'But there is masters of the enterprise. In reality they led to an unemployment rate approach­ a sense of abundance. If I want, 1 can seldom exercise mastery. The English ing 20 percent, an inflation rate always come and buy it, as much as 1 bourgeois economist Harold Lydall sees approaching 200 percent a year-the want, without a line. It's not simple to the Yugoslav experience as proof posi­ create that feeling here, but if we highest in Europe, East or West-and a succeed it will have a colossal psy­ tive of workers' universal incapacity to savage austerity program dictated by chological effect'." manage: the world bankers' cartel, the IMF -·New York Times, 4 July 1987 "The management of a modern enter­ (International Monetary Fund). And prise, even one of medium size, is a com­ The long lines for consumer goods in plex and specialized task, or group of the economic crisis has enormously the Soviet Union have nothing to do tasks, requiring the full-time attention intensified national conflicts which with centralized planning per se. For of a management team of specially qual­ threaten to rip the Yugoslav federation years the Kremlin bureaucracy has tried ified people. The ordinary worker can apart. Last fall, the defense minister, to create the illusion of rapidly rising no more take responsibility for man­ Admiral Branko Mamula, declared, agerial decision-making than he can incomes by increasing money wages perform a surgical operation, write a "The crisis is approaching the point at faster than production. The result is symphony, or play in a champion foot­ which the integrity of the country and suppressed inflation with people wait­ ball team." the existing social system may be en­ ing for hours to buy at official prices, - Yugos/GI' Socialism: dangered" (London Financial Times, alongside a flourishing black market at Theory and Practice (1986) 25 September 1987). far higher prices. Yugoslavia, by con­ This is, of course, the standard apolo­ Between 1981 and 1985 real earnings trast, is an extreme case of unsup­ gia for class rule. The lower orders are per worker fell 20 percent, fixed invest­ pressed inflation. deemed too ignorant, too narrowly self­ ment by 40 percent. To halt this slide, in interested to govern society: that is a late '85 the Belgrade regime moved to Workers Management or task for the qualified elite. stimulate the economy through expan­ Bankers' Management? Yugoslav workers have enough sense sive fiscal and monetary policies. The Despite the economic collapse, Bel­ of responsibility and economic savvy, predictable result: hyperinflation as grade officials continue to proclaim that however, to strike against the ruinous skyrocketing prices reached an annual the Yugoslav system uniquely empow­ austerity prescribed by the ever so qual­ rate of 140 percent in early 1987. The ers the working class. At the very time he ified savants of the International Mon­ dinar fell through the floor of the was announcing the 1M F-dictated aus­ ctary Fund. If these same workers do foreign-exchange market, Yugoslavia terity program, Yugoslav prime min­ not exercise their nominal power at the teetered on the edge of international ister Branko M ikulic reiterated: "We are enterprise leveL it is because the enter­ bankruptcy. To roll over the country's convinced that Yugoslavia has no future prises themselves are impotent. Their nearly $20 billion in foreign debt, the without self-management. The mean- major decisions on production, pricing, IMF demanded the kind of shock treat­ ment it usually prescribes for Latin American juntas. So last spring the Yugoslav Stalinists froze and even rolled back wages while raising the prices of consumer goods between 25 and 60 percent. In response some 150,000 workers in over 1,000 enterprises walked out (see "Yugosla­ via in Turmoil," WV No. 429, 29 May 1987). Coal miners in Labin, Croatia struck for two months, by far the longest strike in Yugoslavia's postwar history. Faced with working-class resistance of this magnitude, the regime backed off a bit by announcing a 90-day price freeze for certain basic necessities. In Novem­ ber wages were frozen again in the face of even greater price increases-over 30 percent for bread, 100 percent for milk, 70 percent for electricity, 60 percent for rail travel. Gorbachev and his advisers are, of course, well aware that the Yugoslav economy is a total mess, in every way far worse than Russia's. But Leonid Abal­ kin, a leading architect of perestroika, Workers council meeting in Yugoslav factory-"self-management" is a sham. still holds up Yugoslavia as a model: For central planning based on workers democracy! 4 investment, etc. are dictated by the sufficient; it is dependent on a long and management." The social pressure for forces of market competition on the one fragile chain of payments. It receives ever greater decentralization has come hand and the banks on the other. supplies from numerous firms on not from below-from workers in the The banks have become the real various terms of credit. Some suppliers shops-but from the bureaucracies in power in the Yugoslav economy. Dur­ are in other countries, thus involving the the richer republics, Croatia and Slove­ ing the 1960s fixed investment financed enterprise in foreign-exchange trans­ nia. The economic effects of devolution by bank loans increased from just 5 per­ actions. An enterprise, in turn, sells to have in turn given rise to virulent cent to over 40 percent by the end of the numerous customers in the domestic national resentment in the poorest decade. Since then, according to the and world markets on various terms of regions, especially in Kosovo, where the former head of the National Bank of payment. Market relations thus make Albanian nationality in Yugoslavia is Yugoslavia, Ivo Perisin: "The decision­ financial intermediaries the strategic concentrated. making power of Yugoslav banks (most link between producing units. It is Leading Belgrade politicians now of them small institutions by objective entirely within the logic of "self­ speak of "two Yugoslavias"-one in the standards) continued to grow, with the management" that the world bankers' north, the other in the south-and warn economy becoming more and more cartel, the IMF, has a greater say in the of the "Lebanonizing" of the country. dependent on them and their credits and Yugoslav economy than all of the work- The New York Times (I November 1987) recently reported: WV Graphs 18% 180% "Portions of southern Yugoslavia have reached such a state of ethnic friction Yugoslavia: Yugoslavia: that Yugoslavs have begun to talk of the horrifying possibility of civil war in a )60 16 Registered Annual Increase in land that lost one-tenth of its popula­ Unemployment Cost of Living tion, or 1.7 million people, in World War II." 14 Source 140 Source: Financi,,1 Times OECD Survey, That fear of civil war was heightened 22 December 1987 y\!goslavia, January 1987 when last September an Albanian con­ 12 120 script went berserk with a machine gun in an army barracks, killing five fellow soldiers (all Slavs) and wounding 10 f- several others. After four decades of ) i\ "market socialism" and "workers self­ management," the historic gains of the 8 I Yugoslav Revolution are now at risk. / The Socialist Republic of Yugoslavia was forged in the Communist-led 6 I ) resistance to the Nazi German occupa­ tion during World War II. The strength 4 1/ of Tito's partisans lay in the fact that they fought for a resolution of the Bal­ kan question on an anti-nationalist 2 basis. Tito himself was a Croat while the ranks of the Communist movement were predominantly Serbian and Mon­ o tenegrin. With myriads of nationalist "75 '77 "79 '81 '83 '85 '87 '75 "77 '79 '81 '83 '85 '87 Est Est. groups-monarchist Serbian Chetniks, fascist Croatian U stashi and quislings of falling deeper and deeper in debt" ers councils together. Only centralized every South Slav nationality-partici­ (Radmila Stojanovic, ed., The Func­ management can enable the workers to pating in genocidal slaughter, workers tionin/i of the YU/ioslav Economy democratically decide the direction of and peasants came to know they were [1982] ). the economy. safe when partisans with the red star on Nominally Yugoslav banks are con­ their caps arrived in town. trolled by the founding enterprises, National Conflict and The partisans of the Communist communes (municipal governments) Decentralization in Yugoslavia Party of Yugoslavia managed the in­ and the like. In reality they are crea­ The Yugoslav experience is extremely credible feat of uniting the nationalities tures of the local and regional bureauc­ relevant to Gorbachev's Russia, and not against the German occupiers, driving racies, although they sometimes play the simply because the current general sec­ the Nazis out and exterminating the roy­ role of Frankenstein's monster. An retary of the CPSU is talking about alist and fascist movements of Yugosla­ enterprise which falls afoul of the banks shifting the economy over to self­ via. To defend its own position, the will find its loan requests rejected, its management. The Union of Soviet petty-bourgeois Stalinist formation in outstanding loans called in and its credit Socialist Republics and the Socialist power had to throw representatives of cut back. RepUblic of Yugoslavia are both multi­ the old state apparatus out of the gov­ The strategic power of banks in national, federated states. In Yugo­ ernment and nationalize the means of Yugoslavia is by no means an acci­ slavia the national configuration is production, smashing the rule of cap­ dent. Finance is the Achilles' heel of politically represented by six republics italism. Having come to power through self-management and of the anarcho­ and two autonomous provinces. their own armed struggle, with enor­ syndicalist model in general. An en­ The nationalities question has been mous sacrifices, the Yugoslav Com­ terprise cannot be financially self- at the heart of the politics of "self- munists were unwilling to accept the 5

Thus, the movement to increase the economic surplus in the hands of HUNGARY the enterprises expressed a resurgence of nationalist centrifugal forces in ROMANIA Yugoslavia. A British historian of postwar Yugoslavia notes that the "de­ statization" campaign of the late '50s marked the point "that the Yugoslav 'national question,' relatively dormant since the war, again became Yugo­ slavia's central question" (Dennison Rusinow, The Yugoslav Experiment 1948-1974 [1977]). The Bitter Fruits of "De-Statlzatlon"

- Inleln;jlhon~1 bound~ry The market-oriented "reforms" ofthe - Republic boundar, 1960s radically shifted the locus of --- "ulonomous prowlnce brnmd~ry economic power. The share of fixed * Nahonal capll~1 ~ Republic or autonomous prOWlnce capItal investment financed by the government fell between the early and late '60s from over 60 percent to less than 10 percent! Thus began the stripping away of the sou~Ct P,~p.,.d 10' P,,,(tl,,,,,. of Co,"",,~ ...... , ,'''' C4""':I"P~" 5-",.< •• L.bO"'~ty Oop.<\m.M 01 G.o"•• p_, \.I~, .... ",)",,,,.,.,.~,j .. ,., .. ",- P ..... O """,u:>C.""., economic power of the federal (central) I!''''''U~"'' ""'"" ~ ...... ~ !>hU'J '''''~'''''' Jon ....,. 'M, government, so that by 1980 a prom­

Problems of Communism inent Yugoslav economist, Zoran Po­ Yugoslav federation made up of six national republics, two autonomous pov, could write that "the republics and provinces. provinces are almost exclusively in con­ trol of economic policy. The consistent dictates of Moscow. They remained Croatia and Slovenia. The effort to use implementation of this arrangement in wedded to the Stalinist-nationalist dog­ the centralized control of investment the practical development of the system ma of "socialism in one country" ... for funds to redistribute the country's has made our system inflexible, sluggish their country. The break with Stalin in productive resources triggered a nation­ and inefficient." Many tourists in Yugo­ 1948 greatly enhanced the popular alist backlash in Croatia and Slovenia, slavia have experienced this inflexibility authority of the Tito regime. formerly provinces in the old Austro­ and inefficiency for themselves. When­ Enjoying exceptional popular sup­ Hungarian Empire. ever a train crosses the border from one port, the Titoists undertook a series of In the late '50s Vladimir Bakaric, the republic into another, the locomotive liberalizing measures of which the most veteran Communist boss of Croa­ has to be changed! significant was self-management of the tia, launched a campaign for "de­ The decentralizing measures of the enterprises. Most Yugoslav workers statization" of the economy. By this '60s also radically altered the way in doubtless welcomed this measure, Bakaric meant that the economic sur­ which the Yugoslav economy interacted because it gave them some protection plus generated in Croatia should remain with the world capitalist market. In against bureaucratic abuse in the work­ in Croatia. The means: increasing the 1967, enterprises were allowed to retain place. For a number of years, however, financial autonomy of the enterprises. a portion of the foreign exchange which the rhetoric of self-management far exceeded the reality. Enterprise manag­ ers continued to be chosen by the local party and government bosses. More fundamentally, the economic surplus remained concentrated in the hands of Marxist Working-Class Biweekly of the Spartacist League the state. In the late 1950s less than 10 percent of gross profits were retained by the enterprises; the rest was transferred o $7/24 issues of Workers Vanguard o $3/3 issues of (includes English-language Spartacist) Women and Revolution to the government through taxes, o New 0 Renewal 0$2/10 introductory issues interest payments on assets and other International rates: of Workers Vanguard charges. $25/24 issues-Airmail $7124 issues-Seam ail (includes English-language Roughly half of all investment in new 0$214 issues of Spartacist (edici6n en espanol) Spartacist) plant and equipment was financed by Name ______the federal government. The Tito regime used these investment funds to narrow, Address ______to some degree, the vast economic dif­ ______Apt. # ____ Phone ( __ ) ______ferences between Yugoslavia's national­ ities. Investment per worker was far City ______State ____ Zip ____"""""= higher in the poorest regions-Mace­ MSOC donia, Montenegro and Kosovo-than Make checks payablelmail to: Spartaclst Publishing Co., Box 1377 GPO, N_ York, NY 10116 in the most developed republics of 6

Josip Broz Tito forged pan-Yugoslav anti-Nazi partisan movement, tran­ scending national antagonisms through revolutionary struggle. they earned. Since then the scramble inequalities between regions which now tral Soviet budget has earmarked addi­ over foreign exchange has been a major threaten to rip apart the Socialist tional funds for the Central Asian source of regional/ national and inter­ Republic of Yugoslavia. Slovenia en­ republics. enterprise conflict, at times leading to joys a standard of living comparable to However, Gorbachev's market- outright economic warfare. For exam­ neighboring Austria's, while conditions oriented "reforms" will reverse these ple, in 191\0 a producer of x-ray film in in Albanian-populated Kosovo more equalizing policies and divert resources Croatia, the only domestic supplier in closely resemble Turkey. The decentral­ back toward European Russia. Two Yugoslavia, demanded an increased izing measures of the '60s widened this American experts on the Soviet econo­ foreign-exchange quota. To put pres­ gap. In the late 1970s resources per cap­ my employed by the U.S. Congress, sure on the federal government, the ita in Kosovo were less than 30 percent John P. Hardt and Richard F. Kauf­ enterprise cut back shipments of x-ray of those in Slovenia; resources per cap­ man, write: film to the other republics. In hospitals ita in Macedonia were less than half "Gorbachev's policies seem to favor the throughout Yugoslavia x-ray examina­ those of Slovenia. The economic col­ western regions of the Soviet Union as tions had to be postponed. opposed to Central Asia, East Siberia, lapse of the '80s has hit hardest the poor­ and the Far East. For example, the Market competition between enter­ est regions. While the unemployment industrial modernization program de­ prises has produced stark inequalities at rate in Slovenia is still less than 2 per­ fers new construction and emphasizes all levels of Yugoslav economic life. cent, in Kosovo it is over 35 percent! No renovation of existing facilities, most of Even within the same republic, for wonder many Albanians are violently which are located in the developed, largely Slavic regions of the European example, Slovenia, some workers re­ hostile to the Yugoslav federation as it is Soviet Union." ceive two and a half times as much as presently constituted and managed. -U.S. Congress, Joint Economic others doing the saine kind a/work. In The Soviet Union is far from free of Committee, Gorbachev's the country as a whole these differences Great Russian chauvinism and national Economic Plans (1987) are significantly greater. A machine conflict. But it is instructive to contrast . Despite rapid progress in recent dec­ operator in one enterprise might receive Soviet Central Asia with south Yugo­ ades, rural Soviet Central Asia remains four times as much as his counterpart slavia. Two generations ago the Turkic­ the poorest, most backward section of in a less profitable enterprise. These speaking peoples of the Central Asian the USSR. The main reason is the con­ income differences have nothing to do republics were nomadic herdsmen, sep­ centration of the Turkic-speaking pop­ with the diligence of the individual arated from European Russia by a vast ulation on collective farms where their workers or competence of the respective social and economic gulf. However, cen­ labor prod uctivity is very low. enterprise managements. The main fac­ tralized planning and management on A genuinely socialist (i.e., interna­ tor determining enterprise profitability the basis of collectivized property has tionalist) policy on the national ques­ is the axe of its plant, whether it is enabled the USSR to appreciably nar­ tion calls for not only transferring technologically up-to-date or obsolete. row that gulf. Uzbek machine opera­ productive resources to the Central "Market socialism" violates the elemen­ tors in Tashkent receive the same wage Asian republics but also promoting the tary principle, shared by trade union­ rates and benefits as their class brothers voluntary migration ofTurkic-speaking ists as well as socialists, of equal paYlor in Leningrad. Social programs in Cen­ people to the labor-short areas in Euro­ equal Il'ork. tral Asia are on the standard Soviet pean Russia, the Ukraine and Siberia. While grossly unequal pay for equal scale. Collective farmers in Central Asia This would not only benefit the Turkic work doubtless causes resentment receive relatively favorable prices for peoples but would raise labor produc­ among individual workers, it is the stark their main crops. Furthermore, the cen- tivity in the Soviet Union as a whole. 7

Such a policy would require occupa­ The unemployment rate soared from cards finally collapsed, Agrokomerc tional retraining for millions of people, 3.5 percent in the early '70s to 8.5 per­ head Fikret Abdic exclaimed: "Every­ massive housing construction, estab­ cent in the late '70s. In one important body in Yugoslavia has been doing it, so lishing multilingual schools in the major respect self-management has a greater why is Agrokomerc being victimised cities of European Russia and similar built-in tendency to generate unem­ when we were only trying to get funds to measures. In short, the economic ployment than does capitalism. The complete some of our big projects?" integration of the numerous national­ goal of a self-managed enterprise is not (Economist, 5 September 1987). ities making up the USSR is possible to maximize profits, much less output, Indeed, everybody in Yugoslavia has only on the basis of centralized plan­ but profit per worker. If a Yugoslav been doing it for years. As a result, the ning and management, workers democ­ enterprise can increase its output by, inflation rate tripled during the '70s, racy and a struggle against national say, 10 percent by spending a million reaching 30 percent by the end of the inequality. dinars on new equipment or by spend­ decade. The inflation ruined Yugosla­ ing half a million on new equipment and via's export competitiveness. To pay for Behind the Economic Collapse the rest on taking on more workers, it necessary imports, the Tito regime For two decades spokesmen for the will always choose the first alternative. turned to the loan sharks of the "Yugoslav road to socialism" could and The system is strongly biased against Frankfurt Borse, City of London and did point to one of the highest growth young workers first entering the labor Wall Street. Foreign debt increased ten­ rates in the world. During the 1950s market. fold during the '70s, from $2 billion to industrial production advanced 9.5 per­ Established enterprise workers coun­ $20 billion. As Yugoslavia entered the cent annually, in the '60s over 8 percent cils, however, have had a certain polit­ 1980s, it was living on borrowed time. a year. However, this impressive eco­ ical clout. If the market had been allowed to operate freely, hundreds of For a Socialist Federation nomic performance was by no means of the Balkans! proof of the superior virtues of enter­ enterprises would have folded in the late prise self-management. '70s. To forestall this the Tito regime Marshal Tito's death in 1980 removed In the 1950s Yugoslavia enjoyed an had recourse to inflationary finance and both a powerful symbol of Yugoslav advantage unavailable to the Soviet­ massive foreign borrowing. Firms run­ unity and an authoritative political lead­ bloc states: subsidization by U.S. ning in the red were merged with profit­ ership. It signaled the passing of the gen­ imperialism. After Tito broke with Sta­ able firms or pumped up with bank eration which had made the Yugoslav lin in 1948, Washington regarded the loans. Revolution by overcoming the age-old Belgrade regime as a semi-ally against How the system operated was ex­ blood feuds of the Balkans. They were Moscow. In the first decade of the Cold posed by the Agrokomerc scandal succeeded by political midgets pursuing War Yugoslavia received roughly a which shook Yugoslavia last fall. The the most parochial and shortsighted billion dollars in largesse from Uncle management of Agrokomerc, a huge interests. As one dissident intellectual Sam. At the same time, Yugoslavia was food-producing firm, was closely linked put it: "We live under a pluralist oligar­ running large balance-of-trade deficits to Bosnian party boss Hamdija Pozde­ chy, or better, eight oligarchies." Any with the West. Without the U.S. aid, rac, one of the most powerful politi­ republic can veto federal legislation for balance-of-payments constraints would cians in the country. Over several years a year. The president of the federal gov­ have retarded its economic growth. Agrokomerc dumped on Yugoslav ernment is rotated every year on a In the early 1960s U.S. aid dried up, banks near~r a billion dollars in prom­ regional basis, one of Tito's most ill­ but Titoist Yugoslavia found another issory notes backed by nonexistent fated legacies. Even within the frame­ source of foreign exchange: exporting assets. When the financial house of work of Stalinist rule the current surplus labor to the West European Common Market, especially to West Germany. At its peak, just before the 1974-75 world depression, migrant workers amounted to 12 percent of Yugoslavia's total labor force. And the money they sent back to their families and returned home with amounted to 40-50 percent of Yugoslavia's earnings Soviet university from the export of industrial and agri­ students in cultural products. Kalmyk ASSR in The economic collapse of the 1980s southern steppes. had its origin in the world capitalist cri­ Centralized sis of 1974-75. The quadrupling of oil planning and prices engineered by the Seven Sisters/ management has OPEC cartel greatly increased Yugo­ dramatically slavia's import bill, payable in dollars narrowed not dinars. As a result the balance-of­ gulf between backward regions trade deficit jumped from $1.6 billion in of USSR and 1973 to $7.2 billion in 1979. At the same European Russia. time, the depression and subsequent stagnation of the West European econ­ omy sent a quarter million Yugoslav workers back home by the end of the decade. 8

Yugoslav bureaucracy has shown it­ thrown onto the streets. cry among the Albanians. The Kosovo self criminally and perhaps suicidally The bankruptcy of the "self-managed question exploded in 1981 with Albani­ irresponsible. economy" has enormously intensified an student protesters demanding that The musical-chairs government in the centrifugal forces in Yugoslavia. the autonomous province be granted the Belgrade has become little more than Last summer the house organ of the status of full-fledged repUblic. Today collection agents for foreign loan international financiers, the London the more extreme nationalists are sharks. By putting the economy through Economist, titled an article on Yugo­ demanding "an ethnic Albania that the wringer, they squeezed out $l~ slavia "A Lebanon in the Balkans?" The includes western Macedonia, southern billion since 1981 for the bankers of imperialist hyenas are beginning to Montenegro, part of southern Serbia, Frankfurt, London and New York. And smell blood, salivating at the thought of Kosovo and Albania itself" (New York now the bankers are demanding further the breakup of the Socialist Republic of Times, I November 19~7). In recent austerity measures which would make Yugoslavia, that would undo the revo­ years much of the Serbian minority has the past few years look like la dolce "ita lution and turn Serbia, Croatia, Slove­ left Kosovo, driven out by the rising tide by comparison. Last summer the Bel­ nia, etc. into neocolonies of interna­ of Albanian nationalism and the deep grade regime, under pressure from the tional capitalist finance. The wealthier economic depression. IMF, adopted a law eliminating all state regions of the north resent the economic The situation in Kosovo inflames all subsidies and other aid for money­ burden of the impoverished south. Bozo the national passions in Yugoslavia. The losing enterprises. Oskar Kovac, min­ Kovac, ed ifni of Slovenia's leading daily Economist (18 July 1987) noted: "Few ister in charge of economic relations newspaper, boasts: "Capacity in Slove­ people outside Yugoslavia have been with the West, stated: nia is better utilized and managed than paying much attention to Kosovo. But if "There will be firms that will clearly in the south." the trouble there is not solved, it could have to go. I only hope it will not take The London Independent (8 October rattle the whole of Yugoslavia." Recall­ such dimensions that it will cause seri­ ing the effects of the assassination of an ous social unrest. But even with that risk 19~7) reports: "There is much political we must go ahead." daydreaming of secession from the Austrian archduke by a Serbian nation­ -Washington Post, 21 July 19X7 South Slav federation, which the 1.5 alist in Sarajevo in 1914, which sparked Going ahead, the first round shut down million Slovenes are inclined to see as a WW I, it noted that "local conllicts in 800 firms with 200,000 workers. If the pure drain on their hard work and more the Balkans have a nasty way of devel­ law is stringently carried out, every European way of life." If secession is a oping into wider ones." fourth worker in Yugoslavia will be daydream for the Slovenes, it is an angry Titoist Stalinism has not achieved and cannot achieve a lasting solution to the national problems of Yugoslavia. For example, the Albanian popUlation Womenand~ of Kosovo should have the right to unite with their national brethren across the Subscribe! H~~Y'91~~_o~_O I border in Albania. The Macedonians ~~1~~)~~~1.~~2~2.'.'~:: ~~.:.':.. t~l' :,[1<1"<1'_'$1 Ledguf' '-)"" $100 I should have the right to become part of Bulgaria. Such policies would go a long Women and Return to the Road of Lenin and Trotsky! I way toward defusing the current na­ Revolution How the Bolsheviks Fought I tional antagonisms within Yugoslavia, laying the basis for a genuine socialist Journal of the for Women's Emancipation SEE PAGE SIX federation of the Balkans within a Spartacist League/U.S. Socialist United States of Europe. Women's Commission ~/. Writing over a decade ago on "The National Question in Yugoslavia" (WV 3-issue subscription No. 110, 21 May 1976), we warned: $3.00 "Now even the great achievements of the Yugoslav revolution-the over­ throw of capitalist property relations and the overcoming of bloody national conflicts which wracked bourgeois Yu­ goslavia-are themselves threatened by the bureaucracy's fostering ... of cen­ trifugal forces. The conditions are being accumulated for a bloody civil war ... one which may well be cloaked in the form of a 'national liberation' struggle. This is the legacy of Titoism, of Stalinism 'with a human face.' It is the Make checks legacy that the working masses must payable/mail to: overcome by com,tructing a Trotskyist vanguard party capable of carrying Spartacist through a workers political revolution Publishing Co. to oust the Tito bureaucracy and Box 1377 GPO thereby create the conditions for inter­ NY, NY 10116 national extension of the revolution." Today, as the bankruptcy of "workers self-management" fuels resurgent na­ tional antagonisms, this program offers the only genuine path to socialism .• 9 Part D reprinted from Workers Vanguard No. 448, 11 March 1988 Hungary: "Goulash Communism" Goes Bust

Petty capitalism undermines Hungary's socialized economy: speculators trade bonds of state-owned enterprises (above). Liberal Stalinist Janos Kadar (below) tells Hungarian workers austerity lies ahead.

Burdened by massive debts to West­ ership "highly respected" Hungary's were greeted with a eonsumption (value­ ern banks, much of East Europe is now economic policies and declared: "We arc added) tax and an income tax, the first racked by economic crises. In Romania facing similar economic problems and ever in the Soviet bloc. Most Hungari­ buildings are kept so cold, due to short­ are progressing down a similar path .... " ans already work at two or more jobs ages of electricity, that musicians per­ Five years ago Alec Nove, a leading just to make ends meet. Now, a top form concerts with gloves on. Last Western expert on the Soviet-hloc official of the finance ministry projects November thousands of workers from economies, wrote: "Hungary's experi­ that 200,000 workers will be laid off the Red Star truck factory in Brasov ence shows clearly both the advantages under a new bankruptcy law designed to marched through the industrial city and the difficulties which follow from an shut down unprofitable enterprises. protesting a 50 percent wage cut and attempt to introduce what can be called The austerity programs have hit hard­ shortages of just about everything. They 'market socialism.' On balance the pos­ est at the working class, while a new stormed the mayor's office, tore down itive features seem to predominate .... " class of petty entrepreneurs has been portraits of Romanian Stalinist despot The alleged advantages of "market enriching itself through the increasing Nieolae Ceausescu and burned official socialism" certainly do not predomi­ privatization of the economy. Report­ papers in the town s4uare. In Poland nate today. Hungary has heen econom­ edly handbills spread in Budapest and new economic "reforms" introduced by ically stagnant for a decade and is now the industrial center of Szombathely last the .Iaruzclski regime will increase the saddled with the highest per capita year warn, "If you raise the prices, we'll cost of living by 200 percent over the foreign debt in East Europe. Under hurn down the factories!" Hungary's next few years. Even Hungary, not long pressure from Western bankers. the new prime minister, Karoly Grosz, ago held up as thc economic showcasc of Budapest Stalinists have been imposing admits: East Europe, is facing ever more austere increasingly severe hardships on the austerity. working people. l.ast summer the priccs "The puhlic mood is deteriorating as the Visiting Budapest last spring, the of hread, fuel oil, ekct !'Icity and other living standards of a considerable strata of society have stagnated over the last number two 111;,)11 III the Krenilin, Yegor necessities were raised 20 percent, and years and even decreased for a not neg­ Ligachcv. stal\:d ';I"l the Soviet lead- on New Year's Day Hungarian citilens ligible scction of society. 10

"Confidence in the leadership has dwin­ dled and sometimes the viability of socialism is put in doubt." -New York Times, 17 September 1987 The era of "goulash communism" associated with the long reign of Janos Kadar, installed after the suppression of the 1956 Hungarian Revolution, has been played out. Conditions are rapidly building toward a major social crisis, pitting the working class and its allies against the growing milieu of petty entrepreneurs, pro-Western intel­ lectuals and elements of the ruling bu rea ucracy. From Horthy to the 1956 Hungarian Revolution The contemporary Hungarian state was born out of the disintegration of the ramshackle Habsburg Empire with its Eastfoto Icarus bus factory in Budapest. Western bankers are now demanding defeat in World War I. Following the massive contraction of Hungary's state-owned industry, bloody suppression of the short-lived Hungarian Soviet Republic in early 1919, the country came under the The deformations were especially cratic rule in that country but also fascistic dictatorship of Admiral Horthy marked in Hungary. The regime of to prevent political revolution from for the next quarter century. In the arch-Stalinist Matyas Rakosi was spreading to the rest of East Europe and 1930s the Horthy regime aligned itself exceptionally bloody, including toward into the Soviet Union itself, where the with Nazi Germany, and the Hun­ fellow Communists, even by the stan­ political order had just been shaken by garian Arrow Cross fought alongside dards of what was later euphemistically Khrushchev's "secret speech" denounc­ the Waffen SS when Hitler launched called "the era of the cult of personal­ ing Stalin's crimes. (For a Trotskyist Operation Barbarossa against Russia ity." Economically, the Rakosiites pur­ analysis of Hungary 1956, see "Political in 1941. sued an extreme version of Stalinist Revolution in Hungary-Ten Years The Third Reich was destroyed four autarky, vowing to make Hungary "a After," Spartacist No.8, November­ years later as the Soviet red flag and country of iron and stee\." Massive, December 1966.) hammer and sickle was raised over the unbalanced investment in heavy indus­ Reichstag in Berlin while Hitler com­ try-90 percent of all investment­ Introduction of the mitted suicide in his hunker. In 1945 the drove down the living conditions of New Economic Mechanism Soviet Red Army also liberated Hun­ both workers and peasants. Following the suppression of the rev­ gary from the nightmare of fascism. A The post-Stalin "thaw" in the Soviet olution, the Kremlin installed in power few years later, reacting to the Cold War Union cracked the totalitarian police­ the liberal Stalinist Janos Kadar, who pressure of U.S. imperialism, the Sta­ state apparatus which protected Rakosi had been imprisoned and tortured linists carried out in East Europe a and his cohorts. In October 1956 a pop­ under Rakosi. After an initial period of delormed social revolutionfrom above. ular uprising broke out against this universally hated regime. This was a repression, Kadar set out to gain popu­ bona fide proletarian political revolu­ lar acceptance or at least tolerance for tion. The main force in the revolution his regime. In the early 1960s he cau­ ARE YOU BOLD ENOUGH was workers councils, usually led by tiously liberalized political and intellec­ TO INVEST IN HUNGARY? anti-Rakosi Communists. To be sure, tual life. But the main thrust of Kadar's the insurgent workers and radical intel­ program was to redirect investment so lectuals were by no means free of liberal as to rapidly raise consumption levels. Khrushchev himself welcomed Kadar's NEW AREAS ARE RISKY and especially nationalist prejudices and NEW AREAS ARE PROFITABLE illusions. But the c1ericalist-Horthyite "goulash communism" for restoring RISKS ARE MANAGEABLE counterrevolutionary forces around social stability in Hungary.

To dlsc?ver INVESTMENT OPPOATUNlTIES in Hungary's develop­ Cardinal Mindszenty were relatively By the mid-'60s it was becoming In9 capital market, you'll need a PARTNER small and widely despised. harder for the Hungarian bureaucracy , with a well-earned profesSIonal reputation lor Investment. security and lending operations, The workers were fighting for a dem­ to come up with ever more goulash. The I WIth In-depth knowledge 01 the Investment mar1let through a wide­ ranging chenlele who make up the country's most dynamic compan\85; ocratic, socialist Hungary. Likewise, the economy was running into a labor With expenence In International banking and trade and thus the perfect communicatIOn bndga between you and the Hungarian bUSiness commu­ Revolutionary Committee of Hungar­ shortage (as the Soviet Union would a nity. ian Intellectuals declared: "Factories decade later), thus blocking the tradi­ • Interinvest and land are to remain the people's tional Stalinist path of extensive a banking COrporation specialized in new teehm ues to finance property and nothing is to be given back growth. To keep living standards ris­ eeon"..... ""","n~ary1-. ___--- either to capitalists or big landowners." ing, it was necessary to significantly Hungarian bureaucrats appeal to The Kremlin leaders sent the Russian increase labor productivity. The only the Western capitalists for joint army in to crush the Hungarian work­ way to do this in short order was to ventures, ers' uprising not only to restore bureau- import from the West capital equip- 11 ment embodying advanced technology. asks the manager: "Have you had a preneurs out of which have emerged But to import more from the West, bonus under the economic reform. and Hungary's nouveaux riches. Practically Hungary had to export more to the what have you done with it?" Reply: "I the entire service sector is now priva­ West. bought a country cottage, and the rest of tized along with much of the con­ Unlike the Soviet Union and Poland, the money I put in the savings bank." He struction industry. According to official Hungary's exports to the West were not asks the chief engineer the same ques­ figures, in the mid-'80s there were raw materials dug out ofthe ground like tion. Reply: "I bought a car, and the rest almost 200,000 petty capitalists in oil and coal. Nor did it produce an agri­ of the money I put into the savings Hungary (not including cooperative cultural surplus capable of financing its bank." Finally Kadar asks a worker. farmers). Close to half had annual imports. In the 1960s (as well as today) Reply: "\ bought a pair of shoes." incomes between twice and six times about 80 percent of Hungary's exports Kadar: "And the rest of the money?" that of the average worker. These consisted of machinery, manufactured Worker: "The rest of the money I had to official figures grossly understate the consumer goods and semi-processed borrow from my mother-in-law." actual extent of private wealth, since goods. That is, Hungary had to com­ Working-class discontent was not there is a huge volume of illegal pete with Western and Japanese manu­ limited to retailing jokes in the factory (untaxed) transactions. facturers in Western markets. It was cafeteria. Opposition to the New Eco­ shackled in this competition by poor nomic Mechanism made itself felt The Boom-Bust Cycle, quality goods, limited assortment, and even through the rigidly bureaucratized Hungarian Style inflexibility in changing output and trade unions, and this limited the scope prices to meet shifting demands. of the "reforms." Higher taxes were In its first years the New Economic The New Economic Mechanism imposed on more profitable enter­ Mechanism seemed to be wildly suc­ (NEM), introduced in 1968, was de­ prises, thus narrowing the income dif­ cessful. A top official of the National signed primarily to better mesh Hun­ ferences between workers in different Bank of Hungary, Janos Fekete. later garian industry with the demands of the enterprises. All workers were guar­ wrote: "The performance of the Hun­ West European Common Market. Cen­ anteed a minimum wage, to be paid for garian economy improved spectacularly tralized planning and management was if necessary out of the central govern­ after 1968. We had six golden years ... " effectively scrapped. Enterprise man­ ment budget. Enterprises making losses (Back to the Realities [19821). As events agers were free to determine output and were not allowed to go bankrupt but would soon show, the first golden years set prices. Profitability became the either merged with profitable ones or had little to do with the virtues of "mar­ main criteria for managerial success, were subsidized by the state treasury. ket socialism." advancement and income. Workers' Thus, working-class pressure forced the The Kadar regime stepped up its incomes were also tied to their enter­ Kadar regime to retain critical elements industrial exports to the Common Mar­ prise's profits. of economic centralization, much to the ket at a time when the West European This profit sharing was, of course, dissatisfaction of the advocates of"mar­ economy was experiencing an infla­ rather unequal. The workers' attitude ket socialism." tionary boom. At the same time, the toward the New Economic Mechanism While working-class pressure limited Hungarian economy was being suhsi­ was captured in a joke making the income differentiation in socialized dized by the Soviet Union through rounds of Hungarian factories in the industry, the New Economic Mechan­ cheap oil and other raw materials which early '70s. Kadar visits a factory and ism spawned a new class of petty entre- East Europe got at well below world

.. Der el AP 1956 Hungarian uprising topples hated Stalinist regime. Workers councils vowed to defend collectivized property. 12 market prices. Two American experts were living on a costly illusion. Their Hungary has now acquired a political on the subject, Michael Marrese and answer was austerity. Under siege by dimension. Jan Vanous, calculated that Soviet Western financiers, Hungary negoti­ trade subsidies to Hungary between ated a settlement in 1982 through the Before the Storm 1968 and 1974 amounted to almost world bankers' cartel, the International $2 billion. This happy state of affairs Monetary Fund (IMF). The IMF's Hungary's nouveaux riches entrepre­ would not last long. terms: scrap enterprise and price sub­ neurs and their Western imperialist As in the case of Yugoslavia. Hun­ sidies; shut down unprofitable firms and godfathers have found political and gary's current economic crisis has its operations; impose heavy taxes on con­ ideological support among the bu­ origin in the 1974-75 world capitalist sumption; increase the role of private reaucracy and intelligentsia: Leszek depression precipitated by the quad­ capital in the economy. Balcerowicz, a leading "theorist" at the rupling of oil prices engineered by The most ominous development in official State School of Planning (!), the Seven Sisters/OPEC cartel. World recent years is the degree to which petty openly calls for the restoration of trade in machinery and consumer goods capitalism has undermined the social­ capitalism: declined, industrial and agricultural ized economy. Factory managers rou­ "The dream of an economic system bet­ ter than capitalism is dead. There is no protectionism increased in the West, tinely contract out maintenance, repair third way, no model between Stalinism and the world market price of manu­ and small-scale construction to private and capitalism that works well. The factures fell sharply relative to raw outfits. Even socialized medicine is only reasons to stop short of return- materials. At the same time, the Krem'lin tops, faced with a slowdown in the Soviet economy, decided they could no longer afford to sell oil to their East European allies at little more than a third of what they could get on the world market. In 1975-76 the Soviets raised oil prices to East Europe about 70 percent, and also cut back their oil and natural gas ship­ ments to East Europe, thus forcing Electron-beam Hungary to buy some of its fuel from the multi-chamber Seven Sisters/OPEC bandits. Overall furnace during the 1970s, lower export prices produced by and higher import prices cost Hungary LEW Kombinat. the equivalent of one year's total output. East German industry Had Hungary been a capitalist mar­ is the most ket economy, it would have experi­ technologically enced an acute economic crisis in the advanced in the late '70s. Wages would have been cut to Soviet bloc. make exports more competitive; un­ profitable enterprises would have been shut, producing large-scale unemploy­ ment; prices would have risen to reduce imports and free up more goods for export. But none of these things hap­ becoming unsocialized as doctors de­ ing to capitalism are pragmatic-and pened.lnvestment continued to expand, mand under-the-table cash payments political." living standards continued to rise. for decent treatment. "We have set up a -Washington Post, 6 April 1987 How was Hungary able to achieve 'free' health service, but to have a baby By "pragmatic and political" reasons for this? Increasingly, both enterprise in­ in comfort it can cost a month's not returning to capitalism Balcerowicz vestment and wage increases were wages," a Budapest lawyer complained means fear of the Soviet army. financed by the state treasury. The (London Guardian, 30 December 1986). The Western imperialists are begin­ higher cost of fuel and raw material Last November Hungary experienced a ning to see in Hungary the precondi­ imports was offset by price subsidies. By mini financial crash when speCUlators tions for counterrevolution-a Stalinist the mid-1980s enterprise and price sub­ dumped the bonds of state-owned enter­ regime bankrupt politically as well as sidies took up one-quarter of the total prises in order to hoard consumer financially, popular disillusionment and government budget. But where did the goods, anticipating a sharp price rise. discontent with "official socialism," a Kadar regime get these funds? It bor­ And now they're talking about selling large class of petty capitalists, aggres­ rowed them from the loan sharks of shares in state-owned enterprises to the sively and openly pro-Western intellec­ Wall Street, the City of London and the pUblic. tuals. Looking at Hungary's economic Frankfurt Borse. Hungary's foreign More than any other East European crisis, the New York Times (4 January) hard-currency debt increased ninefold, country, Kadar's Hungary has geared its writes: "Mr. Gorbachev's nightmare is from $1 billion in 1970 to $9 billion in economy to the Western market and so the kind of crisis that rocked Poland in 1980. Doubtless, the Budapest regime has imported the boom-bust cycle inher­ 1981, when the political troubles sur­ was hoping for a return to the favorable ent in capitalism. The present austerity rounding the independent Solidarity international economic conditions of is the direct outcome of 20 years' trade union were aggravated by a severe the late '60s-early '70s. increasing commercial and financial shortage of foreign exchange that ren­ But the second oil-price shock in 1979 dependence on the West. And the dered the country, for all practical finally convinced Kadar & Co. they imperialist economic penetration of purposes, bankrupt."

'I IIIIIII~II~III!I!I. __'" "'" '1"11'" "'II'''''."'''''''''''-~·------··· 13

There is, indeed, a certain parallelism between develop merits in Hungary and Poland. In 1956 Poland stood on the brink of a proletarian political revolu­ tion, and in 1970 a workers' revolt in the Baltic ports toppled the Gomulka regime. To assuage working-class unrest the liberal Stalinist regime of Eduard East German Gierek, like Kadar in Hungary, prom­ Stalinist chief ised and initially delivered a rapid rise in Erich Honecker (left) consumption levels. When interna­ with West German tional economic conditions turned sour chancellor in the mid-1970s, Gierek and Kadar Helmut Kohl. mortgaged their respective countries to Bonn's Ostp-olitik Wall Street and the Frankfurt Horse. aims to subvert Then came the day of reckoning when East German the imperialist loan sharks demanded deformed their pound of flesh. workers state. There is, however, a fundamental difference between Hungary and Po­ land in the consciousness of the work­ ing class and the lines of social polarization. In Poland the powerful Catholic church (which in Hungary is fairly weak) was socially based on the This mouthpiece for Wall Street here divided industrial heartland of Europe. smallholding peasantry. In the mid-'70s accurately conveys the bonapartist role There is another reason that East Ger­ pro-Western, social-democratic intel­ of the Stalinist bureaucracy as a social many (officially the German Dem­ lectuals like Jacek Kuron subordinated stratum balancing between the imperi­ ocratic RepUblic [DDR]) stands out in themselves to the church hierarchy and alist bourgeoisie and the proletariat. In present-day East Europe. It has far and became agents of Cardinal Wyszynski Hungary today the Stalinists' balanc­ away the most successful economy in and Pope John Paul Wojtyla within the ing act is tottering and could well crash. the Soviet bloc, especially in the 1980s, working class. Thus, Solidarnosc was The situation is becoming ripe for a pro­ and is the only major country that hasn't born in 1980 with a clerical-nationalist letarian political revolution. What is tried to reform away centralized plan­ ideology and a year later demanded lacking is a Trotskyist vanguard party ning and managcment. "Western-style democracy," i.e., cap­ which can channel the workers' instinc­ East Germany has become the tenth italist counterrevolution. Fortunately, tive opposition to "market socialism" leading industrial country in the world Solidarnosc' bid for power was stopped into a struggle for soviet power and with a per capita national income higher by General Jaruzelski's countercoup in socialist planning. than Britain or Italy. Nor has its December 1981. Since then the Solidar­ In one sense the absence of proletar­ economic growth been the one-sided nosc leadership has openly called for ian leadership is more striking today expansion of heavy industry character­ restoring capitalism (see "Solidarnosc than in 1956. Then the workers councils istic of the Stalin era. In 1960 only 3 per­ Calls for Wall Street to Run Poland," were typically led by dissident Com­ cent of East German families had auto­ WV No. 406, 20 June 1986). munists, many of whom were groping mobiles and less than 10 percent had Kadar's Hungary, however, has po­ toward an authentic Marxist program. refrigerators or washing machines. larized along very different lines. The Today a working-class revolt in Hun­ Today about half of all East German workers have been hostile to the New gary would be anarchic and spontane­ households have cars and practically Economic Mechanism from its incep­ ous. But the workers cannot take power everyone has refrigerators, washing tion. They despise the pro-Western through a spontaneous uprising. They machines and televisions. The DDR's intellectuals, like Tibor Liska, who are must be led by a party which knows impressive industrialization and growth the most ardent advocates of "market where it is going-toward an interna­ in living standards was achieved with­ socialism." And they hate the wheeler­ tional socialist order. For Hungary can­ out recourse to the much-vaunted dealers who are growing rich off the not exist as an island of workers power market-oriented "reforms" touted by NEM. Hungarian workers are not only and socialism amid a Europe divided bourgeois ideologues, social democrats hostile to the petty capitalists in their between imperialist capitalism and the and liberal Stalinists. own country but also to the imperialist Stalinist bureaucracy. For communist In the mid-1960s the East Berlin financiers whom they rightly see as the unity against imperialism, through po­ Stalinists did introduce a program of main architects of the economic crisis. litical revolution from Budapest to market-oriented "reforms" called the The Wall Street Journal (5 November Moscow and Peking, and socialist rev­ New Economic System. The results 1986) observed: olution in the capitalist West! were not to their liking. The partial "Their workers, who have gained the decentralization of investment, geared least from liberal reforms, stand to lose The East German Key most from an industrial shakeout. ... to enterprise profitability, produced "If the government charges ahead, it The natural bridge between political imbalances and bottlenecks through­ could face trouble from its workers. Ifit revolution in Stalinist East Europe and out the economy. Manufacturing out­ doesn't, the trouble may come from another quarter: the capitalist banks socialist revolution in imperialist West put increased twice as fast as the gener­ to whom Hungary owes billions of Europe is East Germany, a deformed ation of electrical power, leading to dollars." expression of proletarian power in the numerous power cuts and brownouts. 14

So in 1970 the New Economic System percent! At the same time, it reduced its cannot build socialism in half a country. was scrapped and the economy was fuel and other raw-material imports. In Despite the DDR's impressive econom­ recentralized. The role of enterprise Western parlance this would certainly ic growth, its productivity and living profitability was de-emphasized, espe­ be termed an "economic miracle." How standards remain well below those of cially in determining the distribution of did they do it? By concentrating invest­ West Germany, which therefore exer­ investment funds. ment in new technology designed to save cises a powerful counterrevolutionary Seeking to overcome the burea ucratic energy and raw-material costs. Between pressure upon the deformed workers rigidity of traditional Stalinist plan­ 1980 and '83 national income increased state east of the Elbe. The road to social­ ning, during the 1970s the East German by 12 percent as consumption of fuels ism lies neither in the bureaucratic economy was divided into Kombinate, and other raw materials decreased by command ism of old-line Stalinism or huge, vertically integrated groups of 9 percent. the market-oriented "reforms" of lib­ enterprises. These amount to relatively Here we encounter the striking supe­ eral Stalinism. That road lies through a self-sufficient industrial empires. In the riority of centralized planning and man­ democratically administered, centrally late '70s the DDR faced the same agement, even when bureaucratically planned, egalitarian and internation­ adverse international economic condi­ deformed, over "market socialism." In ally organized economy. tions as did Hungary and Poland. the Hungarian and Yugoslav systems Demand contracted in the West for its the investment funds available to a given For the Revolutionary manufactured exports and their relative enterprise or branch of the economy are Reunification of Germanyl price fell. At the same time, the price of determined primarily by its profits. fuel and other raw-material imports Enterprises with high profits are, as a With few exceptions Western bour­ soared. Like its counterparts in Buda­ rule, those with new, up-to-date equip­ geois economists deny any connection between East Germany's superior eco­ pest and Warsaw, the Honecker regime ment. It is enterprises with old, obsolete in East Berlin borrowed heavily from equipment which urgently need to be nomic performance and its centralized the Western bankers to maintain in­ retooled, and it is here that one gets the planning. Instead they point to the DDR's special economic relationship come levels. In fact, in 1980 the DDR's greatest improvement in productivity with West Germany (officially the Fed­ foreign debt per capita was higher than per forint or dinar invested. But in Hun­ Poland's. gary and Yugoslavia such unprofitable eral RepUblic of Germany). East Ger­ man exports to the Federal Republic During the 1980s, however, East Ger­ enterprises are starved for investment many has reduced its Western debt with­ funds! Under "market socialism," in­ are exempt from the Common Market out an austerity program driving down vestment is directed into areas that are tariffs which are levied on other East living standards. The economy has con­ least productive to the economy as a European countries, the Bonn re­ tinued to grow soundly, real wages have whole. gime has guaranteed bank loans to the DDR, etc. continued to improve and social pro­ While the East German economy has But these factors cannot account for grams, such as old-age pensions and certainly been more successful than East Germany's economic achieve­ maternity henefits, have continued to Hungary, Poland or Yugoslavia, the ments. Its remarkably successful export expand. In the face of a world capitalist Kombinat system has produced its own drive in the early 1980s was mainly depression, in the early 1980s the DDR distortions, imbalances and a tendency directed at Western markets other than increased its exports, predominantly toward building bureaucratic fiefdoms. the Federal Republic, where the DDR manufactures, to Western markets hy 60 Ultimately, the East Berlin Stalinists enjoys no special tariff advantage. Access to Western loans cannot explain East Germany's ability to radically reduce its energy and raw-material costs per unit of production. Hungary, Poland and Yugoslavia had no prob­ lems borrowing billions of deutsch­ '1:.):' .i. marks from Frankfurt bankers, and the .,;,~ ~. only result was to deepen and ulti­ mately intensify their economic crises. To be sure, the Federal Republic does subsidize the DDR. Through the "swing" credit, West German manufac­ turers and middlemen have gotten the equivalent of half a billion dollars a year subsidy from the Bundesbank in Bonn to help cover their exports to East Ger­ many. This is in part an export subsidy for West German capitalists (i.e., a dis­ guised form of trade protectionism). However, Bonn's special economic rela­ tionship with the DDR is not primarily a means for Ruhr industrialists to sell more machine tools or construction equipment. Its main purpose is far more sinister. 17 June 1953-East German workers rise up against the Stalinist regime, call The masters of the Fourth Reich aim upon West German workers to "sweep out your crap in Bonn." to subvert and undermine the social- 15

ized economy of East Germany and :j beyond the Oder-Neisse line (the post­ WW II border with Poland), reconquer­ ing what Hitler lost when he launched Operation Barbarossa against the So­ viet Union. (To this day West German publications frequently refer to the DDR as "Middle Germany"!) The ulti­ mate aim of Bonn's O!>lpolilik and deutschmark diplomacy is clearly per­ ceived by the French bourgeoisie, for whom the prospect of a reunified Ger­ many-whether capitalist or social­ ist-is a historic nightmare. After Honecker's triumphant visit to West Germany last fall, former French for­ eign minister and rabid Gaullist Michel Jobert exclaimed: "Germany intends to go its own way in Mitteleuropa. It is a people that thinks it can make a deal with the Soviets, rely­ ing on the economic strength of the Fed­ eral Republic to buy back its unity-in whatever form." -NeI"sweek, 14 September 1987 Meanwhile, West Germany is using that economic strength as a lever to pro­ mote and protect pro-imperialist forces within the DDR. Thus, Alfred Dregger, right-wing Christian Democratic leader in the Bundestag, stated that Honn's Red Army liberated Europe from nightmare of Nazi occupation. Soviet economic and diplomatic concessions to soldiers hoist red flag from Reichstag, Berlin, for May Day 1945. H onecker were "the price for getting him to give a little more freedom to ecstatic welcome Willy Brandt received widespread fear that the madmen in his own people" (London Independent, when he visited Erfurt in 1970. In recent Washington will trigger a nuclear war 9 September 1987). What the likes of years the Brandt wing of the SPD, along beginning on German soil, can be the Dregger are concerned with is freedom with its Green fellow travelers, has been basis for the revolutionary reunifica­ for the pro-Western "human rights" dis­ the main expression of resurgent Ger­ tion of Germany-socialist revolution sidents and "peace" movement grouped man nationalism in pseudo-leftist and in the West, political revolution against around the Lutheran church. pacifistic colors. The slogan of a neu­ the Stalinists in the East. The potential The Lutheran church is the only insti­ tral, demilitarized and reunified Ger­ for revolutionary reunification was his­ tution in the DDR that is allowed to many~~independent of both Washing­ torically demonstrated in the June 1953 exist to some degree independent of the ton and Moscow·-is a thinly disguised East German workers' uprising. A mass Stalinist bureaucracy. But East Ger­ call for "democratic" counterrevolu­ meeting of metal workers in East Berlin many is not Poland. (Indeed, East Ger­ tion in East Germany. raised the slogan of a metal workers mans despised the clerical-nationalist In the Frankfurt banking hOllses, government based on strike commit­ Solidarnosc.) The DDR is a secularized Bonn chancelleries and SPD headquar­ tees. And in the Halle train station strik­ society at its base with a socialist­ ters they are planning how to regain ers greeted travelers from the West with minded proletariat and intelligentsia. Prussia and Saxony for "free world" a banner reading, "Now sweep out your This is not to say that East Germany is capitalism. However, a~ the Scottish crap in Bonn·-in Pankow [East Berlin] immune from the powerful pressures poet Robert Burns ob,erved, "the best we're cleaning house." emanating from Western imperialism. laid schemes 0' mice and men gang aft The future of divided Germany can­ The East German "peace" movement, a-gley." Polls show huge majoritics not and will not be determined solely several of whose members were recently in both German state, !i\vor reunifi­ within Germany. Germany is the leader arrested by the Stasi secret police and cation. Reunification i, a two-edged of Europe-for socialism or for bar­ then expelled from the DDR, is in fact a sword. It also has a Ilro/etarian edKc barism. Under the Nazis, German channel for the introduction of social­ which can sweep away the masters of the imperialism brought to Europe the democratic German nationalist ideol­ Fourth Reich and their Social Dem­ unspeakable barbarism of Auschwitz ogy of the Green/pacifist variety. ocratic lackeys. When youth in East and Dachau. But if the social power of The West German Social Democ­ Berlin protested last .June, theircry"The the industrial proletariat of the two racy (SPD) is a potent force, both Wall mllst go!" was accompanied by Germanys is united as an axis for social­ ideologically and organizationally, for "We want Gorbachev'" and singing ist revolution in Europe, it will find counterrevolution in East Germanv. the Internatiol1a/e (see "Di\ ided Ger­ allies in the working classes from Por­ Social Democratic sympathies persist in many and Gorbachev's Glasnost," tugal to Russia. A Soviet Germany will the DDR, where many see the SPD as a WV No. 438, 16 October 1987). take its rightful place as the industrial "democratic" alternative to their own The sense of identity between work­ core of a Socialist United States of Stalinist regime. This was shown by the ers on both sides of the Elbe, the Europe .• 16 Partm reprinted from Workers Vanguard No. 454,3 June 1988

For Central Planning j Through Soviet Democracy

When Tito's Yugoslavia instituted ized its economy in the early '70s. for capitalist counterrevolution. workers' self-management of enter­ Today, however, East Germany is the At the same time, Gorbachev's prises in the late 1940s, it was presented exception, the only major East Euro­ perestroika means harsher conditions as and regarded as a fundamental chal­ pean country to retain centralized plan­ for Soviet workers. While the intelli­ lenge to Stalinism. When 20 years lat­ ning and management. It is also, not gentsia looks to a new wave of liberal­ er Hungary introduced the market­ accidentally, the most successful econo­ ization similar to Khrushchev's "de­ oriented New Economic Mechanism, it my in East Europe. Stalinization" in the mid-late 1950s, for was viewed as very much an anomaly There is an inherent tendency for Sta­ the working class therc is a partial return among the Sino-Soviet states. But today linist regimes to abandon central plan­ to the labor practices of the Stalin era. "market socialism" has come to Oeng's ning in favor of an economic setup with Instead of the expansion of consumer China and Gorbachev's Russia. Soviet the following major elements: output goods and relaxation of draconian labor economist Abel Aganbegyan, the lead­ and prices determined through atom­ discipline during the post-Stalin "thaw," ing intellectual architect of perestroika ized competition between enterprises; there is now an anti-egalitarian cam­ (restructuring), declared during his investment, managerial salaries and paign with the reintroduction of piece recent visit to the U.S.: "We're going to workers' wages geared to enterprise rates on a wide scale, a widening of have a market for all of the factors of profitability; unprofitable enterprises income differences between workers production, from raw materials to are shut down, resulting in unemploy­ and the managerial and technical elite. machine tools to consumer durables, ment; price subsidies are eliminated, But as the New York Times (10 May) everything, to replace the centralized resulting in a higher rate of inflation; the recently reported on the impact of pere­ distribution system." role of petty capitalist entrepreneurs is stroika in a Black Sea port, "the ruth­ We are seeing here a historical ten­ expanded, especially in the service sec­ lessness of the marketplace violates the dency among bureaucratically degen­ tor; increased commercial and financial sense of justice and equality reinforced erated/deformed workers states, not ties to Western and Japanese capi­ by 70 years of Soviet rule." merely a coincidence of economic policy talism, including joint ventures, are Thus Soviet workers are bound to zigzags. The drift toward "market encouraged. These measures do not resist the effects of "market socialism." socialism" is neither linear nor irrevers­ amount to creeping capitalism, as many Gorbachev's Russia is clearly heading ible. East Germany experimented with Western bourgeois commentators and toward serious labor unrest, although the market-oriented New Economic not a few confused leftists contend. But we cannot predict its magnitude, imme­ System in the 1960s but then recentral- they do strengthen the internal forces diate demands or leadership. The ex~ plosive combination of market-oriented economic measures and political liber­ alization has created the best oppor­ tunity for the emergence of an inde­ pendent workers movement since the 1920s. The central task for a reborn Leninist-Trotskyist vanguard in the USSR is to link the defensive economic struggles of the working class to the pro­ gram of proletarian political revolution to oust the Stalinist bureaucracy, estab­ lishing a centrally planned economy on the hasis of soviet democracy and restoring Soviet Russia as a bastion of world revolution. The economic crises in much of East Europe and the drive toward market­ oriented reforms demonstrate the im­ pos~ihility of huilding socialism in one country. As early as the 1840s Marx and Engels insisted that "The communist revolution will therefore be no merely national one" ("Principles of Com­ Der Spiegel munism" [' 8471). Achieving commu­ Long lines and empty shops in Warsaw as Polish Stalinist regime imposes Illsm rnlUlrt~' al least the combined austerity dictated by Western bankers. dlort of several of the most econom- 17

klar Bulla Communism equals soviets plus electrification, said Lenin. Workers at Putilov metalworking factories meet to elect deputies to Petrograd soviet, 1920 (left). Dnieperstroy hydroelectric station, originally advocated by Trotsky (right). In 1926, Stalin said the mammoth power plant would be no more use to Russia than agramophonetoa peasant without a cow. Yet upon completion in 1932, Dnieperstroy generated more electricity than in all of tsarist Russia.

ically advanced countries. An isolated Leon Trotsky. insisted on the need for basis for the abolition of classes in the socialized regime would be subject to rapid industrialization and central plan­ U .S.S. R., for the building of a socialist enormous military and economic pres­ ning. As early as 1925, Trotsky warned society." -J.Y. Stalin, "The Results of sures from the surrounding capitalist that "if the state industry develops more the First Five-Year Plan" world, pressures which deform and will slowly than agriculture ... this process (January 1933) ultimately destroy a nationally limited would, of course, lead to a restoration of He declared that the success of the first workers state. capitalism" ( Whither Russia?). five-year plan was "creating in the coun­ As the Opposition had predicted, by Stalinist Russia: From try the prerequisites that would enable it the late '20s the growing contradictions not only to overtake but in time to Bureaucratic Commandism of NEP led to an acute "scissors crisis" to Perestroika outstrip, technically and economically. as a sclerotic ind ustry was unable to sup­ the advanced capitalist countries." The advocates of "market social­ ply the peasantry. who sharply.cut back Trotsky acknowledged the enor­ ism" in Gorbachev's Russia look back grain deliveries, threatening to bring mous historical significance of Soviet fondly on the New Economic Policy urban Russia to a standstill. Stalin industrial construction, but pointed out (NEP) especially of the mid-late 19208. reacted by switching to a policy of ultra­ the limits and contradictions of Stalin­ whose leading ideological apologist was left economic adventurism-forced col­ ist industrialization and exposed the Nikolai Bukharin and whose chief im­ lectivizatibn of agriculture, bureaucrat­ illusion of "building socialism in one plementer was his then-bloc partner ic command ism and a breakneck tempo country": Joseph Stalin. Bukharin talked of build­ of industrialization. At the end of the "The progressive role of the Soviet ing socialism "at a snail's pace." insist­ first five-year plan, he boasted: bureaucracy coincides with the period ing that the expansion of industrial "The fundamental task of the five-year devoted to introducing into the Soviet production in the Soviet Union should plan was, in converting the U.S.S.R. Union the most important elements of be determined by the market demand of into an industrial country, to com­ capitalist technique. The rough work of pletely oust the capitalist elements, to borrowing. imitating, transplanting and the small-holding peasantry for manu­ widen the front of socialist forms of grafting, was accomplished on the bases factures. The Lcft Opposition. led hv economy. and to create the economic lain down by the revolution. There was, 'I

18

thus far, no question of any new word in Russia the Great Patriotic War). Hit­ depicts the social malaise of the last the sphere of technique, science or art. It ler's Operation Barbarossa, although Brezhnev years in the late '70s-the is possible to build gigantic factories according to a ready-made Western finally broken by the Red Army, devas­ inward-turning personalism and polit­ pattern by bureaucratic command-­ tated western Russia and the Ukraine. ical cynicism, the rowdy street gangs in although, to be sure, at triple the nor­ Twenty-five million people were left Moscow's better-off suburbs. Gorba­ mal cost. Hut the further you go, the homeless, hundreds of towns and thou­ chev himself laments the loss of social­ more the economy runs into the prob­ lem of ljuality, which slips out of the sands of villages were completely de­ ist idealism in the contemporary Soviet hands of a bureaucracy Iikc a shadow. stroyed. In 1945 industrial output in the Union which he heads: rhe Soviet products arc as though areas which had been occupied by Nazi "Decay began in public morals; the branded with the gray label of indiffer­ Germany was just 30 percent of the pre­ great feeling of solidarity with each cnce. Under a natirehabilitation was weakening; patible with a totalitarian regime of Soviet industrial production did not alcoholism, drug addiction and crime fear, lies and flattery." [emphasis in recover its prewar level until 1950. were growing; and the penetration of original] the stereotypes of mass culture alien to -The Revolution Betrared Resistance to the Nazi invasion re­ us, whieh bred vulgarity and low tastes (19.\0) . kindled a spirit of patriotism among the and brought about ideological barren­ Soviet peoples. This was intensified by ness increased." Today Gorbachev admits that precisely ~Perestroika in the sphere of Ljuality, in technical and the Cold War launched by U.S. imperi- Gorbachev is lumping together and confusing very different kinds of social idealism. The workers who made the Bolshevik Revolution were imbued with the spirit of revolutionary internation­ alism; they believed they were leading all of mankind into a socialist future. When the Polish Jewish anarchist Hersh Men­ del arrived in Moscow in October 1917, he asked a group of Red Guards what they were fighting for. One of them replied, for the brotherhood of peoples (sec "Memoirs of a Revolutionary Jewish Worker," Spartaeist No. 41-42, Winter 1987-88). In contrast, the shock brigades of Stalin's first five-year plans believed they were building in a few short years socialism in one country. And in defending the "socialist mother­ land" against the Nazi German inva­ sion, Soviet workers and peasants responded to Stalin's appeals for na­ tional patriotism.

T ASS from Sovfoto Nonetheless Gorbachev is right in one Gorbachev exhorts Soviet people to work harder, but his market-oriented important respect. In the last Brezhnev perestroika (restructuring) means harsher conditions for workers. years all forms of social idealism atro­ phied in the Soviet Union. And this has scientific innovation, the Soviet lJ nion alism, whose leaders threatened to use had a profoundly negative impact on the has fallen increasingly behind Western their monopoly of nuclear weapons economy, captured by the cynical for­ and Japanese capitalism: against Russia. Thus Soviet workers mula common in the Soviet bloc: "we "A country that was once ljuickly clos­ and peasants were willing to make the pretend to work, they pretend to pay ing on the world's advanced nations sacrifices and accept the labor disci­ us." Gorbachev's answer is to reintro­ began to lose one position after another. pline necessary for the rapid postwar Moreover, the gap in the efficiency of duce piece rates and tie wages to enter­ production, quality of products. scien­ reconstruction of the economy. Fven prise profitability. Other elements of the tific and technological development. the bureaucratic parasitism and corruption Kremlin elite want to go even further production of advanced technology and was restrained in this period compared along these lines than Gorbachev. For the use of advanced techniques bcgan to to the la dolce vita spirit of Brezhnev widen, and not to our advantage." example, the economist Nikolai Shme­ and his cronies in the 1970s. ~Perestroika: Nell' '1ilinkingjiJr lyov, a former son-in-law of Khrush­ Our CUlII1Irl' ilnd the JVorld Khrushchev's denunciation in 1956 of chev and extreme partisan of pere­ (19~7) . Stalin's monstrous crimes generated an stroika, maintains that only the whip One might reasonably ask: why has it expectation of socialist renewal, espe­ of unemployment can restore labor taken half a century for the econom­ cially among the youth. The Soviet film discipline: ic contradictions of Stalinist Russia, /11us('ol\' noes Not Believe in Tears con­ "Today it is, I believe, clear to everyone which Trotsky wrote of in The Rcvolu­ veys the naive hut genuine social ideal­ that we owe disorderliness, drunken­ ness. and shoddy work largely to tion Betrayed, to come to the fore') The ism of peasant youth who come to the excessively full employment. We must answer lies in the effects. hoth economic hig city as factory workers in the early discuss fearlessly and in businesslike and political, of World War II (called in Khrushchev period. lhe film also terms what we could gain from a com- 19

paratively small reserve army of la­ bor .... A real danger of losing your job and going onto a temporary allowance or being obliged to work wherever you are sent is a very good cure for laziness, drunkenness and irresponsibility." -quoted in U.S. Congress, Joint Economic Committee, Gorbachev's Economic Plans ( 1987) In his own way Shmelyov focuses on a basic contradiction of a bureaucrat­ ically degenerated workers state. Eco­ Stalin inspects nomic planning, one of the main limousine, benefits of which is full employment, symbol of can be effective only when the workers, privileged technical intelligentsia and managers Kremlin identify themselves with the govern­ Oligarchy. ment which issues the plans. When they are alienated from the ruling oligarchy, the plan will be ignored and subverted at the base. The formal plan targets may be met, but by poor quality and ill-assorted goods. Raw materials, energy and other inputs will be used wastefully. State­ applicable to all times and places, on Oskar Lange in the 1930s. owned supplies and equipment will be how to combine central planning, the Stalin has given central planning a diverted into the black market, under­ market and soviet democracy. This will bad name. Many people assume it mining the socialized economy. depend on the level of economic devel­ means a small group of bureaucrats or Within the framework of Stalinism, opment, thc international situation and technocrats running the economy. How there is thus an inherent tendency countless other shifting conditions. can planning be combined with soviet to replace centralized planning and Workers democracy and planning are democracy? Generally speaking, the management with market mechanisms. not enough; there must also be an most fundamental economic decision Since managers and workers cannot be intelligent political leadership-a revo­ facing society is the division of the total subject to the discipline of soviet democ­ lutionary party-to assess and adapt product between consumption and racy (workers councils), increasingly the to the concrete situation facing a given investment, and the division of invest­ bureaucracy sees subjecting the eco­ workers state. We can, however, sketch ment between consumer goods and pro­ nomic actors to the discipline of market out some general guidelines concern­ ducer goods (e.g., machine tools). As a competition as the only answer to ing the plan, the market and workers rule the larger the proportion of total economic inefficiency. The restoration democracy. output invested and the larger the pro­ of workers democracy in the Soviet Clearly, some economic activities are portion of investment in producer Union is not just an abstract ideal but a suitable for long-term planning and oth­ goods, the higher will be the long-term vital condition for the renewal of the ers arc not. In building a new city or growth in income. Soviet economy on a socialist basis. developing new oil fields in Siberia, a During the 1920s the Soviet econ­ ten- or even fifteen-year plan might be omist G.A. Feldman. basing himself on Plan, Market and desirable. For constructing new fac­ Marx's model of expanded reproduc­ Soviet Democracy tories, a five-year plan may be optimal. tion in the third volume of Capital. On the other hand, the output mix of developed a theoretical model for long­ To be sure, workers democracy is not various factories-how many dresses term planning. (This pioneering work. a cure-all for the economic problems of and skirts, pots and pans they pro­ "On the Theory of Growth Rates of the Soviet Union or elsewhere. In the duce-might well be changed every National Income," has been translated early 1930s Trotsky observed that the week or two in line with changing mar­ into English in Nicolas Spulber. cd .. Stalinist bureaucracy imagined it "could ket demand. Fuundatiuns of' Soviet ,<';trategl' fc)r a priori draw up a faultless and Long-term planning should be ap­ Ecunomic Gruwth [1964].) Feldman exhaustive economic plan, beginning plied to the expansion of productive related the current level of investment with the number of acres of wheat down capacity (e.g., factories. railroads) and and its division between consumer and to the last button for a vest." Neither other major construction projects such producer goods to the future growth would a genuine workers government be as housing. schools. hospitals. The out­ rates of per capita income, consump­ blessed with perfect foresight and the put of different con~umer goods and tion and investment. On the basis of capacity to draw up a letter-perfect plan intermediate products should be adjust­ Feldman's work or similar models it is down to the last detail. Thus Trotsky ed constantly on the ba~is of changing possible to draw up a series of alter­ wrote: "Only through the interreaction supply and demand conditions. The native plans, ranging from one which of these three elements, state planning, mechanism for this, however. need not maximizes near-term consumption to the market, and Soviet democracy, can be and should not be atomized com­ one which maximizes long-term growth the correct direction of the economy of petition between enterprises as in Yugo­ in income. Alternative plans could be the transitional epoch be attained" slavia or Hungary. Rather there should presented to the highest soviet body, ("The Soviet Economy in Danger" be a centralized market mechanism, for which would then determine the basic [October 1932]). which a theoretical model was devel­ future shape of the economy. There is of course no recipe book, oped by the Polish socialist economist Once the growth of per capita income 20

is determined, it is possible to project­ size shirt is in short supply, the agency another style, consumers should pay based on past experience, surveys and would order the factory(ies) to produce twice as much for it. This does not rule consultation with consumer cooper­ more of this item and fewer items in out subsidies or additional taxes in spe­ atives-the increased demand for the relatively ample supply. The clothing cial cases. For example, to encourage broad categories of consumption (e.g., factories would in turn be serviced by a children to read, children's books might food, clothing, household appliances, centralized distribution agency com­ be priced below the publishing cost. The automobiles). The increased quantities manding the resources of various tex­ economic organization described above of raw materials and intermediate goods tile mills. If a particular kind of syn­ will not be totally immune from im. (e.g., steel, plastics, textiles) required to thetic fabric is in short supply, the balances and bottlenecks. But no eco­ produce the final array of goods can be agency would order the mills to increase nomic system can fully anticipate projected through the input-output the production of this fabric and reduce changing wants, resources and technol­ analysis first developed by Wassily those in relative oversupply. ogies. That's just life. Leontief. (Leontief was an economics The idea that market competition is student at the University of Leningrad needed to adjust production of con­ Workers Management in the mid-1920s before emigrating to sumer goods to demand is a myth of Versus Socialist Planning the West. Input-output analysis should hourgeois economics. In fact, it isn't The question of workers manage­ therefore he viewed as a by-product of even true of the highly monopolized ment/control has become a boundless the theoretically rich, as well as histor­ economy of the advanced capitalist sea of confusion and confusionism. It ically portentous, debate over industri­ countries. Computerized stock control has also become a common demand alization and planning in the Soviet is now common in the U.S. and West voiced by would-be leftist opponents of Union during the 1920s.) The rapid Europe. When someone goes to one of traditional Stalinist bureaucratic com­ development of computer technology in the larger su per markets the items they mandism. For example, the manifesto recent years enormously increases the purchase are recorded at the checkout issued by the Federation of Socialist potential scope and accuracy of input­ counter where a photoelectric cell reads Clubs, formed in Moscow last summer, output analysis. It is thus possible to the product code on the package. This demands the "transfer of the social draw up an investment plan that is both information is fed into a complex means of production (factories) to a sys­ internally consistent and in line with distributional network linking factories tem of leasing self-managed enterprises the democratically determined overall to stores. A socialist economy would be to collectives," while at the same time growth of investment and consumption. even more efficient in constantly adjust­ calling for the "democratization of the As previously indicated, the current ing production to the shifting needs and planning system" (International View­ output mix of consumer goods and serv­ wants of society. point, 9 November 1987). Needless to ices should he determined through a Adjusting supply and demand is of say, the Socialist Clubs' manifesto centralized market mechanism. How course critically dependent on how does not indicate how it is possible to would this work'? Take the clothing relative prices are set. A dress which is combine self-managed enterprises with industry, for example. A centralized immed iatcly sold out of the stores at $20 democratized economic planning. distribution agency would be responsi­ may be unsalable at $40. How then The principles of socialist economic ble for supplying a number of stores and should its price be determined? In gen­ organization sketched out in the pre­ consumer cooperatives. In turn it would eral prices should be proportional to the vious section define the nature and lim­ command the resources of various cost of production, i.e., if one style dress its of workers control at the point of clothing factories. If a particular style or costs twice as much to produce as production. Workers would certainly elect their own managers and make cer­ tain other managerial decisions (e.g., the organization of training programs). A small fraction of total investment-say, 10 percent-can be placed at the dis­ posal of individual workers councils and their decisions worked into the upcom­ ing investment plan. But to have in­ dividual workers councils determine production and prices is to recreate the anarchy of the market. Nor can enter­ prise councils decide the scope and com­ position of investment, since particular groups of workers cannot have unlim­ ited claims on the state budget, i.e., on the collective social surplus. In response to the first article in this series, "The Bankruptcy of the Yugo­ slav Model," we received a thoughtful letter from WV reader Bob Mont­ gomery. He pointed out that Marx's "Critique of the Gotha Program" (1875) Interfata MTI via Eastfata took aim at the conception of the prole­ Gorbachev (third from left) meets with heads of Warsaw Pact states. tariat as an agglomeration of groups of Economic crises, a product of Stalinist mismanagement, national autarky individual workers to be amalgamated and imperialist pressure, now wrack much of East Europe. into state-supported producer cooper- 21

allowing workers to elect managers. And the Kremlin tops are willing to let Polish socialist economist workers make certain decisions over Oskar Lange (left) enterprise operations, especially when developed those decisions are determined by the theoretical model need to maximize profits. As the Yugo­ for combining slav experience demonstrates, workers market calculation management and "market socialism" with centralized weaken the political consciousness of management. the proletariat and intensify divisions Soviet-educated especially along generational and na­ economist tional lines. Wassily Leontief pioneered input­ The advocates of workers manage­ output analysis, ment, East and West, have a con­ a key tool for ception of the economy that is funda­ central planning, mentally technologically stagnant. It is here that the outlook of syndicalist­ New York Times minded radicals converges with that of atives. This was the 19th-century ver­ put it, class consciousness of the revolu­ Stalinist bureaucrats (both old-line and sion of workers' self-management. tionary proletariat has nothing in reform-minded) as well as of bourgeois Marx reminded philistine "social­ common with the syndicalist fetish of ideologists. All assume that the same ists" that resources for the replacement workers managing their"own" means of workers do the same work in the same and expansion of the means of produc­ production and exchanging their prod­ factories or offices year after year. In tion, provision for the aged and others ucts with other groups of workers. striking contrast, the Marxist concep­ unable to work, expenditure on schools Many would-be leftist opponents of tion of socialism is of an economy so and hospitals, etc., must be deducted the Kremlin oligarchy, such as Boris technologically dynamic that mechan­ from the total social product before Kagarlitsky, principal organizer of the ical and mindless labor rapidly dimin­ distribution to individual workers. He Federation of Socialist Clubs, view ishes and is replaced by creative scien­ pointed out that "what the producer is enterprise self-management, by weak­ tific and artistic activity: deprived of in his capacity as a private ening the power of the nomenklatura "To economise on labour time means to increase the amount of free time, i.e. individual benefits him directly or indi­ (ruling bureaucratic caste), as the time for the complete development of rectly in his capacity as a member of path of least resistance to workers the individual, which again reacts as the society." As Marx indicated, the differ­ democracy. In fact, enterprise self­ greatest productive force on the produc­ ence between socialism and capitalism is management can serve as an effective tive force of labour .... Free time­ which includes leisure time as well as that the worker functions not as a diversion from a genuine struggle for time for higher aetivities·--naturally private producer of labor but as a mem­ soviet democracy. The Ciorbachev re­ transforms anyone who enjoys it into a ber of the social collective. As our reader gime itself has made a big to-do about different person, and it is this different

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person who then enters the direct price-gouging. stopped at the last possible moment by process of production. The man who is In the mid-'70s the East European General Jaruzelski's countercoup in being formed finds discipline in this process, while for the man who is countries were hit by a double blow December 1981. But the debt-ridden already formed it is practice, exper­ from which (with the exception of East Polish economy, made worse by Jaru­ imental science, materially creative and Germany) they have not recovered to zelski's market-oriented reforms a Ia self-objectifying knowledge, and he this day. The world capitalist depression Gorbachev, has once again produced contains within his own head the accu­ of 1974-75 collapsed their export mar­ widespread worker unrest. And once mulated wisdom of society." -Karl Marx, The Grundrisse ket in the West, while the cost of fossil again Walesa, the Gdansk agent of "free (edited and translated by fuel and other raw materials (largely world" imperialism, is seeking.to exploit David McLellan [1971]) (fortunately, without much success) the This conception of a communist future bankruptcy of Polish Stalinism. presupposes a glohal economic order, It is the Kremlin oligarchy which is which requires the appropriation of the ultimately responsible for the political productive resources of the advanced and economic bankruptcy of its East capitalist countries through proletarian European clients. It was, after all, J. V. revolution. Stalin who formed present-day East Europe in his own image-bureaucrat­ Toward a Global Socialist Order ically deformed workers states. And it is The economic crises now wracking the Soviet leadership which determines much of East Europe are a direct the basic economic order in East consequence of the Stalinist dogma Europe. In the mid-late '70s the Brezh­ of "socialism in one country." The nev regime encouraged Gierek's Poland Soviet bloc economic organization, the and Kadar's Hungary to borrow heavily Council of Mutual Economic Assis­ from the West so as to ease the financial tance (COMECON, also abbreviated burden on Russia. Under Gorbachev as CMEA), is less integrated than the Soviet economic relations vis-a-vis East Common Market of capitalist West Europe have become even more nar­ Europe. COMECON trade is only one rowly nationalistic and shortsighted. step more advanced than barter. For Michael Marrese, an American special­ example, if East Germany runs a trade ist in Soviet bloc economics, noted a few surplus with Poland, it cannot use the years ago: resulting credit balance to increase its " ... the Soviets seem to have aban­ imports from Hungary. doned a multilateral approach to eas­ ing shortages of energy and raw materi­ As a consequence of the bureauc­ als among CMEA countries. It appears racies' refusal to coordinate econom­ that the Soviets intend to negotiate ic policies across national borders, bilaterally with individual.East Euro­ COMECON trade is based on world pean countries and adjust their long­ term supply commitments with respect market prices (with a time lag and to energy and raw materials, depending subject to negotiation in special cases). Worl on the relative attractiveness of the This practice is adhered to even when Leon Trotsky in 1917, co-leader with exports which each country offers. world market prices are wildly distort­ Lenin of the BOlshevik Revolution. Those countries more forthcoming with ed by international cartels, such as the food, industrial consumer goods, or high-quality, sophisticated machinery Seven Sisters/OPEC manipulation of imported from the Soviet Union) sky­ will find it easier to secure adequate the world oil market. Recent proposals rocketed. To maintain employment and supplies of Soviet energy and raw by Aganbegyan and others to even­ living standards, the East European Sta­ materials." tually make the ruble convertible will linist regimes turned to the loan sharks -International Organization, Spring 1986 only intensify the disruptive effect of of Wall Street, the City of London and the world market fluctuations on the Frankfurt Bi)rse. East Europe's debt Such is the logic of "socialism in one COMECON. to Western bankers increased five/old country." During the early 1970s, when the between 1974 and 1980, from $11 to $55 The COMECON practice of basing world market price of oil was inflated by billion. To meet their debt payments trade on world market prices is funda­ 400 percent, the Soviet Union was sell­ Poland, Hungary and Yugoslavia have mentally irrational, economically de­ ing oil to East Europe at an ever smaller since 1980 imposed ever more severe stabilizing and politically divisive. It fraction of the OPEC price. As a result austerity programs dictated by the makes no sense at all. Relative costs of the East European bureaucrats squan­ world bankers' cartel, the International production in East Europe and the dered energy instead of conserving Monetary Fund (IMF). Soviet Union are radically different it. New factories in Poland, Hungary In Poland the economic crisis led to from those prevailing in the capitalist and East Germany were designed to the brink of counterrevolution. The world. Why, then, doesn't COMECON use energy as if cheap oil was a perma­ powerful Catholic church-one of set prices proportional to costs of nent condition. Then in 1975-76 the whose sons, Karol Wojtyla of Krakow, production? Because the nationally Soviet Union raised oil prices within became Pope John Paul II in 1979-was based bureaucracies have no control COMECON by 70 percent and also cut able to mobilize much of the working over production costs in their "social­ back its oil and natural gas shipments class through the "free trade union" ist" trading partners. The Kremlin appa­ to East Europe so as to sell more on Solidarnose. Lech Walesa and the other ratchiks wouldn't dream of giving the the world capitalist market, taking clerical-nationalist leaders of Solidar­ East Germans some control over pro­ advantage of the Seven Sisters/OPEC nose made a power bid only to be duction costs in developing Siberian oil 23

Hungary, 1956: Crisis of "de-Stalin ization" leads to proletarian political revolution as Hungarian army units go over to Insurgent workers councils.

fields. In turn, the East Berlin Bonzen European countries. sucking capitalist bankers. Imperialist do not allow the Muscovites to influ­ Proletarian political revolution in economic warfare against East Europe ence costs and internal prices for elec­ East Europe, to oust the bureaucratic would be transformed into class war­ trical machinery in Leipzig and Erfurt. caste which usurped political power fare within the heartland of world So Russia and East Germany trade oil from the Soviet workers and turned its capitalism. and machinery on terms set by the back on Leninist internationalism, will The Trotskyists do not propose to Rockefeller empire and Siemens! raise on its banner: repudiate the ruin­ replace the dogma of socialism in one Stalinist nationalism thus intensifies ous debt to Western hankers. The Sta­ country with that of socialism in half the pressure of the capitalist world mar­ linist regimes in East Europe could not a continent. As long as Wall Street ket upon and within the Soviet bloc. The conceive of such a measure--indeed, financiers, German industrialists and socialist economic integration-espe­ they have increasingly become local col­ Japanese zaihatsu own most of the pro­ cially through large-scale investment lection agents for the 1M F-·because ductive wealth on this planet, the com­ projects-of East Europe is a vital ne­ they cannot withstand the inevitable munist vision of a classless and stateless cessity not only to raise productivity but imperialist retaliation (e.g., trade boy­ society cannot be realized anywhere. As to counter imperialist economic sub­ cotts). However, socialist economic in­ long as world imperialism exists, the version and warfare. For example, a tegration would make East Europe less shadow of nuclear Armageddon will major research effort, pooling the tech­ dependent on Western imports and hover over mankind. The only road to a nological resources from East Berlin credits, while revolutionary workers future of peace, material abundance, to Novosibirsk, might make a break­ governments in East Berlin, Warsaw social equality and personal freedom is through in producing cheap synthetic and Moscow would have the moral au­ the road of Lenin and Trotsky, the road oil. Such a development would signif­ thority to appeal to West European and of international proletarian revolution icantly reduce import costs for the East American workers against the blood- leading to a global socialist order..

Correspondence for: Address to: International Spartacist Lega Trotskista d'ltalla , ., .... Walter Fidacaro C.P. 1591 Tendency Directory 20101 Milano, Italy Spartacist League/U.S ...... Spartacist League Correspondence for: Address to: Box 1377 GPO Ligue Trotskyste de France ... Le Bolchevik, BP 135-10 New York, NY 10116, USA 75463 Paris Cedex 10, France Trotskyist League of Canada ...... , Trotskyist League Spartacist League/Britain . .... Spartacist Publications Box 7198, Station A PO Box 1041 Toronto, Ontario London NW5 3EU, England M5W 1X8, Canada Trotzkistische Liga Spartacist League of Deutschlands ...... Verlag Avantgarde Australia/New Zealand ...... Spartacist League Postfach 11 02 31 GPO Box 3473 2000 Hambu rg 11, West Germany Sydney, NSW, 2001, Australia 24 reprinted from Workers Vanguard No. 455, 17 June 1988 In Honor of Christian Rakovsky If the rehabilitation of Bukharin and Rykov was long expected, the same can­ .' T" not be said of Christian Rakovsky. From 1923 to 1934, Rakovsky was a central leader--second only to Trot­ .' sky-of the Bolshevik-Leninist Opposi­ tion to the Stalinist bureaucracy. Three years after the 1938 Moscow Trial, where he stood in the dock, he was shot. Notably, the 25 March Novae Vremya carried a eUlogistic piece on Rakovsky, even mentioning that he had been expelled in 1927 for participation in "the Trotskyist opposition." The article described his courageous behavior in Stalin's prisons, where he told an NKVD man: "So, I'll be dead soon; I'll be a corpse .... Some day the corpses will start to talk." Born in 1873 in Romania of Bulgar­ ian parents, Christian Rakovsky went on to playa leading role in the revolu­ tionary movements of Bulgaria, Roma­ nia and Russia (and was also active in the French, Swiss and German move­ ments), following his first arrest at age 14. Six years later he was a delegate to the Zurich congress of the Sec­ ond International. When the Bulgarian Social Democracy split into "broad" I and "narrow" wings, paralleling the split Veteran revolutionary Christian Rakovsky (left). with Trotsky in 1927, was the second leading figure in the Left Opposition. between Mensheviks and Bolsheviks in Russia, Rakovsky sided with the Tes­ on the other." When, while Soviet friends-be it even comrades of thirty nyaki, the "narrow" socialists who ambassador in Paris in 1927, he signed years of struggle. Let every Bolshevik insisted on a revolutionary cadre or­ an Opposition statement calling on say to himself: 'A sixty-year-old fighter ganization. His authority among the with experience and prestige left our workers and sold iers in the capitalist Romanian workers was so strong that ranks_ In his place I must win three countries to defend the USSR in case of twenty-year-old ones and the gap will when he was arrested in 1909 they war, he was declared persona non grata be filled: Among the twenty-year-old went into the streets and took on the and expelled by France. Shortly there­ ones, new Rakovskys will be found Bucharest police in a bloody battle. He who, with us or after us, will carry for­ headed the first Soviet government in after, he was declared persona non grata ward our work." by Stalin as well. the Ukraine, and was elected to the While Bukharin's and Rykov's works Executive of the Communist Inter­ Deported from one internal exile to have now been made available to the national, whose founding proclamation another after the suppression of the Soviet public, Rakovsky's writings re­ he wrote. Left Opposition, his health broken, main banned to all but a handful: his Rakovsky was one of the first Bol­ demoralized by Hitler's unchallenged powerful indictment of the Stalinist shevik leaders to openly attack Stalin's rise to power, he finally capitulated to bureaucracy, his eloquent defense of bureaucratic methods, particularly over Stalin in 1934. In "The Meaning of Leninist internationalism, his leading his chauvinist treatment of the non­ Rakovsky's Surrender" (March 1934), role as Trotsky's comrade in the Left Russian nationalities. At the 12th Party Trotsky wrote: Opposition, represent a dagger at the Congress in 1923, Rakovsky warned of "Rakovsky's declaration is' the expres­ throat of Stalin's heirs in the Kremlin. "the fundamental discrepancy being cre­ sion of a subjective impasse and of pes­ The Kremlin seeks only to "rehabil­ simism_ Without exaggerating by a ated daily and growing larger and larger hair's breadth, we can sav that Stalin itate" Rakovsky the victim. We honor between our party, our programme on got Rakc-.ysky wit h the aid of Hiller., __ the memory of Christian Rakovsky, the one hand, and our state apparatus "We have no time to weep long over lost Left Oppositionist and fighter.. 25

choice to fill that emptiest and most his gentleness and humaneness, Bukha­ Bukharin ... glaring of "blank spaces" in the Gorba­ rin for a long time did not understand chev regime's restructuring of Soviet the historical need for the country to (continued from page 32) make a sharp spurt forward in building history: who opposed Stalin'! With up its economic might." "market socialism" increasingly seen as Red Army and the murder of millions of Leon Trotsky, who was the principal the way to reinvigorate the flagging Soviet Communists. Half a century "defendant" in absentia in the Moscow Soviet economy, Bukharin is identified later, on 4 February 1988, the Supreme Trials and was felled by one of Stalin's with the New Economic Policy (NEP) of Court of the USSR concluded that assassins in Mexico City in 1940, the 1920s and hailed as the "forefather "unlawful means" and "falsified" evi­ remains un-"rehabilitated." (The June of perestroika." There is a desperate dence had been used in the 1938 Mos­ 13 Soviet Supreme Court decision need to find some historical alternative cow Trial. All but one of the convic­ cleared "everyone involved" in the Mos­ tions have now been overturned. The to the discredited Stalin on the same cow Trials. Yet Trotsky and his son one left standing is that of Genrikh political Kround of "socialism in one Leon Sedov had been convicted, in Yagoda who, until his own arrest, had country." In his speech on the 70th anni­ absentia, of "terrorism" in the same tri­ been Stalin's chief hatchet man and versary of the Russian Revolution, Gor­ als as Zinoviev, Kamenev, Radek and torturer. On June 13, the Soviet Su­ bachev praised Bukharin for playing Pyatakov.) Glasnost notwithstanding, preme Court rehabilitated Zinoviev, "an important part in defeating Trot­ Trotsky cannot and will not be restored Kamenev, Radek and Pyatakov and 29 skyism ideologically," as opposed to to his rightful place by Stalin's heirs, the other leading Bolsheviks framed up in Kamenev and Zinoviev, who made com­ bureaucracy whose intransigent foe he the 1936-37 Moscow Trials and then mon cause with Trotsky. remained until his death: Trotsky killed. Izvestia declared, "N ow it is clear Gorbachev. however, criticized the fought for Lenin's program of world ... that they are not guilty before the Right Opposition for having "underrat­ socialist revolution which was and law, the state or the people." ed the practical significance of the time remains anathema to the Stalinists. factor in building socialism in the 30's," After Bukharin's execution, his Bukharin, on the other hand, was part and he explicitly defended Stalin's col­ young wife, Anna Larina, the daughter and parcel of the bureaucracy, a fervent lectivization of agriculture. A subse­ of another Old Bolshevik, spent the next proponent of Stalin's nationalist dogma quent article in Literaturnaya Gazeta 20 years in prison camps and in exile. of "socialism in one country." Now they (9 December 1987) was more explicit: Courageously she continued to fight to want to make of Bukharin the embodi­ "Today. one can assert that if Trotsky fulfill her husband's last request, that he ment of "Stalinism with a human face," had taken the helm of the Party it could who fought Stalin's excesses but also be exonerated before future genera­ have expected even greater ordeals, tions. "For me," the 73-vear-old Larina ordeals fraught with the loss of socialist opposed the "Trotskyite heresy." recently said. "time doe~n't exist. Truth gains-especially because Trotsky did The current wide-ranging debate in exists." After she was granted a private not have a clear and scientific program the Soviet Union over the "Stalin of building socialism in the USSR. question" is missing the central ingredi­ audience with Khrushchev in 1962, Bukharin did have such a program; he a leading Soviet spokesman admit­ had his own vision of goals for the Party ent of the foundation of the Soviet state: ted: "Neither Bukharin nor Rykov, of as a whole. However, despite all his per­ internationalism. For their grandpar­ course, was a spy or a terrorist." Yet it sonal attractiveness, his great intellect, ents cared, passionately, about world took 50 years for Stalin's heirs in the Kremlin to officially acknowledge even this tiny sliver of truth. Soviet Leaders: View in Moscow So Bukharin, Rykov, Rakovskyand other Old Bolsheviks have finally been VERY juridically "rehabilitated." Today the NEGATIVE Soviet press is rife with references to the "tragic year of 1937," when they were Brezhnev arrested, as the bureaucracy seeks to disencum her itself of lies no one believes. of crimes whose immediate Khrushchev benefactors have long since perished. OKonyok and Moscow News, flagship organs of Kla.lno.l'l. feature interviews stalin with Bukharin's widow and his Prince­ ton hagiographer, Stephen Cohen. Now Cohen's biography of Bukharin is being Bukharin published in the Soviet Union under contract. Sputnik, the Soviet Reader's DiKest, highlights a biographical paean Trotsky under the headline "Glasnost, Democ­ racy, Personality." Yevgeny Yevtushen­ ko, the "poet of the possible" of the Based on 939 Moscow residents interviewed by telephone May 7, 8, Soviet bureaucracy, has dedicated a 14, and 15 by The Institute of Sociological Research of the Soviet poem to him. The Soviet Academy of Academy of Sciences for The New York Times and CBS News. Sciences has reinstated Bukharin and Those who gave neutral answers are not shown. pronounced him "in tune with our New York Times/27 May 1988 thoughts today." Why? Recent Moscow public opinion poll shows Bukharin is now most highly Nikolai Bukharin is seen as the best regarded past Soviet leader since Lenin.

~ IIIIIIII1111111111 26

revolutionary offensive. Bukharin led the Lefts who were opposed in principle to the signing of the Brest-Litovsk treaty with Germany in May 1988 1918, counterposing revolutionary war against Germany at a time when the Soviet state scarcely had an army to speak of. The Stalinists falsely attribute this position to Trotsky. In fact, Trot­

¢I0TO Jlbsa sky's difference with Lenin was tacti­ WEPCTEHHIIIKOBA H M3 apll14Ba A M JlAP\I1HOIiI cal-whether to accept the humiliating ~Qutnik, the German peace terms outright or to force Reader's Digest the Germans to break the truce and thus of the Soviet Union, runs make it clear to the international prole­ glowing article tariat that the Bolsheviks had no other on Bukharin alternative. In the upshot, Lenin was under the proved correct, as the Germans swept heading over the front and imposed much o HHKOJIae "Glasnost, ~YXAPI1HI: - harsher terms than had originally been «Jlt06HMue lIapTHH~). Democracy, l(JIeHe 11oJlKrfitopo IlK. proposed. In the final vote in the Cen­ penpeCCHpoBIlHIIOM npH Persona lity ." C'rLTIHHe. tral Committee, Trotsky abstained in KOppecIIOH)1eHT *YPHaJla (OroHeK)) order to allow Lenin to win against fieCe)1YeT c ero B~BOH AHMOU JIAPHHOH Bukharin. When it became clear that the world revolution was not around the corner, Bukharin, in knee-jerk reaction, antici­ socialist revolution-they lived day-to­ ten on the eve of his final illness, pated the nascent bureaucracy's con­ day on the hope of extension of the rev­ characterizing the key party leaders: ciliationism toward hostile class forces. olution, the key to the significance and "Bukharin is not only a most valuable By 1922 he (and Stalin) were advocat­ survival of the newborn Soviet workers and major theorist of the Party; he is ing the abandonment of the state mo­ republic they had fought and sacrificed also rightly considered the favourite of the whole Party. but his theoretical nopoly over foreign trade, one of the for. Today this is presented as an eso­ views can he classified as fully Marxist chief economic bulwarks of the isolated teric "Trotskyite heresy" of "export of only with great reserve. for there is workers state against imperialist en­ revolution." So even the pride of Soviet something scholastic about him (he has croachment. This prompted Lenin to Afghanistan war veterans in having ful­ never made a study of dialectics, and, I think, never fully understood it}." charge him with "acting as an advocate filled their "internationalist duty"-as of the profiteer, of the petty bourgeois best they understood it under the stodgy The reference to Bukharin as the party's and of the upper stratum of the peas­ conservative Brezhnev-is now subject favorite is quoted with nauseating regu­ antry in opposition to the industrial pro­ to deprecation as a "mistake" of the "old larity in the Soviet press these days, as letariat" ("Re the Monopoly of Foreign thinking." though it can somehow retrospectively Trade," December 1922). Recently, an important article by bestow Lenin's mantle on him. It is no accident that Bukharin was not per­ Otto Latsis, deputy editor of the Soviet NEP and Perestroika party journal Kommunist, argues that ceived by any of his colleagues as a pos­ Bukharin was the real heir to Lenin and sible successor to Lenin. Lenin observed Bukharin's biographer Stephen Co­ that the year 1929, when the Right earlier: "We know how soft Comrade hen credits him with being the "fore­ Opposition was smashed by Stalin, rep­ Bukharin is; it is one of the qualities father of perestroika": resented a "counterrevolution" (New which endears him to people, who can­ "Anti-Stalinism is an essential part of York Times. II June). But there are not help liking him. We know that he Gorbachev's program. Perestroika is an clearly a lot of problems with clevating has been ribbed for being as 'soft as effort to dismantle the system created wax.' It turns out that any 'unprinci­ in the thirties. Bukharin was the real Bukharin to some kind of "Anti-Stalin." defender of NEP ... the idea of cooper­ Not only did Bukharin not fight Stalin, pled' person, any 'demagogue,' can leave ative socialism, the role of the market, this "gentle" and "humane" man was for any mark he likes on this 'soft wax'." the role of private farming, the role of many years Stalin's chief ideologue It was this impressionistic, scholastic competition .... " -New York Times, 19 January and henchman. And when the "Great quality that shifted Bukharin from the Leader" turned against him, he capitu­ extreme left to the extreme right of the The NEP was a temporary retreat after lated with scarcely a whimper. As for party spectrum in a matter of several the devastation of the Civil War in Bukharin's "program of building social­ years. Bukharin was scarcely 30 years a backward, overwhelmingly peasant ism," it would have left the Soviet Union old when the revolution occurred. His economy in which industry had broken a backward, peasant-dominated coun­ theoretical works to that time had been down and was utterly disorganized. try, easy prey for counterrevolutionary characterized by a rigid ultraleftism: a Perestroika is an attempt to regulate the forces within and hostile imperialist Luxemburgist opposition to Lenin on Soviet economy through market forces enemies without. the right of national self-determination, and "enterprise competition," with po­ an anarchist impulse to dismiss the tentially far-reaching consequences of Like "Soft Wax" need for a state following the proletar­ dismantling central planning, the cen­ ian revolution. a tendency to collapse terpiece of the socialized economy_ In his 2 November 1987 speech. Gor­ the program of world revolution into It was Trotsky, not Bukharin, who bachev quoted Lenin's Testament, writ- an immediate perspective of military- first proposed what became known as

-... "-.~" .. """,,, .,'" ",," "... "." ." ... "" ,..... "'-,,.. _-,,-, .. ,,',. ,., ..... " " .. " ...... 27

1 '"." ~n'a" not: i~ ~figh~t:'tor::tlie' conquest of Socialism Through power. ... "The lever of economic construc­ tion is of tremendous significance. World Revolution Without a correct leadership, the dic­ From Castro's Cuba to Gorba­ "The new doctrine proclaims that tatorship of the proletariat would be chev's Russia, the Stalinist bureaucra­ socialism can be built on the basis weakened; and its downfall would deal cies repudiate international proletar­ of a national state if' only there is no a blow to the international revolution ian revolution in the name o.f'building intervention. From this there can from which the latter would not "socialism in one country. " This is the and must follow (notwithstanding all recover for a good many years. But the most decisive evidence of their repu­ pompous declarations in the draft conclusion of the main historical diation of the Leninist program of program) a collaborationist policy struggle between the socialist world the 1917 October Revolution, which towards the foreign bourgeoisie with and the world of capitalism depends declared itself' to the wor/d's workers the object of averting intervention, on the second lever, that is, the world and oppressed as the first, but only the as this will guarantee the construc­ proletarian revolution. The colossal first, step on the road to the over­ tion of socialism, that is to say, will importance of the Soviet Union lies in throw of capitalism internationally. In solve the main historical question. that it is the disputed base of the world his 1928 "Critique of the Draft Pro­ The task of the parties in the Comin­ revolution and not at all in the pre­ gram of the Communist Interna­ tern assumes, therefore, an auxiliary sumption that it is able to build social­ tional," Trotsky explained how the character; their mission is to pro­ ism independently of the world Stalinists' nationalist perspective en­ tect the U .S.S. R. from intervention revolution. " dangered not only the world proletar­ iat but also the Soviet state. -Leon Trotsky, The Third International After Lenin (1928)

NEP, in February 1920, in the form of a later Lenin put forward a similar plan, "seriously and for a long time." Lenin "tax in kind" based on a percentage of which became the core of the NEP. In happened to be (favorably) quoting production, to replace the forced requi­ an attempt to lend Lenin's authority another speaker, who argued it meant sitioning of surpluses from the peas­ to perestroika, supporters of "market 25 years. "I am not that pessimistic," antry necessitated by the harsh condi­ socialism" claim that he saw NEP as replied Lenin, referring in the same tions of civil war-the policy of "war defining the transition to socialism, cit­ paragraph to NEP as a "retreat." Ear­ communism." While Trotsky's proposal ing his statement (at a May 1921 party lier in the debate he emphasized: was defeated in the Politburo, a year conference) that the NEP was meant "We tell the peasants frankly and hon­ estly, without any deception: in order to hold the road to socialism, we are mak­ ing a number of concessions to you, comrade peasants, but only within the stated limits and to the stated extent; and, of course, we ourselves shall be the judge of the limits and the extent." It took far less than 25 years to approach the limits of the NEP. On the eve of his final, incapacitating illness in late December 1922, Lenin made a bloc with Trotsky against the developing bureaucracy. One of the issues in the bloc was the need to proceed urgently with planned industrialization. He com­ municated to the Politburo that Trot­ sky's proposal to grant broad legis­ lative powers to the State Planning Commission (Gosplan) was "a sound idea," and "I think we can and must accede to the wishes of Comrade Trot­ sky." However, Stalin, Bukharin & Co. greeted the proposal for a five-year plan "with mockery in the spirit of the petty bourgeois who fears 'a leap into the unknown'" (Leon Trotsky, The Revo­ lution Betrayed [1936]). At the 12th Party Congress in 1923, Trotsky gave a vivid exposition of the "scissors crisis," showing a sharp rise in industrial prices

Wide World over agricultural prices. This was a Stalin's forced collectivization at its height: Banner calls for "Liquidation of danger signal: if there were not suffi­ Kulaks as a Class." Left Opposition advocated voluntary collectivization with cient manufactured goods to exchange the incentive of tractors produced by planned industrial growth. for agricultural produce, the peasants 28

now ascendant bureaucracy. The early NEP legislation, drawn up under Lenin's direct guidance, while allow­ ing free trade in agricultural produce, severely restricted the hiring of labor and acquisition of land. However, in 1925 these restrictions were greatly lib­ eralized. Thus Stalin/ Bu kharin 's post- 1925 policies were far more permis­ sive toward agrarian capitalism than Lenin's NEP. Against these policies, the Left Opposition called for increased taxation of the kulaks to finance industrialization and for "the system­ atic and gradual introduction of this most numerous peasant group [the middle peasants] to the benefits of large-scale, mechanized, collective agri­ culture" (Platform of the Opposition [1927]). The Left Opposition advocated speeding up the tempo of industrializa­ tion not only to relieve "the scissors cri­ sis," but also to increase the social weight of the proletariat. For the Trot­ skyists, socialist construction within Russia wa~ linked to the spread of proletarian revolution internationally. Against this Leninist perspective, the bureaucracy signaled its seizure of power when Stalin proclaimed the pos­ sibility of building socialism in a single country. Following the defeat of the 1923 German Revolution, Bukharin pro­ pounded the theory of the "stabiliza­ tion of capitalism," denying the pros­ pect of the international extension of the revolution "perhaps for a consid­ erable time." The erstwhile advocate of revolutionary war became the hatchet man for the attack on Trotsky's per­ manent revolution, denouncing it for sowing "the seeds of doubt about the possibility of building socialism in one country." The idea that socialism-a classless society requiring qualitatively Max Alpert higher levels of production than even Magnitogorsk iron and steel complex being constructed in early 1930s. As contradictions of NEP came to a head, Stalin undertook brutal, forced-draft the most advanced capitalism--could industrialization. be built in one country. moreover one as backward as Russia, was so f1agrantly would begin hoarding and withholding encouraging the petty-bourgeois "Nep­ anti-Marxist that not only Lenin, but foodstuffs from the cities. men" (speculators and entrepreneurs) Stalin and Bukharin themselves, had Addressing the Fifth Congress of the had become part of a full-scale assault always denied it. Communist International in 1924, even on the principles of socialism. The year Bukharin acknowledged that the NEP 1924 marked the consolidation of power Bukharin the Anti-Stalin? had not been intended as a long-term by a bureaucratic layer in the Soviet The "gentle," "humane" Bukharin policy: party and state, a political counterrevo­ threw himself into the struggle against "The opinion prevails abroad that NEP lution which usurped control from the the Leninist Left Opposition with a vin­ was introduced in order to preserve hands of the proletarian vanguard. dictiveness and viciousness which at the power; and so indeed it was. But later we became convinced that NEP was Bukharin grotesq uely urged the peas­ time surpassed even Stalin's. It was more than a simple manoeuvre." antry, "Enrich yourselves!" and de­ Bukharin who initiated one of the hall­ -cited in E. H. Carr, Socialism in clared that socialism would proceed at marks of the Stalini~t method of One Country, Vol. 3 "a snail's pace." Kulaks and Nepmen "polemic," dredging up disparaging In this casc, "we" was Bukharin/Stalin, were welcomed into the party, where quotes from Lenin out of context to use for whom conciliating the peasantry and they became a significant wing of the for character assassination. In 1925, 29

Bukharin admitted to Trotsky, "We have no democracy because we are afraid of you." At a November 1926 party conference Bukharin railed at the J oint Opposition of Trotsky / Zinoviev / Kamenev in the language of an Ortho­ dox priest, demanding the groveling confessions which were to become the sine qua non of the Stalin regime: "come before the party with head bowed and say: Forgive us for we have sinned against the spirit and against the letter and against the very essence of Lenin­ ism." Stalin crowed, "Well done, Bukharin, well done. He does not speak, he slashes." When Kamenev and Zinov­ iev did "confess," Bukharin reviled them and sneered: "You have done well to make up your mind-this is the last minute-the iron curtain of history is just coming down." Thus was Trotskyism "ideologically defeated." Trotsky and other leading il I Inc. Oppositionists who refused to capitu­ Leaders of the Left Opposition in 1928: Seated, left to right: Serebryakov, late were not only expelled from the Radek, Trotsky, Boguslavsky, Preobrazhensky. Standing, left to right: party but exiled from Moscow. Bukha­ Rakovsky, Drobnis, Beloborodov, Sosnovsky. rin raised no objection. In January 1928, Trotsky and his family were placed Communists. Stalin saw no other manner of Bertolt Brecht's Galileo. He under arrest in their Moscow apart­ recourse than to lash out with an sought to mock his persecutors, deny­ ment and forcibly evicted and deported unplanned, ill-conceived and brutal ing specific allegations while absurdly to Alma-Ata. His wife Natalia recalled, policy of forced collectivization and declaring: "I plead guilty to ... the sum "Later on, we were informed that the forced-march industrialization. total of crimes committed by this 'political direction' of the send-off had And he necessarily lashed out at his counter-revolutionary organization, ir­ been Bukharin's." Yet Stalin's "iron cur­ erstwhile allies of the Right Opposi­ respective of whether or not I knew of, tain" was soon to fall on the head of tion. Subjected to the same treatment he whether or not I took a direct part in, Bukharin as well. In a matter of months, had earlier meted out to. Trotsky, any particular act." the head of the Right Opposition was Bukharin not only capitulated but Bukharin supporters like Cohen call secretly appealing for a bloc with the crawled. He disowned his pro-peasant this his "finest hour." But if he did not Left Opposition against Stalin, saying in policy and his opposition to collectiv­ grovel in the pitiful manner of the terror, "He will strangle us-He will slay ization with grotesque paeans to Sta­ rest of the "defendants" in this show us." Trotsky was adamantly opposed to lin's infallibility, even outdoing Stalin in trial, he did, nevertheless, confess. In a political bloc, insisting that the eco­ his praise for a policy he opposed. A his book, Nikolai Bukharin- The Last nomic program of the Right Opposi­ recent letter to the New York Times Years (19150), Roy Medvedev quotes tion was the more immediate threat to (28 February) points out that only Bukharin's abject confession to the 17th the preservation of proletarian state eleven days before Stalin's cynical Party Congress in 1934. when the noose power. article, "Dizzy With Success," which was not yet hanging over his head and Bukharin's policy fueled the forces of tried to lay the blame for the cata­ that of his family: "Comrade Stalin social counterrevolution in the Soviet strophic tempo of the collectivization on was entirely correct in speaking out Union. The policy of "enriching" the lower-level cadre, Bukharin wrote an so eloquently, making brilliant use kulaks predictably led not only to the article for Pravda (19 February 1930) of Marxist-Leninist dialectics, against exacerbation of class distinctions in the entitled "Great Reconstruction," which many of the theoretical premises of countryside, as the poor peasants were happened to be the last defense of rightist deviation which I myself had virtually reduced to their prerevolu­ unrestrained collectivization. previously formulated." After quoting tionary status as sharecroppers, but also For a few years, Stalin "rewarded" this, Medvedev comments: "Bukharin to blackmail of the cities by the kulaks. Bukharin for his good behavior. For a could scarcely have been sincere in say­ Meanwhile, the Nepmen had continued while he was editor of Izvestia. In 1936 ing all this but sometimes it is necessary to grow in strength: at the end of 1926, he drafted the notorious "Stalin Con­ to act against one's conscience." This is nearly 60 percent of the total indus­ stitution," which proclaimed the advent hardly a commendation for a Commu­ trial labor force worked in privately of socialism in the midst of the most hid­ nist leader, much less one now claimed owned small-scale industry, under the eous police-state terror. Having au­ to be the leading opponent of Stalinism. grip of petty capitalists who controlled thored what was deemed to be the "most supply and distribution. By 1928, the democratic constitution in the world," Return to the Road of kulaks were organizing grain strikes, Bukharin was arrested. Faced with Lenin and Trotsky! threatening to starve the cities. In Stalin's threat to murder his young What was posed in the factional Smolensk, Byelorussia kulaks were wife and son should he resist, Bukharin struggles of the '20s was the very exis­ toasting the upcoming liquidation of all verbally fenced with his accusers, in the tence of the Soviet state. It was Trotsky 30

grotesque confidence in Hitler's assur­ ance of peaceful intentions following the signing of the Hitler-Stalin pact, his destruction of the cream of the Soviet officer corps, cost the Soviet peoples millions of lives. If the policies of the Bukharinist Right Opposition had won out, there likely would have been no Soviet Union by 1941. From the 1956 Khrushchev speech "On the Cult of Personality and Its Con­ sequences," to contemporary Soviet works, Stalin is treated primarily as an aberrant, brutal personality. That he was. But, as Trotsky said, "it is not a question of a match between Stalin and Trotsky, but of an antagonism between the bureaucracy and the proletariat" ("Stalinism and Bolshevism," August 1937). It is hardly an accident that Sta­ lin's apparatus was populated by many who had been on the other side of the Basil Blackwell Inc. barricades in 1917. The chief prose­ Left Oppositionists in Siberian exile demonstrate on anniversary of Bolshevik cutor in the third of the Moscow Trials, Revolution, 1928. Banner at left says: "Turn the Fire Against the Right, Andrei Vyshinsky, was not only a Against Kulak, Nepman and Bureaucrat .... " Menshevik official in Kerensky's Pro­ visional Government, but reportedly and the Left Opposition who fought the world revolution-in China, in personally signed an order for the arrest Stalin and Stalinism, who had a pro­ Spain, in Greece-he almost succeeded of Lenin as a German spy during the gram for developing and strengthening in digging the grave of the Soviet Union reaction of the "July Days." the Soviet workers state while fighting itself. Much of the hostility to Stalin With its policies of glasnost and for its only sure defense, international within leading circles in the Soviet perestroika, the Gorbachev regime extension of the revolution. And this is Union, particularly among the mili­ is simultaneously encouraging a re­ precisely why Trotsky remains anath­ tary, derives from his catastrophic examination of Stalin's crimes against ema to the bureaucracy. In his 70th destruction of the leading cadres of the the Soviet working people and the rev­ anniversary speech Gorbachev regurgi­ Red Army in 1937, including Marshal olution they made, while trying to pur­ tated timeworn Stalinist attacks on Tukhachevsky. As many as 82,000 Red sue economic and international policies Trotsky: Army officers, including virtually all of which cut deeply against the interests of "'Trotsky and the Trotskyites negated the general staff, were slaughtered in the Soviet and international proletari­ thc possihility of huilding socialism in Stalin's purges. (Twelve years earlier, at. The Soviet Union is headed toward conditions of capitalist encirclement. Mikhail Frunze, a Civil War hero who serious internal turmoil, as the working "In foreign policy they gave priority to export of revolution, and in home succeeded Trotsky as war commissar, class seeks to defend its economic inter­ policy to tightening the screws on the died in mysterious circumstances when ests from the "market economy" and peasants, to the city exploiting the Stalin insisted he have an unnecessary austerity measures of perestroika. countrvside, and to administrative and operation.) The only revolutionary alternative to military fiat in running society." The war against Nazi Germany, in the crimes of Stalinism lies in the pro­ So now that they've stopped trying to which 20 million Soviet citizens died, gram and history of the Trotskyist Left pass Trotsky off as the agent of Hitler, understandably looms large in the con­ Opposition. The archives of Soviet his­ the Mikado and the King of England, sciousness of the Soviet population. tory must be made available to the the line is to portray Trotsky as "Super­ At a recent public appearance in the masses. There, in the record of earlier Stalin," addicted to "military fiat." But New York area, Anatoly Rybakov, struggles, they will find a revolutionary in an incisive commentary on Gor­ author of the anti-Stalin novel Chil­ answer to the problems that face them hachev's speech titled "Trotsky Still dren ()lthe Arhat, said bitterly, "It was today: the perspective of international Shrouded in Non-Personality Cult" because of Stalin that the Germans got socialist revolution to defend and (.Vew York Times, 8 November 1987), as far as Moscow .... We won the war extend the gains of October, the pro­ Christopher Wren explained that "Trot­ despite Stalin." gram of proletarian political revolution sky's theory of 'permanent revolution' Stalin's heinous crimes represented to oust the bureaucratic usurpers. As is embarrassing when M r. Gorbachev the end logic of his defense of the priv­ we wrote ten years ago in "The Cam­ says he wants to cooperate with the ileged interests of the bureaucracy, paign to 'Rehabilitate' Bukharin" (WV West." Wren added, "Trotsky's castiga­ whose overthrow of the revolutionary­ No. 220, I December 1978): "The real tion of Stalin as the 'gravedigger of internationalist program of the October historical reckoning will only come as a the revolution' was far harsher than Revolution necessitated the "liquida­ result of the proletarian political revo­ M r. Gorbachev's description of the tion" of the cadres who had led it. The lution to oust Stalin's heirs, together dictator as 'an extremely contradictory bureaucracy's anti-revolutionary poli­ with social revolution in the capitalist personality' .. ~." cies internationally reinforced the iso­ countries." Return to the road of Lenin Stalin was not only the gravedigger of lation of the Soviet Union. Stalin's and Trotsky!_ 31 reprinted from Workers Vanguard No. 452, 6 May 1988 Refuting Assassins' Slanders Honor Ignace Reiss We print below a letter to the editor of and to join with Trotsky when the the New York Times Book Review frame-ups of the first Moscow Trial and responding to a scurrilous slander of the execution of the Old Bolsheviks, Ignace Reiss, a Communist murdered together with the Kremlin's strangling by Stalin's NKVD in 1937. Similarly. a of proletarian revolution in Spain. con­ recent piece on Trotsky in the Times vinced him that Stalin's counterrevolu­ (16 November 1987) echoed the Stalin­ tionary policy threatened the survival of ist Big Lie with the disingenuous claim the USSR. For this Reiss was assas­ that "it was never proved that Stalin sinated by the NK VO near Lausanne, ordered Trotsky's assassination." Swit7erland on 4 September 1937 As the flagship organ of U.S. imperi­ (despite Kondratiev's claim he was sell­ alism, the New York Times has a long ing secrets to the Nazis in 1938). record of retailing anti-communist It was not Reiss and the courageous "disinformation," going right back to Russian Left Oppositionists who aided the hoary slander that Lenin and Trot­ Hitler's cause and endangered the sky were German agents (see illustra­ gains of the October Revolution of 1917 tion). During the infamous Moscow --centrally the collectivized property Trials in the late 1930s, its Moscow cor­ forms. It was Stalin who beheaded the respondent Walter Duranty dutifully Red Army, murdering Marshal Tukha­ parroted Stalin's deadly lies that the Old chevsky and the cream of the Soviet Bolsheviks were a pack of Nazi spies. officer corps on the eve of Hitler's in­ Whether drawn from tsarist or Stalinist vasion (they too were falsely accused arsenals. for the Times any anti­ Vladimir Klbalchlch of being German spies). Ignace Reiss Bolshevik lie is deemed "fit to print." Stalin murdered Ignace Reiss, eloquently expressed his views in an Readers are also referred to Theo­ heroic Soviet spy who embraced open letter "To the Central Commit­ dore Draper's informative article in the Trotsky's Fourth International. tee of the Communist Party of the 14 April New York Review of Books. U.S.S.R .. " dated 17 July 1937, written Kondratiev descri bed Ignace Reiss as "a a few weeks before his execution by SPARTACIST PUBLISHING K.G.B. defector who was selling impor­ Stalin's assassins: COMPANY tant military intelligence in 1938 to the "The working class must defeat Stalin highest bidder, which happened to be and Stalinism so that the U .S.S. R. 28 March 1988 Nazi Germany." In slandering Reiss as a and the international workers' movc­ Nazi spy, Kondratiev is retailing in a ment do not succumb to fascism and New York Times Book Review counter-revolution .... To the Editor: new form the universally discredited "I intend to devote my feeble forces Stalinist lie that Leon lrotsky and the to the cause of Lenin .. I want to contin­ Your recent exchange on "Stalin's Left Opposition (as well as the entire ue the fight, for only our victory­ Killerati" (March 6) contains a gross generation of Old Bolsheviks) were alI th~lt of the proletarian revolution-will historical falsehood that must not free humanity of capitalism and the agt:nts of Hitler and the Mikado. U.S.S.R. of Stalinism. remain unanswered. A letter by Vadim Contrary to the utterly unsupported "Forward to new struggles! For the claim of Vadim Kondratiev. the son of Fourth International!" ~115 September 19181 one of the N K V 0 a"assins of Reiss, Historical justice to the memory of Ignace Reiss lived and died fighting for this devoted communist demands this €fire New i.ork ~imt,t ~ communism and to del end the Soviet correction. Union. For a truthful account of the life Very truly yours, and struggle of Ignace Reiss, see the DOOUMENTS PROVE memoirs of his widow. Elisabeth Poret­ James Robertson sky, Our Own People (University of President LENINE AND TROTZKY Michigan Press, 1970). He personified cc: Leon Trotsky Museum, Coyoacan, that tendency within the Soviet appara­ Mexico tus which sought to restore the authen­ Institute for Social History. HIRED BY GERMANS tic traditions of the October Revolu­ Amsterdam Prometheus Research Library, tion, traditions betrayed by the usurping Communications Between Ber. New York Stalinist bureaucracy. Institute of Marxism-Leninism of lin and BolshevIst Govern. A Galician communist won to Bol­ the Central Committee, Communist ment Given Out by Creel.- shevism ii"l 1919, Ignace Reiss joined Party of the Soviet Union. Moscow Soviet intelligence in 1922, He was Callier.I' Lt!of/ Trolskl'. Paris finally driven to break with Stalinism Nel'O/uliollarr Hi.HUrl'. London

~ III 111111111111111111111111111111111111 111111111111111111111111111111_, ___.'11l1li1 32 reprinted from Workers Vanguard No. 455, 17 June 1988 Gorbachev Rehabilitates Leader of Rig·ht Opposition The Bukharin Dossier

Nikolai Bukharin (center) served as Stalin's ideological hatchet man against Trotskyist Left Opposition during the 1920s. (At right is Stalin's lieutenant Sergo Ordzhonikidze.)

Today Nikolai Bukharin is the most for 12 years and was president of the These three men are now accused of popular historical figure in the Soviet Communist International for three. having suddenly become 'spies' and Union since V.l. Lenin, according to a 'agents' of foreign powers, aiming to Rykov succeeded Lenin as president of destrov and dismember the USSR and recent Moscow survey. He is praised the Council of People's Commissars, cstablish capitalism .... and eulogized in article after article in head of the Soviet government. Rakov­ "Whoever tries to judge the events the Soviet press. Now a major piece by sky was a founding member of the unfolding in Russia finds himself faced the deputy editor of the Communist Executive Committee of the Commu­ with the following alternatives: (I) either all the old reyolutioll"ts--who Party's theoretical journal declares nist International. led the struggle against C/.~lr"m, built Rukharin to be Lenin's true heir. During the stormy years following the the Bolshevik Partv. achicved t hc Fifty years ago, in March 193R, death of Lenin in 1924, they became bit­ October Revolution, fed the three years Nikolai Bukharin stood amid the ornate ter political opponents. Bukharin and of civil war, established the Soviet state and created the Communist Interna­ surroundings of what had once been the Rykov were leading exponents of the tional-either all these figures, almost Nobles' Club, vilified by Stalin's prose­ Right Opposition and, for many years, to a man, were at the very moment of cutor Vyshinsky as a "mad dog" and a Stalin's allies. Rakovsky, until his ca­ these achievements, or in the years "crossbreed between a fox and a pig," pitulation to Stalin in 1934, had been a immediately following, agents of cap­ charged with being a lifetime counter­ italist states; or (2) the present Soviet central leader of the Trotskyist Left government, hraded by Stalin, has per­ revolutionary and anti-Soviet sabo­ Opposition. petrated the most heinous crimes in teur. Beside him stood Alexei Rykov, In the end, they all died victims of Sta­ world historv." -"Behind the Mosc:ow Trials" Christian Rakovsky and 18 others, ~in's terror. Bukharin and Rykov were (March 1938) defendants in the third and last of shot immediately; Rakovsky, aged 65, the frame-up Moscow Trials against was imprisoned, then shot on Stalin's The Moscow Trials of 1936-3X, and the "Anti-Soviet Bloc of Rights and orders three years later. Of this mon­ the blood purges which accompanied Trotskyites." strous frame-up, Trotsky wrote: them, resulted in the slaughter of virtu­ ally the entire leadership of Lenin's Bol­ They had been leaders of Lenin's "Bukharin has thirt\' l'ears or revolu­ party, organizers of October. Bukharin tionary work to izis' credii. Rrkov shevik Party, the decapitation of the edited the leading party organ, Pravda, a/most forty. Rakovsky nearl!' /iiiy. continued 1If! {'age 25