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Military Origins of Command Economies a DISSERTATION NORTHWESTERN UNIVERSITY A State under Siege: Military Origins of Command Economies A DISSERTATION SUBMITTED TO THE GRADUATE SCHOOL IN PARTIAL FULFILMENT OF THE REQUIREMENTS for the degree DOCTOR OF PHILOSOPHY Field of Sociology By Pavel Osinsky EVANSTON, ILLINOIS June 2007 2 © Copyright by Pavel Osinsky 2007 All Rights Reserved 3 ABSTRACT A State under Siege: Military Origins of Command Economies Pavel Osinsky This dissertation develops a war-centered theory of collectivist regimes. I argue that in a large- scale war of coalition alliances, belligerent nations launch extensive programs of economic mobilization and establish centralized institutions of economic regulation. Because exterior states are likely to restrict interior states in their access to the international markets, measures of centralization are likely to be more extensive among interior states than exterior states. Deprived of free access to global markets, even the most economically developed interior states deplete their domestic resources. Such states experience shortages of goods, social unrest, crisis within ruling elite, military setbacks, and, due to the combined effect of these conditions, state breakdown. Under conditions of economic polarization, a total collapse of authority may unleash coercive redistributive action of the lower classes directed against the better-off classes and institutionalization of redistribution through nationalization of economic assets by the state. My comparative analysis of economic and political transformations in five European nations (Austria-Hungary, France, Germany, Great Britain, and Russia) during World War One (1914-1918) supports the war-centered argument. The exterior nations that maintained access to the world economy (France and Great Britain) survived total war. The interior states (Austria- Hungary, Germany, and Russia) experienced breakdown. In Russia, where the old system of authority had become completely paralyzed, the state collapse resulted in massive redistribution of economic assets and institutionalization of the collectivist form of social organization. 4 TABLE OF CONTENTS Part I. Introduction 6 Part II. Military Origins of Command Economies (1914-1918) 38 Part III. Total War and State Breakdown (1917-1918) 155 Part IV. State Collapse and Property Redistribution (1917-1919) 252 Part V. Conclusion 306 References 323 5 LIST OF TABLES AND FIGURES Table 1. Selected Measures of Economic Regulation among five European Nations, 1914-1918 147 Table 2. Four Types of Regime Change 158 Figure 1. A Model of State Breakdown 164 6 Part I. Introduction The Rise and Demise of Collectivist Regimes One of the most dramatic features of social change in the twentieth century was the rise and demise of communist and fascist regimes. For several decades these violent and anti-liberal forms of political organization represented a mortal challenge to capitalist democracies. In the mid twentieth century, when communism was on the rise, many observers thought that capitalism was giving way to socialism, in one variety or another. Collectivism dominated, individualism was in retreat. Some scholars thought that the triumph of socialism was inexorable and wondered if capitalism had any chance to survive (Schumpeter 1942). Even in the 1980s the communist system was commonly viewed as stable and durable, albeit neither effective nor democratic. For many Western intellectuals socialism still embodied a human quest for equality and social justice. Leaders of Third World countries chose between different models of socialism as a developmental strategy. Social scientists examined pathways of transition from capitalism to socialism. These scholars would have been shocked if someone told them that in few years they would be studying the reverse transition. Predictions of the fall of communism and the triumph of free market economy were seen as coming from the realm of pure fantasy. By the end of the century everything changed. Like the fascist regimes a half century before, communist regimes became either discredited or defunct. Command economies lost in competition against market economies and most Western intellectuals abandoned their fascination with socialism. It no longer appealed to the leaders of the Third World countries. In 7 spite of the fanfare of an imminent communist paradise on Earth, the lifespan of these regimes turned out to be remarkably short. Existing Explanations of Collectivist Regimes It appears as if everything that can be said about communism and fascism has already been written. We know that collectivist regimes have been brought to power by mass social movements driven by radical ideologies. To achieve the lofty ideological goals proclaimed by their leaders, these regimes sought to subordinate all private interests to strategic goals of the state-organized collectivities. Political control and administrative regimentation permeated all social institutions and spanned the public-private divide. By enveloping individuals with a totalizing ideological discourse, authorities sought to create a new type of personality completely dissolved in a collectivity. In nations where collectivism triumphed, operations of markets were either subordinated to the national goals or suspended entirely. In partially socialized (corporate) economies, private actors continued to operate but markets have been subordinated to corporatist macro-institutional arrangements coordinating interests of the state, the employers, and the employees. In completely socialized (state socialist) economies, the state came into possession of all major productive assets of the nation and market operations have been suspended. In their ideological proclamations, leaders of collectivist regimes, particularly of the communist variety, boasted to represent a higher form of economic and political organization than the one offered by a capitalist society. They promised not only to catch up and overcome capitalist countries in economic and social arenas but also to create a society of justice, prosperity, and equality. Some of their technological achievements and social accomplishments, let it be acknowledged, were truly spectacular. In a very short period of time, the Soviet Union 8 reached military-strategic parity with the United States and took the lead in space exploration. Social welfare services, provided in most communist countries, including free education, free health care, and retirement pensions, were unprecedented in their scope and universal access. In the long run, however, collectivist economies proved to be ineffective. Being able to run mobilization campaigns around ambitious economic projects, they failed to keep their promise in providing their citizens with quality goods and services, something that market economies did much better. These seemingly mundane things proved to be decisive in the end. Communist regimes had lost economic competition with capitalism. In communist countries, not only were citizens becoming disillusioned with the system, but also the new leaders launched economic and political reforms that made these societies more compatible with the realities of both the outside world and the aspirations of their own citizens. As mentioned above, social scientists seem to know everything there is to know about collectivist regimes. Voluminous histories of such regimes have been written, read, and regularly reprinted. Do we need another study of collectivist regimes? Is there anything new that we can learn from it or something that was neglected? As unorthodox as it may seem, I think that social scientific research of collectivist states, free from ideological predispositions and hidden political agendas, is still at its initial stage. For many decades, the confrontation with collectivism prevented an objective social inquiry of structures and institutions of these societies. Unsurprisingly, many studies of collectivist regimes have been written by uncritically adopting terminology and interpretative schemes invented by ideologues of collectivism, despite the fact that most Western scholars rejected its ideology and practices. In a curious fashion, the fall of communism showed the superiority of market 9 democracies and the utopianism of the Marxian project, but left the question of why communism had emerged unanswered. Of course, historical accounts of collectivism are abundant but these narratives beg an explanation. The goal of social scientists is developing theoretically grounded explanations, not recounting history wie es eihentlich gewesen ist (as it really did happen) over and over again. Certainly, uncovering new evidence, adding new details, or bringing attention to neglected dimensions of change advance our knowledge. Still, even the most detailed histories of the collectivist states cannot substitute for a theoretical explanation of such regimes. Do not existing comparative studies, one may inquire, develop such a theory? Surprisingly, they do not. Most comparative studies of collectivist regimes do not take us beyond generalizations, albeit perceptive and insightful generalizations. None of these studies alone or even all of them together explain the origins of collectivist regimes. Their best contribution is providing building blocks for such a theory. Let’s review three such perspectives: a totalitarian perspective, a social engineering perspective, and a paths-to-modernity perspective. 1. A totalitarian perspective. To accentuate the monistic, violent, and coercive nature of the twentieth century collectivist
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