re-why did socialism fail in the soviet bloc

[MLuftmensch@xxxxxxxxxxxxxxxx (Michael Luftmensch)]

re-why did socialism fail in the soviet bloc

This question was addressed by A.G. Frank in an essay/critique
entitled, The Death of Socialism.

He makes a number of points relevent to the debate.
Below are a few excerpts. If  anyone wants the article
in its entirety, I can email it to them.

-Michael

-------------------------

To begin with, these regions entered the competitive
development race under the "socialist" flag with an enormous
historical handicap in their starting positions within the
world economy.  From a real[istic de-ideologized] world
economic perspective, the efforts in the Soviet Union and
Eastern Europe were [much] less to build "socialism" as to
catch up.  For a while, they seemed to succeed -- before they
failed. However, not so much the now universally faulted and
rejected ideological  "socialism" or political "planning" but
much more the historical economic differences and still
contemporary relations between the two parts of Europe in the
world economy is responsible for the backwardness of the East.

(..)

Little wonder then that these countries sought to break out of
this bind through "socialist" development. [Recall that Lenin
himself defined the essence of "socialism" as "electricity
plus soviets," but that he then immediately abolished the
latter]. For a while and against "all odds," including post-
war Marshall Plan help restricted to Western Europe and
continued Western CoCom and other embargoes against the East,
the East also seemed to succeed. 2/ They had the massive
increases in electric, coal, steel and oil production to show
for it. Then in 1957, the Soviet Union was the first to launch
Sputnik and so outpaced the United States also in the
"production" of engineers as to put a real scare into the
Americans. Few people regarded Krushchov as a hollow boaster
when a few years later he said "we will bury you" - in the
competitive development race in the world economy. Little East
Germany advanced to the world's 9th industrial power. By
various indeces of economic production of steel, energy, etc.
and human capital or social welfare [health and education]
several countries in Eastern Europe narrowed the gap and in
some cases even overtook countries in Western, not to mention
Southern, Europe in the 1950s and 1960s (Hofbauer and Komlosy
1992).  In the 1970s, the Soviet Union and Eastern Europe
still held their own and maintained the recently narrowed gap
in this world economic competition. Eastern Europe did so,
however, at the cost of running up debts to the West, when
recessionary lower growth rates in the West fed western loans
to the East and allowed eastern borrowing from the West. The
Soviet Union achieved some kind of parity in the arms race and
significant successes in space.  In the 1980s however, the
Soviet Union and Eastern Europe all missed the technological
train - and lost the race.

Thus, when it all came out in the wash, 70 years in the Soviet
Union and 40 years in Eastern Europe of politics and ideology
of "socialist development," literally not to mention the
"development of socialism," seem not to have substantially and
definitely changed the economic positions of these regions,
neither relative to each other, nor relative to Western
Europe.   Thus, over the entire postwar period taken as a
whole, the East-West gap and the relative positions within the
East changed but little.

(...)

The revolutions of 1989 in Eastern Europe and the breakup of
the Soviet Union were not so much responses to supposed
differences between economic and political policies between
the "socialist" East and the "capitalist" West. These
revolutions were more the consequences of their participation
in a single world economic system and its present world
economic crisis. This world economy and crisis evoked
important similarities of economic policy in the East with
those in the West and especially those of the South in Latin
America, Africa and parts of Asia.

The world economic crisis spelled the doom of the "socialist"
economies, much more than their "socialist planning" "command
economy," which is now almost universally blamed for the same.
Not unlike the "Third World" economies of Latin America and
Africa, the "second world" economies of the Soviet Union and
Eastern Europe were unable to bear the pace of accelerated
competition in the world economy during this period of crisis.
Like every previous one, this economic crisis forces one and
all to restructure economically and to realign politically. It
is true that economic command organization and political
bureaucracy  were instrumental in depriving economies in
Eastern Europe and the Soviet Union from the flexibility
necessary for adaptation to the world economic crisis and the
technological revolution and restructuring, which that same
crisis engendered elsewhere. However, many Third World
"market" economies and sectors in the industrial world and
especially the United States also failed. In the meantime,
Japan Inc. and the East Asian NICs relied on important state
political economic commands to promote their technological
advance and adjustment.

So we may return to the question of "what went wrong?." Far
>from looking for the answer only or even primarily in the
"internal" structure, policies or "socialist" ideology of the
Soviet Union and Eastern Europe, we must seek it in the
structure and development of the world economy in general and
in the recent world economic crisis and its present 5th
recession in particular.

Regarding Eastern Europe, the 1970s and 1980s - and indeed
again the 1990s - make amply clear that "socialism" was
largely irrelevant to their failure. For East European
policies - and the resultant experiences - were hardly any
different than those of the "capitalist" Latin American debtor
countries, which failed equally.

In the l970s, the countries of Eastern Europe (and "socialist"
countries everywhere) switched from ISI import substitution to
"import-led growth." They then sought to fuel their growth by
importing technology and capital from the West, which they
intended to pay for by exporting the derivative manufactures
back to the West and the world market. Actually, this "import
led growth" strategy of exporting manufactures to import
technology by the East European NICs was only the supply
constraint/ scarcity economy version of the self same "export
led growth" strategy. That was to import technology in order
to export manufactures, and it was followed by the demand
constrained surplus economies of the East Asian and South
American NICs.  Moreover, the East Europeans continued with
their export promotion to the Soviet Union and each other.

Unfortunately for them -- and for the peddlers of ideological
models for success -- the East European NICs failed no less
than the South American ones did, and a few South East Asian
ones to boot.  No doubt, there were domestic reasons for all
these failures, as well as world economic ones.  The latter,
in a word, were caused by the world economy in crisis, which
permitted only few successes to penetrate the protected and
recessionary import markets in the West and the world
generally.





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