socialism finito, sez Nation

[ECOELT@xxxxxxxxxxxxxxxx]

In response to Doug Henwood's suggestion:
	Norman Rush's conclusion (The Nation, January 24, 1994)
that it is "over for socialism" seems a bit premature judging by
recent events in Eastern Europe.  Disillusionment over the results
of capitalist markets as produced by different versions of "shock
therapy" can be seen all over the former "socialist bloc."
	Areas of the world which became accustomed to full employment
for anywhere from 40 to 60 years are increasingly nostalgic for the
security blanket or welfare state that was accompanied by low crime
rates, high cultural levels, lack of overt nationalist antagonisms,
not to mention affirmative action for women, Roms, and less developed
regions.
	This backlash showed up in recent elections in Bulgaria,
Lithuania, Poland, and most recently in Russia. In Hungary, where
early elections are promised,it is expected that the socialists
will also benefit from the backlash.  Whereas the former communists
(outside Russia) now prefer a socialist label, they generally agree
that going too fast towards the market is politically unpalatable
for the electorate.
	Prime Minister Viktor S. Chernomyrdin's announcement that
"the period of market romanticism is over now" on January 20, 1994,
would seem to represent a turning point. Two years of following Yegor
T. Gaidar and Boris G. Fyodorov, operating with the blessing and
encouragement of the I.M.F., has failedto stabilize output. The
same is true for Eastern Europe, with the possible exception of
Poland and the Czech Republic.
	The failure of independent currencies in the former
Republics of the USSR to produce better results -- and in many
cases poorer economies than Russia's -- would seem to lead
inevitably to the restoration of a natural common market with a
common currency (the ruble) as already seems evident in Belarus'.
	Even in countries that are nominally still "socialist,"
the events in Eastern Europe call for caution in moving towards
the market. Shina still prefers to call its economy "socialist
with Chinese characteristics." North Korea seems more reluctant
to consider reunification as a result of the German experience.
And both Cuba and Vietnam seem more intent on developing a
Third Way.
	It is certainly true that the new socialists in Eastern
Europe have not as yet produced a viable alternative to shock
therapy. Rejecting I.M.F. advice and positive real interest rates
is only a first step.  Minimizing conventional tools designed to
curb demand-pull inflation -- such as reducing the budget deficit
or the growth in the money supply -- is crucial. On the other
hand, turning to remedies for supply-side inflation -- shortages due to chaos
in distribution networks -- such as state planning for some investment
wouldseem to hold some hope for a "socialist" renaissance.

Lynn Turgeon ECOELT@xxxxxxxxxxxxxxxx