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What Was Socialism, and Why Did It Fall? '
f&lbcrine Vtrdsty
The Start ling disintegration of Communist Party rule in Ha stern Europe in 1989, and its somewhat lengthier unraveling in the Soviet Union between 1985 and 1991, rank among the century's most momentous occurrences. Especially because neither policy -makers nor area specialists predicted them, these events will yield much analysis after the fact, as scholars develop the hindsight necessary for understanding what they failed to grasp before. In this chapter. 1 aim to stimulate discussion about why Soviet style socialism fell. Because I believe answers to the question require understanding how socialism "worked," 1 begin with an analysis of this and ihen suggest how it intersected faiefully with certain features of its world-system context.
What Was Socialism?
'Ihe socialist societies of Eastern Europe and the Soviet Union differed from one another in significant respects - for instance, in the intensity, span, and effectiveness of central control, in ihc extent of popular support or resistance, and in the. degree and timing of efforts at reform. Notwirhstanding these differences within ''formerly existing socialism." I follow theorists such as Kornai in opting for a single analytical model of it, lhe family reseuihlane.es among socialist countries were more important than their variety, for analytic purposes, much as we can best comprehend 1'rencb, Japanese, West German, and North American societies as variants of a single capitalist system. Acknowledging, then, that my description applies more fully to certain countries and time periods than to others, I treat ibem all under one umbrella.
Fur several decades, the analysis of socialism has been an international industry, employing both Western political scientists and Eastern dissidents. Since E'89 this industry has received a massive infusion of new raw materials, as once secret files are
" This chapter was originally entitled "What Wat Socialism, and What Conns \'cNlVn and was delivered as a lecture for the Center for Comparative Research in History, Society and Culture, at the University of (California, Davis, in January 199.Y 1 am grateful to those who invited me - William 1 la^tn, G, William Skinner, and (!arol A Smith as well as to members of the Center's seminar, for a very stmiulatinr; discussion. 1 also received helpful advice from Ashraf (Jhani.
f.arlier tonus ot the argument appeared in "Theorizing Socialism" ami in niy hook Xri:ior,,ii hUofogj under Socialism: Identity and Cultural Po&tia in Cumfesiti's Romtimn (berkelev and Iais Angeles: I 'iiiversity of California Press, 1901}. 'lhe underlying conceptualization was developed in 1988: alter 1°89 I added some Thoughts on how the model might illuminate the system's collapse. Reprinted from ('antenaon: Dtkjlts in Sedtti, Cxhitrt. Mil S.ittk't 1. no. S 'ITO . I>v permission of Indiana University Press,
opened and translations appear of research by local scholars (especially Polish and Hungarian) into their own declining socialist svstems. Mv taste in such theories is "indigenisl": 1 have found most useful the analvses of .1 '.ast Europeans concerning the world in which they lived, 'lhe following summary owes much to that work, and it is subject to refinement and revision as new research appears. Given temporal and Spatial constraints. I will compress elements of a longer discussion, emphasising how production was organized and the consequences of this for consumpUon and for markers. I believe these themes afford the best entry into why Party rule crumbled much faster than anyone expected.
Production
from the earliest days of the "totalitarian" mode), Americans' image of "Communism" was of an autocratic, all-powerful state inexorably imposing its harsh will on its subjects. Even after most area specialists ceased to use the term "totalitarian" in their writing, the image of totalitarian autocracy persisted with both the broader public and many politicians; indeed, it underpinned Ronald Reagan's view of the "evil empire" as late as the 1980s. Yet the image was by and large wrong, Conimunist Party states were not all powerful: they were comparatively weak. Because socialism's leaders managed onlv partially and fitfully to win a positive and supporting attitude from their citizens - (hat is. to be seen as legitimate - the regimes were constantly imdermincd ljy internal resistance and hidden forms of sabotage at alt system kvtb. Ihis contributed much to their final collapse. I will describe briefly some of the elements of socialist nontotalitarianism and signal a few places where resistance Jay.
Socialism's fragility begins with the system of "centralized planning," which the center neither adequately planned nor controlled. Central planners would draw-up a plan wuh quantities of everytliing they wanted to see produced, known as taigers. (hey would disaggregate the plan into pieces appropriate for execution and estimate how much investment and how many raw materials wen" needed if managers of firms were to fill their targets. Managers learned early on. however, that not only did the targets increase annually but the materials required often did not arrive on time or in the right amounts. So they would respond by bargaining their plan: demanding more investments and raw materials than the amounts actually necessary for their targets, livery manager, and every level of the bureaucracy, padded budgets and requests m hopes of having enough, in the aciual moment of production. i\ result of lhe bargaining process, of course, was that central planners always had faulty information about what was really required for produetiou, and this impeded their ability to plan.) 'Ihen. if managers somehow ended up with more of" some material than they needed, they hoarded it. Hoarded material had two uses; it could he kept for the next production cycle, or tt could be exchanged with some other firm for something one's own firm lacked. These exchanges or barters of material were a crucial component of behavior within centralized planning.
A result of all the padding of budgets and hoarding of material;; was widespread shortages, for which reason socialist economies are called economies of shortage. Shortages were sometimes relative, as when sufficient quantities of materials and labor for a given level of output actually existed, btit not where and when they were needed. Sometimes shortages were absolute, since relative shortage often resulted in lowered production, or — as in Romania - since items required for production or consumption were being exported. "The causes of shortage were primarily that people lower dowu in the planning process were asking for more materials than they required and then hoarding whatever they got. I'uderlying their behavior was what economists call soft budget constraints - that is, if a firm was losing money, the center would bail it out. In out own economy, with certain exceptions (such as Chrysler and the savings and loan industry), budget constraints are hard: if you cannot make ends meet, you go tinder. But in socialist economies, it did not matter if firms asked for extra investment or hoarded raw materials; they paid no penalty for it.
A fictitious example will help to illustrate - say, a shoe factory that makes women's shoes and hoots. Central planners set the factory's targets for the year at one hundred thousand pairs of shoes and twenty thousand pairs of hoots, for which they think management will need ten tons of leather, a half ton of nails, and one thousand pounds of glue. The manager calculates what he would need under ideal conditions, if his workers worked consistently during three eight-hour shifts. He adds some for wastage, knowing (he workers are lazy and the machines cut badly; some for theft, since workers arc always stealing nails and glut:; some to trade with other firms in case he comes up short on a crucial material at a crucial moment; and some more for the fact (hat the tannery always delivers less than requested. The manager tints refuses the plan assigned him, saying he cannot produce that number of shoes and boots unless he gets thirteen rather than ten tons of leather, a Ion rather than a half ton of nails, and two thousand rather than one thousand pounds of glue. Moreover, he says he needs two new power stitchers from Germany, without which he can produce nothing. In short, he his bargained his plan. Then when he gels some part of these goods; he stockpiles rhem or trades excess glue to the managet of a coat factory in exchange for some extra pigskin. If leather supplies still prove insufficient, he will make fewer boots and more shoes, or more footwear of small size, so as to use less leather; never mind if women's feet get cold in winter, or women with big feet can find not lung to wear.
With all this padding and hoarding, i( is clear why shortage was endemic to socialist systems, and why the main problem for firms was not whether they could meet (or generate) demand but whether they could procure adequate supplies. So whereas the chief problem of economic actors in Western economies is to get profits by selling things, the chief problem for socialism's economic actots was to procure tilings. Capitalist firms compete with each other for markets in which they will make a profit; socialist firms competed to maximize their bargaining power with suppliers higher up. In our society, the problem is otiier sellers, and to outcompetc them you
have to befriend the buyer. Thus our clerks and shop owners smile and give the customer friendly service l>ecause they want business; customers can be grouchy, but it will only make the clerk try harder. In socialism, the locus of competition was elsewhere: your competitor was other buyers, other procurers; and to outcompete them you needed to befriend those higher up who supplied you. ITiUS in socialism it was not (he clerk — the provider, or "seller" - who was friendly (they were usually grouchv) but die procurers, the customers, who sought to ingratiate themselves with snides, bribes, or favors 'Hie work of procuring generated whole networks of cozy relations among economic managers and their bureaucrats, clerks and their customers. We would call this corruption, hut that is because getting supplies is not a problem for capitalists: the problem is getting sales. In a word, for capitalists salesman-ship is at a premium; for socialist managers, the premium was on acquisitionsmanship. or procurement.
So far I have been desenbing the clientelism and bargaining that undercut (he Parry center's effective control. A similar weakness in vertical power relations emerges from the way socialist production and shortage bred workers' oppositional consciousness and resistance. Among the many things in short supply in socialist systems was labor. Managers hoarded labor, just like any other raw material, because diey never knew how manv worker? thev would need. J'iftv workers working three eight-hour sliifts six days a week might be enough to meet a firm's targets - if all the materials were on hand all month long. Bur this never happened. Many of Those workers would stand idle for part of the month, and in the last fen days when most of the materials were finally on hand the firm would need 75 workers working overtime to complete the plan. 'Die manager therefore kept workers on the books, even though most of the time he needed few-er, and since all other managers were doing the same, labor was scarce, This provided a convenient if unplanned support for the regimes' guaranteed employment.
An important result of labor's scarcity was that managers of firms bad relatively little leverage over their workers. Furthermore, Jiecause supply shorrages caused so much uncertainty in the production process, managers had to turn over to workers much control over this process, lest work come to a standstill. 'Thai is, structurally speaking, workers under socialism had a somewhat more powerful position relative to management than do workers in capitalism, just as managers' bargaining with bureaucrats undercut central power, so labor's position hi production undercut that of management.
More than this, the very organization of the workplace bred opposition fo Party-rule. Through ihe Partv controlled trade union and the frequent merger of Party and management functions. Parry directives were continually felt in the production process - and, from workers' viewpoint, they were felt as unnecessary and disruptive. Union officials either meddled unhelpfully or contributed notliing. only to claim credit for production results that workers knew were their own, Workers participated disdainfully - as sociologist Michael Burawoy found in his studies of Hungarian
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factories - in pari) - organized production ritaals, such as uwk unit competitions, voluntary workdays, and production campaigns; they resented these coerced expressions of their supposed commitment to a wonderful socialism. Thus instead of securing workers' consent, workplace rituals sharpened their consciousness and resistance. Against an official "cult of work" used to motivate cadres and workers toward fulfilling the plan, many workers developed an oppositional culr of nonwork, imitating the Party bosses and trying lo do as little as possible for their paycheck. Cadres often foimd no war around this internal sabotage, which by reducing productivity deepened the problems of socialist economies to the point of crisis.
Tie very forms of Party rule in the workplace, then, tended to focus, politicize, and nirn against it the popular discontent thai capitalist societies more successfully disperse, dcpoliticize, and deflect, hi this way, socialism produced a split between "us" and "them," workers and Party leaders, founded on a hvdy consciousness that "they" are exploiting "us," lhis consciousness was vet another dung that undermined socialist regimes. To phrase it in Gramsrian terms, the lived experience of people in socialism precluded its Utopian discourse from becoming hegemonic precluded, that is, the softening of coercion with consent.
Riding Coinrnunist Parties developed a variety- of mechanisms to try to obscure this fact of their nature from their subjects, mechanisms designed to produce docile subject dispositions and to ensure that discontent did not become outright opposition. 1 will briefly discuss two of these mechanisms', the apparatus of surveillance, and redistribution of the social product.
Surt>ii!kin(e and Paternalistic Rcdif-tributinn
In each country, some equivalent of the KGB was instrumental in maintaining surveillance, with varying degrees of intensity and success, particularly effective were the Secret Police in the Soviet Union, L'.ast Gcnnany, and Romania, but networks of informers and collaborators operated to some extent in all, 'lhese formed a highly elaborale "production" system parallel to the system for producing goods-a svstem producing paper, which contained real and falsified histories of the people over whom the Parry7 ruled. Let us call the immediate product "dossiers," or "files," though the ultimate product was political subjects and subject dispositions useful to the regime. This parallel production system was at least as important as the sysrem for producing goods, for producers of files were much better paid than producers of goods. My image oi this parallel production system comes from the memoirs of Romanian political prisoner Herbert Zillrcr:
'lhe first ureal stieialist industry was that of the production of files, 'lhis new industry \m an army of workers: the inroimcrs. It works with ultramodern electronic equipment (microphones, tape recorders, etc), plus m army pi rypisrs with their typewriters. Without all this, socialism could nor have survived. ... In the socialist bloc, people and filings exist only rhrouph their files. Alt our existence is in the hands or him who possesses hies and is constituted by him who constructs them. Real people are but the reflection of their files.
The work of producing files (and thereby political subjects) created an atmosphere of distrust and suspicion dividing people from one another. One never knew whom one could trust, who might be informing on one to the police about one's attitudes toward lhe regime or one's having :-,v Ac-e-.-j^n to dinner QSigeJaravioris i . : I also hv. false. Informers with a denunciation against someone else were never asked what nughl be their motive for infonning; their perhaps - envious words entered directiy into constituting another person's file — thus another person's sociopolitical being. Moreover, like all other parrs of the bureaucracy, the police too padded their "production" figures, for the fact of an entry into the file was often more important than its veracity. The existence of this shadowy system of ptoduction could have grave effects on die people "processed" through it, and the assumption that it was omnipresent contributed much to its success, in some countries, in suppressing unwanted opposition.
If surveillance was the negative face of these regimes' problematic legitimation, its positive face was their promises of social redistribution and welfare. At the center of both the Party's official ideology and its efforts to secure popular support was "socialist paternalism," which justified Party rule with the claim thai the Party would lake care of everyone's needs by collecting the total sodal product and then making available whatever people needed - cheap food, jobs, medical care, affordable housing, education, and so on. Partv authorities claimed, as well, that they were better able to assess and fill these, needs than were individuals or families, who would always (end to want more than their share. Herein lay the Parly's paternalism: if acted like a father who ^ives handouts to the children as he sees fit. The Benevolent Father Party educated people ro express needs it would then fill, and discouraged them from taking the initiative that would enable them to fill these needs on their own. The promises - socialism's baste social contract — did not go unnoticed, and as long as economic conditions permitted their partial fulfillment, certain socialist regimes gained legitimacy as a result. But this proved impossible to sustain.
Beyond its effects on people's attitudes, paternalism had important consequences for the entire system of production discussed previously and for consumption; here 1 shift to the question of why consumption was so central in the resistance to socialism. A Party that pretends to meet its citizens' needs through redistribution and thai insists on doing so exclusively - that is, without enhsting their independeni efforts -must control a tremendous fund of resources to redistribute. Nationalizing the means of production helped provide litis, and so did a relentlessly "productioiust" orientation, with ever-increased production plans and exhortations to greater effort.
The promise of redistributton was an additional reason, l>esides my earlier argument ahoul shortages, why socialism worked differently from capitalism, Socialism's inner drive was to accumulate not profits, like capitalist ones, but distributable resources. 'I"his is more than simply a drive for autarchy, reducing dependency on the outside: it aims to increase dependency of those within. Striving
to accumulate resources for redistribution involves things for which profit is totally irrelevant. In capitalism, those who run lemonade stands endeavor to serve tliirsty customers m ways that make a profit and outcompctc other lemonade stand owners. In socialism, the point was noi profit but ilie relationship between thirsty persons and the one with the lemonade - die Party center, w Inch appropriated from producers the various ingredients (lemons, sugar, water) and then mixed the lemonade to reward them with, as it saw fit. VChethtT someone made a profit was irrelevant: the trausaclion underscored ihc center's paternalistic superiority over its citizens - that is, its capacity to decide who got more lemonade and who pot less.
Controlling the ingredients fortified the center's capacity to redistribute things. But this capacity would be even greater if the center controlled not only the lemons, sugar, and water but the things they come irom: the lemon trees, die ground for growing sugar beets and the factories that process them, ihe wells and the well-digging machinery, 'lhat is, mosi valuable of all to the socialist bureaucracy was to get its hands not just on resources but on resources that generated other usable resources, resources that were themselves further productive. Socialist regimes wanted not just eggs but the goose thai lays them. Thus if capitalism's inner logic rests on accumulating surplus value, the inner logic of socialism was to accumulate means of production.
The emphasis on keeping resources at the center for redistribution is one reason why items produced in socialist countries so often proved uncompetitive on the world market. Basically, most of these goods were not being made to be sold competitively: they were being cither centrally accumulated or redistributed at low prices - effectively given away. Ihus whether a dress was pretty and well made or ugly and missewn was irrelevant, since profit was not sit issue: the dress would be "given away" at a subsidized pnee, not sold. In fact, the whole point was not to sell things: the center wanted to keep as much as possible under its control, because that was how it had redisrributive power, and it wanted to give awray the. rest, because thai was how it confirmed its legitimacy with the public. Selling things competitively was therefore beside the point. So too were ideas of "efficient" production, which for a capitalist would enhance profits by wasting less material or reducing wages. But whatever goes into calculating a profit — costs of material or labor inputs, or sales of goods - was unimportant in socialism until very lale in the game. Instead, "efficiency" was understood to mean "the full use of existing resources," "the maximization of given capacities" rather than of results, all so as to redirect resources to a goal greater than satisfying die population's needs. In other words, what was rational in socialism differed from capitalist rationality. Both are stupid in their own way, bur differently so.
('onsumptinn
Socialism's redistributive emphasis leads to one of the great paradoxes of a paternalist regime claiming to satisfy needs. Having constantly to amass means of production so as to enhance redistnhuttve power caused Party leaders to prefer heaw
industry (steel mills, machine construction} at the expense of consumer industry (processed foods, or shoes). After all, once a consumer got hold of something, the center no longer controlled it; central power was less served by giving tilings away than by producing things it could continue to control, ihe central fund derived more from setting up a factory to make construction equipment than from a shoe factory or a chocolate works. In short, Uiese systems had a basic tension between what was necessary to legitimate them - redistributing things to the masses - and what was necessary to their power — accumulating things al llie cenler. The tension was nlitigated where people took pride in their economy's development (that is, building heavy industty might also bring legitimacy), but my experience is that the legitimating effects of redistribution were more important bv far.
Kach country addressed this tension in its own way. For example, Hungary after 1968 and Poland in the 1970s gave things away more:, while Romania and Czechoslovakia accumulated things more; but the basic tension existed everywhere. Ihe socialist social contract guaranteed people food and clothing but did not promise (as capitalist systems do) quality, ready availability, and choice. Thus the system's mode of operation tended to sacrifice consumption, m favor of production and controlling the products. Tlris paradoxical neglect of consumption contributed to the long lines about which we heard so much (and we heard about them, of course, because we live in a system to which consumption is crucial).
In emphasizing this neglect of consumption as against building up the central resource base, I have so far been speaking of the fomatfy organized economy of socialism — some call il the "first" or "official'' economy. But this is not the whole story. Since the center would not supply what people needed, thev struggled to do so themselves, developing in the process a huge repertoire of strategies for obtaining consumer goods and services, ihese strategies, called the "second" or "informal" economy, spanned a wide range from the quasi legal to the definitely illegal. In most socialist countries it was nol illegal to moonlight for extra pay - by doing carpentry-, say — but people doing so often stole materials or illegally used tools from their workplace; or they might manipulate state goods to sell on the side. Clerks in stores might earn favors or extra monev. for example, bv saving scarce goods to sell to special customers, who tipped them or did some important favor in return. Also part of the second economy was the so called "private plot" of collective farm peasants, who held it legally and in theory could do what they wanted with it - grow food for their own table or to sell in the market at state-controlled prices. But although the plot it self was legal, people obtained high outputs from it not just by virtue of hard work but also by stealing from the collective farm; fertilizer and herbicides, fodder for their pigs or cows, work time for their own weeding or harvesting, tractor time and fuel for plowing their plot, and so on. The second economy, then, which provisioned a large part of consumer needs, was parasitic upon the state economy and inseparable from it. Il developed precisely because ihc state economy tended to ignore consumption. To grasp the interconnection of the two economies is crucial, lest one
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think that simply dismantling the state sector will automatic all)' enable entrepreneurs hip — ready present in embryo — to flourish. On the contrary: parts of the second economy will wither and die if deprived of the support of the official, Slate economy.
It is dear from what I have said thai whereas consumption in our own society is considered primarily a socioeconomic question, the relative neglect of consumer, interests in socialism made consumption deeply political. In Romania in tlie 1980s (an extreme case), to kill and eat your own calf was a political act. because the government prohibited killing calves; you were supposed to sell rhem cheap to the state farm, for export. Romanian vilingers who fed me veal (having assured themselves of my complidry) did so with special satisfaction. It was also illegal for urbanitcs to go and buy forty kilograms of potatoes directly from the villagers who grew potatoes on theit private plot, hecause the authorities suspected that villagers would charge more than the state-set price, thus enriching themselves. So Romanian policemen routinely stopped cars riding low on the chassis and confiscated produce they found inside.
Consumption became poliiidzed in yet another way: the very definition of "needs" became a matter for resistance and dispute. "Needs," as we should know from our own experience, are not given: they are created, developed, expanded - the work especially of rhe advertising business. It is advertising's job to convince us that we need things we didn't know we needed, or that if we feel unhappy. It's because we need something (a shrink, or a heer, ot a Marlboro, or a man). Our need requires onlv a name, and it can be satisfied with a product or service. Naming troubled states, labeling them as needs, and finding commodities to fill them is at the heart of our economy. Socialism, by contrast, which rested nor on devising infinite kinds of things to sell people but on claiming to satisfy people's hash needs, had a very unadorned definition of them — in keeping with socialist cgalitarianism. Indeed, some Hungarian dissidents wrote of socialism's re la lion sin p to needs as a "dictatorship.''' As long as the food offered was edible or the clothes available covered you and kept you warm, that should lie sufficient. If you had trouble finding even these, that just meant von were not looking hard enough. No planner presumed to investigate what kinds of goods people wanted, or worked to name new needs for newly created products and newly developed markets.
At the same time, however, regime policies paradoxically made consumption a problem. F.ven as the regimes prevented people from consuming by not making goods available, they insisted that under socialism, the standard of living would constantly improve. This stimulated consumer appetites, perhaps with an eye to fostering increased effort and tying people into the system. Moreover, socialist ideology presented consumption as a "right." The svstem's organization exacerbated consumer desire further by frustrating it and thereby making it the focus of effort, resistance, and discontent. Anthropologist John Rorneman sees in the relation between desire and goods a major contrast between capitalism and socialism.
Capitalism, he savs, repeatedly renders desire concrete and specific, and offers specific - if ever-diangkig - goods to satisfy it. Socialism, fa) contrast, aroused desire withnut focalizing it, and kept li alive by deprivation.
As people hecame increasingly alienated from socialism and critical of its achievements, then, the poliudzation of consumption also made them challenge official definitions of their needs. 'Ibey did so not just by creating a second economy to grow food or make clothes or work after hours but also, sometimes, by pubkc protest. 1'oland's Communist leaders fell to such protest at least twice, in 1970 and in 1980, when Polish workers insisted on having more food than government price increases would permit them. Less immediately disruptive were forms of protest in which people used consumption styles to forge resistant social identities, the black markets in Western goods that sprang up everywhere enabled alienated consumers to express their contempt for their governments through the kinds of things they chose to buy. Yon could spend an entire month's salary on a pair of blue jeans, for instance, but it was worth it: wearing rhem signified that you could get something the system said you didn't need and shouldn't have. Thus consumption goods and objects conferred an identity tliat set you off from socialism, enabling you to differentiate yourself as an individual in the face of relentless presstires to homogenize everyone's capacities and tastes into an undifferentiated collectivity. Acquiring objects became a way of constituting your selfhood against a deeply unpopular regime.
Bunukcmt'c VattknaUsm and Markets
Refbre turning to why these systems fell, I wish to address one more issue: politicking in rhe Party7 bureaucracy, .\llhough this took different and specific forms in the different countries, it is important to mention (he issue, for socialism's collapse owed much to shifts in the balance among factious that emerged within the Party apparatus, liven before 1989, researchers were pointing to severid forms of intra Parly division. Pobsh sociologist fadwiga Staniszkis, writing specifically of the moment of transition, speaks of three factions — trie globalisrs, the populists, and the middle-level bureaucracy; others, writing more generally, distinguish lie J we en "strategic" and "operative'' elites, the state bureaucracy and ihe "global monopoly:' the bureaucracy and the Party elite, "in-house" and "out-of house" Tarty workers, and so forth. One way of thinking alxiut these various divisions is that they distinguish ownership from management, or the people who oversaw the paper work of administration from those "out in the field,'' intervening in actual social life. We might then look for conflicting tendencies based in die different interests of these groups - such as conflicts between the central "owners" or paper workers, on one hand, who might persist in policies that accumulated means of production without concern for things like productivity and output, and the bureaucratic managers of the .iDocative process or its fieldworkers, on the other, who had to he concerned with such things. Although the power of the system itself rested on continued accumulation, such tendencies if unchecked could obstruct die work of those who
had actually to deliver resources or redistribute them, Without actual investments and hard material resources, lower-level units could noi produce the means of production upon which both bureaucracy and center relied. If productive activity were so stifled by "overadmnuslration" that nothing got produced, this would jeopardize the rcdistrihutive bureaucracy's power and prestige,
Tims when central accumulation of means of production began to threaten the capacity of lower-level units to produce; when persistent imbalances between investment in heavy industry and in light industry, between allocations for investment and for consumption, and so on, diminished the stock of distributable goods; and when the center's attempts to keep enterprises from meddling with surplus appropriation obstructed the process of production itself-this is when pressure arose for a shift of emphasis The pressure was partly from those in the wider society 10 whom not enough was heing allocated and partly from bureaucrats themselves whose prestige and. increasingly, prospects of retaining power depended on having more goods to allocate. One then heard of decentralization, of the rate of growth, of productivity-in a word, of matters of output, rather than the inputs that lay at the core of bureaucratic performance. This is generally referred to as the language of "reform."
For those groups who became concerned with questions of output and productivity, the solutions almost always involved introducing mechanisms such as profitability criteria and freer markets. Ibis meant, however, introducing a subordinate rationality discrepant with the system's inner logic and thereby threatening continued Party rule. Market forces create problems for socialism in part for reasons treated implicitly or explicitly above in contrasting capitalism's demand-constrained economics with socialism's economy of shortage (its lack of in teres!, for example, in the salabih'ty of its products). Bui more broadly, markets create problems because they move goods horizontally rather than vertically toward the center, as all redisliibulive systems require. Markets also presuppose that individual interest and the "invisible hand." rather than the guiding hand of the Party, secure the common good. Because these horizontal movements and individualizing premises subverted socialism's hierarchical organization, market mechanisms had been suppressed. Reformers introducing them were opening Pandora's bos.
Why Did It Fall?
My discussion of socialism's workings already points to several reasons for its collapse; I might now address the question more comprehensively. To do this requires, in my view, linking the properties of its internal organization (discussed above) with properties of its externa] environment, as well as with shorter-term "'event history." litis means examiruiig the specific conjuncture of two svstems — "capitalist" and "socialist," to use ideal types - one encompassing the other.
In event history terms, the proximate cause of the fall of Fast European and Soviet socialism was an act of the Hungarian government: its dismantling of the
barbed wire between I lungarv and Austria, on the eve of a visit by President George Bush, and its later renouncing the treaty with the GDR that would have prevented Hast German emigration through Hungary. This culmination of Hungary's long term strategy of opening up to the West gave an unexpected opportunity for some East German tourists to extend their Hungarian vacations into West Germany; the end result, given that Gorbachev refused to bolster the Fast German government with Soviet troops in this crisis, was to bring down the Berlin Wall. To understand the conjuncture in which Hungary could open its borders and Gorbachev could refuse I lonecker his troops requires setting in motion the static model I have given above and placing it in its international context. This includes asking how socialism's encounter with a changing world capitalism produced or aggravated factional divisions within Communist Parties. International Solutions to Internal Problems
My discussion of socialism indicated several points of tension in its workings that affected die system's capacity for extended reproduction. Throughout their existence, diese regimes sought to manage such tensions in different ways, ranging from Hungarv's major market reforms in the 1960s to Romania's rejection of reform and its heightened coercive extraction. In all cases, managing these tensions involved decisions that to a greater or lesser degree opened socialist political economies to Western capital. The impetus for this opening - critical to socialism's demise — came, chiefly from within, as Parry leaders attempted to solve their structural problems without major structural reform. Their attitude in doing so was reminiscent of a "plunder mentality" that sees the external environment as a source of booty to be used as needed in maintaining one's own system, without thought for the cost. This altitude was visible in the tendency of socialist governments to treat foreign trade as a residual sector, used to supplement budgets without being made an integral part of them. Because of how this opportunistic recourse to the external environment brought socialism into tighter relationship with capitalism, it had fateful consequences.
The critical intersection occurred not in 1989 or 198~ but in the late 1960s and early 19"0s. when global capitalism entered the cyclical crisis from which it is still struggling to extricate itself. Among capitalists' possible responses to the crisis (devaluation, structural reorganization, etc), an early one was to lend abroad; facilitating this option were the massive quantities of petrodollars thai were invested in Western banks, following changes in OPEC policy in 19"3. By lending, Western countries enabled the recipients lo purchase capital equipment or to build long-term infrastructure, thereby expanding the overseas markets for Western products.
lite loans became available just at the moment when all across the socialist bloc, the first significant round of structural reforms had been proposed, halfheartedly implemented, and, because profitability and market criteria fit so poorly with the rationale 01 socialism, largely abandoned. Reluctance to proceed with reforms owed much, as well, to Czechoslovakia's Prague Spring, from which the Party apparatus all across the region had been able to see the dangers that reform posed for it*
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monopoly 011 power. Instead of reforming the system from within, then, most Party leaderships opted to meet their problems by a greater articulation with (lie surrounding economy: importing Western capital and using it to buy advanced technology {or. as in Poland, to subsidize consumption), in hopes of improving economic performance. Borrowing thus became a substitute for extensive internal changes that would have jeopardised the Party's monopoly over society and subverted the inner mechanisms of socialism. In this way, the internal cycles of two contrasting systems suddenly meshed.
The intent, as with all the internal tonal borrowing of the period, was lo payoff the loans by exporting manufactured goods into the world market. By the mid-1970s it was clear, however, that the world market could not absorh sufficient amounts of socialism's products to enable repayment, and at the same rime, rising interest rates added staggeringly to the debt service. With the 19~9-80 decision of the Western banking establishment not to lend more money to socialist countries, the latter were thrown into complete disarray. I have already mentioned several features that made socialist economies inapt competitors in the international export market. The "plunder" stance toward external economies, the system's fundamental organization against notions of salability of its products, the shortage economy's premium on acquisitionsmanship rather than on salesmanship, the neglect of consumption and o£ producing to satisfy consumer needs with diverse high-quality products — all this meant that an adequate response lo the hard-currency crisis would have catastrophic effects on socialism's inner mechanisms. To this was added lhe fact that socialist economies were "outdated": as Jowitt put it, "After 70 years of murderous effort, the Soviet Union had created a German industry of the 1880s in the 1980s."
In these circumstances, the balance of power tilted toward the faction within the Communist Party of the Soviet Union that had long argued for structural reforms, die introduction of market mechanisms, and profit incentives, even at the cost of the Party's "leading role." The choice, as Gorbachev and his faction saw* it, was to try to preserve either the Soviet Union and its empire (by reforms that would increase its economic performance and political legitimacy) or collective property* and the Party monopoly. Gorbachev was icady to sacrifice the latter to save the former but ended by losing both.
VCTiitc Western attention was riveted on the speeches of policy makers in the Ivrernliu, the more significant aspects of reform, however, were in the often-unauthorized behavior of bureaucrats who were busily creating new property forms on iheir own. Staniszkis describes the growth of what she calls "political capitalism," as bureaucrats spontaneously created their own profit based companies from within the state economic bureaucracy. Significantly for my argument that socialism's articulation with world capitalism was crucial to its tall, the examples she singles out to illustrate these trends are all at the interface of socialist economies with the outside wo rid — in particular, newr companies mediating the export trade and state procurement of Western computers. In fact, she sees as critical the factional split
between the groups who managed socialism's interface with the outside world (such as those in foreign policy, counterimelligence, and foreign trade) and those who managed it internally (such as the Party's middle-level executive apparatus and the KGB). Forms ot privatization already taking place as early as 1987 in Poland and similar processes as early as 1984 in Hungary show the emerging contours of what Staniszkis sees as the reformists' goal: a dual economy. C )ne part of tills economy was to he centrally administered, as before, and die other part was to l>e reformed duough market/profit mechanisms and selective privatization of state property, lhe two were to coexist symbiotically.
"Ihese forms of '"political capitalism" arose in part by economic managers' exploiting the shortages endemic to socialism - shortages now aggravated lo crisis proportions. In the new hope of making a profit, "political cajritalists" (I call them "cntrepratchiks") were willing to put into circulation reserves known only to them -which the) would otherwise have hoarded - thus alleviating shortages, to their own gain. As a result, even antireformist Soviet and Polish hureaucrals found themselves acumescing iti entrepratchiks' activities, without winch, in Staniszkis's words, "the official structure of the economic administration was absolutely uns tee table." Contributing to their tolerance was rampant bureaucratic anarchy, a loss of control by those higher up, rooted in the "inability of superiors to supply their subordinates (managers of lower level) with the means to construct a strategy of survival." Because superiors could no longer guarantee deliveries and investments, they were forced to accept whatever solutions enterprising subordinates could devise — even at the cost oi illicit profits from state reserves. Kiitrepratchiks soon liegan to regard the state's accumulations much as Pre obraz hen sky had once urged Soviet leaders to regard agriculture: as a source of primitive accumulation. They came to find increasingly attractive the idea of further "privatization," so important to Western lenders.
It is possible (though unlikely) that socialist regimes would not have collapsed if their hard-currency crisis and the consequent intersection with capitalism had occurred at a different point in capitalism's cyclialy. lhe specifics of capitalism's own crisis management, however, proved unmanageable for socialist systems. Without wanting to present recent capitalism's "flexible specialization" as either unitary or fully dominant {its forms differ from place lo place, and it coexists with other socioeconomic forms), I find in the literature alxmt it a number of characteristics even more mimical to socialism than was the earlier Pordist" variant, which Soviet production partly imitated. Ihese characteristics include: small hatch proriurrion; just m time inventory; an accelerated pace of innovation; tremendous reductions in the turnover time of capital via automation and electronics; a much increased turnover time in consumption, as well, with a concomitant rise in techniques of need-creation and an increased emphasis on the production of events rather than goods: coordination of the economy by finance capital; instantaneous access to accurate information and analysis; and an overall decentralization that increases managerial control (at the expense of higher-level bodies) over labor.
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I low is socialism to mesh with this? - socialism with its emphasis on large scale heroic production of means of production, its resources frozen by hoarding no just in-time here! - its lack of a systemic impetus toward innovation, the irrelevance to it of notions like "turnover time," its neglect of consumption and its flat-footed definition of "needs," its constipated and secretive flows of information, (except for rumors!) in which the center could have no confidence, and the perpetual struggle to retain central control over all phases of the production process? Thus; I submit, it is nor simply socialism's embrace with capitalism that brought about its fall but the fact thai it happened to embrace a capitalism of a newly "flexible" sort. David Harvey's schematic comparison of "Fordist. modernity" with "flexible post-modernity" clarifies diings further socialist systems have much more in common with his "Fordist" column than with Ins "flexible" one.
Let me add one more thought linking ihe era of flexible specialization with socialism's collapse. Increasing numbers of scholars note that accompanying the change in capitalism is a change in the nature of state power: specifically, a number of the state's functions are being undermined. The international weapons trade has made a mockery of the state's monopoly on the means of violence. Ibe extraordinary mobility of capital means that as it moves from areas of higher 10 areas of lower taxation, many states lose some of their revenue and industrial base, and this constrains their ability to attract capital or shape its flows. Capital flight can now discipline all nation-state governments. The coordination of global capitalism by finance capital places a premium on capital mobility, to which rigid state boundaries are an obstacle. And the new computerized possibilities tor speculative trading have generated strong pressures fo release the capital immobilized in state structures and institutions by diminishing their extent.
This has two consequences for the collapse of socialism. First, groups inside socialist countries whose structural situation facilitated their fuller participation in the global economy now had reasons to expand their state's receptivity 10 capital - that is, to promote reform. Second, the control that socialist states exerted over capital flows into their countries may have made them special targets for international financial interests, eager to increase their opportunities by undennining socialist states, 'lbe.se internal and international groups each found their chance in die interest of the other. It is in any case clear from the politics of international lending ;tgencics that they aim to reduce (he power of socialist states, for they insist upon privatization of state property-the basis of these states' power and revenue. Privatization is pushed even in the face of some economists' objections that "too much effort is being invested in privatization, and too httle in creating and fostering die developmen! of new private firms" - whose entiy privatization may actually impede.
,\o Tim; fir Sndahw;
Rather than explore further how flexible specialization compelled changes in socialism, 1 wisli to summarize my argument bv linking it to notions of time. Time, as
anthropologists have shown, is a fundamental dimension of human affairs, taking different forms in different kinds of society. The Western notion of a linear, irreversible time consisting of equivalent and divisible units, for instance, is but one possible way of conceptualizing time and living it. A given cultural construction oi time ramifies throughout its social order. Its calendars, schedules, and rhvthms establish the very grounds of daily life (which is why elites, especially revolutionary ones, often manipulate them), undergird power and inequality and affect how people make themselves as social beings.
Capitalism exists only as a function of timc-and of a specific conception of it. Efforts to increase profits by increasing die velocity of capital circulation are at its very heart. Tlius each major reorganization of capitalism has entailed, in 1 larvey's terms, "time space compression": a shrinking of the lime horizons of private and public decision-making, whose consequences encompass ever-wider spaces owing to changed communications and transport technology. The basic logic of socialism, by contrast, placed no premium on increasing turnover time and capital circulation. Although the rhetoric of Stalinism emphasized socialism as a highly dynamic system, for the most part Soviet leaders acted as if time were on their side. (When Khrushchev- said, "We will bury you," he was not too specific about (lie date.) Indeed, 1 have argued that in 1980s Romania, far from being speeded up, time was being gradually slowed down, flattened, immobilized, and rendered nonlinear.
Like the reorganization of capitalism at the end of the nineteenth century, the present reorganization entails a time-space compression, which we all feel as a mammoth speedup. A'et the socialism with which it intersected had no such time-compressing dynamic. In this light, the significance of Gorbachev's perestroika was its recognition that socialism's temporality was unsustainable in a capitalist world. 1'ercstroika reversed Soviet ideas as to whose time-definition and rhvthms were dominant and where dynamism lay: no longer within the soci;Jist system but outside it, in the West. Gorbachev's rhetoric from the mid-1980s is full of words aboul time: the. Soviet Union needs to "catch up," to "accelerate" its development, to shed its "sluggishness" and "inertia" and leave behind the "era of stagnation." For him, change has suddenly Income an "urgent" necessity.
[Byj the latter half ol the seventies. . . the country began to lose inomenmm. . , . KJcmi'tils of stagnation. . . begun to ap[>car. . . A kind of ''braking mechanism" afrectjed] social am! economic development . . . I*he inertia of extensive economic development was leading to sit economic deadlock and stagnation.
'fhese are the words of a man snatched by the compression of space and time.
Kven as he spoke, new time/space-compressing technologies were wreaking havoc on the possible rhythms of liis and other leaders' control of jwjhtics. as Radio Free Furope made their words a( once domestic and international. Soviet leaders could no longer create room for themselves by saying one thing for domestic consumption and someiliing else for the outside world: ihcy were now prisoners of simult:uieiiy. The
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role of Western information technology in undermining socialism was evident in the spread of Solidarity's strikes in 1980, news of which was telephoned out to the West and rebtoadcast instantly into Poland via Radio Free Europe and the BBC, mobilizing millions of Poles against their Party. The revolutions of 1989 were mediated similarly.
1 am suggesting, then, that the collapse of socialism came in part from the massive rupture produced by its collision with capitalism's speedup. If so, it would be especially useful to know something more about the life-experience of those people who worked at the interface of these two temporal systems and could not help realizing how different was- capitalism's time from their own. Rttreaucrafs under pressure to increase foreign trade and foreign revenues, or importers of computer equipment, would have discovered that failure to adapt to alien notions of increased turnover time could cost them hard currency. They would have directly experienced time-annihilating Western technologies, which effected a banking transaction in milliseconds as opposed to the paper-laden hours and days needed by their own financial system. Did the rise of "profitability" criteria in the command economy owe something to such people's dual placement? Did they come to experience differently their sense of themselves as agentsr My point, in short, is that the fall of socialism lies not simply in the intersection of two systems' temporal cycles bu! rather in the collision of two differently constituted temporal orders, together with the notions of person and activity proper to them.
If socialist economies had not opened themselves to capital import and to debt servicing, perhaps their collision with capitalist speedup would have been less jarring - or would at least have occurred on more equal terms, But ihc capitalist definition of time prevailed, as socialist debtors bowed to its dictates (even wThilc postponing them), thereby aggravating factional conflicts within the elite. Because its leaders accepted Western temporal hegemony, socialism's messianic time proved apocalyptic. ITie itony is that had debtor regimes refused the definitions imposed from without - had they united to default simultaneously on their Western loans (which in 1981 stotxl at over $90 billion) - ihey might well have brought down the world financial system and realized Khrushchev's threatening prophecy overnight. Thai this did not happen shows how vital a thing was capitalists' monopoly on the definition of social reality.
What Comes Next?
The outcome of the confluence l>etween socialist and capitalist systemic cases is far more complicated than "capitalism triumphant," however. Ken. Jowitf captures litis with an unexpected metaphor, tiiat of htological extinction and lis attendant erasure of formerly existing boundaries among forms of life. In his brilliant essay "The Ixninist Extinction," he pursues the metaphor's implications as follows:
|t fas, rcature| ot mass extinctions. . is that they typically affect more than one spi-cies. in this respect, the collapse til I Uiropean leninism may be seen more as a political volcano than as an asteroid. A volcano's eruption initially .Kiwis a circumscribed area (in this cast
limited to Leninist regimes), but, depending on its force, tiie elfects gradually bui dramatically become global. The I -etiiuist volcano of 1989 will liavi* a comparable effect on liberal and 'Third World" biota around the jrjobe.
After describing the new regime "species" thai have emerged with changed forms of government in Poland, Hungary-, Romania, and elsewhere, as weD as other new forms of political life arising out of Yugoslavia and the Soviet Union, he ponders the larger question of the end of the Cold War:
For half a century we have rhought in terms of East and West, and now there is no East as such. The primary axis of international politics has "disappeared," ITiermonucIear Russia hasn't, but the Soviet Union/Empire most certainly has. Its "extinction" radically revises the framework within which die West, the United States itself, the Third World, and the countries of Eastern Europe, the former Russian 1 empire, and many nations in Asia have bounded and defined themselves.
The Leninist Hxrincrion will force the United Sraics (not to mention all (hose others] to reexamine the meaning of its national identity.
What die Ixminiai I-Lxtinction confronts us with, then, is a conceptual vacuum, fowiti concludes bv invoking the biblical story of Genesis ("the world was without form, and void"), whose theme is bounding and naming new entities, as the "narrative" most appropriate to the immediate future.
In my view% not only is jowitr absolutely right but one could go even further. It is not just new political identities, including our own, lliat we will have the task of bounding and naming - a task which, if the example of Bosnia is *any indication, is ot awesome magnitude. It is also the enlne conceptual arsenal through which Western institutions and social science disciplines have been defined in this century. As one reads scholarship on the postsocialisl processes of ''privatization," the creation ot "property rights,'' the development of "democracy" or "civil society" or "constitutions" - in short, the proposed building of a "liberal state" - profound confusion sets in. One begins to sec that these terms do not label useful concepts: they are elements in a massive political and ideological upheaval that is by no means restricted to the "East."
If this is true, then everything we know is up for grabs, and "what comes next" is anyone's guess.
In: Verdery, Kadierine. What W'm. Soiiaum and What Cumu Stxt. Princeton University Press, 1996.19-38
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