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What Was Socialism, and Why Did It Fall? '
Kalbmnc Virdery
The startling disintegration of Communist Party rule in Eastern Europe in 1989, and its somewhat lengthier unraveling in the Soviet Union between ] 985 and 1991, rank among die 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 scholar* 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 then suggest how it intersected fate-fully with certain features of its world-system context.
What Was Socialism?
'1 be socialist societies of Eastern Europe and the Soviet Union differed from one another in significant respects — for instance, in the intensity, span, and effectiveness ot central control, in Ihc extent of popular support or resistance, and in the. degree and timing of efforts at reform. Notwithstanding these differences within 'Tormerly existing socialism," I follow theorists such as Kornai in opting for a single analytical model of it, l"he family resemhlane.es among socialist countries were more important than their variety, for analytic purposes, much as we can best comprehend French. Japanese, West German, and Xorth American societies as variants of a single capitalist system. Acknowledging, then, that my description applies more fully to certain countries and time periods lhan to others. I rreal ihcin all under one umbrella.
For several decades, the analysis of socialism lias been an international industry, employing both Western political scientists and Uasrem dissidents. Since !('89 this industry has received a massive infusion of new raw materials, as once-secret fries are
" This chapter was originally entitled "What Was Socialism, and What Conns Nwt?" and was delivered as a lecture for the f 'enter for Comparative Research in History, Society and Culcure, at the University of California, Davis, in January 19°.V I am srratefu] to those who invited me - William 1 lajjtn, G, William Skinner, and (iaml A. Smith- as well as 10 members of the Center's seminar, for a very stimulating discussion. I also received helpful advice from Ashraf (ihani.
Earlier tonus ot the argument appeared in "Theorizing Socialism" ami in my l«x>k Stftomi/ liko/og) under iotiiiHim: Identity ami (.xttttral PoUtks m Ceintfesiu's SmNMW (IVrkelev ami ],os Anjjeles: I 'uivffsitv ot California Press, W1). The underlying coneeptualization v.'i< developed in 1988: after 1080 I added some thoughts on how the model might illuminate the system's collapse. Reprinted trom C'anttnaon. Pthitts in Sadrtf, CvHitn. and Slime 1, no. 3 '\<nS:. bv pennission of Induna i 'niversiry Press.
opened and translations appear of research by local scholars (especially Polish and Hungarian) into their own declining socialist systems. Mv taste in such theories is ''tndagenist"; 1 have found most useful the analyses of .1 ast Europeans concerning the world in which they lived. 'Ibo. 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 ckmetus ol a longer discussion, emphasizing how production was organized and the consequences of this for consumption and ior markets. I believe these themes afford the best entrv into why Party rule crumbled much faster than anyone expected.
Preduditin
From the earliest days cf the "totalitarian" model, Americans' image of "Communism" was of an autocratic, all-powerful slate 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 ol the "evil empire" as late as the 1980s. Yet the image was by and large wrong. Communist Party states were not all powerful they were comparatively weak. Because socialism's leaders managed only partially and fitfully to win a positive and supporting attitude from their citizens - thai is. to be seen as legitimate - the regimes were constantly undermined liy internal resistance and hidden forms of sabotage at alt system kveh. ITiis contributed much to their final collapse. 1 will describe briefly some of the elements of socialist nontotalilarianisrn and signal a few places where resistance Jay.
Socialism's fragility begins with the system ot '"centralized planning," which the center neither adequately planned nor controlled. Central planners would draw up i plan with quantities of everylliicg they wanted to see produced, known as targets, '(ncv would disaggregate the plan into pieces appropriate for execution and estimate how much investment and how many raw materials were 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 Ihc amounts actually necessary for their targets. Every manager, and every level of the bureaucracy, padded budgets and requests m hopes of having enough, in ibe aciual momeui of production. (A result of tbc bargaining process, of course, was that central planners always had faulty information about what was really required for production, and this impeded their ability to plan! Then, if managers somehow ended up with more ot some materia] than they needed, fhev hoarded II. Hoarded mareriil had two uses: it could be kept far the next production cycle, or it could be exchanged with sotne other titm for something one's own firm lacked. These exchanges or barters of material were a crucial component of behavior within centralized planning.
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A result of all the padding of budgets and hoarding <>f materials 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, but 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 con sum ptioti were being exported. "The causes of shortage were primarily that people lower down in the planning process were asking for more materials (ban they required and then hoarding whatever they got. I'nderlying their behavior was what economists call soft budget constraints - that is, if a firm was losing money, the center would bail it nut. In our 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 under. But in socialist economies, it did not matter if firms asked for extra investment or hoarded raw materials; they paid no penalty for ir.
A fictitious example will help to illustrate - say, a shoe factory that makes women's shoes and boots. Central planners set the factory's targets for the year at one hundred thousand pairs of shoes and twenty thousand pairs of boots, for which they think management will need ten tons of leather, a half ton of nails, and one thousand pounds of glue. Tile manager calculates what lie would need under ideal conditions, if his workers worked consistently during three eight-hour shifts. lie adds some for wastage, knowing (he workers are lazy and the machines cur badly; some, for theft, since workers are 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 that ihc tanneiv always delivers less than requested. The manager dius refuses the plan assigned hirn, saving he cannot produce that number of shoes and boots unless he gets thirteen rather than ten tons of leather, a ton 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 has twgaincd bis plan. Then when he gels some part of these goods; he stockpiles them or trades excess glue to ihe manager of a coat factory in exchange, for some extra pigskin. If leather supplies still prove insufficient, he will make fewer hoots and more shoes, or more footwear of small size, so as to use less leather; never mind il women's feet get cold in winter, or women with big feet can find not lung to wear.
With all this padding and hoar [ling, ii is clear why shortage was endemic to socialist systems, and why the main problem for linns was not whether they could meet (or generate) demand but whether they- could proeute adequate supplies. So whereas the chief problem of economic actors in Western economies is in get profits by selling things, (lie chief problem for socialism's economic actors was (o procure tilings. Capitalist firms compete with each other for markets in wbkh the)- will make a profit; socialist firms competed lo maximize their bargaining power with suppliers higher up. In our society, the prohlem is other sellers, and to outcompete them yon
have lo befriend the buyer, Thus our clerks and shop owners smile and give the customer friendly service because 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. Thus in socialism it was not the clerk — the provider, or "seller" - who was friendly (thev were usually grouchy) but the 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. ••XV -you'd c.ill this co-hot*:, hul that i« bec-r.i.<«- geicng ^..ppi'ies is i:o- -i 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 acquisition smanship, or procurement.
So far 1 have been describing the clieutelism and bargaining that undercut the Party cenrex'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 svswms was labor, Managers hoarded labor, just like any other raw material, because diey never knew how many workers they would need. J'iffy workers working three eight-hour shifts six days a week might be enough to meet a firm's targets - /fall 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 ren days when most of the materials were finally on hand the firm would need 75 -workers working overtime to complete the plan. The manager therefore kept "5 workers on the books, even though most of rhe time he needed fewer; and since all other managers were doing the same, labor was scarce. Thjj provided a convenient if unplanned support ior the regimes' guaranteed employment.
An important result of labor's scarcity was that managers of firms had relatively little leverage over their workers. Furthermore, because supply shortages caused so much uncertainly in the production process, managers had to turn over to workers much control over ibis 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 managers1 bargaining with bureaucrats undercut central power, so labor's position in production undercut that of management.
More (han tilts, the very or$>:uuzation of the workplace bred opposition to i'arty rule. Through the Panv controlled trade union and the frecjuenl merger of Party and management functions, Party 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 Burawov found in his studies of Hungarian
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factories - in part) - organized production rifuaJs, such as work unit competition,", 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 cult of nonwork, imitating the Party bosses and trying to do as lilile as possible for their pavcheek. Cadres often Jound no way around this internal .sabotage, which by reducing productivity deepened the problems of socialist economies to the point of crisis.
lhe very forms of Party rule in the workplace, then, tended to focus, politicize, and nun against it the popular ttiscoiitent that capitalist societies more successfully disperse, dcpolincize, and deflect, hi this way, socialism produced a split between "us" and "them," workers and Party leaders, founded on a lively consciousness thai "they" are exploiting "us," 1 Tits consciousness was ret another tiling that undermined socialist regimes. To phrase it m Gramsrian terms, the lived experience of people in socialism precluded its Utopian discourse from he.coming hegemonic precluded, that is, the softening of coercion with consent.
Ruling Communist Parties developed a variety of mechanisms to rry to obscure this fact of their nafuie 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.
SHrreilhnw andPatemalzsik Rcdirtributinn
In eadi 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, liast Germany, and Romania, but networks of informers and collaborators operated to some extent in all, 'Hiese formed a highly elaborale "production" system parallel to the system for producing goods—a system producing paper, which contained real and falsified histories of the people over whom the Parry7 ruled. Let un 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 system for producing goods, for prodncm of files were much better paid than producers of goods. My image of this parallel production system comes from the memoirs of Romanian political prisoner Herbert Zilbcr:
I he first urcat siKtalist industry was that of the production of tiles. This new industry has an army of workers: the inmrmcrs. It works with ultramodern electronic equipment (microphones, tape iccottStts, eta), plus an army of rypwis wit]] rht-ir typewriters. YTithoui «11 this, socialism could not hive survived. ... In the sonata;! bloc, people and tilings exist only thrown their files. All our existence is in the hands (it him who possesses files and ts constituted by him who constructs rhem 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 repute or one's having .it' Arte-.Kyi to dmn:'.i .)eckr.tr:nns rv.jT.t also he false. Informers with a denunciation against someone else were never asked what might be their motive for informing; their perhaps - envious words entered direcliy inio consfitilling another person's file - thus another person's sociopolitical beir.^. Moreover, like all other parts 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 production could have grave effects on the people "processed" through it, and the assumption that it was omnipresent contributed much lo its success, in some countries, in suppressing unwanted opposition.
If surveillance was the negative face of rhese regimes' problematic legitimation, its positive face was their promises of social redistribution and welfare. At the center of borh the Patty's official ideology and its efforts To secure popular support was "socialist paternalism," which justified Party rule with the; claim that the Party would lake care of everyone's needs bv collecting the total social product and then making available whatever people needed - cheap food, jobs, medical care, affordable housing, education, and so on. Parte authorities claimed, as well, that rhey -were better able to assess and fill these needs than were individuals or families, who would always tend to want more than their share. Herein lay (he Party's paternalism: it acred like a father who gives handouts to the children as he sees fit. lhe Benevolent I-'aiher Party educated people to 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 basic 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 tts effects on people's altitudes, paternalism had important consequences for the entite 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 that insists on doing so exclusively - that is, without enlisting their independent efforts -must control a tremendous fund of resources to redistribute. Nationalizing the means of production helped provide I his, and so did a relentlessly "produclioiust" orientation, with ever-increased productiou plans and exhortations to greater eitort.
The promise of redistribution Was an additional reason, besides my earlier argument about shortages, why socialism worked differently from capitalism. Socialism's inner drive was to accumulate not profits, like capitalist ones, but distributable, resources. This is more than simply a drive for autarchy, reducing dependency on the outside: it aims to increase dependency of those within. Striving
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to accumulate resources for redistribution involves things for which profit is totally irrelevant. In capitalism, those who run lemonade stands endeavor to serve thirstv customers in ways that make a profit and outcompctc other lemonade stand owners. In socialism, the point was not profit but the relationship between thirsty persons and the one with the lemonade - the Party center, winch appropriated from producers the various ingredients (lemons, sugar, water) and then mixed the lemonade to reward them with, as it saw fit. VChethcr someone made a profit was irrelevant: the transaction underscored the center's paternalistic superiority over its citizens - that is. its capacity to decide who got more lemonade and who got less.
Controlling the ingredients fortified the center's capacity to redistribute things. But this capacity would be even greater if the center controlled not onlv the lemons, sugar, and water but the things they come from: the lemon trees, die ground for growing sugar beets and ihe factories that process them, the wells and the well-digging machinery, 'Ihat is. most 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. Ihus 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 unconi pen rive 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 iow prices - effectively given away. Thus whether a dress was pretty and well made or ugly and liiisscwn was irrelevant, since profit was not at issue: the dress would be "given away" at a subsidized puce, not sold- In fact, the whole point was not 10 sell things: the center wanted 10 keep as murh as possible under its control, because that was how it had redisrributive power; and it wanted to give away the rest, because, thai was how it confirmed its legitimacy with the public. Selling things competitively was therefore heside 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 late 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 the 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.
C ~,onsnmpUon
Socialism's redistributive emphasis leads to one of the greal paradoxes of a paternalist regime claiming to satisfy needs. Having constantly to amass means of production so as to enhance redistributive power caused Party leaders to prefer heaw
indnstry (steel mills, machine construction) at the expense of consumer industry (proccssed 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 rhmgs it could continue to control llie central fund derived more from serting up a factor, to make construction equipment than from a shoe factory-or a chocolate works, hi short, diesc systems had a basic tension between what was necessary to legitimate them - redistributing things to the masses - and what was necessary to their poyver — accumulating things at the center. The tension was mitigated where people took pride in their economy's development (that is, building heavy- industry 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 yvay. 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 nol promise (as capitalist systems do) quality, ready availability, and choice. Thus the system's mode of operation tended to sacrifice consumption, in favor of production and controlling the products. This 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 fsmnify organized economy of socialism — some call il ihe "first" or "official" economy. Bui this is not the whole story. Since the center would not supply what people needed, thev struggled to do so themselves, developing m the process a huge repertoire of strategies for obtaining consumer goods and services. These 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 pav - bv 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 cam favors or extra money, for example, by 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" ef collective farm peasants, who held it legally and 111 theory could do what thev wanted with it - grow food for their oyvn table or to sell in the market at state-controlled prices. But although the plot itself was legal, people obtained high outputs from it not just by virtue of hard work but also by Stealing from the collective farm: fertilizer ami herbicides, fodder for their pigs or COWS, work time for their own weeding or harvesting, tractor lime 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 ihe 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 automatically enable entrepreiieurslup - 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, state economy.
It is clear from what I have said That whereas consumption in our own society is considered primarily a socioeconomic question, the relative neglect of consumer interests in socialism made consumption deeply political. It) Romania in the 1980s (an extreme case), to kill and eat your own calf was a political act. because the government prohibited killing calves: you were supjKised to sell them cheap to the state farm, for export. Romanian villagers who fed me veal (having assured themselves of my comphdty) did so with special satisfaction. It was also illegal for url>anitcs to go and buy forty kilograms of potatoes directly from the villagers who grew potatoes on their private plot, because 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 thev found inside.
Consumption became politicized 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 the 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 liecause we need something (a shrink, or a heer, or 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 ha.<b needs, bad a very unadorned definition of them — in keeping with socialist egalitarianism. Indeed, some Hungarian dissidents wrote of socialism's re la lion siri p to needs as a "dictatorship." As long as the food oitered was edible or the clothes available covered you and kept vou warm, thai should be sufficient. II von had trouble finding even ihese, that jus? meant rou 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 raarkcls.
At the same time, however, regime polities 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 system's organization exacerbated consumer desire further by frustrating it and thereby making it the focus of effort, resistance, and discontent. Anthropologist John Bornem.m 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-changing - goods to satisfy it. Socialism, in contrast, aroused desire withmi focalizing it, and kept it alive by deprivation.
As people ?weame increasingly alienated from socialism and critical of its achievements, then, the politicization 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 hut also, sometimes, by public protest. Poland'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 ol protest in which people used consumption styles to forge resistant social identities. "ITie 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. You could spend an entire month's salary on a pair of blue jeans, for instance, but ir was worth it: wearing rhem signified that you could get sometliing the system said you didn't need and shouldn't have. Thus consumption goods and objects conferred an identity that set vou off from socialism, enabling you to differentiate yourself as an individual in the face of relentless pressures 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.
Buritiiicmtie Yactioisa'dsm and Markets
Before turning to why these systems fell, I wish to address one more issue: politicking in the Part;- bureaucracy. Although this took different and specific forms in the different countries, it is important to mention the issue, for socialism's collapse owed much lo shifts in the balance among factious that emerged within the Party apparatus, liven before 1989, researchers were pointing to several forms ot tntta Parly division. Polish sociologist! Tadwiga Stanis?.kis, writing specifically of the moment of transition, speaks ot three factions — the glohalisrs, the populists, and the middle-level bureaucracy; others, writing more generally, distinguish net we en "strategic" and "operative" elites, the. state bureaucracy and ihe "global monopoly:' the bureaucracy and the Parry elite, "in-housc" and "out-of house" Parly workers, and so forth. One way of thinking alx>ut 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 soaal life. We might then look for conflicting tendencies based in the different interests of these groups - such as conflicts lielwecn the central "owners'" or paper workers, on one hand, who might persist in policies that accumulated means of production without concern for tilings like productivity and Output, and the bureaucratic managers of the aDocarive process or its field-workers, on the other, who had to ]te concerned with such things. Although the power of the system itself rested on continued accumulation, such tendencies if unchecked could obstruct the work of ihose who
had actually to deliver resources or redistribute rhem. 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 "overadnmnsiration" that nothing got produced, this would jeopardize the rcdismbutive bureaucracy's power and prestige.
Thus 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 lor investment and lor 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 presnge and, increasingly, prospects of retaining power depended on having more goods to allocate. One then heard of decentralization, of rhc rate of growth, of productivity-in a word, of matters of output, rather than the inputs that lay at the core of bureaurratic performance. This is generally referred to as the language of "reform."
For those groups who became concerned with questions of output arid productivity, the solutions almost always involved introducing mechanisms such as profitability criteria and freer markets. This meant, however, introducing a subordinate rationality discrepant with the system's inner logic and thereby threatening continued Parti- rule. Market forces create problems for socialism in part for reasons treated implicitly or explicitly above in contrasting capitalism's demand-constrained economies with socialism's economy of shortage (its lack of interest, for example, in the salabilitv of its products). But more broadly, markets create problems because they move goods horizontally rather than vertically toward the center, as all redislribulive systems require Markets also presuppose that individual interest ami 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 liierarchicai organidation, market mechanisms had been suppressed. Reformers introducing them were opening Pandora's box.
Why Did It Fall?
My discussion of socialism's workings already points to several reasons tor its collapse; I might now address the question more comprehensively. To do this requires, in my view, linking the properties ot its internal organization (discussed above) with properties of its external environment, as well as with shorter-term "'event history." Iliis means examining the specific conjuncture of two systems — "capitalist" and "socialist," to use ideal types - one encompassing the other.
In event history terms, the proximate cause of the fall of East European and Soviet socialism was an act of the Hungarian government: its tlismantliiig of the
barbed wire between I lungary and Austria, 011 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 Mast German tourists to extend their Hungarian vacations into West Germany; the end result, given that Gorbachev refused to bolster the Hast 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 llonecker his troops requires setting in motion the static model J 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. Iniemaimnal Solutions to Internal Problems
My discussion of socialism indicated several points oi tension in it? workings that affected ihe system's capacity for extended reproduction, Throughout their existence, these regimes sought to manage such tensions in different wavs, ranging from Hungary'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 deastons 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 he used as needed in maintaining one's own system, without thoughl 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 ot how this opportunistic recourse to the external environment brought socialism into tighter relationship with capitalism, it had fatc-fiil consequences.
'Ihe critical intersection occurred not in 1989 or 198" but in the late 196(*s 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 iceipients to purchase capital equipment or to build long-term infrastnicture, therein" expanding the overseas markets for Western products.
The loans became available just at the moment when all across the socialist bloc, the first significant round of structural reforms had been proposed, halfheartedly iTipkmeiired, ind, because profitirfS$ttj mhJ «tsi.-ci criteria fit so poorly witjb. \in-rationale of socialism, largely abandoned. Reluctance to proceed with reforms owed much, as well, to Chechoslovakia's Prague Spring, irom which the Party apparams all across the region had been able to see the dangers that reform posed for its
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monopolv on power. Instead of reforming the system from within, then, most Parti-leaderships opted to meet their problems by a greater articulation with the surrounding economy: importing Western capital and using il 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 sodetv and subverted the inner mechanisms of socialism. In this way, the internal cycles of two contrasting systems suddenly meshed.
'flic, intent, as with all the international borrowing of rhe period, was to pavoff the loans by exporting manufactured goods into the world market. By the mid-1970s it was cleat, however, that the world market could not absorh sufficient amounts of socialism's products to enable repayment, and ai the same time, 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 disairav. 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 salabilitv of its products, the shortage economy's premium on acquisition sman ship rather than on salesmanship, the negJect of consumption and of producing to satisfy consumer needs with diverse high-quality prodiicls - nil this meant that an adequate response to the haid-cuTrency crisis would have catastrophic effects on socialism's inner mechanisms. To this was added the fact that socialist economies were "outdated": as Jowitt put it, "After 70 years of murderous effort, the Soviet Union had created a Germsui industry of the 1880s in the 1980s."
In these circumstances, the balance of power tilted toward the taction 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 us economic performance and political legitimacy) or collective property and the Party monopoly. Gorbachev was ready to sacrifice (he latter to save the former but ended by losing both.
While Western attention was riveted on the speeches of policy makers in the Kremlin, the more significant aspects of reform, however, were in the often-tin authorized behavior of bureaucrats who were busily creating new properly forms on their own. Sraniszkis 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 artkulaliun with world capitalism was crucial !<> its fall, the examples she singles oui to illustrate these trends are all at the interface of socialist economies with the otuside world — in particular, new companies mediating the export trade and state procurement of Western computers. In fact, she sees as critical the factional split
lietween the groups who managed socialism's interface with the outside world (such as those in foreign policy, counterintelligence, and foreign trade) and those who managed it internally (such as the Party's middle-level executive apparatus and the KGB). Forms of 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 the other part was to be reformed dirough market/'profit mechanisms and selective privatization of state property. The two were to coexist symbiotically,
'ihesc 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" (5 call ihcm ''cutrepralchiks") were willing to put into circulation reserves known only to them which the)' would otherwise have hoarded - thus alleviating shortages, to their ov. n gain, As a result, even antireformist Sonet and Polish huteaucrals found themselves acquiescing in entrepratchtics' activities, without which, in Slaniszkis's words, "the official structure of the economic administration was absolutely ^Iílsteerable.," Contributing to their tolerance was rampant bureaucratic anarchy, a loss of control bv those higher up, rooted in the "inability of superiors to supply their subordinates (manageři 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 cnteiprising subordinates could devise — even at the cost of illicit profits from state reserves. Kulrepraichiks soon began to regard the state's accumulations much as Pre obraz hen sk v had once urged Soviet leaders (0 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 cydimly. The specifics of capitalism's own crisis management, however, proved unmanageable tor socialist systems. Without wanting to present recenl capitalism's "flexible specialization" as either uriilary or hi 11 v dominant (its forms differ from place to place, and It coexists with other socioeconomic forms), I find in the literature al>out it a number of characteristics even more inimical to socialism than was the earlier Pordist" varf.ini. which Soviet production partly imitated. Ifiese characteristics include: small batch production; just m lime 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 tedimqucs of need-ciealion and an increased emphasis on the production of events rather than goods: coordination of rhe economy by finance capital; instantaneous access to accurate information and analysis; and an overall decentralisation that increases managerial control (at the expense of higher-level bodies) over labor.
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llow 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 that it happened to embrace a capitalism of a newly "flexible" sort. David I Harvey's schematic comparison of "Fordist modernity" with "flexible post-modernity" clarifies tilings 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 m capitalism, is a change in the nature of state power: specifically, a number of the stare's functions are being undermined. The international weapons trade has made a mockery of the state's monopoly on the means of violence. Hie extraordinary-mobility of capital means that as it moves from areas of higher 10 areas of lower taxation, tnanv 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 possibilides for speculative trading have generated strong pressures to release the capital immobilized in state structures and institutions bv diminishing their extent.
j~his has two consequences for the collapse of socialism. First, groups inside socialist countries whose structural situation facilitated (heir fuller participation in the global economy now had reasons to expand their state's receptivity to 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, 'llie.se internal and international groups each tound their chance in the interest of the other. It is fa any case clear from the politics of international lending agencies that they aim to reduce the 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 Utile in creating and fostering die development of new private firms" - whose entry privatization may actually impede.
,\« Time jarSricialiim
Rather than explore further how flexible specialization compelled changes in socialism, 1 wish 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 lime and living it. A given cultural const met ion oi time ramifies throughout its social order. Its calendars, schedules, and rhvthms establish the very grounds of daily life (which is whv 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 tunc-and of a specific conception of it. Efforts 10 increase profits by increasing the velocity of capital circulation are at its very heart. Thus each major reorganization of capitalism has entailed, m 1 larvey's terms, "tunc space compression": a shrinking of the time horizons of private and public decision-making, whose consequences encompass ever-wider spaces owing to changed communications and trail sport technology. The basic logic of socialism, bv 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 aboul (he date.) Indeed, 1 have argued that in 1980s Romania, far from being speeded up, time was being gradually slowed down, flattencd, 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 feci as a mammoth speedup. Yet the socialism with which it intersected had no such time-compressing dynamic. In this light, the significance of Gorbachev's petestroika was its recognition that socialism's temporality was unsustainable in a capitalist world. I'erestroika reversed Soviet ideas as to whose time-definition and rhvthms were dominant and where dynamism lay: no longer within the socialist system but outside it, in the West. Gorbachev's rhetoric from the mid 1980s is full of words aboul time: the. Soviet Union needs 10 "catch up," to "accelerate" its development, to shed its "sluggishness" and "inertia" and leave behind the "era of stagnation." hot him, change has suddenly Iwcome an "urgent'' necessity.
[HyJ the latter hall oi the seventies. . . the country liegan to lose momenlum. . . . Kie 11 ictus nf stagnarioii. - . begun tci appear. . . A kind of ''braking mechanism" al"tect|ed| social am! economic development . . . ITie inertia of extensive economic development was leading to an economic deadlock and stagnation.
These an; the words of a man snatched by rhe compression of space and rime.
Even as he spoke, new time/ space-compressing technologies were wreaking havoc on the possible rhythms of Iris and other leaders' control of jwjhtics. as Radio Free Hurope. made their words ai once domestic and international. Soviet leaders could no longer create room for themselves by saying one thing for domestic consumption and sometliing else for the outside world: ihev were now prisoners of simultaneity. The
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role of Western information technology in undermining socialism was evident m the spread of Solidarity's; strikes 111 198(5, news of which was telephoned out to the West and rebroadcast 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. Bureaucrats 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 lime-snnihdating Western technologies, which effected a banking transaction in milhseconds -as opposed to the paper-laden hours and days needed by their own financial system. Did the rise of "profilabilily" criteria in the command economy owe something to such people's dual placement? Did they come to experience differently their sense of themselves as agents? My point, in short, is that the fall of socialism lies not simply in the intersection of two systems' temporal cycles bus mber 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, Bui the capitalist defiiution of time prevailed, as socialist debtors bowed to its dictates (even while postponing them), thereby aggravating factional conflicts within the elite. Because lis leaders accepted Western temporal hegemony, socialism's messianic time proved apocalyptic. The irony 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 tiring was capitalists' monopoly on the definition of social reality.
11% Corms Next?
The ourcome of the confluence lietween socialist and capitalist systemic crises is far more complicated than "capitalism triumphant," however Ken. Jowitt captures tliis with an unexpected metaphor, that of hiological extinction and lis attendant erasure of formerly existing boundaries among forms of life. In his brilliant essay "The Ixninisr Extinction," he pursues the metaphor's implications as follows:
|t)ne feature| ot mass extinctions. . is that they typically affect more than one species. In this respect, the collapse ol huropean l-eninism may Ik: seen more as a political volcano than as an asteroid. A volcano's cniption initially ait'ecls a circumscribed area (in this rase
limited to Leninist regimes), but, depending on its force, the elfects gradually hul dramatically become global, the laaiiuist volcano of 1980 will liave a comparable effect on liberal a ml "Third World" biota around the globe.
After describing the new regime "species" thai have emerged with dianged forms of government in Poland, Hungary, Romania, and elsewhere, as well as other new forms of political life arising out of Yugoslavia and ihe Soviet Union, he ponders the larger question of the end of the Cold War:
I1 or half a century we have thought in terms of liitst and West, and now there is no East as such. The primary axis of international politics has ''disappeared," ihermoriuclear Russia hasn't, but the Soviet Union/Empire most certainly has. Its "extinction" radically revises the framework within which ihe \Test, ihe United States itself, the Third World, and the countries of Eastern Europe, the former Russian limpire, and many nations in Asia have bounded and defined themselves.
The Leninist Extinction will force (he United States |not to mention ail those others] to reexamine lhe meaning of its national identity.
What the Ixninisl I-Lxtincfion confronts us with, then, is a conceptual vacuum. Jowitt concludes bv invoking the biblietd story of Genesis ("the world was without form, and void"), whose theme is bounding and naming new entities, as the ''nanafive" most appropriate to the immediate fixture.
In my view, not only is jowitt 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 oi awesome magnitude. It is also the entire conceptual arsenal through which Western institutions and social science disciplines have been deimeri in this century. As one reads scholarship on the postsociahst processes of "privatization," the creation of "property rights," the development of "democracy'' or "civil society" or "constitutions" - in short, the proposed building of a "liberal state" - profound confusion sets hi. 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 "Hast."
If this is true, then even-thing we know is up for grabs, and "what comes next" is anyone's guess.
In: Yerdery, Ka the line. What Was Socialism and What Comas Next. Princeton University Press, 1936. UJ-38
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