[more real. Such a deepening of the deals…]

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more real. Such a deepening of the deals with imperialism-trading off "its revolution would serve to inspire the own" bargaining chips when necessary. In a masses of workers and peasants, not only sense, Chinese Stalinism has been engaged in Nicaragua, but throughout Central and in an effort to trade-off the interests of their Latin America. former mentors in exchange for a longerThese countries also face a deepening term peaceful coexistence deal with U.S economic crisis. Masses of already impov- imperialism. (The Chinese invasion of erished workers and peasants are also Soviet ally, Vietnam, in 1978 being a experiencing debilitating rates of inflation most graphic instance of its willingness to and increasing rates of unemployment. Bold serve as a cats paw for imperialism in revolutionary action in Nicaragua would exchange for "peaceful coexistence" and inspire them to follow a similar course. economic concessions.)

President Ortega's speech points to the But history follows its own hidden logic. best defense of the Nicaraguan Revolution The structural changes now taking place in workers at the points of production, transportation, and distribution. This permits miscalculations—which are inevitable in any economic system-to be easily corrected when they are discovered in the very course of the process of production. And in this way corrections may be made in the very first stages, before much harm can be done.

But workers' management and control of production, and consumers self-organized to guarantee equal access by all to the best quality goods, can be operative only on the basis of a truly democratic system. Essential background reading! Order today from Socialist Action. Only $.75.

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COMBUTTIOM ENCIHLERING Will make equipment and provide PEPSICO Will open two Pizza Huts in MosARCHER DANIELS MIDLAND Discussing ventures in chickenSSMC Negotiating a venture to make BRE STRIES Discussing ventures to produce LUL bIkE Has opened talks on manufacturSubscribe to Socialist Action and don't miss an issue!

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SOCIALIST ACTION JANUARY 1988 13 .. summit changes being developed in the Soviet economy as follows:

"Give enterprises more discretion. Enterprises will keep a portion of their surplus incomes instead of paying a 100percent tax and will be allowed to use those funds to raise wages and management compensation, and expand productive capacity... Enterprises are no longer to receive subsidies to cover operating losses."

Hence, "management compensation" —a euphemism for profit—will be promoted to enable managers to engage in capitaliststyle investment, and failure in the marketplace will result in plant closures. Feldstein continues:

"Change the character of central planning. The proposed reforms will replace rigid planning of all production with a system of minimum production quotas set at levels that leave enterprises with substantial excess-production capacity, thereby allowing enterprises to determine their own production levels....

"Decontrol prices. The new system will allow the wholesale prices of the discretionary product to be determined by negotiation between the enterprises that sell and those that buy....

"Create credit markets. A major reform is now under way in which a national network of local banks will actually assess credit risks and make loans to enterprises."

And Feldstein correctly concludes:

"Any radical reform necessarily entails problems, but the Soviet goal of an economy that is half-free [sic] and halfcontrolled will inevitably have more severe and persistent difficulties. To succeed, the Soviet reform process may have to move far closer to Western capitalism than Mr. Gorbachev and his close advisers realize."

Imperialist investment in the Soviet Union Martin Feldstein's assessment reflects the wave of excitement and hopeful anticipation that has swept through the world's business leaders. The Gorbachev reforms, the world's capitalists believe, may signal more than a risky effort to make the socialized economy work better.

They are reading Gorbachev's reforms as a possible preparation to create conditions acceptable to imperialism for large-scale investment in the Soviet Union. This view is bolstered by a similar, longer-standing trend in Eastern Europe and most markedly in China.

Gorbachev announced last January that 11 U.S. corporations have already agreed to enter into joint ventures with the Soviet government. The plan allows foreign investors to hold a 49-percent equity in Soviet industrial facilities. It provides tax exemption, independence from central Soviet economic planning, freedom to experiment with capitalist labor-management techniques, and free access to both the Soviet home market and the world market. Many of these provisions significantly undermine pillars of the Soviet planned economy.

Charles E. Hugel, president of Combustion Engineering Inc., a U.S. firm setting up a joint venture with the Soviet Ministry of Oil Refining & Petrochemical 12 months for $ 6 months for $3 Enclosed is a contribution.

Name Address City Zip Industry, told Business Week (Dec. 7, 1987): "The changes being promulgated in the Soviet Union are so dramatic that a lot of companies are interested. The ones that are in early are going to get a foothold— and I think they will be successful."

But such ventures are still limited. The capitalists are still at an exploratory stage. They are hoping that further barriers to capitalist investment—such as the free convertibility of the Russian ruble-will be forthcoming.

Soviet leaders in the past-including Lenin-have favored such capital investment, but on terms that would not affect the integrity of the planned economy. Capitalists, on their part, have always OCCIDEMTAL PETROLEUM MORSANTO HONEYWELL favored investment on terms that could break down the planned economy. Even investments very profitable for Western bankers and industrialists—in the short run—are generally declined if the assistance gained for the Soviet economy-in the long run—politically outweighs imperialist profits.

Exclusion from world market To come down to fundamentals, the overriding handicap to the socialized system of production is its forced exclusion from the world market place; that is, from access to a natural world division of labor. This division of labor reflects the natural differences from country to country in each's ability to produce certain commodities most efficiently, and thus cheaply.

Those areas of the world that have naturally rich deposits of minerals and ores can produce them most cheaply. And those [] Send me more information about Socialist Action.

Send following me following pamphlet: State Tel. cow, more if successful soybean-processing sewing machines chemical industry Wer blin! why areas whose climates make certain agricultural products easiest to produce, also do so most cheaply. And so on. Excluding socialized economies from access to the cheapest products available on the world marketplace compels them to waste their labor and capital in the production of certain goods, difficult for them to produce, but vital to their economy as a whole.

Two roads for the Soviet Union From the very beginning of the Russian Revolution, the Bolshevik leaders educated the workers to understand that a socialist society was impossible in the world's first workers' state precisely because of its Venture engineerng management to upgrade industrial plants Plans to build petrochemical complex with Italy's Montedison Working on agreement to set up herbicide plant raising, grain storage, cooking oil, Negotiating to design plants and provide processing systems for energy, mining, and construction equipment ing diesel engines or components isolation to one country-especially one as backward as was Russia in 1917.

Consequently Lenin and Trotsky, who at the head of the Bolshevik Party led the Russian workers to conquer state power, organized a world party—the Third International—to lead workers everywhere to carry through their own socialist revolution.

Socialism could be built, they explained, only on the basis of a world division of labor. Such a division of labor must at least include one of the major industrialized nations. Germany, at that time in the throes of a revolutionary crisis, was looked to hopefully by the world's conscious vanguard-especially the workers in the Soviet Union-as the place from which it was most likely to expect the next breakthrough for world socialism.

A Soviet Germany together with Soviet Russia could have begun the climb to a higher level of productivity...and thus toward a socialist society.

But a series of defeats in Germany and elsewhere caused a wave of disappointment. Stalin in 1924, representing the pessimistic gestating bureaucracy, seized on the mood of demoralization to call for a dramatic change in foreign policy.

Whereas as late as 1923 he had written articles rejecting the notion of building socialism within Soviet borders alone-in accord with the well-established Bolshevik viewpoint—Stalin now launched the infamous call for building "Socialism in one country."

Arguing that all material prerequisites for socialist economic development existed within Soviet borders, he initiated a dramatic shift in foreign policy. The Third International was swiftly transformed from the world party of socialist revolution into a mere reformist pressure group.

Leon Trotsky, the leading opponent of the new line, characterized the Stalinized Communist parties as having become "border guards" in the service of the Soviet bureaucracy's foreign policy—a policy, it soon became abundantly clear, that was counterrevolutionary to the core.

Today-despite a series of anti-capitalist overturns in Eastern Europe, Asia, and Cuba-the Soviet Union still remains a long way from a socialist society. These overturns, moreover, were carried out in opposition to Soviet bureaucratic policy, as in Yugoslavia, China, and Vietnam. Or independent of the Soviet bureaucracy, as in Cuba. Or as a measure in defense of its borders, when faced with imminent military assault by U.S. imperialism, as in Eastern Europe.

Today, uprisings in Eastern Europe and even rumblings in the Soviet Union itself, have the Soviet bureaucracy up against the wall. The Soviet crisis is precisely the result of the bankruptcy of Stalinist policy—a policy that foreclosed the extension of the revolution to the world's developed countries, but, at the same time, failed to achieve the objective of peaceful coexistence.

The Soviet bureaucracy appears to have embarked on a calculated course toward giving world capitalism a material reason for long-term peaceful relations—a foothold within the Soviet economy. But Gorbachev and Co. have going for them a parallel crisis in world capitalism that has been developing, ever more swiftly, for nearly two decades. The stock market crash only registered a new stage in this developing crisis.

Gorbachev hopes that the imperialists' own problems will induce them to take parallel risks in the game of who will come out ahead from the possible new economic and trade relationship that was clearly on the hidden summit agenda. This is a relationship that promises to offer more overt and energetic assistance by Gorbachev to help politically stabilize world imperialism in exchange for a bold economic compact.

However this turns out, it won't bring the world one step closer to the socialist future. That problem cannot be solved at summit meetings. It can only be solved by working people organized in a world party of socialist revolution. The Third International is dead. But the Fourth International, organized by Leon Trotsky, exists.

This humanity's hope for

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U.S.-SOVIET JOINT VENTURES IN THE MAKING