Every Russian a capitalist?

Scan page 6

Resentment is growing among both Soviet and Chinese workers as 'market reforms' threaten to ravage social gains of revolution. lation. This class, the workers, has back with the other. How does this work? them, as the necessary pre-condition for 2, 1992, New York Times, speaks vol6 SOCIALIST ACTION SEPTEMBER 1992 Faced with one failed plan after another designed to accomplish a leap into capitalism, Russian President Boris Yeltsin has come up with a new one. The idea is to distribute free vouchers alleged to be worth between $40 and $60 to every Russian citizen-reportedly roughly equal to four months wages—to exchange for shares in state-owned enterprises, or tur the vouchers over to mutual funds to invest in their behalf, or just sell them. The plan is set to begin on Oct. 1.

Similar plans are being implemented in Czechoslovakia and Poland. Yeltsin's plan is said to eliminate drawbacks in the other two countries' plans.

Leaving aside the technical differences between the privatization schemes, they have certain basic features in common. The most important is that they are all designed to create the illusion that the material wealth of these societies will be fairly divided between every citizen-man, woman and child.

Nothing could be further from the truth.

In the first place, the total shares freely distributed amount to only a portion of the claimed value of the publicly owned enterprises. 1 The Russian scheme, for example, provides for only 49 percent of the ownership to be distributed free. The other 51 percent of the assets in each enterprise may be purchased by its "managers and employees," who are to "submit bids" for buying up the major portion of each enterprise.

This means, one, real control of each enterprise will ultimately reside with "managers and employees."

Even if shares distributed to all citizens are not sold, as their holders are free to do, but invested in one form or another in the enterprises, ownership would be so dispersed that real control would rest in the hands of "managers and employees."

And two, the "managers," that is, the Stalinist bureaucrats who remain in control on every level of the state and industrial bureaucracy, generally have "savings" far in excess of amounts saved by the great majority of workers. Consequently, managers can buy, in most cases, more shares than all the workers combined.

There are many other factors that, according to the laws of market relations, will tend to concentrate ownership and control of the nation's wealth into fewer and fewer hands. This means that if nothing stood in the way of these privatization schemes, a classic war would unfold between would-be "robber barons."

Each bandit, or group of bandits, swindling away the vouchers in one way or another, would also swindle and rob each other as they fight their way to the top of the heap of grasping neo-capitalist aged economies would provide the material entrepreneurs. basis for higher living standards comparaThis scenario would have some similarity to the process that concentrated ownership in the United States into the hands of a relatively few railroad magnates, bankers and other successful "robber barons.

But, there are two important differences that distinguish the battle royal opening up in the unravelling workers' states from the historic precedents in the evolution of class society. The initial difference flows from the form of property ownership first established by the October 1917 Socialist Revolution, which transformed Czarist Russia (and later, Eastern Europe, and large parts of Asia) from a society essentially based on private property to one based on collective property.

Now, those leading the "revolution" in property relations are attempting to go since. against the tide of history.

The "fly in the ointment"

This trying to turn back history leads to the second and most profound difference; something considerably more than a "fly in the ointment" for those who scheme to become capitalists: Unlike every other attempt at the transformation of property relations in history, standing in the way of this one is a powerful social class making taken away from workers with one hand, up the overwhelming majority of the popu- they have often been compelled to give back with the other. How does this work? everything to lose by the reintroduction of • It is well known that a very extensive private ownership of the means of produc- system of social guarantees was in place providing economic security for all from Unfortunately for Mr. Yeltsin and his cradle to grave. A prerequisite for creating capitalist-oriented co-thinkers, the resis- market relations is to eliminate such guartance of workers to their plans has barely antees, especially cheap prices for food and begun. Workers have not yet taken a more other basic necessities and the guarantee of aggressive course in opposition to capital- a job for everyone. In other words, before ist restoration partly because of illusions capitalism can get off the ground, labor and hopes that the capitalism that would power, the key commodity necessary for come would bring a massive inflow of capitalist development, must be made subject to market forces.

The working people reasoned that rapid • While the state has made some headway economic development of their misman- toward this goal, those in charge of managWing large-scale industry have been compelled by strikes and other actions to ble to those in the advanced capitalist compensate workers for the higher cost of living-mostly in the form of outright Their illusions, however, have been con- grants of food and other necessities. And siderably dimmed since their high point the local managers have been largely just after the wave of rebellion swept blocked from laying-off "redundant" workacross Eastern Europe at the end of 1989. ers.

This revolutionary tide scared the daylights Capitalist investors hold back out of the Stalinist dictatorships, spurring them to launch an accelerated course toward The world's would-be capitalist investors in the degenerating workers' states are well It wasn't long before workers found out aware of the enormous obstacles standing that the kind of capitalism imperialists had in the way of profitable investment. Even in mind for these countries was the capital- optimistic reports in the mass media from time to time are heavily tinged with doubt.

Africa-not that of Germany and other And, lately, most often they have been advanced countries of Western Europe. downright pessimistic. Worker resistance to sacrifices imposed on A report by Louis Uchitelle in the July 2, 1992, New York Times, speaks volmarket relations, has been rising ever umes. It's headlined, "On the Path to an Open Economy: A Decrepit Steel Plant in Although uncoordinated and episodic, the the Urals." The author compares steel workers' knee-jerk resistance has had the plants like this one (Magnitogorsk) with effect, so far, of folling one restorationist "the dinosaur steelworks in the United scheme after the other. The capitalist-ori- States that were forced to close a decade ented bureaucrats, especially those in ago..." He writes further, "The steelworks harge of the massive state-owned indus are one of many giant state enterprises in tries, have repeatedly been forced to back company towns across Russia that have ing a breakthrough to war est or mine emerged as a powerful political force because they keep workers housed and fed. market relations. Moreover, what they have But their clout runs counter to the pressure from industrial nations on President Boris N. Yeltsin to move quickly to a market economy, even if this leads to layoffs and labor unrest...

"If we close the plant, there are no other jobs,' said Anatoly Starikov, the 51-yearold general manager of the steelworks. *People would have to look for work elsewhere, and in Russia that is unrealistic. If we halt part of the production, then half the city will be hurt. That is also inadmissable.'"

Later on, under the subhead, "Protecting Workers Not Stockholders," Uchitelle writes: "While the executives who closed Lackawanna and Homestead responded to pressure from stockholders, Mr. Starikov will not have shareholders until the steelworks are privatized, which is not expected for at least a year and could take much longer. His constituents remain the townspeople he would have to lay off. They and their families make up half the population in this company town of 450,000 people."

"Company towns" like this one are what make up the ex-Soviet Union and the other countries of eastern Europe.

The Times author continues his perceptive report: " "The workers have the power, and the managers try to satisfy them so that they can hold on to their own positions, and keep alive their hopes of some day becoming owners,' said Aleksander Titkov, a Russian economist and sociologist. "These managers are operating in a middle ground between the old socialist state and the markets...?

"While the government. remains the nominal owner of these giant enterprises, Mr. Starikov and his peers exercise most of the authority. They set production and wage levels, bank their revenues instead of turning them over to the state, buy their raw materials and make their own investment decisions. The government, in fact, has become more adversary than ally."

The capitalist media's characterization of these industrial bureaucrats as "hard-liners, opposed to privatization," reflects its tendency to picture them as pro-socialist. This, clearly, is not the case. The factory "bosses" have had no choice, as the Times article explains, but to bow—temporarily—to the threat of "worker unrest." Later on Uchitelle spells this out. He writes:

"The industrial nations are backing Mr. Yeltsin and his economic team, even at the cost of layoffs and bankruptcies. But the unrest that might result from widespread unemployment has become a bargaining weapon for the managers and their representatives in Parliament, among them Vladimir Kluvgant, the 34-year-old Mayor of Magnitogorsk.

' I understand the position of Mir. Gaidar to stabilize the ruble,' Mayor Kluvgant said, referring to the acting Prime Minister, Yegor T. Gaidar. 'But don't forget: You can bend a stick up to the point that it breaks. Otherwise you will have social explosion.' "

Such reports pepper the pages of the more informative capitalist publications. A not untypical incident, in Albania, is briefly reported in the Aug. 27, 1992 San Francisco Chronicle:

"Albania's government said yesterday that it is ready to use force to quell riots by arms factory workers angered by job losses, Tirana radio said. The workers, who began protesting Tuesday [Aug. 25] in the town of Polican about 110 miles southeast of Tirana, have set ablaze factory offices, besieged the town council and taken hostage the town's chief of police."

Trouble brewing in China too The New York Times, in an earlier edition (June 11, 1992), reported a marked shift in mass sentiment away from support to privatization in China. A piece titled, "Factories in a Changed China Suffer Strikes and Sabotage," by Nicholas D. Kristof, is significantly more pessimistic than most reports on the progress of capitalist restoration in China. The author writes:

"Worried by layoffs and rising prices, many Chinese workers seem increasingly disenchanted by the capitalist-style changes taking hold in shops and factory floors around the country. As a result, for the first time since China began liberalizing its economy more than a dozen years ago, many ordinary citizens seem to be no (continued on next page)

Scan page 7

observers have been watching the events Prospects for political revolution ers' democracy and its establishment of a TOPI 0 olutionary road leading to world tually omnipotent. world's ruling classes have been able to Hence, it is unlikely that a mass revoThis exaggerated impression of capital- keep a lid on the volcanic forces gestating lutionary workers' movement can be Many in the socialist movement have ism's power is backed up by the underground, they have nevertheless been built in the workers' states if it appears been disoriented by the failure, thus far, relatively subdued level of class struggle seriously weakened of an independent political movement of in the imperialist centers since the end of workers-organized in their own name the 1940s-except for brief episodes of and advancing their own class interests mass worker mobilizations such as the This is expressed in such things as countries-seems to conflict with the to emerge in these countries. Socialist 1968 general strike in France. imperialism's inability to yet take advan- evidence of the last 40 years.

This is in contrast to the repeated revo- tage of the gigantic shake-ups in the Why? The basic social, economic, and the workers there have not yet spoken Lutionary challenges in the decades Soviet Union and Eastern Europe.

between the two World Wars and their Even the powerful German imperialists from the outset was that the social revoword. immediate aftermath, have expended more of their capital lutions beginning in October 1917 have (For example, the German revolutions reserves to integrate the former East Ger- been essentially restricted to the backward What hampers political revolution? of 1918 and 1923, the British general many into their economy than they countries of the world. The basic premise While only those with the dubious strike of 1926, the Spanish Civil War, expected. This has compelled them to try of revolutionary Marxism is that the conability to see into the future can lay out a and the rise of the CIO in the United to make their working class foot the bill. struction of socialism can begin only at line-by-line scenario of coming events, it States after World War I; and the revolu- This has already begun to jolt German the highest economic levels reached by is only possible for us mortals to see the tionary upsurges in Eastern Europe, workers, the most powerfül in Western capitalism.

France, Italy, Greece, and China after Europe, toward class struggle in defense That's why the leaders of the Russian of their living standards as is evidenced Revolution looked to the extension of In those 30 or so years the potential by the recent successful railroad strike. questions: What stands in the way of a shown by workers for conquering state Moreover, German capitalism's capaci- capitalist countries as their only real hope resurgence of the working class in these power was demonstrated for all to see in ty for getting a firm grip on their for socialist development. countries? And, what objective develop- one revolütionary upsurge after another in economic woes is, for the first time since Backward Russia, most of eastern ments will set-off the inevitable struggle the industrialized countries and through- World War IT, in doubt. by them for political power and genuine out the world. The only thing standing in The Germans, carrying the rest of and Cuba, need the enormous material the way of socialist revolution in those Western Europe in their tow, have been resources that would come from a socialThe most decisive factor standing in years was the subjective factor-the fail- forced to risk destabilizing all of Europe ist revolution in Germany, England, the way of the revival of revolutionary ure of workers to construct a political and the United States by following a France, Japan, or the United States, to struggle in the disintegrating workers' party capable of leading them to revolu- tinancial policy that runs counter to the reach the productive levels of advanced states is the same factor that has brought tonary success. needs of the rest of the capitalist world. capitalism and surpass it Moreover, while the failure to solve They have been raising interest rates to To sum up, then: When the coming bativity of the powerful working class of the problem of revolutionary working fight inflation and attract capital to their the United States and the rest of the class leadership the subjective factor- economy. Meanwhile, the rest of the imperialist world to one of its lowest lev- remains the central problem to be solved, world has been lowering interest rates in els in this century. This temporary the relative stability of capitalism has the hopes of reviving their stagnating decline in militancy is rooted in an made the subjective factor an objective economies. unprecedented four decades of relative one for small revolutionary socialist This factor-the long period of relative Of course, it has now become unmis- tive passivity of workers in the Workers in Eastern Europe, the Soviet takably clear that the prolonged period of imperialist centers of world capitalism— Ilninn and China caw no chance of relative sanitaliet crahilito te ranidiv is mainlu reconcihle for haldino hark VILL in namona An una ni avia is mainly responsible for holding back obtaining aid for revolutionary struggle approaching an end. A crisis that threat- the working classes in the degenerating from a revived workers' movement in the ens to shake all sectors of the capitalist workers' states from beginning their own capitalist West. To workers in the East, world to its foundations is rumbling struggle, in their own name and in their imperialist capitalism appeared to be vir- beneath its surface. And while, so far, the own class interests.

SOCIALIST ACTION SEPTEMBER 1992 7 A growing number of socialist-oriented unfolding in the bureaucratized workers' states with great interest. Many of these people, however, have become pessimistic, concluding that capitalist restoration is, for all practical purposes, an accomplished fact.

Even many who looked to Leon Trotsky's perspective of a political revolution by Soviet workers that would take that country back onto the road of world socialism have all but given up hope.

Trotsky, along with Vi. Lenin, was a central leader of the Russian October Revolution. After Lenin's death in 1924, he became the foremost opponent of the Stalinist-engineered destruction of workcounter-revolutionary bureaucratic dictaBetrayed," first published in 1936, Trotsky explained that Stalinism had placed one foot in the camp of imperialism and that its course was toward capitalist restoration. But he also predicted that Soviet workers were an enormous obstacle blocking the road back to capitalism.

He explained why political revolution was in the cards and that the working class would have every chance to overthrow the restorationist bureaucracy and tur the Soviet Union back onto the revsocialism.

Action, however, remains convinced that and, moreover, are certain to have the last general outlines of events in the future.

To begin properly, we must first World War II.)

answer the following closely connected socialism?

the level of class consciousness and comprosperity in these centers of world capi- groups.

talist power.

(continued from previous page)

longer agents of change but obstacles to it. Workers in several cities have attacked factory directors who have tried to introduce market-oriented changes, and there are growing reports of strikes and acts of sabotage.

"Those incidents suggest that opposition to fundamental change is increasingly coming not only from octogenarian Communist hard-liners [sic] but also from many ordinary blue-collar workers."

A little farther along Kristof points more accurately to the real roles of workers and bureaucrats. He writes:

" "There's enormous frustration out there with the reforms,' a Chinese economic official said. "The leaders are running scared....' Reform used to be very easy...[but] in the 1990s, the agenda is different. While virtually all Chinese endorse 'reform' as a general slogan, many workers worry about what it will mean: higher rents, rising rice prices, and destroying the "iron rice bowl' system that guarantees workers stable employment and steady incomes.

"According to a folk ditty now making the rounds among workers: Before liberation, we had a clay rice bowl. Then Chairman Mao gave us an iron rice bowl. Deng Xiaoping [currently the most authoritative spokesman for the Chinese Stalinist dictatorship] poked a hole in it. Since reform, we've had a porcelain rice bowl."

The Times reporter gives his readers a taste of how workers view the attack upon their economic security: " 'A porcelain rice bowl looks rather elegant,' a manual laborer in her 40s explained dryly. 'But it's no more sturdy than one made of clay.' A 26-year-old woman who works in a factory said that when she was in the university, PRATIOUP • КПСС Crises on the horizon stability that is the root cause of the relashe believed that most Chinese wanted more economic liberalization. But now she figures that aside from intellectuals, many people are against fundamental changes....

"Early this year, a laid-off driver at a toothpaste factory drove his truck over his boss, a pioneering manager who had shaken up his factory by adopting Western-style management practices. The central Government suggested that the factory manager be hailed as a 'martyr' for reform, but the factory workers refused to nominate the manager for the honor...

" 'The Government's talking about smashing our iron rice bowls, and making us pay for our own medical care,' said a 29year-old worker in Beijing. 'Companies are even beginning to lay off workers! Of course folks are angry.... 899 The Times, reporter concluded on this obvious note: "Top leaders reportedly met recently to discuss the problem and decided that its basic premise the revolutionary capability of the working class, especially in the most developed capitalist political problem of the workers' states their revolution to one of more developed Europe, China, Vietnam, North Korea, crises of collapsing capitalist stability once again impels workers everywhere toward revolutionary mass action in defense of their living standards, the world's working classes will once again demonstrate that they alone have the capacity to rescue the human race from capitalist barbarism.

As in the past, every victory by workere in any conntry will incnire workers in every other country to follow their example, and ultimately go forward toward an authentically new order of world socialism.- N.W.

to proceed cautiously for fear of setting off labor unrest."

"Labor unrest" is something that terrifies Stalinist bureaucrats, because the bureaucracy does not have real roots in the collective economy. It is a parasitic growth that can be swept away rapidly in an upsurge, as happened, in a matter of weeks for example, during the Hungarian revolution of 1956.

Unless the bureaucrats can transform themselves into capitalists, they have no future. But in the attempt to do that, they are putting their necks in a noose.

1 The claimed value here of enterprises is no more reliable than the alleged value in dollars of wages paid in rubleswages in these societies are only a small part of actual compensation, which includes a large portion of living costs provided free or below the cost of production.

Scan page 8

style is lucid, popular, but never superfi-

----- pull-quotes -----

torship over the first workers' state. In his book, "The Revolution