20 Century

Created 1/24/1997
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Slouching Towards Utopia?: The Economic History of the Twentieth Century

-XXVI. The Fall of the Soviet Union-

J. Bradford DeLong
University of California at Berkeley and NBER


February 1997

Leonid Brezhnev:

The person who saw this most clearly was the German classical liberal Max Weber. He saw that socialism would become nothing but a synonym for bureaucratic despotism. And:

History shows that wherever bureaucracy gained the upper hand, as in China, Egyptit did not disappear. A progressive elimination of private capitalism is theoretically conceivable. What would be the practical result? The destruction of the [dehumanizing] steel frame of modern industrial work? No! [S]imply that also the top management of thesocialized enterprises would become bureaucratic.[T]here is even less freedom, since every power struggle with a state bureaucracy is hopeless.

State bureaucracy would rule alone if private capitalism elminated. The private and public bureaucracies, which now check one another to a degree, would be merged into a single hierarchy. This would be similar to the situation in ancient Egypt, but it would occur in a much more rational[ized]-and hence unbreakable-form.

[Bureaucracy t]ogether with themachineis busy fabricating the shell of bondage which men will perhaps be forced to inhabit as powerless as the fellahs of ancient Egypt. Who would want to deny that such a potentiality lies in the womb of the future

This was written in 1917. Weber was right. From the perspective of 1990 there is little to add. One slogan of the turn of the century American labor movements was "one big union." The slogan of twentieth century socialism might as well have been "one big bureaucracy."

Weber did not note the corruption (and the related economic disruption and waste) that would come to dominate "socialist" economies, and Weber had no inkling of the periodic waves of mass terror required to preserve Communist Party power in the face of the enormous gap between the party's official ideology and its actual practice. In fact, socialism turned out in the direction that but much worse than Weber had anticipated beforehand.

The principal reason that Marx feared market economies turned out to be false: they did not have a powerful inner dynamic leading to a polarization of the distribution of wealth. This had become clear by 1883, or at least by 1900, even though it had not been clear in 1848. The appropriate reaction to the fact that growing material wealth was trickling down should have been enthusiasm. Markets are powerful instrumentalities for controlling and guiding persons and organizations. They generate a rapid pace of innovation, provide for efficient recombinations of factors of production into new enterprises, and pressure large organizations toward effective fulfillment of their productive missions. To the extent that markets can be harnessed for the purpose of building Utopia, scarce public administrative capacities and competencies can be redirected to other uses. A society that can harness markets uses a form of sociological judo, applying small amounts of pressure at key points to make inertia push results in desired directions.

But the response of those who had positioned themselves left of social democracy was not enthusiasm that it would be easier to approach utopia than Marx had expected. Instead, the response was the continued denigration of systems that assigned a prominent role to either private production or market exchange, and a worship of hierarchical administration and bureaucracy-under the name of "conscious social control and administration of production for use"-as the answer to all problems. Whatever utopia is, it does not consist of one big corrupt bureaucracy. And so the left has had little constructive to offer social democrats and others trying to manage and reform the "mixed economies" of the twentieth century.

Doublethink

Paul Sweezy, The Present as History (New York: Monthly Review Press, 1953).
p. 50-1: "Burnham alleges that[for] a society [to be] socialistit must be. fully democraticWithout entering into a discussion of the precise meaning of the term `democracy', we may agree that socialism has been historically thought of as `fully democraticin all spheres'. We may also agree that this does not apply to the Soviet Unioni in the political sphere, where there is a single-party system and certain restrictions on civil liberty. At the same timethere is more genuine democracy in the economic and social spheres in the Soviet Union than anywhere else in the world."

p. 62: "From the standpoint of economic science, the political leadership in the Soviet Union is acting as the agent of the working class. No relation of exploitation exists between controllers and workers.The real issue is one of general interests and objectives, which are prescribed by the structure and form of social relations as a whole. In this sense the objective of those who direct the Soviet economy can only be production of use values which corresponds in every way to the interests of the working class. We might, therefore, say that the working class is the ruling class in the Soviet Union."

p. 76: "those who understand that in essence Marxism is a method of analysis and a guide to actionwill be in little doubt that Schwartz has mistaken the enrichment of Marxism by the two great twentieth-century revolutions [of Lenin and Mao] for its decomposition."

p. 286: "[Hayek] even goes so far as to compare Nazi anti-semitism with the liquidation of the kulak in the USSR. The two things, of course, have absolutely nothing in common. The Jew remains a Jew; the kulak could, and most of them did, become a collective farmer on exactly the same terms as his fellows."

p. 352: "The publication in 1952 of Stalin's Economic Problems of Socialism in the USSR would make possible today a more satisfactory reply.In the light of [Stalin's] explanation I would like to amend the statement which Mr. Kazahaya criticizes.[The amended statement] conveys my meaning more accurately than the original wording and is, I think entirely in accord with Stalin's view."

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Is Reform Possible?

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After the Fall: the Satellites:

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After the Fall: Russia:

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20 Century

Created 1/24/1997
Go to Brad DeLong's Home Page