After more than five years of experimenting with anti-socialist economic reforms, the bourgeois elements in the Soviet government have virtually thrown in the towel in their effort to restructure the economy and return it to capitalism.
No, they haven't given up their effort to overturn the socialist system by other means. But their economic plans, which have had five years to show some results, have proven bankrupt.
Their last offering was the so-called 500-day or "miracle" plan. First proposed last summer, it was supposed to install what would amount to a capitalist regime in less than two years. But it has come up against insurmountable obstacles and its principal architects, two right-wing bourgeois economists, have resigned.
These two, the team of Stanislav Shatalin and Nikolai Y. Petrakov, were considered whiz kids comparable to Reagan's budget director and darling of the rightwing, David Stockman, and "cut-'em-up" Rep. Phil Gramm of the Gramm-Rudman bill. They concocted the 500-day plan as a last-ditch effort to install a Western-type "free enterprise" system.
Just how they would do it, when and to whom they would present it, was somewhat of a secret, a book with seven seals. It wasn't published or presented to parliament for hearings. We first read about it in an interview with Mikhail Bocharov. (The interview was conducted by Irina Rishina and appeared in Literaturnaya gazeta of Aug. 15, 1990; excerpts in English can be found in the Current Digest of the Soviet Press, Sept. 19, 1990.)
Bocharov is a USSR and Russian SFSR People's Deputy and, more significant, the chairperson of the Russian Supreme Economic Council, which is similar in concept to the U.S. Council of Economic Advisors. It doesn't have legislative authority but wields enormous power over the Congress of People's Deputies and generally reflects the views of the president.
What are the basic points of the plan, according to Deputy Bocharov?
It is divided into four stages. The first, to last about 100 days, is a "preparatory stage" to propagandize the plan without giving specific details.
The second stage, to last from day 100 to day 250, is more important and gets down to nitty-gritty matters, like the beginning of privatization. It also marks the beginning of "destatizing" property, but no concrete details are given.
Just how will they start to privatize the nationalized economy in a big way? They will "cancel subsidies and grants."
In the minds of the governmental bureaucracy, and particularly its degenerate bourgeois elements, subsidies and grants are something the government generously hands down to the people, just as a bourgeois government "subsidizes" the mass of the people.
This is not how Marxists see it at all. On the contrary. Grants and subsidies are what the workers give to the governmental apparatus and its hordes of servants. The masses of producers are the ones who give the grants and subsidies, according to the Marxist concept as explained in the Gotha Program.
The workers do not receive in wages the full value of what they produce. Money is withheld for health, education, insurance against natural disasters, the environment, and so on. Whatever is left over is actually a grant to subsidize the civil servants, what is today the bureaucracy and its multitude of servitors.
But these economists talk about grants and subsidies as though that were something they generously gave to the people, and now want to take away.
How will they do it, and what will be the social and direct economic effects? What will it mean to the people, to Ivan and Olga? They don't say. Specific legislation will spell it out.
By canceling the subsidies and grants, they hope to amass an enormous amount of money. But that alone is inadequate. The more important aspect of the second stage is that "the state will obtain 200 billion rubles as a result of privatization and other measures."
And what will they do with the 200 billion rubles that they hope to obtain by privatization? What will they make private? Who will buy? Who really has the authority to sell?
They must have presented a whole set of specific measures by which privatization would go ahead full steam, but these have not been made public. However, it would have to entail selling state property to those who have money — mostly hoarders, speculators, and those who in other ways have amassed fortunes in the years of the Gorbachev regime. The specific legislative rules and regulations have not been published.
The third stage, to last from day 250 to day 400, goes to the heart of the matter, "launching the market mechanism." What does that entail? "The lifting, in the main, of state control over prices." This could only mean giving free rein to not just inflation, but hyperinflation. Price rises, especially in a period when there's already inflation, can only mean a deep cut in the living standards of the masses. It is an indirect way of enormously reducing their pay.
Can the governing group really withstand such a development? After so much chaos, inflation, and disruption of the production and distribution of goods, could they survive this new shock? But wait. There is a safety net.
It is a nauseating imitation of bourgeois mechanisms — a "system of social guarantees (a rationing system, indexing, specific-purpose assistance programs, etc.)." Imagine, these bourgeois types intend to hand out alms to the people! Will they establish soup kitchens, perhaps?
There's more.
This third stage calls for "allowing a deep slump in the basic branches of the economy." Incredible as it seems, they are advocating a capitalist recession. Then comes "regulating unemployment and regulating inflation — with the aim of a drastic structural reorganization of the economy."
This will allow them to move on to the final stage when, "regardless of the economic situation," the plan will "achieve visible positive results by the end of the program's acceleration" which will then result in "a deceleration point in the slump in the basic branches of the economy." This last stage, they claim, will last from day 400 to day 500, and will begin to stabilize the economy.
It is difficult to conceive that such a document could be published in the Union of Soviet Socialist Republics without an outcry and a demand for the ouster of the government!
There was only one miscalculation in this beautiful plan. It did not take into account the mass of the workers, collectivized peasants, or the masses of people in general.
After this plan was revealed last summer, Gorbachev met with Boris Yeltsin, who promoted the plan "with reservations." Together, they were supposed to come out with a compromise of sorts by which both the Russian Republic and the Soviet Union as a whole would agree to institute the plan. But the agreement collapsed.
Gorbachev must have shrunk from it in horror, while Yeltsin himself tried to squirm out of some of it. In his usual demagogic style, Yeltsin came out both for and against the plan, utilizing the opportunity to attack the former regime while at the same time doing nothing to improve the economic situation.
As the basic ideas of the plan became more and more public, consternation and in fact a mood of outright rebellion began to germinate in the population. A shift in the mass mood was clearly discernible. If anything would awaken the masses of workers, collectivized peasants, and ordinary people in the Soviet Union to the danger of what the new bourgeoisie has in store for them, this was it.
As time went on, it became plainer than ever that the nouveau riche, the new bourgeois elements and their political and intellectual leaders, are after all a narrow sector of Soviet society.
How they swung various elections enough in their favor to be able to construct a bourgeois parliament still needs elucidation, but all that notwithstanding, the majority of the population is opposed to the new bourgeoisie. The representatives of the bourgeoisie in parliament and elsewhere are now scared stiff of civil war, and are deserting the struggle.
Gone is that self-confidence, that arrogance, which they showed at the time of the 27th Party Conference. Furthermore, their intellectual stock in trade is losing confidence in their own ideas as they see what the capitalist market is doing in Europe and the U.S.
It was this shift in the mass consciousness which forced the hand of Gorbachev. He embarked on a wholesale change in his cabinet. Foreign Minister Eduard Shevardnadze, who resigned on Dec. 20, was replaced by Aleksandr Bessmertnykh. Valentin S. Pavlov succeeded Prime Minister Ryzhkov. Boris K. Pugo became the new interior minister, and Gennadi I. Yanayev is now vice president. This shakeup, plus the dismissal of many top economists, is described by the New York Times (Jan. 27) as the replacement of "virtually all his liberal economic and political advisers with a new circle of tough hard-liners."
The first crop of economists associated with perestroika included Tatyana Zaslavskaya, Abel Aganbegyan, Leonid Abalkin and Nikolai Shmelyov, among others. They were milder, advocating a new version of Lenin's New Economic Policy. But the bourgeois elements wanted to go much further and looked for another crop who would carry out more deepgoing cuts for the masses.
This group, however, seems to have given the coup de grace to the whole scheme. Their proposals made Gorbachev's political position untenable. Almost in a panic, he began to reshuffle his governing group.
Almost all of the bourgeois economists, right on down to Shatalin and Petrakov, have either resigned, been ousted, or moved into very subordinate positions.
The anger of the workers and collective peasants was also accompanied by a change in mood in other sectors of society. The petty bourgeois elements who had been roped in by the new crop of bourgeois politicians and cheerleaders for free enterprise were becoming disillusioned. Disappointment also began to show up among the bourgeois elements.
In a word, what has happened is that the bourgeois counterrevolution is in retreat. Its various economic plans, including the latest and most outrageous one, are bankrupt and totally unacceptable to the people.
An emergency measure has just been instituted to withdraw 50- and 100-ruble notes from circulation. On the surface this may seem to be only a technical change, but in reality it is a significant blow at the new bourgeoisie, speculators and black marketeers. In order to change large amounts of old bills for new ones, they must fill out a form declaring where they got the money they want to change. This is aimed directly at the so-called nouveau riche, the new bourgeoisie.
It is only one measure, but more will follow.
From the very beginning, the Soviet leadership must have had grave doubts about whether they could put a saddle on a cow and make it work. But they did believe that if they made significant concessions to the imperialist bourgeoisie, the West would open up its markets, cancel the Jackson-Vanik amendment restricting trade between the U.S. and the USSR, make substantial loans, give them access to the World Bank and the IMF, and accord them a significant role in the bourgeois world economy similar to their political role in the Security Council where they have a veto power.
But nothing of the sort happened. Despite some last-minute promises by Bush himself on the eve of launching the Gulf war, no real concessions were made by the imperialist bourgeoisie. The collapse in Eastern Europe, which was stimulated by the Gorbachev reforms, won a lot of applause and sickening flattery, but no huge loans, no easy credit, no opening up of markets. Just a lot of subversion in the Soviet Union under the cover of joint ventures.
So now Gorbachev finds himself isolated. The bourgeois elements and the proletariat are at polar opposites as never before. Gorbachev is losing support from the center and the chaos is continuing.
The big question is whether Gorbachev will at this late date attempt to divert the domestic crisis into a foreign policy adventure of horrifying proportions by actually carrying out the Pentagon's demand that the USSR join in the military offensive against the Arab people.
The progressive part of the military is opposed to it. The Soviet Chief of Staff, who visited the U.S. in October at the request of the Pentagon, spoke publicly against starting a war, even as Foreign Minister Shevardnadze was collaborating with the U.S. in the UN. The new foreign minister, Bessmertnykh, en route to his first official meeting with U.S. Secretary of State James Baker on Jan. 26, tried to distance himself from the scope of the war against Iraq.
The most significant development, however, is the postponement of the Bush-Gorbachev summit conference that had been scheduled for February. The idea that the U.S. is too busy with the Gulf war to meet with Gorbachev is a lie. The Bush administration would love to use such an occasion, if they could, to show USSR support for the war.
What made the intervention of the U.S., Britain, France and the other imperialists possible in the first place was the apparent defection of the USSR from the anti-imperialist camp and its cosponsorship of the resolution which gave the green light to attack Iraq.
It looked all but certain that even if the USSR did not commit military forces to offensive action against Iraq, it would at least politically support the imperialist intervention. Now things seem on the verge of turning full circle. The USSR at the present moment is not only not contributing military forces, but is beginning to criticize, ever so softly, U.S. intervention.
Now even the reactionaries in the USSR have begun to realize the danger that the USSR faces — of being entangled in an imperialist war in which they have no interest whatsoever, where the interests lie completely on the other side.
The great theoretical and political mistake they made from the very beginning was to underestimate how deeply entrenched is the complex of social, economic and also political institutions in place since the days of the Revolution. Although badly deformed, they are nevertheless an enduring bastion of socialist construction.
They are products of a new social system created over decades, and no new social system, however unfinished it may be, will give way unless its potentialities are fully exhausted.
The other mistake the restorationists made is to think that a capitalist system can be introduced by political manipulation, by mere political legerdemain, or by what amounts to a political coup worked out in alliance with the imperialist forces.
Capitalism as a social system grew out of feudalism, first in Europe and later Japan. It developed spontaneously over centuries in the economic soil of the time. Where feudalism was static and lacked the capacity for growth, capitalism was dynamic. The widening of the capitalist market, while accompanied by force and violence, was the inevitable result of these economic forces.
The bourgeois elements in the USSR attempted to arbitrarily introduce an older social system, capitalism, which is based upon exploitation and oppression. But a different system cannot be sneaked in by juridical or political sleight of hand. It would have to be fought out in the streets, in the factories, in the military, the universities and everywhere.
The attempts to gradually reduce the effectiveness of socialist industry, to replace collective labor with promises of personal incentives which were supposed to bring a wave of prosperity, brought only a wave of black marketeering, extortion, outright theft and sabotage, and a decline in production and consumption of goods.
All this has led to what is a historic turning point. The fact that Gorbachev himself, the architect of the bourgeois reforms, is still at the helm, does not make it any less significant.
The capitalist press and governments had earlier hailed Gorbachev as a hero, seeming to take it for granted that the capitalist reforms in the USSR, together with the collapse of the governments in Eastern Europe, would ensure a restoration of capitalism sooner or later. Now they see this was a gross miscalculation.
Last summer, the inner circles of the Bush administration were debating whether the capitalist reforms were "irreversible," as they put it. Almost all concluded that the collapse in Eastern Europe and the economic dislocations and chaos, rebellion and divisions among the nationalities would finish off whatever remained of the socialist system. They are learning otherwise.
Last updated: 19 February 2018