Eastern Europe Today:

An Overview and a Polemic.

Paper far the International Association of Scholars

for Democracy and Socialism Conference on

the Legacy of Leon Trotsky.

Chris Edwards

Moscow, November 1994

The developments in Eastern Europe over past few years have vindicated the Trotskyist position on the nature and dynamics of Stalinism. The situation at the moment in the Russian Federation can be summarised as follows: on the one hand there is the Yeltsin wing of the bureaucracy which ìs effectively trying to reconstruct itself as a comprador bourgeoisie; on the other hand there is the conservatives wing of the bureaucracy which wants to restore capitalism in such a way that a national bourgeoisie retains control of the economy rather than foreign imperialist capital. The Trotskyist analysis of Stalinism predicted that capitalism could only be restored through a counter-revolution. Some on the left have argued that capitalism has already been restored in Eastern Europe without a counter-revolution and that this fact has called into question the validity of the Trotskyist analysis. This document argues that this is not the case: capitalism has not been restored; collectivised property remains largely intact in the key area of production; the counter-revolution has yet to come.

Understanding the nature of the conservative wing of the bureaucracy is the key to the whole question. It is true that this wing wishes to restore capitalism through a process of converting itself into a national bourgeoisie. Its conflicts with Yeltsin revolves around the extent to which existing domestic enterprise should be sacrificed on the alter of free market economics and whether foreign capital should be given a free hand to dominate the economy. It has resisted Yeltsin’s wish to introduce the principles of free market economics into the critical area of central bank credit to enterprises. The top managers of the enterprises, despite the fact that they would like to become the new owners of their firms, through converting them to the private sector, are unable to do so and resist the ending of state subsidies. This is because they know that their enterprise are "uneconomic" in world market terms end even in national terms. They fear the reaction of the working class and the lower levels of the enterprise management to large-scale closures, intensification of work rates and pay cuts.

One reason for this fear is the numerically enormous, and very highly concentrated, nature of the working class in Eastern Europe. While this concentration has declined in the capitalist West, the Eastern bloc working class is by far the most concentrated on a global level. It is also centralised through the continuing existence of collectivised state property. Every strike is immediately political because the employer is the state. Free market economists in the West are only too well aware of this fact and so is the bureaucracy in Eastern Europe--including the managers of the state enterprises. The managerial wing of the bureaucracy is, nevertheless, playing exactly the role of defending collectivised property which Trotsky predicted. It does so, however, against its will. Apart from fear of the working class, it is obliged to defend collectivised property to preserve its own immediate interests i.e. economic self-preservation despite its long-term project of the restoration of capitalism (with itself in the saddle).

The collectivised property has shown a considerable amount of durability and resilience in the face of the attempts to undermine it and restore capitalist private property. The bureaucracy still runs Russia and the ex-USSR. The bourgeois political forces from outside the bureaucracy, which were briefly in control in certain republics have now been replaced by forces originating within the bureaucracy. The bureaucrats have been put back in power through elections as the working class experienced the catastrophic decline fn living standards as a result of the free market "shock therapy" introduced to one degree or another throughout the ex-USSR. The result has been that the breakneck dash to restore capitalism, in the form of free-market economies dominated by foreign capital, has been arrested. A more restrained speed has been adopted to restore capitalism in the form of state capitalist mixed economies with a significant role for a national bourgeoisie if it can be created (which does not appear likely however).

An intriguing historical analogy presents itself: capitalism experienced temporary setbacks after the bourgeois revolution in the form of political counter-revolutions which were unable however to reverse the social revolutions. They could not restore feudalism. Is this what is happening now in the Eastern bloc? It does not look hopeful for the restorationists. Western imperialism is unwilling to invest capital because of the short-termism of private capital. Economic and political conditions are not stable enough to guarantee profits. It is not able or willing to provide aid on a big enough scale to make a real difference to these conditions. Long term objectives are frustrated by this inability. Putting money into Eastern Europe is like pouring it down a black hole. There is also insufficient capital in the East to construct a national bourgeoisie. This does not, of course, mean that Trotskyists should be complacent about the need to introduce the subjective factor into Eastern Europe. Speculation about the possibility that it is historically impossible for capitalism to set the social clock back in the Eastern bloc has its dangers, however. If it reflects optimism of the will then all to the good. However ìt would vary dangerous to make the assumption that this is inevitable. Pessimism of the intellect is very necessary here. It is essential that Trotskyist parties are constructed in the Eastern bloc as a matter of extreme urgency. Our generation will not be forgiven for failing in this task. An even worse prospect than the restoration of capitalism may be possible if we fail: the restoration of barbarism. This danger increases the longer the delay in the political revolution. We have already seen what happened in ex-Yugoslavia. The inter-communal clashes in the former Soviet Union are quite capable of making ex-Yugoslavia look like a storm in a tea cup. The simmering dispute between the two largest republics, Russia and Ukraine, over the Crimea is potentially the most devastating as they both have nuclear weapons.

Some privatisations have occurred. By and large however, and particularly in the Russian Federation. these have been mostly confined to the sphere of exchange--not production. A layer of petty merchant capitalists, often linked to the underworld, has been created. The service-sector is their base. Production, however, remains largely collectivised. The existence of a layer of petty merchant capitalists and a significant level of privatisation in the service sector is not sufficient however to justify a characterisation of the economy as a whole as being capitalist. Production is crucial to this--not exchange. The Eastern bloc countries must continue to be regarded as (grossly) degenerated workers’ states.

East Germany is a special case. The existence of the West German bourgeoisie enabled the Eastern state to be incorporated into the Western capitalist economy. However, even in East Germany, despite the fact that collectivised property has been dismantled, it is hardly possible to speak of the actual reality of the restoration of capitalism in terms of production. Rather it is the case that an industrial void, a wilderness, remains where once stood one of the largest economies in the world.

The August 1991 Coup

The August coup of 1991 was a conflict between three Stalinist factions of the bureaucracy: an openly counter-revolutionary comprador wing of the bureaucracy around Yeltsin, a reformist centre around Gorbachev and a conservative wing around the coup-plotters. The issues were: (a) whether the USSR should be maintained in its current form or whether power should be devolved to the constituent republics (b) a dispute over the rate at which the process of restoring capitalism was occurring--the conservatives feared that it was out of control and recognised that the devolution of power to the republics would further accelerate this to a point of a collapse of the system (c) whether free market economics or state capitalist economics would prevail in the restored capitalist economy (d) a dispute about who would dominate the restored capitulate economy: the domestic Stalinist bureaucracy in the form of national bourgeoisie or foreign imperialist capital through the mediation of a comprador bourgeoisie.

No political support should have been given to any wing of the bureaucracy during the August coup. None of them had policies which defended the collectivisation of the economy. This did not alter the fact, however, that the coup attempt by the conservatives was aimed at arresting the tendency toward a rapidly accelerating, uncontrolled, restoration of capitalism on terms favouring the comprador model. Trotskyists should not have been indifferent to the issue of the rate of the restoration of capitalism. As Trotsky always maintained, the defence of the gains of the October Revolution is always necessary. He maintained that those who could not defend former conquests would never build anything new.

While having no illusions in the ultimately restorationist objectives of the conservatives it was necessary for Trotskyists to fight restorationism every step of the way. We will see later on how Trotsky fought for this approach in the context of the invasion of Poland in 1939. Concretely, it was necessary to remain absolutely politically independent of all wings of the bureaucracy in the conflict. It was, of course, necessary to oppose the method employed by the bureaucracy--a military coup. Restorationism and any moves to accelerate the process of restorationism could be defeated only by the mobilisation of the working class and not through the Stalinist military-bureaucratic methods epitomised by the August coup. The effect of the coup on the consciousness of the Soviet and the world’s working class was disastrous. Faced with the accomplished fact of the coup, however, it was necessary to recognise that it strengthened the openly counterrevolutionary, fast-track, restorationist Yeltsin. The fraudulence of his democratic pretensions was exposed in his subsequent actions: banning the Communist Party and later the shelling of the very same Russian Parliament building which he occupied in August 1991. Trotskyists, while opposing the idea of a coup as a means of arresting the lurch towards restorationism, yet faced by it as an accomplished fact, should have responded to the crisis by mobilising the working class. It was necessary to warn them that, although the immediate threat to their interests came from the coup-plotters who wished to extinguish their democratic rights, an even greater danger existed in the form of the openly counterrevolutionary comprador wing of the bureaucracy around Yeltsin. It was necessary to explain to them that not only would Yeltsin employ the same repressive methods as the conservatives if he got the chance, but that Yeltsin favoured a very much more rapid dismantling and destruction of the collectivised enterprises in which they worked than either Gorbachev or the coup-plotters.

Contrary to the advice of some on the left, therefore, it was necessary to oppose his strike calls and overtures to join him at the White House and instead create an alternative pole of opposition, a third force, which denounced both the coup and Yeltsin. It was necessary to occupy the factories and to defend workers against both the possibility of repression from the coup-plotters and Yeltsin’s bid for power to implement his plans to close their factories down in the name of free-market economies. If the working class had been sufficiently conscious, it would have recognised that Yeltsin’s threat to collectivised property was in fact the first issue to be addressed before any settling of accounts could take place with the coup-plotters.

Just as Trotsky prioritised the defeat of Hitler, before settling accounts with the bureaucracy in Poland in 1939, it was first necessary to prevent Yeltsin from coming to power in 1991 through working class action independently of the conservative wing of the bureaucracy leading the coup. Trotskyists should not have been indifferent to the fact that Yeltsin wanted to speed the introduction of markets while the coup-plotters wanted to slow this down. It was necessary to fight restorationism every step of the way. If the working class had recognised this fact and had responded to the coup by mobilising, independently of the bureaucracy, against Yeltsin, austerity and other moves towards restoration, Trotsktyists should have allied with them. This did not happen because the workers were no longer ideologically committed to collectivised property. The very bureaucratic-military methods employed by the conservatives--a coup against Gorbachev--had made this an extraordinarily difficult choice for the working class to make.

Here a number of issues arise about the relative importance of collectivised property and its relationship to the nature of the state. There is a moralistic school of thought, within and without the FI, which says that collectivised property relations are not progressive unless a regime of genuine workers democracy exists. This view is also linked, in some cases, with another argument which says that it is better to restore a democratic capitalist regime, where political struggle can take place, than to continue with an undemocratic Stalinist regime (socialist-stagism). They applauded the collapse of the Berlin Wall and capitalist restoration in East Germany as a great step forward on this basis. It is additionally argued that nationalist movements in Eastern Europe, led by restorationists must be supported and built by Trotskyists even where the restoration of capitalism by their forces is likely. Western-backed restorationist political movements in the guise of national liberation movements are thus given left-cover by so-called Trotskyists. The argument presented by this political viewpoint goes as follows:

“The dissolution of the USSR as a federation is being accompanied by restorationist processes which entail negative consequences for all its peoples. But the two do not necessarily go together and one cannot successfully oppose capitalist restoration by defending a forced union. (...) The right to self-determination is a key democratic right, but it does not supersede other rights such as freedom of association, the right to vote, freedom of the press and especially trade union freedoms and the right to strike.”

USFI resolution: “The Soviet Union After the 19th August 1991” in International Marxist Review No 13. Spring 1992.

This argument is silent, however, on whether the right to self-determination supersedes social rights ernbodied in the defences of collectivised property. For example, the right to have access to the means of production in the form of a guaranteed job for life without the ever-present threat of unemployment. The right to free health-care, education, and other social welfare provision is not mentioned--such as the right to unemployment insurance, denied to millions in the Third World. The right to a living wage is ignored. This argument does not say that these social rights are not superceded by the right to self-determination. Is the working class of the Eastern bloc supposed to simply give up a system of collectivised property which has granted them these rights in exchange for bourgeois "self-determination"? The above approach thus confines itself only to bourgeois democratic rights associated with the restoration of bourgeois democracy. In other words the defence of collectivised property was not an issue: the republics of the former USSR would swap Stalinist oppression for the neo-colonial "self-determination" which the Third World has always enjoyed in relation to Western imperialism. The working class of Eastern Europe would no doubt be grateful to know that it has the right to trades union freedom and the right to strike after having lost all its social gains: It is necessary for Trotskyists to struggle for leadership within the nationalist movements against restorationism--an the basis of defence of collectivised property. Trotsky argued however that independence should only be granted after the restorationist threat had been defeated.

The USSR in August 1991 was not Poland in 1940: it was a conflict between three sets of would-be-restorationist wings of the bureaucracy--not a clear-cut struggle between traditional Stalinism and capitalist counterrevolution. Neither was the restoration of capitalism in practice an immediate consequence of the defeat of the coup. Trotsky’s condition of defence of collectivised property for supporting self-determination was thus not immediately in question. The repression employed in the August coup, however, strengthened the comprador wing and led to more openly restorationist republican regimes coming to power. Thus, the devolution of power to the republics was a contradictory development: the ending of the "forced union", in the context of the maintenance of collectivised property, was progressive; the shift to comprador regimes was retrogressive. The influence of imperialist ideology is evident in the above position--a species of moralistic, eclectic, petit-bourgeois democratism. Such views reject basic positions of Marxism. As Stalinism has committed crime after bloody crime throughout its history, it has become more and more difficult to defend the idea that the Stalinists states are degenerated workers states. First the bureaucratic collectivists in the American SWP, recoiling from the Hitler-Stalin pact and the invasion of Poland and the Baltic states by Stalin's armies, declared that the USSR was no longer a degenerated workers' state. Then the state capitalists capitulated to cold war pressures during the Korean war. The invasion of Afghanistan, the Kampuchean events and the crackdown on Solidarity led to further defections from the Trotskyist position e.g. the neo-Shactmanite Matgamna current in Britain and elements within Solidarity in the US. This was followed by the appearance of what might be termed the "quasi-Shactmanite" current within the contemporary Western Trotskyist movement which shares many of these assumptions and conclusions in relation to Stalinism. The neo-Shactmanite, bureaucratic collectivists explicitly deny the necessity to defend the Eastern bloc against imperialism. The quasi-Shactmanites, on the other hand, while abstractly recognising the existence of the workers states and the need to defend them, in practice abandon this defence by subordinating it to the "higher good" of the need for "democracy". Their line an the Berlin Wall indicates that they are more than prepared to sacrifice collectivised property on the alter of bourgeois democracy.

Such sentiments also ignore what Marx, Engela, Lenin, and Trotsky took for granted: collectivised property (the elimination of private ownership) and a state monopoly of foreign trade, together, are progressive in and of themselves. It is true that it is not merely a question of percentage of nationalisations in the economy (otherwise Burma or Syria would be workers states as is incorrectly argued by the British Labour Militant Group/Committee for a Workers International). It is a question rather of the degree of openness of the economy to penetration by foreign imperialist capital. It was a combination of the hegemony of collectivised property in the sphere of production and state monopoly at foreign trade which, together, prevented the sort of decimation of the Eastern bloc economies by imperialist foreign capital that has so often occurred in the Third World. It was the protection of the economy afforded by the state monopoly of foreign trade which allowed also for the possibility of the development of the economy of the USSR from the status of dependent, semi-feudal backwater in 1914 to that of an industrial giant. This same protection allowed Cuba to emerge from abject poverty to develop the best health and social welfare record in the Third World.

The neo/quasi-Shactmanites throw an important baby out, with the bathwater. We do not as revolutionaries take the side of the working class simply because we are against political tyranny (absence of democracy)--this is just one of our objectives (shared by humanists who are opposed to Marxism). The other objective, which distinguishes Marxism from mere humanism, is the regaining by the working class of its means of production taken away from it and monopolised by private capital: i.e. the deeper and more elemental social tyranny experienced by the working class. This is so obvious that it ought not to be necessary to have to say it. Yet it is necessary because the neo/quasi-Shactmanites have denied this elementary truism of Marxism, Instead of analysing the phenomenon of Stalinism in its development--dialectically--the neo/quasi-Shactmanites refuse to defend the gains of the October revolution--the collectivisation of the means of production because it is not in the form of an ideal norm: a genuine socialist society. If the collectivisation of the means of production is only progressive when there is democracy, then there is no logic to the characterisation of the Eastern bloc countries as degenerated workers’ states or to their defence against imperialism--it is an inconsistent position. Matgamna in Britain defended this position in the early 80s. He then went on to draw the full conclusions, some years later, and now defends full-blown bureaucratic collectivism. The contemporary quasi-Shactmanites appear to be headed in the same direction. They appear to be incapable of comprehending the significance of the social gains bequeathed by the October Revolution. This significance is explained by Trotsky as follows:

"In comparison with monarchy and other heirlooms from the cannibals and cave dwellers, democracy is, of course, a great conquest, but it leaves the blind play of forces in the social relations of men (sic) untouched. It was against this deeper sphere of the unconscious that the October Revolution was the first to raise its head. The soviet system wishes to bring aim and plan into the very basis of society, where up to now only accumulated consequences have reigned." (Trotsky, History of the Russian Revolution)

It is not an accident that bourgeois ideology trivialises and pours scorn on the notion of nationalisation and the social ownership of the means of production. This is the centre-piece of its attack on Marxism. Why is it that free market economists have attempted to privatise it out of existence? Yet a whole sector of the revolutionary left refuses to recognise this fact and indeed has incorporated the very same dismissive scorn for collectivised property. Just as the right counterposes bourgeois democracy to collectivised property, the neo/quasi-Shactmanites counterpose exactly the same thing in their grotesque applause to the capitalist reunification of Germany. Why? Essentially because they are not politically independent of liberal public opinion. Just as the original Shactmanites did not have the political strength of character to defend the USSR in 1940 because of the moral outrage within liberal circles over the invasion of Poland, the present day neo/quasi-Shactmanites are affected by the same reactionary pressures. The contemporary quasi-Shactmanites have argued that Trotsky refused to support the forcible incorporation of Finland or Poland into the USSR in 1939. They cite this as a justification for their support for the capitalist reunification of Germany. However they misunderstood what Trotsky's position was in this regard. His position was spelt out clearly in In Defence of Marxism.

"We do not entrust the Kremlin with any historic mission. We were and remain against seizures of new territories by the Kremlin. We are for the independence of soviet Ukraine and if the Byelo Russians themselves wish of soviet Byelo Russia." (Trotsky, In Defence of Marxism.1940)

However, at no point did Trotsky call for the withdrawal of the Red Army from Poland. Instead he said in the very next sentence after the above quotation:

"At the same time, in the sections of Poland occupied by the Red Army, partisans of the Fourth International must play the decisive part in expropriating the landlords and capitalists, in dividing the land among the peasants, in creating soviets and workers committees etc." (Trotsky, In Defence of Marxism, 1940)

In the very next paragraph Trotsky goes on to say that in the event of an invasion of Poland by Hitler:

"...partisans of the Fourth International, without changing in any way their attitude towards the Kremlin oligarchy, will advance to the forefront, as the most urgent task of the hour, the military resistance against Hitler. The workers will say:

‘We cannot cede to Hitler the overthrowing of Stalin; that is our own task’. (...) While arms in hand they deal blows to Hitler, the Bolshevik-Leninists will at the same time conduct revolutionary propaganda against Stalin preparing his overthrow at the next and perhaps very near stage." (Trotsky, In Defence of Marxism, 1940)

It is clear from Trotsky's formulation, "an independent soviet Ukraine and Byelo Russia", that his support for the independence of these countries and Poland, Finland and the Baltic states was not unconditional. It was conditional upon the preservation and defence of the collectivised property which existed in these countries. Trotsky did not call for the withdrawal of the Red Army from Poland because he said it was necessary for Trotskyists to defend this collectivised property from an attack by Hitler alongside the Red Army which was still occupying Poland. It is clear from this that the quasi-Shactmanites were guilty, in relation to German reunification, of the very thing which Trotsky opposed in 1940. Through their applause for the capitalist reunification of Germany they were guilty of ceding to Kohl and the East German capitalist counterrevolution, the overthrow of the East German Stalinists which was the task of Trotskyists on the basis of the defence and westward extension of the collectivised property.

The Class Nature of the Eastern European States Today

A further problem concerns the characterisation of the Eastern European states as they are now. It is necessary to distinguish between the terms government, state apparatus and state in terms of the society as a whole i.e. nation state. It is my view that the elimination of "political obstacles" could only be achieved through a counterrevolution. The reason why the restorationists have been able to get this far is because working class political consciousness was so confused by decades of Stalinist oppression that it was no longer ideologically committed to the collectivisation of the means of production. It has had to go through the experience of shock therapy, price rises and a catastrophic decline in living standards, as a result of this, in order to see through the fraudulent demagogy of the restorationists. It still does not recognise the validity of collectivisation at the level of ideology, but it does recognise its own basic needs and in this sense demands that the state meet these needs through subsidies to the state enterprises in which it works and welfare provision for the unemployed and low paid. It inevitably compares its worse-off economic position now with what previously happened under Stalinism. The fact that Yeltsin has been forced to repeatedly give large pay rises to certain powerful groups of workers, such as the miners, indicates that a further implementation of restorationism would have to pass through a major confrontation with the numerically-enormous, highly-concentrated Russian working class. This would inevitably be of such proportions as to constitutes a civil war.

The Red-Brown Alliance

The nature of the Zhirinovsky movement is related to the position of Russia in the international context. In one sense Russia may be regarded still as a super-power in the military sense. On one level it might be possible to argue that Russia is a member of the First World. There is also no doubt that Zhirinovky has imperialist, First World, Great Russian pretensions. However, despite the fact that the USSR is a military super power, it was previously put in the category of the "Second World”. The economic position of the population of the Second World generally was better off than the Third World, but a long way behind the First World in terms of general living standards, access to consumer durables etc. In terms of democratic rights, and human rights also, it was every bit as bad as any Third World dictatorship one could mention. This fact was not unrelated to the economic problems either--the existence of the arms race and scarce consumer goods meant that it was difficult to genuinely enfranchise the mass of the population as in a liberal democracy because the resources to buy off and neutralise significant sectors of the working class (as in the West) were absent.

The fact of the matter is that the present regime, and economic position of the population in Russia and Eastern Europe generally, resemble more and more those of a Third World nation--perhaps Latin America might be the nearest equivalent. It is in this context that it is possible to see that the right wing populist/fascist movements throughout Eastern Europe have more in common with right wing Third World populist movements--such as Peronism for example--than the typical First World fascist movement. These movements, generally speaking, combine quasi-fascist elements with anti-Western anti-imperialist demagogy, while at the same time, and especially in the case of Russia, expressing imperialist pretensions of their own. In Russia this contradictory mixture of ideologies reflects the historic role of Tsarist Russia as partly a Great Russian colonial power and partly a semi-colony of Germany, and other Western European imperialist powers, in the pre-First World War period.

This analysis helps explain why Zhirinovsky opposes the project of Yeltsin: it is because he is opposed to "foreign" capital displacing the potential for the development of domestic, patriotic capital. This movement also undercuts the possibilities for an independent working class movement to develop in the same way that the Strasserites of the Nazi Party stole the clothes of the Communists in pre-war Germany. The opposition of Zhirinovsky to the free-market, break-neck restorationism of Yeltsin and Gaidar coincided with that of the Stalinist Conservatives who prefer a more nationally-based restoration of capitalism. The Stalinists have allied with the right wing populists because they also yearn for the "good old days" when the USSR was seen as a major player on the world stage. While their desire for the old USSR to be reconstructed coincides with that of the Zhirinovsky movement, and forms the basis for the red-brown alliance, it is a mistake to see these two movements as being essentially identical. Similar conclusions flow from entirely different ideologies. Trotsky's analysis predicted that a wing of the Stalinist bureaucracy would side with the working class against a wing which would side with the restorationists. While the resistance of the managers, particularly the lower level ones) of the State enterprises, vindicated his predictions about a centrist wing of the bureaucracy which would, for self-interested reasons, defend collectivised property, there is as yet no evidence of any wing of the bureaucracy shifting in a revolutionary socialist direction. A revolutionary workers vanguard party will have to be constructed by the small Trotskyist groups which have emerged since the advent of Glasnost.