How capitalism failed in the former Stalinist east

Eastern Europe was not the first continent that broke with Stalinism. In fact China had started to embrace capitalism as early as 1978. It was the Chinese ’’Communist’’ Party that first started with Special Economic Zones, long before Mikhail Gorbachev was General Secretary of the Communist Party of the Soviet-Union (CPSU). The Chinese and many sectarian Stalinists had attacked the USSR for abandoning classic Stalinism after 1956. Now those sectarian Maoists were the first who embraced capitalism. The Vietnamese and Laotians followed with Doi Moi in 1986 and finally Eastern Europe under Soviet leadership slowly started to embraced the market dictatorship. Despite the promise of improvements, capitalism did not help working class people.

Stalinism as a failed political and economic model

From 1945 until 1990, Eastern Europe was ruled by communist parties, installed by Moscow as its puppets. These communist parties all followed the classic Stalinist system that Stalin had set up in the Soviet-Union around 1927. It was build on a single party state and the complete nationalization of all means of production. According to the Stalinists and their supporters, socialism was build and soon the communist society would set in. Revolutionary socialists from the Trotskyist tradition rejected this falsehood as we knew that a Stalinist society is build on top down centralism, bureaucratic planning and no democratic input from workers.

Yet even Trotskyists were surprised by the quick collapse of the Stalinist model between 1989 and 1991. The Stalinist communists always said that we were ’’ counter-revolutionaries’’ and that we stood for the ’’restoration of capitalism’’. In the end, it turned out that the Stalinists were the ones who embraced capitalism and abandoned their Marxist-Leninist facade. Not only the Eastern Europeans and the Soviet leadership moved towards the market economy, China and Asian Stalinists too choose the market over planning. The capitalists of the world proclaimed victory and called for the end of state ownership.

Stalinists introduce capitalism

Contrast to popular believe, the people who introduced the free market were the same ones who had praised Marx and Lenin just years before. It was the communist party bureaucracy in each Stalinist state that choose to privatise the economy. The first one was Poland, there the Polish United Workers Party lost power to the political party; Solidarity set up by Lech Wałęsa. Although the trade union Solidarity started as a socialist one, it’s political formation was divided and lacked a clear ideology. Lech Wałęsa managed to privatise the economy, but it cost him everything. Workers felt betrayed because they were told that capitalism would bring them wealth. Instead it only brought wealth to those who owned the privatised state enterprises.

Many blamed Mikhail Gorbachev for the collapse of the Soviet-Union. But the people who broke up the union were the members of the Stalinist bureaucracy. The Communist Party of the Soviet-Union was banned, but its members simply switched side and colours. Under the leadership of Boris Yeltsin they privatised the economy and ran off with the profits made by workers. Like Lech Wałęsa, Boris Yeltsin was hated and rejected by the late 1990’s. In Hungary and Bulgaria, the Stalinists simply renamed themselves into social-democrats and remained a force of power.

Elders praise the Stalinist period

Elderly people in former Stalinist countries, openly praise the time when there was no capitalism. Despite its limits and undemocratic nature, Stalinism provide workers with a (very) small glip of what is possible if the economy is under collective control. Yes, the propagandists of the ruling class will always use the ineffective planning methods and the abuses, but ordinary people who lived in those days also remember a time when life was not based on profiteering. Today elders suffer from low pensions and crumbling infrastructures as the capitalist state has all but abandoned them and their towns.

In Eastern Europe, Russia and former Soviet republics, the capitalist rulers care little for those who are old and of no use for the system. The You-Tube channel: Bold and Bankrupt by Benjamin Rich, shows how the people of the ex-USSR and Eastern Europe live today. Unlike western documentaries and history shows, his channel is a window into the world of ordinary workers, who experienced a decline of life under capitalism. Since Benjamin Rich speaks Russian, he can communicate with many people who were educated in Russian, even if he is not in Russia itself.

Poverty and disillusion due to capitalist restoration

What Benjamin Rich shows is that most older working class people, have entered poverty and disillusion. They had worked under the Stalinist system and many had high hopes for capitalism when it was introduced between 1989 and 1991. However most of them realised that the system was only serving those who had money. Capitalism ignores you if you don’t have capital and this is the iron rule in all countries, even in the western world. To please the new ruling class, few money is spend on pensioners and infrastructures. You can see this in the videos of Benjamin Rich as he visits countries like Romania, Bulgaria and Moldova. These nations have a lof of elder poverty and abandoned infrastructure, that used to be be part of ”socialist” life under Stalinism.

Because of the economic hardships after 1991, elders tend to idolize the Stalinist period. For them, life was better in a time when the state told them what to do. Under capitalism they must save themselves and none were educated to do that. Young people know how to work under capitalism, but low incomes forces them to leave the rural parts or whole countries as is the case in the Baltic nations. Although Estonia, Lithuania and Latvia look modern on the outside, many young workers do not wish to live in their birth nations. This is also the case in Hungary, were many younger workers hate the right-wing regime of Viktor Orban.

Democratic socialism, not social democracy is needed

The Stalinists embraced social-democracy in theory after 1991. But even classic social-democracy with its welfare system would no longer be tolerated by capitalists today. If a country would enforce classic social-democracy, the capitalist class would start to disinvest and close companies. Capital flight and mass lay-offs would force any government to capitulate as we saw with François Mitterrand. Until the late 1970’s, the capitalists feared a potential workers revolution, this is why they compromised with social-democracy. But now that the ”socialist” danger is gone, the ruling class has no reason to compromise and they went full on the offensive in the 1990’s, demanding austerity and deregulation.

Social-democrats have also been tainted with neoliberalism as most European social-democrats govern no different then liberals or conservatives. There is little or no difference between a social-democratic government or a liberal government. Social-democracy has become just another capitalist tool in the political game of the ruling class, they sell to us workers. This is why we call for democratic socialism from below.

Socialism means democratic control over the biggest companies and all means of production. It does not mean the complete nationalization of all businesses, only those who are in control of whole economic sectors.