Victorious in War But Defeated in Peace -- How Development-Socialism Ended in Capitalism

From 8^th to 9^th May of this year, the Russians and many other peoples of the world celebrated the 70^th anniversary of victory of the Soviet and allied armies over Nazi Germany (Berlin had fallen a few days earlier in 1945).
    On 30^th April 2015, anti-imperialists and socialists all over the world should have celebrated the 40^th anniversary of the great victory of the North Vietnamese army and NFL guerrillas over the hated American imperialists (Saigon had fallen On 30^th April 1975). But it did not occur to me. Two days later, I read an article in the internet, the title of which was a call to its readers: "Salute The Nation That Brought The US Empire To Its Knees".¹ The article ended with another call: "Let’s ensure that the heroism and sacrifices of the Vietnamese people are not only remembered with reverence but celebrated with pride."

But What Is There to Celebrate?

I knew the date at which Saigon fell. I remember we rejoiced over the great news. But forty years later, the great significance of that date was out of my mind, until two days later the said article reminded me of that. Why was it out of mind? Obviously because I had in the meantime written Vietnam off as a socialist state. Because, although the country is officially called Socialist Republic of Vietnam, there is in fact no socialism there since long. Moreover, it is a small country and, unlike Russia and China, it does not celebrate its great military victory over the imperialists. Therefore, for me too, there was nothing to celebrate on 30^th April.
    But it is a good occasion to fill up some gaps that I left in the answer I gave in 1999² to the question why socialism failed in the Soviet Union. I now slightly reformulate the question as follows: Why did socialism fail and why couldn't a socialist society be built up in the Soviet Union or China and Vietnam respectively? In this short article, I can only present some of my reflections; it is not a full analytical study comparable to the one presented in my 1999 book.
    I am leaving out the erstwhile socialist countries of Eastern Europe because there the people had not made their own socialist revolution. Socialism was, depending on the observer's view of the things, given to them as a present or imposed on them. And I am leaving out Cuba, firstly, because there the matter is still in a state of flux and, secondly, because I have already published my doubts and fears in this regard in two texts posted in this blog.
    I know that many leftists, particularly anarchist socialists, refuse to accept that these countries had been proper socialist ones. OK, but let us not debate here what proper socialism should be. Let us ask why Soviet, Chinese and Vietnamese communists failed to defend their socialist society built up following their conception of socialism or gave up the attempt to realize it in their respective countries, although they there wielded absolute power. We should ask this question, if only for the sake of understanding what happened in history, which is also very important for us.

The Compulsion to industrialize

There is a difference between the case of the erstwhile Soviet Union and the two cases of China and Vietnam. Already in 1936, Stalin declared the Soviet Union to have become, also in the economic sense, a socialist state. The preceding three periods were characterized as War Communism, the period of New Economic Policy (private enterprise and profit-making were allowed), and the period of rapid, forced, and planned industrialization under the leadership of the state. By 1936, the Soviet Union was deemed to have become an industrial country, which, in the socialism theories of those days, was considered to be an essential condition for a socialist society. When socialism was wound up in the Soviet Union (beginning in1991), it was a very highly developed industrial country of long standing, second only to the United States, and a super power. In contrast, China and Vietnam had not yet risen to the status of an industrial country when – in 1978 and in the 1980s respectively – they gave up their goal of becoming a socialist society.
    In my book Eco-Socialism or Eco-Capitalism?², I devoted two long chapters to the question why the Soviet model of socialism failed. Here I would like to summarize the answer in one sentence: The Soviet model of socialism failed, firstly, because the overdeveloped Soviet Union had reached the ecological and resource-related limits to its material growth, and, secondly, because of the moral degeneration of Soviet society. These were the two fundamental causes. Other causes stated in the relevant literature were secondary.

Primitive Socialist Accumulation

The first of these two causes does not apply to the cases of China and Vietnam. In 1978 and in the 1980s, they were still very underdeveloped. They could not yet fulfill the most essential task on their path to industrial development, namely the task of primitive socialist accumulation, which turned out to be an insurmountable problem under the then given conditions.
    The Soviet Union had solved this problem by postponing for a few years the goal of building a socialist society. The country was ravaged by war and civil war, the economy was ruined. The Bolsheviks gave up the socialist policy of a fully state-controlled economy and introduced a more capitalism-oriented policy. The New Economic Policy, adopted in 1921, allowed private enterprise and profit-making in most areas of the economy. Foreign investment was also allowed and welcomed. The new bourgeoisie (the so-called NEP-men) that came up were hated but tolerated. In agriculture, forced grain requisition was given up. Farmers were allowed to operate as independent entrepreneurs. They were required only to pay a tax in kind. The rest of their produce they could sell on the market. In China and Vietnam – against a roughly similar background of war, civil war, economic destitution, and ruined infrastructure (in China also due to the chaos generated by power struggle and the Cultural Revolution) – a roughly similar change in policy took place.
    There were however three differences: In the Soviet Union, after just seven years, the New Economic Policy was ended. The Communist Party began in 1928 a policy of building socialism in one country. It comprised massive state-led and planned programs of rapid industrialization with emphasis on heavy industries, state-control of trade, and collectivization of agriculture. All that was possible, because the economic situation had improved in the seven years of NEP. But primitive capital accumulation had to be continued in various forms: confiscation of the surplus produced in the agricultural sector, which resulted in famine in the countryside, reducing the real wages of workers, forced labor in the Gulags etc.
    In China, the new economic policy was never ended. It continued under the name and form of reforms toward market socialism. Capital accumulation largely took place through enormous amounts of foreign investment in the country.
    The case of Vietnam has been much different and extreme in this category. During the ten years long American war (1965–1975), the country was, literally speaking, physically destroyed – in addition to the usual destructions wrought by a brutal modern American war – by means of carpet bombing and the pouring of the chemical agent-orange that poisoned the forests, the soil and living beings. What is worse, the USA and their vassal states, after being defeated in the hot war, began an economic war against Vietnam – using trade and investment embargo and boycott by all US-lackey-states as well as international financial institutions like the IMF and the World Bank.
    I do not want to narrate the modern history of Vietnam in this article, the purpose of which is something different. Politically conscious and active people, who ought to be interested to know this history, should at least read the excellent article of Nick Davies entitled Vietnam 40 years on: how a communist victory gave way to capitalist corruption³. I shall here use and quote from this article in support of my argument.

The capitulation of Socialists

After describing the devastations of the war and the dire economic situation, Davies writes:

"It is not clear how any economic model could have survived this hostile encirclement. Inevitably, Vietnam’s socialist project began to collapse. It adopted a crude Soviet policy that forced peasant farmers to hand over their crops in exchange for ration cards. With no incentive to produce, output crashed, inflation climbed back towards wartime levels, and the country once again had to import rice. In the early 1980s, the leadership was forced to allow the peasants to start selling surplus produce, and so capitalism began its return. By the late 1980s, the party was officially adopting the idea of 'a market economy with socialist orientation'. "
   
Davies, who recently visited Vietnam and talked with many Vietnamese to collect information for this article, says that following this policy change the Vietnamese did have much success in reducing poverty. But many former soldiers and guerillas told him, that they fought not just to liberate their nation from colonialism and imperialism. They were communists/socialists. They had a dream. "And that dream was not simply nationalist, to expel the foreign invader. It was specifically communist and revolutionary." Le Nam Phong, a former lieutenant general in the army of North Vietnam told Davies of his own revolutionary motive:

“Socialism? Yes, of course. The purpose of all the fighting was to build a socialist society, to gain freedom and independence and happiness. During the first days against France and against the US, we already had in mind the society we wanted to create – a society where men would not exploit other men; fair, independent, equal."

    Note that in the above quote the old lieutenant general did not say the purpose of all the fighting was to make Vietnam an economically developed country or to economically catch up with France. But, although he did not use the word development at all, we know from our studies that economic development was in those days implicit in the term socialism. But it was not the old general's top priority. His top priority was rather equality, happiness etc.
    But by the mid 1980s it was already too late for Vietnam. The big brothers Soviet Union and China had already veered toward what they euphemistically called market socialism but were in reality capitalism-oriented market reforms. China had introduced them in 1978 and the Soviet Union again in the mid 1980s. They could not help Vietnam economically, because they themselves had great economic difficulties. It was not possible for small Vietnam to stop the tide that by the end of that decade became a deluge. Beginning in 1989, all the bastions of socialism in Eastern Europe fell one by one. The Soviet Union ceased to exist in 1991, the socialist economy there started being dismantled.

What Really Was the Problem?

In order to understand why such reforms were regarded as necessary, although by that time the ravages of wars and civil wars and related economic difficulties had largely been repaired and smoothed out, we have to know something about the thinking of the communist party leaders of those days, those who initiated and put such reforms through. Of course, there was some opposition to them from traditionalists among party leaders. But they were decried as left-deviationists. Deng Xiaoping, the then top leader (but never the official Chairman) of the Communist Party of China once said: "It doesn't matter whether the cat is black or white, as long as it catches mice". Catching mice, i.e. making money (or getting rich) was the main goal. The color of the system (red or not) was unimportant. Deng is also reported to have said: "To get rich is glorious!"⁴ The nation, the people getting rich (i.e. developed) was already a part of standard socialist thought. But Deng thought of individuals, a minority getting rich. Why?
    The answer can be found in a quote from Vietnam. Khe, a sincere and rebellious journalist – who, as student, was a communist, suffered imprisonment at the hands of the French colonialists, and who today is fighting against corruption –, told Davies:

"We traded millions of lives for independence and equality. When I was in prison I imagined the country would be clear of corruption after the war, but it didn’t happen. The development of the country should proceed, so we don’t go against those who make money legitimately. But we can’t allow those who make illegitimate money to continue to make poor people poorer.”

For the Lieutenant General quoted above, the top priority in his vision of socialism was equality. Khe has now given up that ideal. For him, the more important goal is development, for which, he implicitly argued, it is necessary to accept that some people get rich. It is logical, he implicitly argued, that with equality, in a poor country there would be no savings and hence no capital accumulation. Khe would be satisfied if rich people get richer legitimately, that is, without using illegal and/or corrupt means. That is also the position of the Chinese communist leadership today. They are fighting against corruption, not for equality.
    Both the Chinese and the Vietnamese communists saw a causal connection between the profit motive of private individuals/entrepreneurs and national economic development. Khe believed that only money made illegitimately (i.e. by illegal and/or corrupt means) makes poor people poorer.
    But how could an underdeveloped country like Vietnam have economically developed, when the greater part of its already accumulated capital was no longer available after the war? We know that the greater part of its infrastructure capital (roads, railways, canals, bridges, houses, factories, buildings, hospitals, telephone lines etc.) were destroyed. The greater part of its human capital (the labor power, skills, intelligence and knowledge of over 3 million dead young working people and many times more invalids) were no longer available in 1975. Vietnam had to start the process of its primitive capital accumulation again, almost from scratch.
    Marx described the process of primitive (original) capital accumulation in militarily mighty Western capitalist countries. And we know how it took place in the relatively underdeveloped socialist USSR. In both cases, it was a brutal process of exploitation, expropriation and application of force. The ruling classes took away everything they could from their own people as well as from the peoples of their colonies. But neither China nor Vietnam could have repeated that brutal process in favor of private capitalists without giving up all claims of being a socialist country. (The Soviet state could at least say they were building up socialism). They had moreover no colonies that could be exploited. And they did not want to wait many more years before they have accumulated enough capital within their own territory and by legitimate means. So they opened their doors and told foreigners, who already had huge amounts of accumulated capital seeking profitable investment opportunities, to come and exploit their workers and natural resources. But the foreigners would not invest unless and until the laws and the business climate have become conducive to making profit. They demanded of all countries that were seeking foreign investments that they subordinate their economic systems and national laws to the inexorable laws of global capitalism. That is, they would not invest unless the socialist goals and the corresponding constitutions and laws had been given up. The communist leaders of China and Vietnam (later also the nationalist leaders of semi-socialist Third World countries, such as India, and post-socialist Russia) had to comply. They decided to capitulate. They had no other choice, they had to bow to the demands of their former enemies: the Americans and their vassal countries. They were "victorious in war but defeated in peace." The imperialist and capitalist West had won after all.

Lessons From Recent History

The purpose of studying history is to draw lessons for the present and the future; the rest is merely satisfying curiosity. Inspired by the recent history presented above, an anti-socialist political activist formulated the bon mot: "Socialism is the longest way from capitalism to capitalism." Should it serve as one of the most important lessons from recent history? For us too? In plain English, it means that all efforts to build an egalitarian socialist society are futile; and such socialist societies, if they can be built somehow, are bound to fail sooner or later because innate selfishness is a biologically, i.e. for survival, necessary part of human nature. If one reads history superficially, these conclusions may appear to be most convincing. One may then draw the lessons: (1) that there is no use trying to build an egalitarian socialist society, and (2) that at most only market socialism has some chance of success. In fact, some theorists have asserted that only this type of socialism can succeed because market-socialist economies give humans enough (but not too much) scope to be selfish and enrich themselves, while they can still justifiably be called a socialist economy because they are planned and/or guided and regulated by the state for the common good and because in such economies the "commanding heights" (i.e. the basic heavy industries and the financial infrastructures such as banks and insurances) remain public property. Frans van Waal, a famous ethologist (and primatologist) once said in an interview (given to the tageszeitung, Berlin) that he thought that the maximum egalitarianism that humans can achieve at a societal level is a social market economy (or social capitalism) – the model that existed in the seventies in most western European countries. (from my memory).
    We know that the Soviet Union was not a paragon of egalitarianism. Already in the 1930s, Stalin had introduced a degree of social and income inequality. And in the mid 1980s, Gorbachev even cautiously introduced some degree of profit-motivated competitive market system. All that did not help save socialism. In my 1999 book I explained why.
    I think, the only conclusion that we are compelled to draw from the above exposition of the recent history of socialist countries is that development-socialism has failed. And since we (humanity) have already bumped against the limits to growth, we must conclude that development-socialism has little chance of success in the future. Anybody who observes the world today must, I think, also conclude that even social market economy (capitalistic welfare state) has no future. Not all people can become rich. Only some people can if brutal Manchester capitalism makes a comeback. And that is happening in the world today.
    But can we imagine any other kind of socialism that would deserve the name "socialism" and might have a chance of success? I think yes, but only if we can give up the old idea/goal of development. As Otto Ullrich wrote,

"Socialism is a question of social constitution, of relationships of humans to each other. It is unnecessary … even fatal to connect this question with an indefinable minimum technological and organizational development of equipment of work." Developing the point further, Ullrich asserted: "There is no lower limit of the 'development of productive forces' below which socialism is impossible, … ."⁵

Ullrich has convinced me fully. Now, if the ecological and resource-related crisis compels humanity to accept a policy of economic contraction (degrowth) until at a much lower level of production and productive forces the economy becomes a sustainable steady-state economy, then the question comes up whether it will it be possible to build a socialist society on the basis of such a contracted economy. Following Ullrich's dictum, we must say Yes. Further, I am convinced that it will not only be possible but also an absolute necessity. For when the contraction begins and every year less and less goods and services would be available for distribution, only an egalitarian socialist system can avert chaos and total breakdown of society.
    One may now say: that may be theoretically possible, even necessary, but, humans being selfish by nature, what are the real chances that this will also happen, i.e., the creation of an egalitarian eco-socialist society? To this question, I would like to reply with a quote from the famous German ethologist Irenäus Eibl-Eibesfeldt, who wrote:

"Our innate characteristics are not laid down for ever. We are capable of controlling our nature through our culture. … What is decisive is that we humans are the first creatures to be in a position to set goals for us and thereby give a meaning to our life. That does not mean that we cease to be a part of nature, but we actively put ourselves in new situations, in which new conditions of selection affect us."⁶

I think, the new situation, in which we are today – i.e. the global ecological and resource-related crisis – might compel us to do what is necessary for our survival as species. There is, of course, no guaranty, but a chance that this will happen.

The Perspective

Unlike Russia, China and Vietnam are still being governed by their respective communist parties, and the latter still profess to be pursuing the goal of creating a socialist society. Deng Xiaoping maintained that "socialism and market economy are not incompatible". A few years ago, one middle-level Communist Party leader (I have forgotten his name) told a BBC journalist that the goal remains the same, namely a socialist society, but the path to that goal has changed since the death of Mao. If it is axiomatic for communists that, as Deng said, "the very essence of socialism is the liberation and development of the productive systems (of forces of production, in proper Marxist jargon)", then of course, nobody can object to communists using the path that has already been trodden by more successful old capitalist industrial countries like the USA, the UK etc. and, more recently, South Korea and Taiwan, who were, until the 1950s, economically as underdeveloped as China until 1978. And the term "liberation" can be reinterpreted as liberation from the fetters of state socialism (planning and bureaucracy), i.e. introducing capitalistic market principles. Indeed, that "liberated" the Chinese economy, and it grew (economically developed) by leaps and bounds in the following decades. But a true socialist's question is: when will this allegedly "unfortunately necessary" march along the capitalistic path end for China and Vietnam? Will it ever come to an end? And when will the work of building up a socialist society (socialist relations of production, in proper Marxist jargon) begin?
    Even if we could believe – which is actually difficult at present – that the communist leaders of China and Vietnam sincerely want to do that in near future, there is objectively little chance of that happening. For, firstly, the moral degeneration of communist cadres (even leading cadres) in these two countries have – according to all reports that one can read outside these countries – advanced (metastasized like a cancer cell) so much, that, I think, there is hardly any Communist Party leader left there who cherishes the true socialist values. And even if there are a few left, their number will not soon grow to that critical mass that is needed to begin that change. All the reports on corruption, criminality, and trials against corrupt high-ranking communists emanating from China itself show that my pessimism could be justified.
    Secondly, no developed country can today produce all the goods and services that its citizens and businesses want and/or need to consume/use – not even the simplest ones such as a bicycle or a phone call – without taking part in international trade. They must import things they cannot produce or do not have at home, and they must export things to pay for them. They are therefore, in a certain sense, dependent on the other countries' willingness to trade with them. That is a weak point in today's world economic system, where small and a small number countries can be isolated and boycotted if they are disliked by the others. Particularly, socialist countries are vulnerable to the danger of trade boycott by enemy capitalist countries – even if they do not need foreign investment any more, e.g. China today. Even the formerly socialist COMECON countries, that were part of a big economic group, had such problems as long as they remained socialist.
    We must also consider that the capitalist system is very efficient in artificially creating new consumption needs. Things which previously didn't even exist (e.g. TV, cell phone, Laser-equipment, holography, strawberries in Winter etc.), have not only been invented, but people have also been made to believe that they are "basic needs". How can socialism survive in a country if it cannot even fulfill the basic needs of its own citizens, whereas it originally promised so much prosperity for all citizens of the world?
    The above exposition of the present world situation leads me to conclude that today, eco-socialism in one country (or in a small group of countries) will probably not survive. It must therefore be a global project.

References:

1. Kenny Coyle: "Salute The Nation That Brought The US Empire To Its Knees".
https://www.morningstaronline.co.uk/a-075a-Salute-the-nation-that-brought-the-US-empire-to-its-knees#.VVCbnJgcS1I
2. Sarkar, Saral (1999) Eco-Socialism or Eco-Capitalism? – A Critical Study of Humanity's Fundamental Choices. London: Zed Books.
3. Nick Davies: Vietnam 40 years on: how a communist victory gave way to capitalist corruption (published in The Guardian online on 22.04.2015)
http://www.theguardian.com/news/2015/apr/22/vietnam-40-years-on-how-communist-victory-gave-way-to-capitalist-corruption
4 Deng Xiaoping: quotes are from Wikiquotes: Entry on Deng Xiaoping.
5 Ullrich, Otto (1979) Weltniveau – In der Sackgasse des Industriesystems. Berlin: Rotbuch.
6. Eible-Eibesfeldt, Irenäus (1990) "Glaube als Offenbarungswissen und Zuversicht", in:
Deschner, Karlheinz (Hrsg.)(1990) Woran ich glaube, Gütersloh: Gütersloher Verlagshaus Gerd Mohn.