Socialism Betrayed: Behind the Collapse of the Soviet Union

1. Introduction

The story of the last Soviet power struggle is not, I believe, one that is best understood in terms of an irresistible unfolding of large historical forces and trends. On the contrary, it is in many respects the most curious story in modern history. Anthony D’Agostino, historian1

In awe, amazement and disbelief, the world witnessed the collapse of the Soviet Union, which swept away the Soviet system of government, the erstwhile superpower, the communist belief system and the ruling party. Alexander Dallin, historian2

The Soviet Union’s existence was as sure as the sun rising in the morning. For, it was such a solid, powerful, strong country that had survived extremely difficult tests. Fidel Castro3

This book is about the collapse of the Soviet Union and its meaning for the 21st century. The size of the debacle gave rise to extravagant claims by the political right. For them, the collapse meant the Cold War was over and capitalism had won. It signified “the end of history.” Henceforth, capitalism would represent the highest form, the culmination, of economic and political evolution. Most people sympathetic with the Soviet project did not share this rightwing triumphalism. For them, the Soviet collapse had momentous implications but did not alter the usefulness of Marxism for understanding a world that more than ever was shaped by class conflict and the struggles of oppressed people against corporate power, nor did it shake the values and commitment of those on the side of workers, unions, minorities, national liberation, peace, women, the environment, and human rights. Still, what had happened to socialism represented both a theoretical challenge to Marxism and a practical challenge to the future prospects of anti-capitalist struggles and socialism.

For those who believe that a better world—beyond capitalist exploitation, inequality, greed, poverty, ignorance, and injustice—is possible, the demise of the Soviet Union represented a staggering loss. Soviet socialism had many problems (that we discuss later) and did not constitute the only conceivable socialist order. Nevertheless, it embodied the essence of socialism as defined by Marx—a society that had overthrown bourgeois property, the “free market,” and the capitalist state and replaced them with collective property, central planning, and a workers’ state. Moreover, it achieved an unprecedented level of equality, security, health care, housing, education, employment, and culture for all of its citizens, in particular working people of factory and farm.

A brief review of the Soviet Union’s accomplishments underscores what was lost. The Soviet Union not only eliminated the exploiting classes of the old order, but also ended inflation, unemployment, racial and national discrimination, grinding poverty, and glaring inequalities of wealth, income, education, and opportunity. In fifty years, the country went from an industrial production that was only 12 percent of that in the United States to industrial production that was 80 percent and an agricultural output 85 percent of the U.S. Though Soviet per capita consumption remained lower than in the U.S., no society had ever increased living standards and consumption so rapidly in such a short period of time for all its people. Employment was guaranteed. Free education was available for all, from kindergarten through secondary schools (general, technical and vocational), universities, and after-work schools. Besides free tuition, post-secondary students received living stipends. Free health care existed for all, with about twice as many doctors per person as in the United States. Workers who were injured or ill had job guarantees and sick pay. In the mid-1970s, workers averaged 21.2 working days of vacation (a month’s vacation), and sanitariums, resorts, and children’s camps were either free or subsidized. Trade unions had the power to veto firings and recall managers. The state regulated all prices and subsidized the cost of basic food and housing. Rents constituted only 2-3 percent of the family budget; water and utilities only 4-5 percent. No segregated housing by income existed. Though some neighborhoods were reserved for high officials, elsewhere plant managers, nurses, professors and janitors lived side by side.4

The government included cultural and intellectual growth as part of the effort to enhance living standards. State subsidies kept the price of books, periodicals and cultural events at a minimum. As a result, workers often owned their own libraries, and the average family subscribed to four periodicals. UNESCO reported that Soviet citizens read more books and saw more films than any other people in the world. Every year the number of people visiting museums equaled nearly half entire population, and attendance at theaters, concerts, and other performances surpassed the total population. The government made a concerted effort to raise the literacy and living standards of the most backward areas and to encourage the cultural expression of the more than a hundred nationality groups that constituted the Soviet Union. In Kirghizia, for example, only one out of every five hundred people could read and write in 1917, but fifty years later nearly everyone could.5

In 1983, American sociologist Albert Szymanski reviewed a variety of Western studies of Soviet income distribution and living standards. He found that the highest paid people in the Soviet Union were prominent artists, writers, professors, administrators, and scientists, who earned as high as 1,200 to 1,500 rubles a month. Leading government officials earned about 600 rubles a month; enterprise directors from 190 to 400 rubles a month; and workers about 150 rubles a month. Consequently, the highest incomes amounted to only 10 times the average worker’s wages, while in the United States the highest paid corporate heads made 115 times the wages of workers. Privileges that came with high office, such as special stores and official automobiles, remained small and limited and did not offset a continuous, forty-year trend toward greater egalitarianism. (The opposite trend occurred in the United States, where by the late 1990s, corporate heads were making 480 times the wages of the average worker.) Though the tendency to level wages and incomes created problems (discussed later), the overall equalization of living conditions in the Soviet Union represented an unprecedented feat in human history. The equalization was furthered by a pricing policy that fixed the cost of luxuries above their value and of necessities below their value. It was also furthered by a steadily increasing “social wage,” that is, the provision of an increasing number of free or subsidized social benefits. Beside those already mentioned, the benefits included, paid maternity leave, inexpensive child care and generous pensions. Szymanski concluded, “While the Soviet social structure may not match the Communist or socialist ideal, it is both qualitatively different from, and more equalitarian than, that of Western capitalist countries. Socialism has made a radical difference in favor of the working class.”6

In the world context, the demise of the Soviet Union also meant an incalculable loss. It meant the disappearance of a counterweight to colonialism and imperialism. It meant the eclipse of a model of how newly freed nations could harmonize different ethnic constituents and develop themselves without mortgaging their futures to the United States or Western Europe. By 1991, the leading non-capitalist country in the world, the main support of national liberation movements and socialist governments like Cuba, had fallen apart. No amount of rationalization could escape this fact and the setback it represented for socialist and peoples’ struggles.

Even more important than appreciating what was lost in the Soviet collapse is the effort to understand it. How great an impact this event will have depends in part on how its causes come to be understood. In the Great Anti-Communist Celebration of the early 1990s, the triumphant right hammered several ideas into the consciousness of millions: the Soviet socialism as a planned economic system did not work and could not bring abundance, because it was an accident, an experiment born in violence and sustained by coercion, an aberration doomed by its defiance of human nature and its incompatibility with democracy. The Soviet Union ended because a society ruled by the working class is a delusion; there is no post-capitalist order.

Some people on the left, typically those of social democratic views, drew conclusions that were similar, if less extreme, than those on the right. They believed that Soviet socialism was flawed in some fundamental and irreparable way, that the flaws were “systemic,” rooted in a lack of democracy and over-centralization of the economy. The social democrats did not conclude that socialism in the future is doomed, but they did conclude that the Soviet collapse deprived Marxism-Leninism of much of its authority and that a future socialism must be built on a completely different basis than the Soviet form. For them, Gorbachev’s reforms were not wrong, just too late.

Obviously, if such claims are true, the future of Marxist-Leninist theory, socialism and anti-capitalist struggle must be very different from what Marxists forecast before 1985. If Marxist-Leninist theory failed the Soviet leaders who presided over the debacle, Marxist theory was mostly wrong and must be abandoned. Past efforts to build socialism held no lessons for the future. Those who oppose global capitalism must realize history is not on their side and settle for piecemeal, partial reform. Clearly, these were the lessons the triumphant right wanted everyone to draw.

Our investigation was motivated by the enormity of the collapse’s implications. We were skeptical of the triumphant right, but prepared to follow the facts wherever they led. We were mindful that previous socialist partisans had to analyze huge defeats of the working class. In The Civil War in France, Karl Marx analyzed the defeat of the Paris Commune in 1871. Twenty years later Frederick Engels expanded upon his analysis in an introduction to Marx’s work on the Commune.7 Vladimir Lenin and his generation had to account for the failed Russian revolution of 1905 and the failure of Western European revolutions to materialize in 1918-22. Later Marxists, like Edward Boorstein, had to analyze the failure of the Chilean revolution in 1973.8 Such analyses showed that sympathy with the defeated did not bar the pursuit of tough questions about the reasons for the defeat.

Within the overarching question of why the Soviet Union collapsed, other questions arose: What was the state of Soviet society when perestroika began? Was the Soviet Union facing a crisis in 1985? What problems was Gorbachev’s perestroika supposed to address? Were there viable alternatives to the reform course chosen by Gorbachev? What forces favored and what forces opposed the reform path leading to capitalism? Once Gorbachev’s reform started producing economic disaster and national disintegration, why did Gorbachev not change course, or why did the other leaders of the Communist Party not replace him? Why was Soviet socialism seemingly so fragile? Why did the working class apparently do so little to defend socialism? Why did the leaders so underestimate nationalist separatism? Why did socialism—at least in some form—manage to survive in China, North Korea, Vietnam, and Cuba, while in the Soviet Union, where it was ostensibly more rooted and developed, it failed to last? Was the Soviet demise inevitable?

This last question was pivotal. Whether socialism has a future depends on whether what transpired in the Soviet Union was inevitable or avoidable. Certainly, it was possible to imagine an explanation that differed from the inevitability trumpeted by the right. Take, for example, the following thought experiment. Suppose the Soviet Union had fallen apart because a nuclear attack by the United States had destroyed its government and devastated its cities and industries. Some might still conclude that the Cold War was over and capitalism had won, but no one could reasonably argue that this event proved that Marx was wrong, or that left to its own devices, socialism was unworkable. In other words, if Soviet socialism came to an end mainly because of externalities, such as foreign military threats or subversion, one might conclude that this fate did not compromise Marxism as a theory and socialism as a viable system.

In another example, some have asserted that the Soviet Union unraveled because of “human error” rather than “systemic weaknesses.” In other words, mediocre leaders and poor decisions brought down a basically sound system. If true, this explanation like the former would preserve the integrity of Marxist theory and socialist viability. In actuality, however, this idea has not served as an explanation or even the beginning of an explanation but rather as a reason to avoid a searching explanation. As an acquaintance said, “The Soviet Communists screwed up, but we will do better.” To have any plausibility, however, this explanation needed to answer important questions: what made the leaders mediocre and the decisions poor? Why did the system produce such leaders and how could they get away with making poor decisions? Did viable alternatives exist to the ones chosen? What lessons are to be drawn?

Questioning the inevitability of the Soviet demise is a risky business. The British historian, E. H. Carr, warned that questioning the inevitability of any historical event can lead to a parlor game of speculation on “the might-have-beens of history.” The historians’ job was to explain what happened, not to let “their imagination run riot on all the more agreeable things that might have happened.” Carr acknowledged, however, that while explaining why one course was chosen over another, historians quite appropriately discuss the “alternative courses available.”9 Similarly, British historian Eric Hobsbawm argued that not all “counter-factual” speculation is the same. Some thinking about historical options falls into the category of “imagination run riot,” which a serious historian should rule out. Such is the case of musing about outcomes that were never in the historical cards, such as whether czarist Russia would have evolved into a liberal democracy without the Russian Revolution or whether the South would have eliminated slavery without the Civil War. Some counter-factual speculation, however, when it hews closely to the historical facts and real possibilities, serves a useful purpose. Where real alternative courses of action existed, they can show the contingency of what actually did occur. Coincidentally, Hobsbawm gave a relevant example from recent Soviet history. Hobsbawm quoted a former CIA director as saying, “I believe that if [Soviet leader, Yuri] Andropov had been fifteen years younger when he took power in 1982, we would still have a Soviet Union with us.” On this, Hobsbawm remarked, “I don’t like to agree with CIA chiefs, but this seems to me to be entirely plausible.”10 We too think this is plausible, and we discuss the reasons in the next chapter.

Counter-factual speculation can legitimately suggest how, under future circumstances similar to the past, one might act differently. The debates of historians over the decision to use the atom bomb on Hiroshima, for example, not only have changed the way educated people understand this event but also have reduced the likelihood of a similar decision in the future. After all, if history is to be more than a parlor diversion, it should and can teach us something about avoiding past mistakes.

The interpretation of the Soviet collapse involves a fight over the future. Explanations will help determine whether in the 21st century working people will once again “storm the heavens” to replace capitalism with a better system. They will hardly take the risks and bear the costs if they believe that working class rule, collective ownership, and a planned economy are bound to fail, that only the “free market” works, and that millions of people in eastern Europe and the Soviet Union tried socialism but went back to capitalism because they wanted prosperity and freedom. As the radical movement against globalism grows and the labor movement revives, as the long economic boom of the 1990s recedes, and capitalism’s lasting evils—unemployment, racism, inequality, environmental degradation, and war—become more and more evident, the questioning of capitalism’s future will invariably move to the foreground. But the youth and labor movements will hardly advance much beyond narrow economic demands, moral protest, anarchism or nihilism, if they consider socialism an impossibility. The stakes could hardly be higher.

As the significance of the loss of the Soviet Union sinks in, the opportunity for dispassionate discourse on Soviet history increases. Certainly, a lot of early notions about a peaceful and prosperous post-Cold War world have turned to bitter ashes. A bipolar world was replaced by a unipolar one dominated by American corporate and military power. Globalism replaced anti-communism as the governing ideology. Globalism insists that the domination of the world by a few transnational corporations, the spread of information technology, and the free movement of goods and capital in search of the lowest costs and highest profits represents an unstoppable force before which all other interests—those of weak states, national independence movements, labor movements, defenders of the environment—must give way. Without the Soviet Union as a viable alternative to capitalism—social welfare, the welfare state, the public sector, Keynesianism, the “third way”—have come under attack. In all countries progressive and social democratic parties have staggered under the pressure of an emboldened neo-liberal right. Since 1991, world poverty and inequality have grown by leaps and bounds.

In another crushed illusion, the idea of a post-Cold War peace dividend vanished. Instead of cutting the military budget, the George W. Bush and other American leaders frantically sought a rationale for increased spending and new weapons systems. They tried using a war on drugs, rogue states, and Islamic fundamentalism as rationales. Then the attack on the World Trade Center gave them the justification they needed—an unending war against international terrorism. For many people, these post-Soviet disappointments have diminished the triumphalist interpretation of the Soviet collapse.

Equally tarnishing to the triumphalist interpretation has been the disastrous human toll brought by gangster capitalism in the former Soviet Union. What a decade ago was touted as Russia’s “democratic transformation” and its rebirth as a “vibrant market economy” turned into a sick joke. A United Nations’ report in 1998 said, “No region in the world has suffered such reversals in the 1990s as have the countries of the former Soviet Union and Eastern Europe.” People living in poverty increased by over 150 million, a figure greater than the total combined population of France, the UK, the Netherlands, and Scandinavia. The national income declined “drastically” in the face of “some of the most rampant inflation witnessed anywhere on the globe.”11

In Failed Crusade, historian Stephen F. Cohen went even further. By 1998, the Soviet economy, dominated by gangsters and foreigners, was barely half the size it was in the early 1990s. Meat and dairy herds were a fourth of their size; wages were less than half. Typhus, typhoid, cholera and other diseases had reached epidemic proportions. Millions of children suffered malnutrition. Male life expectancy plunged to sixty years, what it was at the end of the nineteenth century. In Cohen’s words, “the nation’s economic and social disintegration has been so great that it has led to the unprecedented demodernization of a twentieth century country.”12 In the face of the catastrophic failure of Russia’s road to capitalism, smugness over the inevitable problems of socialism lost some of its traction.

Not only may more people be interested in understanding the Soviet experience than previously, but the raw material for analysis is more available than before. The first publications on perestroika and the collapse were dominated by the writing of Gorbachev partisans and anti-Communist war-horses. These included the memoirs and other writings of Gorbachev, Boris Yeltsin and their supporters, the memoirs of American Ambassador to the Soviet Union, Jack Matlock, the essays of such often unreliable Soviet dissidents as Roy Medvedev and Andrei Sakharov, the reports of such Western journalists as David Remnick and David Pryce-Jones, and the work of such anti-Soviet historians as Martin Malia and Richard Pipes. Since then, however, a second wave of publications has appeared. These publications included a much expanded memoir literature of secondary leaders, including Yegor Ligachev, military men and academics. It also included a great number of monographic studies on particular aspects of the Gorbachev years including glasnost, nationalism, co-ops, economic policy, privatization of state property, Soviet policy toward the African National Congress, and Soviet policy in Afghanistan. An American Communist journalist who was stationed in Moscow, Mike Davidow, published Perestroika: Its Rise and Fall, and the Marxist economist Bahman Azad published Heroic Struggle Bitter Defeat: Factors Contributing to the Dismantling of the Socialist State in the Soviet Union. Also, various Communist Parties, leaders and theoreticians, such as Fidel Castro, Joe Slovo, Hans Heinz Holz, and the Russian Communist Party issued statements on perestroika and the collapse. We have drawn on all of these in our examination.

It goes without saying that the defeat of the Paris Commune after seventy days delivered a less telling blow to socialists than the eclipse of the Soviet Union after over seventy years. It may be impossible to end our analysis with the defiance with which Engels ended his remarks on the Commune: “Of late, the Social-Democratic philistine has once more been filled with wholesome terror at the words: Dictatorship of the Proletariat. Well and good, gentlemen, do you want to know what this dictatorship looks like? Look at the Paris Commune. That was the Dictatorship of the Proletariat.” Nevertheless, it is possible to acknowledge the achievements of the Soviet Union, to estimate the size and consequences of the external forces arrayed against it, to assess some of the contending political views within Soviet socialism and to venture some judgments on the policies. It will, however, take much more than this book to reach a full analysis, so that in the future, men and women of the left can struggle for a socialism confident that they are not prisoners of the past. Then they can echo Marx’s words on the Commune, that the Soviet Union, too, “will be for ever celebrated as the glorious harbinger of a new society.”13

In what follows, we argue that the Soviet collapse occurred in the main because of the policies that Mikhail Gorbachev pursued after 1986. These policies did not drop from the sky, nor were they the only possible ones to address existing problems. They derived from a debate within the Communist movement, nearly as old as Marxism itself, over how to build a socialist society. In order to explain the lineage of Gorbachev’s policies before and after 1985, in Chapter 2, we discuss the two main tendencies or trends in the Soviet debate over building socialism. The ongoing debate centered around this question: under the particular circumstances pertaining at any given time, how should Communists build socialism? The left position favored pushing forward class struggle, the interests of the working class and the power of the Communist Party, and the right position favored retreats or compromises and the incorporation of various capitalist ideas into socialism. In this sense, “left” and “right” were not synonyms for good and bad. Rather the correctness or appropriateness of a policy had to do with whether it best represented the immediate and long-term interests of socialism under existing conditions. The history of Soviet politics was thus a complex matter. On the one hand, Vladimir Lenin, who fearlessly pushed forward the class struggle for socialism, at times favored compromise, as in the Treaty of Brest-Litovsk and the New Economic Policy. On the other hand, Nikita Khrushchev, who often favored incorporating certain Western ideas, at the same time favored a leftist policy of greater wage equality. In this chapter, we do not intend to provide a full history and evaluation of Soviet politics but rather a useful, if simplified, backdrop for the later argument that Gorbachev’s early policies resembled the leftwing Communist tradition represented in the main by Vladimir Lenin, Joseph Stalin, and Yuri Andropov, while his later policies resembled the rightwing Communist tradition represented in the main by Nicolai Bukharin and Nikita Khrushchev. After 1985, Gorbachev’s policies moved to the right, in the sense that they involved what might be called a social democratic vision of socialism that weakened the Communist Party, compromised with capitalism, and incorporated into Soviet socialism certain aspects of capitalist private property, markets, and political forms.

In Chapter 3, we discuss the underlying reasons for Gorbachev’s shift in policies and their material basis. We argue that the reason for Gorbachev’s shift was the development of a phenomenon overlooked by most Marxists and non-Marxists, namely the development within socialism of a “second economy” of private enterprise and with it a new and growing petty bourgeois stratum and a new level of Party corruption. The growth of the second economy reflected the problems of the “first economy,” the socialized sector, in meeting the rising expectations of the people. It also reflected the laxness of the authorities in enforcing the law against illegal economic activity, and the failure of the Party to recognize the corrosive effects of private economic activity.

In Chapter 4, we explain the economic, political and international problems that troubled Soviet society in the mid-1980s, problems that gave rise to a search for reforms. We also recount the promising beginning of some of Gorbachev’s reforms, and the problematic aspects of others. In Chapter 5, we explain the transformation of Gorbachev’s policies in 1987 and 1988 and their deleterious consequences. In Chapter 6, we describe the unraveling of the Soviet system. In Chapter 7, we conclude with a discussion of the significance of the Soviet collapse. In an Epilogue, we critique other explanations.