Gorbachov's reforms THE INITIAL reforms of the new young leader of the Soviet bureaucracy were described in the first part of this article in the last issue of International Viewpoint - repressive measures against mass alcoholism and the kiss of the guillotine for a long list of particularly incompetent or unlucky officials. That article ended with an indictment of the present economic structures by the new ruler and his sounding of the alarm about the urgent need for changes. The following one takes up Gorbachov's program for reforming the economy, as well as the problems and contradictions he faces. The advent of a vital and intelligent general secretary of the Soviet Communist Party, in particular following a series of No. One's who held the scepter of supreme power with a dying hand, two of them momified apparatchniks, have inspired heady speculation about a new spring in the USSR. ERNEST MANDEL
USSA spurred by Andropov's disciplinary measures. According to official Soviet sources, industrial production increased by only 3.1% in the period January-June 1985, as against 4.5% for the period January-June 1984 and 4.1%% in the period January-June 1983. For the period January-April, the contrast was even more striking. The growth rate was 2.7% as against 4.9% and 4.4% respectively for the corresponding period in the two previous years. The denunciations of these problems are significant, but after all routine, except for the sense of urgency that surrounds them. They reflect general conditions whose structural character we have been pointing out for a long time.
The slowing of economic growth in the Soviet Union indicates the failure of the bureaucratic dictatorship to make the transition from extensive development to intensive development of the economy. This is generating steadily growing tension in the allocation of supplementary resources.
Unlike the period 1953-1973, the Kremlin can no longer simultaneously raise productive investment, military spending, and the standard of living of the masses. Gorbachov's report explicitly recognizes this. The conclusion that follows from this is obvious. Growth has to be given a new impetus with smaller investment. Above all, investment itself must be "rationalized."
Stress is being put on two factors -modernization and discipline. Gorbachov is the herald of the "scientifictechnical revolution," the bureaucracy's term for the third technological revolution. Automate, computerize, robotize - these are the three themes that are being taken up in chorus by the official ideological apparatus. No doubt, they will be the leitmotiv in the "programatic" documents for the Twenty-Seventh Congress of the CPSU, which has been called for February 1986. (Once again, this formulation is Gorbachov's own).
"Discipline" is supposed to mean greater economy in the use of energy and raw materials, as well as more rational use of equipment and labor power and a reduction of the demands for additional investments to meet the targets of the plan. All of this is quite traditional, abstract, and unrealistic, given the material interests of the bureaucracy, which more than
1. In his report to the Central Committee, Gorbachou nonetheless called for a considerable increase in the production of this "uncompetitive machinery." The grow th of machine production is to be between 9% and 12% per year in the period 19861990, as against a growth of 6% in the period 1981-1984.
2. The full translation of Gorbachou's speech appeared, for example, in the June 29 and July 29 and July «Frankfurter Rundschau," 1985, issues of the West German daily
13
The principal failings of the Soviet economy denounced by Gorbachov are as follows: He pointed to a technological lag and the poor quality of many industrial products, which together "undermine the competitivity of Soviet products, including machinery, on the world market." (1) Then there was the low productivity of investments, which were to a large extent excessive and left unrealized (frozen) for a long time. Finally, he referred to an unbalanced planning, becoming more and more incoherent, and to a growing waste of energy and raw materials. (See table.)
Gorbachov's indictment was followed up by a sensational decision. The draft for the next five-year plan (1986-1990) was sent back to Gosplan (the state planning agency) for major modifications. Gorbachov concentrated his criticisms in an onslaught on the Ministry of Steel:
"Over 15 years, 50 billion roubles in investment have been alloted to the steel industry. Most of this was assigned to financing the construction of new capacity, which moreover has been left uncompleted, while the technical reequipping of the enterprises has been neglected. Because of the defective policy of the Ministry of Steel, and of the minister, Comrade Kazanets, this industry failed to meet the targets of either the tenth or the eleventh five-year plan. The situation
International Viewpoint 14 October 1985 that has developed requires radical changes." (2)
The fact that there is general cause for alarm is attested by the new decline in the rate of industrial growth this year, after a brief recovery
TABLE
A report drawn up by the Polish
Academy of Sciences cited in the
July 6 issue of The Economist estimates the expenditure of energy
(in terms of kilos of coal) and of steel products (in terms of kilos of steel) for each 1,000 dollars of Gross National Product (at official exchange rates) years 1970-1980: Country Energy USSR 1,490 East Germany 1,356 Czechoslovakia 1,290 Hungary 1,058 Great Britain 820 West Germany 565 France *502 Switzerland *371 for the
Steel
Production
135
88
132
88
38
52
*42
*26
These figures are not entirely comparable. Manufacturing plays a smaller role in the formation of the GNP in these countries than in the others mentioned.
ever "rules the roost" in the economy.
The only concrete proposal is for a substantial reduction in construction of new plants for the sake of modernizing already existing plants and equipment. "Reconstruction" is now to absorb more than 50% of investment spending, whereas it now accounts for only 30%. The mountain and the mouse
How can this scheme, along with the related ones in Gorbachov's report, be carried out? There are, of course, the traditional, routine references to "material incentives" and "mobilizing the workers." But everyone knows that this is only empty rhetoric, especially in view of the meager results that followed similar talk in the case of the LibermanKosygin reforms in the mid-1960s. The only recourse left is administrative changes, that is, readjustment of the bureaucracy. In fact, that is all that Gorbachov's proposals can lead to.
He is proposing to beef up simultaneously the power of the central planning bodies and the powers of the plant managers and enterprise groups. It is, therefore, the intermediate authorities that are to have their prerogatives reduced - the ministries, especially the republic ministries, the local and regional bodies, the authorities for specific industries, and inspection bodies. They are to be cut back numerically and accorded less responsibility and weight. This bureaucratic rationalization will be accompanied by a simplification of the indices of the plan.
None of this is very radical or very convincing. It reminds you of a saying by the Latin poet Horace about the mountain in travail giving birth to a mouse. The gravity of the affliction and the severity of the diagnosis are clearly out of all proportion to the hesitating and limited character of the remedies offered. This situation is strongly reminiscent of the famous Novosibirsk Report in 1983 in which Tatyana Zaslavskaya made a critical analysis of the structural deficiencies of the Soviet economy, only to end with extremely vague and limited proposals for reforms. (3)
The reference to Zaslavskaya is not at all a fortuitous one. Although she was publicly reprimanded, she was not removed from her position. Her ideas have by no means fallen into disrepute. They were raised again in an interview with her that she was able to get published in the June 1, 1985, issue of Izvestia. They seem, in fact, to be the inspiration for at least part of Gorbachov's economic reform, as they were for Andropov's 14
"experimental reform." (4)
In any case, you find in the Novosibirsk Report the same theme of a parallel strengthening of the powers of the central planning bodies and of the plant managers, with a reduction in those of the intermediate bureaucratic authorities, that dominates the "Gorbachov reform."
But in Zaslavaskaya's report you also find another reform proposal that has not yet been taken up officially by Gorbachov but which may become a focus of attention before the CPSU congress in February 1986. It calls for an expansion of the "private" sphere of the market economy in agriculture and in the services. Zaslavskaya's interview in Izvestia explicitly mentions the possibility of doing this in agriculture, so long as this expansion "remains within the limits of the law."
In this connection, it should be remembered that for seven years Mikhail Gorbachov was the boss of Soviet agriculture in the Central Committee of the CPSU. The least that can be said is that the record of his stewardship is hardly a brilliant one. Soviet agriculture is suffering from persistent stagnation. The deficit in the production of cereals for livestock feeds has led to a flattening out of meat production at around 60 kilos per capita, as against more than 100 kilos in France and 92 in East Germany, the country increasingly cited as an example by the Soviet leaders (including Gorbachov) for planning and economic management.
This year, cereals production is showing a slight upturn. It will no doubt be around 190-195 million tons. But this is still far from the target of 240-250 million tons that was initially set for the five-year plan 1981-1985.
There are many indications that Gorbachov wants to stimulate the production on the private plots of kolkhoz (collective farm) members, and the Sovkhoz (state farm) workers, which fell into stagnation under Brezhnev. This represents some 25% of total agricultural production, with a greater specific weight in livestock raising and the production of fruit and vegetables.(5)
In fact, stimulating private production while keeping it under the control
3. On the report of Tatyana Zaslauskaya, see the article by Marina Bek in "International Viewpoint," No 73, April 8, 1985.
This concerned a limited number of industries and enterprises, where the power of the managers to determine the prices and assortment of products has been widened.
For fruit and vegetables - except for apples - the gardens of city workers also play a not insignificant role.
This excellent book "Travail et travailleurs en URSS" (editions la De-
Mikhail Gorbachou's recent visit to France a new image for the 'young' leader (DR) of the state and channelling it through the outlets of the state and cooperative distribution networks is one of the solutions advocated by the reformers. This recipe is close to the East German model, halfway between the present Soviet structure (inherited from the Khrushchev and Brezhnev eras) and the Hungarian one, to say nothing of the Polish or Yugoslav one.
The most audacious aspect of this reform comes in the services. It has been applied experimentally in the Soviet Socialist Republic of Estonia. According to an article in the August 19, 1985, issue of Izvestia the repair services industry is today one of those that offers the least satisfaction to the population. The "official" state and cooperative repair services have an annual turnover of 6 to 7 billion roubles. The "unofficial" sector of the repair services industry has a similar volume of transactions. Unmet needs for repairs are estimated at a value of 5.5 to 6 billion roubles a year, that is, about a third of the total.
Moreover, some 17 to 20 million workers do moonlighting repairs in addition to their "official job," which obviously suffers as a result. In particular, they may steal materials from their workplaces to do such work. (6) couverte, Paris, 1984), Jacques Sapir notes that under Andropou, in order to combat absenteeism, which is in part the result alcoholism, an attempt was made to launch moonlighting and is aggravated "Sending the militia [police] at the begin. "hunt for shirkers, but it fizzled.
the militia [police] at the begin. ning of 1983 to check whether the people in the cafes, movie houses, and theaters were absent workers could be an indication. But the way in which this campaign fell flat also shows the limits of coercive action. You cannot put a cot (P. 68) behind everyone of 128 million workers. International Viewpoint 14 October 1985
was part of the attempt to create
In the Estonian SSR, the radio and TV repair firm Elektron in Tallin rented out one of its shops to a brigade of technicians for 650 roubles a month per worker. In addition, the technicians involved had to pay the costs of materials, electricity, heating, and so forth. In return, they could demand what they thought was a proper price for repairs from their customers.
The price was established by the operation of the law of supply and demand. The repair workers could keep 70% of their net income. They had to pay 30% to the state enterprise as a sort of profits tax. TV repair experiment
The results seem to have been sensational. The waiting time for repairs, which had been two weeks -and in that respect Tallin is fortunate by comparison with Moscow and Leningrad, where waits are much longer — was reduced to one or two days. A radio or TV set taken to the shop in the morning was often returned in the evening.
The quality of the work improved considerably. Bribes were eliminated, and prices stabilized rapidly. In fact, the supply and demand were brought into balance so quickly that the brigade is now looking for new clients in the countryside, since the market for its services in Tallin was rapidly saturated.
The fact that articles about such cases can be published in the Soviet press seems to indicate that Gorbachov and his team want to expand this sort of experiment. The example in
International View point 14 October 1985 the service industries is already closer to the Hungarian model. But as the case of Hungary itself indicates, it is by no means easy to apply this sort of reform in large scale industry, and there is no assurance that it will be successful in either economic or social terms.
The Soviet lag in the dissemination and use of computers in a way sums up the scientific, technical, economic, social, and political problems confronting the "Gorbachov reform."
In the field of pure scientific research, one can hardly talk about a clear lag of the Soviet Union behind the United States, Europe, or Japan. The Soviet mathematicians are among the best in the world. Speaking over Radio Moscow on January 20, 1985, Vladimir Gurevich said that the Soviet Union is building the most advanced supercomputer in the world in Severodonetsk. We have no way of telling whether this was a boast, but in itself such a claim does not seem hard to believe.
There is, however, a long road between undertaking such a project, building prototypes, and testing them, and then putting such devices into mass production, let alone into general use. In the latter respect, the Soviet Union's lag is undeniable, striking, and very grave. The only computers available in practice to plants, administrations and schools is still of the so-called Third Generation.
Production of the Fourth Generation, which has already been generalized in the West, has hardly begun. Only 35% of the big Soviet enterprises (i.e., those that employ more than 500 workers) have a computer, while in the United States and Japan close to 100% do. Although the current five-year plan projected an annual production of 2.5 to 3 billion roubles worth of software, the real production in 1983 and 1984 barely amounted to 1% of this figure. Moreover, on the average computers are used only 12 hours a day, even though the plan projected a daily use of 18 to twenty hours.
Massive introduction of computers into the schools is an urgent need to prepare the upcoming generations in the Soviet Union for general use of this new tool for work and research. Given the inadequate production in the Soviet Union itself and East Germany's limited capacity for export, the Soviet authorities have turned to British and American firms in an attempt to import on a large scale "personal" computers of the AppleMacintosh, or IBM PC-AT type. But the lag remains. It is estimated that the Soviet Union is ten to 15 years behind the United States, and five to ten behind Japan and Great Britain as regards the quantity and quality of computers in wide use.
The lag is still more pronounced in the utilization of computers. At the start of the 1970s, the idea was widespread in the Soviet Union and
East Germany that the planned economy would lend itself better than the capitalist one to the use of computers for planning and managing production, investment, and the economic life as a whole. Schemes for a unified data bank for the entire national economy of the Soviet Union were worked out.
Today, the Soviet philosophers, economists, managers, and apparatchiks have to sing a different tune. Rational generalized use of computers in the management of enterprises and of the national economy is running into innumerable difficulties, which seem in fact to be growing. Data and dictatorship
Some of these problems are technical in nature but hard to eliminate in the short or medium term - an inadequate infrastructure (in particular a deficient system of telephones and of telecommunications in general). a scarcity of electronies technicians and especially of software specialists, and difficulties in justifying the use of computer technology in financial or productivity terms (the introduction of computers not having led to the elimination of mechanical or even manual departments for accounting and correspondence).
However, the main difficulties are socio economic and socio-political. Generalized use of computers presupposes the free and open circulation information, which is assured within capitalist enterprises by their private ownership. Such unimpeded circulation of information throughout the national economy is not essential for the functioning of a market economy. (7)
Within the Soviet economy, given the material interest the bureaucrats have in getting the maximum resources for as minimal planning targets as possible, free circulation of information among enterprises and higher authorities is not only assured, it is in practice out of the question. Even within individual enterprises, the circulation of information is limited.
The system of bureaucratic management functions to a large degree on the basis of false information, known to be so by all the interested parties. This is what the former
7. The growing concern of the bour geoisie and its state about "computer crime reflects this controdiction. The relativels easy access of "people outside the busines to information concerning it Interfe with competition.
Communist premier of Hungary, Andras Hegedus, once called "generalized irresponsibility." (8) In such conditions, how can you "rationally" utilize a unified data bank? The bureaucratic system of management itself seems to be an obstacle. (9)
Aiongside the socio-economic problems, there are the sociopolitical ones. Personal computers are generally equipped with printers, that 1s, with a printing apparatus that can function like a small offset press or a photocopier. Millions of personal computers spread through the schools, the universities, the enterprises would be millions of potential sources of samizdat, of a flood of uncensored What hat publications.
What a nightmare for the KGB, and what a windfall for the so-called "organs of anti-Soviet agitation," which in fact is only the natural and normal exercise of the right of the working people to express their views about the whole range of social reality in the workers state, a right that Marx and Lenin expected that the workers would, and should, have.
These two difticulties have given rise to much hesitation and debate in the Soviet establishment about the advisability of disseminating miniaturized computers widely in administration and education. technical progress is irresistible in the world we live in - in particular because of the pressure of competition between the two systems - computers will eventually make a massive breakthrough in the USSR as well.
However, the bureaucrats will try to come up with all sorts of compromises to "limit the damage." So, they are talking about decentralizing the printers, that is, to disseminate personal computers generally but to mutilate them by separating them from their means of printing.
So, Gorbachov's problem is essentially social in nature. He is confronted with a choice between contradictory social interests that come into conflict from the outset of the "reform" and which will collide explosively if certain developments are pursued to the end. (10)
Clearly, bureaucratic "rationaliza tion of bureaucratic management" involves increasing the rights of managers, which will undermine the right of workers to a job, the main gain of the October revolution left for the Soviet workers. All attempts to get around this problem up to now, for example by means of self-discipline and self-layoffs by teams of workers, or through the brigade system, and by holding out the lure of substantial bonuses (for a minority), have come up short against the class 16 solidarity and instinctive egalitarianism of the workers. (11)
It is not very likely that mere political pressure can break down this obstacle. Stepped-up economic pressure will be necessary, that is, the introduction of massive unemployment. But in the present relationship of forces, this cannot be done without provoking enormous and explosive working class resistance.
However, if this barrier of working-class resistance is not broken down, the increase in the rights of managers will remain limited, confined essentially to a minor redistribution of responsibilities within the bureaucracy. Correspondingly, the positive effects on the rate of economic growth and the speed of technological innovation (12) will be of limited duration even if they may be real, as were the first MalenkovKhrushchev reforms and the LibermanKosygin reforms after them. After a few years, the same causes will again produce the same effects. The problem is a structural and not a conjunctural one.
Everything indicates that by his origins, his social nature, and this cast of mind, Gorbachov is incapable of disentangling himself from the bureaucratic octopus, which through a thousand forms of obstruction defends the status quo, that is, its privileges. The crisis of the Soviet economy and society, as even the very limited description in the Novosibirsk Report and in Gorbachov's report makes clear requires a radical cure.
The medicine is called democratically centralized management of the economy by the workers themselves, organized by their democratically elected councils, debating and making decisions openly. This involves motivating the producers fundamentally by energetic action to reduce social inequality and a clear and open share for all in the social dividends. And this means liberating the enormous creative potential of the working masses. Such a turn is impose ma Such a turn is impossible without
1. enmına•
8. The Novosibirsk Report stressed as well, a decade later, the fact that the system of economic management (and "political and social" should be added to this in force in the • Soviet Union generates "laziness, dishonesty, and a low moral level throughout the entire population." It might have added that the example is set at the top, "Der Fisch beginnt am Kopf zu stinken" ("Fish start to go rotten from the head down.")
In this respect, see the important considerations contained in a doctoral thesis by William K. McHenry, an American specialist (very hostile to communism) on Soviet Computer science.
10. The Novosibirsk Report explicitly mentioned the contradictory interests of various social layers as one of the causes of the delay of a radical economic reform in the USSR. Gorbachou himself alluded ting the political monopoly of the bureaucracy throughout the USSR, the introduction of political pluralism, and legalization of the political parties and formations that respect in practice the Soviet constitution. All of this requires a full-fledged political revolution.
Gorbachov sometimes speaks in tones that even through the traditional verbiage and wooden jargon reflect an awareness of the gravity of what is at stake. In an interview published in Time of September 9, 1985, he said, for example:
"The need for a drastic change and the need for a radical improvement of performance are not only supported by the people; they are becoming its demand, the real imperative of our time." [Retranslation from French]
These words "drastic change" and "radical improvement" have a definite sound, but no such thing will be achieved by the sort of bureaucratic reforms this same Gorbachov is projecting.
When the Soviet chief cites the great advances the Soviet Union has made thanks to the structures created by the October Revolution, he has a point. If the imperialist propagandists make fun of the USSR, which today accounts for a quarter of all scientific degrees in the world and nearly half the engineers and still suffers from a marked technological lag behind the imperialist countries, they are a bit too quick to sneer.
These scholars, these engineers, the skills and culture of the Soviet working people are facts, and impressive facts. Anyone who does not understand this, does not have a full understanding of today's world.
It is the immobility and the grip of the Soviet bureaucracy that is preventing this enormous potential from producing the benefits it could for the Soviet peoples, for the cause of international socialism, and for all of humanity. (13) If the Soviet masses break this grip, the world will be changed as dramatically as it was in the ten days that shook the world in October 1917. to the same phenomenon, albeit in a toneddown way. On the debate unleashed in the Soviet Union over the existence of these contradictions, see the article by Marina Bek in IV, No. 72, April 8, 1985.
11. A French industrialist invited to the USSR reported interesting details about this in an account that appeared in the May 24, 1985, issue of the French business magazine "l'Expansion."
12. Gorbachou promised to increase the salaries of engineers and technicians and to increase bonuses for "innovators.
13. Professor Harley D. Balzer recently analyzed the causes of this contradiction in the American magazine Issues in Science and Technology." They all lead back to bureaucratic management and dictatorship and not to the system of collective ownership of the means of production or to economic planning. International Viewpoint 14 October 1985