Hall went on to question “new thinking’s” subordination of class to universal human values. In 1988 and 1989, while still supportive of perestroika, his criticisms grew more forceful and detailed. As Eastern Europe fell apart in late 1989, and as the USSR’s crisis became terminal in 1990 and 1991, his public criticism of the policy of the Soviet leaders grew sharper still, though tempered by the hope that the saner heads would prevail.
Yet even Gus Hall, a dogged opponent of opportunism, did not see the conflicting approaches to socialist construction in the Soviet Union, or the material roots of the latter in the growing second economy. Until 1989 the CPUSA as well as other Communists underestimated the possibility of socialism ending and the Soviet Union fragmenting. This was probably due to the great ideological weight of the Soviet Communist Party in the world movement, and to the difficulty of understanding a complex society other than one’s own. Nevertheless, in contrast, many social democratic writers did discern the two trends in Soviet politics, and some bourgeois economists perceived the growth of the second economy.
A clear analysis of the Soviet Union was also undoubtedly hindered by the difficulty of sorting out legitimate criticism from the mass of generalized hostility directed the Soviet Union’s way. The Chinese Communists did condemn “Khrushchev revisionism” in 1956-64. Their polemics, however, struck many as crude, dogmatic, and self-serving. The Chinese policy erratically veered from left to right, and included Mao’s de facto anti-Soviet alliance with the U.S. For anyone with a shred of sympathy for the Soviet Union, the Chinese criticism increasingly lacked credibility. On the other end of the spectrum, the Eurocommunists merely echoed the hoary criticisms of the social democrats.
Among many friends of the Soviet Union an un-examined assumption grew that, after Stalin, the USSR was perfecting socialism. Khrushchev was better than Stalin. Gorbachev was better than Brezhnev. With the rare exceptions of Isaac Deutscher and Ken Cameron, few attempted to deal with the Stalin, Khrushchev, or Brezhnev periods in a critical but balanced way. Particularly in the case of Stalin, Soviet supporters gave up the effort of an overall assessment, perhaps because of its inherent difficulty, perhaps because such an effort could have no possible payoff, or perhaps because of an assumption that Soviet progress would make Stalin a historical anomaly of diminishing importance. The enemies of the Soviet Union readily filled this vacuum with shelves of books portraying Stalin as a monster or a madman. These caricatures in turn influenced the views of Communists whose only knowledge of the Stalin period was second hand.
The Soviet demise gave a new lease to the idea of “market socialism,” or at least the idea that the jury is still out on the proper role of the market in the political economy of socialism. As in other times, literature on “market socialism” has come into vogue as socialists of all stripes search for answers to the economic disasters of 1985-91. Most of this literature is naively utopian, a lineal descendant of the petty bourgeois socialism of Pierre Joseph Proudhon demolished by Karl Marx. Most versions of “market socialism” contain contradictory theoretical constructs that evade the question of whether labor markets and labor exploitation will exist under market socialism. If so, how is “market socialism” socialism at all?623
During perestroika, market socialism served as a halfway house, briefly useful for justifying to the Soviet public the goal of “reforming” and “perfecting” socialism. As a slogan, it proved effective. By the end of his tenure, when economic “reform” had produced something almost indistinguishable from capitalist restoration, Gorbachev dropped the pretence of “socialism.” He advanced the goal of establishing a “regulated market economy,” something resembling Western Europe or Scandinavia.
Given the actual history of market socialism under Gorbachev, it would seem that the real lesson of the Soviet collapse leads in the opposite direction, to the conclusion that socialism requires central planning, public ownership, and restricted markets. The question ought not to be debated dogmatically by assembling quotations from classical texts. Rather, the most promising approach, as Marxist economist David Laibman has advised, involves studying the relevant practical experience of socialist construction since 1917.624 The question of the market enters the discussion in three ways: the economic crises of the Gorbachev era; the long-term decline of the Soviet growth rate; and the role of markets in socialist and communist construction. A brief examination of each raises considerable doubts about the desirability of market socialism.
Economic discontent for millions of Soviet people in the Gorbachev era arose not from the central planning system but from its dismantling. In 1985, the economy, still centrally planned, delivered the highest living standards in Soviet history.625 For decades the Soviet economy had grown faster than the U.S. economy, though by the 1980s, it was not closing the gap as fast as before, and the nature of the race was changing. As frontrunner, the U.S. had made important qualitative transitions to new industries. Nonetheless, growing at a respectable 3.2 percent a year in the early 1980s, the Soviet economy was—slowly—catching up with the U.S. economy in many ways.626
As for the long-term decline of Soviet growth rates, too many have uncritically accepted the notion that the market can impart dynamism to socialism, and that a wider use of markets could have accelerated Soviet growth rates. Even cautious proponents of markets within the context of a dominant central plan, have to explain the following awkward facts. In the final three and a half decades of the USSR’s existence, the more market relations and other reforms were introduced—officially and legally in several reform waves (Khrushchev, Kosygin and Gorbachev), and quietly, steadily, and often illegally through the spreading second economy—the more the long-term economic growth rates came down. Even some bourgeois economists admit the downward impact of the second economy.627 The fastest Soviet growth rates ever achieved came in 1929-53 when the Soviet leadership firmly upheld central planning and suppressed the market relations formerly tolerated in the NEP of 1921-29. It was easy to see why the economic reform that Khrushchev and Gorbachev advocated would lower growth rates. Less investment in heavy industry, more stress on consumer goods, more wage leveling,628 all would tend to lower growth. Growth would also slacken due to decentralization that led to wasteful competition and disrupted the coordination between enterprises. Clearly from 1985 to 1991 “the magic of the market” was nowhere in evidence. The more commodity-money relations expanded, the more perestroika failed. In 1992 when Yeltsin fully imposed “shock therapy,” the Soviet economy went into a catastrophic slump, from which it has not yet recovered. Since 1991, market relations remain associated with negative or low growth rates. Indeed, 20th century planned economies, as a rule, grew significantly faster than market economies.629
“The seizure of the means of production by society puts an end to commodity production, and therewith the domination of the product over the producer,” wrote Engels.630 Engels may have misjudged how quickly and automatically the latter would flow from the former, but clearly the founders of scientific socialism envisaged communism—the historical stage after socialism—as a society with no market. The forecast of a communist society where, in conditions of superabundance, free human beings would collectively organize production according to a plan and organize distribution according to need rather through the blind workings of an impersonal and cruel market has been central to the Marxist understanding of social emancipation. Marxists criticized commodity production for causing producers to lose control of their product. In the Marxist view, a great advantage of the planned economy in its socialist and communist stages was that the producers step by step regained control over the product of their own labor. In the end, under communism, conscious human beings, not blind, anarchic market forces, would fully determine the character and pace of economic development.