August 19, 2009

Capitalism and Communism: A Few Things I Changed My Mind About

I sat over lunch under an apple tree with some old comrades. We reminisced about the U.K. referendum on EEC membership back in 1975. At the time, we all campaigned against. I mentioned that since then I had changed my mind. Why? Because, I offered, the EU had done more to spread and consolidate democracy in central and eastern Europe than any other factor or force. I'm not sure, but I think someone close to my right ear muttered "Shame!" That, and a few other remarks, made me realize that some of those I was sitting with might not have changed their minds about much, despite the passage of a third of a century.

Some things I have kept. I was brought up in a high-minded atmosphere of nineteenth-century rationalism. Now, I would not recommend this for everyone. It was not a lot of fun. I did not really learn how to party, for example. However, I did absorb a lot about the sanctity of truth and the beauty of logic. As for politics my mother, a lifelong Liberal, imbued me with the notion that:

Whoever could make two ears of corn or two blades of grass to grow upon a spot of ground where one grew before would deserve better of mankind and do more essential service to his country than the whole race of politicians put together (from Gulliver's Travels by Jonathan Swift).

That was the "rationalism" side of my upbringing. The "nineteenth century" bit was the optimism that came with it. I had instilled in me a belief in the possibility of progress -- that we, the human race, could learn from experience and reasoning to make things better for everyone.

These things I still believe.

But some I don't. One thing I used to believe was that the government could always fix things -- at least, if not the government, then some other government.

I lost faith in this idea gradually, a bit at a time. To begin with, I believed it wholeheartedly -- as did we all (this was those of us that were studying economics in Cambridge, England, in the late 1960s). The only problem would be if the government was mistaken in fact or logic. If so, it was our job to put it right! We all saw government service as the highest calling of a professional economist. I nearly went that way, but I got bitten by the economic history bug.

A little later, my view of politics had darkened. I no longer trusted the government -- our government, the capitalist government, that was. I became a revolutionary socialist, and then a communist. (By this point I had forgotten about the two blades of grass.) It was still the government's job to fix things, but it had to be a government of the people, by the people, for the people. This outlook wasn't anarchistic, but it was libertarian. I wanted a world, foreshadowed by Marx in the Communist Manifesto of 1848, where,

In place of the old bourgeois society, with its classes and class antagonisms, we shall have an association, in which the free development of each is the condition for the free development of all.

What kind of government would that be? Well, although a communist, I did know it wasn't the Soviet government of the day. I had lived and studied in Moscow; I knew it was a police state and didn't much like it, although there were other things I was ready to admire. But the voices from the Soviet bloc that I listened to were the Czechoslovak and Polish reformers (some of them now exiled to Britain) and, in the Soviet Union, democratic Marxist dissenters like Roy Medvedev. This was the now forgotten era of Eurocommunism which, germinated by the 1960s, blossomed briefly during the 1970s. Italian and Spanish communists put forward the daring view that Soviet socialism had something missing from its makeup. The Russian Revolution of 1917, although not a mistake, had driven a wedge between democracy and socialism. In Britain some communists, but by no means all, took this up. It was our job to put democracy and socialism back together. (We failed.)

We debated the mistakes and crimes of Stalinism. This debate turned out to have some unexpected twists. In the Great Terror of 1937, Stalin had murdered a million people. No one really wanted to defend this. Those who wanted to support the Soviet Union on principle generally divided into two. One lot went into denial: some real enemies had been justly executed, and the rest was a fabrication. Others accepted the truth, but stuck to the line of Khrushchev in 1956: it was the fault of Stalin and a few leaders, who had died or been got rid of, and everything else was basically healthy, so that made it okay.

More disturbing, if anything, was the problem of the far more numerous victims that Stalin didn't intend, but killed anyway: for example, the five to eight million deaths resulting from the famine of the early 1930s. There was no plan to kill them, but they died because Stalin's drive to industrialize the country took too much food from the villages, leaving not enough to keep the rural population alive. Their bones were buried in the foundations of socialist construction. This was harder for some to face up to than premeditated mass murder. If a death was a crime you could convict the murderer, but killing by mistake placed the whole Soviet system on trial.

We wanted to heal the rift between socialism and democracy. We were failing, but we didn't know it yet. For the mid-1980s saw the coming to power in the Soviet Union of a leader who walked and talked like us: Mikhail Gorbachev. Like us, Gorbachev wanted to put socialism back together with democracy. The Soviet Union could become a free, democratic society! We were re-inspired, briefly.

It wasn't all philosophy and infighting. While disagreeing on history and the Bolshevik Revolution, we lived in our own country in the present. Putting differences aside, we engaged in many campaigns. We fought for jobs and full employment, opposed racism, supported strikers, marched for peace, campaigned for votes, and worked to enliven and empower our local communities.

Some other beliefs that I still held at that time mirrored my faith in political action to put things right. One was that fairness matters more than efficiency. In the late 1980s, shortly before his final illness, I became friends with Peter Wiles. We soon understood each other pretty well. Given our different starting points -- in many ways he was a classic liberal -- he was exceptionally kind to me. But even when he was no longer quite sure who I was or why I was there, he would turn to me suddenly and say: Efficiency! You've never paid enough attention to efficiency! Efficiency is very important!" And he was right. Because, the more efficiency you have, the more blades of grass and ears of corn you have, and the easier it is to be fair. At the time, this was something that I was still thinking about.

Then the Soviet experiment came to an abrupt end, a complete and total failure. Sometime early in 1991, I decided that the era ushered in by the Bolshevik Revolution was over. It was time to move on. I didn't know where, but I knew I couldn't stay where I was. I turned in my party card, and that was it.

A few years later, I was still stuck with nineteenth century rationalism, but I had changed allegiance from Marx and Engels to Smith, Ricardo, and Mill. In economics and politics I had become a liberal. I was happy -- as most liberal economists are -- with progressive redistribution through taxes and benefits, and tax-financed health and education services. I still had an optimistic belief in progress. But I no longer thought the government could drive progress, or fix everything, and I didn't even want it to do these things any more.

Political economy and the study of bureaucracy helped me to this view. Politicians and government officials, I realized, are not to be judged by their high-mindedness. Whether capitalist or socialist, under democracy or a dictator, political leaders and civil servants are self-interested. If the incentives align their private interests with those of society as a whole, well and good. Mostly, however, this is not the case. I ceased to believe that good government needed only correct facts and correct logic. I began to grasp the possibility that governments could fail systematically, perhaps more often than markets could fail.

From there it was a short step to the idea that a good way to organize society is to place the government under strict constitutional constraints, and let the citizens govern themselves as much as possible.

There were plenty of things I struggled with then, and still do today.

One is climate change. When climate change is (in the words of the Stern report) "the greatest market failure the world has ever seen," it is clear that without some kind of political action there is no solution. (You can actually read me struggling with this in my first and only article about climate change, written way back in 1991. I had figured out the political action problem, although in a crude and overdramatic way, but not yet the coordination problem that goes with it.)

Another is military intervention. I still thought military force had a purpose in the modern world and, to be perfectly honest, I still do. That doesn't mean I know exactly what that purpose is. Here's an example. I was in favour of the U.S. led invasion of Afghanistan in 2001, and less surely in favour of the invasion of Iraq two years later. What do I think now? There is a lot of evidence now to suggest I was wrong. I still think Saddam Hussain brought defeat on himself by pretending to have weapons that he wanted to have, and had tried to develop, but did not in fact possess. Also, I think the full consequences will not be known for many years, and could well differ greatly from what seems obvious now. Still, that is to anticipate hindsight that we don't yet have.

More to the point is this. I never forgot a conversation about Iraq with an American friend and fellow economic historian. I visited his university in November 2004 when Bush had just won his second term. Depressed and angry, Tim exploded at me: "You ex-coms are all the same!" (I wondered how many he knew.) "When it comes to military intervention you still think the state can fix everything." I think he had me just right. I was skewered.

A third thing I struggle with is who gets my vote. I favour policies that are economically conservative, socially liberal, tolerant and generous in international affairs, interventionist when forced but always reluctant and mindful of the perils of selective intervention. The only party that would be all these things is a party that is not interested in power. No party is all of these things in any country that I can think of. But if we don't vote, I believe, they will take our liberties anyway.

The last thing I want to mention is what it has meant to me to have spent the last eighteen years working in and with the Soviet state and party archives. First, a wonderful privilege: what luck, that I was granted such an opportunity. I have used it to work on a wide range of topics -- statistics, economic planning, growth and development, wartime mobilization, defence planning and procurement, decision making, information, secrecy, lying, cheating, whistleblowing, and repression. There is so much to study! This was a state of 200 million people and one sixth of the world's land surface that recorded everything of note in millions upon millions of documents over 70 years.

And second, a strange voyage of discovery, hard to define in a few words -- but I'll try. In general, no great surprises. The documents show a vast, centralized dictatorship with a mailed fist and a decaying metabolism. But we knew that, already. The fact is that academics and writers older and better than me, the dissidents and scholars of Peter Wiles's generation, had already worked out the main dimensions and characteristics of the Soviet system, its politics and economics. This was a state that just had too much power. 

In specifics, though, my sense of shock, accompanied by a full span of emotions from grief to laughter, is continually renewed by the opening of each new file. Two examples: First, how did I get interested in secrecy? I was working on Soviet military procurement. Every year the government gave the Red Army a cash budget to buy new equipment. Soldiers toured the factories to work out what weapons were available and at what price. Industry was supposed to sell weapons to the military at cost price. So, the officers' first question tended to be: "How much does that cost?" And the standard answer? "We can't tell you. It's a military secret." It sounds ridiculous! But it worked! Year after year and decade after decade, it worked. That told me there was something interesting and remarkable in the operation of Soviet secrecy that needed to be understood.

Second example: Earlier in the summer I took a first look at the files of the Lithuania KGB, newly acquired from Vilnius by the Hoover Institution archive. Every year the KGB second administration, responsible for counter-intelligence, made a plan of work and a report of work. They enumerated the thousands of "objects" that, in the course of the year, they would aim to monitor, intercept, warn off, compromise, recruit, blackmail, or arrest, and the hundreds of informers they would deploy to achieve the plan. This is what the KGB did in Lithuania year after year, right up to the end of the 1980s. The term "object" is no mistake; they coldly manipulated "the lives of others" with casually understated brutality. Suddenly at the end of the 1980s the endgame arrived, and a hundred thousand people were on the streets, demonstrating for independence -- half of them, party members! They were taken completely by surprise! They'd been watching the wrong people! (Or had they? Again, there's a story in this.)

And finally, an inner struggle between the calls of science and morality. As a social scientist, my first duty must be to understanding. Understanding comes from new knowledge, and there is so much new knowledge in those dusty files and blurred microfilms! Judgement should come later. But there is also a feeling that spreads involuntarily from my gut, a voice that I can't shut out: Reagan was right. This was an evil empire.

Do I regret my past associations or activities? No. I believed or did many things that seem silly or misguided with hindsight, but I did not betray anyone or do anything really wrong. Many good people belonged to the communist party who inspired me both as idealists and as activitists. From them I learned about how to translate ideals into action, and how to work with people of differing views, build cooperation, and get things done in the face of criticism and opposition; it is hard to imagine that I could have learned these things in any other way. One thing I learned was always to start from the world as it is, not as you would like it to be. This was one reason I did not write off the Soviet Union at the time. Which bring us to mistakes. Well, they are supposed to help you learn. I made many, many mistakes and this just gave me plenty of scope to learn from them. Of course, I probably did not learn all that I should and I probably made many more mistakes than I ever recognized.

No doubt there is some degree of self-serving fiction in my story. The way I tell it, I remained true to the values I got from my mother: truth and reason before everything else. The facts changed, so I changed my reasoning. The world changed, and I moved on. But there could be other versions.

My children might say: In his youth, Dad was a free thinker. He got older and more established, put on weight, and settled for a comfortable life in an armchair.

The old comrades I lunched with might not go along with that. After all, they got older too, but they did not settle for comfort or accommodate to new times. They remained true to the cause. Among them, some might tell a story of treachery and betrayal, in which I began with my heart in the right place, but eventually sold out the cause in return for academic status and reputation. Others might wonder if I wasn't always a middle-class revisionist, just playing with politics, an enemy within from the start, never a true comrade. Somewhere in this tangled tale lies the golden thread of truth -- but where? You choose.

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  1. himmelwerft

    How about watching the unmatched calamity that the collapse of the USSR brought on the citizens of a relatively well-off industrialized second world nation? Weren’t you present here, working in the achives but clearly seeing the Russian life outside?

    By the 1980s, the USSR was far from being a Third World hellhole. I was there and I’ve seen it all through the eyes of a child, and the suffering of a homeless, jobless adult, the agony of the crippled Russian “state” that still I find crippled even until now.

    I can tell quite a reverse story. Unlike you, I was educated in an environment of intolerance to the USSR and communism as a concept. My university was full of free-marketeers, the daily hypocrisy of whom I saw in every word, in every long-winded concept they invented to explain the chaotic unleashing of suffering on humans by the “invisible hand” of the market. The terms of “ineffective” human labour that cannot expect to be paid with more than the life minimum, or the sorry statements of professors that “it’s sadly the market level of wages that puts them below the life minimum” – the same professors, I bet, not a few of whom were Marxists back in the day.

    The more I understood in classical, neoclassical, monetarist and all other capitalist schools of economic thought, the more I turned to neo-Marxism, the ideals of democratic communism and socialism. The history of the USSR became a very long-lasting hobby for me, albeit not an occupation.

    I was forced into a religion with the onslaught of the intolerant, hateful American evangelism into my nation, and I rejected this religion (and all other religion along with it, understanding the evolution of European secularism and the benefits it brought mankind).

    Excluded from the political process, daily fighting for my labour rights, for the ability to receive my education freely and without bribes, for my ability to receive medical treatment freely as I always did, for social guarantees that come with official employment and which are so hard to come by even now, I can clearly see the failure of “liberal democracy” in Russia to provide even the life level that we had under the opressive and far from ideal Soviet system. I became a communist and I am one now here in Russia.

    It’s like the flip side of the coin. I am of the younger generation, so perhaps I will go the same way you went – who knows.

    21 Sep 2009, 05:09

  2. Mark Harrison

    Yes, I was there.

    But I never forgot a conversation with friends in 1998, when Primakov followed Chernomyrdin as prime minister. I asked: “Would you rather be ruled by a thief a policeman?” They looked at me in horror. “A thief, of course!” I asked why. “Because with a thief, you know what they’re doing.”

    Your argument for taking a kindly view of the Soviet experience is essentially that it was replaced by something worse. Louis XV of France said: “Apres moi, le deluge.” Every autocrat has the same logic on his side: If not me, worse will follow! But if you accept that logic, the chance for improvement is ruled out forever. If you overthrow dictatorship, you take a gamble; sometimes, things will get worse before they get better.

    Democracy does not happen overnight (as I wrote on August 30). It is like driving on the right; nearly everyone has to agree to it before it can work well. The same is true of a market economy. But the evidence that these are essential ingredients of development is compelling. I see no reason why Russia should be different.

    23 Sep 2009, 20:06

  3. himmelwerft

    > I see no reason why Russia should be different.

    There are, and remain, examples of a different attitude towards reform (e.g. China, Belorussia). I have visited both nations and I must say their handling of reform was far superior to what happened in Russia.

    I can also add that upon examining the UN Human Development Indices in transition, as well as reading R.E. Allen’s excellent monography “Farm to Factory: A Reinterpretation of the Soviet Industrial revolution” (which was one of the first things that sparkled my interest in Soviet industrialization as a separate subject from overall Soviet history), I have seen quite enough evidence that the life level achieved by the USSR was not a simple task in and of itself. Nations with similar industrialization rates per capita in the 1900s (e.g. Mexico, Argentina) did not reach the same life level by the 1980s, at least.

    The wild abandon of a life level that I have personally witnessed to being superior to an absolute majority of world nations and being inferior to an absolute minority (the First World nations only, that constitute around 15% of the world’s population), is not something that is to be ever taken lightly, no matter what the promises are.

    > But if you accept that logic, the chance for improvement is ruled out forever
    The improvement in Soviet life level over the last century, especially in the post-Stalin years when the seeds of industrialization finally bore fruit, was quite tremendous.

    The de-industrialization of the USSR that followed it’s collapse was likewise tremendous ( my own look on the matter ), and the human cost in local wars alone was measured in hundreds of thousands of lives (that was included in one of the World Bank poverty reports, probably by B. Milanovic). That may be scoffed as insignificant in the light of the millions of lives ended prematurely during the industrialization of the USSR, but the 1980s are not the 1930s. The age of mass deaths seemed to pass away. In the 1980s-1990s the loss of hundreds of thousands of lives is not precended for an industrialized nation (maybe I am wrong here, however).

    This is not a mere excuse “Follow me or else!”. There should be valid grounds for suffering. If suffering increases so that the life level would increase in the future, that is a valid and possibly excusable suffering. But if suffering increases at the same time as the life level decreases… that is not excusable in my view. Stalin’s industrialization, for example, gave the Soviet citizen a life expectancy that rivalled the First World by the late 1950s. Each moment of suffering increased the life level of the future generations as opposed to decreasing it.

    The current situation will take many, many years to rectify and achieve even the pre-1991 life level, whereas China, for example, endured without a collapse of it’s political system. Belorussia, reverting to the quasi-Soviet political system, also managed to exceed the 1990s life level (and was IIRC the first post-Soviet republic to do so, or one of the first in any case). In my view, not only was the sacrifice not worth it, but despite the Soviet socialism being flawed, rectifying something is better than destroying it along with all it’s achievements. The fundamental misconceptions of Russians about the market economy and the international division of labour where Russia has been relegated the role of a de-industrialized resource appendage for cheap oil and gas, remain the real source of the problem.

    I never said that dictatorship is the way to go. In fact, I would support a democratic vision of socialism, like the communists in Kerala who are voted in power for 50 years and have made their state a haven of First-World life indicators in a Third World nation… or the left-wing governments of Latin America.

    Such is my position on the issue.

    25 Sep 2009, 06:35

  4. himmelwerft

    ^ correction: my look on the post-Soviet de-industrialization –

    25 Sep 2009, 06:36

  5. Mark Harrison

    Thanks for the comments. I apologize for my long delay in responding. I had to get ready for a new academic year and a new generation of students … and that’s still takng up most of my time. But you mentioned the influence that Bob Allen’s book Farm to Factory had on you. In fact, I agree that Farm to Factory is a very good book in the sense of rigorous argument and use of evidence.

    But it is also (in my personal judgement, of course) wrong. The short version of my criticism is that Allen misses and so underestimates the profound damage that Soviet socialism did to social institutions and social capital. The long version is here in a review I wrote for the journal Russian Review. (There were also useful reviews by Michael Ellman in Slavic Review 63:4 and by R. W. Davies for here

    I relate this to the argument you make as follows. The high quality of life that you recall was based on the state monopolization of resources, the command system, and the associated power of the state to force effort and push people and things around. That power could be sustained only by fostering secrets, mistrust, and lies, and punishing those that spoke the truth. It couldn’t be sustained indefinitely—especially in the age of information.

    When it collapsed, who was to blame? Not the western economists; they were just the messenger bearing the bad news. Was there some third way, or some way that would have been better managed? I doubt it. This pain was stored up and waiting to be released. If the fault lay anywhere, it lay with the builders of socialism, that stored it up in the first place.

    15 Oct 2009, 21:16

  6. himmelwerft

    > I apologize for my long delay in responding.
    This is an internet discussion, and my opinion is that it’s allright to take as much time as one wants or not even reply at all. I’m quite fond of your history work, that’s why I comment a lot.

    > The short version of my criticism is that Allen misses and so underestimates the profound damage that Soviet socialism did to social institutions and social capital
    To the European part of Soviet territories, which had some established, more or less working and more or less modern social institutions, it may have dealt a damage.

    But certainly for say Central Asia the social institutions isntalled by the USSR were more modern, progressive and built up a far superior social capital than the neighboring Central Asian states which remained independent and became nationalist-islamist nations (e.g. Iran, Pakistan, Afghanistan). It was all the more evident after the throwback to Islamist and other nationalism in the post-Soviet Central Asian nations which drastically lowered the life level and completely destroyed a good swath of the social capital so painfully created under the USSR (higher and general education, professional workers in all spheres of economy).

    So it can’t be such a simple issue. Not to mention that the great empires of old created their wealth, power and First World status by exactly the same methods – secrets, mistrust, lies, backstabbing and mass consolidation of efforts, either by the state or huge colossal state-affiliated corporations (East India company can serve a prime example of such a non-state body). Modern capitalist Russia likewise enforces it’s regime with lies, mistrust and punishing political opponents, including those on the left side of the political spectrum.

    > If the fault lay anywhere, it lay with the builders of socialism, that stored it up in the first place.
    Blaming the creator while fully white-washing the destroyer is not something I can agree with.

    16 Oct 2009, 07:41

  7. yuri yudin

    In my view, the real question is that of power. The Soviet Union was to a much extent a law-less state with a great power. The real power never laid with law but with the inter-dependence of its elite, aka ‘krugovaya poruka’. A think-frame of inclusion and fear much stronger than in any other society.
    This had potential of creating both good things (like mass education and mass health service) when the power was turned to good ends and bad things (mass murders as one example) when swirled to evil.
    The ex-Soviet states are still not based on law. And this explains the mass suffering of people in the 1980s and even now—not the failure of the ‘invisible hand’. Statism and free market are secondary to the rule of law

    11 Nov 2013, 14:27

  8. Nonliberal Evil

    It seems to me you always were a liberal at heart, never anything else. I mean it is clear from the language you use.

    Liberals always balk at the violence necessary to perform revolution and sustain it. The only ones (liberals) whom are attracted to socialism in any degree are those whom no matter how hard they try cannot seem to grasp the following “Communism is not love. It is a hammer which we use to crush the enemy.”

    Hell you admit ’’ I still had an optimistic belief in progress. But I no longer thought the government could drive progress, or fix everything, and I didn’t even want it to do these things any more.”

    No serious socialist I know would ever have even formulated the idea that somehow “government could fix everything” or anything like such. If anything, the trained leftist knows that the state is the primary instrument of class power. Indeed, it is the state that guarantees private property (and of course state property) by all means, but in the end if necessary by unlimited force. “Political power grows out of the barrel of a gun”

    And indeed, it is only via centuries of accumulation by force, then colonialism & war, and now mostly financial institutions as well as systemic patterns of trade that the west transformed from one of the most brutal ever waring plague stricken ignorant wastelands to its haughty liberal social market capitalist democracies of today (still of course dependent on cheap resources from the third world).

    “The same is true of a market economy. But the evidence that these are essential ingredients of development is compelling. I see no reason why Russia should be different.”

    The only states I recall developing (going from third world to first in terms of gdp/capita) in the twentieth century are South Korea, Taiwan and Singapore. Hardly liberal democratic relatively free market states in their periods of highest growth (and indeed, the first two having tacit military support & trade access to the largest economy in the word). But that is a side issue.

    The fact that you formulate things in terms of markets vs. state is indeed indicative of the profound descriptive liberal nature of your worldview. No proper socialist thinks in these terms. Or at least, no socialists whom take power in a backward country and transform it into a nuclear superpower that scares the greatest of the imperial world powers, despite the devastation of war unlike any other.

    Liberalism is such a cancer… I detest it with the utmost profundity my soul can muster. Ultimately this is a normative difference. But know this: At the end of the day your liberal states will always use violence to secure private property, irrespective of your soft condemnation. But when a crisis of the liberal system should be generated, know that those whom are proper leftist have no qualms in liberating your head from your body, to the cheers of many millions.


    Apologies for this scathing piece. I quite enjoyed “Economic Transformation Soviet Union 1913 1945” along with Robert C. Allen’s work “Farm to Factory” for data and some analysis. A professed liberal with some academic integrity is difficult to come by.

    But… I simply am completely void of the liberal intuitions you harbor, and hence am your eternal enemy. What saddens me is that as liberal you would probably balk at the idea of giving me a dignified execution, recognizing the fundamental irreconcilability, unlike that which we would extend to you.

    25 Apr 2014, 02:18

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I am a professor in the Department of Economics at the University of Warwick. I am also a research associate of Warwick’s Centre on Competitive Advantage in the Global Economy, and of the Centre for Russian, European, and Eurasian Studies at the University of Birmingham. My research is on Russian and international economic history; I am interested in economic aspects of bureaucracy, dictatorship, defence, and warfare. My most recent book is One Day We Will Live Without Fear: Everyday Lives Under the Soviet Police State (Hoover Institution Press, 2016).

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