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Issue 42, October 1999

The Wall Comes Tumbling Down

THE TEARING DOWN of the Berlin Wall ten years ago (on 9 November 1989), was a highly symbolic event. It was, in reality, just one link in a profound chain of events. But it signalled a decisive stage in the irreversible collapse of the Stalinist states of the Soviet Union and Eastern Europe, which until then had appeared to be monolithic, immovable regimes.

The rapid disintegration of the 'communist bloc' marked an historical turning point. It terminated the post-world war two era of the 'cold war', that is, the bi-polar economic, military, political and ideological rivalry between imperialism, dominated by the US superpower, and Stalinism, dominated by the Soviet superpower. The removal of the Stalinist counterweight to capitalism at the same time accelerated the erosion (begun by the depressionary economic trends which emerged after the 1974-75 slump) of capitalism's post-war social and economic order, the 'welfare state' in the advanced capitalist countries, and some degree of national economic development in underdeveloped countries which gained political independence after 1945.

In this and following issues, Socialism Today will recall the devastating impact of the processes set in motion by the fall of the Wall and we will attempt to sum up the character of the new period which emerged. We begin with accounts of events in the former German Democratic Republic in 1989 (page 18) and the current situation in the Czech Republic (page 24).


The societies which collapsed in Russia and Eastern Europe were not genuine socialism, but a grotesque caricature. Economic planning in the nationalised economies took the form of central command from above by bureaucratic ministries and managers acting on the orders of the privileged ruling caste, which had consolidated its power under Stalin. The ruling bureaucracy eliminated every last element of workers' democracy originally established during the 1917 revolution. There was not a trace of democracy left at any level. Although claiming to run society in the interests of the working class, the Stalinist regimes were, in reality, ruthless dictatorships. This was the end product of the impossible aim of building 'socialism in one country'.

Up until the early 1970s, we should not forget, the nationalised economies produced impressive advances, especially in heavy industries, though consumer goods were generally in short supply and of poor quality. Despite many shortcomings, however, those former societies also provided basic education, healthcare, and other social amenities to the majority of the population - now sorely missed as they have been destroyed by the emerging capitalist market.

During the 1970s and 1980s, however, it became clear that the outdated, rigid framework of the Stalinist economies could not cope either with technological change or the social demands of a much more developed society. Even as the Soviet Union (under Brezhnev) appeared to reach the pinnacle of its influence as a superpower, degenerative processes were eating away at the foundations. A layer of the ruling bureaucracy, moreover, sensing impending collapse and fearful of losing their material privileges, were ready to abandon 'socialism' and stake their future on a transition to capitalism.


The mass workers' struggles in Poland during the 1980s, followed by the upsurge of a mood of mass opposition in East Germany, Hungary, the former Czechoslovakia and elsewhere, triggered a political avalanche throughout Eastern Europe. Initially, the sweeping mass movements which erupted had features of a political revolution: workers demanded the democratisation of the factories, of economic planning and the state. Such was the mass revulsion against the grotesque Stalinist model of 'socialism', however, that progressive demands for a democratic advance towards genuine socialism were soon engulfed by a counter-revolutionary tide in favour of 'the market', in reality, capitalism.

This partly reflected extreme confusion of consciousness in societies where the working class had for decades been denied any independent political expression. It also reflected massive illusions in the material rewards offered to the majority of people in capitalist economies. At the same time, intervention by the US, Germany, Britain and other capitalist powers played a decisive part in the counter-revolution. Just as they financed the Catholic intellectuals in Poland, who usurped the leadership of Solidarity from the militant workers, the Western powers backed any prominent figures, groupings and subsequently parties who backed a transition to capitalism. They were promised vast amounts of financial aid provided only that they moved quickly to shatter the old structures, especially state industries.

By 1989, very few on the left internationally defended the Soviet Union and its East European satellites as a model for socialism. This included even most of the Western Communist Parties, which by that time had reconciled themselves to the market and, under the banner of 'Eurocommunism', adopted completely reformist policies. In the eyes of most people around the world, however, the Soviet Union had been the pre-eminent practical example of an alternative socialist or communist form of society. Given the weakness of the forces of genuine Marxism, it is hardly surprising, then, that the collapse of the Soviet Union led to massive disillusionment and disorientation amongst even the more politically conscious layers of the working class around the world.


The impact of events on consciousness was reinforced by a systematic, relentless ideological campaign by the international bourgeoisie. Socialism and communism, according to the triumphalists, were dead and buried. Capitalism, they claimed, had proved to be the only practical, workable way of organising the economy. Parliamentary democracy was the optimal way of running society. After the US-led intervention against Iraq in the Gulf, facilitated by Gorbachev's support, the US declared a 'New World Order', a new Pax Americana.

What, after ten years, have been the benefits to capitalism of its triumph at the beginning of the 1990s?

The most conspicuous fruit for capitalism has been the boom during the second half of the 1990s, predominantly in the financial sector and dominated by the resurgence of capitalist profits, especially in the United States. Taking advantage of a retreat by the working class, the capitalists internationally moved to claw back many of the concessions they granted in the post-war period, when Stalinism acted as a certain counterweight to capitalism. Neo-liberalism represents an attempt to return to the more naked, ruthless capitalism of the 19th century.

But while the resurgence of profits has restored the self-confidence of the bourgeoisie, it has failed to overcome the underlying problems of overall global stagnation of the productive resources, reflected in historically low growth rates and mass unemployment. Neo-liberal policies, moreover, have enormously widened inequalities in society, preparing the basis for future social explosions.


In the mid-1990s, rapid growth in a handful of semi-developed countries on the basis of globalisation was used to claim that capitalism was now developing the underdeveloped countries. Conditions for a majority of the world's population, however, declined in that period. As the recent UN Development Report shows (see page 27), the 1990s have enormously widened inequalities on a worldwide basis.

The intensified exploitation of underdeveloped countries, also facilitated by the collapse of Stalinism, has led to a process of social breakdown in many regions, notably in central Africa at the present time. Since the Asian economic crisis broke out in 1997, even the growth of the so-called emerging markets has been reversed. Some recent recovery on Asian stock markets does not reflect any underlying improvement for those societies.

The New World Order proclaimed by US President Bush in 1991 has proved to be a new world disorder. Operation Desert Storm did not resolve the Iraqi conflict, which still continues, with unimaginable suffering on the part of the Iraqi people. The bloody conflict in former Yugoslavia, the recent intervention against Serbia, and the current conflict in East Timor all point to the growth of instability and armed conflict - arising ultimately from the economic impasse of world capitalism.

The capitalist counter-revolution in Eastern Europe and the former Soviet Union, far from opening the path to an economic paradise, has been a human catastrophe. "The transition of these countries", according to a recent report of the UN Development Programme, "has in reality been a Great Depression, plunging more than 100 million people into poverty, with many millions more hovering precariously above subsistence". (UNDP Transition 1999, as reported in The Times, 23 August).

We will return to these themes in the next few months - and also to the prospects for a revival of the workers' movement and a renaissance of socialist ideas.

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