The defeat of neo-liberalism is no
longer a question for debate. The triumph of neo-liberalism never occurred, the
economic model of the free market is disintegrating before our eyes, and in the
countries of Eastern Europe the words and expressions making up the liberal
lexicon have taken on the force of obscenities.
It would seem that the time for
alternatives has now come. But where are these alternatives?
When the American philosopher
Francis Fukuyama declared that with the triumph of neo-liberalism the end of
history had arrived, people first argued with him, then began laughing at him,
and finally forgot about him. This, however, was a mistake. When Fukuyama
declared the end of history, he did not by any means base his thesis on the
economic or social successes of capitalism. In practice, he measured the success
of the victorious ideology by a single criterion: the ability of the world
ruling class to destroy, suffocate, corrupt or discredit any constructive
alternative to itself. If there were no alternatives to capitalism, everything
would stay the same whether capitalism was good or bad.
In this sense, we are now even
closer to the end of history than in 1989.
The economic failure of
neo-liberalism has not led and will not lead automatically to the collapse of
its ideological hegemony. The elites of contemporary capitalism cannot resolve
the system's objective contradictions, and cannot and do not want to solve its
growing problems, but they are capable of paralyzing any attempts to solve these
problems on the basis of alternative approaches.
Technological development is not
paralyzed by social structures that are clearly outdated and increasingly
absurd. This development continues; the only difference is that it ceases to
improve people's lives. Indeed, technological development becomes a negative
factor. With every turn in the spiral of technological revolution, more and more
new contradictions and disproportions accumulate. Relationships become confused,
the structures and systems of rule grow steadily more complex, and the processes
become less and less predictable.
tolerance" of the 1960s has been replaced by repressive or coercive
hegemony. The official ideologies no longer convince anyone, but this scarcely
troubles the authorities, since they do not allow alternative ideologies to be
propagated. Or else, such ideologies are disseminated in fragmentary form, and
in this way simply demonstrate their inadequacy as genuine alternatives.
The new information technologies,
which in theory have the potential to undermine the dominance of the mass media
that are monopolized by the elites, themselves retain an elitist character. Even
the "massive" spread of computers has not made them available to the
slumdwellers of Rio de Janeiro or the miners of Prokopyevsk in Central Siberia.
In short, the new technologies serve not only to unite people, but also to
Paraphrasing Lenin, one could say
that despite the obvious crisis, those on top do not want change, and those
underneath cannot achieve it.
The lack of a revolutionary
perspective has led to a profound crisis of reformism. Nowhere have the forces
of the left been prepared for the new situation. Moreover, the left is itself
undergoing a deep moral crisis. Instead of an indispensable reevaluation of
values following the events of 1989, there has been massive ideological
desertion. Serious discussion on how to interpret the traditions and values of
the workers' movement under present day circumstances has been replaced by
agitated chatter about what should replace these values.
The traditional program of the left
is not only a real alternative, but quite simply the only alternative. The
system now is in such a tangle that the only way to deal with its Gordian knot
of contradictions is to slice through it. Partial reforms and gradual
improvements are becoming possible only as the consequences of radical shifts in
the whole structure of society and the economy. Without a broad nationalization
of private capital ("the expropriation of the expropriators"), without
overcoming the "free market", it is impossible to carry out even a
minimal reform of the health care system or to improve social welfare.
Most left parties, however, are not
afraid of anything as much as of their own traditions. Instead of discussing
what nationalization means today, they are wasting their time trying to prove to
the ruling elites that there will not be any nationalizations. The ruling
classes, meanwhile, have less than complete trust in these promises, and prefer
not to allow leftists to gain access to the levers of real power unless these
leftists have given proof of their complete political impotence.
The lack of alternatives is leading
to the erosion of all forms of representative democracy. Despite this in this
case the crisis of democracy, unlike the case in Europe in the 1920s or in Latin
America during the 1970s, is not leading to the rapid collapse of democratic
institutions. Instead, these institutions are slowly degenerating and dying out.
They are increasingly being by-passed not only by economic decision-making, but
even by the political process itself.
The rebirth of fascism in Europe is
an important symptom of the crisis. But what is involved is not just the rise of
extreme right-wing organizations. The organizations of the political
establishment itself are increasingly becoming infected with authoritarian
populism. And this is only natural in circumstances where trust in the
institutions of representative democracy has been undermined.
A crisis without an alternative is
a sign of imminent shocks. In this sense the catastrophe in Rwanda provides
humanity with a warning. The West should not comfort itself with the hope that
the hunger, bloodshed and economic collapse on the periphery will not touch the
The fall of the civilizations of
antiquity also began with collapse on the periphery. In this respect, the past
has a terrible lesson to teach us. The "end of history" is not a
foolish joke by a person who has read too much Hegel, but a real possibility. Of
course, what is at stake is only our own history and our own present-day
society. Humanity as a biological species has survived the fall of a series of
civilizations. It will also survive the collapse of the "global"
bourgeois civilization of our time.
Nevertheless, there is a basis for
optimism in the often-demonstrated ability of various societies to find a
solution even where organized political forces, traditional institutions and
generally recognized elites have shown their total bankruptcy. In such a
situation the spontaneous resolving of contradictions "from below" is
accompanied by the collapse of all these institutions and elites. What this
signifies is shocks on no less a scale than during the ill-fated epoch from 1914
Twenty years ago not even the most
hardened pessimist could have imagined an "optimistic" scenario such
as this. But it is precisely this scenario that represents the global-historical
result of the "success" of neo-liberal reforms. It seems that for the
majority of the earth's population, social cataclysms are the only hope left for
The 1980s were bad years for the
Left. European socialist parties were already in crisis, but this crisis had
become incomparably more acute by the mid 1990s, following the collapse of the
communist movement. The presidency of Mitterrand in France began with fine
hopes, but is now ending in universal disappointment. The failure of the most
serious reformist project in post-war Western history makes it imperative to
rethink the question of the possibilities and prospects of reformism. No less
striking was the collapse of Soviet perestroika, which can also be described as
a type of reformist project, and which had a very strong though also short-lived
influence on the entirety of global left wing culture.
The French socialists not only lost
their parliamentary majority to the right-wing parties, but even before the
rightists returned to power, they had in practice rejected their own reformist
project. They prepared the ground for the triumph of the rightists, who not only
abolished most of the innovations of the first years of the socialist
administration, but also annulled many of the social gains of previous decades.
Perestroika in the Soviet Union culminated in the collapse of the Soviet state
itself, and in the coming to power of the most decadent section of the old
nomenclature. The regime that arose on this basis is best described by the word
"kleptocracy" - the rule of thieves. The pillage of the country went
ahead in close association with the restoration of capitalist property relations
and the subordination of Russia to the interests of the West. This does not at
all signify that a genuine capitalism has arisen in the republics of the former
Soviet Union, or that it can arise in the near future. Rather, what is involved
is a peculiar symbiosis of the traditional corporative-bureaucratic order with
the power of comprador and usurer capital.
As a result of the victory of the
West in the Cold War, Russia has been transformed into a peripheral within the
capitalist world, but there are no grounds for speaking of the birth of Russian
capitalism. The neoliberal reforms have led to a massive destruction of
productive capacity and to the plunder of resources, but have not served to set
in place any kind of serious national capital. The bankruptcy of capitalist
modernization is even more obvious in Russia today than it was eighty years ago.
This means that new battles and new shocks lie ahead.
The reaction that set in after 1989
differed from all previous reactions in that it succeeded in presenting itself
as "progress" and "modernization". This semblance of
"progress" was due to the fact that the period of social reaction on
the world scale has also been a time of technological renewal. This in itself is
nothing new; something similar occurred in the first half of the nineteenth
century during the initial stages of the industrial revolution. Only later, and
with hindsight, was it to become clear that new technologies do not strengthen
the positions of triumphant reactionary elites, but undermine them. At the
beginning of the century the introduction of new machines was accompanied
directly by the defeat of bourgeois republicanism, by a sharp weakening of the
social position of hired workers, and by the installing of a "new world
order" within the framework of the Holy Alliance, the first precursor of
the United Nations.
It was only later, after the
workers' movement had grown in strength thanks to the rise of modern trade
unionism and the appearance of the first socialist parties, that reaction gave
way to a new revolutionary upsurge. The experience of the century that followed
has become fixed in a peculiar piece of labour movement mythology. Here I have
in mind two extremely dangerous errors. In the first place, workers and their
ideologists became convinced that any technological and industrial development
strengthened their position. In the second place all these people, whether
socialists or communists, reformists or revolutionaries, viewed history as a
rectilinear process of constant movement toward more "advanced" forms
of social organization. The forces of reaction could, no doubt, retard or even
halt this process, but they could not encroach upon the "irreversible"
gains of the workers.
The groundlessness of both these
theses has been shown during the 1990s. In this sense the defeats suffered by
the forces of the left during this period have been far more serious and
demoralizing than all the previous blows of the twentieth century. It was
revealed that history does not move in a straight line. The collapse of the
historical illusions of the left and labour movement has been accompanied by an
unprecedented crisis of values and loss of self-confidence, though the only
strategies that were really defeated were the rectilinear ones based on a
mechanistic vision of social progress.
Does the defeat of reformism in
Western Europe and Russia mean the end of socialist ideology or of class
struggle, as liberal ideologues have argued? It is no longer necessary now to be
a Marxist in order to maintain the contrary. Left parties are returning to power
on the crest of a massive wave of dissatisfaction with neo-liberal policies, and
hard-fought strikes in many parts of the world bear witness to the fact that
workers have again begun to feel their strength and do not intend to retreat any
further. The new technologies have not only given birth to new labour relations,
but also to new forms of class consciousness and to new forms of
self-organization among the scientific-technical proletariat and white-collar
The neo-liberal myth has shown its
bankruptcy, but the hopes of the radicals are not being borne out either. The
crisis of neo-liberalism has not sparked revolutionary outbursts. There are
instances in which left parties again enjoy mass support and even hold the
political initiative, but these parties are now often lacking not only
revolutionary strategies, but even reformist ones. The fact that leftists are
coming to power signifies that the elites are in crisis. But are the forces of
the left ready to present an alternative?
Here we are once again forced to
return to the problem of radical reformism. Where does the border lie between
radical reformism and elementary opportunism on the one side, and between
radical reforms and revolution on the other?
In my view, an obvious and rigid
dividing line does not exist. However, there are differences of principle. These
differences need to be clearly formulated, especially now, when in many
countries revolutionary organizations are proclaiming the slogan of a "turn
to reformism" while in fact rejecting serious reforms.
The reason for the failure of the
majority of reformist projects during recent years has been their
"top-down" character. In this sense Mitterrand as the bearer of the
ideas of the technocratic elite and Gorbachev, resting on the
"enlightened" section of the Soviet bureaucracy, were equally remote
from the people they promised to make happy.
Among the reactions to the failures
of reformist and revolutionary parties were calls for replacing them with new
mass movements, and for substituting alternatives from below for policies from
above At the Budapest conference of left theoreticians in 1994 speakers even
raised the concept of "delinking from below" as an economic
alternative to neo-liberal globalization.
It can easily be seen that all this
is no more than a mirror image of previous illusions. The state is hierarchical,
and the world system is vertically integrated. These structures were specially
created in order to resist pressures from below. Any effective mass movement
gives birth to its own hierarchical structure - in the final analysis, to its
own "counter-elite ". It is not hard to see that under certain
conditions this "counter-elite" can become integrated into the
"establishment", but this does not by any means signify that it is
possible to do without it entirely.
The radical-reformist answer to
these appeals can only be to try to unite the "movement from below"
with the "transformations from above". Leftists must not reject the
traditional strategy of seeking to win control of state institutions. But
success here only makes sense if the state institutions are themselves under
constant pressure from below - that is, if there are mass organizations capable
of controlling their own leaders, and if necessary of forcing them to do what
they would otherwise be too unwilling or irresolute to do.
If leftists, on coming to power, do
not begin promptly to democratize the institutions of the state, this can only
end in the degeneration and ignominious collapse of the left government. The
democratization of power and the participation of the masses in decision making
cannot in themselves guarantee that the reforms will be successful. But if these
steps are not taken, failure is inevitable.
In general, it should be noted that
among left ideologues a healthy scepticism with regard to the possibilities of
state action has very quickly been replaced by completely absurd theories of a
kind of "stateless socialism". In the 1950s, when socialists posed the
question of nationalization, liberal ideologues stressed that property itself
was not as important as the mechanism of control. In the 1980s, however, massive
privatization began, leading to the destruction of the state sector on a world
Meanwhile, a significant sector of
the left has not only failed to resist privatization, but has in practice become
reconciled to its results.
The unwillingness of the African
National Congress to encroach upon South Africa's own large corporations is a
clear sign of weakness. This is how it will be perceived by corporate capital;
seeing the weakness of the new leadership, the large firms will demand endless
new concessions. The central question in the struggle for reforms is that of who
secures concessions from whom. Only where the left forces are persistent and
aggressive can they win a social compromise that is at least favourable to
Everyone who goes to the
market-place knows the first rule of trade: if you want a reasonable deal, ask
for more than you expect to get. But leftist politicians, hypnotized by their
own words about "responsible management" have totally forgotten that
their class enemy (excuse me, "social partner") lives according to the
laws of the market, and is incapable by nature of respecting any other laws.
There is no need to suppose that capital can reconcile itself to radical reforms
in the sphere of property. In a country where unique resources are present (and
South Africa has such resources), and where regional business interests are
concentrated, even large transnational corporations will prefer to make
concessions to the state sector rather than to place at risk the very
possibility of their participating in this market.
In Lithuania, Poland and South
Africa, we now see leftist governments with the same fear of undertaking radical
measures in the interests of the people who elected them. Ultimately, the desire
to reassure their adversaries proves stronger than their readiness to do
anything for their own supporters.
Veterans of the Communist Party
nomenclature in Lithuania, Poland and Hungary are acting in line with their
experience and traditions. It would be hard to expect that two or three years in
opposition would transform them from miserable functionaries into ardent
revolutionaries or even into competent reformers. But South African leftists are
another matter entirely. The victory of the ANC and the success of the Communist
Party and other left groups were ensured by the struggle of the masses. The
people are still organized and politically active. This means that one is
entitled to hope that the changes will proceed according to another scenario.
If the state sector, even in the
bureaucratized form in which it existed in both East and West by the 1980s, had
not represented a potential threat to the interests of the bourgeois elites,
they would not have set about destroying it so frenziedly at the first possible
opportunity. During the Cold War the ruling elites of the West were forced to
reconcile themselves to certain "elements of socialism" as a sort of
pay-off for social stability and steady growth. It was this which created the
objective preconditions for the success of social-democracy. After the
"collapse of communism", such tactical concessions became unnecessary.
A series of attacks on the "social-democratic model" ensued. The
dissolution of the state sector began, making it absolutely inevitable that
other structures of the Welfare State would be liquidated as well. The rejection
of nationalization signifies in practice the rejection of serious efforts to
transform society. Unquestionably, the existence of state property on its own
does not yet constitute socialism. It does not automatically ensure either a
more just distribution of national income or a more harmonious development. But
without a strong state sector, resolving all these problems is impossible in
Trotsky in his time provided a good
metaphor to illustrate this point. In The Revolution Betrayed he compared
state ownership of the means of production with the cocoon through which the
caterpillar has to pass in order to become a butterfly. The cocoon is not the
butterfly. Millions of larvae in their cocoons perish without becoming
butterflies, but skipping the cocoon phase is impossible. While fully
recognizing the limitations of "state socialism", we cannot fail to
see its necessity.
The numerous plans for establishing
co-operatives and other collective enterprises, and also for flexible social
regulation of the economy, seem very attractive. Hut without a strong state
sector all this simply will not work. Unless the state sector acts as the core
of the productive system, "self-managed enterprises" will be starved
of investments, and ultimately, will be enslaved by finance capital.
The only way to break the economic
power of large finance capital is through nationalization. Alternative
strategies for modernization and restructuring then become possible. Only with
the emergence of a state sector is it possible to speak of serious social
control over the investment process.
During the 1980s the myth of the
inefficiency of state enterprises gained increasing currency among leftists.
No-one provided theoretical proof for the notion that state-owned industries
were economic failures. No one could cite statistical data showing that OTHER
FACTORS BEING EQUAL, state-owned enterprises functioned worse than private ones.
On the contrary, during privatization a great deal of information was
accumulated showing the opposite. In Britain, studies of successful instances of
privatization showed that the main increases in efficiency occurred not with
privatization, but in the process of preparing for it, at a time when the
enterprises were still state property. After they were transferred to private
hands, the new owners were not able to change or improve anything substantially.
The experience of Eastern Europe and Russia has been even more striking.
Privatization has been accompanied by catastrophic declines in productivity,
labour discipline and managerial responsibility, together with a lowering of the
technological level and a catastrophic fall in productivity and general
efficiency. The majority of the enterprises that were providing profits for the
state began making losses after privatization.
From the point of view of
efficiency, the results recorded by various group-owned enterprises are not
especially impressive. The claims made by ideologues of collective property for
the managerial democracy which is supposed to be organic to this model are no
less doubtful. Studies show that oligarchic structures quickly form in such
enterprises, while the workers themselves finish up dependent both on the
managers of their own enterprises and on "outside" capital (credits,
investments from outside and so forth). It can of course be argued that all
these problems can be solved if the model of collective ownership is changed,
but the same can also be said about the nationalized sector.
It would be quite wrong to suggest
that nationalized enterprises are always impeccably managed. The record of
nationalization in various countries is decidedly mixed. The results of
nationalization depend in the first place on the condition of the state, on its
structures and on its social character. The effectiveness of nationalization,
its ability to resolve social problems and speed development, the structure of
the state sector, the position of the workers within it, and the degree of
democracy in management all depend on the relationship of forces in the country.
It is clear that the model of the
state enterprise, like the model of the state, needs to be dramatically altered.
But this is the essential task of radical reformism, the feature which
distinguishes it from dogmatic currents of a communist or social-democratic
stripe. If the former are prepared to reproduce old institutions under the
banners of "workers' power" and "people's property", the
latter, referring to the failure of the former, will increasingly reject any
attempt at change.
In a number of countries,
nationalization helped to solve or mitigate the problem of a shortage of
investment under the conditions of modernization, to alter the relationship of
social forces, to redistribute power and incomes, and to make possible a
restructuring that was impossible in an organically conservative market economy.
The degree of readiness to nationalize strategically important sectors of the
economy or monopoly enterprises can be taken as a measure of the seriousness of
a reformist government. Both ruling elites and left-wing politicians know very
well that even successful nationalization does not mean the destruction of
capitalist relations in society. But it does create the possibility that
qualitatively new institutions and a new relationship of social forces may
The constant references which
left-wing politicians who are in power or on the brink of it make to the
weakness of their positions and to the impossibility of resisting the
International Monetary Fund are no more than excuses. The strength of the IMF
and of other international financial institutions consists above all in the fact
that they co-ordinate their actions on an international scale, while their
opponents are isolated. Consequently, the answer to the policy of financial
blackmail should not be the renouncing of reform, but the search for allies in
the international arena, combining this with a clear policy of change and with
reliance on the mass movement within the given country.
A theoretical argument which is
more and more often invoked in order to justify inaction holds that the national
state as a central element in the strategy of leftists (whether Marxists or
social-democrats) is now losing its significance. The weakening of the role of
the national state in the context of the "global market" is an
incontestable fact. But it is equally indisputable that despite this weakening,
the state remains a critically important tool of political and economic
development. It is no accident that transnational corporations constantly make
use of the national state as an instrument of their policies. And is it really
true that the International Monetary Fund is something other than an
international institution? The dominant forces here are not private banks, but
creditor states. In this sense the global role of the IMF bears witness not to
the strengthened role of basically market factors, but on the contrary, to the
strengthened global economic role of the states of the centre in relation to the
countries of the periphery.
It is clear that leftists need to
have their own international economic strategy, and to act in a co-ordinated way
on a regional scale, but the instrument and starting point of this new
co-operation can only be a national state.
Nationalization limits the
possibilities of international financial capital. It is precisely the threat of
property losses that forces the elites to make serious concessions. In other
words, until the question of property is posed, smaller, "individual"
problems will not be solved.
The policy of nationalization
pursued by the British Labour Party from 1945 to 1951 was extremely limited, but
it created a favourable setting for a whole complex of social reforms.
Meanwhile, the privatization which by the early 1990s had become transformed
into a global process made all attempts to preserve the welfare state in East or
West quite pointless.
In this sense, the problem of
contemporary social-democracy does not lie in its attachment to reformism or
even in the moderation of its approach, but in its rejection of any reformist
project whatever. The erosion of the reformist potential of social-democracy
leads to the systematic weakening of its influence in society, which also
explains its consistent failures in Western Europe throughout the 1980s and the
first half of the 1990s.
The situation in South Africa today
provides grounds for apprehension not only because the African National Congress
government might suffer a setback. Setbacks in themselves are not so terrible.
Far more dangerous is the inability of the left forces to respond correctly to
these reverses. When in The Dialectic of Change I wrote that leftists
have to learn to retreat, my observation aroused furious indignation among
radical authors. This position is reminiscent of the famous episode during the
Second World War when in the Soviet Army all plans for retreat were kept secret.
As a result, the army was incapable of retreating in organized fashion. Any
tactical reverse turned into a catastrophe, and withdrawal was swiftly turned
into panic-stricken flight.
In politics, knowing how to retreat
means knowing how to sacrifice tactical positions for the sake of strategic
goals, and understanding that it may be necessary to reject power in order to
preserve the movement. Not least, it means remaining true to one's goals and
principles in a period of setbacks. There is now a good deal of evidence to
suggest that this period is nearing its end. One can cite the results of
elections in Eastern Europe, which have returned leftists to power; the fall of
apartheid in South Africa; the gains by the Party of Democratic Socialism in
Germany; and the dissension and confusion in international financial centres.
But if left-wing politicians, demoralized by their own misfortunes and lacking
confidence in their strength, do not muster the resolve to present society with
a serious program of structural reforms, they will be routed very easily.
The new generation of leftists has
to draw the unavoidable conclusions from the lessons of the 1980s. This new
generation is taking shape today. Fearless of defeats, able to keep their feet
on the ground in the case of victory, refusing to waste time on fruitless
dogmatic wrangles, and equally ready for action on the streets, in the
factories, in the parliamentary chambers or in the offices of state ministries,
the members of this new generation will sooner or later make their presence
And the sooner this happens, the