Understanding Of The Problems With Socialism Politics

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Central planning did not function, because the targets set by the regime were not or could not be met. The allocation of raw materials happened through a system of estimating which firms would need what amount of investments and raw materials. However, these investments and raw materials would not always arrive on time or in the right quantity. In order to make up for these problems, the firms would ask for more investments than were actually necessary, in the hope that they would receive enough to reach their targets. However, because firms passed false information to the regime, central planning became more difficult and efficient production became problematic. As a result, shortages were widespread, thereby undermining the socialist principle.

Capitalism is focussed on salesmanship of its products, and because of that, the main problem for capitalism entails other sellers, which makes your aim to befriend customers in order to outcompete other sellers. Socialism however, is focussed on acquisition of the resources, and because of that, the main problem for socialism are the other buyers, which means your goal is to befriend your suppliers in order to outcompete other buyers. Since resources are allocated by the state, this created widespread corruption, as the firms tried to gain the upper hand by way of bribes or favours to civil servants, which worked against the efficiency of the socialist system.

During the late 60's and early 70's, problems arose with economic performance in socialist states. However, they would not resort to structural reform, as this could form a threat to the regimes monopoly on power. Instead they sought to meet these problems by borrowing from the West and using these funds to buy means of production or consumption products. Although the loans were supposed to be paid off by exporting goods into the world market, this did not function, because there was no market for the amount of products necessary to repay the debt. The socialist focus on acquiring rather than selling proved fatal, as their acquisition of western loans made them vulnerable to the up and downturn of the capitalist business cycle. When in 1979-80, Western banks decided to stop lending to socialist countries, these countries suffered from a sudden inability to supplement their budget.

These problems created the need for 'perestroika' or reform, with Gorbachev trying to sacrifice collectivisation and Party monopoly to save the Soviet Union. However, by introducing capitalism in the socialist states, the socialist collapse was even closer. According to Vedery, capitalism had entered a stage of 'flexible specialisation', in which decentralised control and the importance of the mobility of capital greatly undermined the states functions. Since capital has greater mobility, it can easily move from areas with high taxation levels to ones with low taxation levels, which weakens the states ability to influence the flow of capital and may cause them to lose revenue. The wish for more mobility of capital in socialist states puts pressure to release the capital stuck in state structures by privatisation. The domestic firms who would profit from increasing participation in the world economy pushed their states to become more receptive of capital and reform accordingly. Internationally, lending agencies were eager to increase their opportunities by opening up the socialist markets, also stimulating privatisation.

Another problem for the socialists was the tension between the acquisition of resources for control and the distribution of resources for legitimacy. Socialism was based on the accumulation of distributable resources by the government, which would create a dependency of the masses on the regime, reinforcing its strength. However, the power of the state would be even greater if it did not only have the resources, but also the means of production by which to make these resources. Therefore, socialist regimes preferred heavy industry, where further means of production were accumulated, over the consumer industry, because the moment a consumer got hold of something, the centre no longer controlled it, and the dependency of the population would decrease. The legitimacy of socialism is partly based on its "Paternalistic redistribution", the central claim that in socialism, the Party will give the people what they need by equally distributing the resources. The Party also claimed that it would be better able to do this than individuals, as it would not tend to take more than its share.

On the one hand, the dependency principle caused regimes to believe that they should only give the population the bare necessities (and sometimes not even that). Real wages sank with 17 percent in Poland, for example. On the other hand, regimes insisted that the standard of living would continuously improve, which stimulated the people's desire for goods. This combination of simultaneous stimulation and neglect of needs undermined socialist legitimacy.

'Time-space compression' lies at the heart of capitalism. It seeks to constantly increase profits by decreasing the turnover time. Shortening time needed for decision making and increasing the velocity at which capital circulates, while at the same time widening the spaces in which the effects are noticeable, through ever changing technology. The five year plans worked against such compression in the Eastern bloc. The rigidity of planning did not allow for rapid adoption of technological progress, or swift reaction to changing international circumstances, causing soviet economies to be outdated. Politics were also more difficult to control, as the increasing speed of communication led to an almost instantaneous supply of information, which did not allow for a distinction between what was said domestically and what was said internationally, limiting manoeuvrability for Soviet leaders.

Might of Sovjet Union

The ascendency of Gorbachev as leader of the Soviet Union was an important reason for the collapse of the Eastern bloc. He believed said 'unity does not mean uniformity', meaning that there was no single model of socialism and socialist states should interact according to the principle of equality, in contrast to the previous system where the Union limited the sovereignty of the satellite states. From this equality of states followed that every state has the sovereign right to choose their own social system and that the use or threat of force, especially military force, to force a country was totally unacceptable.

Reasons for this change can be attributed to several points. Afghanistan had shown the Soviet leaders that investing in an unpopular communist regime led to more problems than solutions. If one is unable to win a supportive attitude amongst the people, internal resistance will undermine the regime. Furthermore, past incidents had shown that the national armies were not reliable. In 1956 for example, the Hungarian army had joined protesters and the Polish authorities had to rely more on their secret policy than their regular army in the battle to suppress uprisings.

The need for Eastern Europe in the defence of the Soviet Union was declining. Originally, the USSR had believed it needed a buffer zone in case of conventional warfare, however the development of long range missiles and the possibility of a destructive nuclear conflict, ruled conventional warfare out and thereby decreased the necessity of a strong presence in Eastern Europe. Gorbachev believed that security should be attained by cooperation rather than confrontation with the other European states.

The economic costs of keeping troops in eastern Europe, and the rising costs of the arms race were instrumental, as they prohibited the attempts to improve the Soviet economy. The rise of economic powers such as Japan had convinced the USSR that economic power, rather than military power would be important in the future. The Soviet Union could only make itself an equal to the western economies by letting go of its satellites in eastern Europe.

In countries such as Poland and Hungary, where regimes were not as strongly imbedded and dependent on the USSR, increasingly frequent strikes and uprisings would no longer be mended by the threat of Moscow force, which led them in the direction of reform. The revolutions in these countries could be called refolutions, as the regimes brought about change by the adoption of new political and economic structures which undermined Party power. In countries who had been relatively independent from Soviet power, regimes would not so easily give up their position. Although Romania had debts to the west, it did not seek to pay it off by reform, instead it increased its extraction power, distributed less and put down revolts by increased police terror. The Romanian communists did not move to capitalism, but their heightened extraction, and strict socialism in the time of Gorbachev's relaxation, caused domestic and international support to fall, eventually also leading to a revolution.

Growing consciousness of the Population

Another factor was the desire for an accurate representation of the past. This desire was fed by the 'ridiculous stories that were handed out by the official propagandists'. Glasnost allowed enquiry into history, causing previously controversial beliefs to be mentionable and undermining past propaganda on which the legitimacy of the roles of the USSR and eastern European regimes were built. For instance, the 1989 declaration of the USSR government that the Nazi-Soviet pact had been illegal destroyed its legitimate basis for controlling the Baltic states, which caused a rise of nationalism in these countries.

Gorbachev's political liberalisation allowed more freedom for institutions, which had previously been underground or mildly tolerated. The new freedom experienced by religion allowed it to undergo a considerable revival in the second half of the 1980's. Religion was seen as a symbol of national past which had been lost under Soviet rule as the official communist stance on religion was still the promotion of atheism. The new, recognised power of religion therefore provided a huge stimulus for the determination of nation states to break off from the USSR.

The younger generations played a large role in the revolutions that would cause the collapse. At the time of the revolutions, people under the age of 40 had had no negative experiences of capitalism, to them it was nothing more than a part of history, a history that was believed untrustworthy because it was linked to Soviet propaganda.

An increasing availability of information on West contributed to the fall of the Eastern bloc. In large parts of eastern Europe the authorities had ceased jamming of western radio stations, and there was a notable rise in western video-cassettes and channels. On the western end of the Eastern bloc, it had become increasingly possible for citizens to travel across the border to the west. In 1985 only 66,000 GDR citizens had been granted visas for such travel, but in 1987 the number was 1,200,000, amongst which many young. These factors led to an expansion of knowledge on the west. The impact of the economic also became deeper, as comparisons to western lifestyle were less disturbed by state propaganda.

Moreover, after 1980, western governments became more right-wing and increasingly willing to condemn the socialist system, with politicians such as Reagan and Thatcher indicating that they did not wish coexistence, and that they supported the adoption of the market economy and multi-party system by the states of the Eastern bloc. This western support provided the east Europeans with the determination to move away from their 'evil empire'.

Concerns about environmental degradation also served to undermine communist legitimacy. Pollution problems and medical issues, often caused by large scale industrialisation, provided as subject for which intellectuals and masses could be mobilised. Chernobyl would be the incident that has undoubtedly had the largest effect on environmental consciousness but it was not the only one. There was a growing belief that these problems were by-products of the communist system. Crampton argues that environmentalism undermined the materialism at the basis of Marxist socialism, because if economic expansion through industrial production was poisoning the planet and its inhabitants, it should be stopped.


There were several problems inherent in socialism that caused its downfall. In order to prevent problems with supply, firms bribed and presented false information to the state, which led to widespread shortages and corruption.

Communism neglects actual consumption.

-Mixture of capitalism & communism, undermined state functions. -> Stopped lending money.

-Tension between acquiring for control & distributing for legitimacy.

-Capitalist obsession with shrinking time span-Communists don't have it.-> Five year plans to rigid for technological development.

Gorbachev recognises national pathways, refuses the use of violence, freedom of choice.

-Moscow would & could not rely on local forces.

-Sovjet administration believed Eastern Europe had become a burden and was no longer of any strategic value.-> Bufferzone not needed, long range missiles.

-The desire for an accurate representation of the past.

-The rise of religion.

-Younger generation-> No experience of 'the problems of capitalism'

-Information on the west was more readily available.-> 'the evil empire'

-Environmental degradation undermined communist legitimacy.-> Chernobyl

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