Socialism’s Agenda Time

By Stephen Gowans

From 1928, when the Soviet Union laid the foundations of its socialist economy, until the late 1980s, when Gorbachev began to dismantle them, the Soviet economy grew without pause, except during the period of the Nazi war machine’s scorched-earth invasion. Unemployment and later economic insecurity became ills of the past.

True, growth slowed beginning in the 1970s, but the major culprits were the diversion of budgets and R&D to the military to counter threats of US and NATO aggression, and growing resource extraction costs, not the alleged inefficiencies of public ownership and central planning, as is now widely believed. (1)

In fact, Soviet socialism—while it existed–worked better than capitalism in producing economic growth.

From 1928 to 1989, GDP per capita grew in the USSR by a factor of 5.2, compared to 4.0 in Western Europe and 3.3 in the major industrial offshoots of Western Europe—the United States, Canada, Australia and New Zealand.

And importantly, Soviet growth happened without the recurrent recessions—and their attendant pain in unemployment, hunger, and despair–that were routine features of the capitalist economies over the same period.

Indeed, while capitalism was mired in a major depression during the 1930s, leaving hundreds of millions without work, the Soviet economy was expanding rapidly, absorbing all available manpower. And while the dual ills of inflation and unemployment ran rampant in the stagflation crisis that roiled the capitalist economies during the 1970s, the Soviet economy expanded without interruption and without inflation or joblessness.

But that’s not what we’re told today. The received wisdom—rooted not in reality but Cold War propaganda—is that the Soviet economy collapsed under the weight of it inefficiencies, and that the demise of the USSR proves that an economic system based on public ownership, central planning and production for use, is unworkable. Even many Marxists believe this, touting the merits of “market socialism” as the only workable alternative.

And yet the Soviet economy’s record of peacetime expansion and full employment remained unblemished until Gorbachev began to experiment with the very same market socialism that many Marxists now embrace.

Hence, Soviet socialism’s reputation for being unworkable is underserved. A slow-down in economic growth—having as much to do with US efforts to cripple the USSR by embroiling it in a ruinous arms race as it did with internal problems–has been transformed into a myth about economic collapse.

Myths work both ways. While they can turn successes into what appear to be failures, then can also turn failures into what appear to be successes.

So it is with capitalism. With a major bank bailout needed to rescue it, the US economy in recession on Main Street, European economies falling like dominoes under the weight of stagnation and mounting debt, and long-term unemployment stuck at alarmingly high levels with no sign of improvement, few people are pointing out the obvious: capitalism isn’t working. Had the Soviet economy’s record been as bad, it would have long ago been judged, not as inefficient, but as an inhumane disaster—a pox on humanity to be eradicated as quickly as possible.

And yet, in a period of deep crisis for capitalism, many of the Marxist organizations that you would think would be hammering home the point that surely, we can do better than capitalism, aren’t. Instead—with notable and inspiring exceptions–they’re talking about other things—about how the main battle is against “the Right”, by which is meant Republicans and Conservatives, and how socialism won’t be on the agenda for another 500 years.

Another 500 years?

There’s a self-fulfilling prophesy here. Socialism doesn’t boil up spontaneously and come knocking at the door asking politely to be put on the agenda. Like any agenda item, someone has to put it there. If socialism is always deferred to a distant future, no matter how deeply capitalism sinks into crisis, no matter what toll capitalism needlessly takes on the lives of hundreds of millions, no matter how pressing the need for socialism’s arrival, it will never show up on the agenda – not in 500 years, not in 1,000.

The future—as mass unemployment, worsening economic malaise, and austerity make clear–has arrived.

Surely we can do better than capitalism. The time to put socialism on the agenda is now.

1. For discussions of Soviet economic performance see: Robert C. Allen. 2003. Farm to Factory: A Reinterpretation of the Soviet Industrial Revolution. Princeton University Press, 2003; David M. Kotz. “The Demise of the Soviet Union and the International Socialist Movement Today”. Paper written for the International Symposium on the 20th Anniversary of the Former Soviet Union and its Impact, Beijing, April 23, 2011; and Roger Keeran and Thomas Kenny. “A Rejoinder to Erwin Marquit’s Critique of Socialism Betrayed”. Nature, Society, and Thought, vol. 17, no. 3. 2004.

The far right has a ready answer. Does the left?

By Stephen Gowans

“The search for scapegoats has started,” observes German magazine editor Michael Naumann, alluding to growing anti-immigrant sentiment throughout Europe. The Swedes “elected an anti-immigrant party to Parliament for the first time, and the French are busy repatriating Roma” while “Germans continue to debate a best-selling book blaming Muslim immigrants for ‘dumbing down society’.” (1) Complaints are heard in England that England is no longer for the English, while a paroxysm of Islamophobia marks a US campaign to block a Ground Zero mosque, which is neither a mosque nor at Ground Zero. Naumann’s point is taken, but he misses the reality. The search hasn’t just begun, it’s complete.

These days, the paradigm for scapegoating is provided by the Nazis’ blaming Jews for the ills of the inter-war years, a period of intense capitalist crisis. The parallel is the latest crisis, with its mass unemployment, insecurity, stagnant and shrinking incomes, and in some places, fiscal austerity. The real blame lies with capitalism–a system whose internal dynamics regularly produce wrenching downturns, making life uncertain, challenging and sometimes cold, bleak and humiliating for countless millions. How many people 50 years of age and older live, either without hope of ever again finding work, or in fear they’ll lose their jobs and never work again? How many young people have failed to land a first job, or are forced to navigate an uncertain world of low-paying, part-time, contract or temporary positions? How many are working harder, for less? In times of crisis the desperate, the humiliated, the frightened, look for an explanation for their situation.

They don’t have to look far. The far right has a ready answer—that immigrants are stealing our jobs and freeloading on social services. The first part has a ring of truth to it. Governments, after all, do use immigration policy to manage labor market flexibility, a euphemism for a pool of employees large enough to meet capital’s current demand for labor with a reserve army of job seekers left over. The reserve army–eager to take the place of those who already have work– maintains downward pressure on wages and keeps those with jobs in line. Without keen competition for employment, the price of labor would rise, eating into profits, possibly so much that capitalists would no longer invest, and the system would come to a halt. Labor market flexibility, then, is necessary to the smooth functioning of the system. But because people compete for jobs, any measure which increases the intensity of competition is hostile to their interests. It limits their bargaining power and increases the chances someone else will get the job they hold or want.

In the competition of all against all, those who bear the greatest burden are the workers who fill the ranks of the reserve army, or go from one low-paying job to another, denied any form of economic security. It’s easy for them to blame their plight on the immigrants they see working in jobs they want (though regularly in jobs they would disdain to hold), because it is often with them they compete. It’s true, they also compete against people of the same ethnicity, color and national origin, but don’t hold them to blame. But differences in skin color, accents, cultural practices and religion facilitate the creation of in-group-out-group divisions, making it easy to mark out the competition.

At the same time, the non-immigrant working poor often live side by side with newly arrived immigrants, some of whom have no work, and get by on welfare payments and sometimes criminal activity. Their presence is a source of confusion and resentment to the working poor, who question the wisdom of their governments’ accepting new immigrants–whose upkeep can be subsidized in part by the working poors’ taxes–at a time of economic downturn.


Crises, you would think, would provide opportunities to transcend the capitalist system. At these times the system’s problems are encountered the most acutely and therefore the motivation to overcome them ought to be greatest, but crises paradoxically have often led to the rise of far right parties and anti-immigrant sentiment. The reason why is two-fold: The far right’s seemingly plausible explanation for the insecurity many people are forced to bear; and the left. When the left provides a compelling alternative explanation and mobilizes mass energy around it and thereby threatens to take power, charismatic far right leaders are provided with money to rally public support for a nationalist cause and vie with the left for power. When the left fails to offer a compelling alternative explanation, the far right movement remains limited, poorly organized, and largely spontaneous; it’s not needed to protect the system from challenge, and so is left in its inchoate state. The far right isn’t pressed into service and built up as a major force unless the left is strong.

The dominant left response to the recent rise of xenophobic sentiment has been moral suasion and anti-racism demonstrations, a strategy that possibly owes more to satisfying the psychological needs of the practitioners than concern over efficacy. It fails to attack the root cause of the disease, trying to suppress the symptoms instead. Campaigns of anti-racism offer their practitioners cathartic opportunities to express moral indignation (which may be the underlying motivation for carrying them out), but their effectiveness is questionable unless accompanied by an assault on the root causes. The recent wave of anti-immigrant sentiment didn’t arise in a vacuum. Its momentum comes from economic crisis, and if one wants to mobilize the energy that far right explanations attract, a credible solution must be offered to the critical underlying problem: economic insecurity. Against the far right’s explanation that immigration is the cause of joblessness, the left could point out that insecurity is caused by the failure –indeed refusal–of capitalism to offer secure employment to all; that the solution is to transcend the capitalist system; and that where it has been transcended in the past, secure employment has been made available to all, along with guaranteed healthcare, security in old age, subsidized housing, free education, and a raft of other mass-oriented reforms. There is no freeloading in a socialist society. Work is an obligation. But at the same time, employment is guaranteed. Against the pseudo-explanation: immigration is the cause of your problems, must be counterpoised an accurate explanation: capitalism is the cause of your problems; it can’t—won’t—guarantee a secure life for all; socialism can.

The problem is that much of the left, even that part of it that traces its origins to revolutionary Marxism, has given up on both revolution and socialism, defined here as production for use (not profits), governed by a plan (not markets), and carried out in publicly owned (not private) enterprises. Socialism in contemporary usage has come to refer to a mixed economy presided over by an elected government that calls itself socialist. Production is governed by markets, much of the economy remains in private hands, the commanding heights of the economy are brought gradually under public control, and the exploitation of man by man is accepted as necessary, desirable, and the key to efficiency. But markets—which almost everyone now thinks are an unavoidable necessity–inescapably mean recurrent economic crises, unemployment, and inequality. In other words, socialism, as it is defined by 21st century socialists, offers no solution to the economic insecurity that regularly flares up and drives the insecure into the arms of far right campaigns to scapegoat immigrants and foment xenophobia. Sweden, often celebrated as a social democratic paragon and held out as an attractive alternative to Marxist-Leninist-style socialism, has proved no less vulnerable to outbreaks of recession-induced xenophobia than bastions of neo-liberalism have. And that’s because 20th century social democracy and its equivalent, 21st century socialism, don’t transcend capitalism, but embrace it, and therefore accept its destructiveness (in crops, products, factories, and gainful employment eliminated during regular downturns), inefficiencies (capitalism regularly operates below capacity and well below during downturns), wars (to pry open closed markets and secure new investment opportunities) and blighted lives.

No one in Germany “is predicting the rise of a successful right-wing party,” remarks New York Times reporter Michael Slackman, “but that is because the main ingredient is missing: a charismatic leader to rally the public. With such a leader, and some financial support, the prospect could take on a life…” (2) Perhaps. But there is also one other ingredient missing: a compelling left alternative explanation of people’s distress. Without one, there’s no need to find, and provide financing to, a charismatic right-wing leader to transform a spontaneously arising, minority, anti-immigrant movement into a mass movement capable of vying for power to do what far right mass movements have been historically mobilized to do: block the rise of a revolutionary left movement. That the rise of a far right demagogue is unlikely can perhaps be looked at as a good thing (and in one sense it is), but in another sense it is far from good, for it means capitalism is safe, despite what one might think about capitalism’s current tribulations creating an opportunity for change. The opportunity may exist, but who is there to seize it?

It used to be that the role of a revolutionary Marxist party was to set forth an alternative explanation to the dominant ideology, one that would supply an essential ingredient to the project of transcending capitalism at a time of crisis. People’s troubles with unemployment, under-employment and poverty, it would be explained, are systemic, not personal or immigrant-related; they are remediable, not inevitable. Freedom from the ills of capitalism, it would be shown, is possible and realistically achievable through collective action. Nationalism, xenophobia and social democracy would be revealed to be pseudo-solutions, offering the illusion of change but no real redress of capitalism’s ills. No longer. Nowadays, everyone has shifted to the right. Liberals are conservatives, social democrats are liberals, and communists are social democrats, if not liberals in practice with a vaguely radical rhetoric.

With a void having opened up in the space once filled by alternative left explanations, the current capitalist crisis is proving to be a fertile ground for the growth of far right pseudo-explanations of what are properly systemic problems. With the left having embraced markets, and thereby all that markets imply (regular crises, unemployment and inequality), it no longer has a solution to offer for market-induced plights. Having capitulated, it has reduced itself to the role of uttering pious expressions of benevolence.


Many people who were once communists drew strength from the knowledge that communism represented a mass movement. Perhaps it remained marginal (or more aptly, suppressed) in their own country, but it had been embraced by a substantial fraction of the world’s people and seemed to be getting stronger. With the demise of communism in Eastern Europe and the Soviet Union, and China’s journey down the capitalist road, all that changed. Now, really-existing socialism had all but disappeared, hanging on, sort of, in a few outposts: Cuba, where parts of the socialist model had to be dismantled to survive, and North Korea, where the Juche philosophy supplanted formal adherence to Marxism-Leninism. Communism now seemed largely discredited, and to cling to it, was to mark oneself as peripheral and locked in the past.

Desperate to reconnect to a mass movement, many embraced the only mass working class movement they could find, which in many Western countries, was social democracy. But the corruption that had led the Bolsheviks to break away from social democracy to form the communist movement in 1917 had intensified, and by the time the Soviet Union was dismantled, social democracy had nothing anymore to do with socialism; it had become capitalism with a friendly face, and at times, not so friendly.

In Marx’s and Engel’s day, there were periods when a meeting of every socialist in Europe could have been easily held in a mid-sized hall. Until 1917, the Bolsheviks—whose ideas and organizational forms would eventually guide the economic and political organization of a majority of the world’s population–remained a political party of limited significance without a mass following. The need to be connected to a popular movement—and the practice of linking up with a cause on the basis of its popularity and not the ideas and aims that inspire it– would have led many latter day communists to shun Marx, Engels and the Bolsheviks had they been contemporaries.

One reason Marxism-Leninism commands little authority nowadays is that it seems to have been rejected by its practitioners. Glasnost and Perestroika and the eventual dismantling of communism in the Soviet Union, followed by communism’s collapse in Eastern Europe, and the turn to capitalism in China and Vietnam, appear to be admissions that Marxism-Leninism doesn’t work and that capitalism is both inevitable and the end of history. Cuba’s recent decision to expand its private sector by cutting loose 500,000 state employees—and Fidel Castro’s remark to Atlantic journalist Jeffrey Goldberg that “The Cuban model doesn’t even work for us any more” (3)—seems to underscore the point. All this, however, misses a few significant points.

First, communism arose under inauspicious circumstances. It took root where capitalism was weak, and therefore without the strength to smother the infant in its cradle. In 1917, Russia’s Tsarist ruling class was demoralized by war and the capitalist class too small, weak and disorganized to put down revolutions in March and October. But capitalism being too weak to block the rise of revolution meant that the revolution would have to take hold in a country where the working class was small and the industrial base–necessary to progress toward a communist society of plenty–was rudimentary at best. Lenin believed his revolution would spark working class revolutions in Germany and elsewhere in Western Europe, and that the working class in those countries would come to the Bolshevik’s aid, providing the necessary capital Russia would need to build its own socialist society. He judged wrong. While the Kaiser’s rule was overthrown in Germany, the Social Democrats–who disagreed with Bolshevik’s revolutionary methods and refused to break decisively with capitalism and its rulers –came to power. Revolutions elsewhere were stillborn or not in the cards. After a period of waiting, the Bolsheviks realized that if socialism were to come to Russia, they would either have to first shepherd the country through a long period of capitalist development, actively intervene in Western Europe to foment revolutions there, or undergo a program of rapid industrialization and forced agricultural collectivization at home. After a period of conflict about which path to pursue, the Bolsheviks decided to build socialism in one country. This decision was reinforced by the expectation that the capitalist powers would attack the Soviet Union within a decade, and that an industrial base was urgently needed to build a modern military for self-defense.

Second, communism had not a moment’s rest from attempts by the capitalist countries to destroy it. Blockades, sanctions, trade embargoes, sabotage, subversion, diplomatic isolation, military intervention, war (both hot and cold) and ideological warfare were pressed into service with the aim rolling back—and ultimately destroying– communism. The chances of communism surviving the onslaught were far from sanguine. Attributing the demise of really-existing socialism to internal failings, and ignoring seven decades of efforts to exterminate the communist challenge—a practice of both the right and left–is a peculiar form of blindness. As William Blum observes: “It’s as if the Wright brothers’ first experiments with flying machines all failed because the automobile interests sabotaged each test flight. And then the good and god-fearing folk of the world looked upon these catastrophes, nodded their heads wisely, and intoned solemnly: Humankind shall never fly.” (4)

Third, it wasn’t because communist countries rejected markets that they failed. It was because they backed off of Marxist-Leninist principles, and conciliated with capitalism, that they collapsed. Poland, for example, ran into trouble because it failed to collectivize agriculture and provided implacable enemies of socialism, including the Catholic Church, space to operate. Rather than using agricultural surpluses to pay for industrialization, Polish communists subsidized food prices and emphasized light industry and the production of consumer goods and foot the bill by borrowing heavily from Western banks. Burdened with debt, the government was eventually forced to allow Western banks to dictate economic policy. The banks demanded the government remove its food subsidies to pay interest on its debt. This led to spikes in food prices, sparking strikes and ultimately the development of a working class strike movement. The strike movement was hijacked by anti-socialist ideologues linked to the Catholic Church and the CIA who eventually managed to force the government to step down when it became clear that the Soviet Union, under the leadership of Mikhail Gorbachev, would not intervene.

Gorbachev was dismantling the Marxist-Leninist basis of the Soviet state and experimenting with market mechanisms in response to a slow-down in the Soviet economy. The slow-down had a number of causes. The Soviets had been forced to adopt a policy of self-sufficiency to protect the country from the possibility of imperialist countries manoeuvring to strangle it economically by cutting off its access to vital raw materials. This led to a situation where the Soviets paid more to extract some raw materials internally than they would have paid had they imported them. Another factor was an increase in raw materials costs. As easy to reach mines were depleted, deeper mine shafts had to be dug, and longer distances had to be travelled to reach new mines.

Planning had its own problems. Enterprises hung on to employees to ensure they had sufficient staff to meet planned production targets. This led to over-staffing, and to the less than efficient deployment of manpower. The Soviet commitment to full employment also meant that retrofitting factories—in order that they could continue in operation with layoffs avoided—was favored over building new factories based on new technology. As a result, the industrial base became a patchwork of new grafted onto old.

At the same time, the need to keep pace with NATO put a severe strain on the Soviet economy. Despite its rapid growth, the Soviet economy was still much smaller than that of the United States. To come anywhere close to matching NATO expenditures, the Soviets had to allocate a crushingly large percentage of their GDP to the military. Although necessary for self-defense, this was wasteful, since it diverted resources away from the productive investments that were needed to raise living standards. US cold warriors figured that if they could stall the growth of the Soviet economy by locking the Soviet Union into an arms race, they could weaken attachment to Marxism-Leninism, both among the Soviet citizenry and in the Kremlin. With living standards failing to converge on those of the advanced capitalist countries, Eastern Bloc populations might sour on the socialist model and look longingly to the West. At the same time, it might occur to Soviet leaders that their only hope was to compromise on Marxism-Leninism and open up the Soviet economy to market mechanisms and the world capitalist economy.

There were other strains. In order to win allies and expand socialism to other countries, the Soviets shipped aid to countries and movements struggling to free themselves from colonialism. Most of these countries were desperately poor, and profited from transfers and subsidies from the Soviet Union, while returning little in exchange. For example, the Soviets bought Cuban sugar and nickel at above world prices, getting little in return from Cuba. Cuban military intervention in southern Africa on behalf of the liberation movements there–ultimately paid for by the Soviet Union–and the intervention in Afghanistan on behalf of a modernizing and secular revolutionary government, put further strain on the Soviet economy. In the end, Gorbachev decided to pull troops out of Afghanistan, cut Cuba loose, and not intervene to protect Warsaw Pact allies from counter-revolutionary movements. He also moved the Soviet Union toward a Scandinavian-style social democracy. Far from invigorating the Soviet economy, the attempt to make over the USSR pushed the economy into collapse. As the economy imploded, the economies linked to it through the socialist community fell like dominos. By embracing capitalist methods, Gorbachev had turned a set of manageable problems into a catastrophe. Communism’s collapse was not due to public ownership, central planning, and production for use, but the abandonment of socialist practices in favour of markets and capitalist methods. The problem wasn’t that there was too much socialism; there was too little.


The capitalist class in imperialist countries is a formidable enemy. Except for the period of the Great Depression and the chaotic aftermath of the two world wars, it has not been weakened, demoralized and disorganized—a condition that would need to prevail if revolutions were to come about. What’s more, both world wars led to a stronger, more confident, and assertive class rule based in US finance and industry. The opportunities for Marxist-Leninists to lead new revolutions were, therefore, limited. At the same time, the space for socialist countries to develop was systematically impeded by a United States immeasurably strengthened by WWII, whose rulers committed themselves to wiping the communist foe from the face of the earth, a campaign that carries on today in efforts to bring down the Cuban and North Korean systems. (By comparison, the Soviet Union was immeasurably weakened by the same war.) That the communist movement should be bloodied, bruised and knocked to the mat should come as no surprise. The opponent was formidable. But does that mean the towel must be thrown in? It would appear that for communists who were accustomed to being linked to mass movements, the answer is yes. But the movement of revolutionary socialists has been tiny and peripheral before. Had there not been a core of revolutionaries who remained dedicated to Marxist-Leninist principles and refused to sacrifice fundamental principles for immediate gains and popularity, the first attempt at building socialism would never have come off. Capitalist crises and war are inevitable and recurrent. Opportunities for transcending capitalism and liberating mankind from its scourges are therefore, inevitable and recurrent as well. When they arrive, a Marxist party capable of offering an explanation of people’s unhappiness, showing that another way is realistically achievable, and revealing the pseudo-solutions of nationalism, religion and social democracy to be dead-ends, can lead a renewed attempt to move humanity forward.

1. Michael Slackman, “Rightwing sentiment, ready to burst its dam”, The New York Times, September 21, 2010.
2. Ibid.
3. Jeffrey Goldberg, “Fidel: ‘Cuban Model Doesn’t Even Work For Us Anymore’”, September 8, 2010.
4. William Blum, “The Anti-Empire Report,” September 2, 2009.


Robert C. Allen, Farm to Factory: A Reinterpretation of the Soviet Industrial Revolution, Princeton University Press, 2003.

Bahman Azad, Heroic Struggle, Bitter Defeat: Factors Contributing to the Dismantling of the Socialist State in the USSR, International Publishers, New York, 2000.

Roger Keeran and Thomas Kenny, Socialism Betrayed: Behind the Collapse of the Soviet Union, International Publishers, New York, 2004.

Melvyn P. Leffler, The Specter of Communism: The United States and the Origins of the Cold War, 1917-1953, Hill and Wang, New York, 1994.

Irwin Silber, Socialism: What Went Wrong? An Inquiry into the Theoretical and Historical Sources of the Socialist Crisis, Pluto Press, 1994.

Albert Szymanski, Class Struggle in Socialist Poland With Comparisons to Yugoslavia, Praeger, 1984.

Albert Szymanski, “Crisis and Vitalization: An interpretive essay on Marxist theory,” in Rhona F. Levine and Jerry Lembcke (Eds.), Recapturing Marxism: An Appraisal of Recent Trends in Sociological Theory, Praeger, 1987.

A failed system’s failed promises

By Stephen Gowans

With Communism’s demise, and the return of Warsaw Pact countries to the capitalist fold, the world was promised a new age of peace and prosperity. The shadow of war would lift. Military expenditures would be cut back, and troops would be brought home from Cold War postings. There would be more money for new wars — on poverty and homelessness, this time. And capitalism, the single sustainable model of success (it had, after all, emerged triumphant in a decades-long battle with Communism) would deliver the poor from poverty, and bless the world with a bonanza of consumer goods.

Talk about failed predictions.

In place of peace, we got the lone remaining superpower waging war to sweep up the few remaining stragglers that continued to resist integration into the US dominated global economy. Iraq was conquered, at the expense of countless dead, homeless, mangled and ruined; campaigns of intrigue and bombing in the former Yugoslavia pushed the region into the US orbit; and a war on Afghanistan continues to blast away thousands of peasants but cements a US military presence in a Central Asia pregnant with the promise of oil and gas wealth. Wars on Iran and north Korea are real possibilities.

Today, the United States is asserting its military might over the face of the globe more audaciously than ever. There are 368,000 US troops deployed in nearly 130 countries around the world. (1) US citizens think their military protects their interests abroad and defends host countries from threats. They rarely pause to wonder whether what’s called “their” interests are really their own personal interests or those of people who live in bigger houses and get bigger tax breaks and have sizeable investment portfolios. Nor do they make a habit of wondering how it is that with the US exercising a virtual military monopoly over the world, host countries could be under a threat so imminent they would require a US force presence. Exactly which of the tiny collection of countries not hosting US troops are threatening the remaining 130?

Could it be that US troops gird the globe to enforce the access of US firms and investors to the land, labor, markets and resources of others? Do “our” interests equate to Iraq’s oil, Indochina’s tin, Central Asia’s natural gas, Kosovo’s mines, the Balkan’s pipeline routes, Africa’s treasure trove of minerals and oil, and Indonesia’s sweatshops? “A lot of people forget,” remarked Alexander Haig, former Supreme Commander of NATO and Secretary of State in the Reagan administration, that the presence of US troops in Europe is “the bona fide of our economic success…it keeps European markets open to us. If those troops weren’t there, those markets would probably be more difficult to access.” (2) A lot of people forget, because they were told something quite different: That US troops were stationed in Europe to deter a Soviet invasion, not to put a gun to the head of Europeans to keep their markets invitingly open to US firms and investors. The obvious question, With the threat of a Soviet invasion long passed, why are US troops still there?, is rarely asked. So it doesn’t really matter that we’ve forgotten. The most blatant of Washington’s latest exercises in imperialism run amok has a similar character. It was said that the Iraqi government of Saddam Hussein was hiding banned weapons. None were found. But US forces stay in Iraq anyway, to ensure the conquered country remains the refashioned paragon of free markets and free trade Washington’s policy makers have turned it into.

Which is to say, the emergence of US capitalism triumphant hasn’t given us peace, as promised; it has given us a bold US military prepared to wage war. And it seems to be waging war to facilitate US capital settling everywhere, nestling everywhere and establishing connections everywhere, to paraphrase a shockingly topical passage from the Communist Manifesto of Karl Marx and Friedrich Engels, a document whose irrelevance was said to have been established beyond a shadow of a doubt when the Berlin Wall was razed to the ground. Yet, today, it seems to be more relevant than ever; certainly more relevant than when a competing ideology forced the stewards of capitalism to tidy up the image of their vaunted system lest the rabble get it into their heads that they could do better. It’s said in newspapers and on TV that Washington’s wars have to do with fighting terrorism, but the documents which define the US national security strategy are long on paeans to free markets and free trade and capitalism and short on concrete measures to protect the lives of US citizens from attacks by radicalized West Asians bearing legitimate grievances against the United states. On the contrary, the strategy is a recipe for provoking terrorist attacks.

Marx and Engels: While the irrelevance of Communist Manifesto was said to have been established beyond a shadow of a doubt when the Berlin Wall was razed to the ground, today it seems to be more relevant than ever

Bourgeois society,” to use Marx’s and Engels’ phrase, hasn’t given us prosperity either, unless by “us,” you mean the people who own and control the economy. For the bulk of humanity things are a lot worst materially than they were when communists, socialists, and nationalists kept upsetting the capitalist apple cart by bringing vast tracks of national economies under public control, and putting the public welfare ahead of the profit interests of bondholders and investors.

According to the United Nations, 54 countries are poorer today than they were in 1990, about the time Communism was declared failed, and capitalism lionized as the single sustainable model of success. More children under the age of five are dying in 14 countries, and enrollment in primary schools is down in 12. Extreme poverty remains the fate of over one billion people. And in former Soviet republics — cradle to what has been dismissed as a failed system — poverty had tripled one decade into their liberation from Communism. Seventeen countries in Eastern Europe and the countries that made up the former Soviet Union have hardly become dynamos of prosperity, which should leave anyone with an ounce of gray matter wondering by what standard success is measured; surely not by the majority’s well-being. (3)

After having been demonized for decades by a capitalist establishment bent on making Communism radioactive (along with anyone so cavalier about their standing in polite society to utter a kind word about it) it’s sometimes forgotten, if ever apprehended in the first place, how impressive Communism’s economic achievements were…and still are, considering the barren and poisoned ground in which the lone holdouts have been forced to eke out precarious existences.

Let’s start with the most reviled of the hold-outs: north Korea. The idea that north Korea is a threat to the United States is about as believable as the idea that a colony of ants is a threat to the elephant whose foot hovers three inches over its hill. North Korea hasn’t a single solider stationed outside its borders. Washington, on the other hand, has 37,000 troops deployed, on, or near, the north Korean border, 65,000 troops stationed in nearby Japan, the Seventh Fleet lurking in nearby waters, and bombers within striking distance. It has dismissed Pyongyang’s pleas to sign a nonaggression treaty, declaring bizarrely that it will not succumb to blackmail. And what has north Korea done to threaten the United States (or to blackmail the country)? It has fired up a mothballed nuclear reactor capable of producing weapons grade material, and withdrawn from the Nuclear Nonproliferation Treaty, but only after Washington reneged on an agreement to build light water reactors and provide fuel oil shipments. And only after Washington issued a virtual declaration of war, designating north Korea part of “an axis of evil.”

Could a north Korea with one or two crude nuclear bombs pose much of a threat to the United States poised to strike with overwhelming force? Quite the other way around. Indeed, north Korea’s pursuit of nuclear weapons can be said to be a rational response to an overwhelming US threat. And there have been plenty of signs the threat is real.

“This is just the beginning,” a Bush administration official told the New York Times, after US and British troops marched on Baghdad. “I would not rule out the same sequence of events for Iran and north Korea as for Iraq.” (4) The Pak Tribune cited CIA sources that revealed a “list of countries where replacement of government has been declared essential.” (5) The list included north Korea. US undersecretary of state for arms control and international security, John Bolton, warned Pyongyang to “draw the appropriate lesson from Iraq.” (6) It has. “The DPRK (north Korea) would have already met the same miserable fate as Iraq’s had it compromised its revolutionary principle and accepted the demand raised by the imperialists and its followers for ‘nuclear inspection’ and disarmament,” declared the official daily of the ruling Korean Workers Party, Rodong Sinmun. (7) Later, the government issued this statement: “The Iraqi war teaches a lesson that in order to prevent a war and defend the security of a country and the sovereignty of a nation it is necessary to have a powerful physical deterrent.” (8)

Washington ultra-hawk, Paul Wolfowitz, anticipating similar words US Secretary of state Hilary Clinton would utter seven years later, warned, “north Korea is headed down a blind alley. Its pursuit of nuclear weapons will not protect it from the real threat to its security, which is the (internal) implosion brought about by the total failure of its system. Indeed the diversion of scarce resources to nuclear weapons and other military programs can only exacerbate the weakness of the (government).” (9) So what’s the choice? Head down a blind alley, or turn over the country to Washington, and the multinational corporations it represents? Who’s the blackmailer?

History has not been kind to the tiny country. The mountainous north was once the center of the peninsula’s heavy industry, the south its breadbasket. The Korean War, which saw US bombers destroy every building in the north over one story, changed that. The north was reduced to rubble. But it rebuilt, and until the 1980s, outpaced the south economically. By 1961, it was self-sufficient in agriculture. North Korean children were better vaccinated than their counterparts in the United States, according to the World Health Organization and United Nations, who commended the country for its delivery of health care. And life expectancy was higher than in the capitalist south. (10)

Then disaster struck. The socialist trading bloc collapsed, depriving Pyongyang of its major trading partners. Oil subsidies from Russia ended. And if that weren’t enough, floods and droughts ravaged crops. Famine followed. But, for a time, the country had enjoyed impressive material gains, an affirmation of what can be achieved outside the capitalist system, even where resources are diverted to defense against an unrelenting foe than remains poised on your borders to strike. Imagine what the country could have achieved without the United States breathing fire down its neck.

Cuba, in many respects, fits the same mold: Astonishing social and economic gains under a communist government, the implacable and unrelenting hostility of the United States, and some backsliding after the collapse of its major trading partners. (The United States has maintained an economic blockade for half a century.) Still, despite these challenges, Cuba is a much kinder and egalitarian place today than it was before the revolution, under the rule of the US-backed Batista regime, when the country’s economy was an appendage of that of the United States. The United States fears Cuba, journalist Seamus Milne observes, not because it is a threat to the safety of US citizens, but because it’s an example of what can be accomplished outside the US dominated capitalist model. (11 )

In 1953, the illiteracy rate in Cuba exceeded 22 percent. Today it is under one percent. Three percent of those over the age of 10 had a secondary school education. Today, almost 60 percent do. Back then, at the height of the sugar harvest, when unemployment was lowest, eight percent were jobless. Today, the unemployment rate is three percent, making Cuba one of the few countries in the world to boast full employment.

Well over 80 percent own their own homes, and pay no taxes. The remainder pays a nominal rent.

No other country has as many teachers per capita. Education is free through university. The country also provides free university educations to 1,000 Third World students every year. And classroom sizes put those of Western industrialized countries to shame.

Health care is free. And while the United States has deployed over 300,000 troops in almost 130 countries to keep markets open to US investment, Cuba has sent 50,000 doctors to work for free in 93 Third World countries to heal the sick. (12)

Infant mortality is lower than in any other Third World country and even some Western capitalist countries (it’s higher in Washington, DC.) Life expectancy is 76 years, and is expected to rise. (13) By comparison, the return of capitalism has pushed life expectancy down in former communist countries.

These gains, seldom mentioned in the United States, place the country head and shoulders above other Latin American countries firmly ensconced in the US orbit, for which Washington’s single sustainable model of success continues to deliver grinding poverty, misery, and gross inequality, but the profits necessary to keep the capitalist system afloat and the capitalist class awash in mansions, retinues of servants, stables of luxury cars, exclusive schools and private clubs.

There are elections, and, contrary to Washington’s anti-Cuba propaganda, Cubans do vote. But they don’t choose among two largely identical parties, as in the United States, where the parties, and their candidates, are almost invariably in thrall to, or are representatives of, the capitalist class. As for human rights, Cuba stands as a model of what can be achieved by way of economic and social rights, the basic rights to food, housing, clothing, health care, education and jobs, enshrined in the Universal Declaration of Human Rights, but not recognized as human rights in the United States. (14) Washington, on the other hand, has made a fetish of civil and political liberties, which, in the case of its relations with Cuba, has everything to do with giving its agents in the country, mistakenly called “independent” journalists and “independent” librarians (they’re not independent of Washington, which bankrolls their activities), room to maneuver to organize destabilization, with the object of overthrowing the revolution and banishing economic and social rights in favor of investors’ rights. That Cuba, a poor country, has been able to guarantee the right to food, clothing, shelter, health care, education and jobs, despite trying economic circumstances and US hostility, can be seen as extraordinary, or simply what can be readily accomplished outside the strictures of capitalism. If a poor Third World country, harassed by a powerful neighbor, can deliver high quality health care and education for free, why can’t the world’s richest country do the same? The answer: Capitalism drives towards better profits, not better lives.

Ever since the US-dominated global economy has, with the collapse of Eastern Bloc Communism over 10 years ago, more boldly sought purchase everywhere, US military imperialism has run amok, wars of aggression have been started, and poor, and formerly communist, countries have become poorer. The leaders of the Western world declare capitalism to be the single sustainable model of success, but countries that rejected capitalism, and committed to egalitarianism, have done better in terms of guaranteeing economic and social rights than comparison countries, despite difficult circumstances. Meanwhile, those that have rejected egalitarianism in favor of a return to capitalism have regressed. The promises of peace and prosperity that attended Communism’s collapse were a fraud based in the self-interest of a narrow band of wealthy people in the world’s richest countries. That it is a fraud is richly evident in the failed promises and dismal record of the post-communist era.

1. “Where are the Legions? Global Deployments of US Forces,” GlobalSecurity.Org,
2. UPI, January 7, 2002.
3. “UN report says one billion suffer extreme poverty,” World Socialist Web Site, July 28, 2003.
4. “Pre-emption: Idea With a Lineage Whose Time Has Come,” The New York Times, March 23, 2003.
5. “Iran to be US next target: CIA report,” Pak Tribune (Online) March 24, 2003.
6. “U.S. Tells Iran, Syria, N. Korea ‘Learn from Iraq,” Reuters, April 9, 2003.
7. “North Korea vows to make no concessions,” Agence France-Presse, March 29, 2003.
8. “Administration Divided Over North Korea,” The New York Times, April 21, 2003.
9. “Wolfowitz Visits US Military Base In Korean Buffer Zone,” AFP, June 1, 2003.
10. “Peace, the real resolution to famine in North Korea, ZNet, July 23, 2003.
11. “Why the US fears Cuba,” The Guardian, July 31, 2003.
12. Ibid.
13. Speech by Fidel Castro on the 50th anniversary of the attack on the Moncada barracks, July 26, 2003.
14. Karen Lee Wald, “Democracy, Cuba-Style,” Canadian Dimension, July/August, 2003.

Originally written in August 2003, revised and updated May 2010.

The Limits of Progressive Thought: A Review of Donald Gutstein’s Not a Conspiracy Theory: How Business Hijacks Democracy

By Stephen Gowans

Progressive media analyst Donald Gutstein, a professor in the school of communication at Canada’s Simon Fraser University, and a former co-director of Project Censored, has written what appears to be a promising analysis of the state in contemporary capitalist society. Not a Conspiracy Theory: How Business Hijacks Democracy, examines the role of business in shaping public opinion, but is a disappointing farrago of misconceptions, faulty logic, and contradictions, whose prescriptions offer the left no way out of the cul-de-sac it finds itself in. Gutstein, a liberal with a hazily radical air, argues from a vaguely Marxist and radical standpoint, but his horizons are limited to targeting “radical” conservatives in an effort to restore the social welfare gains of the post-war period. Gutstein wants to relegate business to the role he imagines it once played: as just once voice in a pluralist society presided over by a neutral state.

In short, Gutstein’s argument is that “In Canada and the United States, corporate power and the free market were reined in after the Second World War” [1] in favor of building a mixed economy. “Business signed on to the welfare state because it feared working class activism and a return to Depression-era conditions. It supported nearly-full employment for males, expanded trade union rights and the construction of a social safety net.” [2] The mixed economy produced “unprecedented growth and prosperity,” but “in the 1970s…profits declined and inflation rose” [3] as oil prices skyrocketed and competition from a revived Japan and Western Europe intensified. This prompted business to launch a counteroffensive to restore profits. Business recruited and funded “radical” conservatives to build a propaganda machine to change people’s attitudes and beliefs about unions, the mixed economy and the welfare state. The propaganda worked astonishingly well, allowing business to hijack the media and government, both of which have become instruments of corporate power. Business needs to be reined in so that it is only one of many voices in a pluralist debate (as it was in the post-war period.) The way to accomplish this goal is for progressives to build their own propaganda machine to restore the credibility of the mixed economy and welfare state, relying on grassroots donations and funding from wealthy liberals.

Has business propaganda been successful?

Gutstein argues that business propaganda is used to shape public opinion in ways that favor the interests of business owners against the majority. Propaganda, in his view, keeps the majority from using its numbers to pressure governments to adopt policies that encroach upon business interests.

“A democratically elected government with a mandate from voters to protect jobs, regulate environmentally destructive industry and ensure business pays its fair share of taxes, presents great risks to businesses, limiting a company’s ability to produce ever increasing profits for its share-holders. The risk to business is that…the public…will conclude that business is too powerful and needs to be reined in. The purpose of business propaganda is to ensure that these ideas do not arise.” [4]

Has business propaganda worked? While Gutstein says it has, the examples he cites show it hasn’t. For instance, while he argues that one of the goals of business propaganda is to persuade the public that business isn’t too powerful, he writes,

“A poll commissioned by (Business Week) found that 72 percent of Americans said business ‘had gained too much power over too many aspects of their lives.’ Surprisingly to the Business Week editors, respondents seemed to agree with the sentiments expressed at the 2000 Democratic convention, when presidential nominee Al Gore declared that Americans must ‘stand up and say no’ to ‘Big Tobacco, Big Oil, the big polluters, the pharmaceutical companies, the HMOs’.” [5]

Gutstein argues that the business “propaganda machine…was astonishingly successful in reversing the gains of the welfare state.” [6] But if business propaganda works by changing people’s attitudes and beliefs, it could only have achieved astonishing success in reversing the gains of the welfare state by changing the attitudes and beliefs of the majority about the welfare state. And yet, as Gutstein himself shows, the majority’s support of the welfare state has never wavered. “Despite thirty years of (business) propaganda for tax cuts,” he writes, “people still want spending on social programs.” [7]

In Gutstein’s view, if the majority recognizes that business is too powerful, it will act to rein business in. But popular action doesn’t always or even often follow a correct understanding of a problem. That’s because more than a correct understanding is needed before people take action. Also important is motivation, understanding of what action can be taken, and a belief that the action will make a difference. Furthermore, the action of the majority doesn’t always or even often change public policy. A majority of the world’s population opposed the US-UK invasion of Iraq, and filled the streets in protest on the eve of the invasion in the largest demonstrations in human history. Public opinion was elevated to the status of a second superpower. Yet public opinion turned out to be a rather feeble superpower. The invasion went ahead. Seven years later, Iraq remains under military occupation. Polls show a majority in Canada, Italy, France, Germany, Spain, Britain and even the United States either oppose deployment of their countries’ troops to Afghanistan or favor withdrawal [8], and yet the missions continue, and the U.S. mission will likely continue indefinitely. It could be argued that U.S. President Barack Obama was elected by voters because they believed he was committed to ending the war, yet there are more U.S. troops deployed abroad in combat zones today than under former U.S. president George W. Bush. Public policy seems to have little to do with the attitudes and beliefs of the majority, much less its actions, or votes. Gutstein’s belief that putting the business genie back in the bottle depends on the majority recognizing that business is too powerful is unduly optimistic.

What’s more, a majority of the world’s population already favors progressive policies, despite decades of business propaganda, and yet progressive policies continue to be dismantled. A GlobeScan poll conducted in 27 countries from June to October, 2009, and representing 70 percent of the world’s population, shows that most people in the world are social democrats, while a sizeable number are anti-capitalist, in their attitudes and beliefs. The poll found that a clear majority of the world’s population favors policies traditionally associated with socialism, including public ownership of major industries, redistribution of wealth, and an active role for government in regulating enterprises. [9] Gutstein himself acknowledges that “most people believe…that the acquisition of civil, political, and social rights is an inherently good thing”, [10] and that despite intensive propaganda against Medicare, “the public still backs the system.” [11] Business propaganda, it seems, has been astonishingly unsuccessful. All the same, the welfare state in advanced capitalist countries has been greatly weakened. To understand why, we have to look beyond business propaganda.

Is business propaganda new?

Gutstein can’t seem to decide when business propaganda began. Was it in the 1970s, when declining profits galvanized business to try to get out from under the burden of the welfare state, strong unions and rising popular demands, or did it begin earlier? The answer depends on which page of Gutstein’s book you consult. At one point he writes that the business propaganda machine was first established in the early seventies [12] but points to earlier business-directed campaigns aimed at winning support for a public policy climate favorable to business. He cites a 1949 American Medical Association campaign “to defeat attempts to create universal, federally-insured health care” [13] and a “massive, pro-capitalism grassroots campaign” carried out by “the Advertising Council and the PR industry” between 1945 and 1950. [14] “In 1947 alone,” he writes, the Advertising Council “spent over $100 million to ‘sell’ the American people on the wonders of the American economic system. The campaign, which continued into the 1950s, had two aims: to re-win the loyalty of the workers who had switched to the union, and to halt ‘creeping socialism.’” [15] Gutstein also points out that after World War I many people involved in the propaganda effort to mobilize support for the U.S. entry into the war “turned their efforts to a new crusade: making the world safe for business.” [16] According to Gutstein’s own review, then, the origins of business propaganda date to the period immediately following World War I and not the seventies. [17] If business propaganda has been around since at least the end of World War I, could it be that the domination of government and the media by business began much earlier than 30 years ago?

Have the media and government been hijacked?

Gutstein seems to think that the media and government have been hijacked by corporate interests, rather than created by them (the media) or dominated by them (government.) He misrepresents Noam Chomsky’s and Edward Herman’s propaganda model, outlined in their Manufacturing Consent, as one in which “the prevailing power elites co-opt intellectuals and large media companies and transform them into instruments of shaping public opinion.” [18] (Chomsky and Herman describe media corporations as businesses, whose very nature as businesses, structure their reporting. They have not been co-opted.) Similarly, Gutstein speaks of the corporate agenda becoming the government agenda, as if governments in capitalist society are capable of escaping the imperative of aiding business in its pursuit of profit. Gutstein’s thinking, then, implies that the media and government are capable of playing a neutral role in the clash of labor and business, with government mediating the conflict and the media siding with neither labor nor capital. But the media, for one, are clearly not independent of corporate interests, a point Gutstein himself makes: Media corporations, he writes, are “profit-seeking businesses owned by very wealthy families and by other companies. Owners are generally very conservative politically and favour the dominant North American private enterprise ideology.” [19]

For all of his optimism that business can be relegated to the role of one of many participants in a pluralist debate, [20] Gutstein recognizes that business “has significant influence over government, and controls the debate” [21] because it is able to use its wealth to press for a public policy climate favourable to its interests. Business-sponsored think-tanks, he writes, have,

“greater financial resources. Business sponsored think-tanks can hire more staff, fund more scholars, cover a wider range of topics and produce more studies and reports (than progressive think-tanks, with more limited financial resources, can.) They are also more effective because they have the ear of a sympathetic corporate media far more frequently than progressive think-tanks.” [22].

However, Gutstein focuses too much on the role business think-tanks play in shaping public policy, and too little on the movement of the same individuals back and forth between top corporate and government jobs, [23] the overwhelming role corporations and the wealthy play in funding major political parties, and the work of lobbyists on behalf of individual corporations and business as a whole. [24] He also ignores the limited room for manoeuvre of governments that work within the framework of capitalism. Unless they mobilize the energies of a significant portion of the population to overthrow the system, governments in capitalist society are constrained to act in ways that do no harm to the interests of business. If they do cause harm, business will stop investing, either because it is no longer profitable to do so, or to sabotage the government’s anti-business policies. Capital strike, or the flight of capital to business-friendly jurisdictions, will either bring the government back in line, or prompt voters to change the government. Either way, no government that willingly works within a capitalist framework can privilege lower classes at the expense of business for long without being reined in or replaced. It’s highly likely that governments in capitalist society would act to continue to defend and promote business interests whether business think-tanks – and business propaganda — existed or not.

The counteroffensive

At times, Gutstein seems to paint a picture of a world in which ideas are disconnected from the material world. At other times, he seems more firmly grounded in reality. But always ideology has primacy in his analysis. Ideas, if skilfully expressed by able and well-funded propagandists, have the power to compel action. For example, he attributes the Canadian government’s abandonment of social welfare policies and adoption of a neo-liberal program to a single report by Harvard professor Michael Porter. “After the Porter study (on Canada’s competitiveness in the world) made the rounds of senior officials, the corporate agenda became the government agenda.” [25] This supposes that the government’s agenda hadn’t always been the corporate agenda. An alternative view is that the Porter study didn’t cause the Canadian government to adopt a new agenda. The imperatives of the capitalist system did. What the Porter study did was justify the new agenda.

Gutstein’s emphasis on ideology is also expressed in his discussion of class conflict. Progressive movements, he notes, have “been followed by ideological counterthrusts of extraordinary force … sponsored by the entrenched interests of the day, fighting to protect their privileges and wealth, block progress toward a more just, equal and enlightened society, and undo the reforms already achieved.” [26]

It’s true that progressive movements have been followed by ideological counterthrusts, but more importantly, they have been followed by changes in policy. These changes have occurred when business’s ability to turn a profit has been damaged by a crisis of the capitalist system or by the insupportable encroachment of the demands of progressive movements on business interests.

Social welfare capitalism succeeded laissez faire capitalism as a result of the Great Depression, (though it was the massive spending on the war that brought the United States out of the crisis.) North America’s post-war growth and prosperity was largely caused by pent-up demand following the restraint and shortages of the war, the Marshall Plan, the Cold War, the space race and the rise of the automobile industry, (with its ramifying effects in touching off the growth of steel, glass, petroleum and rubber industries, and the construction of highways and the suburbs.) [27] Additionally, having escaped any major war damage, North American industry enjoyed a virtual monopoly for the greater part of the post-war period, as its competitors rebuilt. At the same time, ideological competition with the Soviet Union dictated that the working class in North America be granted concessions to meet the social welfare standards set by the Communist countries, with their full employment and robust social wage. [28] Strong unions and expanding social programs were easy for business to tolerate as the economy expanded, the price of raw materials was low, and foreign competition was modest.

By the mid-1970s, growth was slowing, the creation of the OPEC cartel sent oil prices skyrocketing, labor had become increasingly militant, and popular demands were being made for further expansion of the welfare state. The top shareholders and executives of major corporations decided that social democracy had gone too far. They used advances in transportation and telecommunications to shift production to non-union areas and later to low-wage countries, to escape the limits strong unions and minimum wage laws imposed on capital accumulation. Publicly-owned assets were sold off, generating new opportunities for profitable investment. Corporate taxes were slashed to fatten bottom lines, reducing the tax revenue base needed to fully support social programs. The welfare state capitalism of the post-war period was being dismantled. But the reason it was being dismantled was not because “radical” conservatives had organized themselves into corporate-funded think-tanks, which had then hijacked the media and government, but because business interests could no longer tolerate the social welfare gains of the post-war years. It was this that caused business to use its agents to both implement and justify a new agenda.

A false solution

Gutstein believes that progressives can achieve success by aping conservatives. Where conservatives identify liberals and leftists as their enemies, “progressives have to make…radical conservatives…the enemy” [29] abandoning their historical focus on “poverty, homelessness, inequality, poor healthcare, racism and sexism.” [30] These evils should never be lost sight of, he writes, but at the same time, they shouldn’t get in the way of targeting “radical” conservatives.

One of the implications of targeting “radical” conservatives is to vote strategically to stop their rise to elected office. But strategic voting by left-wing voters strengthens conservatives by pushing politics increasingly to the right. This happens in two ways. First, those who would otherwise vote for an authentic left alternative throw their weight behind a party which represents a position to the right of their views, in order to defeat conservatives who are even further to the right. This alone represents the skewing of political positions in electoral contests to the right of the base of political positions held by the voting population. Second, the parties that receive the votes of left-wing strategic voters (Labour in Britain, the Democrats in the United States, the Liberals and NDP in Canada), are given permission to move further to the right, in an effort to expand their appeal to cover right-wing voters, since they know that no matter how far right they move, left voters will move with them, so long as there are conservatives even further to the right who must be blocked. Targeting “radical” conservatives, then, rather than promoting authentic left-wing positions, is a self-defeating strategy that only guarantees further migration to the right.

In elaborating this approach, Gutstein urges progressive foundations to take a leaf from the playbooks of conservative foundations. Progressive foundations, he says, spend their money on “thousands of grassroots groups disconnected from one another and from national politics,” while conservative foundations fund a smaller number of “well-chosen think-tanks and advocacy organizations.” [31] Conservatives have “demonstrated that a successful political movement required building multi-issue organizations,” while progressive foundations spread their resources thin, distributing their more limited funding on “organizations engaged in one or a few issues.” [32] Gutstein assumes that once this truth is apprehended, progressive foundations will change their funding practices. But what he misses is the possibility that progressive foundations fund a multiplicity of disparate, single-issue organizations, by design. What wealthy liberals want no more than wealthy conservatives is an effective multi-issue political movement capable of challenging the privileges of corporations and the wealthy. Keeping the left fractured and disorganized, by doling out small donations to disparate groups working on single issues, is one way of preventing the rise of an effective, multi-issue organization. [33]

A multi-issue movement of the left that united its fractured parts would be more effective than the current agglomeration of single-issue groups, but what would it be united in pursuit of? In Gutstein’s view, it would unite to discredit “radical” conservatives, an enterprise which, if successful, would force governments to see the light and rein business in, so that business would be forced to return to the status of equal player in a pluralist debate mediated by a neutral government. This, however, flies in the face of reality. Business has always dominated the state in capitalist society. It may have appeared at certain points to many members of the corporate elite that the state was encroaching upon business interests more than was necessary to stabilize the society and secure the support of the working class, and at the same time, it may have appeared to members of the working class that the state was trying to balance the interests of labor and business, but there has never been any doubt that in a capitalist society the interests of capital are pre-eminent. There may be disagreements among the top shareholders and key executives of major corporations about the best way forward. Some may favor government intervention to stabilize the economy and to secure a basic level of economic security for the working class in order to build a stable society conducive to capital accumulation. Others may regard these interventions as unnecessary and prohibitively costly. Still others may look to permanent war, the mobilization of society against external threats (real or fabricated) and the promotion of religion, nationalism, racism and patriotism as alternatives to class, as the best way to stabilize society and perpetuate the rule of business. But in all cases, it is capital that is the dominant force.

Who is in the driver’s seat – and who ought to be?

Gutstein believes that there has been a fundamental shift in the balance of power over the last 30 years, where business, once reined in by government, has since slipped its reins, hijacked the government and media, and turned the corporate agenda into the government agenda. Let us accept Gutstein’s view for the moment, that it is indeed only in the last three decades that business has emerged to dominate government and the media. Whether corporate domination is inherent in capitalist society or only of recent origin, it remains the case that the present reality, as Gutstein notes, is that “Corporate power is in the driver’s seat. It has the money, organization and access to the media.” [34] How, then, does Gutstein propose that business be pushed from the driver’s seat? And who should replace it?

It would seem that the surest way to solve the problems of “poverty, homelessness, inequality, poor healthcare, racism and sexism” that Gutstein lists as the historical concerns of the left, is to replace business in the driver seat with the class that suffers most from these afflictions: the working class. Indeed, where the working class was, and currently is, in the driver’s seat, these evils were and have been nearly eliminated, if not abolished. In Cuba today and the socialist bloc before its demise, homelessness, poor healthcare, racism, sexism and extremes of income were largely eliminated, if not eradicated altogether. Since it is in the interest of the working class to deal with these problems but not in the interests of business to do the same, (except insofar as these problems threaten to destabilize society and business’s ability to accumulate capital), it would seem that the working class is the agent for this change. But that is not Gutstein’s view. As a pluralist, he wants to replace business in the driver’s seat with “neutral” elected politicians who will reconcile the clash between labor and capital. But can politicians be neutral in capitalist society? Since electoral success is highly sensitive to how much money and media support a candidate for elected office can command, and because business is in the best position to furnish candidates with the resources and media support they need to get elected, the capitalist system does not tend toward the production of neutral politicians. On the contrary, it tends toward the production of errand boys for business. What’s more, as already mentioned, politicians who operate within the framework of capitalism have no option but to make capitalism work, and that means, in the first instance, ensuring that the profit-making requirements of business are met above all else. This is true whether the government is conservative, centrist or social democratic. No government that operates within a capitalist framework is neutral.

If business is in the driver’s seat, “the money, organization and access to the media” that allowed it to move into the driver’s seat in the first instance, allows it, at the same time, to maintain its position and beat back challengers. How then does Gutstein propose that business be forced from its commanding position at the apex of society? The answer he offers is for progressives to unite to discredit “radical” conservatives and restore the credibility of the mixed economy and social welfare. This is shallow.

We have already seen, and Gutstein himself has shown, that social welfare, regulation, and public ownership never lost credibility with the bulk of people in capitalist society. The majority continues to regard these things as desirable, and yet these things are no longer part of the government agenda. This is so because public ownership, regulation and social welfare, lost credibility with business, and with its media and government agents, beginning in the mid-1970s. Indeed, the fundamental shift in the balance of power that Gutstein claims happened 30 years ago was really the loss in credibility of the welfare state among business and its representatives who dominate the state. This is why a conservative agenda was implemented despite continuing popular support for social welfare. Calling for a campaign to restore the credibility of the mixed economy and the welfare state can only mean restoring the credibility of social welfare capitalism among members of the ruling class, since this is the only class for which the credibility of public ownership, income redistribution and regulation, was lost. In other words, what Gutstein is proposing is that the public petition business and its agents in government to recreate the world as it was in North America from the end of World War II to the mid-1970s.

Since business and its agents will only implement a welfare state if it’s in their interests to do so, and since objectively, it’s not always or even often in their interests to grant a full panoply of concessions and reforms, the likelihood of this approach being successful is entirely dependent on the interests of business. If there are times when it would suit the profit-making imperatives of business to strengthen social welfare, concede advances in unionization, and allow a measure of public ownership, these reforms and concessions will be made…but at the discretion of the same business interests that are in the driver’s seat. Reform and concessions will, therefore, be contingent and revocable, and will be taken back at the earliest moment the welfare state is no longer judged by business to be in its interests. The lesson of the last three decades for the left is not to work to restore the credibility of social welfare capitalism, but for the working class itself to take control of the economy and to replace business in the driver seat. This is the only way to permanently end the evils that Gutstein calls the historical concerns of the left.

It should be noted that Gutstein’s views are representative of those of progressives who aim to persuade business and its agents that income redistribution, strong unions, and robust social programs are a pathway to growth and prosperity, not burdens which reduce profit-margins. This Panglossian view, which also seeks an equal status for, or partnership between, labor and capital, holds that social democracy is a win-win for both classes. This view carries little weight with business, which recognizes that an irreconcilable antagonism exists between its interests and labor’s, and that if it can get away with paying less tax and lower wages, so much the better. The progressive argument that business could reap higher profits if it paid more taxes and raised wages is, not surprisingly, dismissed by business as nonsense. As to the view that a partnership between business and labor is democratic, this can be dismissed as nonsense too, for even if we were to suppose that labor and capital could have an equal status in capitalist society, it would be a strange democracy in which the 90 percent or more of the population that makes up labor had a voice only equal to the 10 percent or less that constitutes capital.

The limits of progressive thought

To summarize the problems with Gutstein’s analysis:

1. The post-war period may have been a time of robust growth and prosperity in Canada and the United States, but it does not follow that robust growth and prosperity were caused by a mixed economy, expanded union rights and the construction of a social safety net. What’s more, the United States economy has never been mixed, and the Canadian economy has only ever been mildly so. Pent-up demand following the restraint and shortages of the war years, the stepped up military spending of the Cold War, the space race and the expansion of the automobile and allied industries, contributed to making the post-war period a time of growth and prosperity. The role these factors played in creating growth and prosperity, alongside the industrial monopoly enjoyed by North American business for the greater part of the post-war period, allowed a social safety net to be built. The ideological imperative of meeting the social welfare standards established by the Communist countries provided the impetus to do so. The smaller size of the global capitalist workforce prior to its doubling with the collapse of the socialist bloc and the opening of China and India to foreign investment, checked the strong downward pressure on wages that would soon follow. The location of production in advanced industrial countries prior to the advances in telecommunications and transportation that allowed production to be relocated to non-union areas and low-wage countries also supported strong unions and higher wages.

2. While business recruited “radical” conservatives to promote neo-liberal and neo-conservative ideologies, the business propaganda machine has not been the astonishing success Gutstein say it has been. On the contrary, it has failed miserably in changing the beliefs and attitudes of the majority about social welfare, regulation and public ownership. And yet, the social welfare state has been largely dismantled and unions weakened. Business and is errand boys in government didn’t manufacture consent among members of the working class for these changes; they simply went ahead and made them.

3. Business did not hijack the media and government after profits declined and inflation rose in the 1970s. Media corporations, business themselves, are by their very nature corporate agents, while governments have long acted in the interests of business, because they have regularly been led by ambitious lawyers (typically), recruited, trained and financed by the corporate rich, and often by the corporate rich themselves, and because any government that willingly works within the context of capitalism must accommodate the profit-making interests of business, or risk its rule being destabilized.

4. By virtue of its ownership and control of the economy, business is in a position to use its immense wealth to undermine laws intended to rein in it, and to tilt the playing field in its favor. In a capitalist society, business wields too much power for it ever to be but one voice in a pluralist contest mediated by a neutral state. Business control of the economy and the wealth it allows it to accumulate furnishes business with the means to buy the media, lobbyists and politicians to undermine regulation.

5. Wealthy liberals are no more interested in building effective movements to challenge their wealth and privileges than wealthy conservatives are. While a coordinated, organized and disciplined multi-issue organization is necessary to successfully advance left-wing goals, the role traditionally played by liberal philanthropists in their relationship with the left has been one of co-opting moderates and splintering the left into disparate, single-issue groups, organized around concerns other than class (gender, race, poverty, environmentalism, and so on.) Any serious effort to secure advances for the working class will not be funded by those most likely to be adversely affected.

While each of the above issues is important alone, all can be more readily addressed within a publicly-owned, rationally planned economy than within the framework of capitalism. Progress in eliminating racism, sexism and in providing basic economic security came much faster and went much further in the Soviet Union and other socialist countries than in advanced capitalist countries. While progress toward the resolution of important problems does happen within capitalism, it happens in a slow, fitful manner, without the determined energy that has characterized the history of socialist countries. A commitment to building socialism is a more certain and rapid path to eliminating these scourges than attempting to secure gradual, piecemeal change within capitalism. With the world being driven headlong into environmental disaster by the competitive lash of capitalism, gradual, piecemeal reforms are not an option.


Contrary to Gutstein’s thesis, government and the media weren’t hijacked three decades ago. They have always been agents of corporate rule. However, three decades ago, the welfare state lost credibility with business and its representatives in government and the media because it no longer served business interests. Strong unions, labor militancy, rising popular expectations and demands for the expansion of the welfare state, and the crisis of stagflation, combined to encroach upon business interests to a degree business was no longer willing to tolerate. In a backlash against labor, unions were attacked, social safety nets were shredded, and the taxes of corporations and the wealthy were slashed. The backlash was facilitated by advances in shipping and telecommunications, which allowed production to be relocated to non-union areas and low-wage countries. The doubling of the global capitalist workforce, which occurred as a result of the opening of China and India to foreign investment, and the collapse of the Warsaw Bloc, helped to drive wages down. [35] The ideology propagated by “radical” conservatives who organized themselves into corporate-funded think-tanks justified the new agenda, but didn’t cause it.

Gutstein and other progressives think it’s possible to turn back the hands of time. They want to return North America to a post-war capitalism. But returning to the post-war welfare state means recreating the material conditions of the post-war years, something no amount of counter-hegemonic progressive propaganda can achieve. Those days are gone, and while they may have been comfortable for white, male workers in the United States and Canada, they were not a nostalgic period for women and racial minorities in the global north, nor for the greater part of humanity in the global south whose oppression the social welfare gains of the north partly defrayed.

The lesson of the last three decades for the left is not, as Gutstein concludes, to work to restore the credibility of welfare capitalism, but to face up to the reality of what happens when working class movements fail to take the driver’s seat themselves, and allow business to keep its hands on the wheel. Left in place to drive the car, the major shareholders and board members of the top corporations steer in the direction that suits themselves, veering only slightly off course when the passengers, or the conditions of the road, leave them no other choice. But the road of capitalism is narrow, and business absolutely will not steer off the road, though it is in another direction that the interests of the car’s working class passengers lie. As Gutstein points out, “poverty, homelessness, inequality, poor healthcare, racism and sexism” are the traditional concerns of the left, and it is in societies in which the working class has come to power that these evils have been greatly reduced, if not eradicated altogether. By contrast, in societies in which business has been left in the driver’s seat or where labor attempts to share power with business, progressive gains, if they’ve gone far at all, are almost always temporary, revoked the moment business needs to take them back and is strong enough to do so. No, the lesson of the last three decades for the left is not to work to restore the credibility of social welfare capitalism, but for the working class itself to take control of the economy and to replace business in the driver seat. This is the only way to permanently secure the benefits business temporarily ceded to one section of the global working class during the post-war period, and to make them a reality for all.

1. Donald Gutstein, Not a Conspiracy Theory: How Business Hijacks Democracy, Key Porter Books, 2009, p. 315.
2. Gutstein, p. 59.
3. Gutstein, p. 57.
4. Gutstein, p. 17.
5. Gutstein, p. 315.
6. Gutstein, p. 58.
7. Gutstein, p. 304.
8. Jennifer Agiesta and Jon Cohen, “Public opinion in U.S. turns against the war,” The Washington Post, August 20, 2009; John F. Burns, “Brown pledges to maintain Britain’s Afghan forces,” The New York Times, September 5, 2009; Julian E. Barnes, “Doubt raised on troop boost in Afghanistan war,” The Los Angeles Times, September 11, 2009; Linda McQuaig, “NATO is an unwelcome wedding guest,” The Toronto Star, July 28, 2009; “Just 40% of US back Afghan conflict,” The Morning Star (UK), October 8, 2009; Eric Schmitt and Steven Erlanger, “U.S. seeks 10,000 troops from its allies in Afghanistan,” The New York Times, November 26, 2009.
9. GlobeScan, “Wide Dissatisfaction with Capitalism — Twenty Years after Fall of Berlin Wall,” November 9, 2009,
10. Gutstein, p. 80.
11. Gutstein, p. 303.
12. Gutstein, p. 58.
13. Gutstein, p. 66.
14. Ibid.
15. Gutstein, p. 92.
16. Gutstein, p. 63.
17. Ibid. One of the people involved in the post-World War I campaign was Ivy Ledbetter Lee who “helped John D. Rockefeller clean up his reputation.” This was done by establishing the Rockefeller Foundation. Being liberal, Rockefeller’s philanthropy escapes Gutstein’s critical gaze.
18. Gutstein, p. 70.
19. Ibid. It’s curious that Gutstein considers private enterprise ideology to be uniquely dominant in North America. While it’s true that social programs and unions are stronger in other places (Western Europe, for example), it would be an exaggeration to say that private enterprise ideology isn’t dominant among mainstream journalists and media commentators, top level civil servants and political parties, including labor, socialist and social democratic parties, outside of North America. It is not, however, dominant among the majority, as shown above.
20. Gutstein, p. 315.
21. Gutstein, p. 11-12.
22. Gutstein, p. 73.
23. Paul Sweezy, “Power elite or ruling class?” Monthly Review Pamphlet Series, No. 13.
24. G. William Domhoff, Who Rules America? Power, Politics and Social Change, McGraw-Hill, 2005.
25. Gutstein, p. 30.
26. Gutstein, p. 56.
27. Paul A. Baran and Paul M. Sweezy, Monopoly Capital: An Essay on the American Economic and Social Order, Monthly Review Press, April, 2009.
28. Fred Goldstein, Low-Wage Capitalism: Colossus with Feet of Clay, World View Forum, New York, 2008.
29. Gutstein, p. 309.
30. Ibid.
31. Gutstein, p. 318.
32. Ibid.
33. Joan Roelofs, Foundations and Public Policy: The Mask of Pluralism, State University of New York Press, 2003; See also Michael James Barker’s web-log, Barker has written extensively on liberal philanthropies and their role in manipulating democracy.
34. Gutstein, p. 292.
35. Goldstein.

Polls show a spectre is haunting Europe…and much of the rest of the world

By Stephen Gowans

Just two months before the West celebrated the 20th anniversary of the events that would lead to the collapse of communism in Eastern Europe, the Pew Global Attitudes Project, a polling organization funded by a tax-exempt trust established by the founder of the Sun Oil company, conducted a poll that showed that Eastern Europeans are decidedly gloomy about their lives under capitalist democracy.

Available from Baraka Books
While Western media and politicians spoke glowingly of Eastern Europeans embracing freedom and regular multi-party elections, Russians, Poles, Bulgarians, Ukrainians and other residents of former communist states complained to the Pew pollsters about being worse off today than under communism, about their dissatisfaction with capitalist democracy, and about the transition from communism to capitalism benefiting business owners and politicians, not ordinary people.

The poll revealed that what Eastern Europeans really think about life under capitalism is a far cry from the picture painted by US and British journalists, who, in their celebration of the 20th anniversary of the opening of the Berlin Wall, mostly presented the events of 1989 to 1991 through the eyes of dissidents and business owners rather than ordinary people. “Our voice, the voice of those whose lives were improved by communism,” remarked Zsuzsanna Clark, who has written a book about her life growing up in communist Hungary, “is seldom heard when it comes to discussions of what life was like behind the Iron Curtain. Instead, the accounts we hear in the West are nearly always from the perspectives of wealthy émigrés or anti-communist dissidents with an axe to grind.” [1]

The poll of 14,760 Eastern Europeans was conducted in August and September in eight countries: Bulgaria, the Czech Republic, Hungary, Lithuania, Poland, Russia, Slovakia and Ukraine. [2]

According to the poll, one-half of Eastern Europeans say they’re worse off today than they were under communism. Only one-third say they’re better off. [3]

The chief beneficiaries of the collapse of communism, according to eight of 10, have been business owners. More than 90 percent say politicians have also benefited. But less than one-quarter say ordinary people have reaped any advantage.

Other findings:

• Only one-third of Eastern Europeans believe their country is run for the benefit of all people.

• Only one in three is satisfied with capitalist democracy.

• Only one-quarter believes that most elected officials care what ordinary people think.

The failure of Eastern Europeans to laud their retrogression from full employment and freedom from economic insecurity under communism to high rates of unemployment and the tyranny of the market under capitalism was chalked up to cultural retardation in one New York Times article. “We have created democratic institutions, but we are missing the democratic-political culture to make them effective,” a Bulgarian academic explained. [4]

Rather than being a neutral observer, the Pew Global Attitudes Project is an integral part of a public relations program of imbuing Eastern Europeans with the right culture – a public relations project that has failed miserably.

Funded by the wealth sweated out of oil industry labor by Sun Oil Company founder, Joseph Pew, the Pew Charitable Trust channels money to organizations and individuals that work toward propping up, legitimizing and disseminating capitalist ideology and weakening capitalism’s opponents.

The Pew Global Attitudes Project is part of this wider project. It monitors global attitudes, as an early warning system, to detect growing dissatisfaction with capitalism so that defensive measures can be taken to pre-empt possible challenges to the capitalist state. It also sets benchmarks, to monitor progress in inculcating global populations with attitudes favorable to capitalism.

What is likely to trouble the poll’s sponsors is the continued commitment of Eastern Europeans to the values of solidarity and welfare that characterized communism. Two-thirds of the residents of the former Warsaw Pact countries continue to cleave to one of the defining values of communism: that it’s more important that the state play an active role in guaranteeing that nobody is in need than it is for everyone to be free to pursue their life’s goals without interference from the state.

If the Pew poll points to the tenacity of pro-socialist values in Eastern Europe, a GlobeScan poll conducted in 27 countries, representing 70 percent of the world’s population, shows that most people in the world are social democrats, while a sizeable number are anti-capitalist. [5]

One-half of the world’s population living in areas in which capitalism is the dominant economic system hold social democratic views, believing that capitalism’s problems can be solved through reforms and stricter regulation, while one in five are radicals, believing capitalism is fatally flawed and a new economic system is required. The remainder, 30 percent, hold laissez-faire capitalist views, believing capitalism works well and should not be subject to reforms and government oversight. [6]

GlobeScan is a strategic issues management firm that provides public relations advice to governments and transnational corporations. To survey global attitudes toward capitalism, GlobeScan partnered with the Program on International Policy Attitudes, an organization funded by the Ford, Carnegie, Rockefeller and other capitalist foundations, which largely exist to burnish the reputation of capitalism. GlobeScan also does work for the World Bank and World Trade Organization.

The poll found that a clear majority of the world’s population favors policies traditionally associated with socialism, including public ownership of major industries, redistribution of wealth, and an active role for governments in regulating businesses.

According to the poll, 62 percent of adults living in the world’s capitalist areas would like governments to play some role in owning or controlling major industries, while 44 percent believe governments should play an even more active role than they play today.

At the same time, three-quarters want governments to distribute wealth more evenly and 60 percent favor governments being more active in redistributing income.

Seven of 10 of the 29,000 people polled by GlobeScan say governments should play at least as much of a role in regulating businesses as they play today, while 55 percent believe governments should play an even stronger role.

The poll, which sampled opinion in the Americas, Europe, Asia, Africa and Australia, revealed that the greatest percentage of radicals is in France, where 43 percent believe capitalism should be replaced by a different system. (Three-quarters of French citizens, according to the Pew poll, believe that government providing for the basic needs of all is more important than ensuring individuals can pursue personal goals without government interference.) By contrast, Japan, Germany and the United States have the smallest percentage of radicals. Only 10 percent in these countries believe capitalism is fatally flawed and needs to be replaced.

On balance, the GlobeScan survey of world opinion shows that in the world’s capitalist areas, a majority remains unwilling to write capitalism off as fatally flawed, but recognizes the system’s problems are severe enough to warrant public ownership, income redistribution and regulatory measures as correctives. While this may appear to be a pessimistic finding to those who favour a clear break with capitalism, public ownership, regulation of enterprises (through central planning) and a sharp reduction in income inequality were central planks of the economic policies of countries that broke decisively with capitalism after 1917 and World War II. Despite a reluctance to reject capitalism entirely, the world’s majority favors decidedly socialist policies.

Taken together, the two polls show that the political attitudes of the world’s population reflect the majority’s position in the world economy as sellers of their own labor, vulnerable to the vicissitudes of the labor market and faced by growing economic insecurity. Eastern Europeans recognize that capitalist democracy benefits business owners and politicians, not ordinary people, and that elected officials are not responsive to the majority. They are also dissatisfied with capitalist democracy and believe that life was better under communism. A majority of the world’s population favours a traditional socialist policy of government ownership and control of the commanding heights of the economy and calls for governments to play more of a role in distributing wealth evenly, an expression of a commitment to egalitarian values. And while half of the world’s population believes that capitalism’s flaws are remediable, a large majority, 70 percent, recognizes that capitalism is a flawed system.

The polls suggest that most people are socialists, whether they recognize themselves as such, or would use the word to describe their core political values. That they routinely vote for parties of private property is not indicative of the majority’s political orientation. A substantial number of people don’t vote, recognizing, as Eastern Europeans do, that elected officials do not work on behalf of the interests of ordinary people and that the state operates in the interests of business owners. Those who do vote, often vote against parties and policies they don’t want, finding no parties that advocate policies they do want, settling for the lesser evil. Pro-capitalist parties command a virtual monopoly on the resources required to run the marketing campaigns necessary to win elections, meaning they are often the only choice voters are aware of. And many people shy away from parties that advocate anti-capitalist positions for fear that if the parties come to power they will provoke businesses to move elsewhere or curtail investment, thereby touching off an economic crisis, leading to the loss of their jobs.

The polls underscore that the goal for those who advocate a radical solution to capitalism’s problems is to show that the widely-favoured policies of public ownership, income redistribution and tighter regulation, without a wholesale rejection of capitalism, cannot bring about the intended benefits in any lasting way.

The Pew poll also shows that history’s lone top-to-bottom alternative to capitalism, the socialist states of Eastern Europe, were not rejected holus-bolus by the people who lived in them, and that the popular reaction to the successor capitalist regimes does not warrant the celebratory retrospectives on the “fall of the Berlin Wall” and the collapse of communism favoured by the Western media.


1. Zsuzsanna Clark, “Oppressive and grey? No, growing up under communism was the happiest time of my life,” The Mail on Sunday (UK), October 17, 2009.

2. The Pew Global Attitudes Project, “Two decades after the Wall’s fall: End of Communism cheered but now with more reservations,” November 2, 2009.

3. All figures represent averages weighted by country population.

4. Matthew Brunwasser, “Bulgaria still stuck in trauma of transition,” The New York Times, November 11, 2009.

5. PIPA and GLobeScan, “Wide Dissatisfaction with Capitalism — Twenty Years after Fall of Berlin Wall,” November 9, 2009,

6. All figures represent averages weighted by country population.

Democracy, East Germany and the Berlin Wall

The GDR was more democratic, in the original and substantive sense of the word, than eastern Germany was before 1949 and than the former East Germany has become since the Berlin Wall was opened in 1989. It was also more democratic in this original sense than its neighbor, West Germany. While it played a role in the GDR’s eventual demise, the Berlin Wall was at the time a necessary defensive measure to protect a substantively democratic society from being undermined by a hostile neighbor bent on annexing it.

By Stephen Gowans

Available from Baraka Books
While East Germany (the German Democratic Republic, or GDR) wasn’t a ‘workers’ paradise’, it was in many respects a highly attractive model that was responsive to the basic needs of the mass of people and therefore was democratic in the substantive and original sense of the word. It offered generous pensions, guaranteed employment, equality of the sexes and substantial wage equality, free healthcare and education, and a growing array of other free and virtually free goods and services. It was poorer than its West German neighbor, the Federal Republic of Germany, or FRG, but it started at a lower level of economic development and was forced to bear the burden of indemnifying the Soviet Union for the massive losses Germany inflicted upon the USSR in World War II. These conditions were largely responsible for the less attractive aspects of life in the GDR: lower pay, longer hours, and fewer and poorer consumer goods compared to West Germany, and restrictions on travel to the West. When the Berlin Wall was open in 1989, a majority of the GDR’s citizens remained committed to the socialist basis of their society and wished to retain it. [1] It wasn’t the country’s central planning and public ownership they rebelled against. These things produced what was best about the country. And while Cold War propaganda located East Germany well outside the ‘free world,’ political repression and the Stasi, the East German state security service, weren’t at the root of East Germans’ rebellion either. Ultimately, what the citizens of the GDR rebelled against was their comparative poverty. But this had nothing to do with socialism. East Germans were poorer than West Germans even before the Western powers divided Germany in the late 1940s, and remain poorer today. A capitalist East Germany, forced to start at a lower level of economic development and to disgorge war reparation payments to the USSR, would not have become the social welfare consumer society West Germany became and East Germans aspired after, but would have been at least as worse off as the GDR was, and probably much worse off, and without the socialist attractions of economic security and greater equality. Moreover, without the need to compete against an ideological rival, it’s doubtful the West German ruling class would have been under as much pressure to make concessions on wages and benefits. West Germans, then, owed many of their social welfare gains to the fact their neighbour to the east was socialist and not capitalist.

The Western powers divide Germany

While the distortions of Cold War history would lead one to believe it was the Soviets who divided Germany, the Western powers were the true authors of Germany’s division. The Allies agreed at the February 1945 Yalta conference that while Germany would be partitioned into British, US and Soviet occupation zones, the defeated Germany would be administered jointly. [2] The hope of the Soviets, who had been invaded by Germany in both first and second world wars, was for a united, disarmed and neutral Germany. The Soviet’s goals were two-fold: First, Germany would be demilitarized, so that it could not launch a third war of aggression against the Soviet Union. Second, it would pay reparations for the massive damages it inflicted upon the USSR, calculated after the war to exceed $100 billion. [3]

Courtesy of Brendan Stone

The Western powers, however, had other plans. The United States wanted to revive Germany economically to ensure it would be available as a rich market capable of absorbing US exports and capital investment. The United States had remained on the sidelines through a good part of the war, largely avoiding the damage that ruined its rivals, while at the same time acting as armorer to the Allies. At the end of the war, Britain, France, Germany, Japan and the USSR lay in ruins, while the US ruling class was bursting at the seams with war industry profits. The prospects for the post-war US economy, however, and hence for the industrialists, bankers and investors who dominated the country’s political decision-making, were dim unless new life could be breathed into collapsed foreign markets, which would be needed to absorb US exports and capital. An economically revived Germany was therefore an important part of the plan to secure the United States’ economic future. The idea of a Germany forced to pour out massive reparation payments to the USSR was intolerable to US policy makers: it would militate against the transformation of Germany into a sphere of profit-making for US capital, and would underwrite the rebuilding of an ideological competitor.

The United States intended to make post-war life as difficult as possible for the Soviet Union. There were a number of reasons for this, not least to prevent the USSR from becoming a model for other countries. Already, socialism had eliminated the United States’ access to markets and spheres of investment in one-sixth of the earth’s territory. The US ruling class didn’t want the USSR to provide inspiration and material aid to other countries to follow the same path. The lead role of communists in the resistance movements in Europe, “the success of the Soviet Union in defeating Nazi Germany,” and “the success of the Soviet Union in industrializing and modernizing,” [4] had greatly raised the prestige of the USSR and enhanced the popularity of communism. Unless measures were taken to check the USSR’s growing popularity, socialism would continue to advance and the area open to US exports and investment would continue to contract. A Germany paying reparations to the Soviets was clearly at odds with the goals of reviving Germany and holding the Soviet Union in check. What’s more, while the Soviets wanted Germany to be permanently disarmed as a safeguard against German revanchism, the United States recognized that a militarized Germany under US domination could play a central role in undermining the USSR.

The division of Germany began in 1946, when the French decided to administer their zone separately. [5] Soon, the Western powers merged their three zones into a single economic unit and announced they would no longer pay reparations to the Soviet Union. The burden would have to be borne by the Soviet occupation zone alone, which was smaller and less industrialized, and therefore less able to offer compensation.

In 1949, the informal division of Germany was formalized with the proclamation by the Western powers of a separate West German state, the FRG. The new state would be based on a constitution written by Washington and imposed on West Germans, without their ratification. (The GDR’s constitution, by contrast, was ratified by East Germans.) In 1954, West Germany was integrated into a new anti-Soviet military alliance, NATO, which, in its objectives, aped the earlier anti-Comintern pact of the Axis powers. The goal of the anti-Comintern pact was to oppose the Soviet Union and world communism. NATO, with a militarized West Germany, would take over from where the Axis left off.

The GDR was founded in 1949, only after the Western powers created the FRG. The Soviets had no interest in transforming the Soviet occupation zone into a separate state and complained bitterly about the Western powers’ division of Germany. Moscow wanted Germany to remain unified, but demilitarized and neutral and committed to paying war reparations to help the USSR get back on its feet. As late as 1954, the Soviets offered to dissolve the GDR in favour of free elections under international supervision, leading to the creation of a unified, unaligned, Germany. This, however, clashed with the Western powers’ plan of evading Germany’s responsibility for paying war reparations and of integrating West Germany into the new anti-Soviet, anti-communist military alliance. The proposal was, accordingly, rejected. George Kennan, the architect of the US policy of ‘containing’ (read undermining) the Soviet Union, remarked: “The trend of our thinking means that we do not want to see Germany reunified at this time, and that there are no conditions on which we would really find such a solution satisfactory.” [6]

This placed the anti-fascist working class leadership of the GDR in a difficult position. The GDR comprised only one-third of German territory and had a population of 17 million. By comparison, the FRG comprised 63 million people and made up two-thirds of German territory. [7] Less industrialized than the West, the new GDR started out poorer than its new capitalist rival. Per capita income was about 27 percent lower than in the West. [8] Much of the militant section of the working class, which would have ardently supported a socialist state, had been liquidated by the Nazis. The burden of paying war reparations to the Soviets now had to be borne solely by the GDR. And West Germany ceaselessly harassed and sabotaged its neighbor, refusing to recognize it as a sovereign state, regarding it instead as its own territory temporarily under Soviet occupation. [9] Repeatedly, West Germany proclaimed that its official policy was the annexation of its neighbor to the east.

The GDR’s leaders faced still other challenges. Compared to the West, East Germany suffered greater losses in the war. [10] The US Army stripped the East of its scientists, technicians and technical know-how, kidnapping “thousands of managers, engineers, and all sorts of experts, as well as the best scientists – the brains of Germany’s East – from their factories, universities, and homes in Saxony and Thuringia in order to put them to work to the advantage of the Americans in the Western zone – or simply to have them waste away there.” [11]

As Pauwels explains,

“During the last weeks of the hostilities the Americans themselves had occupied a considerable part of the Soviet zone, namely Thuringia and much of Saxony. When they pulled out at the end of June, 1945, they brought back to the West more than 10,000 railway cars full of the newest and best equipment, patents, blueprints, and so on from the firm Carl Zeiss in Jena and the local plants of other top enterprises such as Siemens, Telefunken, BMW, Krupp, Junkers, and IG-Farben. This East German war booty included plunder from the Nazi V-2 factory in Nordhausen: not only the rockets, but also technical documents with an estimated value of 400 to 500 million dollars, as well as approximately 1,200 captured German experts in rocket technology, one of whom being the notorious Wernher von Braun.” [12]

The Allies agreed at Yalta that a post-war Germany would pay the Soviet Union $10 billion in compensation for the damages inflicted on the USSR during the war. This was a paltry sum compared to the more realistic estimate of $128 billion arrived at after the war. And yet the Soviets were short changed on even this meagre sum. The USSR received no more than $5.1 billion from the two German states, most of it from the GDR. The Soviets took $4.5 billion out of East Germany, carting away whole factories and railways, while the larger and richer FRG paid a miserable $600 million. The effect was the virtual deindustrialization of the East. [13] In the end, the GDR would compensate both the United States (which suffered virtually no damage in World War II) through the loss of its scientists, technicians, blue-prints, patents and so on, and the Soviet Union (which suffered immense losses and deserved to be compensated), through the loss of its factories and railways. Moreover, the United States offered substantial aid to West Germany to help it rebuild, while the poorer Soviet Union, which had been devastated by the German invasion, lacked the resources to invest in the GDR. [14] The West was rebuilt; the East stripped bare.

The GDR’s democratic achievements

Despite the many burdens it faced, the GDR managed to build a standard of living higher than that of the USSR “and that of millions of inhabitants of the American ghettoes, of countless poor white Americans, and of the population of most Third World countries that have been integrated willy-nilly with the international capitalist world system.” [15]

Over 90 percent of the GDR’s productive assets were owned by the country’s citizens collectively, while in West Germany productive assets remained privately owned, concentrated in a few hands. [16] Because the GDR’s economy was almost entirely publicly owned and the leadership was socialist, the economic surplus that people produced on the job went into a social fund to make the lives of everyone better rather than into the pockets of shareholders, bondholders, landowners and bankers. [17] Out of the social fund came subsidies for food, clothing, rent, public transportation, as well as cultural, social and recreational activities. Wages weren’t as high as in the West, but a growing number of essential goods and services were free or virtually free. Rents, for example, were very low. As a consequence, there were no evictions and there was no homelessness. Education was free through university, and university students received stipends to cover living expenses. Healthcare was also free. Childcare was highly subsidized.

Courtesy of Brendan Stone

Differences in income levels were narrow, with higher wages paid to those working in particularly strenuous or dangerous occupations. Full gender equality was mandated by law and men and women were paid equally for the same work, long before gender equality was taken up as an issue in the West. What’s more, everyone had a right to a job. There was no unemployment in the GDR.

Rather than supporting systems of oppression and exploitation, as the advanced capitalist countries did in Africa, Latin America and Asia, the GDR assisted the people of the global South in their struggles against colonialism. Doctors were dispatched to Vietnam, Mozambique and Angola, and students from many Third World countries were trained and educated in the GDR at the GDR’s expense.

Even the Wall Street Journal recognized the GDR’s achievements. In February, 1989, just months before the opening of the Berlin Wall, the US ruling class’s principal daily newspaper announced that the GDR “has no debt problem. The 17 million East Germans earn 30 percent more than their next richest partners, the Czechoslovaks, and not much less than the English. East Germans build 32-bit mini-computers and a socialist ‘Walkman’ and the only queue in East Berlin forms at the opera.” [18]

The downside was that compared to West Germany, wages were lower, hours of work were longer, and there were fewer consumer goods. Also, consumer goods tended to be inferior compared to those available in West Germany. And there were travel restrictions. Skilled workers were prevented from travelling to the West. But at the same time, vacations were subsidized, and East Germans could travel throughout the socialist bloc.

Greater efficiencies

West Germany’s comparative wealth offered many advantages in its ideological battle with socialism. For one, the wealth differential could be attributed deceptively to the merits of capitalism versus socialism. East Germany was poorer, it was said, not because it unfairly bore the brunt of indemnifying the Soviets for their war losses, and not because it started on a lower rung, but because public ownership and central planning were inherently inefficient. The truth of the matter, however, was that East German socialism was more efficient than West German capitalism, producing faster growth rates, and was more responsive to the basic needs of its population. “East Germany’s national income grew in real terms about two percent faster annually that the West German economy between 1961 and 1989.” [19]

The GDR was also less repressive politically. Following in the footsteps of Hitler, West Germany banned the Communist Party in the 1950s, and close tabs were kept by West Germany’s own secret police on anyone openly expressing Marxist-Leninist views. Marxist-Leninists were barred from working in the public service and frequently lost private sector jobs owing to their political views. In the GDR, by contrast, those who expressed views at odds with the dominant Marxist-Leninist ideology did not lose their jobs, and were not cut off from the state’s generous social supports, though they too were monitored by the GDR’s state police. The penalty for dissenting from the dominant political ideology in the West (loss of income) was more severe than in the East. [20]

The claim that the GDR’s socialism was less efficient than West Germany’s capitalism was predicated on the disparity in wealth between the two countries, but the roots of the disparity were external to the two countries’ respective systems of ownership, and the disparity existed prior to 1949 (at which point GDP per capita was about 43 percent higher in the West) and continued to exist after 1989 (when unemployment – once virtually eliminated — soared and remains today double what it is in the former West Germany.) Over the four decades of its existence, East German socialism attenuated the disparity, bringing the GDR closer to West Germany’s GDP per capita. Significantly, “real economic growth in all of Eastern Europe under communism was estimated to be higher than in Western Europe under capitalism (as well as higher than that in the USA) even in communism’s final decade (the 1980s).” After the opening of the Berlin Wall, with capitalism restored, “real economic output fell by over 30 percent in Eastern Europe as a whole in the 1990s.” [21]

But the GDR’s faster growth rates from 1961 to 1989 tell only part of the story. It’s possible for GDP to grow rapidly, with few of the benefits reaching the bulk of the population. The United States spends more on healthcare as a percentage of its GDP than all other countries, but US life expectancy and infant mortality results are worse than in many other countries which spend less (but have more efficient public health insurance or socialized systems.) This is due to the reality that healthcare is unequally distributed in the United States, with the wealthy in a position to buy the best healthcare in the world while tens of millions of low-income US citizens can afford no or only inadequate healthcare. By contrast, in most advanced capitalist countries everyone has access to basic (though typically not comprehensive) healthcare. In socialist Cuba, comprehensive healthcare is free to all. What’s important, then, is not only how much wealth (or healthcare) a society creates, but also how a society’s wealth (or healthcare) is distributed. Wealth was far more evenly distributed in socialist countries than it was in capitalist countries. The mean Gini coefficient – a measure of income equality which runs from 0 (perfect equality) to 1 (perfect inequality) – was 0.24 for socialist countries in 1970 compared to 0.48 for capitalist countries. [22]

Socialist countries also fared better at meeting their citizens’ basic needs. Compared to all capitalist countries, socialist countries had higher life expectancies, lower levels of infant mortality, and higher levels of literacy. However, the comparison of all socialist countries with all capitalist countries is unfair, because the group of capitalist countries comprises many more countries unable to effectively meet the basic needs of their populations owing to their low level of economic development. While capitalism is often associated with the world’s richest countries, the world’s poorest countries are also capitalist. Desperately poor Haiti, for example, is a capitalist country, while neighboring Cuba, richer and vastly more responsive to the needs of its citizens, is socialist. We would expect socialist countries to have done a better job at meeting the basic needs of their citizens, because they were richer, on average, than all capitalist countries together. But the conclusion still stands if socialist countries are compared with capitalist countries at the same level of economic development; that is, socialist countries did a better job of meeting their citizens’ basic needs compared to capitalist countries in the same income range. Even when comparing socialist countries to the richest capitalist countries, the socialist countries fared well, meeting their citizens’ basic needs as well as advanced capitalist countries met the needs of their citizens, despite the socialist countries’ lower level of economic development and fewer resources. [23] In terms of meeting basic needs, then, socialism was more efficient: it did more with less.

Why were socialist countries, like the GDR, more efficient? First, socialist societies were committed to improving the living standards of the mass of people as their first aim (whereas capitalist countries are organized around profit-maximization as their principle goal – a goal linked to a minority that owns capital and land and derives its income from profits, rent and interest, that is, the exploitation of other people’s labor, rather than wages.) Secondly, the economic surplus the citizens of socialist countries produced was channelled into making life better for everyone (whereas in capitalist countries the economic surplus goes straight to shareholders, bondholders, landowners and bankers.) This made socialism more democratic than capitalism in three ways:

• It was more equal. (Capitalism, by contrast, produces inequality.)

• It worked toward improving as much as possible the lot of the classes which have no other means of existence but the labor of their hands or brains and which comprise the vast majority of people. (Capitalist societies, on the other hand, defend and promote the interests of the minority that owns capital.)

• It guaranteed economic and social rights. (By comparison, capitalist societies emphasize political and civil liberties, i.e., protections against the majority using its greater numbers to encroach upon the privileges of the minority that owns and controls the economy.)

As will be discussed below, even when it came to political (as distinct from social and economic) democracy, the differences between East and West Germany were more illusory than real.

Stanching the outward migration of skilled workers

Despite the many advantages the GDR offered, it remained less affluent throughout its four decades compared to its capitalist neighbor to the west. For many “the lure of higher salaries and business opportunities in the West remained strong.” [24] As a result, in its first decade, East Germany’s population shrunk by 10 percent. [25] And while higher wages proved to be an irresistible temptation to East Germans who stressed personal aggrandizement over egalitarian values and social security, the FRG – keen to weaken the GDR – did much to sweeten the pot, offering economic inducements to skilled East Germans to move west. Working-age, but not retired, East Germans were offered interest-free loans, access to scarce apartments, immediate citizenship and compensation for property left behind, to relocate to the West. [26]

Courtesy of Brendan Stone

By 1961, the East German government decided that defensive measures needed to be taken, otherwise its population would be depleted of people with important skills vital to building a prosperous society. East German citizens would be barred from entering West Germany without special permission, while West Germans would be prevented from freely entering the GDR. The latter restriction was needed to break up black market currency trading, and to inhibit espionage and sabotage carried out by West German agents. [27] Walls, fences, minefields and other barriers were deployed along the length of the East’s border with the West. Many of the obstacles had existed for years, but until 1961, Berlin – partitioned between the West and East – remained free of physical barriers. The Berlin Wall – the GDR leadership’s solution to the problems of population depletion and Western sabotage and espionage — went up on August 13, 1961. [28]

From 1961 to 1989, 756 East German escapees, an average of 30 per year, were either shot, drown, blown apart by mines or committed suicide after being captured. By comparison, hundreds of Mexicans die every year trying to escape poor Mexico into the far wealthier United States. [29] Approximately 50,000 East Germans were captured trying to cross the border into West Germany from 1961 to 1989. Those who were caught served prison sentences of one year. [30]

Over time, the GDR gradually relaxed its border controls, allowing working-age East Germans to visit the West if there was little risk of their not returning. While in the 1960s, only retirees over the age of 65 were permitted to travel to the West, by the 1980s, East Germans 50 years of age or older were allowed to cross the border. Those with relatives in the FRG were also allowed to visit. By 1987, close to 1.3 million working-age East Germans were permitted to travel to West Germany. Virtually all of them – over 99 percent – returned. [31]

However, not all East Germans were granted the right to cross the border. In 1987, 300,000 requests were turned down. East Germans only received permission after being cleared by the GDR’s state security service, the Stasi. One of the effects of loosening the border restrictions was to swell the Stasi’s ranks, in order to handle the increase in applications for visits to the West. [32]

Pauwels reminds us that,

“A hypothetical capitalist East Germany would likewise have also had to build a wall in order to prevent its population from seeking salvation in another, more prosperous Germany. Incidentally, people have fled and continue to flee, to richer countries also from poor capitalist countries. However, the numerous black refugees from extremely poor Haiti, for example, have never enjoyed the same kind of sympathy in the United States and elsewhere in the world that was bestowed so generously on refugees from the GDR during the Cold War…And should the Mexican government decide to build a ‘Berlin Wall’ along the Rio Grande in order to prevent their people from escaping to El Norte, Washington would certainly not condemn such an initiative the way it used to condemn the infamous East Berlin construction project.” [33]

GDR sets standards for working class in FRG…and abroad

Despite its comparative poverty, the GDR furnished its citizens with generous pensions, free healthcare and education, inexpensive vacations, virtually free childcare and public transportation, and paid maternity leave, as fundamental rights. Even so, East Germany’s standard of living continued to lag behind that of the upper sections of the working class in the West. The comparative paucity and lower quality of consumer goods, and lower wages, were the product of a multitude of factors that conspired against the East German economy: its lower starting point; the need to invest in heavy industry at the expense of light industry; blockade and sanctions imposed by the West; the furnishing of aid to national liberation movements in the global South (which benefited the South more than it did the GDR. By comparison, aid flows from Western countries were designed to profit Western corporations, banks and investors.) What East Germany lacked in consumer goods and wages, it made up for in economic security. The regular economic crises of capitalist economies, with their rampant underemployment and joblessness, escalating poverty and growing homelessness, were absent in the GDR.

The greater security of life for East Germans presented a challenge to the advanced capitalist countries. Intent on demonstrating that capitalism was superior to socialism, governments and businesses in the West were forced to meet the standards set by the socialist countries to secure the hearts and minds of their own working class. Generous social insurance, provisions against lay-offs and representation on industrial councils were conceded to West German workers. [34] But these were revocable concessions, not the inevitable rewards of capitalism.

East Germany’s robust social wage acted in much the same way strong unions do in forcing non-unionized plants to provide wages and benefits to match union standards. [35] In the 1970s, Canada’s unionized Stelco steel mill at Hamilton, Ontario set the standard for the neighboring non-unionized Dofasco plant. What the Stelco workers won through collective bargaining, the non-unionized Dofasco workers received as a sop to keep the union out. But once the union goes, the motivation to pay union wages and provide union benefits disappears. Likewise, with the demise of East Germany and the socialist bloc, the need to provide a robust social safety net in the advanced capitalist countries to secure the loyalty of the working class no longer existed. Hence, the GDR not only furnished its own citizens with economic security, but indirectly forced the advanced capitalist countries to make concessions to their own workers. The demise of the GDR therefore not only hurt Ossis (East Germans), depriving them of economic security, but also hurt the working populations of the advanced capitalist countries, whose social programs were the spill-over product of capitalism’s ideological battle with socialism. It is no accident that the claw back of reforms and concessions granted by capitalist ruling classes during the Cold War has accelerated since the opening of the Berlin Wall.

The collapse of the GDR and the socialist bloc has proved injurious to the interests of Western working populations in another way, as well. From the Bolshevik Revolution in 1917 to the opening of the Berlin Wall in 1989, the territory available to capitalist exploitation steadily diminished. This limited the degree of wage competition within the capitalist global labor force to a degree that wouldn’t have been true had the forces of socialism and national liberation not steadily advanced through the twentieth century. The counter-revolution in the Soviet Union and Eastern Europe, and China’s opening to foreign investment, ushered in a rapid expansion worldwide in the number of people vying for jobs. North American and Western European workers didn’t compete for jobs with workers in Poland, Romania, Slovakia and Russia in 1970. They do today. The outcome of the rapid expansion of the pool of wage-labor worldwide for workers in the advanced capitalist countries has been a reduction in real wages and explosive growth in the number of permanent lay-offs as competition for jobs escalates. The demise of socialism in Eastern Europe (and China’s taking the capitalist road) has had very real – and unfavourable – consequences for working people in the West.

Going backward

Since the opening of the Berlin Wall and the annexation of the GDR by the FRG in 1990, the former East Germany has been transformed from a rapidly industrializing country where everyone was guaranteed a job and access to a growing array of free and nearly free goods and services, to a de-industrialized backwater teeming with the unemployed where the population is being hollowed out by migration to the wealthier West. “The easterners,” a New York Times article remarked in 2005, “are notoriously unhappy.” Why? “Because life is less secure than it used to be under Communism.” [36]

During the Cold War East Germans who risked their lives to breach the Berlin War were depicted as refugees from political repression. But their escape into the wealthier West had little to do with flight from political repression and much to do with being attracted to a higher standard of living. Today Ossis stream out of the East, just as they did before the Berlin Wall sprang up in 1961. More than one million people have migrated from the former East Germany to the West since 1989. But these days, economic migrants aren’t swapping modestly-paid jobs, longer hours and fewer and poorer consumer goods in the East for higher paying jobs, shorter hours and more and better consumer goods in the West. They’re leaving because they can’t find work. The real unemployment rate, taking into account workers forced into early retirement or into the holding pattern of job re-training schemes, reaches as high as 50 percent in some parts of the former East Germany. [37] And the official unemployment rate is twice as high in the East as it is in the West. Erich Quaschnuk, a retired railroad worker, acknowledges that “the joy back then when the Berlin Wall fell was real,” but quickly adds, “the promise of blooming landscapes never appeared.” [38]

Twenty years after the opening of the Berlin Wall, one-half of people living in the former East Germany say there was more good than bad about the GDR, and that life was happier and better. Some Ossis go so far as to say they “were driven out of paradise when the Wall came down” while others thank God they were able to live in the GDR. Still others describe the unified Germany as a “slave state” and a “dictatorship of capital,” and reject Germany for “being too capitalist or dictatorial, and certainly not democratic.” [39]

Much as the GDR was faulted for being less democratic politically than the FRG, the FRG’s claim to being more democratic politically is shaky at best.

“East Germany…permitted voters to cast secret ballots and always had more than one candidate for each government position. Although election results typically resulted in over 99 percent of all votes being for candidates of parties that did not favour revolutionary changes in the East German system (just as West German election results generally resulted in over 99 percent of the people voting for non-revolutionary West German capitalist parties), it was always possible to change the East German system from within the established political parties (including the communist party), as those parties were open to all and encouraged participation in the political process. The ability to change the East German system from within is best illustrated by the East German leader who opened up the Berlin Wall and initiated many political reforms in less than two months in power.” [40]

West Germany outlawed many anti-capitalist political parties and organizations, including, in the 1950s, the popular Communist Party, as Hitler did in the 1930s. (On the other side of the Berlin Wall, no party that aimed to reverse socialism or withdraw from the Warsaw Pact was allowed.) The West German parties tended to be pro-capitalist, and those that weren’t didn’t have access to the resources the wealthy patrons of the mainstream political parties could provide to run the high-profile marketing campaigns that were needed to command significant support in elections. What’s more, West Germans were dissuaded from voting for anti-establishment parties, for fear the victory of a party with a socialist platform would be met by capital strike or flight, and therefore the loss of their jobs. The overwhelming support for pro-capitalist parties, then, rested on two foundations: The pro-capitalist parties uniquely commanded the resources to build messages with mass appeal and which could be broadcast with sufficient volume to reach a mass audience, and the threat of capital strike and capital flight disciplined working class voters to support pro-business parties.


No one would have built a Berlin Wall if they didn’t have to. But in 1961, with the GDR being drained of its working population by a West Germany that had skipped out on its obligations to indemnify the Soviet Union for the losses the Nazis had inflicted upon it in World War II, there were few options, apart from surrender. The Berlin Wall was, without question, regrettable, but it was at the same time a necessary defensive measure. If the anti-fascist, working class leadership of the GDR was to have any hope of building a mass society that was responsive to the basic needs of the working class and which channelled its economic surplus into improving the living conditions and economic security of all, drastic measures would have to be taken; otherwise, the experiment in German democracy — that of building a state that operated on behalf of the mass of people, rather than a minority of shareholders, bondholders, landowners and bankers — would have to be abandoned. And yet, by the history of drastic measures, this was hardly drastic. Wars weren’t waged, populations weren’t expelled, mass executions weren’t carried out. Instead, people of working-age were prevented from resettling in the West.

berlin mural
Courtesy of Brendan Stone

The abridgment of mobility rights was hardly unique to revolutionary situations. While the needs of Cold War propaganda pressed Washington to howl indignantly over the GDR’s measures to stanch the flow of its working-age population to the West, the restriction of mobility rights had not been unknown in the United States’ own revolution, where the ‘freedoms’ of dissidents and people of uncertain loyalty had been freely revoked. “During the American Revolution…those who wished to cross into British territory had to obtain a pass from the various State governments or military commanders. Generally, a pass was granted only to individuals of known and acceptable ‘character and views’ and after their promise neither to inform or otherwise to act to the prejudice of the United States. Passes, even for those whose loyalty was guaranteed, were generally difficult to acquire.” [41]

Was the GDR worth defending? Is its demise to be regretted? Unquestionably. The GDR was a mass society that channelled the surplus of the labor of all into the betterment of the conditions of all, rather than into the pockets of the few. It offered its citizens an expanding array of free and virtually free goods and services, was more equal than capitalist countries, and met its citizens’ basic needs better than did capitalist countries at the same level of economic development. Indeed, it met basic needs as well as richer countries did, with fewer resources, in the same way Cuba today meets the basic healthcare needs of all its citizens better than the vastly wealthier United States meets (or rather fails to meet) those of tens of millions of its own citizens. And while the GDR was poorer than West Germany and many other advanced capitalist countries, its comparative poverty was not the consequence of the country’s public ownership and central planning, but of a lower starting point and the burden of having to help the Soviet Union rebuild after the massive devastation Germany inflicted upon it in World War II. Far from being inefficient, public ownership and central planning turned the eastern part of Germany into a rapidly industrializing country which grew faster economically than its West German neighbor and shared the benefits of its growth more evenly. In the East, the economy existed to serve the people. In the West, the people existed to serve the minority that owned and controlled the economy. Limiting mobility rights, just as they have been limited in other revolutions, was a small price to pay to build, not what anyone would be so naïve as to call a workers’ paradise, but what can be called a mass, or truly democratic, society, one which was responsiveness to the basic needs of the mass of people as its principal aim.

1. Austin Murphy, The Triumph of Evil: The Reality of the USA’s Cold War Victory, European Press Academic Publishing, 2000.
2. Henry Heller, The Cold War and the New Imperialism: A Global History, 1945-2005, Monthly Review Press, New York, 2006.
3. Jacques R. Pauwels, The Myth of the Good War: America in the Second World War, James Lorimer & Company Ltd., Toronto, 2002; R. Palme Dutt, The Internationale, Lawrence & Wishart Ltd., London, 1964.
4. Melvyn Leffler, “New perspectives on the Cold War: A conversation with Melvyn Leffler,” November, 1998.
5. Heller.
6. John Wight, “From WWII to the US empire,” The Morning Star (UK), October 11, 2009.
7. John Green, “Looking back at life in the GDR,” The Morning Star (UK), October 7, 2009.
8. Shirley Ceresto, “Socialism, capitalism, and inequality,” The Insurgent Sociologist, Vol. XI, No. 2, Spring, 1982.
9. Dutt; William Blum, Killing Hope: U.S. Military and CIA Interventions Since World War II, Common Courage Press, Maine, 1995.
10. Pauwels.
11. Ibid.
12. Ibid.
13. Ibid.
14. Murphy.
15. Pauwels.
16. Green.
17. Ibid.
18. The Wall Street Journal, February 22, 1989.
19. Murphy.
20. Ibid.
21. Ibid.
22. Ceresto.
23. Ibid.
24. Green.
25. Murphy.
26. Ibid.
27. Ibid.
28. Ibid.
29. Ibid.
30. Ibid.
31. Ibid.
32. Ibid.
33. Pauwels.
34. Fred Goldstein, Low-Wage Capitalism, World View Forum, New York, 2008.
35. Ibid.
36. The New York Times, December 6, 2005.
37. The Guardian (UK), November 15, 2006.
38. “Disappointed Eastern Germans turn right,” The Los Angeles Times, May 4, 2005.
39. Julia Bonstein, “Majority of Eastern Germans felt life better under communism,” Der Spiegel, July 3, 2009.
40. Murphy.
41. Albert Szymanski, Human Rights in the Soviet Union, Zed Book Ltd., London, 1984

Cuba and the real battle for democracy

By Stephen Gowans

While Obama may have contrived to create the impression at the recent Summit of the Americas of extending an open hand to Cuba, it’s clear that his aims are no different from those of George W. Bush or any other of his presidential predecessors, all the way back to Kennedy. The point for the US state has always been to recover Cuba as a field for US investment, and the surest way to achieve this goal is to dismantle Cuba’s socialist system, or at least to severely limit it. So it is that after making the obligatory rhetorical references to Cuba needing to improve its human rights situation (see Netfa Freeman’s recent Black Agenda Report article on Cuba and US hypocrisy), Obama’s “aides outlined a series of steps that Cuba…could do to demonstrate a willingness to open its closed society.” The principle step was “allowing United States telecommunications companies to operate on the island.” (1) In other words, moves would be made toward lifting the US embargo, if Cuba first made moves toward opening its doors to US capital. Since the purpose of the blockade has always been to extort this concession, how could it be said that the Obama policy is any different from that of his predecessors?

That the prize is an “open society” in Cuba, which is to say, open to capitalist exploitation from abroad, was made plain when Canada’s prime minister, Stephen Harper, remarked that, “If the objective is to see change in Cuba, it’s hard to see how a trade embargo would do anything other than keep the economic system closed.” (2) Harper opposes the blockade, not because he wants to see Cuba’s socialism thrive, but because he thinks lifting it is the best way to undermine Cuba’s socialist economy. Engage Cuba has always been the Canadian position. Eventually it will come around to our way of thinking.

Cuba’s socialist system offers a materially secure existence to all, with free health care and education through university. It does this despite limited resources and in the face of nearly 50 years of economic warfare by the United States. Imagine what it could accomplish if the United States wasn’t continually trying to undermine it.

Prying open Cuba’s economic system would profit Western banks and corporations. But would it benefit Cubans in the majority?

Not under conditions the US government would favour. The ideal situation from the point of view of the US state and the corporate interests it represents is the replacement of Cuban socialism with an open, multiparty electoral democracy – which to Westerners, even most leftists, is a political summum bonum.

To those with lots of money, and the need to find places to invest it, multiparty electoral democracy offers two advantages.

The first is that practically everyone is for it. Accordingly, marshalling support for measures to build democracy abroad is never difficult. The US government can act in whatever way the structural imperatives of the capitalist system demand without incurring too much opposition so long as it says it’s promoting “democracy”, implicitly understood as regular electoral contests between two or more parties (not the ancient’s rule by the rabble or Marx’s dictatorship of the proletariat.)

The second advantage of a multiparty electoral democracy to the states and interlocked corporate interests that favour it, is that the entire process can be easily hijacked by the rich. Modern elections, popularity contests contested by ambitious exhibitionists who vie for the backing of wealthy patrons, are driven by money. Generous campaign financing – or lack of it – can make or break a campaign. Ambitious politicians know this, and make their peace with the reality, or are weeded out. Once in office, they know that if they play their cards right, there are perks and handsome opportunities awaiting them in their post-political lives. Easily circumvented electoral laws forbidding foreign donations fail to stop funding from foreign sources rolling into candidates prepared to sell their country’s sovereignty, natural resources and labor to the imperial center. It may be facile to put it this way, but the golden rule of multiparty electoral democracy is that those who have the gold, rule. And so democracy has travelled the path from rule by the plebs to the dictatorship of the proletariat to ambitious lawyers chasing after the patronage of the rich.

Not in Cuba. But if Obama and Harper had their way, the golden rule would prevail. And what would the consequences be? A minority of Cubans – those who facilitated the exploitation of their country by foreign business interests — would benefit. But the majority would find their lives becoming increasingly insecure, roiled by the vicissitudes of the market, and in turn, by decisions made in foreign boardrooms. Hollow promises would be solemnly made. Cuba needs foreign investment, and the way to get it is to turn Cuba into an investor-friendly environment. Do this, and Cubans will be lifted out of poverty. The deception is evidenced in the state of Cuba’s Caribbean neighbours, in Haiti, in Jamaica, where free trade and the open door and untrammelled foreign investment have piled up misery and poverty at one end, while vast riches are accumulated at the other, hundreds of miles away, to the north.

While lifting the trade embargo would be a welcome step, the act, by itself, would in no way represent a lessening of hostility to Cuban socialism, only a different tact in the unceasing campaign of corporate-dominated governments to recover Cuba as an open field for investment and cheap labor.

There are no changes Cuba needs to make to accommodate the US; the US has not been wronged. But it would be naïve to think that whatever concessions Washington makes, if any, will represent Washington taking the first step along the path to peaceful co-existence. So long as the United States remains a corporate-dominated (that is, a capitalist) society, and Cuba a socialist one, a structural compulsion will exist to shape US foreign policy toward unceasing efforts to remove whatever obstacles are in the way of profit-making. Since an egalitarian system which defines a materially secure existence for all as the summum bonum is the antithesis of one based on the incessant drive of the few to accumulate great wealth by exploiting the many, there shall never be peace between the two. The only hope for peace is the destruction of one by the other, and in these days of renewed economic crisis, it is clearer than usual which system it would be in the interests of the bulk of us to prevail.

It may be objected that whatever the advantages of Cuban socialism in offering a materially secure existence to all, it is still an existence at a lower level than enjoyed in advanced capitalist countries, and therefore, how can socialism be the preferred system?

To this could be replied, first, that to the bulk of humanity, which lives outside the advanced countries of the West, capitalism is hardly a system of consumer riches and abundance. It is instead a system of dearth, misery, and ceaseless toil. This too is true of tens of millions of poor people who live in the advanced capitalist world.

It is true that socialist countries have been poorer than advanced capitalist countries, but their lower material level has not (and in the case of the Soviet Union and the Eastern European people’s democracies had not) been caused by socialism; on the contrary, it had been largely overcome as a result of socialism. The socialist countries started out at a lower level compared to their advanced capitalist counterparts, building their productive assets without the benefits of the slavery, colonialism and neo-colonialism advanced capitalist countries relied on to get rich.

In popular Western discourse, the division of the capitalist world between the affluent countries of the north and the underdeveloped countries of south is glossed over. Capitalism is equated with the West, and therefore with great affluence. Capitalism could just as readily be associated with the south, and therefore with great poverty, for the south is as thoroughly capitalist as the north. But it suits the purposes of spreading the capitalist doctrine to equate capitalism with a part of the world whose affluence is due to capitalist imperialism rather than capitalism itself, as if any country that embraced multiparty democracy and free markets would soon find itself a facsimile of the United States.

In 1983, Shirley Ceresto found that if you divided countries into poor, middle income and rich, the socialist countries occupied the middle range, even though most were poor before embarking on paths of socialist development. In terms of satisfying basic human needs, the socialist countries did better than all the capitalist countries combined, better than middle income capitalist countries, and as well as advanced capitalist countries. (3) (What socialist countries offered that advanced capitalist countries didn’t, was security of income, gender equality, and secure access to health care, education, housing and necessities.)

As the socialist countries were struggling to catch up to the West, they found they needed to safeguard their revolutions from the incessant threat of military intervention from a stalking capitalist world. This diverted a significant portion of their more limited resources to military spending and away from productive investments. Despite these handicaps, socialist countries did grow at a rapid pace, and were closing the gap with their capitalist adversaries. At the same time, the socialist community was becoming more egalitarian, both within and between countries, and an increasing portion of necessary goods were available to their populations for free or at highly subsidized prices. (4)

Nowhere is the incidental (and not causal) connection between socialism and poverty more evident than in the former German Democratic Republic (East Germany) where the regression to capitalism has done nothing to close the gap with the former West Germany or make the lives of east Germans better. After experiencing two decades of a resurrected capitalism, half of east Germans want to return to what they had before. Reuters, hardly known for promoting socialism, revealed that a public opinion poll had found that 52 percent of east Germans had no confidence in capitalism, and most of them wanted to return to a socialist economy. Here’s what east Germans told Reuters’ (5).

Thomas Pivitt, a 46-year-old IT worker from east Berlin:

“We read about the ‘horrors of capitalism’ in school. They really got that right. Karl Marx was spot on. I had a pretty good life before the Wall fell. No one worried about money because money didn’t really matter. You had a job even if you didn’t want one. The communist idea wasn’t all that bad.”

Hermann Haibel, a 76-year old retired blacksmith:

“I thought communism was shit but capitalism is even worse. The free market is brutal. The capitalist wants to squeeze out more, more, more.”

Monika Weber, a 46-year-old city clerk:

“I don’t think capitalism is the right system for us. The distribution of wealth is unfair. We’re seeing that now. The little people like me are going to have to pay for this financial mess with higher taxes because of greedy bankers.”

Ralf Wulff:

“It took just a few weeks to realize what the free market economy was all about. It’s rampant materialism and exploitation. Human beings get lost. We didn’t have the material comforts but communism still had a lot going for it.”

The former socialist countries have not been transformed into the consumer paradises many of their citizens believed they would become. Instead, citizens of former socialist countries have been liberated of materially secure existences and are now dominated by decisions made in boardrooms, many located in foreign countries, and are governed by ambitious exhibitionists who cater to the interests of the wealthy by necessity (for if they didn’t, they wouldn’t have access to the resources they need to get elected.) The same retrograde fate is the desired future for Cuba of the Obama administration, and will remain the desired fate for Cuba of every succeeding administration, until such a time as corporate interests no longer dominate the US state and the few no longer exploit the many; that is, until the real battle for democracy is won. (6)

1. Ginger Thompson and Alexei Barrionuevo, “Rising expectations on Cuba follow Obama,” The New York Times, April 19, 2009.
2. Ibid.
3. Shirley Ceresto, “Socialism, capitalism and inequality,” The Insurgent Sociologist, Vol. XI, No. 2, Sprint 1982.
4. Albert Szymanski, Is the Red Flag Still Flying? The political economy of the Soviet Union today, Zed Press, 1983.
5. Reuters, October 16, 2008.
6. “The first step in the revolution by the working class is to raise the proletariat to the position of ruling class to win the battle of democracy,” wrote Karl Marx and Friedrich Engels in The Communist Manifesto. Democracy would be exercised through the dictatorship of the proletariat. The working class would use its state powers to repress its class enemies and prevent their return. Since dictatorship and democracy are today understood to be opposites, it’s difficult to grasp how a dictatorship could be thought of as democratic. The democracy Marx and Engels were thinking of was closer to the original definition of democracy than the current understanding based on universal suffrage, representative democracy and regular multiparty elections. Democracy from antiquity had always been a class affair, which is why anyone who mattered was against it. The Marxist view was that capitalist democracy couldn’t be democracy in the original sense, because it allowed the majority to be governed by the few, who use their money power to dominate elections and the state. In a democracy as Marx and Engels understood it, the state would be dominated by the working class, its policies aimed at the interests of the working class and hence encroaching upon those of the capitalists, who would ardently seek to recover their previous advantages. The only way to secure democracy against the counter-revolutionary designs of the capitalists would be to be dictatorial in a new way – against the capitalist class. To socialist countries, most of which had had no tradition of liberal democracy, this meant that elections needed to be dominated by the Communist Party, as the leader of the working class. What was clear was that no party committed to reversing the gains of the revolution could be allowed to operate freely. In Cuba, elections are not party-based, and the Communist Party has no role in them. Instead, individuals stand for election. It is understood that elections are carried out within the socialist system and that the reversal of socialism is not on the table.

West Takes Aim at Belarus’ Pro-Social Policies

Belarus is one of the few remaining genuine alternatives to the neo-liberal economic order. A US nurtured and bankrolled fifth column is working with Washington to topple it from within.

By Stephen Gowans

The US government has nurtured a fifth column in Belarus to help overthrow the Lukashenko government to replace its socialist-oriented policies with a made-in-the-USA neo-liberal regime that favours US investors and corporations.

The US State Department last year provided funding to five opposition parties and 566 opposition activists, and support and training to over 70 civil society organizations, 71 antigovernment journalists and 21 opposition media outlets in Belarus. On top of that, 900 Belarusian youth were enrolled tuition-free at US government-expense at the European Humanities University. The university is an alternative to Belarusian state schools which the US government condemns for failing to “support the country’s transformation to a free-market democracy.” [1]

The US government has been nurturing Belarus’s anti-Lukashenko coalition since President George W. Bush signed the Belarus Democracy Act in October 2004. The act authorizes the US government to spend millions of dollars to create antigovernment media in Belarus, train election monitors to discredit Belarus’s elections, and back civil society organizations opposed to the Lukashenko government. [2] Washington pledged nearly $12 million to Belarusian antigovernment forces to fight the March 2006 presidential election. [3] The opposition candidate, Alexander Milinkevich, lost badly, an outcome Washington attributed to vote fraud. But even Western newspapers and polls paid for by the Republican Party’s international arm, the IRI, acknowledged that Lukashenko would win the vote handily and that the opposition’s support was in the single digits. Having failed to meet its regime change objective in 2006, Washington authorized further spending of $27 million in each of 2007 and 2008 to support opponents of the Lukashenko government. [4]

The mantra from Washington, echoed by dodgy leftists close to the US ruling class, is that Belarus is governed by an authoritarian president who abuses power to win elections. As we’ll see, this is an invention used to justify US meddling in Belarus’ internal politics. What authoritarian measures the Lukashenko government have taken have been defensive reactions to blatant Western attempts to engineer a free-market coup d’etat.

Contrary to the charge that he is Europe’s last dictator, Lukashenko is an elected president whose electoral victories have been based on wide popular support, earned by promoting the interests of the vast majority of Belarus’ citizens. Washington’s real grievance with the Belarusian government is that its policies are at odds with the interests of US investors and corporations.

Here’s what’s wrong with Belarus, according to the CIA:

• Not enough structural reform.
• Market socialism.
• Private companies have been re-nationalized.
• A wide range of income redistributive policies has produced levels of income equality almost unmatched in the world, but these policies have made Belarus unattractive as a destination for US investment. [5]

Here’s the view of the Heritage Foundation and Wall Street Journal:

• Foreign banks are virtually shut out of the country.
• US investors are barred from buying land.
• Basic goods and services are subsidized by the state.
• Retail prices are regulated.
• The government continues to rely on state-owned enterprises.
• Tariff barriers and subsidies make it difficult for US companies to compete in Belarus. [6]

The Economist’s Intelligence Unit complains that:

• Belarus follows active policies of import suppression and export promotion.
• Lukashenko “pursues a policy of pervasive state involvement in the economy.”
• The government denies ownership rights to the commons, keeping natural resources, waters, forests and land under public control. [7]

The Washington Post says “The economy of Belarus is still state-controlled (and) the nation’s food is grown on collective farms.” [8] And The New York Times points out that “Mr. Lukashenko…has steadily turned Belarus into a miniature version of the Soviet Union itself, with a state-run economy.” [9]

Is Belarus under Lukashenko really as socialist-oriented as US establishment sources say?

Tatyana Golubeva, general secretary of the Communist Party of Belarus, part of a governing coalition with Lukashenko, says “Belarus is still on the socialist path of development. We are one of the few that never gave up.”

Venezuela’s President Hugo Chavez praises Belarus “as a model of a social state,” likening it to the society Chavez’s Bolivarian revolutionaries are building in South America. [10] Chavez, who calls Lukashenko “a brother in arms” [11] awarded the Belarusian leader Venezuela’s highest award for foreigners, the Order of the Liberator. Lukashenko has also been awarded the highest honor Cuba bestows on foreigners, the Order of Jose Marti.

Belarus retains the symbols and social supports of its Soviet past. An imposing monument to Lenin still guards the approaches to the government headquarters. Education through university is still free, and university students continue to enjoy living stipends as they did in Soviet days. [12] Much of the economy remains under public control.

Clearly, Belarus isn’t the kind of place the CEO’s, corporate board members and investment bankers who dominate decision-making in Washington can warm up to. Sure, Minsk’s policies are good for ordinary Belarusians. Basic goods and services are kept affordable, the public controls the commanding heights of the economy, and income equality is virtually unmatched in the world. But what about the interests of American investors and exporters? Where are the profitable investment opportunities? Where are the lucrative export markets?

Building an opposition

To oust Lukashenko and his socialist-leaning policies, the US government set out to mold a disparate group of opposition parties and activists into a single, coherent unit, guided by a single executive with authority to enforce common goals and strategy. The international arm of the Republican Party, the IRI, has assumed a leadership role in focusing “primarily on the process of consolidating and unifying all of the pro-democratic elements in the country into a single coalition.” [13]

True to the game plan the US government has followed in engineering soft coups in other countries, the opposition has been given a name that underscores its professed struggle for democracy against an alleged dictatorship. While the West created the Democratic Opposition of Serbia to oppose what it called the dictatorship of Slobodan Milosevic, and the Movement for Democratic Change to oppose the misnamed dictatorship of Robert Mugabe in Zimbabwe, in Belarus the US-backed and funded opposition goes by the name of the United Democratic Forces (UDF). Its goal is to oppose and topple the alleged dictatorship, and socialist-oriented policies, of Alexander Lukashenko.

The US government uses the word “dictatorship” in a unique way. Belarus is decried by Washington as a dictatorship even though the country’s political system is a multi-party democracy with universal adult suffrage. [14] Dictatorship is to be understood in the world of Washington’s regime changers, not as rule by an individual or committee, where suffrage is absent, but as rule by elected officials the US government opposes because their policies are either immediately or indirectly at odds with the interests of US capital. Branding a socialist or nationalist leader as a dictator provides the US government with a pretext to sanitize its interference in the internal politics of foreign countries by misrepresenting its meddling as democracy-promotion.

The US government has likewise tried to discredit the government of Hugo Chavez in Venezuela, referring to Chavez as a would-be autocrat, to justify nurturing and bankrolling the “democratic” opposition. Chavez, Milosevic, Mugabe and Lukashenko have all pursued policies that have rejected, in various degrees, the free-market, free-enterprise, free-trade orthodoxy Washington insists all countries (but itself) adopt.

The UDF comprises 10 opposition parties and more than 200 NGOs. In 2005, the coalition selected Alexander Milinkevich as its candidate for president. Terry Nelson, national political director of the 2004 Bush-Cheney campaign, practically ran Milinkevich’s 2006 campaign, according to The New York Times. [15] But help from the Republicans was not enough to overcome Milinkevich’s failure to resonate with the public. The UDF’s own polling, paid for by the IRI, “showed the ratings of Milinkevich and other opposition leaders in the single digits.” [16] Lukashenko won the election handily with 83 percent of the vote, a lopsided victory the US government immediately attributed to vote rigging, on grounds that no one could be that popular.

But there are plenty of elections elsewhere won by higher margins which the US government has endorsed as fair reflections of the democratic will. The US-educated and fiercely pro-US ruling class Mikhail Saakashvili polled 97 percent in Georgia’s 2004 presidential elections, without Washington batting an eye. Kurmanbek Bakiyev won 89 percent of the vote in Kyrgyzstan’s Tulip Revolution, without incurring Washington’s disapproval. And Eduard Shevardnadze, when he was still Washington’s man in Georgia, polled 92 percent of the vote in Georgia’s 1992 election, without repercussions.

Laying aside US government double standards, there are a number of reasons to believe the 2006 presidential vote in Belarus was free and fair. All the polls, including the opposition’s IRI-paid poll, anticipated a Lukashenko victory as a virtual certainty. This reflected Lukashenko’s enormous popularity, something even members of the opposition acknowledge. [17] “Even his fiercest opponents don’t question the accuracy of independent polls that rate him the most popular politician in the country.” [18]

Lukashenko’s popularity derives from policies which favour the working class over Western investors. He has,

“presided over a continual increase in real wages for several years…He has also cut (the value added tax), brought down inflation, halved the number of people in poverty” and created “the fairest distribution of incomes of any country in the region.” [19]

Belarus’ egalitarianism has been a particular irritant to the US government. While the Lukashenko government’s income-redistribution policies have maintained a narrow gap between the rich and poor, they have also reduced the attractiveness of Belarus to the US corporate rich as a venue for profitable investment. With a choice of serving ordinary Belarusians or catering to corporate America, Lukashenko chose the former and incurred the wrath of the latter.

Beginning in April 2007, the IRI, along with the Democratic Party’s international arm, the NDI, and the Council of Europe, hosted a series of meetings with UDF members, culminating in a national congress attended by 693 delegates. The purpose of the meetings was to formulate coalition strategy and to draft a transitional constitution to be rolled out if and when the UDF topples the government and seizes the reins of power [20] (at which point it will sell off public enterprises, end subsidies for basic goods and services, and reverse Lukashenko’s income redistribution policies.)

Uncle Sam’s NGOs

The US government also provides “extensive support, grant making, leadership and capacity building to over 60 indigenous NGOS.” The US State Department, PACT and the NDI have assisted 60 NGOs in various ways, purchasing goods and services for the organizations, setting up cross-border exchanges with other NGOs, offering advice on strategic planning, and doling out over 40 grants. To strengthen connections among NGOs, the sponsors established a Leadership Fellows Program, to build leadership skills among members of the anti-Lukashenko opposition. [21]

The NDI, “held a youth conference in February 2007 to assist youth groups in their efforts to mobilize, build organizational capacity, (and) improve cooperation.” Not to be outdone, the IRI hosted 10 sessions for more than 300 Belarusian youths, to train “the next generation of political leaders.” These sessions were led by “trainers from across democratic Europe,” [22] non-violent pro-democracy activists trained to foment uprisings in Serbia, Georgia and Ukraine. Every few months, disciples of Gene Sharp, the US-based guru of non-violent regime change, are “deployed abroad to teach democracy activists how to agitate for change…going everywhere from Eastern Europe to train Belarusians to Turkey to coach Iranians.” The Center for Applied Nonviolent Action and Strategies, bankrolled in part by the IRI and the CIA-interlocked-Freedom House, plays a leadership role in these training sessions. [23]

Along with Renaissance, Pontis, and the Eurasia Foundations, the US State Department helped found the Belarusian Institute for Strategic Studies, a think tank of pro-US ideologues prepared to disgorge policy advice congenial to the US government’s free-market, free-enterprise, free-trade ideology. [24] When the media need quotes from “experts,” they turn to BISS.

As part of efforts to shape public opinion, the US State department funds European Radio for Belarus, an anti-Lukashenko radio station, joining Radio Free Europe/Radio Liberty, US-government-sponsored propaganda radio stations, in preaching the anti-Lukashenko, anti-socialist, pro-neo-liberal gospel. On top of ERB, Western regime changers doled out $24 million to Media Consulta, a German-led consortium to broadcast anti-government news into Belarus. Individual European countries have also kicked in. [25]

The fifth column goes to Washington

The Republican Party has been heavily involved in nurturing Belarus’s opposition, meeting frequently with its key activists. In April 2005, US Secretary of State Condoleezza Rice held meetings in Lithuania with members of the opposition, discussing the use of “mass pressure for change,” [26] and pledging $5 million in backing, to be provided through the IRI. [27] It is typical of color revolutions, including the Rose Revolution in Georgia, the Orange Revolution in Ukraine, and the ouster of Milosevic in the former Yugoslavia, for the US-sponsored opposition to accuse the government of electoral fraud. This provides an occasion to mobilize opposition supporters to take to the streets to force the government to step down. At her meetings in Lithuania, Rice told opposition representatives that the impending presidential election would be an “excellent opportunity” to challenge the government. [28] The opposition followed Rice’s strategy to a tee, not as much “running an election campaign as…trying to organize an uprising.” [29] The New York Times commented that Milinkevich was “campaigning not for the presidency but for an uprising.” [30] For the opposition, an uprising was the only realistic path to power. Polls paid for by the IRI “showed the ratings of Milinkevich and other opposition leaders in the single digits.” [31]

Opposition activists have unique access to high US State officials through the IRI, and have been provided a platform from which to deliver persuasive communications to a wide audience – a platform they would not have without US government influence.

The IRI hosted a delegation of opposition activists over eight days in December, 2007. The delegation had private meetings with Rice and a nearly one-hour meeting with US President Bush, after which each delegate had his photograph taken with the president. The IRI also arranged for the delegation to meet with the Washington Post editorial board, to answer questions on a Radio Free Europe/Radio Liberty call-in show beamed into Belarus, and set up radio and television interviews with the official US overseas propaganda service, Voice of America. [32]

This came on the heels on another UDF visit to Washington hosted by the IRI from February 26 to March 2. On this trip, delegates met with State Department, White House, and Congressional officials, and shared their points of view with the media, including The Washington Post, Voice of America and Radio Free Europe/Radio Liberty. In its meetings with US officials, the delegation expressed its gratitude “for the support of the US government.” [33]

Supporting a working class-friendly alternative

There are a few reasons to oppose US interference in Belarus’ democracy.

Belarus is one of the few remaining places on earth in which the commanding heights of the economy are publicly owned, where robust income redistribution narrows the gap between rich and poor, where essential goods and services are subsidized so they remain affordable to all, and where education is free and university students receive a living stipend.

US government interference in Belarus is not aimed at promoting democracy. Belarus already has a democracy, both in the narrow, technical, sense of offering universal adult suffrage and regular elections featuring a multiplicity of parties, and in the broader, more meaningful, sense of being a place in which the interests of the bulk of people predominate.

US government interference in Belarus is aimed at the very opposite of democracy: promoting the interests of a super-privileged minority comprising US and Western investment bankers, CEOs, corporate board members, and hereditary capitalist families, who seek unfettered access to Belarus’ resources, markets, labor and public assets. Corporate America wants to own Belarus’ banks, waters, forests and other natural resources; to buy Belarus’ state-owned enterprises; to sell goods and services unimpeded by tariff barriers and unhindered by subsidies to domestic firms. It wants a low-tax environment, no restrictions on expatriation of profits, and a low-wage and biddable workforce held in check by a reserve army of the unemployed. From the point of view of the US ruling class, Belarus should be investor-friendly, not working class-friendly.

US citizens and citizens of other Western countries that contribute to nurturing Belarus’ fifth column should oppose the use of their tax dollars to bring down one of the few remaining challenges to the neo-liberal economic order. Taxpayer dollars should be used to help fund public health care, provide free education, and subsidize basic goods and services at home, not to undermine working class gains abroad.

1. United States Department of State, “Belarus 2007 Performance Report,” November 16, 2007.
2. The Los Angeles Times, September 25, 2005; “Belarus Democracy Act Will Help Cause of Freedom, Bush Says,” October 21, 2004.
3. The New York Times, December 17, 2005.
4. Russian Information Agency Novosti, July 13, 2007.
5. Central Intelligence Agency, The World Factbook, Belarus.
6. The Heritage Foundation, 2008 Index of Economic Freedom.
7. Cited in The Heritage Foundation, 2007 Index of Economic Freedom.
8. The Washington Post, September 23, 2005.
9. The New York Times, January 1, 2006.
10. The New York Times, July 24, 2006.
11. The Financial Times (London), August 2, 2007.
12. The Morning Star (UK), January 7, 2008.
13. Remarks by Stephen B. Nix, Director of Eurasia Program, International Republican Institute, Conference on European Union and Democracy Assistance, Center for European Studies, the University of Florida, March 30, 2007,
14. The IRI’s Belarus page describes Belarus’ type of government as a dictatorship. On the same page, under the rubric “suffrage” is written: universal, age 18. The CIA’s World Factbook lists 19 political parties in Belarus.
15. “Bringing Down Europe’s Last Ex-Soviet Dictator,” New York Times, February 26, 2006.
16. Ibid.
17. The Washington Post, March 21, 2006.
18. The Los Angeles Times, September 25, 2005.
19. Times Online, March 10, 2006.
20. United States Department of State, “Belarus 2007 Performance Report,” November 16, 2007.
21. Ibid.
22. Ibid.
23. “A Georgian soldier of the Velvet Revolution,” The Los Angeles Times, September 2, 2008.
24. United States Department of State, “Belarus 2007 Performance Report,” November 16, 2007.
25. The New York Times, February 26, 2006.
26. The New York Times, April 22, 2005.
27. Xinhua News Agency, May 13, 2005.
28. The New York Times, April 22, 2005.
29. The New York Times, January 1, 2006.
30. The New York Times, February 26, 2006.
31. Ibid.
32. “IRI Host Belarusian Democratic Leaders,” IRI News Release, December 12, 2007.
33. “IRI Host Belarusian Democratic Leaders,” IRI News Release, March 9, 2007.

The U.S. Department joins the CIA, the Heritage Foundation, The Wall Street Journal and The Economist in complaining about Belarus’s refusal to establish conditions congenial to foreign investment:

“After an initial outburst of capitalist reform from 1991-94, including privatization of state enterprises, creation of institutions of private property, and development of entrepreneurship, Belarus under Lukashenko has greatly slowed, and in many cases reversed, its pace of privatization and other market reforms, emphasizing the need for a ‘socially oriented market economy.’ About 80% of all industry remains in state hands, and foreign investment has been hindered by a climate hostile to business. The banks, which had been privatized after independence, were renationalized under Lukashenko. The government has also renationalized companies using the ‘Golden Share’ mechanism–which allows government control in all companies with foreign investment–and through other administrative means.

“The U.S. Government continues to support the development of the private sector in Belarus and its transition to a free market economy. With the advent of the Lukashenko regime, Belarusian authorities have pursued a generally hostile policy toward the private sector and have refused to initiate the basic economic reforms necessary to create a market-based economy. Most of the Belarusian economy remains in government hands. The government, in particular the presidential administration, exercises control over most enterprises in all sectors of the economy. In addition to driving away many major foreign investors–largely through establishment of a ‘Golden Share’ requirement, which allows government control in all companies with foreign investment–Belarus’ centralization and command approach to the economy has left only a trickle of U.S. Government and international assistance programs in this field.

“The United States has encouraged Belarus to conclude and adhere to agreements with the International Monetary Fund (IMF) on macroeconomic stabilization and related reform measures, as well as to undertake increased privatization and to create a favorable climate for business and investment.

“Because of the unpredictable and at times hostile environment for investors, the U.S. Government currently does not encourage U.S. companies to invest in Belarus. Belarus’ continuing problems with an opaque, arbitrary legal system, a confiscatory tax regime, cumbersome licensing system, price controls, and lack of an independent judiciary create a business environment not conducive to prosperous, profitable investment. In fact, several U.S. investors in Belarus have left, including the Ford Motor Company.” (My emphasis.) US Department of State, .

21st or 19th Century Socialism?

By Stephen Gowans

“Che was one of the greatest Latin Americans in history but ours is 21st Century Socialism,” remarked Rafael Correa, president of Ecuador in early October.

“We don’t believe in class war or dialectical materialism. We believe it’s possible to bring about profound radical socialist change using current structures, democratic means.”

So too did many other people reject the orthodox Marxist emphasis on class war and believe it was possible to bring about profound radical socialist change using current structures, democratic means.

Bernstein, Bauer, Ebert, the British Labour Party when it professed to be a socialist party and proud of it. These people believed in 21st Century Socialism too. Only they believed in it in the 19th and 20th centuries.

Correa, Chavez and others talk about 21st Century Socialism as if it’s new, fresh and exciting, rather than a warmed-over version of something that has been showing up, and then fading away, regularly, like a full moon or a new season.

“Bernstein was the first to celebrate abstract democracy and freedom in contradistinction to the orthodox Marxist emphasis” on class war and dialectical materialism, wrote sociologist Albert Szymanski in the 1980s.*

“Indeed virtually all the basic arguments of (contemporary) reformists and progressives ….were more or less fully developed in 1899 (by Eduard Bernstein in his Evolutionary Socialism) and reasserted again in the late 1920s as well as in the 1950s and early 1960s” and later in the 1980s. And now in the 21st century as 21st Century Socialism.

“In some ways,” observed Szymanksi, “the same (ideas) are (discovered), confined to the mice, and eventually rediscovered again (and again.)”

Szymanski pointed out that while in certain periods reformist ideas traceable to Bernstein resonate and seem to make sense of people’s experiences and point the way to future change, at other times they appear to be superficial and naïve.

For example, “while such terms as ‘imperialism’, ‘capitalism’, revolutions’, and ‘working class’ were scoffed at in the early 1960s because of their dogmatic, sectarian and inappropriate air, after 1966 they very rapidly became central. But ‘by 1980 things had once again turned full circle from where they were a decade before. Bernstein’s ideas now resonate(d) (once again).”

Correa’s claims today, and Bernstein’s in 1899, would have been meet with sardonic laughter in Germany from 1933-1945, or throughout all of Europe in the late 1930s. They would also meet derisive dismissal in Chile after 1973, or today in Palestine where it is impossible to bring about profound change, much less socialist change, using current structures and parliamentary means. European parliamentary socialism, which aimed to bring about socialist change within current structures by democratic means, failed miserably, and nowadays is dead in all but name.

While 21st Century Socialism claims to be a fresh alternative to the orthodox Marxist revolutionary approach that led to the really-existing socialism of the Soviet Union and Eastern Europe, it’s just an old, not terribly roadworthy car, with fresh paint.

Really-existing socialism of the 20th century – the implicit foil to 21st Century Bernsteinism — had the advantage of accomplishing deep transformations that materially advanced the human condition, until counter-revolution, celebrating Bernstein’s concepts of freedom and democracy in the abstract, threw the whole machine into reverse gear. 21st Century Socialism, in its 19th and 20th century guises, can lay claim to no such transformations – only minor modifications around the edges, often instigated by the capitalist class and its representatives, but claimed by the reformers as fruits of their own efforts.

21st Century Socialism is a welcome advance over what came before, but it will not produce the profound radical socialist change Correa promises. Deep radical transformation within current structures is impossible – and an attempt at profound radical socialist transformation without an emphasis on the orthodox Marxists ideas Correa eschews, is, at best, naïve.

* Albert Szymanski, “Crisis and Vitalization: An Interpretive Essay on Marxist Theory,” in Recapturing Marxism: An Appraisal of Recent Trends in Sociological Theory, (Rhonda F. Levine and Jerry Lembcke, eds.), Praegar. 1987.