Editor’s note: David Laibman is Professor of Economics at the City University of New York and editor of Science and Society. He is the author of Value, Technical Change and Crisis: Explorations in Marxist Economic Theory and Capitalist Macrodynamics: A Systematic Introduction. He was also formerly the assistant editor of New World Review.

PA: With the collapse of many of the socialist countries, the Marxist left has suffered a crisis of confidence and numbers from which it is slowly recovering. How has this crisis played out in your experience as editor of Science and Society?

DL: I’ll begin by saying that my personal views do not represent the position of Science and Society. There are any number of left outlooks within our group, and the journal is open to all of them.

Since the crisis of 1989-1991, the anti-Soviet left has felt totally defeated and has never satisfactorily explained that fact to itself. It’s never worked out the relationship between their anti-Sovietism and the sense of tragedy that engulfed them. In other parts of the left, including the CPUSA, there’s still a reluctance to envision socialism, to actually project some concept of socialism. The political economy of socialism was very much tied up with Soviet reality. With the USSR gone, people are queasy about discussing it. I think that needs to change.

On the positive side, we’ve detected at Science and Society a renewed interest in studying the capitalist ruling class. There is a debate about transnational capitalist class formation – whether we’re entering a stage where a transnational, as opposed to international, capitalist class, is becoming dominant.

Also on the positive side, there is more openness and interchange, more of a sense that we need to learn from one another. I very much applaud the way Political Affairs is drawing views from different people and bringing about interchange of ideas. I see four responses on the left to the 1989-1991 crisis. The first is based on an unmediated view of the USSR – a failure to distinguish its political economy from its political culture. These levels are often in fact relatively independent. So, it’s asserted, for example, that the Soviet people rejected 'that' model of socialism, meaning the system that existed before 1991. Charlene Mitchell put this case for the CCDS, about 10 years ago, and Jarvis Tyner used almost the exact same language recently! But this throws the baby out with the bath water. The crisis of the Soviet political culture does not mean there was a crisis in the institutions of socialist planning and management.

The second response is to shift political allegiance to another model that holds state power: China. But it would be a mistake to repeat, in relation to China, the uncritical approach previously adopted with respect to the Soviet Union.

Third is a tendency to make a direct link between fundamental Marxist categories and a perverse reality that we’re trying to explain. So if socialism was destroyed in the USSR, this must have been the work of a capitalist class, a 'Soviet bourgeoisie.' That is an attempt to create some kind of Marxist explanation for what happened, but I think we need a more nuanced approach.

Finally, there’s a retreat to pre-Marxist understandings. Here I refer to the concept of market socialism. Again, we need to more carefully preserve the positive content of the Soviet experience, rather than reviving concepts that aren’t adequate to current tasks.

PA: Picking up on market socialism, discussions of different methods of building socialist societies have emerged. Which view do you see as the strongest?

DL: Bertell Ollman recently stated his anti-market position in PA. Others put forward a market socialist view: markets are an inherent feature of human life and socialism should be based on them. In my view, both the pro-market and anti-market positions are wrong. Both use an ahistorical, decontextualized concept of 'the market,' which ignores the social relations in which markets are embedded.

A general model of socialism can be synthesized from the entire 20th-century experience. That model has at its center a system of democratic planning, with evolving market relations surrounding it. Let me explain both aspects. First, democratic planning combines central with decentral planning. The most common error here is to counterpose central to decentral, to treat them as opposites, whereas they are in fact mutually supporting. You need both the stability provided by central planning and the detailed, quality information available only at the level of the enterprise, or work team. There’s a continuous iterative flow of information and task assignments among levels. Negotiated coordination takes place in a climate of visibility and open debate. Finally, evaluations and rewards are formed according to planned criteria, very different from anything a spontaneous market could achieve. For example, you can build criteria into the pricing and bonus systems that evaluate a collective’s impact on the environment, its progress in overcoming ethnic and national antagonisms, gender divisions and gender oppression, its relation to the community in which it is located and the sector within which it resides, so that its work can be subjected to a broad qualitative social evaluation.

But this model requires a completely articulated plan, with all of its input/output relations and the millions of equations that the economists constantly tell us about. However, modern electronic technology places socialism in a wholly new light. If the means to compute a plan did not exist at the middle of the 20th century, they do now. In place of the commercial waste and anarchy of today’s Internet, one can envision Intranets for enterprises, and sectors, progressively linked together in a continuous computational and information flow that undercuts the impossibilist arguments of the capitalist economists. Social planning is the essence of socialism. We can go in that direction, put it forward as a vision, with due regard for the particular circumstances of different countries.

Now the market is a necessary part of this. First, the planned sector must have market relations with sectors that continue to function spontaneously: agriculture, retail trade and personal services. Markets also provide secondary confirmation of the social validity of an enterprise’s activity. While enterprises are under indivisible social ownership, they don’t immediately feel that way; they act as separate collectives, and so need to sell their output, as a confirmation of their work. Finally, markets survive at an even higher level as horizontal relations within planning. Horizontal search-and-discovery and contract formation, on the basis of known rules and evaluation criteria and always visible to the center which can step in when coordination is necessary, are an inherent part of modern planning.

Here is a simple analogy. Think about the working class, the state and the market. The working class eventually abolishes itself, by becoming stronger – empowered economically, politically, culturally. But of course, worker-citizens continue to exist and in that sense the working class continues to exist. The state, in turn, is also slowly abolished – it 'withers away' – but again by becoming stronger and more democratic. But this doesn’t mean that public administration will disappear; society won’t revert to isolated communes or formless anarchy.

Now similarly, the market, and this point hasn’t been recognized, acquires new social content as it evolves under the umbrella of democratic planning. It slowly abolishes itself, transcending the polarizing, fragmenting, alienating, possessive-individualist qualities of the spontaneous market that market socialism’s critics rightly refer to. But the market is not 'abolished'; it, too, withers away. It slowly evolves away from its negative roles, which were functional for capitalist society, not merely by-products. The rational core – reasoned horizontal search and contracting – continues to exist.

PA: Why do people have such a difficult time discussing the collapse of the Soviet Union? People tend to propose one of two main reasons: human error or systemic problems. What is your view on this? Was the collapse inevitable?

DL: Again we need to distinguish between the political culture of a society and its political economy. Soviet political culture was defined by the over-politicized and repressive aspects of the CPSU, the bureaucratic-authoritarian deformation. I don’t have to go into detail, I think. Everyone knows what I’m referring to.

But in the area of political economy, I’m going to make a radical claim: the Soviet Union had it right! It was enormously advanced in the level of socialist development over other socialist countries. Some Eastern European countries were more developed technologically and industrially, but not in the sense of socialist relations of production.

By 1980 a system of central/decentral institutions was in place in the USSR. This was a functioning system of comprehensive or democratic socialism. It was, needless to say, overlain with a deformed political culture that undermined it and kept it from realizing its potential.

In July 1979 – note that this is under Brezhnev, long before Gorbachev – a Council of Ministers Resolution established a major set of new directions, which were then progressively implemented during the 1980s. One was direct election of factory managers. This is not well known, even in the non-anti-Soviet left. Nothing done anywhere else, before on since, comes close to this vast movement for democratic election throughout industry – whatever the actual quality of the elections and the degree of democracy achieved.

The Resolution also called for elected team councils, which were responsible for the work team’s plan. So planning was extended from the enterprise level to that of the team, with potential for much greater mass participation in economic life.

Third, the teams received collective bonuses, based on the performance of the team. This bonus was distributed to individual workers based on evaluation by the team council. This is a complex political structure, which requires a high degree of maturity to prevent abuse. But it was a subtle and potentially profound advance in worker control.

Last is a series of technical innovations: normative indicators to solve the long-standing problems of evaluation and more sophisticated methods of price planning, etc.

The Soviet demise was due to the culture, not to the economy. Something like the late Soviet economic system, but in a climate of visibility, discussion and debate, is the core of a socialist answer to TINA ('there is no alternative'). However, in the USSR the accumulated anger and pain from the Stalin deformation, from everything that had happened to people as a result of that, eventually overcame the positive potentials. Was this inevitable? Nothing is inevitable. If the institutional basis for more developed socialism and the cleansing power of glasnost had emerged earlier; if the leadership had been different, if, say, Gorbachev had come along ten years earlier at a time when the reservoir of patriotic support and popular mandate was still strong; and if the world’s working-class movement had been stronger, then the negative deformations could have been overcome without the loss of Soviet state power and the horrendous suffering imposed on the post-Soviet peoples today. So the fall of the USSR had structural causes, but not in the sense that the socialist system or model was wrong. Rather, the blame lies with the structural aspects of the political and cultural deformation.

Many people blame Gorbachev, saying that he 'sold out.' I think this is superficial. Gorbachev had to walk a knife-edge. On one side you had the entrenched bureaucratic system, and on the other you had political chaos. It would have taken a politician larger than life to survive that. To blame Gorbachev, or 'human error,' misses the point.

PA: A variety of views have emerged to explain or define capitalist triumphalism: neoliberalism, neoconservativism, etc. Many on the left regard these as having little or no distinction. What is your view on this?

DL: Neoliberalism is the free market, reapplied to the international context. And neoconservativism means the authoritarian military agenda of Bush & Co. I think there is a real contradiction here; they are not the same. They express two sides of an essentially unresolvable contradiction for the latest stage of capitalist accumulation: the inadequacy of the nation state as a means to implement a transnational ruling class strategy.

Transnational capital, with an interest transcending the nation state, still requires some kind of state management. But it’s very difficult – I won’t say impossible – to form a world state, for two fundamental reasons: military and ideological. The military function must take a national form, owing to its need for personnel with the strong allegiances required of people who can be trusted to kill or be killed. The nation state is also the basis of consciousness and identity for its citizens. National ideology is important in enabling capitalist exploitation. Workers in normal times are controlled by two ideologies (we could add a third religion): nationalism, and the market (which obscures the source of exploitation).

Now that can’t occur on a world scale, because the nation always requires an other: 'my' nation, opposed to other nations. On a world scale, national identity dissolves into a universal human identification, which threatens this aspect of capitalist control.

PA: You’ve done work on the concept of stages of capitalist development as a way of thinking about the uneven development of capitalism, where it is at now, where it is going and what it will take to replace it. Can you talk about this?

DL: To know where we are at present we need to revive stadial thinking. 'Stadial' means thinking in terms of stages. Now descriptive stages are often invoked to explain capitalist evolution, and what stage we may be in currently. But while descriptive stages, as distinct from theoretical stages, are a good starting point, they are not adequate.

Here are some examples. Lenin’s concept of transition from competitive capitalism to an imperialist stage was based on the fusion of banking and industrial capital to form finance capital. But he doesn’t try to nail down the qualitative point at which this fusion is both possible and necessary. He doesn’t explain why it couldn’t have occurred, say, 50 years earlier.

Later on the world communist movement developed the concept of state monopoly capitalism. It’s interesting that this term has completely dropped out of our vocabulary. Other Marxist circles have stadial concepts: Regulation Theory, Social Structures of Accumulation, and others. We hear about the 'Age of Railroads' and then the 'Age of the Automobile,' the 'Age of Mass Production' giving way to 'flexible specialization.' Why does that happen? When? Not explained. It just does. Currently, of course, we have the 'Information Age' or 'Network Society.'

The problem with these kinds of stages is you don’t get any sense of determinacy. Why should one stage lead to the next? What’s the total number of stages? You can’t try to guess what somebody is going to be describing 50 or 75 years from now. So we need to return to the search for theoretical stages. A theoretical stage has definite pre-conditions in the stage before it; lays foundations for the stage that follows; and has an internal dialectic that drives the transition to a subsequent stage.

Capitalism diffuses outward, as the market dissolves local and tribal particularities and isolation. A level is reached at which it both enables and requires nation-states to emerge. The nation-states then block the outward diffusion process, providing a protected internal terrain for an early stage of capitalist accumulation, the focus of Marx’s Capital. But these hardened nation-states at a later point become an obstacle to global diffusion. Capital’s world dominance is actually very far from complete because of this. We are in a capitalist diffusion crisis, the material root of the current global polarization.

Because of the contradictions imposed by nation-states, which were the necessary precondition for the first stage of accumulation, capitalist transformation of the world is problematized. What Marx praised the bourgeoisie for doing 150 years ago – transforming the world in its own image – is becoming more difficult for capitalism to accomplish. Look at Central Asia, the Middle East, China, Latin America and Africa and ask to what extent capitalist production relations are actually forming there? The answer: to a much lesser degree than we customarily assume.

China is an example. There are hundreds of articles on the Internet about the conditions of workers in the Chinese industrial zones, but almost nothing on the actual social relations of workers in Chinese industry. What are their links to their ancestral villages? There are still important ways in which communal ties are still very strong. The kind of proletarianization that would qualify Chinese workers as abstract sellers of labor power does not exist. What you have are capitalist enclaves.

But capitalist enclaves have always existed. In Latin America the cities have genuine labor markets, but outside of some of the largest cities development is very uneven: small-scale peasant agriculture, plus some residual precapitalist latifundia-type production. In the Middle East workers are tied to a particular industry: oil. They’re very important politically in Iraq, Iran and other countries, but they are a working class in one industry only. Transferability of labor, the source of the abstract universality of being reduced to a seller of labor power, is only minimally present.

This is the material basis for the crisis of the present. The world diffusion crisis gives rise to polarization and de-development of large parts of the world, particularly Central Asia. Increasing poverty breeds anger and frustration. Combined with modern technology and US imperialist instigation of Islamic terrorist groups as a weapon against the Soviet Union in the earlier period, we have the ingredients for September 11.

This has a major implication: where secular development under capitalist control is all that’s possible at present, the left should support it. Secular development, again thinking stadially, is a necessary precondition for any kind of social transformation that can take place subsequently. In today’s world we must look for those kinds of alliances. This is again a language that has dropped out of our vocabulary, but it was very important for Marx, who indicated that Communists would support a national bourgeoisie whenever it acted in an objectively revolutionary way. That’s a formulation from the Manifesto, and the Bolsheviks repeated it in their international policy. I think we need to revive that perspective. Naturally we seek possibilities of combined development within that. We don’t abandon leadership to capitalist forces, to the extent we are capable of influencing it in other directions. We build the working-class component independently within it. But we look for alliances to promote secular development, and in fact take some responsibility for the kinds of capitalist development which today’s capitalist ruling classes can’t themselves bring about, partly because the units of capital are now so large they have a strategic interest in preventing capitalist development in other parts of the world.

PA: Just to clarify, are you saying that outside of the developed countries, capitalism must develop first in order for us to move on to the next stage?

DL: I’m not suggesting that the commercial dominance of large capitalist firms from Western Europe and the United States is not a reality. 'Coca-Cola-nization,' the imposition of capitalist commodity culture, is very much in evidence. The road to socialist transformation, however, lies through the development of capitalist relations, where that is the current form of secular development. It is not that we need to mechanically wait until a later time. We shouldn’t repeat the errors of the Second International and use stadial theory as a means of postponing revolution. On the contrary, combined development means that one can move forward very rapidly to socialist tasks within a coalition that is accomplishing capitalist ones. It isn’t about circumventing that road, but of actually enhancing it and moving along it more quickly.



--For more readings on the issue of socialism from back issues of Political Affairs click here.