The Contradictions of Real Socialism: The Conductor and the Conducted

The Contradictions of Real Socialism: The Conductor and the Conducted by Michael A. Lebowitz. New York: Monthly Review Press, 2012, $15.95, Pp. 222.
Reviewed by Roger Keeran and Joseph Jamison

August 28, 2015

The Contradictions of Real Socialism was written by Michael A. Lebowitz, a US-born professor emeritus of economics at Simon Fraser University in Vancouver, Canada, and the author of several other books on Marx and socialism, including Build It Now: Socialism for the Twenty-First Century. Lebowitz poses three questions: What were the characteristics of “Real Socialism” (by which he means the socialism of the Soviet Union and Eastern Europe between 1950 and 1980)? How did this system reproduce itself? Why did it ultimately yield to capitalism without resistance from the working class?

Lebowitz argues that Real Socialism produced economic growth and unquestionable benefits for the working class and that it successfully reproduced itself for decades, but that it also contained contradictions between its three major “classes,” the central planners (vanguard), the plant managers, and the workers. These contradictions led to shortages and stagnation and ultimately to a reversion to capitalism. According to Lebowitz, Real Socialism collapsed because it did not represent the socialism envisioned by Karl Marx but instead a deformed socialism that he calls “vanguard socialism.”

The term Real Socialism in the title has a history: In the 1970s and 1980s, Communist writers used the phrase “actually existing socialism” or “really existing socialism” or “real socialism,” for socialist states such as those in the Soviet Union and Eastern Europe. These terms implied that those who did not believe that the Soviet Union and Eastern Europe, among others, were socialist were relying on ahistorical, utopian and anti-Marxist definitions of what constituted socialism. The term ‘actually existing’ highlighted the need to understand the actual materialist development of socialism toward communism. The phrase Real Socialism and its variations have enraged social democrats, who almost always treat it with contempt by putting it in quotation marks or capitalizing it to suggest their scorn. Lebowitz is no different.

The book’s subtitle, The Conductor and the Conducted, refers to Marx’s musical metaphor for the function of management under socialism. Lebowitz admits that Marx held that management must exist under socialism, but Lebowitz attaches a negative implication by saying that the metaphor suggests that the individual orchestra members “lose the opportunity to develop their own capacities by exercising knowledge, judgment, and will, collectively.” (26) This dubious exegesis of the metaphor is his opening salvo against the idea of a vanguard party. It is one of many cases where he tendentiously tries to use Marx against Marxism and Real Socialism.

Though Lebowitz’s views about Real Socialism are fundamentally mistaken, some of his ideas deserve attention. First, Lebowitz represents a sophisticated statement of what could be called “romantic anarchism” or “idealist social democracy,” ideas that have become widespread since the collapse of the Soviet Union and the ascendancy of neo-liberalism. For example, Lebowitz ‘s idealist orientation is reflected in his notion that Marxism and socialism are whatever he alone declares them to be (Lebowitz, 187). His anarchism is apparent in his idea that socialism can be “built now” without a transfer of state power to the working class. In an essay on Lebowitz in Science & Society (July 2015), “Socialism, Stages, Objectivity, Idealism: Reply to Lebowitz,” David Laibman similarly points out that Lebowitz represents the current fashion of re-reading Marx in order to deny Marx’s scientific advances and replace them with “anarchism and romantic idealism.” The second reason that Lebowitz’s theories deserve attention is that, like many false theories, his nonetheless have something to teach us, or at least offer some things to ponder. More on this later.

Lebowitz aspires to do for Real Socialism what Marx did for capitalism: to abstract the key elements and reveal their relationships, tensions and movement. Oddly for someone with this aspiration, Lebowitz fleshes out none of his abstractions about socialism with the kind of detail that Marx provided about capitalism. Lebowitz rarely departs from his abstractions for the nitty-gritty of the real world. Indeed, Lebowitz’s book is almost completely devoid of any actual history of the Soviet Union, either its accomplishments or the policies that led to its collapse. Actual members of the vanguard, actual plant managers, and actual workers are entirely absent. For example, Khrushchev merits only three mentions, Brezhnev three, Andropov one, and Gorbachev five. Instead, Lebowitz’s understanding of Real Socialism relies on the works of such economists as the Hungarian Janos Kornai, whom he footnotes at least 111 times.

A word about Kornai: Lebowitz identifies Kornai as “the Hungarian analyst of Real Socialism.” That is a bit like calling Rush Limbaugh an analyst of American politics. For most of his career as an economist, Kornai ground his ax against socialism. Even though Kornai began as a Communist, he did not last long. In 1955, the Hungarian Communist newspaper for which he worked dismissed him. By 1959, Kornai anticipated  Euro-Communism by blaming socialism’s problems on over-centralization, views reflected in his most famous book, Economics of Shortage (1980). When socialism in the Soviet Union and Eastern Europe unraveled in the late 1980s, Kornai moved to the West, became an admirer of neo-liberal Friedrich Hayek, and in 1986 was rewarded with a professorship at Harvard University. He also served as a Distinguished Research Professor at the Central European University, the institution founded, funded and led by the billionaire currency speculator, George Soros. The book under review thus represents an amalgam of Kornai’s neo-liberal critique of socialism and Lebowitz’s own anarchism and social democracy.

There is an irony in Lebowitz’s reliance on Janos Kornai’s ever-rightward-moving critique of Hungarian socialism: Recent surveys show that Hungarians, even more than other East European peoples, believe that life was better under socialism. (Pew Research Center, Global Attitudes Survey, April 7, 2010)

By saying Lebowitz is a social democrat, we mean that his writings exhibit the general features of those who call themselves social democrats or democratic socialists in the US and Europe. Social democracy has been and remains the political trend in the working class movement which denies or downplays the necessity of class struggle, socialist revolution and working class state power. It espouses class collaboration, and it hopes to ameliorate capitalism by reforms and regulations. Like many social democratic theorists, Lebowitz proffers a vision of socialism as a society that gives priority to a timeless, classless, abstract ethical ideal of “human development.” (Lebowitz, 17) Like most social democrats, Lebowitz considers his approach to be the Third Way (Lebowitz, 7) between capitalism and Real Socialism. His socialist vision remains Eurocentric, with little or no evaluation of socialist construction in China, Vietnam, the DPRK, Cuba, and Laos.

Today, social democracy is in the process of self-reinvention. It is not the first time. It did so after the Second World War, when the politics in the US and Western Europe turned rightward, and social democracy turned from a wartime alliance with Soviet socialism to Cold War hostility. Social democracy then began to call itself “democratic socialism.” The reinvention was codified in the Frankfurt Declaration of the Socialist International (1951) which displayed heightened anti-Communism and which abandoned many Marxist formulations in social democratic party programs.

Since the 1990s, social democracy has been striving to reinvent itself again, as “21st Century Socialism.” Lebowitz and his partner Marta Harnecker, are especially associated with this term.

The financial crash of 2008 required yet a new reinvention effort. Since many social democratic parties became part of the coalition governments that imposed austerity on Greece, Spain, Portugal, Ireland, and elsewhere, they found themselves the butt of anger and disaffection among their supporters. Consequently, social democracy has tried to come up with an updated, “anti -austerity” version of itself exemplified by the “new style” social democracy of SYRIZA in Greece. But this latest reinvention suffered a humiliating setback in July 2015, when SYRIZA flagrantly betrayed the majority will of the Greek people. Its leader caved in to the austerity demands of the German banks. Now SYRIZA has split. Lebowitz, of course, was writing before the current crisis of social democracy, but he nonetheless shares the same contradictions. The great irony is that in attacking the history of Real Socialism he assails the very reality that made the heyday of social democracy possible.

Absent a socialist camp offering a systemic alternative to capitalism, the golden era of social-democracy (or in the US, New Deal welfare state policies) has ended. In 2015 the capitalist system no longer needs or wants the social-democratic compromises of the last half of the twentieth century. With its seemingly unfettered ambition to take back every 20th century concession made, finance capital considers it possible and necessary to shift the burden of the crisis onto other classes by means of austerity, by cutting government budgets, public employment and social welfare. Moreover, as investment opportunities outside of financial speculation are increasingly difficult to secure, capital seeks to privatize everything in sight, so that it can expand into what was once public economic space. (Eugene McCartan, “A Changed and Changing Political Landscape,” Socialist Voice, 2014). So much for the third way.

Lebowitz’s brand of social democracy has some specific features. He avoids crude anti-Communist positions and terminology. He does not openly reject Lenin and Leninism; he rejects Vanguard Socialism. Unlike many social democrats who are obsessed with hatred of Stalin and who often trace the Soviet Union’s problems back to him, Lebowitz sees the problems of Real Socialism developing after 1950, i.e., mostly after the Stalin era (1924-1953).

In spite the manifest weaknesses of many of his answers, Lebowitz does address three central questions of socialism’s collapse. First, what was the source of the economic problems (“stagnation” in short) that led to the reforms (“perestroika”) that overthrew socialism? Second, what was the material basis for the social democratic or neo-liberal ideas that constituted the reforms that led to capitalist restoration? Third, why did the working class fail to mount a successful resistance to capitalist restoration?

Lebowitz argues that the problems that led to the reforms were not due to circumstances external to socialism (say, the low level of development in Soviet Russia) but were inherent in the operation of the system. Following Kornai, Lebowitz argues that the key characteristic of Real Socialism was “omnipresent” shortage. Shortages of consumer goods, labor and investment resulted not from backwardness but from the way the system functioned. The central planners believed that socialism demanded steady growth and job protections and benefits for the workers. Growth demanded that plant managers meet the plan goals, and meeting plan goals demanded material incentives or bonuses for managers and workers.

The system, he asserts, involved inherent conflicts and dysfunctions. The managers’ interests conflicted with both those of the planners and the workers. The planners insisted on growth and provided material incentives for meeting plan goals. The workers expected full employment, job security, the right to transfer jobs, a leisurely pace of work, rising wages, and stable prices. To meet plan goals and obtain bonuses, managers had to resort to maneuvering. They underestimated capacity, tried to lower their plants’ goals, stressed quantitative fulfillment (over quality), valued extensive growth over intensive growth, hoarded labor and raw materials, and so forth. These maneuvers produced shortages and economic stagnation.

Lebowitz argues that shortages and stagnation led many economists and other so-called reformers to join with the managers in seeing the solution to shortages and stagnation in a weakening of central control and the weakening of labor benefits and protections. In essence, the overthrow of Real Socialism represented the victory of capitalist-minded managers over the vanguard of planners and over the workers.

Placing the entire blame for shortages and stagnation on the system itself leads Kornai and Lebowitz to the conclusion that the Soviet system was impervious to reform and had to be completely overthrown. (Lebowitz, 154) Such an analysis, of course, requires willfully ignoring all the objective, external circumstances that contributed to shortages and stagnation: the original backwardness of Russia, the destruction of the country caused by the Germans during World War II, including the vast loss of manpower, the rising costs of extracting natural resources, the need to divert investment into the military, and so forth. This analysis also requires ignoring the positive achievements of some economic reforms before Gorbachev’s headlong plunge into privatization and the market. Such factors, ignored by Lebowitz are discussed in Socialism Betrayed. (Socialism Betrayed: Behind the Collapse of the Soviet Union, 1917-1991, by Roger Keeran and Thomas Kenny; International Publishers, NY, 2004)

In answer to the question of the source of the ideas that undermined socialism, Lebowitz locates their material basis in the managerial class. Though the managers were not capitalist owners of property, they nonetheless developed a capitalist-like mentality. The managers had responsibility without control. They had responsibility for meeting the plan goals set from above, and indeed their material wellbeing depended on it. At the same time they could control neither the goals, nor the costs of materials and machines, nor the price of products, nor the workforce. Because of the rights and expectations of the workers, the managers could not freely discipline, reward, dismiss or transfer workers. Consequently, the managers developed capitalist-like class interests: they wanted to increase their own autonomy at the expense of central planning, and they wanted to control their workforce. It was this capitalist-like mentality that eventually affected economists, planners and some Party leaders.

In Socialism Betrayed, we locate the material basis of the petty bourgeois reform ideas in the second economy and the mentality it fostered. This is not necessarily inconsistent with Lebowitz. He might be right that a capitalist mentality arose among the managers, perhaps not from, or just from, the self-interest reasons that he posits, but because, as suggested in Socialism Betrayed, many managers were entwined in the second economy. Lebowitz, however, does not see it this way. He rejects the idea of the second economy as a primary source of problems. Though he acknowledges the existence of the second economy (Lebowitz, 164) and admits that it involved widespread stealing from the socialized economy, he does not think the second economy fostered a petty bourgeois spirit. Incredibly, he thinks the stealing that supported the second economy reflected a positive, socialist mentality among workers. (Lebowitz, 133, 139) He contends that public ownership made the workers think that they owned everything and thus had a right to take what they wanted. He provides no evidence that workers actually thought this, nor does he acknowledge that such behavior violated socialist norms and morality regularly reinforced by Communist leaders, newspapers and the law. One cannot but wonder if Lebowitz thinks that under his idealized version of socialism, stealing public property would also express socialist consciousness.

As to why the working class resistance was not sufficient to prevent the return to capitalism and the erosion of the job security and material benefits that workers enjoyed, Lebowitz blames “vanguard socialism.” He argues that the socialism that developed in the Soviet Union and Eastern Europe was not the socialism envisioned by Marx but a deformed, top-down socialism. According to Lebowitz, Marx had envisioned socialism as democratically run workplaces and community cooperatives. Instead, under Soviet socialism, a disciplined, centralized and unified party ran things with a top-down, hierarchical structure. Even though the vanguard pursued a policy of economic growth to benefit workers and the whole society, Lebowitz regards Real Socialism as “a system of exploitation,” “since the workers themselves have no power to make this choice.” For Lebowitz, “deformed Marxism” denied the workers the “power to make decisions and to develop their capacities through their activity,” and it perpetuated the division between “doing” and “thinking,” between workers and leaders. Consequently, though workers benefited from Real Socialism, they did not feel it was theirs and lacked the institutions to defend it.

Lebowitz’s argument may beguile some, since it rests upon well-known facts. The Soviet Union was led by a Leninist vanguard party. Soviet socialism was based on central planning which unquestionably involved a strong, top-down component in setting economic goals relying on the nomenklatura system by which local leaders were appointed by the top and were accountable to the top. Furthermore, Lebowitz does not deny that workers under Real Socialism enjoyed greater security and benefits than under capitalism. Full employment, job security, a comparatively leisurely pace of work, stable prices, rising incomes, and the right to transfer employment, Lebowitz acknowledges, constituted “great achievements” for the working class. Moreover, the Soviet system was not based on autonomous worker and community cooperatives. Nevertheless, Lebowitz’s argument is not only mistaken but it also misrepresents Marx.

In the first place, what Lebowitz says about Marx’s vision of socialism is completely misleading. Lebowitz simply ignores Marx’s idea of the stages of socialist development. Lebowitz argues that vanguard socialism by concentrating decision-making at the top did not overcome the division between thinking and doing, and consequently it did not represent Marx’s vision of socialism. This is flatly wrong. It is a sleight of hand, whereby Lebowitz conflates Marx’s view of a socialist stage followed by a communist stage, in order to argue that Real Socialism fell short. In the Critique of the Gotha Programme, Marx explains why socialism must develop in stages. Only after a period of development, when a socialist society had left behind the “birthmarks” of capitalism could it move to a communist society where the divisions of mental and physical labor and between town and country would disappear, and where the free development of each would depend upon the free development of all. Such a communist society, however, could only emerge after socialism had produced sufficient development and abundance that society could be organized on the basis of from each according to his abilities and to each according to his needs, rather than on the basis of to each according to his work. To ignore flatly what Marx said and then claim Marx as an authority for a critique of Soviet socialism is simply dishonest.

Even if Marx had not clearly said so, it should be obvious that eliminating the division between thinking and doing and encouraging full human development requires meeting the basic human needs for employment, food, clothing, shelter, health care, and leisure and raising the educational and cultural level of people. Moreover, never in human history had any society done so much as the Soviet Union to provide all of these things to its entire people in such a short period of time. By the 1980s, the Soviet people enjoyed greater literacy, read more books and magazines and attended more concerts and museums than anyone else in the world. If this is not human development what is? If this did not lay the groundwork for eliminating the division between thinking and doing what would?

Part of Lebowitz’s indictment of “vanguard socialism” is the idea that Marx envisioned a socialism based on worker and community cooperatives. As eloquently as Lebowitz waxes on this idea, it is not Marx’s. Marx’s words, “self-working and self-governing Communes,” appears in “The Civil War In France (First Draft) (available on-line at www.marxists.org/archive/marx/works/1871/cvil-war-france/drafts ) where he described what occurred under the Paris Commune. Marx’s most extensive discussion of worker cooperatives occurred elsewhere and dealt with their function under capitalism. In his “Inaugural Address of the Working Men’s International Association” (1864), Marx praised the emergence of worker cooperatives and the passage of the Ten Hours’ Bill in England as two of the most important working class developments since 1848. He valued these “experiments,” but he warned that workers’ cooperatives “if kept within the narrow circle of the casual efforts of private workmen” could never “free the masses, nor even perceptibly lighten the burden of their miseries.” He said that “co-operative labour ought to be developed to national dimensions, and consequently, to be fostered by national means.” This required that workers “conquer political power.” Marx’s idea that socialism meant cooperation on a national (rather than local) basis and could occur only after workers has conquered state power foreshadows what happened in the Soviet Union. Marx’s ideas have no relation to Lebowitz’s idea of autonomous worker and community cooperatives. Lebowitz’s attempt to use Marx against Soviet socialism is misleading at best, dishonest at worst.

The other part of Lebowitz’s argument with regard to vanguard socialism is that while top-down, vanguard socialism brought benefits for the workers, it also disarmed them, disempowered them; and thus when the Gorbachev reforms began to erode socialism and undermine workers’ well-being, the workers were ill-prepared to defend socialism and their own interests. One does not have to agree with Lebowitz that vanguard socialism represented “deformed Marxism,” to recognize that he has identified a problem. Something was clearly amiss in the Communist Party of the Soviet Union that it could produce a Gorbachev and his collaborators and that they could proceed to weaken the party itself and undermine and then overthrow socialism with no significant political struggle to stop them. This is not to say that no resistance occurred, but the resistance by other Communist leaders, the Party rank and file and the working class, was not nearly great enough to stop or even seriously retard the Gorbachev counterrevolution. But was vanguard socialism the problem?

If Lebowitz wants to blame the failures of Real Socialism on the mistaken idea of the vanguard, one would think that he would at least explain the origin, nature and role of the vanguard party in the history of Real Socialism. He does none of this. He does not even acknowledge that the idea of the vanguard party originated with Lenin, nor that the vanguard idea (though not the word itself) was foreshadowed as far back as the Communist Manifesto with such sentences as: “Communists represent the interests of the movement as a whole… the Communist Party understands the line of march, the conditions, and the ultimate general results of the proletarian movement.”

Lebowitz does not acknowledge that Frederick Engels wrote an entire essay “On Authority,” in which he ridiculed socialists (not unlike Lebowitz) who thought that socialism could function without centralized organization and authority. Engels said:

They [the anti-authoritarian socialists] demand that the first act of the social revolution shall be the abolition of authority. Have these gentleman ever seen a revolution? A revolution is certainly the most authoritarian thing there is; it is the act whereby one part of the population imposes its will upon the other part by means of rifles, bayonets, and cannon—authoritarian means, if such there be at all; and if the victorious party does not want to have fought in vain, it must maintain this rule by means of the terror which its arms inspire in the reactionaries. Would the Paris Commune have lasted a single day if it had not made use of this authority of the armed people against the bourgeois? Should we not, on the contrary, reproach it for not having used it freely enough? (Frederick Engels, “On Authority,” Karl Marx and Frederick Engels Selected Works in Two Volumes (Moscow: Foreign Languages Publishing House, 1962), Vol. 1, 639)

Nor does Lebowitz explain what Lenin meant by the revolutionary vanguard and why Lenin thought a centralized, unified, and disciplined party of professional revolutionaries was necessary to make a revolution. That would require an analysis of opportunism, a concept absent from Lebowitz’s outlook. Nor does Lebowitz acknowledge that the vanguard character of the Russian Communist Party enabled it to overthrow the Czar, win the civil war, nationalize property, collectivize agriculture, industrialize the country, thwart internal opposition, defeat Nazi Germany and rebuild the country after World War II. It is hard to imagine that any reasonable person could not credit the role of the CPSU, a vanguard party, in these accomplishments. Lebowitz’s silence speaks volumes. Even if one admits that weaknesses in either the theory or the practice of the vanguard party contributed to the collapse of Real Socialism, it is ridiculous to deny that without the CPSU, a vanguard party, there would have been no socialism to collapse.

Fourteen pages into his chapter “Goodbye to Vanguard Marxism,” Lebowtiz declares that “Nothing in the above discussion (or anywhere in this book) should be interpreted as a critique of the necessity for leadership in the struggle against capital or to build a new socialist society.” (Lebowitz, 186) Given his attack on the vanguard idea throughout the book, this statement constitutes a preposterous, clumsy and transparent attempt to deflect criticism. Nowhere does Lebowitz explain what kind of leadership he thinks would have been as effective as that provided by the CPSU, or what kind of leadership would have safeguarded socialism from counterrevolution.

In spite of the glaring flaws of this book, Lebowitz’s ideas about the role of managers and the function of the vanguard party do identify problems worth further study and thought by Marxists. This hardly offsets, however, his appalling and deceitful distortions of Marxism, Leninism, and the history of 20th century socialism to promote ideas of anarchism and sentimental socialism.

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