Democracy capitalism consensus quote. How can Western social democracy develop further? Political systems and economic transformation
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It seems that we are already witnessing the birth of a new trend, when the traditional alliance of capitalism and democracy is beginning to disintegrate.
Today there are examples of a new model of capitalism, i.e. capitalism without democracy . For example, the authoritarian regime in Turkey, which achieved great economic success, and the state capitalism of China, which became the embodiment of an economic miracle for several decades, show that capitalism can exist without traditional democracy and even without refined liberalism.
At one time, M. Gaddafi was a fierce critic of democracy. As he rightly noted, democracy involves two phenomena - the people and seats (power). Power apart from the people is representation or guardianship, which is a deceit that the rulers resort to so that the chairs do not belong to the people. Such chairs in the modern world are parliaments, with the help of which power is monopolized by individual clans, parties and classes, and the people are barred from participating in politics. Moreover, Gaddafi rises to a philosophical understanding of democracy, saying that the party acts as a modern dictatorial instrument of government, since the power of the party is the power of the part over the whole. The presence of a ruling party means that supporters of one point of view are allowed to rule the whole people. Although Gaddafi himself could not offer any serious alternative, his criticism of democracy is quite convincing. For example, everyone is well aware of the aphorism according to which questions of scientific truth are not decided by voting. As a rule, when discussing something new, most people tend to make mistakes, but then democracy in science can lead to violence of fools (the mistaken majority) over smart ones (the right-wing minority). A if the principle of democracy does not work in science, why should it work in politics?
Continuing such doubts, D. Zolo goes even further. According to his ideas, modern society is characterized by a colossal complication and coexistence in it of various functional subsystems of science, economics, politics, religion, family, etc. At the same time, each subsystem, due to its growth and development, tends to become an independent social integrity. In this situation, the task of the democratic regime is to protect social diversity from the predominance of any particular subsystem of production, science and technology, religion, trade unions, etc. Otherwise, democracy will develop into the despotism of the dominant social group (subsystem). Thus, in the modern world, the very concept of democracy is fundamentally transformed and becomes largely meaningless. Until now, it has been thought that democracy provides some acceptable balance between political protection and social complexity (diversity), security and personal freedom, governance and individual rights.
Any noticeable shifts in these binary links lead to the transformation of democracy into an oligarchy.
The complication of society and the growth of social risks lead to the growth of various conflicts and the violation of the democratic balance. In such a situation, authoritarian regimes turn out to be a completely natural and reasonable way out of the current situation. Sometimes it is authoritarian rule that keeps the system from disintegration, it is it that allows you to balance the interests of different social groups. Singapore is a good example , which has achieved the highest technological efficiency, widespread use of information tools, general prosperity, high employment rates, etc., all against the backdrop of a lack of political ideology and public debate. In other words, within the framework of the capitalist system, there is a gradual replacement of democratic political regimes with effective authoritarian management .
The existence of different approaches to the problem of the relationship between capitalism, socialism and democracy depends in part on the meaning given to these vague concepts. The most interesting is the concept of R. Dahl. In his opinion, political democracy implies the adoption of a number of structural measures that contribute to ensuring broad popular participation in political life and the effective competition of organized groups 5 . J. Schumpeter, the author of the book "Capitalism, Socialism and Democracy" 6 , owns the idea that procedural democracy means the institutionalization of group conflict, i.e. rivalry in elections, freedom of information, the availability of appropriate opportunities for the formation of . opposition, the non-repressive nature of the police and the army. Legislatures, courts, coalition political parties, and voluntary associations compete peacefully for political power. The ways of coming to power, its implementation and transfer from one team to another are regulated by laws and informal rules. These procedures, as well as the structures that play the role of a counterbalance, limit the power of politicians who are obliged to make decisions "procedurally competent" and in accordance with the intended goals. Another aspect of political democracy is associated with the special role of spontaneous, voluntary participation. Democracy means that the "demos" - the people - have a legal right and a real opportunity to actively participate in the policy making and implementation process. The people have the opportunity to freely express preferences for one or another political course, to gain access to leading politicians, to make decisions on issues that form the “agenda”. Participation rights include the right to elect leaders, as well as the ability to be involved in a wide variety of forms of participation in the political decision-making process, especially organized, opposed to those in power, certain public policy courses, institutional arrangements and socio-economic structures. In short, political democracy presupposes freedom and equality. This gives citizens the right to be members of organizations that ensure that their political preferences are translated into responsible public decisions. Political leaders and the public consider it legitimate to express opposing points of view 7 .
Economic systems can be classified according to two parameters: according to the form property And distribution resources. Thus, capitalism presupposes private property and market distribution, while socialism presupposes state ownership and state planning. In practice, in terms of these two variables, all economic systems are mixed types.
Within the model of a competitive market system, voluntary impersonal exchange regulates the relationship between sellers and buyers. The basis of the exchange of goods and services is not the personal status of the individual, not gender or ethnicity and political ties, but only his ability to pay. The production of goods meets consumer demand and is measured by the ability of citizens to pay money for them, which is an impersonal intermediary in any exchange. In conditions of market competition, a large number of buyers and sellers participate in economic transactions. And no firm has the power to dictate the price of a good or decide how much to produce. Consumers have complete information regarding the availability of a variety of goods. If they don't like a certain product, they have the right to buy another brand or another type of product. Labor and capital, acting as impersonal factors of production, are highly mobile.
Within a competitive capitalist economy, the market has fewer restrictions than under socialism. Firms exchange their goods at certain prices; managers pay workers; lenders lend money to borrowers who agree to repay it with interest. After the Second World War, governments began to pursue various kinds of policies regulating the markets for goods, labor and credit in both capitalist and socialist economies. Since then, the "private" market sector has depended on the "public" public sector. However, statesmen in Eastern Europe have severely restricted the functioning of the markets. Unlike them, the Scandinavian social democracies did not suppress the market, but controlled it 8 .
If capitalism, due to its specificity, reduces the possibilities of planning, then democratic socialism, especially state socialism, presupposes the wide use of its mechanisms. Under the conditions of state socialism, the Politburo and Gosplan not only formulate general priorities, but also issue detailed directives regarding infection.
fees, prices, currencies, interest rates, trade, investment, and the production of capital goods and consumer goods. A strong party-state apparatus passes orders down the bureaucratic ladder. However, neither the trade unions nor the enterprises themselves have special powers. Under a democratic socialist government, economic planning sets the overall priorities. A strong social democratic party competes with other political parties. Trade unions and cooperative associations inform leading statesmen about their political preferences. These organizations, together with private enterprises and consumer unions, plan on the basis of a broad public dialogue, resulting in the harmonization of private interests within the framework of a common policy 9 .
Capitalism presupposes private ownership and private control over economic resources; socialism, on the other hand, adheres to the principle of social property. Since the 19th century There are several types of private property. In the early stages of capitalist development, families had their own small farms; heads of families acted as competing entrepreneurs. At the end of the XIX century. national corporations began to emerge. The means of production in them were owned by shareholders, management was carried out by managers. After World War II, the entire capitalist economy was in the hands of transnational corporations (TNCs). Despite the fact that the headquarters of such a corporation could be located in any country - the USA, Great Britain or Japan - its co-owners were the capitalists of different states. Managers, financiers, production engineers, computer scientists controlled the day-to-day activities of TNCs. Thus, over the past two hundred years, most capitalist private property has been concentrated in a few large corporations.
Public property is also of several types. Communist party leaders preferred to retain state ownership of land and capital. While the government of the country was the owner of economic resources, their use was under the control of party organs and ministries. The Social Democrats relied on more pluralistic ownership models. In the northern European social democratic countries, property is limited. State corporations manage
have independent boards of governors. Leading enterprises, such as transport, are owned and operated by regional and city administrations. The social sphere is also under the jurisdiction of local authorities: education, health care, housing. Further, under social democratic rule, quasi-social organizations such as cooperatives and trade unions enjoy support. This prevents the concentration of all property and control over it exclusively in the hands of the state bureaucracy or capitalist corporations and allows alternative structures to this process. In this way, pluralist socialists hope to make the management of the economy more democratic.
The nature of the policy pursued in a socialist or capitalist economy depends in part on the political system itself. Thus, for example, without centralized government on a nationwide scale, without a strong social democratic party and concerted action by trade unions, the social democrats would not have had the organizational means to realize their own egalitarian political priorities. Compared to a market economy run by social democratic officials, state socialism implies tighter government control and the predominance of state institutions over private organizations. The government exercises control over regional and local bodies; central economic ministries run banks and state-owned enterprises. The Leninist Party is engaged in the development of economic policy. The party leadership formulates general political tasks, weighs various options, chooses the optimal political line, and then controls its implementation with the help of government bodies. State socialism subordinates private economic units to public control exercised by a powerful party-state. The state owns physical capital and land. Small-scale production, trade and services are managed by cooperatives. There are few private enterprises, the only exception is the household plots of collective farmers. In contrast to all this, the industrialized capitalist economy presupposes the dispersal of centers of political power in the form of a conciliation system. Private capitalist firms compete with each other both in the domestic and in the world market. The central government does not have the power to exercise tight control over market exchange - especially in the international arena.
State banks, corporations and quasi-independent non-governmental organizations remain largely outside the control of both the central cabinet and state officials. Political parties do not play a significant role in choosing political courses. Fighting for victory in the elections, they are engaged in the development of general guidelines, represent some of the requirements of the voters, their influence on the process of implementing a particular policy is very limited 12 .
Types of political systems
We proceed from the assumption that the political system functions in the form of one or another mode of “policy production”. It is a means of developing and implementing decisions that affect society as a whole. By focusing on the relationships between the whole and its parts, systems analysts examine how certain parts of a system affect each other and the system as a whole. Analysis of parts of the system includes three aspects: 1) cultural values, shaping policy objectives, such as accelerating
Table 1.1.Values and structures of political systems
Moral values State power over social groups
and material interests ______________________________________________
Strong ____________________ I Weak _________
Merged elitist mobilization folk (for)
(North Korea)
Differentiated industrialized conciliation
Table 1.2.Values and Behavioral Models in Political Systems
Moral values Political distance between
and material interests ________ managing and managed __________
Large ____________________ | Small _________
Merged elitist mobilization folk (kung)
(USSR, 1929-1952)
Differentiated bureaucratic conciliation
growth rates and lower inflation; 2) the power they have structures, including governments, parties, social associations within the country and foreign institutions to influence the process; 3) behavior politicians and ordinary members of society who are not so actively involved in government decision-making. These three aspects form the basis of the typology of various political systems: popular (tribal), bureaucratic, conciliatory and mobilization 13 . To understand the socio-economic changes taking place within a single system, as well as inter-system political transformations, it is necessary to clarify the nature of the interactions between the three named analytical parts.
As can be seen from Table. 1.1 and 1.2, these four types of political systems differ in cultural, structural and behavioral parameters. If we talk about the cultural aspect, then to what extent is the system based on the fusion or differentiation of spiritual, moral and ideological values, on the one hand, and material interests, on the other? What is the structural power of the state over social groups and the population in general? The presence of strong power implies the monopolization of coercive mechanisms, centralized government, effective coordination of various aspects of government activity, the provision of social groups with only a slight independence and a wide range of activities. What is the behavioral aspect of the interactions between those who govern (acting politicians) and those who govern (adherents of a particular policy)? The existence of an impenetrable abyss between them speaks of an elitist type of interaction, while a small political distance allows us to speak of more egalitarian relations.
According to these general parameters, popular tribal and bureaucratic authoritarian leaders operate under completely different regimes. Folk (tribal) systems are stateless societies. Material activity - picking fruits, harvesting - is inextricably linked in them with spiritual and moral values, such as the veneration of the gods. The distance between rulers and subordinates is negligible. In a bureaucratic authoritarian system, by contrast, the state exercises strict control over social groups. Individuals have virtually no opportunity to oppose the authorities. Material interests and moral values are sharply separated from each other.
The types of political systems that are equally different from each other include elitist mobilization regimes, with one
on the other side, and conciliatory ones on the other. The leaders of mobilization systems do not share material interests - waging war, industrializing the nation, electrifying infrastructure, improving the healthcare system - and ideological values; these "worldly" tasks are given the character of "sacred rites." The authorities of the mobilization systems run a strong state; social groups receive only a small fraction of independence from the state; there is a great political distance between the rulers and the ruled. The authorities direct the political activity of the people. Individuals have very little opportunity to participate in the policy implementation process.
The conciliation system implements a pluralistic model. The state has limited control over independent social groups. The distance separating political leaders from ordinary citizens is small, the latter actively and voluntarily participate in politics. They achieve certain benefits for themselves with the help of market relations and the government, initiation to spiritual values is associated with religious institutions and social movements. The differentiation of material interests and moral values is reflected in the structural separation of the church from the state.
Of these four political systems, the conciliatory type is most effective in democratic structures and competitive market economies. Its leaders recognize as legitimate the clash of interests of various groups, organizational pluralism and the voluntary participation of citizens in political life. Politicians are willing to compromise with their opponents. Decentralization and decision-making based on strategies aimed at achieving consensus contribute to the development of flexible policies. Liberal democracies in the US, UK, Canada, Australia, and New Zealand all embrace a less "regulated" form of capitalism that gives private enterprise broad autonomy. In Scandinavian social democracies, economic policy is developed through a process of negotiation between government officials, employers and trade union leaders. Although in this case the social democratic governments regulate the economy and comprehensive social security, the main sectors of the economy are privately owned. Economic exchange is largely driven by price mechanisms, not by central bureaucratic planning organizations.
Folk (tribal) systems existed at the pre-capitalist stage of economic development - the stage of primitive communism. In these small communities, whose main occupations were hunting and gathering, families enjoyed common economic resources for all - people lived in conditions of universal equality. Individual ownership was minimal. There was no economic surplus product capable of enriching the elite, which in this case could exploit the classes subordinate to it. By participating in general meetings, individuals made political decisions regarding family disputes, land conflicts, and relations with other communities. The driving force behind the political process was the search for consensus, not coercion by the police or the military. In the early 1960s, African socialists viewed this pre-colonial popular (tribal) system as the basis for modern-style democratic socialism. However, primitive technologies could not provide economic abundance - this socialist priority in the conditions of the modern world capitalist economy. In addition, the undifferentiated structures of folk (tribal) systems prevented the development of competition between individual groups. These segmented societies, being relatively homogeneous except for familial distribution of roles, have held back the development of those diverse interests that stimulate the formation of modern opposition organizations, such as interest groups, political parties and the media, i.e. key structures for the institutionalization of peaceful conflict within a modern democratic system.
Mobilization systems gravitate towards socialism most of all. Populist mobilizers seek to create a modern system based on political and economic equality and large-scale participation of the masses in public life, as in archaic tribal societies. In opposition to capitalist exploitation and state domination, they try to organize the unorganized, empower the weak, enrich the poor. Because of their hostile attitude towards bureaucratic organization, their ability to shape policy throughout the 20th century. were very limited, especially in their attempts to implement radical egalitarian transformations. Faced with powerful elite opposition and mass apathy, populist mobilizers have been unable to create the structures needed to redistribute income, power, and change the status of workers and the poorest.
peasantry. Proclaiming democratic ideals, populists at the same time cling to the myth of class solidarity, leveling the real manifestations of differences of interests. The requirement of equality in relations within groups hinders the formation of alternative political preferences.
Elite-type mobilizers who seized state power in countries such as the former Soviet Union, China, and Vietnam have rarely been able to maintain a mobilization system for long. Belief in the sacred mission of ideology has evaporated. A strong state bureaucracy is no longer striving for the socialist transformation of society, but stands guard over the existing system. Instead of serving the people, the party-state bureaucracy takes care of its own interests. The state-socialist economy hardly met the requirements of a democratic political system. On ideological grounds, the leaders demanded active participation in politics from the masses. However, the mass participation of workers, peasants, youth and women was under the control of the leaders of the party-state. It was neither voluntary nor spontaneous. As the elite mobilization system was transformed into a bureaucratic authoritarian regime, even the forced participation of the masses decreased. Mass apathy has replaced active participation. Although families, denominations, small peasant farms and small businesses managed to retain a certain amount of autonomy from direct state control, all these social groups had too little social weight to oppose the ruling elite, government policy and the socio-political system itself. The rivalry took place mainly between individual factions within the ruling party and the state apparatus, and not between the leaders in power and the institutionalized opposition.
During the XX century. bureaucratic authoritarian systems carried out both state-socialist and state-capitalist policies. Neither was accompanied by a democratic political process facilitated by institutionalized competition and voluntary participation in politics by the masses. After the death of Stalin and Mao, the Soviet and Chinese systems degenerated from elitist mobilization into bureaucratic authoritarian ones. Although the practice of large-scale coercion persisted, pluralism began to gain momentum. Foreign corporations, small home-based and family businesses have received some economic
independence. The state apparatus, the party elite and technocrats (engineers, economists, planners) coordinated their efforts in developing a political course. Other social groups did not have the opportunity to influence the formation of state policy. Among the primary socialist tasks were industrialization and modernization of the economy. Bureaucratic authoritarian regimes, aimed at implementing programs for building state capitalism, adhered to the same direction. Meanwhile, in Asia and Latin America, the military, private domestic enterprises, and TNCs enjoyed great political influence. In particular, in Latin America, in the mid-1970s, economic policy underwent changes. Thus, while during the 1960s military regimes emphasized high customs duties, state-owned enterprises, and industrial development, the following decade saw a more internationalist, competitively oriented policy within the global capitalist economy. The role of transnational corporations has increased. Many state-owned enterprises have been privatized. Governments have abandoned price controls. The austerity policy recommended by the IMF has led to a reduction in government staff and a reduction in subsidies to private entrepreneurs. Urban consumers were left without food subsidies. Government spending on health and education was cut. As the focus of the economy shifted to agriculture, information services, and manufacturing for export, manufacturing unemployment rose 14 . All these manifestations of the austerity policy have increased the demand among the people to change the bureaucratic authoritarian regime of government. The leadership of the armed forces agreed to participate in the elections on a competitive basis. Although the rulers thus elected exercise legislative and executive (presidential) power in a consensual system, key economic policies are implemented and even designed by bureaucratic authoritarian elites. As in Eastern Europe, in Latin America and Asia there is a rivalry for command posts between factions oriented towards conciliation systems and elites seeking to maintain bureaucratic authoritarian regimes.
Conclusion
The above analysis of capitalist, socialist and other political systems raises a number of central
policy making, which is the subject of this book. The first part examines how the process of policy implementation proceeds in various systems, aimed at the socio-economic transformation of the system itself. As already mentioned, the analysis of the political system is carried out in three aspects: socio-political structures, cultural values and the behavior of individuals. With regard to structures, part of the book is devoted to the consideration of institutions, organizations and groups that develop and implement a particular policy: government agencies, political parties, social groups within the country and foreign organizations. Government and commercial organizations, as well as TNCs, have a decisive influence on the political process. Modernization theorists have shown the nature of the influence of Connie al groups within the country, especially business corporations and labor unions, on government institutions. Institutionalists believe that often government agencies make independent decisions that run counter to the political preferences of the business community. Neo-dependentists study impersonal economic movements such as TNC investment, World Bank loans, external public debt, trade balances, total capital stock, decapitalization, and growth rates. Meanwhile, few researchers have analyzed the real structural relationship between TNCs, domestic business, foreign countries and government institutions, including elected leadership, employees, police and military.
In unraveling the meaning of cultural values, the systems analyst explores how generally accepted values, through the efforts of system leaders, are transformed into certain specific political priorities: accelerating growth, reducing inflation, achieving greater income equality. The values inherent in constitutional liberalism, democratic socialism and Marxism-Leninism help to highlight pressing social problems and outline the political agenda. Public and religious organizations, political parties and cultural and educational institutions operating through the media give a certain interpretation to these values, which forms the position of the public on certain issues.
Behaviorally, a systems analyst studies leadership styles as well as public participation in politics. He is interested in how political decisions are made, in particular the openness of a politician to new information coming from the population,
pressure groups and experts. The activity of a politician depends on free access to the entire amount of information to him, on his ability to comprehend this information and on the availability of organizational means at his disposal to adequately respond to it. For example, in democratic societies, the attitude of leaders to the political preferences of the public is an indicator of their responsibility to the citizens of the country.
The second part of the book explores how the policies of the state and their intended outcome affect changes in the political system. In some cases, high taxes or a growing financial deficit can cause the collapse of the entire system and the transition from one, for example, conciliatory, to, say, bureaucratic authoritarian. In other cases, system change is driven by the consequences of certain policies: high inflation, low economic growth, and a widening gap between the rich and the poor. I believe that policies and their results are capable of generating certain cultural, structural and behavioral crises, which in turn explain systemic transformations.
The final chapter analyzes how the effectiveness of public policy implementation affects democracy, capitalism and socialism. The criteria for progress in the development of a society - such policy outcomes as human rights, economic growth, income equality and overall well-being - vary from system to system. Comparing several political systems that existed from the end of World War II to the beginning of the 1990s, I give an assessment of the effectiveness of their policies. How successfully have the conciliation systems of the major industrial capitalist countries ensured the protection of human rights, the acceleration of economic growth, the realization of economic equality, and the increase in the availability of education and health care? Why did the bureaucratic authoritarian states of East Asia achieve higher rates of economic growth and greater income equality than similar regimes in Latin America? Why did the state-socialist economic systems of the former Soviet Union and Eastern Europe fail to achieve their goals and collapse? By trying to find answers to questions like these, I hope to gain a better understanding of the complex relationship between capitalism, socialism, and political systems.
___________________________________________ _ Part I
Political systems and economic transformation
In order to understand how the political system functions, it is necessary to take the position of an outside observer contemplating what is happening “from above”. Through this view of the political landscape, the analyst not only gets the full theoretical overview, but also notices the details, especially how specific details fit into the big picture. System theorists emphasize the need for historical analysis of political changes in different societies. The constituent parts of the political system - culture, structure, behavior - interacting with each other, are not in a static balance, but in dynamics. Political leaders give different interpretations of generally accepted values. The power of social groups operating within the country and foreign institutions, as well as government agencies, undergoes changes over time. In connection with structural changes, both political leaders and ordinary citizens are changing their behavior 1 .
The use of abstract models of political systems helps us to better understand the specifics of the processes of implementing a particular policy that take place in specific societies. Models are cognitive maps (visual representations) that show connections between the components of political systems. Models are not empirical descriptions of specific government agencies, but simplified pictures of the dominant mode of political decision-making, i.e. certain ways of developing and implementing a particular state policy. Often inside from-. of a particular country, there is a struggle for dominance between the elites,
advocating different political systems. The presence of conflicting tendencies - for example, conciliatory and bureaucratic authoritarian - serves as a source of transformation of the dominant mode of political production.
Part I analyzes four models of political systems: popular (tribal), bureaucratic authoritarian, conciliatory, and mobilization. This classification is based on three parameters: 1) ranking and interpretation of cultural values that have a decisive impact on the formation of the priorities of a particular policy; 2) influence on the political process by such structures as the government, political parties, social groups within the country, various foreign institutions; 3) the behavior of the leaders and the masses. We first study the way in which each type of policy is carried out, and then the specific societies that implement this abstract model.
Since these four models are abstract, it helps to clarify how policies are produced in individual countries by dividing them into more specific subtypes. For the same purpose, the concept of the degree of role specialization in the system is introduced. For example, in a number of folk (tribal) systems, “hunting-gathering” as a type is distinguished by less role specialization than agricultural. Industrial bureaucratic authoritarian systems tend to be more specialized than agrarian ones. Of the two types of conciliatory systems - competitive oligarchies and pluralistic democracies - the latter is characterized by greater complexity of political roles. Compared to populist mobilization systems, the elite subtype exhibits a variety of specialized organizations controlled by the ruling party. Systems with more advanced role specializations have the resources (financials, information, technical staff, complex organizational structures), strong political organizations, and the value orientations needed to drive wider social change. Conversely, the less specialized subtypes lack the cultural orientation, organizational structures, and behavioral resources to effectively adapt to shocks that upset the system's equilibrium 2 .
In analyzing various political systems and their subtypes, we focus on three general issues. First, what are the basic cultural principles that define
share the mode of action of political structures and the nature of the behavior of individual participants in the policy? According to the French philosopher of the XVIII century. Montesquieu, each political system is characterized by one or another abstract principle, spirit, or “essence”, which gives it unity, integrity. For example, the civic virtues provide it with the democracy and solidarity it needs and influence the behavior of its leaders. Despotism is based on universal fear. Like Montesquieu, we believe that every political system professes certain ethical principles on which the conduct of a particular state policy depends 3 . Second, how do political systems shape it? What is their particular style of making and implementing government decisions? And thirdly, how do different systems effect political transformation?
Joseph Schumpeter."Capitalism, socialism and democracy"
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Part one. MARXIST DOCTRINE
Prologue
Chapter I. Marx is a prophet
Chapter II. Marx - sociologist
Chapter III. Marx - economist
Chapter IV. Marx - teacher
Part two. CAN CAPITALISM SURVIVE?
Prologue
Chapter V. Growth rates of the total product
Chapter VI. The Possibility of Capitalism
Chapter VII. The process of "creative destruction"
Chapter VIII. Monopoly practice
Chapter IX. Respite for the proletariat
Chapter X. The Disappearance of Investment Opportunities
Chapter XI. capitalist civilization
Chapter XII. wall breaking
1. Withering away of the entrepreneurial function
2. Destruction of the protective layer
3. Destruction of the institutional structure of capitalist society
Chapter XIII. Growing hostility
1. Social atmosphere of capitalism
2. Sociology of Intellectuals
Chapter XIV. Decomposition
Part three. CAN SOCIALISM WORK?
Chapter XV. Starting positions
Chapter XVI. socialist project
Chapter XVII. Comparative analysis of projects of social organization
1. Preliminary remarks
2. Comparative analysis of economic efficiency
3. Justification of the advantages of the socialist project
Chapter XVIII. Human factor
Warning
1. The historical relativity of any argument
2. About demigods and archangels
3. The problem of bureaucratic management
4. Savings and discipline
5. Authoritarian discipline under socialism: a lesson from Russia
Chapter XIX. Transition to socialism
1. Two independent problems
2. Socialization in conditions of maturity
3. Socialization at the stage of immaturity
4. The policy of the socialists before the proclamation of socialism: the example of England
Part four. SOCIALISM AND DEMOCRACY
Chapter XX. Formulation of the problem
1. Dictatorship of the proletariat
2. The experience of the socialist parties
3. Thought experiment
4. Looking for a definition
Chapter XXI. Classical Doctrine of Democracy
1. The common good and the will of the people
2. The will of the people and the will of the individual
3. Human nature in politics
4. Reasons for the survival of the classical doctrine
Chapter XXII. Another theory of democracy
1. Struggle for political leadership
2. Application of our principle
Chapter XXIII. Conclusion
1. Some conclusions from the previous analysis
2. Conditions for the success of the democratic method
3. Democracy under the socialist system
Part five. OUTLINE OF THE HISTORY OF SOCIALIST PARTIES
Prologue
Chapter XXIV. The youth of socialism
Chapter XXV. Conditions under which Marx's views were formed
Chapter XXVI. From 1875 to 1914
1. Events in England and the spirit of Fabianism
2. Two extremes: Sweden and Russia
3. Socialist groups in the United States
4. Socialism in France: an analysis of syndicalism
5. Social Democratic Party of Germany and revisionism. Austrian socialists
6. Second International
Chapter XXVII. From World War I to World War II
1. "Gran Rifiuto" (Great Treason)
2. The impact of the First World War on the socialist parties of European countries
3. Communism and the Russian element
4. Managed communism?
5. The current war and the future of the socialist parties
Chapter XXVIII. Consequences of World War II
1. England and Orthodox Socialism
2. Economic opportunities of the United States
3. Russian Imperialism and Communism
MOVEMENT TO SOCIALISM
"Untimely" thoughts of Joseph Schumpeter
B.C. Autonomous
The book offered to the attention of the reader was published more than fifty years ago. By itself, this period should not confuse us. Capitalism, Socialism, and Democracy is often listed as one of the greatest economic writings of all time, and Schumpeter's Harvard student Paul Samuelson declared that this great book is better read forty years after it was published than it was in 1942 or 1950. ( years of publication of the book and the death of its author). However, in the ten years that have passed since this statement, so much has changed in the world, and especially in our country, that the problem of perceiving Schumpeter's masterpiece is now completely different.
In pre-perestroika times, Schumpeter's book, along with Hayek's "The Road to Slavery", Milton's and Rosa Friedman's "Freedom of Choice" and other "capitalist manifestos" adorned the shelves of the special depositories of our scientific libraries. Now they seem to be standing on opposite sides of the barricades. The destruction of the socialist system on a global scale and the destruction of the Marxist system in the minds of most Soviet social scientists caused a powerful movement of the pendulum of intellectual fashion towards private-property capitalism and the ideology of classical liberalism. In Western economic literature, our reader began to look, first of all, for evidence of the optimality of free enterprise and the impossibility of building any kind of socialism. Hayek and Friedman, at least in the classrooms and on the bookshelves, have taken the place of the debunked prophet Karl Marx.
From this point of view, "Capitalism, Socialism and Democracy" looks somewhat suspicious. Schumpeter does not skimp on praises of Marx, interspersing them, however, with sharp criticism. To the question: "Can capitalism survive?" - replies: "No, I don't think so." To the question: "Is socialism viable?" - assures: "Yes, of course." Such "untimely" thoughts, it seems, it's time to put them in special storage again. (However, here, which we will talk about below, the supporters of socialist ideals have nothing to profit from either.)
Still, we urge the reader to be patient. Conclusions about the fate of capitalism and socialism (as Schumpeter himself noted) are of little value in themselves. Much more important is who and on what basis they were made. We will try to answer these questions briefly in this preface.
The books of Joseph Schumpeter in Russian translation are already known to our readers. In 1982, the Progress publishing house published The Theory of Economic Development, and in 1989-1990. Publishing house "Economics" - the first chapters of the "History of Economic Analysis" in the collection "Origins: Questions of the History of the National Economy and Economic Thought" (Issue 1, 2). Finally, in 1989, the INION of the Academy of Sciences of the USSR published a collection of abstracts containing an abstract of the book "Capitalism, Socialism and Democracy", several reviews devoted to this book, and a biographical sketch about the author. Nevertheless, a brief outline of the socio-political views and biography of J. Schumpeter, especially the points related to the problems of the historical fate of capitalism and socialism, we consider it necessary to place here.
Joseph Alois Schumpeter was born on February 8, 1883 in the Moravian city of Trish (Austria-Hungary) in the family of a small textile manufacturer and the daughter of a Viennese doctor. Soon his father died, and his mother remarried the commander of the Vienna garrison, General von Koehler, after which the family moved to Vienna and the ten-year-old Joseph entered the Teresianum Lyceum there, which gave an excellent education to the sons of the Viennese aristocrats. From Theresianum, Schumpeter took out an excellent knowledge of the ancient and new languages of ancient Greek, Latin, French, English and Italian (this gave him the opportunity to read in the original economic - and not only - literature of all times and many countries, to form an independent opinion about it, which is amazing any reader of the "History of Economic Analysis") - and, perhaps more importantly, the feeling of belonging to the intellectual elite of society, capable and called to manage society in the most rational way. This elitist attitude is very noticeable on the pages of Capitalism, Socialism and Democracy, in particular, when describing the advantages of big business over small business, as well as the decisive role of the intelligentsia in the possible collapse of capitalism and the building of a socialist society.
Typical for the Austro-Hungarian monarchy of those times was the separation of the bourgeoisie from power (high officials were recruited from the nobility), which, according to Schumpeter, contributed to the development of capitalism due to the inability of the bourgeoisie to govern the state.
In 1901, Schumpeter entered the law faculty of the University of Vienna, which also included economic disciplines and statistics. Among the economists-teachers of Schumpeter, the luminaries of the Austrian school E. Behm-Bawerk and F. Wieser stood out. A special place was occupied by the Böhm-Bawerk seminar, in which Schumpeter first encountered the theoretical problems of socialism. He studied the works of Marx and other theorists of socialism (as is known, Böhm-Bawerk was one of the most profound critics of Marx's economic theory). It is interesting that the outstanding critic of socialism L. Mises, and equally outstanding socialists R. Hilferding and O. Bauer. Schumpeter's original position in this dispute will be discussed below.
Schumpeter's originality and independence, his desire and ability to go against the current, manifested itself in other moments as well. As you know, the Austrian school fundamentally rejected the use of mathematics in economic analysis. But, while studying at the University of Vienna, Schumpeter independently (without listening to a single special lecture) studied mathematics and the works of economists and mathematicians from O. Cournot to K. Wicksell so much that in the year of defending his dissertation for the title of Doctor of Law (1906) he published a profound article " On the Mathematical Method in Theoretical Economics", in which, to the great displeasure of his teachers, he concluded that mathematical economy was promising, on which the future of economic science would be based. Love for mathematics remained for life: Schumpeter considered lost every day when he did not read books on mathematics and ancient Greek authors.
After graduating from university, Schumpeter worked "in his specialty" for two years at the International Court of Justice in Cairo, but his interest in economic theory won out. In 1908, in Leipzig, his first large book, The Essence and Main Content of Theoretical National Economy, was published, in which Schumpeter introduced the German scientific community to the theoretical achievements of the marginalists, and first of all to his favorite author L. Walras. But, perhaps more importantly, here the 25-year-old author raised the question of the limits of static and comparative-static analysis of the marginalists, which he then tried to overcome in his theory of economic development. The book met with a very cool reception from German economists, among whom at that time the new historical school of Schmoller, which denied economic theory in general and the marginalist theory of the Austrian school in particular, dominated almost completely. Viennese economists who were skeptical about the use of mathematical methods in economic analysis did not like it either, although Schumpeter, especially for the German-speaking audience, presented the entire theory of general equilibrium in words, practically without using formulas (by the way, the Russian reader has the opportunity to get acquainted with this presentation in the first chapter " Theories of economic development). The good genius of Schumpeter was his teacher Böhm-Bawerk, through whose efforts the book was credited to Schumpeter as a second dissertation (Habilitationsschrift).
But one way or another, the Viennese university professors did not want to have a dissident in their ranks, and Schumpeter had to go to teach on the outskirts of the empire in distant Chernivtsi for two years. Only with the help of the same Böhm-Bawerk, who occupied the highest government positions in the Austro-Hungarian monarchy, Schumpeter managed in 1911 to get a professorship at the University of Graz, despite the fact that the faculty voted against his candidacy.
Here, in inhospitable Graz, in 1912 he published his famous book The Theory of Economic Development. It first expressed ideas that are important for understanding the second part of "Capitalism, Socialism and Democracy", in particular the famous chapter on "creative destruction", so it seems worthwhile to mention them in this preface. Schumpeter created a theory of economic dynamics based on the creation of "new combinations", the main types of which are: producing new goods, applying new methods of production and commercial use of existing goods, developing new markets, developing new sources of raw materials and changing the industry structure. All this economic innovation is carried out in practice by people whom Schumpeter called entrepreneurs. The economic function of an entrepreneur (implementation of innovations) is discrete and is not fixed forever for a certain carrier. It is closely related to the characteristics of the personality of an entrepreneur, specific motivation, a kind of intelligence, strong will and developed intuition. From the innovative function of the entrepreneur, Schumpeter derived the essence of such important economic phenomena as profit, interest, and the economic cycle. "The Theory of Economic Development" "brought the 29-year-old author worldwide fame - in the 30s and 40s it was already translated into Italian, English, French, Japanese and Spanish.
During the Graz period, Schumpeter also published other works that marked the circle of his scientific interests for life: the book "Era of the History of Theories and Methods" (1914) and a large article on the theory of money in the journal "Archiv fur Sozialwissenschaft und Sozialpolitik" (1917).
In 1918, a seven-year period of "going into practical activity" began in Schumpeter's life. The First World War ended with the collapse of three empires: German, Russian and Austro-Hungarian. In all these countries, socialists or communists came to power. Socialist parties were also gaining strength in other European countries. Discussions at the Böhm-Bawerk seminar were taking shape before our eyes. Former colleagues also reminded of themselves: in 1918, Schumpeter was invited by the socialist government of Germany to work as an adviser to the Socialization Commission, which was to study the question of the nationalization of German industry and prepare appropriate offers. The commission was headed by Karl Kautsky, and the members were Schumpeter's Viennese comrades Rudolf Hilferding and Emil Lecherer. The fact that Schumpeter accepted this proposal was obviously not only due to fatigue from the overworked scientific work of the previous decade and the hostility of university colleagues. Schumpeter was never a member of any socialist parties and groups and did not adhere to socialist views. In The Theory of Economic Development, he brilliantly described the role of the private entrepreneur in giving dynamism to the capitalist economy. According to G. Haberler, when asked why he consulted the Commission on Socialization, Schumpeter replied: "If someone wants to commit suicide, it's good if a doctor is present." But this is clearly not the whole truth. First, Marxism as a scientific theory undoubtedly had intellectual appeal for Schumpeter. Secondly, it was quite natural of him to think that the collapse of the old system would finally give power into the hands of the intellectual elite, to which Schumpeter rightfully considered himself, and thirdly, what theoretical economist does not think of trying to realize his ideas and knowledge in practice? Suffice it to recall at least young doctors and candidates of economic sciences who play an active role in Russian reforms. But Schumpeter was at that time 33 years old!
Our conjectures are confirmed by the fact that in 1919, after returning from Berlin, Schumpeter took the post of Minister of Finance in the Austrian socialist government (Otto Bauer, another student of Böhm-Bawerk, Otto Bauer, was Minister of Foreign Affairs). As you know, any social revolution, breaking, restructuring, etc., not to mention a lost war, is accompanied by the destruction of the financial system. In this situation, the decision to take the post of Minister of Finance was suicidal, and there is nothing surprising in the fact that after seven months Schumpeter, who was not trusted by either the socialists, or the bourgeois parties, or his own subordinates - ministerial bureaucrats, was forced to resign , An academic career in Vienna was still not available to him, of course, he did not want to look for a place in the provinces of a famous scientist, an honorary doctor of Columbia University, and Schumpeter decided to apply his knowledge in the field of finance as president of the private bank "Biederman Bank" . The results were quite deplorable: in 1924 the bank went bankrupt, and its president lost all his personal fortune and had to pay off debts for several more years.
Failures in the political and business fields, apparently, were natural. As Schumpeter himself wrote in The Theory of Economic Development: "Thorough preparation and knowledge of the matter, the depth of the mind and the ability to logical analysis in certain circumstances can become a source of failure." Of the not very numerous scientific works of this period, the most interesting for us is the brochure "The Crisis of the State Based on Taxes", in which Schumpeter first raised the question of the historical fate of the capitalist market economy and the possibility, or rather, the impossibility of a practical transition to the "true" Marxian socialism.
Schumpeter was brought out of a severe personal crisis by an unexpected invitation to the University of Bonn - unexpected, since for several decades German universities were closed to theoretical economists, remaining in the undivided possession of adherents of the historical school. True, in Bonn, Schumpeter was not entrusted with a theoretical course: he read finance, money and credit, and the history of economic thought. During this period, he was especially concerned about the problems of monopoly and oligopoly and their influence on the instability of capitalism. The results of Schumpeter's reflections on this subject can be found in Chap. VIII "Capitalism, Socialism and Democracy". At the same time, through the efforts of Schumpeter, R. Frisch, I. Fischer, F. Divisia, L. von Bortkiewicz and several other like-minded people, the international Econometric Society and the journal "Econometrics" were founded, which were to fulfill Schumpeter's old dream - to unite economic theory, mathematics and statistics.
In 1932, Schumpeter moved overseas and became a professor at Harvard University (courses in economic theory, the theory of economic conditions, the history of economic analysis and the theory of socialism). The major works of this period were the two-volume book Economic Cycles (1939), in which the ideas of the Theory of Economic Development were developed, i.e. the reason for the cycles is the unevenness of the innovation process in time, and the systematization of cyclic fluctuations of the economy of different durations is given: the cycles of Juglar, Kuznets and Kondratiev; "Capitalism, Socialism and Democracy" (1942) and the unfinished work "History of Economic Analysis" (published after the death of the author in 1954), which still remains unsurpassed in scope and depth of penetration into the material. In 1949, Schumpeter was the first foreign economist to be elected president of the American Economic Association.
Shortly thereafter, on the night of January 7-8, 1950, Joseph Schumpeter passed away. On his desk lay the almost finished manuscript of the article "Movement to Socialism", which the reader will also find in this book.
The book "Capitalism, Socialism and Democracy" became a bestseller almost immediately, which, however, cannot be surprising. According to the author's intention, it was written for a lay reader, in relatively simple language (with a discount on the inherent Schumpeterian English German heaviness, which the reader of the Russian translation will also feel), and the moment of its publication coincided with another grandiose breakdown of the world order - the Second World War, which put the question of the fate of capitalist civilization (and civilization in general) into a practical plane. But even for a reader versed in economic and sociological theory, the book was and still is of great interest. In his assessment of the prospects of capitalism and socialism, Marxist doctrine, the phenomenon of democracy and the politics of socialist parties, Schumpeter consistently adheres to objective, strictly scientific arguments, diligently excluding his personal likes and dislikes. Therefore, his premises and arguments, even if we do not agree with them, are much more useful for the researcher than the emotional, ideologically and politically overloaded discussions of our days about the market economy and socialism.
As the author himself warns the reader in the preface to the first edition, the five parts of the book are in principle self-sufficient, although they are interconnected. The first part contains a brief critical essay on Marxism. This text, equally unacceptable to the faithful followers of Marx and his indiscriminate detractors, should, in our opinion, be studied by anyone who wants to realize the real significance of Marx in the history of world social thought. The author of the preface can only regret that in his student years Schumpeter's book "Capitalism, Socialism and Democracy" (and especially the first part) could not be included in the list of references for special seminars on "Capital".
Today's commentators of Western economists are not forced by anyone to argue with the author in every place where he disrespectfully speaks about this or that "shrine", and to oppose him everywhere with the "correct point of view". The reader will be able to compare Schumpeter's criticism with the content of Marxist economic and sociological theory. Let us only pay attention to the undoubted similarity of the general "vision" by Shumpeter and Marx of the object of their study - the capitalist system - as a continuously developing and changing organism according to its own laws, as well as their desire to consider economic and social factors in interrelation, although the nature they understood this interconnection, as the reader will see, in different ways.
The second - the central and, perhaps, the most interesting part of the book is directly devoted to the fate of the capitalist system. When reading it, it must be remembered that it was written in the wake of the Great Depression, i.e. at a time when the survival of capitalism in its traditional form seemed doubtful not only to some Soviet economists who decided that he had entered a period of permanent crisis, but also to such authors as J. M. Keynes, as well as to economists who substantiated the New Deal .Roosevelt. However, Schumpeter showed originality here too (his genius can safely be called "a friend of paradoxes"). He did not associate the unviability of capitalism with economic barriers, in particular with the restriction of competition and the dominance of monopolies. On the contrary, both on a purely theoretical (Chapter VI, VII) and on a practical level (Chapter VIII), he argued that the restriction of competition, if understood in the spirit of a static model of perfect competition, cannot be an essential factor. the torus of slowing down economic growth, since the process of "creative destruction" - dynamic competition associated with the introduction of new combinations (see above) plays a much larger role in the capitalist economy. It cannot be hindered by monopoly barriers, and even vice versa. In ch. VIII Schumpeter unfolds before the eyes of the amazed Western reader, accustomed to the fact that monopoly is associated only with losses in social welfare, a wide panorama of advantages (in terms of dynamic efficiency, i.e. creating conditions for the process of "creative destruction") of a large monopoly -istic business over an economy close to the model of perfect competition. (In the context of active antitrust policy in the United States, this idea sounded, and still sounds, as a challenge to public opinion.)
The Great Crisis of 1929-1933 and the protracted depression that followed it also did not make much impression on Schumpeter, since they fit well into his concept of business cycles.
So, according to Schumpeter, the danger to capitalism is not from the economic side: low growth rates, inefficiency, high unemployment - all this can be overcome within the capitalist system. The situation is more complicated with other, less tangible aspects of capitalist civilization, which are destroyed precisely because of its successful functioning. Some of these instruments: the family, labor discipline, the romance and heroism of free enterprise, and even private property, freedom of contract, etc., fall victim to a process of rationalization, bureaucratic control mechanism, succeeding in the field of "creative destruction". Thus, the development of capitalism weakens the capitalist motivation everywhere, it loses its "emotional" appeal. Ch. IX and XII are excitingly interesting from the point of view of the civilizational approach to the capitalist system, which is becoming more and more widespread in our literature. This is, in fact, the same theory of the superstructure and its reverse influence on the basis, the need for which F. Engels spoke in his last letters.
The English left-wing historian Tony Judt, before his death in 2008, wrote a work in which he tried to rethink the role of Western social democracy. The fact that neoliberalism had proved its failure was beyond his doubts. Judt believed that the way out of the current impasse was to return to redistributing wealth and increasing the role of the state.
Tony Judt had a typical background as a Western leftist intellectual. He was a Jew (his mother is from Russia, his father is from Belgium), he graduated from Cambridge. Early on he became interested in Marxism, then switched to left-wing Zionism, and even lived in an Israeli kibbutz for several years in the 1960s. With age, he settled down and moved to the camp of the Social Democrats (his political views corresponded to the left wing of the British Laborites and French socialists). He died relatively young, from a stroke, at 62 in 2010.
His last work was called "Ill Fares the Land", and its title refers to the words from the famous poems of the English poet Oliver Goldsmith (1730-1774), taken as an epigraph to the book:
“Unfortunate is the country where thieves become impudent,
Where riches are accumulated, and people grow weak.
Judt's book had a great resonance in the West (as usual, it was not paid attention to in the Russian intellectual semi-desert). Its appearance coincided with the initial phase of the deep crisis of 2007-2010, when the First World saw a rethinking of neoliberal economics and politics that led Western civilization to a dead end. Here is a short excerpt from Judt's book, which shows the path of becoming a "general welfare" society, as well as reflections on what social democracy should become today.
(Tony Judt)
“The obsession with accumulating wealth, the cult of privatization, the growing polarization of wealth and poverty – everything that began since the 1980s is accompanied by uncritical praise of the unbridled market, disdain for the public sector, the deceptive illusion of endless economic growth.
So you can't go on living. The 2008 crisis reminded us that unregulated capitalism is its own worst enemy. Sooner or later, he may collapse under the burden of his own extremes. If things continue as before, then even more shocks can be expected.
Inequality corrupts society. Differences in material status are transformed into rivalry over status and possession of goods. There is a growing sense of superiority in some and inferiority in others. Prejudice against those who are lower on the social ladder is growing stronger.
Increasingly tangible manifestations of crime and social inferiority. Such are the bitter fruits of the unlimited pursuit of wealth. 30 years of growing inequality have led the British, and especially the Americans, to believe that these are the normal conditions of life. That it is enough to have economic growth to eliminate social ills: the diffusion of prosperity and privilege will be a natural consequence of the growth of the pie. Unfortunately, the facts show otherwise. The growth of aggregate wealth camouflages distributive disproportions.
(Tony Judt during the Six Day War in Israel, 1967)
Keynes believed that neither capitalism nor liberal democracy could survive long without each other. Since the experience of the interwar period has clearly revealed the inability of the capitalists to protect their own interests, it is up to the liberal state to do this for them, whether they like it or not.
The paradox is that capitalism had to be saved by measures that were then (and since) identified with socialism. From Roosevelt's New Dealers to West German "social market" theorists, from the British Labor Party to French "indicative" economic planners, everyone believed in the state. Because (at least in part) almost everyone feared a return to the horrors of the recent past and were happy to restrict the freedom of the market in the name of the public interest.
Although the principles of Keynesianism were adopted by various political forces, the leaders of European social democracy played the main role in their implementation. In some countries (the most famous example is Scandinavia), the creation of a "welfare state" was entirely the merit of the social democrats. The overall achievement has been significant progress in curbing inequality.
The West has entered an era of prosperity and security. Social democracy and the welfare state reconciled the middle classes with liberal institutions. The significance of this is great: after all, it was the fear and discontent of the middle class that led to the growth of fascism. Reconnecting the middle class with the democratic order was the most important task facing the politicians of the post-war period - and by no means an easy one.
The experience of two world wars and the crisis of the 1930s taught almost everyone to the inevitability of state intervention in everyday life. Economists and bureaucrats have come to understand that it is better not to wait for something to happen, but to anticipate it. They were forced to admit that the market is not enough to achieve collective goals, the state must act here.
In recent years, people have been taught to think that the price for these benefits was too high. This price, critics argue, is a decrease in economic efficiency, an insufficient level of innovative activity, a constraint on private initiative, and an increase in public debt. Most of this criticism is false. But even if this were true, this does not mean that the experience of European social democratic governments does not deserve attention.
Social democracy has always been a kind of political conglomerate. Dreams of a post-capitalist utopia combined with her recognition of the need to live and work in the capitalist world. Social Democracy took "democracy" seriously: in contrast to the revolutionary socialists of the early 20th century and their communist successors, the Social Democrats accepted the rules of the democratic game, including compromises with their critics and opponents, as the price of participating in the competition for access to power.
For social democrats, especially in Scandinavia, socialism was a distributive concept. They understood it as a moral issue. They wanted not so much a radical transformation for the sake of the future as a return to the values of a better life. Social insurance or access to health care was thought to be best provided by the government; therefore, it must do so. How - this has always been a matter of controversy and carried out with varying degrees of ambition.
Common to different models of the "welfare state" was the principle of collective protection of workers from blows from the market economy. In order to avoid social instability. The countries of continental Europe have succeeded. Germany and France weathered the financial storm of 2008 with much less human suffering and economic loss than the economies of England and the United States.
The Social Democrats, at the head of governments, have maintained full employment for almost three decades, as well as economic growth rates even greater than during the unregulated market economy. And on the basis of these economic successes, they achieved serious social changes that began to be perceived as the norm.
By the early 1970s, it seemed unthinkable to think about cuts in social services, benefits, government funding for cultural and educational programs—all the things people used to think were guaranteed. The costs of legislating social justice in so many areas were inevitable. As the post-war boom began to subside, unemployment became a serious problem again and the welfare state's tax base more fragile.
The generation of the 1960s was, among other things, a by-product of the welfare state itself, upon which it vented its youthful contempt. The consensus of the post-war decades was broken. A new consensus began to form around the primacy of private interest. What worried the young radicals—the distinction between freedom of private life and frightening restrictions in the public sphere—was, ironically, characteristic of the newly re-entered the political right.
After the Second World War, conservatism was in decline: the pre-war right was discredited. The ideas of "free market" and "minimal state" did not enjoy support. The center of gravity of political disputes was not between the left and the right, but among the left itself - between the communists and the dominant liberal social democratic consensus.
However, as the traumas of the 1930s and 1940s began to be forgotten, there was a revival of traditional conservatism. The return of the right was aided by the emergence of the new left in the mid-1960s. But not earlier than the mid-70s, a new generation of conservatives decided to challenge the "statism" of their predecessors and talk about the "sclerosis" of overly ambitious governments, "killing" private initiative.
It took more than 10 years for the dominant “paradigm” of discussing the problems of society to move from a passion for state interventionism and a focus on the public good to a view of the world, which M. Thatcher expressed with the words: “There is no such thing as society, there are only individuals and families” . The role of the state was again reduced to an auxiliary one. The contrast with the Keynesian consensus could not be more striking.
The very concept of "wealth" cries out to be redefined. It is not true that progressive tax rates reduce wealth. If the redistribution of wealth improves the health of a nation in the long run, by reducing the social tensions generated by envy, or by increasing and equalizing everyone's access to services that were previously reserved for the few, then isn't that good for the country?
What do we want? The first priority is to reduce inequality. With entrenched inequalities, all other desirable goals are hardly achievable. With such a striking inequality, we will lose all sense of community, and this is a necessary condition for politics itself. Greater equality would mitigate the corrupting effects of envy and hostility. This would benefit everyone, including those who are prosperous and wealthy.
"Globalization" is an updated version of the modernist belief in technology and rational management. This implies the exclusion of policy as a choice. Systems of economic relations are treated as a natural phenomenon. And we have no choice but to live by their laws.
It is not true, however, that globalization evens out the distribution of wealth, as liberals claim. Inequality is rising – within countries and between countries. Constant economic expansion alone does not guarantee either equality or prosperity. It is not even a reliable source of economic development. There is no reason to believe that economic globalization is smoothly transforming into political freedom.
Liberal reformers have turned to the state before to deal with market failures. This could not have happened "naturally" because the crashes themselves were a natural result of the market's functioning. What could not happen by itself had to be planned and, if necessary, imposed from above.
Today we face a similar dilemma. We are in fact already resorting to state action on a scale that last took place in the 1930s. However, since 1989 we have congratulated ourselves on the final defeat of the idea of an all-powerful state and are therefore not in the best position to explain why we need intervention and to what extent.
We must learn to think about the state again. The state has always been present in our affairs, but it has been vilified as a source of economic dysfunction. In the 1990s, this rhetoric was widely taken up in many countries. The opinion prevailed in the public mind that the public sector should be reduced as much as possible, reducing it to the functions of administration and security.
How, in the face of such a widespread negative myth, how to describe the true role of the state? Yes, there are legitimate concerns. One is related to the fact that the state is an institution of coercion. Another objection to the activist state is that it can make mistakes. But we have already freed ourselves from the assumption, widespread in the middle of the 20th century, that the state is the best solution to any problems. Now we need to get rid of the opposite notion: that the state is - by definition and always - the worst possible option.
What can the left offer? We must remember how the generation of our grandfathers coped with similar challenges and threats. Social democracy in Europe, the New Deal and the Great Society in the US were the answer. Few in the West today can imagine the complete collapse of liberal institutions, the disintegration of the democratic consensus. But we know examples of how quickly any society can slide into a nightmare of limitless cruelty and violence. If we are to build a better future, we must begin by realizing how easily even the most established liberal democracies can sink.
It is doctrinaire market liberalism that has held for two centuries that unquestioningly optimistic view that all economic change is for the better. It is the right that has inherited an ambitious modernist drive to destroy and renew in the name of a universal project. Moderation is characteristic of social democracy. We should be less apologetic about the past and more confident about achievements. We should not be concerned that they have always been incomplete.
From the experience of the twentieth century, we must at least learn that the more perfect the answer, the more terrible its consequences.
(Quotes: Alternatives magazine, No. 1, 2013;
Michael Magid
The purpose of this article is not to defend representative democracy.
The author of the article is not a supporter of representative, parliamentary democracy, since its mechanism does not provide for either the adoption of basic decisions by general meetings of ordinary people, or the right to directly recall representatives at any time, at the request of meetings of voters, or an imperative mandate (i.e. direct order, mandatory for execution by a delegate of the general meeting). All decisions are made by presidents, governors, deputies. Representative democracy gives a handful of people the right to determine the fate of millions. It is not a form of democracy.
The purpose of this article is to examine the interdependence between the political system and state control of the economy.
1. Representative (parliamentary) democracy and dictatorship in the system of domination of private capital.
Representative democracy and dictatorship in a system dominated by private capital are mutually complementary entities. During periods of internal and / or external instability, big business needs a tough dictatorship that will be able to suppress all protests by force, bring the bourgeoisie itself to a consensus, to a consensus.
But let's not forget that the state, even if its intervention in the economy is relatively small, is still one of the richest owners and speculators...
Over time, in conditions when the situation stabilizes, other factions of capital begin to be burdened by state control. This creates the prerequisites for a transition to representative democracy and bourgeois freedom of speech (in which everyone has the right to express their opinion, but only representatives of certain oligarchs are allowed to work in the media and the education system that form public opinion). The example of Chile, Argentina and many other regimes speaks of just such a development.
Parliamentary democracy is ideally suited to the tasks of bourgeois economic management, political control and cultural hegemony in an era of stability and wealth, since it creates and maintains the illusion of participation of the masses in the government of the state. Within the framework of this system, there is more or less fair competition between influential groups of oligarchs and officials. Playing by the rules may be disadvantageous for the losers, but in the end it is beneficial for all the ruling factions. For only she is able to convince society that he really has the freedom to choose rulers. The fact that this is the freedom of slaves to choose masters is not often thought of by people.
In addition, representative democracy is more comfortable for many working people and for the petty and middle bourgeoisie than a rigid dictatorship: everyone loves to grumble at the authorities. Thus, the ruling elites solve two problems at once. Firstly, they let off steam of discontent, and secondly, the grassroots population is given the false impression that they live in conditions of freedom.
It is curious that such a system sometimes turns out to be more effective even in war conditions. Ernst Junger, one of the founders of totalitarian philosophy, noted that, paradoxically, the democratic regimes of France and the United States turned out to be more capable of mass mobilization of the front and rear than the more authoritarian Germany, Austria and Russia (during the First World War), and were able to avoid fatal internal shocks. The slogan "freedom in danger" or "republic in danger", for all the illusory nature of these freedoms and republics, turned out to be more effective than the obsolete faith in a good tsar and fatherland.
2. Democracy and dictatorship under conditions of limited state capitalism.
Suppose the state nationalizes most of the large enterprises. Does this mean that elections are being stopped and bourgeois freedom of speech is curtailed? Absolutely not necessary. The remaining factions of the big bourgeoisie, as well as representatives of small and medium-sized businesses, who are alarmed by the situation, will most likely begin to finance the opposition press to the state. The latter, incited by sponsors, will say a lot of unflattering words about the program of the ruling party, as well as tell a lot of interesting things about corruption in the ranks of current officials. The authorities will respond with criticism of the oligarchs; as a result, at some point, many interesting facts, usually carefully hidden, will come to the surface.
And not the fact that the nationalization will go further. In Sweden, Austria, and Denmark, part of large and all small and medium industry remained in the hands of the private sector during the years of social democratic reforms (50-70s). Economic and political diversity and competition were preserved. When Olof Palme, the Swedish Prime Minister, crossed the path of some large financial clans (according to another version, the Bofors concern, which produces weapons), he was simply killed.
3. Transitional model. If the state goes even further in the matter of nationalization, the situation will inevitably begin to change. Still, the more property is concentrated in the hands of the state capitalist, the stronger he is. And since he, among other things, has control over the police, the army, intelligence agencies, education systems, taxes, etc., he gradually combines in his hands immense power and wealth. So, if national wealth continues to flow into the hands of the state, if all or almost all large enterprises pass under its control, then a transitional model will arise to a totalitarian regime like the USSR.
Examples of countries where such a transitional model took place are the former Yugoslavia, Israel (until the 80s), Hungary of Janos Kador, Poland in the 70s-80s.
What do we see in such countries? There, usually, there is a so-called. half party system. The power of the ruling party is colossal, the other parties are rather nominal. The power of the secret services is enormous, the media are controlled by the ruling party, and the possibilities for creating any associations independent of the state are severely limited.
It is curious that Israel of the 50s-70s, of all the countries known to me, perhaps to the greatest extent embodied the aspirations of the left socialist-statesmen, the left social democrats. There, all or almost all large enterprises were owned either by the state or by trade unions, while the small and medium-sized private sector was preserved. The bureaucracies of trade unions, ministries, secret services, the army and the ruling Social Democratic Party were closely intertwined. There were certain elements of self-government, which, however, were tightly controlled by the party and economic bureaucracy. Freedom of speech was suppressed, persons suspected of disloyalty to the state could be subjected to all sorts of sanctions or even disappear.
And yet, from Israel, Hungary or Yugoslavia, one could go abroad, one could create a small group of dissidents inside these countries without the risk of immediate reprisals, one could criticize government policies aloud (not on TV) or make opposition films. In Israel, the Communist Party and the opposition ultra-right party Herut (Svoboda) officially operated, although in schools the children were taught that the Kherutites were fascists with whom one should not deal (which is true).
4. Total state capitalism.
The process of further concentration of property in the hands of the state leads to the emergence of a model similar to the Soviet or North Korean. Here, the life of an individual is already totally dependent on state policy. The state pays wages, and alienates the product of labor from producers and commands the army, and controls the special services, newspapers, radio and television. Without it, do not step a step.
Thus, a state structure arises close to that described by Orwell in his anti-utopia "1984". No opposition can exist in such a state. As long as the centripetal forces are strong, no attempts to democratize such a regime, to combine it with a representative democracy of the Western type, are possible. The total state system is a black hole that collapses, shrinking more and more under its own weight. The power of the bureaucratic center is so great and immense that no alternative points of concentration of property or power even partially independent of it become unthinkable, no criticism of the regime is possible.
The totalitarian state-capitalist system gravitates toward unity of command. Sooner or later, it takes the form of a pyramid, tapering upward, at the head of which is one powerful leader. That is why all attempts (from Trotskyists to Gorbachev) to democratize the Bolshevik total system failed. In such a system there is no place for any kind of opposition, and all arguments about a multi-party system in the USSR were meaningless ... until the moment when the USSR existed as a single entity.
We now know that systems of this kind are not static. Over time, the central government weakens control over regions and individual industries. This is due to the decrepitude of the system, with the complexity of managing all social processes from a single center in a vast country. Following this, influential bureaucratic groupings arise and gradually form. At some point, they launch privatization processes in politics and the economy, which is accompanied by the growth of local separatism and regional nationalism. At this point there is a transition to private-capitalist relations, often to the wildest ultra-market capitalism. The circle closes...