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September 05, 2011

Comments

George Hallam

"the USSR collapsed because it lost the competition against the west"

? What are you talking about?

Bobchinski

"- When competition does select against bad firms, it does so in a very costly way. The collapse of Fred Goodwin’s RBS and Dick Fuld’s Lehman Brothers imposed big external costs upon innocent bystanders."

I challenge you to find a libertarian who supported the bank bailouts. (There probably is at least one, since libertarians are all individuals and believe different things for different reasons but... my point is that they are extremely rare)

For most of us, there is no such thing as 'too big to fail'.

chris

@ George: I mean two things:
1. The cost of trying to keep up with US military spending imposed a massive burden upon a poorer economy.
2. East Europeans grew increasingly discontent as they realized that their living standards were falling behind westerners.
These aren't complete explanations - the fall in the oil price in the mid-80s was also a factor - but they surely play some role.
@ Bobchinski: yes, libertarians generally opposed the bailouts. But if the bailouts hadn't happened, there'd still have been a recession (possibly a worse one - not that this matters for my purposes). I was thinking of this as the cost to bystanders, not the fiscal cost of the bailout.

Tim

"But there’s an obvious retort here. If you don’t like burdensome taxes or laws, you can leave the country."

Another obvious retort is that while workers are free to leave this or that job (this or that capitalist), they are not free to leave capital itself. Jerry Cohen makes this point in various places

Tristan

I think Rothbard made the point you make about bosses.

Right libertarians do ignore (or don't see) the structural support from the current political economy for the managers and hierarchy. It often seems like they just want to replace the hierarchy and authority of the state with that of the boss...

Jim

The manager (if not the business owner him or herself) is employed by the business owners to manage the business on their behalf. That is the source of their legitimacy, either being the owner or representing the owner(s).

The State is not in the same position, as the voters who elect it are not the owners of the country that it is being elected to govern. It is being given power over people and things by third parties who are not the owners of said things, or the people themselves either.

Equally the relationship between worker and manager/owner is entirely different to that of voter/State. My relationship with my boss is governed by my contract of employment, which is voluntarily entered into on both sides. If either side break the contract, there are consequences. There is no contract of voting. I cannot sue my MP for failing to do the things he promised in order to get my vote. I cannot even sue him for a blatant breach of promise such as the Lisbon Treaty referendum manifesto pledge fiasco.

The two cases are entirely different and non-comparable.

Sam

"I challenge you to find a libertarian who supported the bank bailouts."

Bob, that's not really the point. You can argue about whether the bailouts were better or worse than no bailouts for the economy then/now, and you can argue about moral hazard, but once the CDO shell game started to unravel, the man in the street wasn't going to get out unscathed.

CahalMoran

It is fairly obvious at a basic level that bosses have the power over their workers, as capital is scarcer than labour - indeed, capitalism requires an army of unemployed workers to function.

For example, can anybody argue with a straight face that people have control over the amount of hours they work? It is decided not by workers or even employers, but by capital, which will want them as long as possible, lest the state intervenes.

So to dismiss complaints about work on the grounds that employees have entered a voluntary agreement is incredibly weak.

George Hallam

"@ George: I mean two things:
1. The cost of trying to keep up with US military spending imposed a massive burden upon a poorer economy."

True, it was a massive burden but the economy coped. There was no collapse of the economy.

"2. East Europeans grew increasingly discontent as they realized that their living standards were falling behind westerners."

True, some East Europeans were discontented.

But two points:
i) Were their living standards were falling behind "westerners"?

As I am sure you know in the US median wage peeked in the early 1970's.

ii) The collapse was due to events in the Soviet Union not Eastern Europe. The remarkable thing about this collapse was the absence of a real mass movement.

The hallmark of your site is a willingness to question popular assumptions. I suggest you apply that approch to what happened in Eastern Europe and the Soviet Union.


Phil

Please don't join the queue to kick Brown now he's down - particularly on the topic of damaging the Labour Party, an area where he did *nothing* by comparison to the sainted Tone.

ortega

As as I see it, there is no contradiction between to propose the market, an open and democratic organization, and, at the same time, choosing a very hierarchical and autoritarian tool, as it is the private company, to navigate through it.
And, by the way, having a boss in a company is not worse than having a few millions in a democracy (see Nozick).

Boursin

'Were their living standards were (sic) falling behind "westerners"?'

Judging by the continuous shortage of cheap, mass-produced necessities of everyday life taken for granted in the West, they were certainly falling behind. The Croatian writer Slavenka Drakulic, in her thoroughly fascinating book How We Survived Communism and Even Laughed, raises the unavailability of ordinary sanitary napkins (something to which most males have probably never devoted any thought when mulling over the fall of communism) to the status of a key symbol for the whole lowness of living standards in Eastern Europe. Women were, so to speak, automatically subject to nature's own anticommunist propaganda campaign once every month.

Similarly, living here in Finland, I personally remember my mother sending completely run-of-the-mill items - such as tights - to my aunt's friends in Estonia in the 1980s, these being received as a gift of luxury goods would have been in the West.

'As I am sure you know in the US median wage peeked in the early 1970's.'

First: Europe is not the US in this respect. And second: in the Soviet Union in the late 1980s, only around 37-38 % of GDP went on wages, while in the industrialised West the average share was over 70 %. So according to Marx's own yardstick for exploitation, Soviets were almost twice as badly exploited as Westerners.

'As as (sic) I see it, there is no contradiction between to propose the market, an open and democratic organization, and, at the same time, choosing a very hierarchical and autoritarian tool, as it is the private company, to navigate through it.'

Until you say at least something about the reason you fail to see the contradiction in question, this statement is bound to strike one as merely autobiographical.

Philip Walker

"Another obvious retort is that while workers are free to leave this or that job (this or that capitalist), they are not free to leave capital itself."

Well, you could go and live on a desert island. Seriously. The only society in which capital does not exist is the pure consumer society, in which the living is literally hand-to-mouth: but in such a society, there can be no technology or medicine or manufacturing or mass entertainment. These all require accumulations of capital in order to improve more basic goods to the more advanced.

"Escaping" from capital? Who would want to?

George Hallam

"Europe is not the US"

True, but neither is it 'The West'.

Just as The UK is not Europe and Scotland is not the UK.

It's fine to be selective, but let's be clear when we do so.

If you look at the evidence the generalisation does not hold.

"Judging by the continuous shortage of cheap, mass-produced necessities of everyday life taken for granted in the West, they were certainly falling behind."

The existence of shortages is not evidence of "falling behind".

There have been enough studies of the pre-1917 Tsarist and pre-1939 Eastern European economies for us to be able to say that the standard of living in these countries was a very long way behind the "West" as it is generally defined. (Japan is a bit of an exception here though it is interesting that its 1913 level of urbanisation was considerably higher than that of Tsarist Russia. Japan was also something of a military power as was shown in 1904-5.)

“Falling behind” would mean that the gap had bigger. I don't think this is true.

Tim Newman

Were their living standards were falling behind "westerners"?

Miles behind, so far it's untrue. West Germans thought material goods in East Germany were utter crap. Russians thought stuff in East Germany was of superior quality to their own stuff. My wife grew up in Soviet-era Leningrad and had a job when she was a kid translating the manuals of East German kit into Russian. When she first left Russia and went to West Germany on a school trip, she couldn't believe her eyes.

Marja Erwin

But it doesn't make sense to say they were falling behind unless they started at rough partity with the West. Instead they were far behind the West even before the world wars, and they suffered more devastation than the West in those wars.

Tim Newman

But it doesn't make sense to say they were falling behind unless they started at rough partity with the West.

The USSR closed the gap which existed between Tsarist Russia and the west quite considerably in the 1930s and again in the 1950s (which is why western governments were most worried about communist takeovers during these periods). During the 1980s, the gap had widened and continued to do so, and given the electronic revolution which was about to occur, would have been left standing. It is not too far fetched to say the USSR was falling behind the west in the 1980s, even if they started off some way back. Perhaps falling farther behind would be better, but it hardly makes a difference to the point being made.

CahalMoran

ortega,

I couldn't really follow your comment. Were you being sarastic or not? If not, please could you clarify why it's OK for an authoritarian structure to exist in the marketplace?

George Hallam

“The USSR closed the gap which existed between Tsarist Russia and the west quite considerably in the 1930s and again in the 1950s.. During the 1980s, the gap had widened.”

It only seems like yesterday that conventional wisdom was that the Soviet standard of living declined in the 1930s. But now, I see, it’s OK to say that yhe Soviets improved their standard of living in the 1930s and 1950s so long as you say that they fell further behind “the West” in the 1980s.

George Hallam

"Miles behind, so far it's untrue."

??

"West Germans thought material goods in East Germany were utter crap."

As opposed to spiritual goods? or as opposed to the every-day goods that West Germans actually bothered to buy?

In the late Seventies I believe that at least some West Germans considered it worth crossing the border to the DDR to buy cotton socks.

Jonny R

Can we sort this End of Cold War argument and move on?

before we get to the bit Chris said about standards of living in the 'West' vs. the USSR, the real bit of flawed conventional thinking is the idea the arms race hastened the end of the Cold War!

Actually, there is a strong argument that increased US spending on arms (especially in the 'Second Cold War' period) lengthened the Cold War. the argument being that the USSR, faced with tensions in near Asia, tensions with China and internal economic grumbles since Kruschev was pushed to one side, exacerbated by stuff like 'Ostpolitik', greeted 'Detente' with open arms (no pun intended) and would have been interested in a slow draw down of the Cold War if only Reagan's evil empire nonsense and 'star wars' fantasy didn't get in the way.

There is plenty of primary evidence for this, not least from within the US at the time. Although the USSR had a different conception of the room Detente provided for the Soviets than the US (Kissinger famously - and unsurprisingly cynically - describing it as "containment by other means'), some voices in US administrations before Reagan did see this change. Carter (for one term) and his Sec of State Cyrus Vance for example, who argued that Soviet 'expansion' in the late 70's was defending against internal worries. Also, the CIA produced a report that identified a reduction of Soviet ICBM's and their weakening technology, the argument being that this provided an opportunity for more negotiations.

Of course, as always happens, then the crazy US right stepped in an made a horlicks of everything, typified by the hilarious 'Team B' report that was commissioned to answer the CIA's argument. This marvellous bit of right wingnuttery made points such as that there ARE lots of ICBMS in the USSR, but the CIA missed them as they are hidden in James Bond villain lake bases and secret tree covered bunkers and they knew this because the USSR is just that sort of place full of those sorts of people. You can find the report online, and it IS that batshit crazy. If all this sounds like Colin Powell's evidence regarding Iraq and WMD, well, signatories to Team B (part of the "Committee on the Present Danger") included people you may have heard of like Donald Rumsfeld, Paul Wolfowitz, Daniel Pipes (Condi Rice's Uni tutor) and so on...

Add to the fact that Gorbachev was one of the few people who seemed to accept the Novorsibrsk report (http://en.wikipedia.org/wiki/Novosibirsk_Report) and that that the USSR was far happier to come to the table when Reagan's policy changes in his second term, well it is quite easy to wonder if the arms race of the first Reagan administration may well have extended the Cold War (with the bonus freebie of screwing the US economy to boot).

The point being that if you buy that Reagan's 'Star Wars' pushed the USSR into oblivion at best it's correlation, at worse, a case of drinking the finest Kool Aid of some very dubious right-wing history.

Well, that what I think anyway! As for the economic stuff and the distraction of people wanting proper cotton socks...

Jonny R

The other side of the argument is a mix of an extension of Mary Kaldor's "The Disintegrating West" and all the stuff that illustrates that there was a clear growth of a 'civil society' in the East and West that pushed towards reform. So, briefly (ish) this time...

1. The West faced economic challenges from the 'periphery' (be it the USA facing challenges economic from the EEC, Europe from Japan, etc etc), so this brings about tensions in the NATO / Atlantic consensus. Of course, this is all greatly emphasised by the gold standard and US currency crisis and stagflation.

2. Wars in Middle East and resulting Oil crisis make all this worse...

3. This also exacerbates tensions between the USSR and China and Japan...

4. A possible small solution to economic stagnation in Europe (in Germany at least) is Willie Brandts "Ostpolitik" (an expansion of relations between West Germany and the GDR) and this obviously begins to chip away at the Warsaw Pact...

5. And, yes, clearly societies in the East did want change. East Germans could pick up West German TV. Anyone remember the Prague Spring? There is a good degree of this being pushed by living standards ("better toasters!!") but this is just as much a result of CULTURAL change, the growth of a more educated youth and technology that makes the world outside more visible means the late 70's and early 80's isn't just CND marches, but also a growing criticism in the East of communism and the USSR.

However, I'd argue that the living standards / civil society creates the environment in which the end of the Cold War is possible without serious armed revolution, it isn't a primary cause itself.

The real causes are broader structural economic change and the fact that at any point the Cold War would have come to an end if either side had properly understood the huge weaknesses of the other. In the end, it was just that this acknowledgement was forced to the surface as alternatives were exhausted.

I do however think this would have happened under a second Carter administration if he'd have had the courage of his convictions, and Nixon hadn't undermined presidential power and helped unleashed the modern American 'new right'.


Tim Newman

"It only seems like yesterday that conventional wisdom was that the Soviet standard of living declined in the 1930s."

Hmm. Care to provide a link?

"But now, I see, it’s OK to say that yhe Soviets improved their standard of living in the 1930s and 1950s so long as you say that they fell further behind “the West” in the 1980s."

No, there is no qualifier. The standard of living for most Soviets *did* improve in the 1930s and 1950s.

"As opposed to spiritual goods? or as opposed to the every-day goods that West Germans actually bothered to buy?"

No, as opposed to industrial goods, food, fuel, etc. What's your point here? Or are you just resorting to semantics because you don't have anything else to say?

George Hallam

Jonny R asked:
"Can we sort this End of Cold War argument and move on?"

As his lengthy posts demonstrate, the answer is "No".

The pressing need to combat communist propaganda generated a great deal of misconceptions about the Soviet Union and its allies. These were generally accepted at the time, even by people who saw themselves as critics of free markets. The collapse of the ‘East’ has been used by neo-liberals to reinforce those negative stereotypes.

A great deal of the arguments that take place on blogs like this are premised on the judgement that central planning does not work. This skews any economic discussion.

If we don’t want to sound like Tony Blair then we need a long critical look at those arguments before we “move on”.


George Hallam

"It only seems like yesterday that conventional wisdom was that the Soviet standard of living declined in the 1930s."

Tim Newman asked

"Hmm. Care to provide a link?"

Try this book review. Failing that you could just read 'Animal Farm'

"The issue of the economic performance of the Soviet Union is hardly any less controversial today than it was at the height of the Cold War. While specialists continue to debate the precise figures, the consensus today is that under Stalin the Soviet economy grew rapidly, though at enormous human cost, and that economic growth was not translated into commensurately rising living standards."

http://www.warwick.ac.uk/~syrbe/pubs/FarmtoFactory.pdf

Tim Newman

The article you cite merely asserts such a consensus exists, seemingly for the purpose of giving Allen something to oppose. Much as you are doing, in fact.

Tim Newman

And note the use of the word "commensurately" in the piece you've quoted. This is an important qualifier.

George Hallam

“The article you cite merely asserts such a consensus exists, seemingly for the purpose of giving Allen something to oppose. Much as you are doing, in fact.”

This review as the first thing that came to hand. Let me try again to explain my point.

There is a great deal of evidence from various sources to support the argument for a significant rise in the general standard of living of the population of the Soviet Union in the 1930 (more specifically the second half of the decade).

Many specialists, mainly in what used to known as ‘Soviet Studies’, now concede the point. However, this conclusion is not widely accepted outside that community.

Two examples:

1. ‘Animal Farm’ has been a GCE/GCSE ‘set book’ since, at the latest, the early nineteen-sixties. There are many commentaries and ‘notes’ to support students in their studies. Orwell gives a strong impression that the standard of living was no better, and in some ways worse, than it had been before the revolution.

So, how many commentators point out the difference between the ‘fairy tale’, as Orwell called it, and the Soviet reality?

About two years ago Goldsmiths ran an AS level history project course. Students worked to produce an extended essay on a topic of their choice. At the start of the course students were invited to put forward their ideas. One girl suggested a comparison between ‘Animal Farm’ and Soviet history. The lecturer wasted no time in ruling this out on the grounds that ‘Animal Farm’ was a very accurate portray of events. End of discussion.

2. Soviet politics. Take any history of the Soviet Union that deals with the nineteen-thirties and see what it says about support for the Soviet Government (or ‘Stalin’ as it is usually termed). You are sure to find lots about cohesion and terror. There may be some reference to a thin layer of officials (aka ‘toadies’) who did well. There will not be very much, if anything, about a general rise in the standard of living.

If it were any other country being discussed is it likely that such a factor would be excluded when assessing the popular support for a government?

Tim Newman

"Many specialists, mainly in what used to known as ‘Soviet Studies’, now concede the point. However, this conclusion is not widely accepted outside that community."

If you mean those who have not bothered to study Soviet history properly will not know very much about Soviet history, then I agree. This can be expanded to all subjects.

"Take any history of the Soviet Union that deals with the nineteen-thirties and see what it says about support for the Soviet Government (or ‘Stalin’ as it is usually termed)."

There are two which I can recommend. Catherine Merridale's "Night of Stone: Deatn and Memory in 20th Century Russia" and William Taubman's "Khrushchev: The Man His Era. The first goes deeply into how the average Russian was affected by Stalin's policies, the second includes a lot about the projects executed and how they transformed Soviet life. Khrushchev's building of the Moscow Metro, for instance, had an enormous impact on the quality of life of the average Muscovite.

George Hallam

"If you mean those who have not bothered to study Soviet history properly will not know very much about Soviet history, then I agree"

Yes, we can agree, though some people might have difficulty with the word "properly".

As Keynes observed, people find it difficult to be objective about Soviet Russia.

Remembe I only got involved in this discussion because of a causal remark about
the USSR collapsing because it lost "the competition" against the West.

ortega

Cahal Moran

Sorry for the delay.
I was not sarcastic. I'm spanish and my english goes only that far.
I was pointing out that it is perfectly possible and no contradictory at all, that the best tool to process the information of the market is a very hierarchical organization. The same civilization that created one has created the other very simultaneously and with quite succes.
Another different thing is that many people do not like to have a boss. Having been both things myself, I assure you that having employees is not that nice neither. Probably the best option is being your own boss, a one man company, like, I think, someone who owns this place.
Sorry again for my english.

George Hallam

If anyone is still interested...

I now have a small pile of quotes that make claims like "the Stalinist regime did little to improve the life of its people in the 1930" (Shelia Fitzpatrick).

I also have comparisons between some GDP growth 1950-85 Eastern and Western European countries. These show that the East (Poland excepted) did not fall further behind Western Europe. West Germany and the DDR growth rates were very close with a slight advantage for the DDR.

I think that a wider understanding of these issues would do a lot more to combat neo-liberalism that looking for micro-inconsistances in their arguments.

Kevin Sadler

As I sit and read this thread, I realize quite quickly that you are all of a historical and worldly knowledge. I ask you, as I did the White House a few weeks back; How do we, in one generation, make the world a better place? Where do we start? I may get booted for not being relevant to the thread at hand, but I am curious as to your responses.

One generation, can we do it?

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