Socialism and the Market: Returning to the East European Debate

ABSTRACT

This study reassesses a body of research that has been somewhat neglected: Eastern European market socialism of the 1960s-1980s. It does so with the objective of recovering key issues and also identifying problems that need to be addressed. Thus, the study begins with an overview of the practices of market socialism, which was pursued to varying degrees from the 1960s. While some (USSR, East Germany and Czechoslovakia) turned back to centrally planned economies in the 1970s, others (especially Yugoslavia and Hungary) pursued further reforms. This material provides the basis for analysis of three theoretical points and their attendant problems: the market as a neutral ‘economic mechanism’, as an effort to detach a market economy from its assumed integral connection with a capitalist socio-economic system; the tensions between planning and market; and the ownership of the means of production, which risked ignoring the liberation of productive forces. The conclusion discusses potential assessments of the market socialist experiments.

KEYWORDS:

• Market socialism
• Eastern Europe
• economic mechanism
• ownership of means of production
• market-planning tension

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 As far as possible, I leave aside potentially contentious questions concerning which there is difference of opinion and would detract from the main argument. These issues include: whether the governments of Eastern Europe arose from primarily endogenous movements or were imposed from without; whether a phrase such as ‘dictatorship of the proletariat and peasantry’ is an empty one; whether there was anything socialist at all about the economies and societies of Eastern Europe and the USSR; and so on.

2 The CMEA included all Eastern European countries, along with Mongolia, Cuba, Vietnam, and Yugoslavia as an equal trading partner in 1964.

3 For country by country surveys, from the early 1980s and the late 1990s, see Nove et al. (1982) and Wagener (1998b).

4 Lange’s later (1953) turn to studying the dynamics and potential of planned economies was already foreshadowed in few intriguing pages of the original breakthrough article (1936, pp. 68–71).

5 For a comprehensive collection of material relating to this debate (also known as the von Mises-Lange debate), see the nine volumes edited by Boettke (2000) and the initial collection by von Hayek (1938a).

6 Three overlapping phases are often identified: a ‘mixed administrative self-managed market economy’ (1953–1962); a ‘labour-managed market economy’ (1963–1972); and a ‘contractual economy’ (1974–1989) (Brus and Laski 1989, p. 91).

7 The logic here is best expressed by Brus (1975, p. 150):

there was the emphasis on the intention of strengthening central planning, among other things by freeing it from the centralistic semblances of precision, efficiency and universality, semblances which were becoming more and more dangerous for the real capacity to plan the course of economic processes.

8 This point also includes the de-linking of socialism from a non-market planned economy (Estrin and Winter 1989, p. 101, 105, Lawler 1998, p. 34, Schweickart 1998, p. 11).

9 Kornai (2014, p. 154) later even came to suggest that the ‘prime feature of the socialist system is repressive and totalitarian political monopoly’ (see also Davies 2018, p. 346).

10 This point ultimately derives from Lenin (1966).

11 See also Schweickart’s (1998, 2002) later proposal in the same vein.

12 The influence of the Roman legal tradition is rather complicated: the Romans invented the category of private property in late second century BCE as a legal and economic outcome of the slave market economy; it was subsequently lost for centuries only to be gradually recovered during the High Middle Ages under the ‘lawyer popes’ of the ‘Papal Revolution’; from there, it fed into many strands, including the Enlightenment, the French civil code of Napoleon, and the first stirrings of capitalist market economies in the sixteenth century (Diósdi 1970, pp. 56–59, Watson 1987, pp. 46–66, Johnston 1999, pp. 56–58, Miéville 2004, pp. 95–97).

13 As Marx and Engels ([1848] 1974, p. 498) make clear already in the manifesto (thereby breaking with Proudhon), the ‘abolition of private property’ means ‘bourgeois private property [bürgerliche Privateigentum]’.

14 Kraus (1998, p. 270) indicates that within these oppositions, further categories were debated in the DDR: ‘state ownership, socialization, nationalization and transformation into public ownership, private and capital ownership, people’s and common ownership, state and communal ownership, and cooperative and personal ownership’.

15 An extreme form was proposed by Altmann (1955) in the DDR, who argued that production relations were thoroughly determinative of the means of production.

16 The question of liberating productive forces was already mentioned in the Manifesto:

The proletariat will use its political supremacy to wrest, by degrees, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e. of the proletariat organised as the ruling class; and to increase the total of productive forces [Produktionskräfte] as rapidly as possible. (Marx and Engels [1848] 1974, p. 481)

17 Brus (1973, p. 1, 33, 1975, p. 105) notes a rate of economic growth of 11 percent per year from 1951 to 1955, with continued growth to 1960, while Kozma’s statistics (1982, pp. 99–104) carry through to 1970.

18 Lange’s argument (1970, pp. 102–3) here should not be misunderstood. He argues that the initial transition phase of the ‘war economy’ was ‘necessary in a revolutionary period of transition’, but that it led to economic stagnation and needed to make the transition to ‘functioning of an established socialist economy’ on the basis of economic laws.

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Notes on contributors

Roland Boer

Roland Boer is a professor in the School of Marxism, Dalian University of Technology in China. Among numerous works on Marxism and philosophy, he has published the five-volume work, The criticism of heaven and earth (Leiden: Brill, 2007-2014). In 2014, the work was awarded the Isaac and Tamara Deutscher Memorial Prize.