[I]n the period of independence, socialism (i.e. the Soviet communist version) appealed to the decolonized governments, not only because the cause of anti-imperialism had always belonged to the metropolitan Left, but even more because they saw the U.S.S.R. as the model for overcoming backwardness by means of planned industrialization, a matter of far more urgent concern to them than the emancipation of whatever could be described in their countries as ‘the proletariat’. (Hobsbawm 1996, 203)
In November 2017, the occasion of the 100th anniversary of the Russian Revolution was commemorated for the huge number of important global changes that originated immediately, or in the course of time, from this epoch-making event. Some historical reminiscences and deliberations on the geo-political consequences of the emergence of the Soviet Union and later the ‘socialist camp’ were the subject of Part I of this article (Hopfmann 2017). But the legacy of the Russian Revolution is not limited to a global bipolar dispensation in the intermundia of which the fighters for national liberation and national sovereignty could make use, and gain advantage by wisely manoeuvring between two major blocs. There are also theoretical deliberations on the political economy of development that attracted the attention of political decision-makers soon after the revolution.
On development theory
Theoretical questions of economic development and developmental policies gained considerable importance in the in the post-war era, after 1945, and gave rise to an obsession about development that rose to become the overarching mantra of decolonisation and national liberation.
Russia’s phenomenal rise as the Soviet Union in the post-war period saw it transformed through forceful industrialisation, in only two decades, from a ‘backward’, predominantly agrarian, country into a global superpower. This made it the role model par excellence for all those struggling for national independence, and working for their young nation-states to industrialise rapidly to catch up.
But at the very moment when the development mantra was being rapturously hailed by the newly liberated nations, who were now gaining their independence from their colonial overlords, the severe structural obstacles to development also became apparent. These were in part a result of the colonial past (in Africa the transcontinental slave trade played a particular destructive role) but were also being perpetuated by a neo-colonial present. It soon turned out that a term like ‘backwardness’ – understood as a form of ‘delay’ in development – was inadequate as a description of the overall socio-economic reality in the so-called Third World or the Global South (the preferred term of today). This specific (neo-)colonial socio-economic constellation became ‘famous’ as underdevelopment (Frank 1966), which was later defined as particular state of a (post-)colonial economy, characterised by a permanent and mutually enforcing interaction of three factors: a) economic heteronomy (dependence); b) a specifically retarded and distorted form of economic development (backwardness); and c) a lasting tendency to overexploit nature and workforce (depletion/overexploitation) (see Ernst and Schilling 1981).
Very early in 1918, the brilliant analysist and political strategist Vladimir Ilič Uljanov (known as Lenin) recognised the specifically restored socio-economic conditions in Russia – which he described as structural heterogeneity – as an obstacle to development. In his pamphlet on ‘Left-wing’ childishness and the petty-bourgeois mentality (Lenin 1972 [1918]), he referred to the ‘skewed’ and inorganic composition of an economy that simultaneously ‘contains elements, particles, fragments … [of] various socio-economic structures’ in mainly agrarian Russia. The final version of Lenin’s analyses of structural heterogeneity was eventually published in 1921 in his famous piece on The tax in kind (Lenin 1965 [1921]). Here he mentioned the following ‘elements of socio-economic structures’ present in Russia’s (rural) economy:
patriarchal, i.e., to a considerable extent natural, peasant farming;
small commodity production (this includes the majority of those peasants who sell their grain);
private capitalism;
state capitalism;
socialism.
Russia is so vast and so varied that all these different types of socio-economic structures are intermingled. This is what constitutes the specific feature of the situation. (Lenin 1965 [1921])
Later, by 1969, this concept of structural heterogeneity understood as a specific kind of obstacle to development was applied to Latin America by Armando Cordova and Hector Silva Michelena (1969), and was introduced to the debate on ‘peripheral capitalism’ in particular by Samir Amin and Dieter Senghaas (see Nohlen and Nuscheler 1992, 44, and Hauck 2012). Similar approaches were elaborated notably by Paul Baran and Theotonio Dos Santos under the concept of enclave economy in the1960s (Baran 1969; Dos Santos 1968). In the early 1980s the concept was developed further into the model of a ‘dependent multisector economy’ (Ernst and Schilling 1981, 30), understood as the general socio-economic structure of underdeveloped economies, whereby the term ‘dependent’ was meant to mark the high degree of external determination of the heterogeneous economic structures. ‘Thus, the multitude of socio-economic structures or sectors is enclosed by international capitalist relations of production’ (Ernst and Schilling 1981, 31; see also Schilling 1982), which are mainly responsible for the reproduction of distorted economic relations that are shaped more by the needs of foreign capital accumulation, and then by the necessities and needs of an internal development of productive forces. And this particular form of integration of Third World economies into the international division of labour refutes the notion that these skewed and seemingly backward structures are of a ‘pre-capitalist’ nature. The idea that vast parts of the economies of countries in the Global South are not yet capitalist or not yet ‘formal’, as well as concepts to ‘modernise’ the informal sector, fundamentally ignores or misrepresents the reality and therefore causes largely misguided ‘development’ interventions. ‘Informality’ is not a leftover from the past but a ‘modern’ functional socio-economic structure in its interwovenness with the capitalist world economy (see Hopfmann and Schilling 1988). Due to its structural effects, which in particular impede the establishment of competitive manufacturing industries, integration into the global economy turned out to be not necessarily beneficial for any national development strategy that aimed to achieve – after political sovereignty – economic liberation and independence.
Here again the period of industrialisation in the Soviet Union and later the socialist countries provided some instructive lessons:
The first thing to observe about the socialist region of the globe was that for most of its existence it formed a separate and largely self-contained sub-universe both economically and politically. Its relations with the rest of the world economy, capitalist or dominated by the capitalism of the developed countries, were surprisingly scanty. (Hobsbawm 1996, 374)
The need for delinking from the current regime of globalization is often not appreciated within the left, which makes significant segments of the left, no doubt unwittingly, subject to the hegemony of neoliberalism. Breaking out of that hegemony is the first priority for transcending the current conjuncture. (Patnaik 2017)
The necessity for a government-planned national industrialisation and development project is by far the most important lesson that the leaders of the young nation-states learnt from the Russian Revolution and the ascent of the Soviet Union to global superpower status during the following decades. However, such an ambitious national development project obviously requires stable and committed political leadership; a political leadership that is not confronted with the challenges of a political opposition and thus can focus all its efforts and all its commitment on the major national task of ‘development’. Therefore, it is hardly surprising that in many countries of the Global South the national industrialisation project went hand-in-hand with the creation of a single-party system that aimed at uniting all political interests under one national goal of overarching importance. Thus, the developmental state in symbiosis with the single-party system became the widespread political model in the Third World, and lasted virtually until the collapse of the Eastern Bloc and disintegration of the Soviet Union in the early 1990s. Only then did the peoples in the Global South – many of them only due to considerable pressure from the so-called donor community – fundamentally change their political system, a system that had been widely discredited for some time, due to the failure of the national industrialisation projects in the 1970s.
The reasons why these industrialisation programmes failed are hotly debated by scientists as well as political activists (see among others Brock 1992). There are certainly case-by-case peculiarities regarding the political framework, but also concerning geographical and geo-political conditions. But none of the new nation-state politicians and bureaucrats had resources at their disposal like those of the USSR decades earlier, and nor could they impose a development model in such a ruthless manner. Moreover, the general geo-political framework was simply too different – the Soviet Union stretched over a territory of 22 million km² and had a population of more than 200 million. The Soviet leaders had access to almost all types of resources and gained control of a huge domestic market, while in the decolonised countries domestic demand was weak and highly concentrated in the hands of a very tiny group of consumers. Thus, industrialisation programmes often focused on strategies to substitute manufactured products that were imported to satisfy the needs of these few people. But this narrow market was from the very beginning much too small to create the necessary economics of scale and scope. Furthermore, the need to import expensive intermediate goods diminished the effectiveness of production.
Focusing on the rich to sustain industrialisation did not really work anywhere:
Large as their individual purchases of various luxuries may be, their aggregate spending on each of them is not sufficient to support of an elaborate luxuries industry – particularly since the ‘snob’ character of prevailing tastes renders only imported luxury articles true marks of social distinction. (Baran 1969, 258)
The need to finance industrial projects with loans in foreign currency while the goods produced from the investments were sold on local markets for local money caused another serious obstacle – the so-called transfer problem. Loans in foreign currency have to be serviced in that currency, thus, the debt structure demands that the newly created industries are export-oriented. But even strategies of export-led growth are heavily dependent on world market conditions that are out of the control of the borrowers. The failure to service the loans and the ensuing ‘debt crisis’ eventually became an issue of concern to the international donor community, most notably the International Monetary Fund (IMF), which imposed the infamous structural adjustment programmes on the over-indebted countries. These programmes led to an enforced privatisation of industrial assets, and from there led straight to deindustrialisation. That is to say, when the new owners discovered that the state under structural adjustment was no longer willing and able to protect them against competition from abroad, they closed the industrial facilities in next to no time. The bitter reality of structural adjustment in Latin America as well as in Africa is that it left industrially deserted landscapes behind. ‘Industry shrank due to forced modernization, and labour moved … out of industry and most notably into rural and urban informality’ (Asche 2015, 129).
In view of this disappointing account of the first attempts to bring about a self-determined path to industrialisation, history is currently taking an ironic turn: 50 years after the first wave, there seems to be a general consensus about the necessity of ‘structural transformation’ (the new buzzword for industrialisation) in the Global South, particularly in Africa. ‘Structural transformation for inclusive and sustained growth’ can be found in one form or another in a number of UNCTAD publications since 2014 alone (see UNCTAD 2014; UNCTAD 2016a; UNCTAD 2016b). Furthermore, the newly discovered need for deeper manufacturing structures and more and better industrial jobs, in particular for young people, comes with the hindsight that otherwise these young men and women may well leave their home countries and emigrate to Europe or other countries of the Global North, where they hope to find decent work and a ‘better future for all’ – especially for themselves and their families (see Döver and Kappel 2015; Asche 2015).
More than 50 years into independence, the main development challenge is still to solve: the agrarian question – or the ‘agrarian revolution’ (Amin) – by linking it to autocentric industrialisation. It is notable that, with the passing of the Decree on land by the Second Congress of Soviets of Workers, Soldiers, and Peasants, the Russian Revolution provided the important insight that each and every serious development effort starts with a land reform that gives thousands of poor peasants the right to access land, thus providing access to the immediate means of self-subsistence. Keeping access to land open for all is even more important under conditions when, due to the size of the population, it is impossible to create enough industrial jobs.
Some young people will always try to seek work in the industrial sector at all costs – including undertaking the dangerous adventure of intercontinental migration in dilapidated boats and at the mercy of reckless slave traders. But the majority will always stay behind in their home countries where they have almost no chance of finding a job in industry, and this is unlikely to improve in the near future. Until 2020 there is
a sobering prognosis: the African working-age population will predominantly remain in the farm and non-farm household economy (70 to 80 per cent); just 15 per cent will work in wage-paying (‘modern’) services (work for the government … included); and a meagre 3 per cent will be in the wage-paying industry. Neither an industrial nor a post-industrial service economy is in sight. (Asche 2015, 131)
During the last 100 years the Russian Revolution and its consequences have in various ways influenced the processes of national liberation and development. However, none of the resulting development models – neither the Eastern model on central planning and enforced industrialisation, nor the Western welfare state (based on a neo-colonial division of labour and asymmetric trade relations), nor the Developmental State in the Third World – have been able to bring about an ecologically sustainable and socially just mode of production and consumption. This still remains a fundamental challenge.
On concluding
The ‘historic mission’ of the Russian Revolution – transition to a non-capitalist, participatory, inclusive, and socially just society – has not materialised. This is the sober but honest assessment of one of the most courageous attempts to change the world, so far.
The capitalist system has been shattered to some extent, and has been forced to adjust here and there, but it survived, and with the system survived its imperialist or neo-colonial traits. The more the global pressure towards social change subsided (because the socialist states encountered more and more economic and socio-political problems – mainly due to inappropriate economic policies, but mostly because of a serious lack of democratic participation), the more the neo-colonial traits of capitalism gained momentum. Thus, as early as the 1980s, important achievements of the Global South were reversed, and many states became ‘re-compradorised’ (Amin). The IMF and the World Bank imposed structural adjustment programmes and deliberately caused devastating deindustrialisation; many national-sovereign projects collapsed; and the Global South had to endure a whole new wave of political conditionality. But, in addition to this, the seemingly victorious capitalist system merely survived. Financialised neoliberal globalisation led socio-economic development almost everywhere into a cul-de-sac. It created many more losers than beneficiaries and provoked a severe world economic crisis in 2007 the effects of which continue to this day. All in all, during the past quarter of a century neoliberalism has delivered a shipwreck of a balance sheet, a declaration of bankruptcy: youth unemployment of unprecedented dimensions, deflation, deindustrialisation, financial instability, growing inequality; stagnating investments, rotting infrastructure, and decaying state services – just to mention the most serious effects. Even the newly formed group of G20 (the group of 20 is formed by 19 nation-states plus the European Union: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Russian Federation, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the USA) has failed so far to tame financial markets and, despite the Paris Climate Accord of 2015, the challenge of global warming remains unsolved. The social compromise of the welfare state is increasingly undermined and is about to disappear completely.
This compromise once became part of the attempts to contain Soviet and (after 1949) also Chinese communism. But with the victory – after decades of confrontation – over the communist and social democratic challenge capital lost exactly the kind of opposition that would be able to enforce a fundamental (and badly needed) modernization of capitalism today. (Schmidt 2016, 544)1
Nevertheless, because so many political leaders of the Global South and elsewhere had linked their hopes and aspirations, despite all delusions and confusions, to the Russian Revolution in 1917, the young generation all over the world will also in future read chapters about this epoch-making event in their history books – and this is certainly not the case for some of the events that still figure prominently in the Eurocentric history tales of the 20th century.