What point has the crisis reached?: Russian capitalism sinks in the world crisis

With Mikhail Gorbachev, Russian propaganda is enjoying the luxury of a media youth cure. Before the world’s cameras, Russia’s new head state declares: “revolutionary transformations are in progress in our country”, and the Kremlin’s new princes speak of “peace”, “revolution”, “democracy”, “disarmament”, etc. But none of this is really new; these have been Russian propaganda’s classic themes for decades. What is new, after the paralysis of the Brezhnev administration, is the new ruling group’s dynamism, its skill in promoting themes of propaganda and mystification, its ability to call on all the resources of the media arsenal, to liberate a few “dissidents” here, to make fabulous “disarmament” proposals there, to arrest a few “corrupt”' bureaucrats elsewhere. The Russian bourgeoisie is following the example of its Western colleagues; it is learning to master the art of ideological campaigns designed to hide from the proletariat the reality of the economy’s generalized decline, the drastic attacks on workers’ living conditions, and the sharpening of imperialist tensions.

Russia’s economic decline

Generally speaking, economic data is always subject to caution, because it is provided by the ruling class, and so in part determined by the latter’s propaganda needs; for most data in Russia, this tendency is much stronger than in the other great powers; the rest is simply classified as secrets. In these conditions, it is very difficult to have an exact idea of the real state of the Russian economy. However, a certain number of elements reveal clearly its weakness on the world scene, and its accelerating decline within the overall framework of capitalism’s world economic crisis:

-- the USSR’s status as the world’s second economic power is only relative. In 1984, the USA was in the lead with a GNP of $3627 billion, while the USSR took second place, closely followed by Japan: $1400 billion and $1307 billion respectively. However, a valid estimate of Russia’s GNP must take into account:

-- the fact that the rouble, which serves as the basis for calculations in Russia, is wildly overvalued in relation to the international currency of reference, the dollar;

-- a large part (10% to 20%) of Russian industrial output is unusable and unsaleable (even on the home market) but nonetheless entered in the accounts, while industrial products in general are of mediocre quality.

If we take account of these elements, it is likely that Japan’s real overall GNP has already overtaken Russia’s. However, even according to the official figures, Japan has already taken the lead in manufacturing output, which only accounts for 25% of Russian GNP.

Japan’s ability to catch up with Russia is proof enough of the latter’s worsening situation on the world economic scene, despite the years of officially announced record growth figures.

-- A good indication of a country’s degree of development is its GNP per inhabitant. In 1984, the USSR, with $5500 per inhabitant, came 49th on the world scale, after Hong-Kong and Singapore. Russia displays serious symptoms of under-development. This is especially clear if we simply consider the foreign trade situation, even if it only represents 6% of GNP (against 18% for France, for example).

 

 

Russia’s trade with the OECD is characteristic of an under-developed country. Essentially, the USSR is an exporter of raw materials, which in 1985 represented 80% of its exports to OECD countries.

Russian capital is incapable of maintaining its competitivity. Whereas in 1973, “technology derived” products amounted to 27% 04 Russia’s exports to the OECD, by 1982 this figure had fallen to 9%. Increasingly, the USSR’s ability to maintain a positive balance of payments and to buy the western technology that it lacks depends, not on its industrial power, but on its mineral wealth. This situation makes the USSR more and more sensitive to the fluctuations of the world market.

In terms of its trade with the West, 1986 was a bad year for Russia. Falling raw material, and especially oil, prices dealt a heaver blow to its export trade: during the first half of 1986, exports fell by 21% in value, while to maintain a positive balance of payments Russia had to reduce imports by 17.5%, and make large sales of gold, thus diminishing its reserves.

-- like any other capitalist country, the USSR is subjected to the full effects of the crisis. Since the beginning of the 70’s, growth rates have been falling constantly. From a mean annual rate of 5.1% in 1971-75, they fell to 3.74 in 1976-80 and to 3.1% in 1985. The rate of 3.2% during 1981-85 was the lowest since the war (these official      figures are over-valued, but they give an idea of the general evolution towards recession).

We are a long way from Khrushchev’s boastful claim that Russia would catch up with the USA in 25 years. And yet today, Gorbachev is still treating us to the tame kind of nonsense. However, behind the media smile lies the same iron fist; the same austerity imposed on the proletariat by the demands of the capitalist economy. The practice of Russia’s ruling class has not changed. Faced with an economic apparatus in decline, and a scarcity of capital typical of under-developed countries, the USSR must substitute its “human capital”, as Stalin put it, for the machines that it has neither the technology to produce, nor the money to buy from the West. For the Russian proletariat, already subjected to terrible conditions of poverty, all today’s fine speeches only serve to hide yet more blood, sweat and tears.

A redoubled attack on the working class living conditions

The struggle for greater productivity includes the police methods already established during the Andropov interregnum. Behind all the campaigns against alcoholism, these measures have been further intensified by the new leaders: stricter surveillance of the factories, prohibition to shop during working hours (which was customary giving the hours of queuing necessary to have a chance of buying the rare goods available in the state shops), checks in the street and the factories against absenteeism and higher penalties for resisting labor discipline, etc.

The Gorbachev team’s aim is to increase productivity and competitivity by increasing the economic competition between workers. The new reforms will increase the proportion of wages dependent on bonuses of all kinds. The new quality control increase wages in a few ultra-modern factories where it is possible to meet them (eg the pilot turbine factory in Siberia, where the monthly wage rose from 320 to 450 roubles); by contrast, where the productive apparatus is in bad condition, as it usually is, the impossibility of satisfying these controls will mean a sharp fall in bonuses, and therefore in wages. Moreover, since bonuses are awarded collectively, all workers must take part in the production effort. This means an increased pressure on all the workers, and also aims to encourage the divisions and oppositions amongst them. These new measures will increase wage inequalities, and accentuate the Russian economy’s “two-speed” functioning: on the one hand the pilot sectors necessary to the technical development of the armaments industry where wages are higher, and on the other the rest of the economy, where wages will fall.

Moreover, since the bonuses that make up 40% of wages are indexed to the results obtained in relation to the Plan, Gorbachev’s highly ambitious aim of 4% growth, given its very slim chances of being achieved, in fact means a wage cut.

Although its existence has never been officially admitted, it is an open secret that inflation ravaged the USSR during the ‘70s, just as it did the Western bloc. This was especially so in the kolkhoz markets, and on the ubiquitous black          market, in the face of the scarcity of goods in the state shops. However, despite a slowdown in recent years, the new measures will eventually cause a resurgence in inflation:

-- prices in the state shops will tend to move into line with the parallel market, due to the diminution of state subventions for staple goods; supply of so-called better quality goods will be “improved”, but at a higher price;

-- greater freedom for the peasants to grow and sell their own produce will make it possible to supply the kolkhoz market, but at prohibitive prices (this summer, a kilogram of tomatoes cost one day of workers’ wages);

-- the present tendency towards the legalization of the black market, the recognition of artisan labor, the new semi-private structures of production and distribution, will tend to bring official prices into line with those of the black market.

These measures are a direct attack on the living conditions of the working class.

What perspectives?

It is entirely indicative that, just as Gorbachev is making his calls to a battle for production and competitivity, the same calls, at the same time, are being made in the West, where Reagan is launching a “battle for competitivity”.

At the same time as the soviet leadership is setting up a vast plan of economic reforms, “restructuring” so as to give more competitive autonomy to state firms, the fashion in the West is for “liberalism”, “privatization”, and eliminating “lame ducks”.The crisis is world-wide, and in the resulting situation of aggravated competition, the struggle for greater competitivity means the organization of tougher austerity programs. This is the real meaning of all the fine speeches being heaped on the proletariat in both East and West.

Gorbachev’s productivist, pacifist, and democratic speeches are so much bluff:

-- the fabulous growth rates announced for the future 5-year plan at the end of the 80’s will never be reached. Slowly but surely, the world economy is sinking into the recession, and a secondary economic power like the USSR, with its outmoded productive apparatus, is quite unable to alter the situation, even by putting its whole bloc to the sack. Like every other country in the world, the USSR is sinking inexorably into the crisis, and given its economic weakness, this is going to take on brutal forms:

-- in these conditions, given its inability to maintain its power on the economic level, the USSR will more than ever uphold its position as a dominant imperialist power through a headlong flight into the war economy, by sacrificing the economy on the altar of arms production. All Gorbachev’s fine speeches about disarmament are nothing but a trap; linked to the strategic reorientation imposed on him by Russia’s inability to confront the US bloc’s recent imperialist offensive, and which aims at tightening up the military apparatus on the frontier and undertaking a vast modernization program of its technologically outdated weaponry;

-- after the proletariat’s defeat in Poland, and the ebb in the struggle that followed, new echoes of the struggle are reaching us from Eastern Europe, which bear witness that the working class combativity is still alive, and that it is reacting against the attacks on its living conditions. In the Eastern bloc also, the perspective is toward the development of the class struggle.

In the USSR, the riots in Kazakhstan reveal a growing discontent. Still more important are the bloodily suppressed riots by workers from the Baltic states requisitioned for clearance work after the Chernobyl disaster, and the echoes of strikes in the gigantic Kamaz truck factory (in the town of Breschnev in the Tartar Republic) against Gorbachev’s “quality controls”.

The primary aim of Gorbachev’s fine words about democracy is to make a recalcitrant working class accept greater austerity, and to adapt the Russian state apparatus to confront the working class’ struggle. Gorbachev’s use of democratic mystifications is no different from the “democratization” of the regimes in Brazil or Argentina: its purpose is to disarm and control the working class the better to confront it. The worst thing for the proletariat would be to take all this fine talk at its face value. The Khrushchev experience, which was also marked, behind the “destalinization” campaign, by a massive attack on workers’ living conditions, and which saw the development in 1961-63 of an important wave of class struggle culminating in the Donbass miners’ strike (violently put down by KGB troops, like the more recent Polish experience), is not too far away to remind Russian workers of the falsehood of all these democratic speeches.

With the development of the crisis, Gorbachev has even less than Khrushchev 30 years ago the means to put his policies into action.

JJ. 27/02/87