Hillel Ticktin

(University of Glasgow, United Kingdom)

The importance of the end of Stalinism for the crisis of capitalism

The Russian Revolution was born in the horrors of the First World War, and was fatally deformed by it. The subsequent Stalinisation begat a historically limited social form, which was highly unequal, ruled from above and necessarily inefficient and inhumane. Once its labour surplus dried up it could not last very long. Understanding its limits, the ruling elite moved to change the system. That allowed the overthrow of its control in Eastern Europe. The Cold War, albeit based on a myth, was crucial in maintaining capitalism in the post-war period through what has been called military Keynesianism. The relatively shallow downturns were  caused by the deliberate actions of those controlling the financial institutions, under conditions of full employment. The end of the Cold War led to the more than halving of military expenditure in the USA, the global imperial hegemon. Almost at the same time, the capitalist class decided to move to finance capital as the controlling form of capital, shifting a proportion of industry to less developed countries. It was this latter change, which also involved the shift of a mostly assembly industry to some countries in Central and Eastern Europe. The combination of finance capital and oligopoly or monopoly dominance restricted the development of the former Stalinist controlled countries. The structurally uncompetitive non-market based firms and industries could not compete, unless absorbed by Western, usually German or US firms. The logical alternative of the rebuilding of existing firms in a democratic context both in the firm and the state was ruled out. Government role in the economy was reduced to a minimum in most countries of Western and Eastern Europe. However, the capitalist economy then found itself with a crisis in investment outlets, which ultimately led to the cannibalism of the derivative boom and crash. The refusal to invest, what some have called an investment strike, continues. In one bank alone, Bank of New York Mellon, some 26-27 trillion dollars are deposited for administration by that bank. The failure to invest is shown both in holdings and the static totals year by year. State investment has been shown to be crucial to innovation and to overall investment but under the nominally remedial programme of austerity it has been cut back and vilified. The result is global depression, or long term stagnation. For Eastern Europe the great success in in the installation of democratic freedoms is now threatened. The shift towards a strong state and the growth of far right groups is inevitable in West and East, but notably in Hungary. The task is to shorten the time  the left will take to revive and put genuine socialism once again on the agenda as the only rational solution for humanity.