The fall of Khrushchev

A good harvest the following year came too late to save Khrushchev. The bureaucracy decided that things had gone too far, and that the policies of the present leader were putting the whole system in danger. They were terrified that the reforms from the top would indeed open the floodgates, just as de Tocqueville had predicted. And they acted just as one would expect a threatened autocracy to act. They organised a conspiracy to put an end to the ‘irresponsible reformist adventure’.

In October 1964 Khrushchev was dismissed. Typically, there was no congress, no explanations, no votes. The “beloved leader Nikita Sergeyevich” was removed by a coup organised by his closest colleagues. No gratitude in politics – at least of the bureaucratic kind! Overnight the man who had been lionised by the world communist press suddenly became transformed into a non-person. Without a murmur, with no questions asked, the leaders of the Communist Parties immediately fell into line. This reminds one of something that Maxim Gorky once wrote:

Question: What do you do when you see a man falling?
Answer: Give him a push.

The bureaucracy hoped a change at the top would lead to better times. Leonid Brezhnev rose to power. He immediately blamed Khrushchev for the past failings, reversed a number of his reforms, and even went so far as to hide the improved 1964 statistics because they proved too favourable. But under Brezhnev, the crisis of Stalinism intensified with the rate of growth steadily declining to about 3 per cent or less. New measures were needed to reverse the slow-down.

To begin with, Brezhnev was forced to abandon in practice the reactionary utopia of economic autarky (‘socialism in one country’). In a desperate attempt to stimulate the economy, the bureaucracy decided to participate in the world market. In fact, amazingly, this was written into the text of the Brezhnev constitution, the first time in history that participation in world trade has ever been elevated to the level of a constitutional principle! Probably this fact reflected internal conflicts within the ruling elite.

Lenin and Trotsky argued in favour of the participation of the Soviet Union in world trade. However, they did not regard it as a panacea, but a means of obtaining a temporary breathing space until the victory of the workers in the advanced capitalist countries would come to the aid of the USSR. The Soviet Union then was a very backward country. Trotsky predicted that, as the Soviet economy developed, it would be forced to abandon autarky and participate more and more in the world economy. But precisely because of that, the crisis in the West would have a bigger effect than in the past, albeit a marginal effect in terms of a fall of production. Far more important however, were the political consequences. Lenin correctly insisted on the need to integrate the Soviet economy as much as possible with the world economy, to get the maximum benefit from the world division of labour. The short-sighted Stalinist bureaucracy was eventually compelled, under Brezhnev, to abandon autarky and embark on at least a limited participation on the world market.

Participation on world markets could have partially provided a check on the irresponsible and uncontrolled bureaucracy. Under the capitalist system, the working out of the law of value through the market to some extent provides a check. It is true that the big monopolies distort and mangle the operation of the market in their own interests. The 500 biggest companies which presently account for something like 90 per cent of world trade use their muscle, immense strategic stocks, the speculative movement of funds, political pressure and outright corruption to obtain a bigger share of the labour of the working class than would be ‘normal’ through the working of the law of value. Nevertheless, they too are ultimately compelled to operate on the basis of the law of value.

From a Marxist point of view, the participation of the Soviet Union in the world economy was not only inevitable, but progressive. Already in the pages of the Communist Manifesto, Marx and Engels explained that capitalism develops the world economy as a single, interdependent whole. It is impossible to separate off one of its component parts without introducing the gravest distortions. The experience of the USSR over half a century is sufficient proof of this assertion. By participating on the world market, the Soviet economy could have benefited from the world division of labour. Its scientists and technicians could have access to the most modern techniques and ideas. But by the same token, it was compelled to compare itself to the most advanced economies in the world and in this mirror, it was compelled to see all its defects shown up in the cruellest light.

The total trade turnover of trade for the USSR at the end of the 1970s stood at $123 billion, a big increase, but still insufficient in proportion to the size of the Soviet economy. If we bear in mind that the equivalent figure for little Holland (which, admittedly, devotes an exceptionally high proportion of its GDP to exports) was $132 billion, the discrepancy is immediately revealed. In the 1960s and 1970s, the foreign trade of the USSR went up from 4 per cent to 9 per cent of GDP. However, since world trade was growing still faster at that time, its actual share of the total decreased from 4.3 per cent to 3.8 per cent in this period. Table 6.1 shows the amount of the USSR’s share of world trade in 1979 and how it compared to other main countries.

It should be added that, although the USA held 12.3 per cent of world trade, this represented a mere 6 per cent of its gross domestic product. Subsequently, however, this situation changed. With the squeezing of living standards, and the consequent reduction of internal demand, the USA adopted an aggressive policy of increasing its exports at the expense of its rivals, in the first place, Japan. In the 1980s, it pushed up the portion of its GDP devoted to world trade from 6 per cent to 13 per cent, and planned to increase it to a staggering 20 per cent by the year 2000. This is tantamount to a declaration of war (at least, a trade war) against its main rivals, who were all equally determined to increase their share of world markets. It goes without saying that in such a context, the outlook for a Russian capitalist regime is not very bright.

There was immense potential in the Soviet bloc itself if it had been organised as a harmoniously integrated whole. The Comecon was a unit of 450 million people, with a developed industry, a huge number of scientists and technicians, a vast area of agricultural land, and access to almost limitless mineral resources. The population of Comecon was 180 million more than the European economic community as then constituted. If to this we add over one billion Chinese, the staggering potential for economic development immediately becomes clear. But the prior condition for this was the formation of a socialist federation of the USSR, Eastern Europe and China.

The only obstacle for realising this was the narrow national interests of each bureaucracy bent on defending its frontiers against its ‘socialist’ neighbours. In fact, the degree of economic integration between the countries of Comecon was even less than that between the member states of the EEC. Thus, the pursuit of socialism in one country materially held back the progress of all these countries. Instead of pooling their resources in a rational way, each national bureaucracy insisted in constructing its own heavy industry – even tiny Albania, with predictably disastrous results. The final bankruptcy was the spectacle of Soviet and Chinese troops killing each other over an artificial and irrational frontier drawn up in the nineteenth century by the Russian Tsar and the Chinese emperor.