A 1988 view seeing Gorbachev’s economic reforms as failing



This article was written in 1988, when many were expecting Gorbachev to renew Soviet power.  Though not foreseeing the abrupt collapse of 1989-91, it correctly scorns his policies and politics.

It is reported that the Pope has written to Gorbachev for the first time. And, indeed, all the liberal excitement and media hype which accompanies Gorbachev’s “Glasnost” is very reminiscent of the hooh-ha surrounding the accession of the first Polish pope.

The liberals ignored everything that the Pope said and did during his

first years of power. They were convinced that this charismatic personality so open to the media had also to be a liberal.

The similarities with Gorbachev and his reforms are amazing. “Glasnost” is generally translated to mean “openness”. What it actually means is “public relations”. “Perestroika” means “re-structuring”. Neither the public relations nor the re-structuring show signs of introducing democracy or an accession of political power for the working class.

Party & State

Just as in Ireland one of the main issues in political life is the relationship between the Catholic Church and the State, so in the Soviet Union the relationship between the Communist Party and the state is of decisive importance.

The Soviet state apparatus is the means by which the Party exerts its dominance over society. While most of the deputies in the local Soviets (councils) are not members of the Party, the fact that the Party is the only purposeful and organised element ensures that it retains its dominance. Also, all non-party deputies are nominated by the Party or Party-controlled institutions.

The head of the Soviet State is Andrei Gromyko, but the most powerful man in the Soviet Union is Mikhail Gorbachev because, as General Secretary, he controls the real locus of power: the Communist Party.

The Soviet political system in its youth was vigorous and purposeful. Lenin and more especially Stalin dragged the society kicking and screaming into the twentieth century. The popularity of the Stakhanovites – a movement dedicated to increasing productivity in industry – was a testament to the enthusiastic support for communist ideals. But Khrushchev’s change of line at the 20th. Party Congress in 1956 seems to have had a similar effect on Soviet society to that of Vatican II on many Catholic societies. It has caused disorientation and cynicism. The corruption during the Brezhnev era has reinforced this pervasive cynicism. Alcoholism has become a real problem and one hears that drug addiction was widespread among Soviet troops in Afghanistan.

The regime itself describes the general malaise as the problem of “consumerism”. The people accept Communist Party rule rather than support it, and meanwhile life is made bearable by the consumption of goods.

But in recent years the economy has been stagnant. The USSR is still importing grain from the USA, and the quality of internally produced goods is poor. Since Marxism-Leninism has lost its appeal, a stagnant economy would inevitably undermine the legitimacy of Communist Party rule, given pervading “consumerist” values.

The Communist Party has decided that it is a waste of time trying to revive enthusiasm for Marxism-Leninism. (The society is already saturated with ideology in any case.) It has decided that if it is to retain power it will have to revive the economy. Gorbachev has been chosen by the Communist Party to deliver the “goods” (literally).


Since Gorbachev has benefitted from the system and was chosen by people who have also done well out of the system, it is inconceivable that he would intentionally reduce the power of the Party in relation to the state. He has described (at the recent Party Congress) proposals for alternative political parties as a “debasement of democracy” and those who advocate them as “parasites”. I don’t think he was merely trying to reassure the conservatives; it would be surprising if ~leading member of the CPSU thought otherwise.

The problem that Gorbachev has is that many of the economic problems have political causes. Now that Marxism-Leninism has lost some of its political force, it is very difficult to prevent corruption within an institution that has a monopoly of political and economic power. Gorbachev has conducted a purge of the Party, sacking many leading Party members in the outlying Republics of Central Asia where corruption was particularly bad. But discipline imposed from the top is not enough. Gorbachev recognises the need for reform within the Party.

There has been talk at the recent CPSU conference of limiting the terms of office of Party members. Another reform that has been proposed is the “election” of the chairman of each Soviet (council) at each level by deputies to that Soviet. But the chairman can only be the secretary of the corresponding level within the Communist Party. In other words, the deputies to the Soviet have only a choice between rejecting or accepting the secretary of the district or regional Communist Party. If he is rejected, the Party will draw “the appropriate conclusions”. It might, just might, appoint a new secretary. There is some confusion as to whether the highest state office (the Chairman of the Supreme Soviet, or President) will be filled by the holder of the highest Party office (the General Secretary).

This hardly constitutes a separation of Party and State although, by formalising and making explicit the existing dominant relationship of Party to State, an element of very limited and indirect accountability is brought to bear on the Party.

There is also a proposal to strengthen the state in relation to the Party by allowing some deputies to the Supreme Soviet to work full time as deputies. But it has to be remembered that all Soviet deputies have to be nominated, in the last instance, by the Communist Party.

All of this is designed to ensure that the Party’s dominance is exercised more efficiently.

Economic Problems

But a more efficient Communist Party is not enough to revive the economy. The centralised economic planning system has proved to be an unwieldy way of providing for the consumers’ needs. The fact that prices and incomes are fixed from the centre and bear a very tenuous connection with the real relative costs and benefits of goods has led to a chronic misallocation of resources. Recently the price of grain was higher than the price of bread. Also, the system provided very little incentive for workers to work. What is the point in earning money if there are very few goods in the shops to spend it on? Why should a factory produce high quality goods if all is required is to fulfill the quantitative targets set by the state planning ministry. Why should a worker work if he is not going to be rewarded – and is not going to suffer by being idle? Unemployment does not officially exist. This creates problems with the allocation of labour resources. In some industries there are chronic labour shortages, while in others there is a surplus of labour.

The economic system can be summed up by the cynical Russian joke: “We pretend to work, and they pretend to pay us”.

Gorbachev has allowed the development of some co-operatives, especially in the Baltic Republics, permitting them to keep their profits. The state farms are gradually being dismantled and, instead, land is being leased by the state to co-operatives. Broad economic strategy will still be decided by the centre but factories and collective farms will have greater room for manoeuvre.

In a speech to East German Communists a couple of years ago, Gorbachev summed up his strategy thus:

” … the idea is to increase the authority of the centre in raising key issues of economic and social development, and delegate the other issues for resolution at local level. It is to switch the factories, collective farms and state farms to a real pay-your-own-way basis, encouraging them in this way to show greater independence, responsibility and socialist enterprise.” (Soviet Weekly, May 3rd, 1986)

A “real pay-your-own-way basis” can only mean a greater role for market forces. But what if the factories cannot pay their own way? Will Gorbachev tolerate unemployment?

As part of his economic strategy he has attempted to present a more sympathetic image of the Soviet Union to the West. A thaw in relations is in its interest because it would like to import more Western technology.

The Thaw

The thaw in relations has also brought foreign policy gains. The Soviet Union has withdrawn troops from Afghanistan, but it still gives military support to the government which it has installed. Meanwhile, the West is not giving as much support to the rebels. Afghanistan is definitely not the Soviet Union’s Vietnam. It has also saved money as a result of dismantling medium range nuclear missiles. Although the problems of the Soviet economy have very little to do with defence expenditure, Gorbachev wants to dismantle nuclear arms in Europe because he knows the Soviet Union has greater conventional military strength than its NATO adversaries.

Gorbachev is not a liberal. Like all Soviet leaders, he hopes to increase Soviet influence throughout the world, while retaining the power of the Communist Party at home. He is like the Sicilian aristocrat in Bertolucci’s film, “The Leopard”. He recognizes that “things must change in order that things may remain the same”. But in real life (if not in Bertolucci’s Sicily) things never quite remain the same. Gorbachev has embarked on a risky course. The Communist Party is capable of keeping the lid on any economic interests which might emerge in Russia as a result of his economic reforms, but it will have more trouble in the non-Russian regions within the Soviet Union.

The industrialized Baltic regions have always been anti-Russian. Lithuania, like its neighbour Poland, has a strong Catholic presence which has an alternative world-view to the Communist Party.

But despite Catholic doctrine on birth control, Lithuania (like the other Baltic regions, Latvia and Estonia) has a declining population and Russia has effectively colonised it. Nearly 50 per cent of the Baltic Republic of Lithuania is Russian. In any case, economic reforms are likely to assuage rather than exacerbate any latent nationalism within the prosperous Baltic regions. (Mind you, it was found necessary to provide Lithuania – alone among the non-Russian Republics of the USSR – with its own version of Pravda, printed daily in Lithuanian under the title Tiesa, the Lithuanian word for “truth”.)

It is more likely that the threat of anti-Russian nationalism will be greater in the Central Asian Republics.

Although more than 50 per cent of the population of the Soviet Union is still Russian, that Russian population is static, while the Kirghiz, Turkmenian, Uzbek and Tadzhik populations are expected to triple over the next three decades (R.J. Hill: The Soviet Union: Politics. Economics And Society. 1985, p. 64). Amalric argues that in the future the Soviet Army will not be able to depend on the growing Muslim Central Asians in the event of a war, especially a Middle Eastern war (Will The Soviet Union Survive Until 1984? 1970, pp. 59 –  62). Although the Soviet Union has survived 1984, the questions that Amalric raises are still relevant. The Soviet Union passed its Afghanistan test, but only just.

In contrast to the Baltic Republics, there is a danger that Gorbachev’s economic reforms will exacerbate nationalism in Central Asia. (In Yugoslavia, for instance, a greater role for free market forces led to greater inequalities between the national groups, fomenting what might be called local nationalisms in that country. Since the death of Tito, Yugoslavia has been on the verge of disintegration. It is likely that Gorbachev will have similar problems, depending on the extent to which market forces are allowed to develop.)

How Gorbachev handles the nationalities question will be crucial in determining whether he holds on to power, and it will be crucial for the survival of the Soviet Union as a world power.

All of this is of consuming interest to the West. But what is its relevance to socialists in Western Europe seeking to make sense of the world?

One of the most disappointing things for me is that, unlike the Czech or Yugoslav Communists in the late 60s, Gorbachev is not providing the politics for his reforms. What he is doing does not represent a new and creative development in Marxist thinking. Glasnost and perestroika are just appealing slogans. They don’t mean anything. He is trying to say his reforms are “Leninist’. Bukharin could now be rehabilitated and the “New Economic Policy” of the early 20s is back in fashion. But the NEP was only introduced by Lenin as an expedient measure before more thorough social ownership could be carried through.

In conclusion, Gorbachev appears to be a highly skilled technocrat who seems to be conducting a slow retreat from socialism in the Soviet Union. The weakness of his campaign is that he has no credible politics to justify his reforms. This could prove to be his Achilles heel.

John Martin

Irish Political Review, Vol. 3, No. 9: September 1988


This article appeared in September 2010, in Issue 3 of the new series Problems magazine.  It contained articles from 1988 from Irish Political Review.  You can find more at the Problems page[1] on the Labour Affairs website.



[1] https://labouraffairsmagazine.com/problems-magazine-past-issues/problems-magazine-older-issues/