The new crisis in the USSR

Ceding control of the coal mines and the Gorbachev-Yeltsin coalition

By Sam Marcy (May 16, 1991)

A new crisis has come to the fore in the Soviet Union with the announcement by Russian radio on May 6 that the Soviet government had ceded jurisdiction over the coal mines in Russia to the Russian republic, headed at the present time by Boris Yeltsin.

More than half the coal mines in the Soviet Union will be affected, including those in the Kuznetsk Basin in central Siberia, the Sakhalin Basin in the Far East, and the Rostov mines near the Ukraine.

Such a development seriously infringes on the nature of the Soviet Union as a planned economy based on public ownership of the means of production in the hands of the state.

Secret meeting on April 23

The transfer of the coal mines was agreed to on April 23 at a secret meeting between Soviet President Mikhail Gorbachev and the heads of nine republics, including Yeltsin. While Pravda broke the news of the meeting on April 24, the specific agreement on the transfer of the mines was not made public at that time. The New York Times of April 25 wrote of the meeting:

"President Mikhail S. Gorbachev yielded significantly to the Soviet republics' demands for power sharing today as he promised revisions of his highly unpopular price and tax programs and announced a new agreement with the major republics for a `radical enhancement' of their role in governing.

"The surprise pact was worked out with leaders of 9 of the nation's 15 republics, including Boris N. Yeltsin, the President of the Russian federated republic and chief opposition critic of Mr. Gorbachev, at a private meeting held secretly at a dacha on Tuesday."

The leaders thereafter issued an accord, excerpts of which were published in the capitalist press. The republics represented were the Russian federation, the Ukraine, Byelorussia, Uzbekistan, Kazakhstan, Azerbaijan, Tadjikistan, Kirghizia and Turkmenia. Apparently excluded from the meeting were the Baltic republics, Georgia, Moldavia and Armenia.

What prompted this meeting, which amounts to a coalition of the Gorbachev forces and those of Yeltsin? Without doubt it is the deepening of the economic crisis. For the first time since the Second World War, production is actually "plummeting," says the accord.

The problems are so acute that "living standards are declining, posing a threat" to the ability of the government to "provide the basic necessities of life." The crisis is posed in the starkest form possible.

One of the purposes of the meeting was to warn the growing number of strikers in the Soviet Union of the economic danger that the country faces and to appeal to them to terminate the strikes.

This supremely important meeting was held in secret despite the fact that glasnost has been in effect for more than five years. The period has been widely advertised as one of openness, where political discussion is free and easy and the government has assumed the obligation of letting the people know what is happening in its various branches. For example, the 19th Party Conference of June 1988 was televised in full for the general public. It was also carried by CNN in the United States and elsewhere. The Congress of Deputies which met in May 1989 also was fully televised from beginning to end.

So much for glasnost.

However, this meeting, whose deliberations resulted in the formation of a virtual coalition government of the two opposing factions, was held in secret. It came as a shock to the public, the media and even to the partisans of each of the factions.

Furthermore, Yeltsin, the most vociferous in demanding more and more glasnost (for the bourgeois elements, of course), called a special secret session of the Russian Parliament on the next day, April 24. No reason was given for its hush-hush character.

A vote of thanks from U.S. imperialism

If the New York Times editorial of April 26 is any indication, the accord makes happy reading for the imperialist bourgeoisie. The agreement, according to the Times, is "the first hopeful sign in months that radical reform can be revived and hard-line dictatorship avoided. America has an enormous stake in extending support for this promising development." The editorial concluded, "Mr. Gorbachev and Mr. Yeltsin are due a vote of thanks, and not just from the Soviet people."

The secret meeting has now been followed by news of the shift in jurisdiction over the mines to the Russian Republic. The surrender of the public ownership of the mines by the national government to the Russian Republic could constitute the most devastating blow to the socialized economy of the USSR and could possibly set the country completely on the road towards counterrevolution.

The happiness of the bourgeoisie at this development is quite understandable. However, there's many a slip 'twixt the cup and the lip, as the historical evolution of the USSR has shown.

In the first place, it is not clear what all this may mean in practice. If it means merely the right to manage the coal industry and to have title to the mines, this would not be the same thing as the Russian republic being able to sell the mines and privatize them.

Also, what benefits would the individual coal mines obtain? It is said they will have the right to export and sell coal on their own without the express permission of the Soviet government. We have raised this possibility in earlier articles and shown that even the central government, with its tremendous administrative machinery developed over 70 years, finds it difficult to sell coal on the world market in light of the present glut.

Individual enterprises, or even the republic, would face tremendous obstacles selling coal on the world market. The competition with France, Germany, Britain, Italy and even Poland would be fierce. If the Yeltsin argument is correct--that the mines are in dilapidated condition and need to be modernized in order to lower the cost of production--where would they get the capital except from the central government?

Champion of economic independence?

Here it is necessary to categorically state that Yeltsin's positioning of himself as the champion of economic sovereignty and independence for the republics is just pure hocum. It is the most absurd demagogy and deceitful propaganda, more fitting for a neofascist leader than a so-called liberalizer and super-democrat.

We live in an interdependent world economy. The pages of the world press are full of it. The Soviet Union today, notwithstanding the dislocations, sabotage and economic crisis, is an integrated economy, the result of 70 years of development in science, technology and industry. Soviet planning aims at self-sufficiency so as to absorb the products of each of the republics and minimize reliance on exports. How could any of the republics become economically "independent" when no republic anywhere in the world is economically independent today? Not Japan, France, Britain, not even the U.S.

It can mean only one thing: an invitation to the imperialists to come in and purchase the republic virtually for a song, making it a neocolony of the imperialist powers. Yeltsin knows this and so do most of his cohorts, especially those from bourgeois academia.

Although the agreement reached on April 23 does not necessarily indicate a coalition government has been formed, this nevertheless deserves closer scrutiny. Yeltsin's stature as head of the biggest republic in the country makes a certain amount of collaboration unavoidable. However, a formal coalition between the supporters of Gorbachev, who hold a centrist position on the bourgeois reforms, and the Yeltsin supporters, who really stand for capitalist restoration, can only be of a temporary character and is most dangerous to the cause of socialism.

But first of all, what is the nature of this coalition? We know of many coalition governments in the capitalist world.

Different coalition governments

For instance, in Britain there have been any number of coalition governments between the Conservatives and the Liberals. Also, the Labour Party in the 1930s joined a coalition with the Conservatives. There was the Weimar Republic in Germany. Italy has had 35 coalition governments since the Second World War. In the U.S., right-wing Republicans joined the Roosevelt administration during the war. Henry Stimson was Secretary of State and Harry Woodring was Secretary of War.

There was a unique form of coalition government in the early thirties in both France and Spain when the Communist parties joined bourgeois radical parties to form a coalition government called the Popular Front. This was under the impetus of a resurgence of the popular masses--the workers and, in Spain, the peasants.

But all these coalitions were forms of parliamentary rule that did not go beyond the confines of bourgeois property relations. They did not challenge the basis of capitalist exploitation and oppression. However radical or even revolutionary they may have been in terms of social programs, they did not challenge the class foundations of the system.

The Popular Fronts are often called Communist-front governments. This confusion arises from the fact that in France and to a lesser degree in Spain the masses of workers eventually intervened and began to take over and occupy the plants. This forced the bourgeoisie to break up the coalition and open an assault upon the workers.

What kind of a coalition do we have in the USSR, assuming it holds?

Workers' state in USSR

The coalition exists within the framework of a workers' state, although not a full-fledged, thriving workers' state moving in the direction of socialism. The state has existed for over 70 years and, notwithstanding periods when it moved backward and forward, it has survived endless hardships, civil war, counterrevolutionary insurrections and a full-scale imperialist war.

Although badly damaged, it is still a workers' state. Boris Yeltsin says in his book Against the Grain (New York, London: Summit Books, 1990), "If one puts the theory and the practice of socialism side by side and compares them with an unprejudiced eye, it becomes clear that of all its classic elements, the only one to have been put into effect is the socialization of property, and even that has been done very crudely."

Indeed, it is precisely the socialization of property, the state ownership of the basic means of production, which is the foundation of a workers' state. All the other so-called classic elements, whatever he may mean by that, may make the system more progressive, but they can be demolished if the bourgeoisie owns the means of production. A capitalist crisis wreaks havoc on the social gains of the workers, especially when there's the threat of a fascist dictatorship.

At the present moment, the basic means of production are still in the hands of the workers' state, which has been under relentless siege ever since the 1985 plenum of the CPSU when Gorbachev was elected General Secretary. However, the workers' state has been yielding ground to hostile, anti-socialist forces.

Worst political and economic crisis

As of today, it faces its severest political and economic crisis. The question really is whether the USSR can long remain a workers' state, even in skeletal form, or whether the bourgeois reforms will eat away at its vitals, dismantle the progressive complex of social and political institutions, and privatize the means of production. The precondition for this is of course the abolition of the planned economy, which has been damaged by successive inroads including the surrender of the monopoly of foreign trade.

To better understand the divergent political positions of the Gorbachev and Yeltsin factions, it is best to bear in mind that both of these leaders were together in the same Politburo just a few years ago. Most of the leading personnel in the present administration are high officials of the Communist Party. Only a few, notably some of the free-market economists, come from the fringes or outside of the party leadership.

The very idea of restructuring the economic system of the USSR was first taken up at a plenum of the Central Committee and later at a party conference. The restructuring plans--perestroika--were unanimously approved by the party. There were no dissenters.

In his book, Yeltsin says that he and Yegor Ligachev, once regarded by the imperialists as leader of the "hard-liners," hold the "same strategic position" on perestroika; that their differences are only tactical. However, it is precisely these tactical differences that make a world of difference.

As we pointed out earlier (in Perestroika: A Marxist Critique, New York, WW Publishers, 1990), Gorbachev originally conceived of perestroika as a plan to modernize agriculture, industry, finance and the like. He particularly stressed the rationalization of industry. The Gorbachev grouping promised to take advantage of the new scientific-technological revolution to the fullest extent. He and his associates stressed that the USSR was lagging behind the Western capitalist countries and even some of the developing countries and that it was necessary to go through a complete transformation on that score.

Few dissented. Indeed, it was greeted with enthusiasm everywhere. Of course, the technological changeover would bring about a certain amount of disruption and temporary unemployment, but this was considered normal. The state would absorb the hardship. It was not going to be like the unemployment endemic to the capitalist system.

Evolution of perestroika

However, the scientific-technological revolution was rather slow in starting. Soon it was being said that other changes of a social character had to come first. It had all the earmarks of a retreat from the improvement in the material conditions of the workers, peasants and general population that had been promised.

Then-Prime Minister of the USSR, Nikolai Ryzhkov, himself began to lead a charge against so-called levelers among the workers. This was soon taken up by the press and media with a virulence that would shock an ordinary worker.

Where did this attack on leveling come from? The term goes back to the period of the revolutionary government under Lenin, when social equality was still at the top of the agenda. The crude idea of "leveling" wages was dismissed as infantile. But that's not the issue today.

The issue for many years now has been the privileged status of the officialdom of the party and particularly those in the industrial establishments. For the government to open an attack now on levelers lacks credibility and could only evoke a feeling of cynicism among the masses towards the new restructuring plans.

Furthermore, the attack against the supposed levelers came together with a campaign to introduce material incentives, as though this were a new idea. But older workers remember the Stakhanovite movement of the thirties, which reintroduced piece work, among other things. While some of the ideas of the Stakhanovite movement raised productivity, it also did considerable damage to the solidarity of the working class.

Those who are constantly intoning against the passivity of the Soviet workers today, and are particularly aghast at the miners now ensnared into the Yeltsin reactionary camp, ought to remember that the promised enhancement of material incentives mostly helped the upper crust of workers and even more the managerial staffs of the enterprises.

Managers embrace restructuring

The next phase in the development of restructuring seemed to be directed at winning the allegiance of the managers of industrial enterprises. Indeed, the not-so-covert attack against the workers was followed by a veritable campaign to win over the managerial staff to a new program. The managers would now have wide discretion and be freed, at least to a limited extent, from the "command economy," from the dead hand of the bureaucracy.

No longer would they have to follow the rigid quotas set in Moscow, but could use their own heads on how much to produce. More significantly, the emphasis would be on quality rather than quantity. But this relief from the extreme rigidity in quotas or the lack of emphasis on quality was greatly exaggerated.

So while a general political program to democratize the economic organs of the state was a welcome development, all this had very significant side effects. It introduced a monstrous form of competition that is the very opposite of what earlier socialist emulation campaigns were supposed to be, that is, competition within the framework of cooperation for the development of socialism.

Now you had a vicious competition of one against all and all against one, resulting in the hoarding of goods and materials. The new freedom was utilized for self-seeking purposes by managers to raise profitability. Of course, the workers were promised huge gains as well.

All this had been introduced as a new phase of the scientific-technological revolution to modernize the entire Soviet industrial and transport system and make consumer goods widely accessible. But nothing like this was developing.

Then new formulations began appearing in the press and in the pronouncements of the government, beginning with Gorbachev himself. The restructuring was explained as first and foremost a social revolution rather than a technological one. The social aspect of perestroika would precede and not follow the scientific-technological revolution.

A change in property relations

But concretely, this vague formulation on a revolution in social relations was taking on the form of a change in property relations. That was an altogether different conception from what was originally enunciated in 1985 and 1986. It appeared now that perestroika could not proceed unless market relations were broadened to encompass the whole economy. This sharp turnaround gave new heart and courage to the outright bourgeois restorationist elements, who began their own campaign for privatization, for a change in the law regarding property.

Step by step the Gorbachev restructuring was feeding reaction up to the point of actually feeding capitalist restoration. Each one of his innovations emboldened the bourgeois elements. Finally, after the meeting of the Congress of Soviets, the most extreme faction calling itself the Inter-Regional Group of Deputies (IRGD) met by themselves as a separate body. Andrei Sakharov and Boris Yeltsin were its leaders. By this time, Yeltsin himself had undergone an evolution far to the right of Gorbachev.

Says Yeltsin, "I believe that July 29-30, 1989, will go down in the history of Soviet society. It was then ... that the IRGD first met. The epoch of monolithic unity was brought to an end."

There were many points of difference in this relatively small grouping. However, on one question there was unanimity. "No doubt the main one is the question of property. If one accepts the private ownership of property, then this means the collapse of the main buttress that supports the state's monopoly of property ownership and everything that stems from it. ... The second point in our program is probably less important, the land question. The slogan `Land to the peasants' is even more relevant than it was 70-odd years ago. Only when land is worked by the people who own it will the country be fed."

This means the dismantling of the collective and state farms and the return to private property.

Demagogy on the national question

"Next is the decentralization of power, the economic independence of the republics and their genuine sovereignty. This will go far toward solving the country's ethnic problems." Yeltsin's unbridled demagogy, based on fraud and deceit regarding sovereignty for the republics, is what has aggravated and intensified the strife since he began his anti-socialist campaign against the central government.

Most demagogic of all is his call for "the elimination of all structural and financial limitations to the economic independence of enterprises and labor collectives." Even the imperialist press dare not go that far.

None of the republics, including the Russian republic, can stand on its own feet "independently" and "with genuine sovereignty." Whatever else it may be, the USSR is a unitary state; 70 years of life and labor have coordinated an economic system which is interdependent.

Its greatest problem has been the isolation imposed upon the Soviet Union by 40 years of military encirclement and economic blockade.

The Gorbachev regime, instead of fearing the spectacle of the republics declaring their independence, especially secession from the likes of the Baltic republics or Georgia, should call their bluff and say, Go on, secede if you want to, for you couldn't stand on your own legs very long without the assistance and economic relationship with the Soviet Union.

The truth is they are dependent on the Soviet Union for raw materials and a market for their products. Gorbachev should hand them the New York Times of May 6, where they can read the following:

"For years, the nations of the Eastern bloc grumbled that Moscow's arcane system for trade with its allies was little more than a swindle. Just give us a chance to sell our goods for cold hard dollars, they insisted, and we will show you who comes out ahead. On Jan. 1 they got their wish, and they have rued the day ever since." The headline of the article was, "Eastern Europe's Hardships Grow As Trade With Soviets Dries Up."

The same goes for Georgia. How interesting it is that the earthquake which destroyed so much property and took so many lives last week has attracted so little attention in the West, particularly the United States. Washington has enough on its hands with the Kurdish refugees and the great human disaster in Bangladesh. The U.S. ruling class is more politically concerned right now with having a significant foothold in the subcontinent, in order to hold vast India at bay and give itself more maneuverability vis-a-vis Pakistan.

Remember all the concern with the earthquake in Armenia a few years ago? That seemed to have more political significance for imperialism than the disaster in Georgia.

In none of these cases is humanitarianism a factor when arrayed against predatory political interest.

Main difference between Gorbachev and Yeltsin

What does the current political impasse signify in terms of the party, Gorbachev's grouping as a whole, and the outright restorationists?

Judging on the basis of his many reports and press interviews, Gorbachev and his grouping would like the restructuring to proceed until there is a full-scale free market--free in the sense of capitalist, although it is not spelled out that way at all. The Yeltsin restorationist group, however, is for the abolition of the public ownership of the means of production. Gorbachev himself is opposed to liquidating the public ownership of the means of production. As he has said, there are two things he will not give in on: the dismemberment of the USSR and the public ownership of the means of production.

Presumably that accounted for his disassociation with the 500-day plan under which the restorationists intended to dismantle the USSR as a workers' state and privatize the means of production.

How stable and viable a coalition can there be if the differences are really so fundamental? Can it endure?

With respect to the free market, there's a wide difference of opinion as to what it all means, where it should apply and where it should not. Does it mean the purchase and sale of small and medium sized industry? Does it apply only to consumer goods? To retail establishments? To the myriad forms of sale of everyday commodities and the shadow economy in the service sector? The market was opened up years ago, but where will it stop?

It is one thing if, after the socialist revolution when the workers' state has overthrown the former owners and taken hold of the means of production, but has had no time to put the new social order into practice, it allows the existence of a free market. For a while the capitalist free market may coexist along with the new revolutionary overturn of property relations. All this is clear as daylight. The revolution has had no time to exercise the rule of the working class in all phases of the economy.

It's an altogether different matter to reverse decades-old forms of socialist distribution--even if they are as yet only embryonic because of compromises with the existence of the petty bourgeoisie and because the workers' state is unable to successfully eliminate the free capitalist market while at the same time preventing the growth of the so-called shadow market.

Effects of price changes

What program does the Gorbachev grouping propose to really stabilize the economy? The elimination of the sales tax will possibly mollify some sections of the population, but at the same time it will not lighten the burden of the increasing budgetary deficit.

The so-called revolution in prices proposed originally by economists Zaslavskaya, Aganbegyan, Popov and others was supposed to bring prices into line with costs. But the steep increase announced several weeks ago was grist to the mill for the demagogues among the restorationists. It was virtually a gift to them.

It is incomprehensible how this presumably adroit and cunning politician, Gorbachev, could have committed himself to do this under such circumstances. It gave the restorationist elements the opportunity to make hay for themselves. Its political effect was to antagonize the masses.

The idea of price restructuring was a means of expropriating the workers' income in the first place. If it was meant as a form of obtaining a capital fund for modernization purposes, it was a poor way to do it. Under no conceivable circumstances could it possibly serve as a means for buttressing a modernization program to reequip the mines, mills and factories of the USSR. It was merely a redistribution of the income to mollify the upper crust of the bourgeois elements.

At any rate, it was never demonstrated empirically how the price increases either improved the well-being of the masses or raised the efficiency of the economic system. The chaos, hoarding and shortages which became more apparent following the institution of the price changes are the most eloquent testimony to their failure.

This coalition is most fragile and precarious. It is not based on actual collaboration between the two antagonistic groupings other than to persuade the miners and other workers to go back to work. The miners' strike has been turned into a political strike. One of its principal demands is for Gorbachev to resign, precisely what the Yeltsin forces have been pushing.

The price increases and especially the sales tax helped the restorationist forces to gain strength. This explains Gorbachev's move in the direction of finding an avenue to collaborate with Yeltsin. By taking him into the government, Gorbachev again raised the stature of Yeltsin personally as well as that of his reactionary constituency.

The current phase of the struggle in the USSR is part of a lengthier transition. The axis of the struggle is whether to advance from the public ownership of the means of production and the complex of progressive social and political institutions to a higher stage of socialism--or surrender to privatization, which in turn will restore the exploitative capitalist system.



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