The collapse of these regimes at the end of the 1980s and in the early 1990s led to capitalist politicians world-wide stepping up their attacks on the ideas of socialism. They now claimed there was no alternative to the capitalist free market.
However, these were not socialist regimes. In 1917 the working class in the old Russian empire came to power and created the first workers’ state in history. It nationalised the economy and laid the basis for socialism. But a combination of Russia’s isolation and backward economy enabled a privileged bureaucracy to develop, with Joseph Stalin as their figurehead. They held society in a suffocating, totalitarian grip, destroying all vestiges of workers’ democracy.
Even though the economy carried on its back the bureaucracy’s wastefulness, inefficiency and brutality, on the basis of the planned economy it developed rapidly through the 1930s. The Soviet Union emerged from the Second World War with the USA as one of the two world superpowers.
But, once society in the USSR developed a certain level of production and technique, i.e. became a modern economy, the old bureaucratic method of rule from the centre could no longer work. Marxists previously described the bureaucracy as a ’relative fetter’ on any further progress of these societies. Now it was becoming more and more an absolute fetter.
What was needed was the involvement of the whole of society in running the economy. The great Russian revolutionary Trotsky explained that a planned economy needs democracy like a body needs oxygen. Capitalism uses the market mechanism to regulate and direct its productive activity. It operates anarchically and unjustly and produces growing periodic crises, but it does provide a check on production.
Without a democratic plan, involving committees of workers on the shop floor, transport workers, distribution workers and working-class consumers covering every corner of the economy, a nationalised economy cannot possibly bring together the billions of strands of activity that a modern economic society demands.
And democracy was the one thing that the bureaucracy wouldn’t try to revive the economy - it would mean an end to power and privilege for the bureaucracy itself.
Lifting the lid
Gorbachev was charged with the responsibility of digging the Soviet economy out of the bog of stagnation that it had run into. The bureaucratic elite running society understood that unless the economy could be reinvigorated, huge social explosions would follow that would threaten its survival.
They saw the movement around Solidarnosc in Poland that began in 1981 amongst shipyard workers in Gdansk. In its early stages this movement posed the possibility of the bureaucracy’s rule being overthrown and the possible birth of a genuine workers’ democracy.
Gorbachev set out with two aims, to free up the economy and to widen the popular base of his hated regime. Perestroika was based on the idea of shaking up industry and allowing limited elements of the market into the Soviet economy.
These were not in themselves new ideas, previous Soviet leaders zigzagging between centralisation and decentralisation had "zigged" to such temporary reforms before, only later to "zag" and re-centralise the economy. What was different this time was the depth of the crisis.
So Gorbachev attempted to get some support from a popular base to break through obstinate opposition from bureaucrats who wanted to hang onto their own jobs. Glasnost (openness) was proposed as an idea of a new political regime where - in theory and within strict limits - the working class could criticise and where there would be some elections with more than one candidate.
Glasnost lifted the lid on huge discontent against the bureaucracy. The relaxation of the worst repression led to posters appearing on the walls attacking the bureaucracy: "Do away with the special privileges for politicians and bureaucrats" and "Not the people for socialism but socialism for the people". The loosening of repression brought forward a flood of criticism of the pampered bureaucracy’s privileges.
At this point there was very little support for any kind of turn to capitalism. Opinion polls showed support for capitalism as low as 3%. What working people were moving toward in a very general way was a workers’ democracy - real socialism.
However, a layer of the bureaucracy realised that the game was up, that the system was irredeemably flawed and that a few reforms would not save it. These bureaucrats were coming to the conclusion that there had to be root and branch change.
Led by Boris Yeltsin they began looking to the West and to capitalism. Under a real socialist system they would lose their luxurious lifestyles and privileges and control over society. Far more attractive to them was the installation of capitalism.
And at the same time capitalism in the West was going through a sustained, if shallow, boom. Compared to the stagnant Soviet economy, western capitalism looked very attractive to the elite.
Gorbachev’s reforms had spread to the Soviet Union’s satellite states in Eastern Europe where pro-democracy movements were undermining shaky regimes in Poland, Hungary, East Germany, Czechoslovakia and beyond. Mass popular movements swept Eastern Europe demanding democratic reform of the system i.e. real socialism, but also containing the first seeds of pro-capitalist illusions.
In 1989 the East German regime fell to a popular revolution that smashed down the Berlin Wall and also the Stalinist bureaucratic state machine. In the absence of a conscious revolutionary party in East Germany that could defend the nationalised, planned economy as well as achieving democracy, the West through the West German government was able to proffer the hand of the "free market" and restore capitalism.
In Russia, Gorbachev watched with alarm as the movement spread across Eastern Europe into the Soviet Union itself which had renamed itself the Confederation of Independent States (CIS). As the crisis developed, Gorbachev became more and more isolated between the old apparatchiks clinging onto the old regime and the new pro-capitalist group.
Rise of Yeltsin
In 1991 the struggle between these two wings culminated in the old regime’s failed coup attempt against the Yeltsin-dominated parliament. Even the coup leaders were resigned to capitalist "reforms", but wanted to reverse Gorbachev’s minor democratic reforms and return to a totalitarian state. The mass of workers, though suspicious of Yeltsin, moved to prevent the coup and it fizzled out as the army’s ranks refused to move.
Gorbachev now cut a pathetic figure. The coup leaders had arrested him. However, the coup’s failure resulted not just in Gorbachev’s release but also the final victory for the Yeltsin group. Gorbachev slipped from power and onto the western university lecture circuit. Yeltsin staggered into power and capitalism occupied Russia and the rest of the CIS in a series of brutal reforms.
As usual the elite benefited. Most of the new Russian capitalists were drawn from the old bureaucracy. Some became billionaires: Yeltsin made a fortune himself. But the capitalist counter-revolution affected the lives of hundreds of thousands as factory closures and the slashing of state benefits devastated living standards.
The average life expectancy tumbled in one of the most dramatic falls in history. Mikhail and Raisa Gorbachev retired in comfort, but Russia’s pensioners still have to fight for the most basic benefits.
Gorbachev later said that he always intended to impose capitalism, but he was being wise after the event. In fact he attempted to save a doomed system. He also said that the Russian Revolution was a great mistake, meaning that the Stalinist system was inevitable and condemned to fail.
The Gorbachevs and Yeltsins of the world cannot imagine a society without privileged elites. But the main lesson of Russia is that, instead of capitalism and Stalinism, the only way for humanity to develop is with socialist democracy.