Theory: What about Russia

Did the fall of the USSR prove that socialism will inevitably fail?

Millions of people have joined anti-capitalist and anti-globalisation protests internationally; angry at the economic crisis that’s wrecking countless lives; at the wars waged by the USA and its imperialist partners, at the oppression, exploitation and environmental destruction of modern-day capitalist society.

Quite rightly socialists direct their main fire against those responsible for the present state of affairs. Official spokespeople for anti-globalisation campaigns often confine themselves to saying what they’re against and don’t explain what the alternative is, or at best put forward inadequate slogans such as "make the rich pay".

The anti-globalisation movement cannot be sustained and built unless a convincing socialist alternative is put forward, which says what we’re for as well as what we’re against. However some will immediately ask "what about Russia? Surely, the collapse of the Soviet Union proved that socialism failed". To answer this, you need to look at the history and development of the former Soviet Union.

Since the USSR collapsed, academics have been busy rewriting history. One of the new myths is that capitalism before 1917 was developing rapidly and successfully in Russia and the revolution in that year cut across this.

Certainly there was a feverish growth of industry in a few big cities in the Czarist empire, (the Czar was autocratic ruler of a Russian empire stretching from Poland to Alaska), but this activity depended on profits generated by impoverished, super-oppressed workers herded into massive factories.

At the same time, the new capitalist class completely failed to transform the country into a modern industrialised society. In particular, it remained dominated by neo-feudal landlords, ruling over an exploited peasantry only recently released from serfdom. There was no sign of the development of an efficient agricultural sector, run on capitalist lines and capable of supporting wide-scale urban industry.

Also, crucially, the oppression of the empire’s non-Russian peoples continued unabated during the late 19th and early 20th centuries, resulting in a seething discontent among them – a bomb ticking away.

These factors undermined the system’s stability and created the conditions for revolution. The trigger was the horrific conditions resulting from the first world war, where millions of peasants were slaughtered in the trenches and the country gradually bled to death.

The October 1917 socialist revolution, led by Lenin, Trotsky and the Bolshevik party, was unique – for the first time the capitalist system had been overthrown and a workers’ state established. It was based on soviets – committees of workers and soldiers created spontaneously during the revolution to organise activity, that were later to become the organs through which the new society would be built.

Initially the soviets were democratic bodies where strict controls were imposed on elected representatives to prevent them usurping their positions.

Workers’ support

THE SUCCESSFUL overthrow of capitalism in Russia caused the ruling classes throughout the world to mount a cruel and bloody civil war which devastated the country and killed millions.

All the main Western countries, including Britain and the USA, sent armies into the country to aid pro-Czarist forces trying to overthrow the new socialist government. But the world’s first workers’ state emerged victorious due to the Russian workers’ and peasants’ heroism and self-sacrifice in trying to build a new society.

Victory would have been much harder though if the Bolshevik government had not had support from workers in the West, because the main powers dared not intervene more widely for fear of provoking indignation and revolution in their own countries.

But victory came at a price, since the most class-conscious workers were killed in the war, making it easier for the careerist and the corrupt to infiltrate the soviets and ultimately take them over.

This process was accelerated by the terrible conditions. The USSR was ravaged by famine and disease and devastated by economic dislocation resulting from World War One and the civil war. It took years of back-breaking effort to re-organise society just to get it back to the pre-war level.

In appalling circumstances of a struggle to survive, speculators and careerists prospered and each looked for ways to build their political influence. Gradually the soviets’ lower ranks came under their control as they formed alliances with demoralised workers’ leaders. They then looked for support higher up in the bureaucracy that was emerging.

They found what they were after in Joseph Stalin, originally a minor figure in the revolution, but hungry for personal power. He saw a chance to consolidate his position by allying himself with the new layer of corrupt bureaucrats.

As a result, by the late 1920s, all vestiges of democracy had been removed from Soviet society by Stalin and his supporters, despite a heroic effort by socialists around Leon Trotsky to defend the October revolution’s democratic principles.

European powder keg

WAS THIS degeneration inevitable as the critics hostile to socialism claim, implying that the revolution itself was counter-productive and futile? Lenin, the leader of the revolution, had no illusions of the difficulties facing the Bolshevik government.

He believed, however, that a revolution in Russia would be part of a Europe-wide working-class movement to overthrow their oppressors. When the opportunity arose to take power in October 1917, he had no hesitation in pressing forward, even though Russia’s poverty and backwardness made for a very difficult environment to build socialism.

Lenin correctly foresaw that Europe was a powder keg, due to conditions created by the world war, and that a successful uprising in Russia would be a spur to workers in other more developed countries like Germany to take power. The German workers would then come to the aid of their comrades in Russia and ease the difficulties they faced, enabling a healthy democratic workers’ state to be built.

This perspective answered the argument of right-wing workers’ leaders, who used Marx’s writings to oppose the revolution, because he envisaged socialism first starting in the most advanced capitalist country not the most backward.

Lenin’s prediction of revolutionary turmoil throughout Europe after imperialist world war and the Russian revolution proved correct. Unfortunately all these attempts to overthrow capitalism were unsuccessful due partly to the revolutionary workers’ mistakes and inexperience, but mainly due to betrayals by the leaders of the European socialist parties and trades unions.

This failure was not however pre-ordained; the outcome could only be determined during the struggle itself and, particularly in Germany, the situation was on a knife-edge. Nevertheless, the result was that the world’s first workers’ state was left isolated and impoverished.

This development allowed a layer of demoralised and corrupt bureaucrats to consolidate their position, because by this time, only the intervention of the international working class, with its democratic traditions, could have dislodged them.

The new bureaucratic caste’s wiping out of the remnants of democratic workers’ control of society was ultimately to lead to the collapse of the Soviet Union itself.

Colossal wastage

IN THE early 1920s Russia’s new government were forced to re-introduce a widespread capitalist market to revive the economy from the devastation inflicted on it. This successfully boosted food production but also created a new class of rich farmers called kulaks.

Socialist opponents of Stalin, particularly Leon Trotsky, warned that the kulaks’ economic power would eventually grow so much that they would threaten the regime. Stalin ignored this for years, but then panicked when danger was imminent in the late twenties and took drastic steps to transform Russia from a predominantly agricultural to an industrial society.

A five-year plan was introduced to build up heavy industry at breakneck speed and a programme of repression implemented to "liquidate the Kulaks as a class". The new line was given an ideological cover under the slogan of building "socialism in one country", which consciously rejected the internationalism that until then was at the heart of socialist thinking.

Much to Stalin’s surprise, the drive to industrialise made spectacular gains. Growth targets were raised every few months as production exceeded the plan. Within a decade the Soviet Union was an industrial giant rivalling the capitalist powers.

How was this achieved? This transformation was unprecedented – capitalist countries had taken centuries of development to get to this point. The driving force in Russia was the plan of production itself; freed from the shackles of the market system, then in its deepest crisis after the Wall Street crash. There seemed no limit to growth.

The allocation of resources directly by the state planning body, rather than by the "hidden hand" of market forces, ensured a staggering pace of growth.

But the downside to the economic miracle was the huge wastage, up to 30% of production, due to the bungling, corruption and bad planning inherent in the undemocratic command system of economic management. The quality of goods was bad; Trotsky called poor quality the ’Achilles heel’ of the planned economy.

The only way round this problem was to introduce a democratic system of control over production where consumers would have real power to ensure that the goods produced were both fit for purpose and made in the right quantities.

The re-introduction of the soviets on democratic lines would have achieved this, but Stalin would not contemplate such a course. Any vestige of democracy would have threatened his regime which, despite the surface calm, was unstable.

Much of the new infrastructure to support industry was built by armies of slave labour political prisoners, where millions perished due to the fiendish conditions imposed on them. The survivors of the camps and the super-exploited workers would have taken a swift revenge if Stalin had loosened the noose for a moment.

Unaccountable bureaucracy

THE RESILIENCE of the planning system was shown again after World War Two when society was rapidly rebuilt after being virtually demolished by the Nazi rampage. By the 1960s the Soviet Union was at its peak, a pioneer of space travel, a superpower rivalled only by the USA. The statistics below demonstrate the economic situation at that time.

The first table shows that in the production of basic industrial commodities, the USSR was in the same league as the main capitalist powers although it never overtook the USA.

The second table shows a more contradictory picture on consumer goods. For simple goods such as footwear there was comparability, but in technology based industries like artificial fibres there was a huge gap which kept increasing over the next 25 years.

It also shows that production of food lagged behind, a legacy of the disastrous forced collectivisation of agriculture in the 1930s, which the USSR never recovered from.

Nonetheless after Soviet leader Khruschev boasted that the USSR would overtake the West, Britain’s then prime minister Macmillan commissioned a secret report to see if it was possible. The research concluded that, on the basis of the then available evidence, it could happen.

But instead the gap between the USSR and the West gradually increased from the 1960s. By the 1980s the Soviet economy was at a standstill. How can this be explained?

Two fundamental inter-linked factors were involved: undemocratic bureaucratic planning could not cope with the needs of a modern, technology-based consumer society while the command system of industrial management failed.

During the Stalin period, bureaucrats were subjected to a carrot and stick approach. They were richly rewarded for reaching planning targets but exposed to fierce reprisals if they failed (one aim of the great purges of the 1930s was to terrorise this group).

This approach ’worked’ in the early period. The material incentives were massive particularly since they were starting from a very low base, and the fear factor was terrifying.

By the 1960s, however, repression had eased following Stalin’s death. The material incentive was also weaker, since the bureaucrats by then already had an opulent life-style, so managers were content to sit back and enjoy life. Their main priority was to defend their privileges, the development of the economy was of minor concern for them.

The other inter-linked reason contributing to economic decline was the breakdown of the planning system. In the first period of Soviet development the task was to develop basic industries and infrastructure, relatively simple from a planning angle.

There was huge wastage because of the undemocratic methods employed, but the inherent advantages of planning over the market led to dramatically successful results. The USSR also had an ample supply of labour from the peasantry, most of the economic growth was due to putting these people into the labour force.

However after the basic industries were built, the job was to orientate the economy to the mass production of consumer goods. This task involved increasing the productivity of labour by applying modern technology.

This is more complicated from a planning viewpoint, but by the 1960s new planning techniques using computers would have made this technically possible. What was missing was the essential element of democratic control in allocating resources, feeding back consumers’ needs to the planning bodies and acting upon them.

The bureaucrats were unaccountable to the consumer, and indifferent to their needs, for reasons discussed above, so nothing happened. As a result the economy went into long-term decline and came to a halt almost completely in the mid 1980s.

Lessons of democracy

THE EFFECT of the economic stagnation was to demoralise large sections of the ruling caste, some of whom began to consider a move to capitalism. However Gorbachev, the Soviet leader from 1985 wanted to reform the system, by bringing in elements of the market and decentralisation to make the command economy work more efficiently (in his opinion).

He gave the Soviet republics huge powers to make autonomous decisions. This policy unwittingly led to political disintegration very rapidly due to an explosive growth of nationalism, which had been suppressed during the Soviet period, but not eliminated.

The process proved unstoppable and the first workers’ state collapsed ignominiously. Capitalism, with all its horrors, emerged from the ashes, literally in many cases.

This historical defeat for the working class can be traced back to the eradication of democracy in the Soviet political system in the 1920s which in turn led to economic failure and ultimately political collapse.

The USSR’s failure was not a failure of real socialism. Genuine socialism must be based on a non-capitalist planned economy but also has to be linked, in order to function efficiently, to democratic controls at all levels of society. This requirement was not met in Russia.

Even if it is accepted that democracy in the system was vital, critics may still say that the degeneration of the 1917 revolution into dictatorship was inevitable. However this was not the case.

Although poverty and backwardness in Russia created fertile ground for Stalinist totalitarianism, the international movement that the events of 1917 triggered could have cut across this development, by the working class in an advanced country like Germany taking power and coming to the aid of their Russian comrades.

This outcome, which was in the balance, would have made a decisive difference and resulted in history taking a completely different course.



Production per head of population 1964








Electric Power (kwh)







Sulphuric Acid (kg)







Cement (kg)








Consumption per head of population 1962-3






Meat (kg)





Artificial textiles (kg)





Leather Shoes





Source: E Mandel, Marxist Economic Theory Vol. 2 Merlin Press 1968 p 558


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June 2002