The Failure of Communism:--and What It Portends

OSCAR HANDLIN

ON July 30, 1961, Pravda and Izvestia published the new Party draft program of the Communist Party of the Soviet Union. Soon thereafter, their readers learned that the document had been greeted with enormous enthusiasm. It answered very important questions, was the sober opinion of a loyal Hungarian. It assured our happiness, explained a molding-machine operator in Irkutsk. Pravda called it proof that “socialism has triumphed,” and Khrushchev read it in full at the Party Congress in October.

Ostensibly, the draft program forecast the planned achievements of the next twenty years. The Russian people received the glad news that the next two decades would bring them unparalleled economic prosperity. At the end of that period, they were told, per capita real income would be up 250 per cent, they would enjoy an abundance of housing, and free lunches, free rent, and free transportation — to each according to his needs.

Outside the Soviet Union, this pronouncement was taken at face value. The satellites, of course, hailed it as a veritable scientific forecast of what was to come; the neutrals gave it respectful and admiring attention; and even Western journals, while confident that the free world would do as well, accepted the program for what it purported to be. Few found it necessary to wonder why it should have been issued when it was.

Yet, the answer to that question may be of the utmost significance in understanding the forces that today shape Soviet policy.

The closest parallel occurred just twenty-five years ago. On June 22, 1936, the plenum of the Central Committee of the Communist Party approved a new Constitution for the Union of Soviet Socialist Republics. Six months later, after a pretense of discussion, the All-Union Congress of Soviets promulgated what Stalin described as “the only thoroughly democratic Constitution in the world.” This charter of unprecedented liberality provided for free elections by universal suffrage in every organ of government from the collective farm and the factory to the highest levels of state power. It gave the people unconditional guarantees of personal rights, including those to a public trial and defense by counsel. It established an independent judiciary and assured the citizens freedom of speech, press, assembly, and the privacy of correspondence.

In retrospect, we know that the Soviet Constitution of 1936 had a twofold aim. It was to gain foreign support in the period of the United Front. And it was a smoke screen that concealed the famine and the breakdown in agriculture that brought millions of Ukrainians to starvation, the purges and deportations that introduced the long Stalinist reign of terror, and the shift in foreign policy that was to culminate in the Nazi-Soviet pact of 1939. The Utopian vision was a deliberate means of concealing developments that moved in precisely the opposite direction from that which was promised.

No one can speak with confidence of what is now transpiring behind the Iron Curtain. But significant bits of evidence indicate that the fantasies of abundance, dated ahead twenty years, have been conjured up to serve a similar function. The roseate glow on that distant horizon is a means of distracting men’s attention from the immediate failures of Communism.

THE most pronounced failure has occurred in the chosen field of Communist tactics — economic development — and particularly in that sector of it which bears most directly on the welfare of the people.

Such a conclusion, at first sight, runs counter to all that has been written about the strength of the Soviet productive system. The figures most readily available, for national income and for the output of certain industries, make a creditable showing indeed. Russian national income, for instance, rose from 54 billion rubles in 1950 to 144 billion in 1960 — a rate of growth greater than that of any western European country. Measurements of the production of steel, cement, and other goods seem equally favorable.

But we learned from Hitler to be skeptical of the quality of totalitarian economic miracles. The statistics themselves are suspect. In dictatorial societies, all information is contrived for a purpose which is as often concealment as enlightenment. The distortion or suppression of data arises partly from the wish to deceive outsiders, but also from the fears of inefficient subordinates, from the rivalry of competing agencies, and from the errors in a system which operates in secret and lacks opportunities for open checks.

In any case, the available statistics measure some, but not all, aspects of the productive system. The rise in national income, for instance, shows that greater quantities of goods and services are being turned out, but it does not in itself reveal whether the result is to make greater quantities available to consumers. A rise in steel or cement production can lead to an increase in the number of prisons or missile bases or homes. In the abstract calculation of output, the destination of the product makes no difference; but to the population of the country, the abstract calculation is less important than whether the result will be to shelter or enslave them.

Yet, it is precisely in relation to consumption patterns that the information made available by the Soviet Union is most deficient. We depend on scattered fragments of fact when we attempt to go beyond the question of volume of production to that of what is produced for whom. Such fragments point unmistakably to the conclusion that the Communist system has not succeeded in increasing the supply of goods available to the people who live under it.

The most conclusive evidence comes from East Germany. The deficiencies of the Soviet order were glaringly apparent in East Germany in the summer of 1961; it was no coincidence that the most recent Communist aggressive pressures were applied there. The Germans of the east zone never recovered from the damage of the war. Bled by their Russian conquerors, their economy limped along until the outbreak of 1953. The repression that followed only made its problems worse.

By 1958 the crisis had set in. It was true that its published statistics credited East Germany with a higher rate of economic growth than that of West Germany. But that was poor comfort to people who could see on which side of the border the grass was greener; the numbers were more manageable than the actuality of a system that could not make a go of it. The substantial subsidy in toll charges from the Bonn government did not help. The regime was compelled to cut back on its aircraft, automobile, and other heavy industries, and still found it impossible to produce the necessities of life for its people. The result, by 1961, was calamitous disorder marked by shortages in every aspect of life, and it was reflected in the steady stream of two and a half million refugees, which deprived the country of its lifeblood.

WE KNOW less about events in Red China, which remains hermetically sealed off from the rest of the world. Yet, the details of enough tragic incidents have trickled out to reveal the pattern of failure. Its masters have labored to industrialize China with ruthless determination, and they can proudly point out impressive increases in some branches of production. But the effort at intensive Westernization has been costly and far from successful. It was significant that, despite earlier boasting, Peiping in 1961 remained silent on its output goals. The communes evoked tremendous resistance and failed to attain their industrial objectives, and the effort totally to transform the economy plunged agriculture into a prolonged crisis.

Famine, never a stranger to the land, now acquired an endemic quality. In 1959, one third, and in 1960, almost one half of the arable land suffered from floods, hailstorms, and contamination. And in the summer of 1961, a searing drought gripped Hupeh province, and food everywhere ran short. The government was compelled to use its scarce foreign exchange to purchase wheat from Canada and Australia; and in the fall higher education almost came to a halt, as students were sent to rural areas to stimulate production by work in the fields. The cholera epidemic in Kwantung province in August was no doubt also due to a deterioration of living standards.

Most important, the fundamental problem of population increase has not been confronted at all. Trapped by a dogmatic hostility to birth control and by a fanatic disregard oi personal values, the Communist leaders have abandoned their efforts to halt the rise in numbers. Therefore, the economy must grow rapidly enough to take care of at least ten million births a year before it can even hope to improve existing standards of living. It has thus far shown no capacity whatever for doing so. We have no way of knowing whether two thousand or two million or twenty million Chinese have starved in the past three years, but we do know that rations of food and clothing have sunk to the meanest levels of subsistence.

With the exception of Czechoslovakia, all the Soviet satellites, from Bulgaria and Hungary to North Vietnam, have met similar problems. Most impressive of all, the Soviet Union itself, whatever show of strength it makes to the outer world, still suffers from deficiencies, and they have been seriously aggravated by recent great failures.

Despite Khrushchev’s personal interest, or perhaps because of it, agricultural productivity has not increased enough to supply the full demands of tlie population. The Premier himself spoke frequently in the provinces in 1961 of his dissatisfaction with the output of foodstuffs, as well as of housing and other consumer goods. He had cause to be concerned. In 1953, the number of livestock was smaller than it had been in 1928, and grain production was grossly inadequate. There has been some progress since then, but not enough.

In 1954, the inability, after many years of effort, to raise productivity per acre persuaded the Soviet Union to attempt to increase the amount of land under cultivation. Immense tracts of marginal soil in Siberia and southeast Russia were put under cultivation, with the aid of hundreds of thousands of workers and machines drawn from elsewhere. The results were disappointing; since 1958, the Virgin Lands, swept by dust storms and parched by lack of rain, have made little return on the capital and elfort invested in them.

The expansion of the American frontier eighty years ago met with similar setbacks in the settlement of the Great Plains. But its flexibility cushioned the economic system as a whole against the consequences of such mistakes. By contrast, the rigid planning of the Soviet Union transmitted the shock of failure to every sector of the productive system. The grain harvests of 1959 and 1960 were smaller than the harvest of 1958. The Russian people will have to pay the cost.

The Soviet regime has never confronted, much less solved, the housing problem. From the revolution, it inherited an inadequate plant. Moscow and Leningrad were as poorly prepared to shelter an industrial proletariat as were other European cities. But the situation became worse rather than better in the inter-war years. The number of urban residents grew rapidly, while the share of national resources allocated to housing remained far smaller than that in Western societies. The shortage of space was already acute when the German invasion added its destructive toll.

After the peace, the absolute necessity of repairing the war damage raised the share of capital invested in housing. But the result fell far short of compensating either for older deficiencies or for the new needs created by the developments of the past decades. The population of the Soviet Union has continued to rise, from 196 million in 1940 to 212 million in 1960; and in the same period the proportion located in cities has skyrocketed from 31 per cent to 58 per cent, with the steady shift of peasants to urban jobs. Yet, only in 1957 and 1958 was there a substantial increase in construction rates, and that did not ease the shortage. In 1957, the total living space per person in urban areas was smaller than it had been in 1926. The Russian proletarian remains an honored figure in Communist mythology, but he is more poorly sheltered than his counterpart anywhere in the West.

The workers and peasants are as poorly off with regard to the clothes they wear or their chance of owning an electric appliance. The planners paid but the scantiest attention to their desires, and a creaky distribution system raised the cost of such goods beyond their reach. Of the immense increase in productivity in the past thirty years, only very meager crumbs have come to them.

THE inability to improve living standards, despite the rise in total productivity, may reflect some distortion in the published statistics. More likely, it is the result of Communist decisions about the way in which the economic pie was to be divided and of miscalculations about the effects.

Any nation, by planning or free enterprise, can use its resources and labor to turn out goods its population will consume, to sustain its military forces, or to create by capital investment the means of further production. But energies directed at one goal must be diverted from the others.

In 1928, the Soviet leaders determined to hold military expenditures constant as far as possible and to push heavy industry at the expense of consumer goods. They reckoned that the temporary sufferings of the Five Year Plan would be rewarded by an increase in power and productive capacity. But the first plan led to a second and a third; when the war intervened, the day of the consumer had not yet come. Nor did peace alter the direction of development. In 1946, Stalin proclaimed a fifteen-year program of intensive industrialization along the same lines.

This policy was partly the product of history. From 1890 onward, the prominent economic role of the state, the pressure of military requirements, and the relatively large scale of enterprise had consistently favored investment in heavy industry, as against expansion of consumer markets. But the Bolsheviks in power had additional reason for furthering the same tendency. Aware of the comparative backwardness of their economy, they were determined to catch up with and outdistance the capitalist West, no matter what the cost to the Russian people. For they never doubted that the two systems would ultimately clash, and in their view, the final outcome rested primarily upon the relative strength of the rival economic orders.

The end of World War II imbued the Communist leaders with a great sense of urgency. The contest for world domination seemed to approach a climax. The devastation of the six preceding years seemed to be that necessary catastrophe which, by Marxist thinking, would lead to redemption by revolution. The country, therefore, remained on a war footing, closed off from outside contacts and taught to fear the capitalist scapegoats who blocked the way to Utopia.

Stalin’s dream of mastery was, however, frustrated by the superior power of the West. The defensive measures of the five years after 1947 contained the Communist threat in Greece, in western Europe, and in Korea. Communist tactics then shifted. Weariness of the years of deprivation, the death of Stalin and the subsequent reduction of terror, the rise to prominence of new men like Malenkov, and the awareness that the collapse of capitalism was not imminent led to some modification in economic policy. The ultimate objective, the victory of Communism, never faded, but the means of attaining it changed.

THE slogan of the new regime was “peaceful coexistence.” The capitalist and Communist nations could live side by side without military encounter as long as the Soviet Union was strong enough to resist aggression. But the war between them would continue in another form: it would be a race for economic supremacy. In the first instance, the uncommitted nations were the target. They could be persuaded of the virtues of the Communist system by the magnitude of its achievements and by the aid which the Soviet Union began to endeavor to give them after 1954. But in time the people of the capitalist countries would also perceive the superiority of the Soviet pattern and would spontaneously gravitate toward Communism. Their masters would be helpless to restrain them. Then would come the total world order of which the heirs of Marxism dreamed.

Within this pattern of expectations, there was room for some improvement of living conditions. The general atmosphere of the thaw encouraged the hope that the Russian people might soon reap the rewards of their earlier sacrifices. Above all, the vision of the Soviet Union as the showpiece of Communism demanded that outsiders receive a more favorable impression of the style of fife it afforded. The Five Year Plan for 1955 to 1960 therefore showed more concern than its predecessors for housing and consumer goods, without, however, neglecting heavy industry. A great rise in productivity would cover both kinds of needs.

So ran the logic behind the Party tactics of the years from 1953 to 1958. The Kremlin’s adherence to this line depended upon three conditions. The arms stalemate between East and West permitted the diversion of a larger share of the national product to consumption without diminishing that which went into capital investment — hence the Soviet interest, in those years, in disarmament. The existence of a large and growing group of neutral nations unsympathetic toward capitalism nurtured the belief that Communism could spread without an open clash of arms. Most important, the Soviets, in peaceful competition, were to prove the superiority of their form of economic organization.

Lenin had, after all, long since demonstrated that the illusion of capitalist prosperity was only a product of imperialism. If the living standard of the oppressed toilers in England, France, and the United States was not declining as Marx had explained it would, that was only because exploitation of colonial empires enabled their masters temporarily to indulge them in comparative wellbeing. With the prop of imperialism removed, the workers would soon be made aware of the hardship of their lot. New data, published by the Soviet economists Varga and Mendelsohn after the war, confirmed the reliability of these predictions of what was to come. Meanwhile, the U.S.S.R., China, and the satellites would show that Communism could produce both a rising level of consumption and a high rate of economic growth.

Since 1958, the dismal economic experience of the Communist regimes has tempered these optimistic expectations. The United States, western Europe, and even Japan have enjoyed unparalleled abundance, despite their loss of colonies. The prospect that workers in New York or London or Tokyo would someday envy the lot of those in Moscow or Shanghai grew dim indeed.

Nor did the ruling circles in Egypt and India show any disposition to embrace Communism. They remained anti-American and anticapitalist, but they still fought the Communist Party at home. Nasser did not hesitate to embrace his genial hosts in Moscow and at the same time jail their Comrades in Cairo. Evidently, some use of the stick as well as of the carrot would be necessary in the future to tame the nationalists. In September, 1961, Russian press comments were severely critical of Egyptian lack of appreciation for help in building the Aswan Dam.

In any case, it was a strain to meet mounting aid commitments, which in 1960 came to more than a billion dollars. In the Sudan, Tunisia, Somalia, and Afghanistan, it was still necessary to bid against the West. Tension between the two greatest Communist powers led the Soviets to promise aid to North Korea, just as the Chinese did to Albania. But there was a marked cutback from the lavish promises of earlier, more confident years. In June, 1961, the Kremlin refused to build the Euphrates Dam for the United Arab Republic and allowed the West Germans to step in. Red China, which had no other friends, was dropped from the roster of aid recipients in 1961. Significantly, Peiping turned not to Russia, but to capitalist Australia and Canada for food.

Moreover, all was not going well with projects on which the Soviets had already embarked. There were complaints from many of the twentyfour countries which had signed economic agreements with the Soviet Union. Petroleum equipment supplied to Argentina was badly designed and faulty. The hotel built in Rangoon had been appropriate for the climate of Moscow, not of Burma; the sugar plant in Indonesia was fine for Ukrainian beets but not for Javanese cane. In a flush of enthusiasm in 1958, the Iraqi revolutionaries had been promised twenty-six industrial projects and a railroad. After a year, not one had been started, and the Iraqis were murmuring over the low quality and high prices of the goods sent them under their trade agreement.

Even when ventures turned out successfully, as did the Bhilai steel mill in India, the costs — and particularly the hidden charges — were high. The jovial Khrushchev was thought to have been joking, at a party for President Sukarno, when he showed his empty pockets and cried out, “Look, he took everything I had !” It may not have been funny at all.

Foreign aid was big business, and the Communists could not keep up with their rivals. The total promised by the Red bloc since 1954 came to about $5 billion, of which only about $200 million a year had actually been delivered. By contrast, the United States alone had actually paid out more than $56 billion since 1947, and its allies in England, France, Germany, and Japan were moving into the field with increasing strength.

It was foolhardy for the Soviet Union to think it could do as well, particularly since internal failures had placed excessive burdens on the economy. The gratification of some consumer desires after 1953 had cost too much and had called for complex organizational changes, by no means successfully carried through. What was worse, even a fleeting taste of the good things in life had stimulated a rising level of expectations. Youth, in particular, was restless. People no sooner got a flat in which to live than they wanted a television set and refrigerator to put into it and an automobile in which to escape from it. Glimpses of the style of life of the West through expositions and contact with foreigners stimulated these desires and threatened to weaken the cultivated image of the new Soviet man — selfless, devoted to work, and ready to sacrifice all for the Party goals.

The demands for foreign aid, consumption, and investment could not be met all at once. The forecasters, whose eyes were already on the 1960s, realized also that it would be difficult to sustain the high rate of growth of earlier decades. The low birth rate of the war years would be reflected twenty years later in a contraction of the productive age groups. With surface resources depleted, high-grade minerals would be more difficult to mine, obsolescence would become a serious problem, and a relatively neglected transport system might not stand up to the increased demands to be made on it. And to maintain the same rate of growth called for an even higher rate of investment than was needed earlier. The prospect that Communism would successfully meet all these challenges was far from bright.

THESE were the conditions under which the Party Congress of January, 1959, scrapped the plan for 1955 to 1960 and adopted a new production program for the next seven years. It was clear that the effort to raise living standards while still expanding heavy industry and supporting ambitious military and foreign-aid programs had failed. The forecast for 1959 to 1965 was much less ambitious. The demand in the new plan for a more thorough integration of the economies of the “socialist bloc” was significant. But more significant still was the preview of what awaited the Russian people in the 1960s. Priority went to heavy industry and chemicals; housing and consumer needs sank to the bottom in the order of urgency. Building, light industry, and food processing were assigned the lowest rates of growth, and the volume of retail trade was expected to decline — sure signs of an anticipated tall in real per capita incomes. There was some indication that the people might be compensated with increased leisure for the commodities they would fail to receive. But even that hope may prove illusory. The Economics Institute of the U.S.S.R. Academy of Sciences learned in 1960 that the industrial labor force would have to be strengthened by hands drawn from domestic work and agriculture and by cadres of students to meet production goals. The Russian people were again to pay the price for the growth of heavy industry.

Temporary failures can be ascribed to natural disasters. But the contrast with the experience of the free world is nevertheless oppressive. The United States and England, France and Italy, West Germany and Japan boast of smaller rates of total growth but have steadily raised the standards of living of their people. Convinced as they are of the infallibility of their doctrine, the Red leaders must account for their own failure to do as well.

The demand for an accounting is not vocal, but it is nonetheless real. The mass of the people in the Communist countries are politically helpless. The Chinese and German regimes of oppression stifle every sign of opposition; and although the Soviet Union has not reverted to the open terror of the Stalinist years, its censorship and control of opinion are thoroughly effective. Vet, men and women without adequate food, clothing, and housing arc not efficient producers. Those who must live on 900 calories a day, as in China, simply cannot summon up the energy to meet production quotas. And with the death of hope, apathy sets in. Apart from the danger that the workers may resort to sabotage and slack at work, terror and propaganda alone cannot indefinitely sustain the efforts necessary for effective labor.

The loss of hope and of realizable objectives generates a quiet discontent that handicaps the regime. This discontent is, naturally, most extreme at the points of contact with the superior achievements of the West. That is why West Berlin does — and before very long, Hong Kong will — prove an irritating thorn in the side of the Communist rulers. The very existence of these places which demonstrate the superior achievements of free enterprise is a graphic proof of the failure of Communism.

More important than popular discontent are the grievances within the Party cadres. These contain the hard core of believers, among them all the important officeholders. Increasingly, the elite, the new class, demands the comforting rewards of its position. Its members cannot believe in the failure of their doctrine, and if the results fall short of expectations, that must be the fault of the leaders. Were that suspicion to spread, then the very structure of authority would be weakened. It was, no doubt, to forestall any such tendencies that the summer of 1961 witnessed a purge of the Central Committee of the Russian Communist Party.

Above all, the leaders themselves must retain faith. As much as the necessity of quieting the population and the Party, their own psychological needs require them to explain their inability to reward their people as the capitalists have.

The limitations of their own way of thinking permit them to see only two explanations. Marxist economics assures them that heavy industry is the foundation upon which all other branches of production rest. If there are not enough shoes or homes, then greater investments in chemicals and steel are needed, even though they, for the time being, increase the pinch on the consumer. And the hostile foreigner has long been the scapegoat of Russian ills. Encirclement of the fatherland by the capitalists bent on its destruction forces it to protect its people at the expense of their present well-being. Both explanations have the incidental virtue of justifying the regime in increasing the rigor of its controls.

These myths are the more readily embraced because for the first time the Russians seem to have gained an advantage over the West in overall military power. Communism has been successful only in its ability to develop powerful machinery for war and for the related achievements in space. In July, 1961, at the same time that the new draft program was devised, the Soviet arms budget was raised by one third.

The Communist leaders have no doubt drawn the appropriate conclusion. Peaceful coexistence has come to an end; they have shifted their tactics back to a power base. What they no longer hope to achieve by economic rivalry they will attempt to achieve by force or the threat of force. No more now than earlier do they wish the holocaust of overt conflict; but they will vigorously attempt to win over the neutrals and neutralize the West by persuasive brandishment of bombs and rockets; hence the increasing expenditures for arms and the diversion of greater shares of the national product to capital investment.

As for the people, they will wait for the draft program’s pie in the sky — twenty years from now.