• Requiem for the Party


    The Dream may be in history’s dustbin, but Communism still potent tool for conspiracy

    Dissolution of the USSR
    Close to a quarter century since the red flag was lowered from the Kremlin for the last time—on Christmas Day of 1991—communism’s dying fall continues unremarked.

    Throughout the once mighty USSR, central authority has disintegrated. Twelve of its 15 member states, led by the Russian Federation, have formed a loose Commonwealth of Independent States (CIS).

    The Baltic states—Lithuania, Latvia and Estonia—have chosen to join its rival grouping, the European Union (EU) and its military arm, NATO. So have most of the East European buffer states—including Poland, Hungary, Bulgaria and the Czech Republic.

    To restore the vigor of the world’s first avowed internationalist state, the Russian strongman, Vladimir Putin, invokes a muscular Slavic nationalism. He has reconnected the Russian state to the Orthodox Church and set it against all outside influences.

    Once a radical ideal
    It is difficult even to recall how this radical form of socialism had once been the object of so much idealism. But the Indian revolutionary M.N. Roy has written of how, in the 1930s, he waited nightly for Moscow Radio to broadcast the communist call-to-the-barricades, the ‘Internationale.’

    In our own country—most intensely during the 1970s—youths in their hundreds immolated themselves for the cause.

    World War II enabled communist parties to associate their ideology with popular patriotism. The cold peace that ended the global conflict found Communist regimes dominating the Eurasian heartland.

    Communism also proved a workable program for forcibly transforming backward countries into advanced ones through rigorous central planning. But in the long run it proved unable to compete in the Cold War (1949-1989) with the capitalist democracies.

    Beginning in the 1970s, command economies started slowing down. By 1985, Russia—which had prided in its heavy industries—was exporting more oil and gas than machineries and other industrial goods.

    In a weak socialist state like India’s, government’s concentration on heavy industry set off crop failures and famines. Even in the USSR, bureaucratization and corruption paralyzed the administrative class.

    ‘Marxism’ Chinese-style
    In Eastern Europe, as in the Soviet Union, Communism was imposed from above by a cadre party. In China, the Party led what was essentially a peasant nationalist movement born out of poverty and oppression.

    But after its victory in the Chinese civil war (1949), the CPC’s sainted helmsman—the utopian Mao Tse-tung—led the country through what even the sympathetic historian Eric Hobsbawm called “two decades of largely arbitrary catastrophe.”

    These included the great famine of 1959 and the Cultural Revolution (1966-76) that kept Chinese society in turmoil for a whole decade.

    Maoism’s anarchic idealism and disdain for knowledge and trained people was closest in spirit to the millenarian uprisings—like the Taiping Rebellion (1850-64)—that had periodically rocked dynastic China.

    But, for Deng Xiaoping, who succeeded Mao in 1976, “The key to achieving modernization is the development of science and technology.” Tough-minded and practical, he exorcised Maoism by giving free rein to the Chinese people’s entrepreneurial spirit—and brought the country its greatest period of prosperity during these past 30 years.

    From 1977 to 2010, China’s economy grew by 6-10%— its fastest historical rate. (At 6%, an economy doubles in size every 12 years.)

    To keep up this rate of expansion, Beijing has begun closing the infrastructure gap between its booming coast and its still-stagnant interior. Mass urbanization will move 250 million rural people to big cities over the next 12-15 years.

    Meanwhile the Party—despite opposition from the state corporations—has authorized President Xi to give the market “a decisive role” in the economy.

    While institutionalizing “market socialism,” Xi Jinping is also purging the CPC’s top leadership to shore up its legitimacy. His apparent goal—the New York Times notes—is to build a form of one-party rule that the Chinese people will accept as responsive to the popular will.

    Though it keeps up the Marxist rhetoric, Xi Jinping’s China has become an authoritarian developmental state, on the orthodox model of Meiji Japan and Ataturk’s Turkey.
    Authoritarian alternative?
    Beijing has also begun to claim that, for the emerging countries, a public-private partnership that combines the dynamism of the market system with the long-term stability of state direction and control is a workable alternative to western-style “winner-take-all” capitalism.

    At a time both American politics and economy are so dysfunctional, this is no mean claim easily dismissed.

    Indeed, in apparent affirmation of this claim, the five biggest emerging powers— the “BRICS states”—are capitalizing a $100 billion development bank and emergency reserve fund (to be based in Shanghai) to rival the western-oriented World Bank and the International Monetary Fund.

    All in all, the state and the economy seem to be settling down to a new balance in the new countries. Conservatism at its best has stood for small government and the least intrusion in people’s lives by the state. This doctrine has generated an explosion of growth wherever it has been applied. But it has failed to ease the inequality and insecurity that seem to arise naturally from the capitalist economy.

    The challenge for the state in the emerging countries is to find ways of protecting people from the penalties of capitalism—even while government seeks to preserve the vigorous spirit that the hope of personal gain gives to the economy.

    In sum, insecurity and inequality are the unavoidable outcome of market operations. But they can be mitigated by state policy. The usual compromise between capitalism and representative democracy has been the “welfare state” — most successfully in Scandinavia. Germany is propagating a variation it calls the “social market.”

    In any case, containing inequality and economic insecurity is now government’s most important task. Left to themselves, inequality and insecurity will eventually generate a backlash against the economic system that could reawaken the conspiratorial aspect of Communism and, in the end, bring down the whole social order.


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    1. The Intelligent Investor on

      Inequality and insecurity aren’t penalties of a free market economy, but rather a natural state of the human condition. In the same way that there are students who choose to study or not study for a certain exam, there will always be people who choose to not work or work. Inequality and insecurity in a free market economy is brought about by personal choice.

    2. The only state intervention that will produce good results is the one where it ensures that the market is always truly free. The problem is our government has been captured by the oligarchy and foreign interests, so the economy is heavily rigged in their favor. The first requirement for a just and prosperous society is a government for the people, by the people and for the people.