Eastern Europe: Western Europe’s poor Second Cousin

The Berlin Wall – the physical barrier dividing the “communist” east from the “free” west – collapsed under the pressure of a magnificent mass movement in 1989. It was difficult, in 1989, not to be sympathetic with the beautiful sight of ordinary East German workers, physically dismantling an ugly barrier which had disfigured the city of Berlin since 1961. But among those in the West who were sympathetic to the revolt from below, most were influenced by what was without question accepted as a truism – that the collapse of the Berlin Wall symbolized the superiority of the market compared to “state-socialism”. East and West started out in much the same shape after the war, the argument goes. But in the west the market, with all its flaws, led to France, West Germany, Sweden, etc. developing into some of the biggest economies in the world, while East Germany, Hungary and the rest of the East stagnated. State control just does not work and the market, with all its problems, has proven its superiority. The problem with this argument is that East and West Europe did not begin from the same point at the end of World War Two.

Western Europe is home to economies which were the first in the world to undergo industrial revolutions. First in Netherlands and England in the sixteenth and seventeenth centuries, followed by France in the late eighteenth century and finally Germany in the late nineteenth century — it was here that capitalism firmly took root, smashing up the old, peasant-based societies, and laying the groundwork for extremely rapid industrialization.[1]

The basis for this industrial strength was driving the peasants off the land, and turning them into wage-labourers in the sprawling new cities of Europe — Manchester, Paris, Turin, Berlin. The wealth produced by an industrial working class – working in large collective workplaces with access over time to more and more machinery and automation – is far greater than that produced by a peasantry working in labour-intensive conditions on small plots of ground in the countryside. The Dutch, the French and the English, on the basis of the massive growth of their industrial economies in the nineteenth centuries, embarked on a global competition for world supremacy, ultimately bringing all or part of every continent in the world under their imperial control.

They were joined by Germany and the New World upstart the United States in the nineteenth century. The rivalries of these capitalist giants twice exploded into world war in the twentieth century.

The situation in what, before 1989, was called “Eastern Europe,” was very different. Much of Eastern Europe had, until very late in the day, aristocratic ruling classes that were much more successful at resisting the advance of capitalism than were their counterparts in the west. The wealth of the aristocracy was based on peasants tied to the great landed estates. Thus the aristocratic ruling class had an interest in preserving the old, peasant-based economies, and resisting the advance of industrial capitalism.

For reasons that are beyond the scope of this article, this ruling class was much more successful in Poland, Russia, Bulgaria, Rumania, etc., in resisting the rise of an industrial capitalist class, than in the West.

In the East, the bulk of the population until well into the twentieth century, continued to live very traditional lifestyles in labour-intensive conditions on the land.[2] The development of the industrial working class occurred, but as a small minority inside society. It wasn’t until the 1860s that serfdom was abolished in Russia. When the Russian Revolution happened in 1917, there were 15 times as many peasants as workers in the country. It was only as a result of defeat in World War II that the power of the old aristocratic ruling class in the Austro-Hungarian Empire was broken up.

Similarly the Ottoman Empire – from which came Turkey as well as several of the southern republics of the Soviet Union – survived the beginning of the twentieth century intact, its semi-feudal ruling class a real barrier to capitalist development. Only with defeat in the First World War was this ruling class smashed up and the possibility of industrial development opened up.

In short, the bulk of the “Eastern Bloc” was carved out of those sections of Europe and Asia that had been very late in embarking on a path of industrialization. The bulk of the “Western Bloc” was comprised of those countries that had been the first to industrialize, that had made incredible strides in the nineteenth and twentieth centuries in developing their industrial base, and had been able to, on that basis, spread their economic interests throughout much of the globe.

There are exceptions to this. Spain and Portugal in the Western bloc were late-industrializing countries, while East Germany in the Eastern bloc had been an historical heart of much of German industry. But in general, the pattern of most-advanced economies ending in the Western bloc, least advanced ending in the Eastern bloc, is accurate.

It means that the two sections of Europe that ended up confronting each other after World War II – a Western section under the hegemony of Washington, and an Eastern Section under the hegemony of Moscow – were coming from very different places. In the West, for the most part, were economies with a history and tradition of industrial capitalism going back generations. In the East, for the most part, were economies which until quite recently, had been under the thumb of conservative and reactionary land-based aristocracies, and which were, as a result, considerably poorer and considerably less industrialized than their counterparts in the West. It was not a contest between equals.

Previous article – “Twenty years since the fall of the Berlin Wall

Read next: The Legacy of World War II

© 2009 Paul Kellogg


[1] See E.J. Hobsbawm, The Age of Revolution: 1789-1848 (Toronto: New American Library, 1962); Immanuel Wallerstein, World-Systems analysis: An Introduction (Durham, North Carolina: Duke University Press, 2004).
[2] In one of his early, and largely overlooked books, Ygael Gluckstein (Tony Cliff) makes this exact point. “Of the total population those engaged in agriculture, fishing and forestry made up in Bulgaria (1934) 80 per cent; Yugoslavia (1931) 79 per cent; Rumania (1930) 78 per cent; Poland (1931) 65 per cent; Hungary (1930) 53 per cent; Czechoslovakia (1930) 38 per cent.” Ygael Gluckstein, Stalin’s Satellites in Europe (Boston: The Beacon Press, 1952), p. 13.

Twenty years since the fall of the Berlin Wall

August 19, 1989 hundreds of East Germans “attending a demonstration called the Pan-European Picnic, escaped into Austria from Hungary by storming a border gate that had been opened as a symbolic expression of unity.”[1] This was one part of an enormous mass movement which engulfed all of Russian-occupied Eastern Europe in the revolutionary year of 1989. As a result of this pressure, Hungary – then part of the Russian dominated Eastern Bloc – was forced to open its border with Austria, and thousands of East German workers – who could acquire visas to visit Hungary or get to Hungary through Czechoslovakia – took advantage of this hole in the “Iron Curtain” to pour across, into Austria, and from there into West Germany.[2] The pressure of this movement of millions, the pressure of a mass movement for democracy and freedom, ended with the November 1989 physical destruction of the Berlin Wall separating East and West Berlin. When that wall came down, a new era in world politics began.[3]

Before these momentous events, one theme dominated world politics – the competition between the United States and what was then called the U.S.S.R. – the Union of Soviet Socialist Republics (which dissolved in 1991). This rivalry was labeled “Cold” only because it did not erupt into a “Hot War” as did the earlier rivalry between Germany and Great Britain, a rivalry which was at the core of the charnel houses of World War I and World War II.

But Cold or Hot – it was terrifying. Three generations grew up in the shadow of the bomb – the nuclear weapons which were deployed in their thousands by both sides in the Cold War – living with the ever-present possibility of nuclear confrontation between the West (led by Washington) and the East (led by Moscow).

The 1980s in Eastern Europe opened with the great working class uprising in Poland in the early 1980s, creating the ten million strong union Solidarność, which by 1989 had been able to push aside the authoritarian Stalinist Communist Party and take governmental office.[4] This was the spark for the mass movements which were to sweep aside Stalinist rule throughout Eastern Europe.

East Germany, like Poland and the rest of Eastern Europe, had been run as a one-party state since being incorporated into the Russian sphere of influence after World War II. The Berlin Wall itself had been erected in 1961 to prevent East German workers escaping to the West. Its construction was an open condemnation of the failing of the so-called “Peoples’ Republics” of Eastern Europe. Its fall was a direct result of the democratization movements that were happening throughout Eastern Europe in the 1980s – moving from Poland to Hungary and Czechoslovakia – which allowed a way out for East Germans who wanted to escape authoritarian rule.

The collapse of the Berlin Wall symbolized the end of the Moscow-centred bloc and the end of the Cold War. The disappearance of the Russian bloc saw authoritarian regimes dissolve, first in Eastern Europe, then in Russia itself.

Now a story like this, in any other circumstance, would be inspiring for everyone on the left. Socialism began as a campaign for democracy and the right to vote.[5] Socialists are always campaigning for an increase in rights and political freedoms. Socialists have always historically identified with mass workers’ movements such as the one represented by Solidarność, and with movements for democratic rights such as those that swept Eastern Europe in the 1980s.

But this story was different. Russia called itself communist. Its East European satellite states called themselves communist. Liberal politicians and theorists had argued that the Cold War was a contest between capitalism in the west and communism in the east, and most on the left agreed. So in the wake of the 1989 collapse of the Berlin Wall and the collapse of these “communist” states – the confusion in much of the left was extreme. Accepting that these regimes were, in some way, socialist, post-capitalist or “workers’ states” drove many on the left into confusion at what they saw as the victory of the market over the state. Instead of joining in the celebrations, and dancing on the fallen wall, many on the left looked on in horror. By contrast, there was a triumphalism among liberal, pro-capitalist theorists. Francis Fukuyama talked about the “end of history”.[6] The argument was pounded home that 1989 proved the superiority of the market and capitalism over the state and socialism.

There was just one problem. The regimes in Russia and Eastern Europe might have been dominated by the state – but they were in no way socialist. Socialism is not about state power, but about the power of the working class and the oppressed. It is not about the suppression of democracy, but about the extension of democracy from the state to the economy. We need to not just elect members of parliament once every few years, but to elect our bosses, our administrators, our judges.[7] The key institution of socialism is not the state bureaucracy, the Politburo, the Party or the Central Committee. The key institution is the workers’ council – an institution of mass working class democracy and accountability. The outlines of this kind of direct democracy were sketched first by the workers of Paris in 1871, and then again by the workers of Russia in 1905 and 1917. A brilliant but short-lived sketch of a workers’ council state occurred in Budapest, Hungary, during the magnificent 1956 uprising against authoritarian rule and Russian occupation.[8]

Russia had seen viable workers’ councils for a few months after the revolution of 1917. But they had quickly disappeared in the cauldron of civil war, imperialist blockade and resulting starvation. The regime which emerged under the leadership of Joseph Stalin in no way resembled the hopes and dreams of those who toppled the Czar in 1917. It was not socialist but state capitalist.

At the end of World War II, when Russian troops occupied much of Eastern Europe, Stalin installed regimes modeled on his own. These regimes had the label communist. But like Russia they were best understood as state capitalist – economies run by the state, enmeshed in competition with the rest of world capitalism through the mechanism of the arms race.[9]

Those on the left who understood this – those of us who had said “Neither Washington Nor Moscow” through the long Cold War – had supported the great Polish uprising led by Solidarność and did not mourn in 1989, but joined in the celebrations when the wall fell.

Read next – “Eastern Europe: Western Europe’s poor Second Cousin

© 2009 Paul Kellogg


[1] Fernanda Santos, “Recalling the Day that Ripped An Opening in the Iron Curtain,” The New York Times, May 4, 2009, p. A.18
[2] Richard A. Leiby, The Unification of Germany (Westport, Connecticut: Greenwood Press, 1999), p. 28
[3] For a useful collection of background material, see The Center for History and New Media, “Making the History of 1989” (Fairfax, Virginia: George Mason University).
[4] For a gripping account of the origins of Solidarnosç, see Colin Barker and Kara Weber, Solidarność: From Gdansk to Military Repression, (London: Bookmarks, 1982).
[5] In the 19th century in Britain, for instance, socialists trace their movements origin to the struggle for the franchise led by the Chartists. See John Charlton, The Chartists: the first national workers’ movement (London: Pluto Press, 1997). For an overview of the centrality of political democracy to the left and the workers’ movement (again limited to a focus on Britain), see Paul Foot’s last book, Paul Foot, The Vote: How it Was Won and How it was Undermined (London: Penguin, 2005). Lars Lih has documented that the struggle for political democracy was far more central to the political orientation of the Russian Bolsheviks than is commonly understood. See Lars T. Lih, Lenin Rediscovered: What Is to Be Done? in Context (Boston: Brill, 2006), especially Chapter 2, “A Russian Erfurtian,” (pp. 111-158).
[6] Francis Fukuyama, “The End of History?National Interest, Summer, 1989
[7] This idea goes back to the great democratic experiment of the Paris Commune in 1871. Writing about this, Karl Marx described the “from below” institutions of mass democracy created by the Paris workers as “essentially a working-class government, the produce of the struggle of the producing against the appropriating class, the political form at last discovered under which to work out the economical emancipation of Labour.” (Karl Marx, The Civil War in France: Address of the General Council of the International Working Men’s Association in Karl Marx and Frederick Engels, Collected Works Volume 51 (New York: International Publishers, 1986), p 334. The necessary basis for working class emancipation, then, is the direct democracy of the producing class. Through this political act – the completion of the democratic revolution, if you will – the producing class will be able to begin working out how to end economic exploitation.
[8] See Peter Fryer, Hungarian Tragedy (London: Index Books, 1997) and Chris Harman, Bureaucracy and Revolution in Eastern Europe (London: Pluto Press, 1974).
[9] Two Russian Marxists, Leon Trotsky and Nikolai Bukharin, provided the theoretical foundations for the theory of state capitalism. Trotsky himself used the term “degenerated workers’ state” to analyze Russia in the 1930s. But two of his most important books from the last years of his life are central in the understanding of the counter-revolution which shaped the new Stalinist regime emerging from the wreckage of Civil War. See Leon Trotsky, The Revolution Betrayed: What Is the Soviet Union and Where is it Going? (Garden City, New York: Doubleday, Doran & Company Inc., 1937), and the unfinished work (unfinished because of Trotsky’s assassination by a Stalinist agent) Trotsky, Stalin: an appraisal of the man and his influence (London: Hollis and Carter, 1947). Bukharin’s key work was Imperialism and World Economy (which really should be translated as World Economy and Imperialism), newly republished in Phil Gasper, ed. Imperialism and War (Chicago: Haymarket Books, 2009). Leon Trotsky’s one-time administrative assistant, Raya Dunayevskaya, was one of the first Marxists to develop a worked out view conceptualizing the U.S.S.R. as a form of state capitalism. See Raya Dunayevskaya, “The Union of Soviet Socialist Republics is a Capitalist Society,” Internal Discussion Bulletin of the Workers’ Party, March 1941, and Dunayevskaya, “The Nature of the Russian Economy,” The New International, December 1946/January 1947. She was joined in this viewpoint by one of the 20th century’s most respected Marxist theorists, C.L.R. James. See C.L.R. James and Raya Dunayevskaya, “State Capitalism and World Revolution”, 1950. In the last decades of the 20th century, the theorist most closely identified with the theory of state capitalism was Ygael Gluckstein (Tony Cliff). See Tony Cliff, Russia: A Marxist Analysis (London: International Socialism, 1964).