What’s the Deal with Socialism? A Review.

contradictions of real socialism

Critiquing Soviet socialism has long been the pass-time of neoliberal apologists and Ayn Rand fanboys. To find a critique of Soviet socialism that is not undergirded by neoliberal ideology, then, is a pleasant surprise. Michael A. Lebowitz’s ‘The Contradictions of Real Socialism” takes on the figure of actually-existing socialism from a Marxist perspective.

The Soviet experiment in Europe was a disaster. Even if you put aside the whole totalitarian nightmare part, Soviet economies were infamous for shortages of goods and grotesque levels of industrial productivity. Lebowitz’ delves into the conditions that caused the Soviet economy to warp into a huge game of “who can lie more to the state.”

For Lebowitz, there are three key players in most Soviet economies. There are the central-planners who decide how and where resources are allocated, managers effectuate these central plans, and the workers who labor under their managers. But it didn’t take long for the managers to  be engaged in a perpetual war of misinformation with the planners.

Managers would under-report production capability, knowingly create shoddy products, and hoard workers when they didn’t need them. Why?

Because managers were given monetary incentives to complete projects on time from the central-planners and run their factory well. Managers would often withhold information about their full productive capacity so the planners would give them easier deadlines and quotas. After all, why would a manger risk being given an order that they can’t fill, when they can do less work and get the same bonus? The planners of course, knew this, but  they were ultimately unable to keep pace with the shenanigans of the managers.

And like any Goldmann Sachs employee would, managers got really good at producing useless commodities that were heavily over-valued. In an example often mocked by the Soviet press, managers would find ways to artificially inflate the value of goods, such as using coat linings that were far more valuable than the exterior fabric. Soviet cartoons and popular culture were rife with references to “heavy chandeliers,” “gold-plated coats,” and one particularly popular cartoon depicted a manager proclaiming he had fulfilled his quota by producing one giant nail.

But the problem wasn’t solely the creation of shoddy products.  Enterprise managers would trick central planners into signing onto an investment project with an artificially low first-year cost. Because of the paternalistic nature of the Soviet economy, when costs ballooned the planners were more concerned about helping the managers succeed rather then let the poorly budgeted project go through.

So why did all of this happen? Is it because workers have no incentive to succeed? Many ideologues have pointed to the Soviet failure and proclaimed “See! Capitalism really is the only solution.” But Lebowitz argues the opposite, the problem with “real socialism” that we saw in the Soviet countries was, in fact, capitalism.

The moment Soviet governments decided to create financial incentives for managers was the moment the revolution was doomed. As Lebowitz argues:

However, these managers do contain with them the logic of capital– just as merchants and moneylending capitalists did before capital was sucessful in seizing posession of production. Whereas the existing constraints upon the managers do not permit us to classify them as capitalists, the drive, impulse, the logic of these managers is a different matter. If these income-maximizing managers struggle to remove the constrainst place upon them- for example, specific output targets, designated suppliers and customers, the appropriation of enterprise profits, the inability to discipline or fire workers, or to introduce freely new methods of production, what is this drive if not the logic of capital? Expressing that logic is the mantra – Free capital!

It’s certainly a compelling response to the so-called superiority of capitalist efficiency. Sure, the lying, cheating and stealing of capitalist enterprise is mitigated by the state regulation and the need to make actual profit. But is this misreporting of enterprise managers in Soviet economies all that different from the toxic asset trading that led to the 2008 economic collapse?

There are, of course, other problems with “real socialism,” though too numerous to enumerate in this article. For one, the “vanguard Marxist” model that consists of, in Lebowitz’ terms, the “conductor and the conducted” just perpetuated worker alienation in the factories.

Although it rejects the perspective of capital, it reproduces the one-sidedness of that political economy through its complete neglect of the existence of a particular joint product- the nature of workers produced under vanguard relations of production. Vanguard Marxism does not consider how workers are deformed by their lack of power to make decisions and to develop their capacities through their activity. How could it be denied that Vanguard Marxism is one-sided?

The Verdict

This book is hella good. Not “holy shit this just blew my mind” good, but I can imagine a 16-year-old version of myself saying something along those lines.

For the seasoned Marxist, the empirical focus on the state of the Soviet economy is a refreshing break from heavy theory. Lebowitz managers to make a dry topic extremely interesting and useful for those interested in Marxist theory.The end of the book offers a theoretical criticism of “Vanguard Marxism” that was well-argued, but is nothing new for those familiar with anarchist critiques of Marxism.

For the Marx newbie, Lebowitz offers enough theoretical background to “get it” without having read Das Kapital.

Grab ‘The Contradictions of Real Socialism” on Amazon.

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