Framing this topic are three key distinctions. The first is between Europe and other parts of the world. Communist (or Marxist-Leninist) ideology originated in Europe in the Nineteenth and early Twentieth Centuries. And as European citizens we naturally focus on the situation in our own continent. But from a global perspective it is (or would be) no less important to consider Asia – preponderantly of course China, but also Vietnam and North Korea – as well as Latin America, which means essentially Cuba, plus the Salvador Allende episode in Chile in the early 1970s as a footnote.
The case of China points to a second key distinction, between politics and economics. Politically one cannot speak in the Chinese case of a Communist “remnant” or “legacy”, since the country remains an avowedly one-party Communist state. But its economy has for several decades been market-based – meaning that decision-taking on a wide range of output is decentralised to individual enterprises and co-ordinated through the price mechanism – rather than command-based or centrally planned.
Before the Chinese example it would scarcely have been imagined that any Communist politics could co-exist in this way with capitalist economics. Interestingly, the early stages of transition or reversion to capitalism (up to the mid-1990s) were effected without any comprehensive prior definition of individual property rights. Rather, local government bodies established so-called TVEs, township and village enterprises, owned by their communities. These structures, however, have since been superseded by full-blooded capitalist institutions; and it is arguable that the People’s Republic of China, while retaining its authoritarian character, is nowadays Communist only in name.
The global appeal of Communism, and of authoritarian regimes more broadly, was enhanced by the economic adversities of the 1920s and 1930s, which the customary economic policies of liberal governments seemed unable to remedy.
The third key distinction is between Communism as a home-grown system and as a regime imposed from outside by compulsion or occupation. “Home-grown” need not of course imply that the process is smooth or peaceful. On the contrary, in the two key cases of the Russian Empire/Soviet Union and China, Communism was established through violent revolution and civil war, and underwent further disruptions in the course of its subsequent development. The same applies in large measure to the lesser examples of North Korea and Cuba. This does not, however, invalidate the distinction between autonomous and imposed regimes, a distinction of primary significance for Europe, where the Soviet Union, itself dating from the aftermath of the First World War, came to rule over most of central and eastern Europe for nearly half a century after the Second World War.
It accomplished this partly through the network of national Communist Parties; partly through the specific institutional arrangememts of COMECON, founded in 1949 as the Soviet riposte to Marshall Aid, for economic relations, and the Warsaw Pact, founded in 1955 as the military counterpart to Nato; and ultimately through the threat of armed intervention (a threat realised in Hungary in 1956 and Czechoslavakia in 1968). For most of Eastern Europe, therefore, unlike for Russia, dismantling Communism after 1990 was synonymous with escape from alien domination or oversight.
For most but not all of Eastern Europe, that is. Yugoslavia under Marshal Tito espoused Communist institutions of its own volition after the Second World War, but almost simultaneously rejected Soviet hegemony and later joined the group of “non-aligned” nations. The neighbouring regime of Enver Hoxha in Albania was at odds with Yugoslavia over Kosovo and related issues. Hoxha remained unshakeably loyal to Josef Stalin and (after 1953) to his memory, but rejected the “revisionism” of his successors, notably Nikita Krushchev. This led him to a closer relationship with Maoist China, both ideologically and in matters of economic linkage.
We come now to the core of our topic. In Karl Marx’s vision the Communist revolution would supervene at a high point of capitalist economic development, to expropriate the owners of capital and to spread the fruits of accumulation and of technology justly across the entire population. In practice, the vision caught on predominantly in countries – notably Russia and China – where spontaneous economic deveopment had lagged behind and where state control could be invoked as a means of forcing the pace. The global appeal of Communism, and of authoritarian regimes more broadly, was enhanced by the economic adversities of the 1920s and 1930s, which the customary economic policies of liberal governments seemed unable to remedy (extreme instability of prices and price levels, collapse of financial institutions, shrinkage of international markets, mass unemployment).
But in the second half of the Twentieth Century the market economy became the mixed economy. Its enlarged public sector and welfare state safeguarded stability. And the mechanism of competition proved to be far better than central planning at fulfilling the diverse and variable aspirations of consumers in conditions of prosperity; and in parallel, at nurturing technological innovation and consequent productivity gains. The one critical area where competition needs to be circumscribed rather than promoted is finance, particularly banking. This is because the nature of the sector’s business makes it prone to herd behaviour; and at the same time, any multiple collapse of banking institutions is liable to cause serious collateral damage (“negative externalities” in the jargon) to the economic system at large. Remarkably, the lesson has had to be re-learned from time to time by governments and the economics profession alike.
State power sooner or later gives rise to its own incentives. An obvious one is the incentive for individuals to seek employment in the state apparatus in pursuit of personal comfort or ambition.
State power sooner or later gives rise to its own incentives. An obvious one is the incentive for individuals to seek employment in the state apparatus in pursuit of personal comfort or ambition. Another is the incentive for geographic or culturally distinct units within the state to seek independence, either partial (devolution, federalism) or total, in order to pursue their specific group interests more closely or effectively. This is a general phenomenon, not confined to Communist states. It has been a factor in the dissolution of colonial empires, and is currently exemplified by Catalan, Quebecois and Scottish nationalist movements.The exceptionally enveloping and oppressive nature of Communist authority tended to obscure the existence of such forces. The demise of Communism, fundamentally on economic grounds, brought them to light.
Yugoslavia broke up after 1990 into its several constituent republics, with parts of the process involving brutal civil strife. A little later, Czechoslovakia was divided into the Czech Republic and Slovakia. Much the most striking case, of course, has been the Soviet Union, fragmenting after 1989 into its 15 member republics, all but simultaneously with the freeing of the former satellite states in Eastern Europe.
In the cases of the three Baltic republics (Estonia, Latvia and Lithuania) the only surprising aspect of this process was that it came as a surprise. They had been incorporated, or reincorporated, into the Soviet Union as recently as 1940, and subsequent population movements had not been large enough to eliminate their distinct languages or sense of nationhood. At the other temporal extreme, Ukraine, together with much of today’s Belarus and parts of the Russian Federation, formed the original Ninth Century Russian state of Kievan Rus’. From the Fourteenth Century onwards, with the expulsion of the Tatars, the centre of gravity shifted to Moscow. However, linguistic and cultural diversities were perpetuated and indeed multiplied over the centuries, as the frontiers of the Russian state fluctuated widely with the ebb and flow of political fortunes and conflicts.
As recently as the dawn of the Soviet era, Russia, by the Treaty of Brest-Litovsk in 1918, surrendered its Polish, Finnish and Baltic territories, as well as, for a brief interval, Trans-Caucasia (Georgia, Armenia, Azerbaijan) and Ukraine. It is consistent with this history that the Russian Federation under Vladimir Putin should be sniffing around its borders with Ukraine, with Georgia and with the Baltics in search of opportunities to re-expand its territorial control.
The alternative to an absolutist or totalitarian regime is democratic sovereignty – in other words, limited government, subject to regular democratic election from a plurality of political parties or programmes – combined with the rule of law under an independent and incorruptible judiciary.
The alternative to an absolutist or totalitarian regime is democratic sovereignty – in other words, limited government, subject to regular democratic election.
The latter requirement is primary, for two reasons. First, a reliably independent judiciary as the ultimate means of resolving disputes between private persons is the basis of trust and honest dealing across society, and hence the basis of economic cooperation and efficiency. Secondly, politicians and public servants must themselves be subject to the law, and be unable to interfere in any way with the process of law enforcement, including (or especially!) laws governing the exercise of democratic sovereignty.
It is in this respect that ex-Communist states, particularly in the former Soviet Union, are most liable to fall short. Elections are (frequently) rigged. Politicians and bureaucrats use their offices to enrich themselves. Business enterprise is hampered by fear of criminal attacks in the form of protection rackets, asset seizures (“reidyerstvo” in current Russian parlance) or financial fraud. Restructuring and economic progress are slowed, and expectations disappointed. The one feature of contemporary western societies most clearly matched, or indeed exceeded, in some ex-Communist states is inequality of income and wealth.
To be sure, corruption, intimidation and fraud are not absent from societies that escaped the Communist experience. These phenomena too are universal. But not everywhere on the same scale. Quantity matters. An occasional mishap or bad apple may be allowed for in a firm’s provision for contingencies; but when these “contingencies” are so common as to have measurable effects on the generality of costs and profit, it is quite another matter.