Ulbricht’s ‘New Economic System’ of 1963 was a typical reform of the time and was partially inspired by the economist Evsei Liberman – a technocratic project to introduce market mechanisms into the plan without giving in to the free market. Efforts were made to subject enterprises to market signals to improve their productivity and to make them more responsive to consumers. This would be done by judging them – and financing them – according to their profitability, rather than by how much they produced, and by giving them more powers over pay and bonuses. At the same time Ulbricht challenged traditional party bosses by seeking to promote technically able, educated ‘experts’ rather than the less well-educated ‘reds’. His reform, however, soon ran into the difficulties that bedevilled all attempts at market-style reforms in the Soviet bloc: the objective difficulty of moving from the old system to the new; political resistance; and fears of worker unrest. Economic bureaucrats complained that they were still expected to fulfil plans, but had fewer powers to do so; enterprises spent money on wages to appease workers, and productivity declined; the regime did not have the courage to set higher commercial prices (vital if producers were to respond to the market); and even though Ulbricht did talk about the need to close down unprofitable plants, it was politically impossible to do so, as they had powerful supporters in the party. Ulbricht also discovered that decentralization deprived him of the powers he wanted to force through his ambitious high-tech projects, and he began to reverse the reforms. Soon a powerful opposition had emerged within the party, led by Erich Honecker, whilst Ulbricht’s obsession with high-tech industries began to cause shortages and bottlenecks in other areas of production. A combination of economic crisis, mass discontent and Brezhnev’s displeasure at Ulbricht’s unauthorized détente with West Germany brought Ulbricht’s fall, his replacement by Honecker and the end of market reforms.32
Serious reform had ended much earlier in the USSR. In 1965, Kosygin introduced a limited version of Liberman’s proposals, but they were soon watered down. Brezhnev was a staunch defender of established bureaucratic interests, and the ‘hungry’ parts of the economy – especially the military and heavy industry – resisted any reduction in their resources.
The Hungarian party introduced the most long-lasting liberal reform, which few predicted after the brutal repressions of 1956–7. Once Kádár had re-imposed Communist rule, he tried to follow a middle course between hard-liners and liberals, and began to seek support for his unpopular regime. The ‘New Economic Mechanism’ of 1966 and 1968 reduced plan targets to a minimum and freed prices, gradually lifting economic controls until by the 1980s the Hungarian economy was one of the freest in the bloc. A dual economy emerged, rather like the Soviet economy in the 1920s, with cooperatives and a (relatively small) legal private sector allowed to compete with the state-owned economy. The reform gave consumers – at least those with money – real power. The old socialist dilemma of too few goods and too much money was reversed, and the problems of capitalism returned: too little money, too much to buy. Wage differences also increased and inevitably caused some discontent. The Hungarians, then, had created their own ‘goulash Communism’; by Communist standards, this was a consumer paradise, and industrial performance also seems to have improved. Even so, this was not capitalism. Market disciplines were weak, and failing firms were not closed down. The state, moreover, still had most of the power.
As long as these reforms promised to improve the popular mood without challenging the party’s rule, the Kremlin tolerated them. And yet there were real dangers. After the crises of the mid-1950s, Communist regimes had bought off rebellious workers at the cost of economic efficiency. Liberalization may have had the support of white-collar workers and peasants, but it was bound to hurt workers and poorer regions. After the Russian invasion, Hungary had a united, disciplined party that could cope with these tensions. Yet most Communist states were not so resilient and proved unable to deal with the tensions liberalization brought in its train. Yugoslavia and Czechoslovakia – both with more powerful Communist traditions than Hungary, but plagued by ethnic division – showed how dangerous the market could be to Communist rule.
By the mid-1960s the dangers of the market were most obvious in Yugoslavia. The old efforts to unite the Romantic Marx of worker councils with the market had long been abandoned. Instead a Faustian pact had been forged – borrowing cash from the capitalist West to fund socialism in Yugoslavia. The bargain proved hopelessly unequal, and Yugoslavia became increasingly sucked into the capitalist world. Forced to export more and more to pay off debts, efficiency and cost-cutting – and with them higher unemployment – were inevitable. By 1968 almost 10 per cent of the population were jobless – a unique situation in a Communist state. Conflicts broke out between conservatives, committed to greater planning and centralization, and liberals, and, more dangerously, they became linked with tensions between Yugoslavia’s republics. Wealthier Croatia and Slovenia resented subsidizing the poorer Montenegro, Macedonia and Bosnia-Herzegovina, especially at a time of retrenchment, and demanded further liberalization and decentralization. Belgrade was beginning to lose control. In 1963 the republics were given more powers; in 1965 the central state’s control over the economy was reduced further; and in 1966 the main defender of the old centralized system, the secret policeman Alexandar Ranković, fell from grace. But state control was not replaced with market disciplines. Local party pressure made it difficult to close inefficient enterprises, whilst managers were free to raise wages and borrow money. The consequence was spiralling debt and inflation. By the 1970s, Yugoslavia was in crisis – inefficient, indebted and in danger of disintegration.
Yugoslavia’s travails should, perhaps, have warned Brezhnev of the dangers of markets and of integrating East European economies with the West. But Soviet bloc economies were not in debt – yet – and Tito’s troubles elicited only schadenfreude in Moscow. Brezhnev, however, could not ignore the crisis in Czechoslovakia. The Czechoslovak party was governed by Antonín Novotný – an old Czech party official of a fundamentally Stalinist bent. As Mlynář described him, he combined a ‘true belief in the correctness of Communist doctrine and its advantages for workers, with political hucksterism and a talent for bureaucratic intrigue’. He had been closely involved in the Stalinist show trials of the early 1950s, and was so lacking in sentiment that he was happy to sleep between the sheets belonging to Vlada Clementis – one of the Communists he had sent to the gallows (the belongings of the condemned were often sold off cheaply to officials).33 Nevertheless Novotný forged links with Khrushchev and was prepared to introduce limited reforms in response to economic failure – growth slowed from an impressive 11.7 per cent in 1960, to 6.2 per cent in 1962, to zero in 1963. He allowed more cultural freedoms and rehabilitated the economist Ota Šik, who proposed a number of liberal reforms. Yet the conservative Novotný dragged his feet when it came to implementing them, and workers – who inevitably suffered from reform – were unhappy.34 As the economy continued to do badly, the intelligentsia also became restive, and a slew of novels appeared, condemning evil apparatchiks in the harshest terms. The party now began to split along ideological and ethnic lines. The poorer Slovaks, who felt very much the inferior partners in Czechoslovakia, and whose economy was doing particularly badly, demanded liberalization (although in practice it would have undoubtedly hurt them). But it was the Prague students who began the crisis, when in December 1967 they protested against poor conditions in their dormitories. The police put the protests down savagely, and Moscow began to get worried.
Brezhnev flew in to Prague for forty-eight hours. Initially, he did not plan to change the leadership, but merely to put pressure on the Czech party. He soon realized, however, that Novotný was not open to persuasion. He seemed to have no idea of the seriousness of the situation, was rigid and did not know ‘how to handle people’. Brezhnev told the Czechs that they had to sort the situation out themselves: ‘this is your affair’.35 But his refusal to give Novotný unequivoca
l backing was fatal to the old regime. The Slovak leader Alexander Dubček replaced him in January 1968, and charged a group of reformist Marxists with formulating an ‘Action Programme’.
Unlike the Hungarian reformers of 1956, the reformers had no intention of dismantling the party-state, or leaving the Soviet bloc. Dubček had spent much of his childhood in the Soviet Union, and was deeply attached to his Russian elder brothers. Similarly, one of his main advisers, Zdeněk Mlynář, wrote in 1980: ‘I was a reform Communist, not a non-Communist democrat. I didn’t try to hide it then, and there is no reason why I should try to do so now.’36 Multi-party democracy, he believed, would only cause a conservative backlash and endanger the reforms. Yet the reformers were left with the old dilemma: how to reconcile genuine democracy with the guarantee that the party would retain its leading role.
Khrushchev’s Romantic Marxist solution had been a programme of moral renewal, to reinvigorate officialdom by means of purges and controlled party elections; officials would then be in a fit condition to mobilize ordinary people. But the Czechoslovak reformers rejected this top-down vision. Whilst they agreed with Khrushchev that the Communist elites were capable of change, they believed it should be through direct democratic pressure from below. The party had to re-earn its ‘leading role’ by taking account of popular opinion.
They justified their democratic socialism by going back to a non-Stalinist Marxism – both Romantic and revisionist. The post-Stalin thaw had given intellectuals a very different view of Marxism from the orthodoxy that had prevailed since the mid-1930s. Mlynář, one of the first cohort to move into the grand new Moscow University building on the Lenin Hills, remembered how narrow and distorted the Marxism he studied there was: ‘it was only in the late 1950s that I finally studied what every Marxist-oriented university should teach its political science students as a matter of course’. Now that he had been able to read the young Marx and Gramsci, as well as Kautsky and Bernstein, ‘my former system of Marxist ideology was destroyed’.37
Most influential, perhaps, was the young Marx. This Marx, the new generation plausibly argued, was interested in human creativity. But from the end of the nineteenth century, Marxism had taken a wrong turn with Engels, his technocratic view of the world and belief in the inexorable laws of history. Feelings and creativity had been sacrificed to modernity and rationality. Stalin, they argued, had merely continued on this path: for him, any amount of human suffering was tolerable, as long as modernity was built. The time had come for a ‘socialism with a human face’ to flourish, which allowed people to engage in ‘praxis’, or creative activity.38
This, of course, all sounds like classic Romantic Marxism. But it is significant that Mlynář’s memoirs do not see any contradiction between the Romantic young Marx and the Pragmatic Kautsky and Bernstein. As in early 1950s Yugoslavia, the contradictions within different kinds of ‘reform’ Communism were rarely seen with much clarity. Some of the Czech proposals – like worker self-management – were Romantic in inspiration, and were, of course, rather difficult to reconcile with market reforms intended to empower managers. Others were inspired by a Pragmatic Marxism, with an almost liberal commitment to market reforms and pluralist politics. The reformers called for multi-candidate elections as the only way of revealing popular opinion, and denied they wanted to vote the Communists out. Multi-candidate elections also had wide public support. But would the elections not undermine the Communist system? Opinion polls showed that they would not, and an overwhelming majority of the population rejected any fundamental change; only 6 per cent believed that political parties opposed to the system should be permitted to stand. Even so, this was not a ringing endorsement of the Czechoslovak Communist Party. When asked whom they would vote for in the event of free elections, the Communist Party came top with 39 per cent, a new, unspecified political party received 11 per cent, and 30 per cent of people refused to answer or did not know. When only non-party members were counted, however, only 24 per cent supported the Communist Party.39
Even so, the reformers believed that they had finally found the philosopher’s stone: a way of uniting the whole people behind the Communist party. Dubček remembered his deep emotions as he watched the May Day parade from his democratically low tribune:
I will never forget the May Day celebration in Prague in 1968… After years of staged productions, this was a voluntary “happening”. No one herded people into columns marching under centrally designed and fabricated catchwords. This time people came on their own, carrying their own banners with their own slogans, some cheerful, some critical, some just humorous. The mood was relaxed and joyful… I was overwhelmed by the spontaneous expressions of sympathy and support from the crowd as they passed the low platform where the other leaders and I were standing.40
Most of the Soviet bloc’s leaders, though, were profoundly unhappy. Everything looked fine in May, but what would happen after September, when the Action Plan envisaged free elections? This looked like a recipe for the collapse of Communist rule. Gomułka asked: ‘Why not draw conclusions from what happened in Hungary? That all began in a similar way.’41 Brezhnev, ever the consensualist, was desperate to avoid Soviet action, and he reluctantly endorsed the Action Programme. But as time went on, it seemed to Moscow that Gomułka and the hard-liners were right. Dubček’s pluralism seemed to be unleashing a wave of criticism. Especially worrying for the Kremlin was the ‘Two Thousand Word’ manifesto signed by leading intellectuals, which implied that the party, full of immoral ‘power hungry individuals’, could never be transformed into a humane force.
Fears that the party would suddenly collapse as in Hungary in 1956 were exaggerated, but pressures for some kind of Soviet intervention became overwhelming when party bosses started to warn of cross-infection; Petro Shelest, the Ukrainian leader, told Brezhnev that the Prague Spring was destabilizing his own republic, and Brezhnev feared that he was facing a series of falling dominoes.42 He agonized, and the crisis marked the beginning of his long battle with illness, insomnia and addiction to tranquillizers and sleeping pills. He finally took the fateful decision. In August the ‘fraternal’ forces of the USSR, Poland, Hungary, Bulgaria and East Germany ‘rescued’ their helpless sibling from the evils of counter-revolution. They were met with some demonstrations but no serious resistance. As in Hungary, brutal repression followed. The new Czech Communist leader, Gustáv Husák, who like Kádár had been imprisoned by Stalin, agreed to do the Soviets’ bidding. Thousands left for the West, were imprisoned or were given punitively menial jobs. Dubček himself became a forestry inspector in Slovakia. Unlike in Hungary, though, short-term repression was not followed by long-term relaxation. The Czechoslovak party kept a tight grip on society until the state’s demise in 1989.
In hindsight, we can see Prague 1968 as the writing on the wall for the whole Soviet bloc, and perhaps for old-style socialism throughout Europe. Hungary in 1956, like the Polish ‘Solidarity’ movement in 1980–1, threatened the Soviet system, but these were cases of anti-imperial rebellion. In both countries, society was largely united in a mixture of nationalist and ideological resentment. But workers could be bought off and opponents imprisoned or intimidated, as happened in Hungary. The Prague Spring, in contrast, exposed the real weaknesses of the Soviet bloc, for it was a movement that had grown up amongst elites within the party and its culture – unlike the more nationalistic Hungarian and Polish rebellions which had largely developed outside it. It was fuelled by Communist true believers who principally sought to use reform to restore the party’s moral right to rule. And whilst still Marxist, it was moving rapidly towards liberalism – unlike the more radical Western protests of 1968 with which it has so often been compared. As Kundera, one of the participants, has written, ‘Paris May ’68 was an explosion of revolutionary lyricism. The Prague Spring was the explosion of post-revolutionary scepticism.’43 These Communists, unlike nationalists and dissidents, knew how to gain power and use it. And it was Communists like these, not nationalist
rebels, who ultimately destroyed Soviet Communism.
There was also a more personal and direct relationship connecting the Czech crisis with the ultimate demise of the Communist system. One of Zdeněk Mlynář’s closest friends at Moscow University in the early 1950s was a fellow law student – Mikhail Gorbachev. Both were part of a student generation committed to a non-Stalinist Marxism, and in 1967 Mlynář had stayed with Gorbachev, now a party official in Stavropol. Mlynář found his old friend broadly sympathetic to the Czechoslovaks’ right to reform, even though his ideas were by no means as radical as his. Gorbachev also visited Prague in 1969, and saw with his own eyes the Czech hatred of their Soviet occupiers. The Soviet authorities were highly sensitive to the potential dangers of Gorbachev’s Czech contacts. In 1968 the KGB questioned Gorbachev’s friends and fellow students about the friendship, but could not find any concrete evidence of heresy. Two years later he became party secretary of Stavropol region, unimpeded by the organs of state security.44 It is tempting to imagine what might have happened had they acted on their suspicions. Rather like the tsarist censors who failed to stop the publication of Capital, they let slip the person most responsible for destroying the system they were charged to defend.
The Red Flag: A History of Communism Page 57