Chapter 1: LIMITATIONS OF CAPITALISM
Since the dissolution of the Soviet Union, the “victory of capitalism” has been touted. However, now that some time has passed since the dissolution of the Soviet Union, capitalism is beginning to reveal its limitations. What are the limitations?
1. Capitalism has not won the game.
1.1. Meaning of the dissolution of the Soviet Union
Since the dissolution of the Soviet Union in 1991 following the end of the Cold War, the "victory of capitalism" has been touted both in international and domestic public opinion. In short, the demise of the Soviet Union, which was opposed to the "Western" capitalism headquartered in the United States, and the confluence of the former Soviet Union bloc with capitalism, meant that capitalism has defeated "communism" as embodied by the Soviet Union, leader of the "Eastern Block".
It is true that the Communist Party ruled the Soviet Union as the only political party for most of its history, but it would be premature to conclude that the ruling political party was the Communist Party and that the social system was also communist. In the first place, the official name of the Soviet Union was the "Union of Soviet Socialist Republics", and the fact that it did not call itself "Communist" should not be simply ignored.
In fact, the 1977 Constitution, enacted on the 60th anniversary of the October Revolution in Russia and regarded as the culmination of Soviet-style socialist constitutions, defines the Soviet society at that time as a "developed socialist society" in its preamble. It then put forward the proposition that "a developed socialist society is a lawful stage on the road to communism." It also clarified the national purpose that "the supreme goal of the Soviet state is the construction of a classless communist society in which social communist autonomy is well developed," and set the construction of a communist society as the goal of the future.
However, this stipulation of communism had already become empty at the time, and without being achieved, the "reformist" General Secretary (later President)Mikhail Gorbachev, who emerged in 1985,decided to abandon communist goals. And the Soviet Union moved closer to capitalism through the introduction of market economy elements, such as the transition of state-owned enterprises to a self-supporting accounting system and the acceptance of private business.
These Gorbachev "reforms" were naturally welcomed by the capitalist camp in the West, but because they were half-finished, they actually worsened the economic crisis in the Soviet Union, including shortages of consumer goods, and put pressure on the lives of the Soviet masses, increasing dissatisfaction.
In August 1991, taking advantage of such public dissatisfaction, the "conservative" party leaders who saw the danger of the dissolution of the Soviet Union carried out a coup d'etat aimed at overthrowing the Gorbachev regime. This plot was thwarted in three days by resistance from "radical reformist" Boris Yeltsin and the Muscovites. Yeltsin and his colleagues, in turn, forced Gorbachev to resign and led the final dissolution of the Soviet Union in December 1991.
In this way, Russia, which took off the mask of the Soviet Union, went through an economic turmoil brought about by the almost anarchic treatment of the market economy under the new leader Yeltsin. And then under the authoritarian leadership of President Vladimir Putin who succeeded Yeltsin, as an emerging capitalist state with strong political leadership, it has achieved a certain degree of stability.
Looking at in this way, it is correct to say that the opponent to whom capitalism was claimed to have won was not "communism,'' but rather Soviet-style socialism--"advanced socialism," according to the former Soviet Union's own official ideology.
So what exactly was Soviet-style socialism, and why did it fail? This question is such a big subject that it would take several volumes of books just to clarify it, so I can't discuss it in detail here, but I would like to give an overview as far as it is related to the theme of this article.
1.2. The real image of Soviet-style socialism
First, if we were to briefly summarize what Soviet-style socialism was, it meant that the state eliminated private companies and became itself a total capitalist , promoting economic development from above through state-owned enterprises.
However, the adoption of a so-called one-party dictatorship in which the Communist Party ruled the country without a change of government led to the spread of the formula that Soviet society is a communist society, but the reality is not. Rather, it should have been called "collectivism."
In short, collectivism is a system in which capital is concentrated in the state, and production, distribution, consumption, and reproduction are carried out according to the economic plan drawn up by the state (national planning agency). From one perspective, it is not impossible to consider it "state capitalism."
In fact, under this system, the main elements of capitalism, the production of commodities and wage labor, continued to exist, so it was not a system that completely broke away from capitalism.
However, as long as the collectivist system realized the nationalization of the means of production by suppressing private companies, it also took on the characteristics of quasi-communism. So there is a reason why it is called an intermediate "socialism" that is neither capitalism nor communism. But capitalism does not only mean the legal freedom of private enterprise, but also is related to the style of commodity production and wage labor. Since it is theoretically possible to say that Soviet-style socialism was collectivism, which still retained such capitalist characteristics, and it was "another form of capitalism" when viewed from an economic perspective.
So it may be possible to explain the success of China's deft economic course change . After the founding of the country in 1949,China initially adopted a Soviet-style socialist system under the leadership of the Communist Party, but it did not succeed. Then nearly a decade before the Gorbachev reforms in the Soviet Union, China embarked on "reform and opening up" with an awareness of capitalism. After the dissolution of the Soviet Union, it promoted it even more strongly, defining such capitalist-oriented economy under the Communist Party leadership as a “socialist market economy" and achieved rapid growth as a de facto emerging capitalist country.
China's change of course is often described as a miracle in contrast to the failure of the Soviet Union. If so, it can be said that the Chinese-style “socialist market economy” (=capitalism led by the Communist Party) was one deconstructive “reform” direction of collectivism.
In fact, even in the Soviet Union, since the 1960s, there had already been a wave of economic reforms conscious of a market economy, centered on the decentralization of economic management and the emphasis on profit rate indicators. The phenomenon called the convergence of socialism and capitalism had begun. but the Soviet system itself came to an end without being able to thoroughly shift to a market economy as in China.
