Why Are Former Communist States in Perpetual Transition?

First published in Versopolis Review, 2016.

The fall of the Berlin Wall brought a wave of optimism to former communist states in Eastern Europe; at last we can all be capitalists! An iconic photograph of that period shows a Trabant laden with a pile of bananas, with capitalism being equated with consumerism. In terms of economy and leadership its western sister took East Germany under its wing, whilst the other states began their transition, in other words, a changeover to capitalism. The term is usually used for something temporary and brief. A quarter of a century later these former communist states are still in transition and it is now clear that this is not an interim circumstance but a new lasting situation.

An ever increasing number of nostalgics believe that communism was a better state than the current floating in a dependent, sometimes almost semi-colonial relationship with the more developed world and even those who condemn communism more and more often covet its methods, at least when they are in power. Eastern Europe is slowly slipping backwards as if it has discovered that transition does not lead anywhere and that it is time to return to the past.

Optimists still claim that all that is needed is something minor, something they do not know how to describe, a sort of undisclosed skill that will transform us into real capitalists and citizens of successful countries. In the countries of the former Yugoslavia that I have a closer knowledge of, the situation is deteriorating into a sort of tragicomic parody of the American Wild West at the end of the nineteenth century; those who grab most are most respected. In this, western corporations have a favourable starting point and local companies are easy prey.

Even the numerous translations of American manuals, seminars and the introduction of Business Administration as a subject in schools have failed to bring transition to an end.

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I live in Slovenia and scrutinize transition at first hand. Only at the end of last year, however, and mainly because I had personal experience of it, did I notice an interesting detail. Like elsewhere, Slovenia too has organizations that collect and distribute copyright compensations for authors. They were established by authors and/or publishers. Then a large German corporation decided that it would try to abolish such an organization or, failing to do so, take it over. I tried to mobilize its members to resist such moves – and most of the times got answers along the lines of ‘Don’t bother with it, it’s all in vain. This common good cannot coexist with capitalism. The one who gets in first, grabs first. This is all that this corporation is doing…’

This pierced me like a thorn. I could not stop thinking about it and began searching for data.

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At the same time I was preparing a lecture on common good and conducted a short survey amongst my compatriots about which contemporary concepts the notion brought to mind. The answers were surprising, mostly Airbnb and Uber.

Airbnb and Uber are the Song of Songs of capitalism. The former packages hospitality and the latter hitchhiking as a retail product. Only in transitional states would someone believe that these extreme feats of capitalism are means of adjusting the common good. When I asked Germans the same question they did not repeat the mistake and most brought up car sharing as their example.

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The Swiss village of Törbel is a mixture of private and common. Private houses are connected with common roads, the village also has common forests and pastures. Villagers gathered in 1483 and decided how they would handle their common good and since then have been meeting every year, to check how their business is working, choose new administrators, set payment levels, decide where and how much timber is to be felled and so on. Nobody prevents villagers from owning private land but the costs of common administration are so much lower that 80% of mountainous areas of Switzerland are managed in this way (Rifkin, 2014).

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When the great-great-ancestors of modern Törbelians gathered at their first meeting, the world was incomparably different. In reality land did not even belong to the king but to God; the king was merely its administrator. As not everyone could afford to own every tool, these were shared and a great deal was done by joint efforts, which is how things are done in these villages to this day.

The private ownership of everything including space, is, historically speaking, a relatively recent invention – for example English enclosures were effectively the privatization of common land in the 18th century.

The fundamental idea of capitalism is based on the premise that everything belongs to someone and that someone can trade with what they own. Everything can thus be sold and bought.

Even with a careful reading of older and newer texts the difference becomes obvious; when the former talk of land, the people belong to the land, in the latter the land belongs to the people. After the Middle Ages the story of the West is essentially one of seizing land, occasionally also called colonialism. This also caused a shift in the legal language. What were in feudalism duties on land tenure became land rights in capitalism.

Max Weber put it neatly when he stated that capitalism occurs when economic values replace spiritual ones. It is not surprising that now it is economists who have become the spiritual leaders to which we pray, ask for advice and expect miraculous solutions from. Their shrines, the banks, are taller than cathedrals.

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In theory, the Swiss system, having been set up in the Middle Ages and having remained unchanged, should mean that Switzerland should have remained one of the most backward countries, a forgotten backwater. In 1968 the journal Science published an article by Garrett Hardin, The Tragedy of the Commons (source) that brought great joy to capitalists. What they had always suspected, that everything that is not private is doomed to failure, was not confirmed by science, common pastures were a tragedy. Private ones mean happiness.

Well, things are not quite like that. Elinor Ostrom set out to research the claims of the article and found out that common pool resources are alive and well everywhere in the world and are pretty effective (in 2009 she was awarded the Nobel Prize in Economics for her work in this field).

I expect that when you’re being duped Hardin is often quoted, Ostrom never.

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Communism equated common good with state ownership and continuously emphasized, praised and idealized it but we all saw with our own eyes that it was essentially a spectrum of placing incompetent cadre, the most blatant theft and misuse. Generation upon generation grew up with family meals where father bragged about what he had stolen from the factory, with mother talking about all the things she had snitched from the store. The common good became something that needed to be appropriated, the more the better, and run away with as soon as possible. If you don’t steal it then someone else will, so you need to hurry.

The common good ceased to be a living organism that needed to be looked after, it became a carcass that needed to be dismembered in the quickest possible way.

It was not because they had not learnt how to be capitalist that former socialist states did not become like Switzerland but because they never re-learnt how to handle common good. Everyone believes that communists destroyed entrepreneurship and private property but nobody thought about the extent to which they ruined common good. They transformed it into loot.

The communists destroyed private property through action and common property by example. No wonder then that it was so fundamentally erased.

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There is no common good without active participation. Once a year all co-owners must be ready, have all the business results and plans in hand, question the leadership till it sweats and, only if the majority agree a new mandate is awarded. If.

Communists struck out harshly with entirely different rules: shut up, mind your own business, look away, vote for the only candidate on the list and you will live happily ever after.

Common good is constantly exposed to two dangers that are triggered at the moment when active participation starts to falter:

  1. internal takeover
  2. external takeover

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With internal takeover a small group decides and continues to operate the matter so it still appears to be for the common good but reaps the fruits for itself.

As Orwell correctly discovered, totalitarian regimes bear the mask of doublespeak: all that is said means something else. The Yugoslav ideologist Edvard Kardelj thought up the concept of self-management, with which he was drawing an angled circle: workers decide, the party decides. The activity of participants thus became pointless. Numerous and impossibly long meetings were only a welcome excuse for slumbering, absence from work and obedient lifting of hands.

With his Yugoslav model of self-management Kardelj created a hymn to bureaucratization. Kardelj was a teacher by profession and liked giving out homework. This way for one single law a million and a half legal files were composed, meaning a bureaucratic tsunami whose labyrinthine structure disabled any kind of purposeful activity.

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With external takeover, when someone privatises the common good, the common owners from communism who have had powerlessness engraved in their minds can merely look upon what is happening with bemusement. They don’t want to cause themselves any trouble, they say. We all grew up with American westerns where everyone was out to grab Indian land. It seemed easy and we said to ourselves, this capitalism is easy as pie. Bring it on! What we overlooked was that in this case it was we who were the Indians.

When an individual wants to appropriate common good in America, the excuse is freedom (source). In Eastern Europe and the Balkans we are more under the German influence so I will talk of saving and optimal management, etc.

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For socialist states the leap of thought to managing the common good is difficult. Previously it was all arranged by the Grand Leader and now we are, all of a sudden, all expected to be small leaders? Capitalism offers communism a more convenient solution: instead of the Grand Leader you will now have the Grand Owner. The former had a party membership card, the latter has a bank card.

In both cases you will not have to think and it will be sufficient if you merely carry out orders. In both cases thing will keep getting worse and you will live in ever-greater uncertainty, since you will be more and more dependent on Him.

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Let us imagine a group of people standing at a pasture, trying to decide how it should be managed.

  1. The strongest amongst them appropriates the pasture for themself, essentially privatizing it. He will need to repay any loans he took out to do so as soon as possible, so he will raise the amount of contributionand sooner or later sell it to a larger company that will sell it on to a multinational and all of a sudden there will be so many administrators that the pasture will no longer be profitable and will go bankrupt. It will also be very expensive.
  2. A communist company is created and an incompetent cousin of a politician is placed at its helm, he will employ his own minions and carry out his own sick business ideas until bitter bankruptcy.
  3. If the pasture is divided, every villager will have to buy themselves a tractor and all that goes with it and eventually succumb to the costs.
  4. Following the example of the Törbelians they manage it as the common good. This way of managing is clearly extremely efficient despite the relatively little time they need to invest in it (once yearly!) but the leaders chosen are the best and are regularly supervised.

Any of these four methods can be employed, it all depends on the circumstances. Even the option of a socialist company can be the right one, for example for politicians with lousy relatives.

Transitional states have forgotten all about the fourth model, the second makes them sick and are thus left with only the first and third option, both of which are less advantageous and less profitable. Consequently they have entered the long-distance race with a serious handicap.

In transitional states we have gained the worst of capitalism and lost the best of feudalism. Only a revival of the concept of common good as a possible tool will move us beyond the hamster wheel.

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