Ken Livingstone on Perestroika and Industrial Democracy

This morning I put up a piece about how Mikhail Gorbachev, the very last president of the Soviet Union, attempted to regenerate Soviet Communism by introducing industrial democracy and strengthening trade unions as part of Perestroika. Ken Livingstone devotes an entire chapter of his book, Livingstone’s Labour, on Perestroika, including a few paragraphs on worker’s control. He writes

So far the reformers around Gorbachev such as Aganbegyan have stressed that as the economy is modernised the workers must be protected from cuts in their standard of living. that is why he emphasises the strengthening of social provision such as housing, health and education. He has also spelt out the intention to keep rents low and to ensure that when price reform comes there must be compensation to protect living standards. He argues that there must be increased investment in new technology but makes the following innovative condition:

The distinctive feature of this reform is industrial democracy moving towards self-management … this will involved [workers] in determining the enterprise plan, the allocation of resources and the election of managers. It is a revolutionary programme. There will be much opposition, especially from management… This can only be overcome because the … driving force is political openness and democratisation.

It is not only academic economists who talk like this. I was struck by the enthusiasm and pleasure with which Vadim Zagladin, the Head of the International Department of the Central Committee, described how a Siberian shoe factory, which had been facing closure, had been taken over by the workers. The products of the factory were notorious for falling apart within days of purchase but the Central Committee had agreed to give the workers a last chance to improve their shoes before closure. Once the workers took control their first act was to sack the incompetent managers. They then turned the business into a dramatic success within two years. Now the factory is expanding and their shoes are in demand all over the USSR. Even more innovative is the workers’ proposal to issue ‘shares’ in factory-not to investors, but to their customers who would then be in a position to exercise real consumer power. (Pp. 205-6).

Livingstone also explains that the Perestroika movement was divided into two camps, with a right-wing that favoured something like Thatcherism, and a left, which included Gorby himself, that wanted to protect the workers as much as possible. He stated

In the first place, the perestroika movement is split into two quite distinct camps (it is the failure to understand this which has led so many We3stern observers to talk so inaccurately about the reintroduction of capitalism). there are those like Nikolai Shmelev and the technocrats Lisichkin and Popov whose arguments are similar to those of Thatcher that the economy can be reformed by the creation of a poll of unemployment which will act as a spur to increase productivity. They argue that Soviet society must be led by an elite and that the welfare state is a ‘survival of feudalism’.

The other faction inside the perestroika movement is that of the democratisers. Typified by the economists Aganbegyan and Zaslavskaya, this faction believes that the economy can only be modernised by democratising Soviet society from the grass roots upwards. Most important of all, they see the way to improve the economic performance of the USSR is by introducing democratic rights at work so that the workers elect their managers. At every stage Gorbachev has thrown his weight behind the democratisers and against the elitists. As he wrote in his book Perestroika (1987)’There was opinion…that we ought to give up planned economy and sanction unemployment. We cannot permit this… since we aim to strengthen socialism, not replace it with a different system … Furthermore, a work collective must have the right to elect its manager.’ (P. 204).

Livingstone was aware how radical Gorbachev’s reforms were, and that there were many who wished them to fail so that they could introduce unemployment:

The excitement with which progressive Central Committee members like Zagladin recount each successful experiment in workers democracy is an indication of just how much is riding on the hopes of the reformers that democracy from below will be the key to the modernisation of the Soviet economy. If they fail the conservatives will be waiting in the wings to try the ‘spur’ of unemployment.(p. 206).

By ‘Conservatives’, Livingstone means the traditional managerial class of party functionaries and civil servants.

This passage is interesting, as it shows how well-informed Red Ken was about the Soviet Union and perestroika. He was well aware, for example, that the restructuring of the Soviet economy would result in 16 million jobs being lost, and acknowledged that this would present a serious problem. In the event, Gorbachev’s radical proposal to transform Soviet industry into co-operatives was abandoned, and they were transformed through the voucher system into straightforward capitalist enterprises. The result was chaos and the complete meltdown of the country’s economy under Boris Yeltsin, a drunk, corrupt incompetent, who was useful as a stooge to the Neo-Cons and Neo-Libs then in the White House and Downing Street.

This also explains one of the quotes the Scum attributed to Red Ken in their campaign against Labour in the 1987 general election. The rag produced a page of photos of various Labour MPs and activists, with a radical quote from each underneath the photo to scare people. Under Diane Abbott they placed the words, ‘All White people are racist’. With Red Ken they placed a line about how he wasn’t in favour of the army, but a corps of soldiers to defend the factories. Looking back now, it seems quite unlikely that those quotes were even true, especially Ken’s, except perhaps at a time in his early career when he, like many left-wingers, was far more radical. But his interest in perestroika, and the reintroduction of industrial democracy, also showed how much of a threat he was to Thatcher and her programme of grinding the workers down any way she could.

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