Neither Capitalist Nor Socialist: The Political-Economy of Post-Capitalist Societies

✑ CATHERINE SAMARY | 3,383 words
‟For the Bolsheviks, it was a transitional society to socialism.

How did the economies of the so-called socialist countries of the Twentieth Century - from the USSR to Yugoslavia, from Cuba to Hungary – function? Not like Karl Marx envisioned socialism, Catherine Samary argued in her 1988 book Plan, Market and Democracy. Even Lenin and Trotsky “characterised the USSR as a transitional society” – as societies in transition towards socialism, not as socialism already achieved. But societies “transitioned” differently. Samary differentiated “three types of economic systems which have really existed or were proposed at one point or another in the so-called socialist countries”. 

Catherine Samary is an economist and specialist on the Balkans and Eastern Europe. Samary has previously been teaching at the Université Paris-Dauphine. She was a member of the IRISSO (Institute for Interdisciplinary Research in Social Sciences) and collaborator of the Institute of European Studies at the University Paris 8. She was a collaborator of Le Monde Diplomatique and has been active in several internationalist associations since the sixties (including Espaces Marx and ATTAC).

Originally published: The following text is a (drastically) shortened version of the “Introduction: theoretical, political and methodological questions” of Samary's book Plan, Market and Democracy (1988). Read more on this book, see a link to the complete book and read an announcements of a new book, edited by Samary and to be published in 2018, at the bottom of the article.

"Between capitalist society and communist society, there stands the period of the transformation of the one into the other."

- Karl Marx, Critique of the Gotha Programme

M arx and Engels left some well-known indications on how they conceived socialism. They were grounded in a critique of the contradictions of the capitalist system, of ‘generalised commodity production.’ The superiority of socialism/communism could emerge only by organising human labour on a new basis, on a scale at least as developed as that of the most advanced phase of capitalism. The internationalisation of production and the worldwide division of labour promoted by capitalism offered humanity a chance to develop its productive forces in an unprecedented way — but at a growing social cost.

The subordination of the economies of the capitalist periphery to the needs of the imperialist metropolises enabled capitalism to pass its most explosive contradictions onto the less developed societies. In this respect, the October revolution, as well as the Yugoslav revolution, were the national products of an organic whole, a world system structured hierarchically.1 As a result, they combined features of the bourgeois democratic revolution (land reform and national sovereignty) and of the proletarian revolution (in their anti-capitalist dynamic), features of the most modem capitalist development and the legacy of pre-capitalist societies. In these revolutions, the question of a socialist transformation was posed in a context in which it was out of the question to avoid going through ‘the detour of the market’.

The discrepancy between the actual circumstances of these revolutions and the writings of Marx and Engels raised some new terminological problems, that is whether one could call the immediately post-capitalist society a socialist society. More importantly, substantial new problems grew up under the terminological dispute: the risk of growing social differentiations fostered by the bureaucratic apparatus, and/or the market, appeared. Cultural, social and economic underdevelopment was conducive to the delegation of power and to the crystallisation of privileged layers defending their own interests.

On the plane of terminology, Marx and Engels often used socialism and communism interchangeably in their writings, even after their well-known statement that the socialist mode of distribution corresponded to a lower stage of communism. In any case, the ‘associated producers’ were supposed to manage directly the product of their labour from the moment that capitalism was overthrown — in this respect, socialism was already communism.

Did this mean that the USSR under the New Economic Policy (NEP) should be labelled socialist? Or that it could be socialist? For the Bolsheviks, it was a transitional society to socialism, major parts of whose economy were still capitalist or based on petty commodity production. In adopting the name Union of Soviet Socialist Republics, they intended to stress their goal of transformation, not the immediate reality. Lenin stressed this point:

“No one, I think, in studying the question of the economic system of Russia, has denied its transitional character. Nor, I think, has any Communist denied that the term Socialist Soviet Republic implies the determination of Soviet power to achieve the transition to socialism, and not that the new economic system is recognised as a socialist order. But what does the word 'transition' mean? Does it not mean, as applied to an economy, that the present system contains elements, particles, fragments of both capitalism and socialism? Everyone will admit that it does.” 2

The Bolsheviks’ conception of what this transitional economy could be, or should be, was particularly unclear because they had not imagined that the revolutionary victory could remain isolated in backward Russia. 3

They did not even consider the idea that socialism could be achieved in a national framework, that is a framework less developed than capitalism which was already a worldwide system. On this point, the Bolsheviks’ theoretical position stood in the fullest continuity with Marx’s thought: they conceived socialist transformation as a world process that only began in the national arena, after the seizure of political power.

In other words, socialist revolution would not stop with the seizure of power, or even with nationalizations. The historical function of the transition was to carry through this ''revolutionary transformation of capitalism into communism" during which regressions would be possible, even to the point of jeopardizing the socialist future.

Trotsky's theory of "permanent revolution" was an extension of Marx's conception into which it integrated the actual conditions in which revolutions were developing, in the social formations of the capitalist periphery. The Left Opposition to Stalin believed that it was possible to begin to build socialism in a country like the USSR, provided one did not harbor the illusion that one could succeed on one's own. It was vital for the USSR to raise itself out of its backwardness and isolation. It should therefore not ask that everything, particularly the possibility of revolutions in other countries, be subordinated or sacrificed to the (impossible) task of building “socialism in one country.” .

You said impossible? But by the late 1930s, Stalin officially proclaimed that socialism had been built in the USSR. He imposed this ‘fact’ both domestically and internationally. The Yugoslav revolution was the first breach in this edifice built by Stalin, because it refused to bend to the diplomatic interests of the new ‘great power.’

Designating the new formation

Faced with anathema from Stalin, the Yugoslav Communists were forced to explain what had really happened in the beloved ‘homeland of socialism’ they had idolised until then. Milovan Djilas wrote:

“Given in particular that the USSR was for a long time the only socialist country, a rather backward country at that, surrounded by the capitalists, and that the conscious participation of the masses to the building of socialism played a relatively minor role there, and that revolutionary forces inside as well as outside the country turned out to be rather weak, what emerged in the end was the creation of a privileged layer of bureaucrats and bureaucratic centralism; the state was transformed provisionally into ‘a power above society’.”4

The only problem was that this ‘provisional’ situation has proved to be quite lasting and has been repeated, in other forms, elsewhere, notably in Yugoslavia. It is well-known that there is no consensus, not even among Marxists, around a unanimously accepted characterisation of this new historical phenomenon.

This new type of society has been variously called ‘socialist’ (sometimes with the addition of an adjective such as ‘bureaucratic’, ‘state’ or even ‘market’ in the case of Yugoslavia), ‘capitalist’ (with a range of contradictory variants) or ‘new class’ society. The economic and political criteria used in these analyses are heterogeneous and need not be discussed here. 5

We subscribe to a fourth option which also has several possible variants. We analyse these societies, unforeseen by Marx, as hybrids, neither capitalist nor socialist, and devoid of a new ruling class, playing an independent and coherent role in the relations of production. This approach stands in the continuity of Lenin’s and Trotsky’s when they characterised the USSR as a transitional society.
‟The society can undergo a regression towards capitalism or a blockage of the transformation of social relations as a result of bureaucratization.
On the theoretical plane, the idea of a transition to communism, even when one inserts a presocialist period, implies that there is no real stabilization at any given intermediate stage, that elements really belonging to the future are already present, just as socialism was already a form of communism. The problem is that the bureaucratic deformation of these elements obviously poses a difficulty in this respect. The direction of their evolution is no longer guaranteed. The society can undergo a regression towards capitalism or a blockage of the transformation of social relations as a result of bureaucratization. This is why we prefer to describe these societies as postcapitalist societies, insofar, of course, as capitalism has not been restored.

How should advances toward socialism be identified?

Simply rejecting the equation that ‘Stalinism = socialism’ (even if one adds the adjective ‘underdeveloped’) does not resolve the problem, far from it. But any attempt to go beyond that and define socialism runs the risk of elevating certain normative criteria, selected on the basis of subjective preferences, above others: Have the means of production been nationalised? What percentage? Is there a plan? What kind of plan? Is there democracy? Beyond what threshold can one say that democracy is present?

We prefer to adopt the same approach to socialism as we adopt towards social property — they are in fact simply different facets of the same problem — namely that it involves the transformation of social relations in the direction of the withering away of relations of oppression and exploitation, and the re-appropriation by each individual — and therefore by all — of labour as a creative activity.

We adopt W. Brus’s approach [2-1975] and extend it. Brus posits and analyses the process of transformation of state property into ‘social property’ in the strict sense — which means property actually controlled by society, and not just by the state as an institution separate from the citizens, nor even simply by one particular group of workers. The difference is that Brus does not question the ‘socialist’ content of the societies described in this way. For us, on the other hand, there can be no socialism without social property, nor advance towards socialism without an advance towards the transformation of property relations. We will deal with socialist self-management in line with this approach.

Socialist self-management

The problem is that the idea of self-management can be promoted by certain ruling classes or castes to preserve their power under new forms. It is then designed, in the best of cases, only to get the workers to participate more actively in their own exploitation. This sort of atomized self-management is sometimes proposed when it is realized that the compartmentalization of work slows down the rate of growth of productivity. At other times, self-management can be the watchword of particular layers who hope to gain more responsibility and influence. The point is to obtain a new delegation of power along with a shift in the balance of forces within the privileged layers. This, incidentally, can cause the emergence of breaches “at the top,” of which those “at the bottom” can take advantage. Overall, though, the result will be not that alienated wage labor withers away — to the benefit of all — but that new stratifications emerge.
‟There can be no socialism without social property.
The juridical question is not the main argument. But this does not mean that it plays no role whatever. “Property rights” are relations between human beings, not relations between human beings and things.6 We will see that rights guaranteed by official ideology can be circumvented or made more effective. In either case, their existence changes people's behavior and consciousness. We will also see that these rights can be challenged directly when a process of capitalist restoration sets in.

Beyond Definitions

The word ‘market,’ used in everyday language (including by economists), can describe very different realities and social dynamics. The same is true, in fact, of the word ‘planning.’ During the post-capitalist transition, there is necessarily a certain dose of market relations (how much? that is the question!). The debate can be clarified if participants explicitly state which areas and which choices are assigned to the market, and with how much leeway in each case.

Three models

For the sake of this necessary process of terminological clarification, we will distinguish, along with Brus, three major ‘models’, each one of which displays significant differences in the role of market mechanisms. They correspond to three types of economic systems which have really existed or were proposed at one point or another in the so-called socialist countries.

  1. Bureaucratically centralised planning
These are the systems in which money plays a passive role. Prices are formed by the planners. One could argue that, in theory, the methods and criteria used by the planners in price formation are not arbitrary. In fact, specialists have debated this point quite extensively. But in practice, the lack of real transparency about the labour actually expended in the Soviet economy means that prices have often acquired a high degree of arbitrariness. At any rate, the notion of passive prices does not necessarily imply arbitrary prices, except in the mind of economists who believe the only possible prices are the ‘true’ market prices.

This first model corresponds to the planning system in effect in the USSR under Brezhnev. It has existed, with variations and historical specificities, in all post-capitalist societies, from Vietnam, through Eastern Europe, to Cuba. It was the basic reference in all so-called socialist countries until reforms were attempted (in general in the 1960s). In some cases, as in Czechoslovakia after the Soviet intervention, it was restored after the reforms were reversed. It is the model which the Polish regime has been trying to reform since the 1970s. (Price changes had caused riots in Poland before the advent of Solidamosc). Even Romania, despite its overtures to the outside world, remains totally centralised.

This model is compatible with the existence of specific economic circuits where money plays a more ‘active’ role (that is, where prices influence the economic decisions of the ‘agencies’ involved). For instance, there exists a partial recourse to market mechanisms in the distribution of the labour force, since workers are free to choose their job on the basis of the more or less attractive level of wages, among other factors. Likewise, in the sector of consumer goods, one can purchase items freely with one's wages, the only limit being the short supply of these items. But this does not mean that supply and demand operate freely to determine the choices of production. Nor does it determine which sector, the private or the state sector, should produce what is missing. Once again, this — the insufficiently ‘active’ role of money and of the market — is precisely where certain re­formers find fault with the system.

This model is also compatible with non-market-oriented reforms designed to improve its efficiency. In East Germany, for instance, reforms have been introduced to change the indexes used to measure performance, to create new channels between the centre and the firms, and to allow for the signing of contracts between firms after validation by the plan. Of course, the particular type of political system which implements this model can also make a big difference in how it operates.

  1. The use of market mechanisms by the plan
This second model enables money and prices to play a more active role — yet without the ‘law of value’ becoming the regulator of the economy. What this model actually involves is the use of market mechanisms by the plan — not the pre-eminence of the market. That pressures in favour of elevating the status of the market exist in this model, is another matter. The model can be implemented without workers self-management, as it was in Hungary in the 1960s, or with workers self-management, as it was in Yugoslavia from 1952 to 1964, before ‘market socialism’ was introduced. This model also inspired the reforms put forward by Soviet economists Liberman and Trapeznikov in the 1960s, implemented in the USSR under Kosygin from 1965 to 1968, and taken up by Ota Sik in Czechoslovakia and Wlodzimierz Brus in Poland around the same period.

To summarise what they are about, we could say that this model combines the supremacy of centralised planning (which has, until now, been bureaucratic, but need not be) over strategic development decisions with more room for decentralised initiative on the basis of market relations (in the sense of ‘purchases and sales’) in other spheres. In this set-up, the decisions of firms are influenced by the pricing system because they must operate on the basis of an economic calculation of costs and profits. Precisely who in the firm decides is another matter; we will examine examples both with and without workers self-management. But this does not mean that the prices on the basis of which the calculations are made are free market prices reflecting the law of value. Nor does it mean that the major investment decisions obey this law.

  1. Market socialism’
In theory, this third model aspires to restore the full coherence of the operation of the law of value — its automatic responses and criteria. The only case where such reforms were actually put into practice was in Yugoslavia, during one of the different reform periods, between 1965 and 1971. But this model was advocated by various ‘experts’ and ‘advisers’ in Eastern Europe, most notably in Yugoslavia, Hungary and Poland by the IKK (executive committee) of Solidamosc. It was also the logic behind the proposals of certain Soviet economists, such as Shmiliov. In any case, one should distinguish the decision to have a reform from its actual implementation 7 .

To conclude: Economics and Politics

The full importance of the political factor must be understood if we wish to avoid a reductionist approach.

On the one hand, the reforms discussed here have never been tried in combination with the fullest political democratisation at all levels. As a result, the ability to master the socio-economic effects of the reforms was considerably reduced.

On the other hand, even though all so-called socialist countries are ruled by a one-party system, the relations between the party leadership and the population are not the same everywhere. This has an obvious effect on the degree of obstruction encountered by the reforms and the audacity of the reformers themselves. In general, one should distinguish the regimes brought to power by a popular revolution (Cuba, Yugoslavia, Vietnam, Mao's China) from those where the rulers have been designated by a crystallised nomenklatura. Moreover, both the process of bureaucratisation and the process of destalinisation have had a different profile in each country, and each national bureaucracy, even the most loyal to Moscow, has sooner or later sought to develop its own roots and legitimacy. Kadar in Hungary is not the same as Ceaucescu in Romania. The problems of bureaucratisation and bureaucratic government (one-party rule) cannot be reduced to the question of Stalinism. The experience now underway in the USSR emphasises the fact that a bureaucracy can develop different policies and methods of rule, even in the same country (Stalin ≠ Khruschev ≠ Brezhnev ≠ Gorbachev ≠ Ligachev, etc).
‟Until now, all attempts at reform of bureaucratic planning have ended in failure. There is much to be learned from this.
Until now, all attempts at reform of bureaucratic planning have ended in failure. There is much to be learned from this. Unfortunately, it seems that each new turn in the so-called socialist countries is immediately accompanied by new justifications, new state truths which sometimes praise the very things which, only a few weeks earlier, were denounced as ‘anti-socialist deviations.’

This is particularly harmful because nations who wish to escape the logic of capitalist development, without closing themselves off to the world capitalist environment, desperately need a critical review of these experiences. What is the best way to advance against the stream of world trade, towards a socialist goal, without living in autarky? Can one borrow some mechanisms of the capitalist system (such as the logic of profit as an incentive and a criterion for the orientation of economic development) without being saddled with all its evils? Can the market and its laws be introduced and given a socialist content?

These questions were already at issue in the debates about the NEP in the USSR of the 1920s. Stalinism closed these discussions and brutally interrupted the NEP. It is therefore necessary to unearth the real content of these discussions and evaluate them in light of the experience since then8.

In trying to deal with these questions, we have been guided by one postulate only: the belief that the communist perspective makes sense only if it means the emancipation of ‘each individual and therefore of all.’

To avoid getting lost in the maze of different situations and preserve one's critical spirit, to develop criteria which are objective but not dogmatic, it is necessary to keep in mind the goal towards which one is striving — provided one thinks it is worth the effort — namely the withering away of all classes, privileges and relations of oppression and exploitation. We should note here that this does not mean a uniform, conflict-free or even easy to manage, society. The theoretical hypothesis that this emancipating goal remains relevant today can be grounded only in a common analysis of the contradictions of both the capitalist and post-capitalist systems.

On Plan, Market and Democracy (1988) 
and more to come in 2018.

The full version of the book
can be downloaded here.
The book Plan, Market and Democracy (1988), published at a moment of crisis in the so-called socialist USSR, reflects on the experiences of the so-called socialist countries during the twentieth century. Samary analyses the contradictions and conflicts within their socio-economic systems, during the era of “bureaucratically styled planning” of the USSR and during the (variety of) reforms that occurred over the decades in different regions.

After a general presentation of “theoretical, political and methodological questions”, in which Samary differentiates “three types of economic systems which have really existed or were proposed at one point or another in the so-called socialist countries”, each variant's contradictions are analysed in separate “lectures”: (1) the centralized bureaucratic planning of the “soviet model” and the different types of reforms. (2) The introduction of some market relationships combined with a reformed planning - without or with self-management rights for workers in the factories. (3) “Market socialism” which suppresses any plan but increases self-management rights in all factories. The last part of the book is a “critical review and up-date” of the “Soviet 1920s debate on the law of value. The conclusion raises the issue of “social optimum”.

In a new book edited by Samary, to be published in 2018, including several authors and her own contributions, she will be revisiting the “short XXth Century” and the post 1989's capitalist globalisation according to her central concerns: up-dating the past conflicting experiences and debates on the "transition to socialism" with a central focus on the issue of self-management, and linking them to the present ones linked to the issue of the 'commons'. 

SE will announce the publication of this new book by publishing one of Samary's articles from this book.


1 There is no unanimity, even among Marxists, on the complex way in which this hierarchy operates, combines with national realities and has evolved in the course of the 20th century. The notion of uneven and combined development and the different theories on the uneven development of capitalism on a world scale are essential to an understanding of the Yugoslav case. We state this even though we do not agree with all the centre and Periphery analyses, a debate which would take us beyond the confines of this study. For a glimpse of the discussion, see rubric 4 of the bibliography, ‘External constraints.’

2 Lenin, ‘Left-Wing Childishness and the Petty Bourgeois Mentality,’ Collected Works, Volume 27, p. 335.

3 David Mandel [1-1983] (see NB in note 1) has shown the extent to which the idea of a socialist transformation of the economy only became widespread in 1918, as a defense against sabotage and factory closures. Among the workers, as well as in the Bolshevik program, the first demand was for the imposition of controls on films which remained under capitalist management. For the evolution of the Bolshevik position, see among others, Ernest Mandel, ‘Stages of the Soviet Economy,’ in Marxist Economic Theory [1-1982]; Bettelheim, ‘First period: 1917-1923,’ [1-1976] and Trotsky, History of the Russian Revolution [1-1980].

4 Translated from the French — Djilas 6-1950, p.8.

5 See selected viewpoints in the bibliography on the debate on the class nature of the USSR and kindred societies.

6 Marx is not the only one to claim this. Paradoxically, the free-enterprise School of Property Rights has adopted a simi­lar problematic, combined with an apologetic view of capitalist private property rights. See Henri Lepage, one of the main French spokesperson for this school in L'Utopie capitalists and Capitalisms et autogestion [3-1978].

7 Comment from CS, 01/2018: The study (and lecture presented in the notebook) of the Yugoslav system in that phase shows that conflicting socio-economic pressures (pro- or radically against capitalist trends) were expressed through social and political movements. The fact that capitalism was not restored can be concretely analyzed: the new reformist turn (in spite of its contradictions and limits) impulsed by the titoist leaders dismantled the autonomous banking system and the alliance between its managing forces and the technocrats of the large factories; new socio-economic rights for self-managed basic units were introduced by Kardelj in constitutional amendments (1973-1976).

8 Comment from CS, 01/2018: This point has been developed later through the concrete and comparative analysis of the capitalist restoration after 1989 in various articles (see ). In 2017, my article updating those debates "From decolonized communism to the democratic system of commons" is at the core of the new book to be printed in 2018.


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