From The Guardian, 5 September 1968, p. 10.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
MICHAEL KIDRON writes about the future of the Czech economy
REPORTS that a delegation of Czechoslovak economists is flying to Moscow, coupled with the furious attack by the Russians on Ota Sik, the former economic overlord, seem to point to an end to Czechoslovak reform. Yet the economic reformers can draw more than a crumb of comfort from the recent Moscow “agreement.” The Russians have promised not to oppose them or their work so long as they break with the movement for political liberalisation.
This is a harsh and humiliating condition for the economists, but not all of them will find it unacceptable. They are very new recruits to the broader movement, and joined for convenience rather than from conviction. Their campaign started after the Czechoslovak economy had flopped badly into stagnation and even – in 1963 – declined. Then they enjoyed the support grudging and suspicious-ridden though it always was, of the Novotny regime. The economists said nothing that in different tones and accents was not being listened to sympathetically in every East European capital.
Their case was that Czechoslovakia had exhausted the small reserves of transferable labour and cheap raw materials on which its postwar industrial growth had been based; that future economic growth would therefore depend very much on increased productivity. It followed that workers would have to be persuaded to produce more by means of both carrots (more and better consumer goods, including food) and sticks (cutbacks in welfare services. housing and security of employment); that they would have to be given modern equipment to work with; and that management would need to produce or buy that equipment, abroad if necessary, and make saleable goods in exchange.
It also followed that tight, centralised planning would need to give way to a “market” system more responsive to the consumers’ wishes and better able to absorb technical innovations – the system based on relative autonomy for the enterprise, and relative independence for its management.
It was not a popular programme. Workers who had seen 1,300 factories and workshops close in 1964 and 1965 were alarmed at plans for another 1,400 closures by 1970. They suspected talks of “freeing” 250,000-500,000 “hidden unemployed” for productive occupations; and then resented the widely-advertised move to better middle-class pay and conditions without a corresponding improvement in their own, particularly when prices were allowed to rise faster than wages.
Managers were deprived of the Stalinist certainties – “this is your plan. Comrades, overfulfil it” – and found themselves doing constant battle with the political bureaucracy over redefining their areas of competence. They were frustrated too by the continuing irrationality of partially- reformed, partially-free processes on which they were supposed to base their decisions; and by having to break, with their bare hands as it were, the vicious circle of finding imports with which to make the exports to pay for them.
As for the ruling political bureaucracy, they were appalled at the emerging suggestion that they share economic power with a broader middle-class. Helped by the economic revival of the mid-60s, they switched against the reformers.
By the summer of last year, the economists were isolated and in need of political allies. First in line was the Slovak Party leadership, long denied their share of political power and economic spoils under the Novotny regime. By October. when the Central Committee met, they had cemented an alliance with the economists and reduced the Czechoslovak Party elite to the small minority of the middle-class. For Novotny it now became crucial to win active support from the workers.
He toured the major factories in February and March this year. But so did the reformers. As a result of their competition for workers’ support real wages shot up 10 per cent in the first quarter, and the Novotnyite leadership of the Trades’ Union Council was removed. The economists sealed this second phase of their alliance in May when they declared formally in the presence of Ota Sik that “the main thing is not only ensuring political freedom for all but literally also a larger hunk of bread.”
It was a victory, but there were misgivings. Economically, Slovakia is relatively backward; its party leadership was more interested in centrally-planned development of their region than in a new system which, unchecked, would speed the development of the richer, western part of the country.
The workers seemed likely to be even less dependable. The initial cost of their support was damaging enough for an economy trying to improve its international competitiveness. Subsequent payments might well have become ruinous. And if, as seemed possible Late this summer, the workers were to follow a French pattern, and come under the influence of the revolutionary Left opposition forming among the students and around the new magazine “Informacni Materialy,” that acquiescence would not have been obtainable at any price.
In a sense, the Russian tanks – have created the very condition for which the economists were willing to settle under Novotny – freedom to get on with the reforms. Workers, at least, are now not being asked, but told; organised opposition is out. Slovak party nationalism – encouraged by the Russians as a divisive factor – will probably act as more of a constraint. But the conflict of interest here is tangential, and its severity very much dependent on how fast the Czechoslovak economy can be made to grow
It is here that the reformers face their greatest uncertainty. They have said repeatedly that Czechoslovakia badly needs Western technology and equipment in order to grow; and that since she has neither the exports nor the hard currency reserves to pay for them, she needs a massive loan.
The Russians have so far turned a deaf ear to their requests. The prospect of the final bill once each member of Comecon has presented its account for maintaining economic viability must be as daunting to them as the memory of the final payment for stability after the Hungarian Revolution 12 years ago.
And yet the Russians must ultimately pay. For if they do not, the economic and political viability of Czechoslovakia and Eastern Europe as a whole will be at risk. and so will the success of Russia’s own attempt to make an orderly transition from being a society structured around primitive accumulation to one geared to internal accumulation within the industry: from a turbulent to a mature stage of capitalism.
Last updated on 22 October 2020