In the next two weeks, we at LeftEast will be publishing a series of nine essays on the effects of 1989 on post-state-socialist Europe and beyond. The pieces were developed around the workshop “Eastern Europe after 30 years of transition: New emancipatory perspectives from the region,” held in Prague on 25-26 October 2019, organised by the Transnational Institute (Amsterdam) and the Rosa Luxemburg Foundation (Prague), coordinated by Agnes Gagyi and Ondrej Slacalek. In addition to their commentary on the present, these articles also give a virtual tour of the collapsing state-socialist world at the moment of its demise, through the memory of those who lived through it, and implore us to reconsider what critical memory might look like, that is, memory that helps us work toward a substantially different future. Florin Poenaru’s discussion of the global history of the 1980s generation in Eastern Central Europe, a cohort whose lives have been so far lived in the structures created by various “transitions”, is the fourth in this series.
C. Wright Mills described the sociological imagination as the ability to understand together the life of an individual and the history of society. Otherwise, seen in isolation from each other, we either get methodological individualism, (or, even worse, psychologism), or abstract empiricism. Mills’ argument is compelling and indeed biography and history should come together in order to understand trajectories, social formations and structuring structures in historical motion.
In this text I want to take up Mills’ challenge and think of 1989, three decades later, from the general perspective of an Eastern European person born sometimes in the 1980s. Such a person is now 30+. Hence, the last three decades that have passed since the fall of the communist regimes largely overlap with this person’s entire life.
Thirty years is also the time-span of a generation in sociological terms. The passage of three decades therefore presents the opportunity to bridge the gap between biography and history by introducing an intermediary level – the generation – that presents simultaneously patterned trajectories, common experiences and divergent outcomes. Moreover, by placing the emphasis on the 1980s, I want to demystify 1989 as an annus mirabilis, as some sort of definitive breaking point that neatly separates between epochs, regimes and periods.
Source: Wikimedia Commons.
By doing so I do not seek to deny the importance of 1989, let alone diminish its symbolic status. But instead of dates, we should look at processes and longer temporal trajectories. Furthermore, by taking as my focal point a generational experience that begins in the 1980s I seek to re-embed 1989 in processes that preceded it, rather than to assume the break it represented and then look at it from what followed next. There is by now a voluminous body of work that properly scrutinized the larger forces that led to the 1989 outcome in Eastern Europe. However, it seems to me that even after three decades there is the tendency to look at 1989 from the perspective of the 90s (and later decades) – that is, like Walter Benjamin’s angel of history, with the back to the future.
Sometimes in the early 1970s the foundations of the world economy significantly began to alter. US denunciation of Bretton Woods in 1971 and the first oil crisis (1973) were signaling events that the previous post WWII order was collapsing. This was a seismic event and we can still feel the vibrations half a century later. As it turned out, two crises were coming together at the same time, one immediate; the other one rooted in long-duree transformations.
The immediate one was a crisis of accumulation in the core of the capitalist system. The postwar military Keynesianism that stabilized Western Europe and other parts of the world under the aegis of the American superpower reached its growth limits. The capitalist class began to see its profit margins collapse and without much room available for extensive expansion within the traditional boundaries of the nation-state it sought to escape its hinges and move to places more amenable to higher rates of profit. The historical conditions were ripe because much of the Global South at the time had a huge reservoir of peasants and under-proletarians willing to move into regular industrial jobs at a fraction of what blue-collar workers earned in the developed economies of the West.
This immediately set in motion a race to the bottom between states in order to attract the floating capital through intertwined incentives: low taxes and cheap and disciplined work force. It also pitted the global proletariat against itself. Competition superseded class solidarities and transnational alliances. The overall effect was stagnation of real wages, if not their suppression across the globe.
This process, with its attendant wider and well-documented consequences, has been known as neoliberalism – a term that has been so misused and overstretched as to become quite ineffectual as an explanatory concept today. Irrespective of the name, however, the process was successful and throughout the 1980s and 1990s large global corporations (many of them truly stateless and state-like in size) began to accumulate unprecedented amounts of wealth. Despite the occasional recessions, these two decades were a golden age for capital, especially for those at the top. This is the moment when inequality levels began to grow, leading to the staggering figures we witness today. In the short term, the capitalist class was having a bonanza.
But neoliberalism was a short-term fix to a short-term crisis. The long-duree crisis was more formidable, less apparent and therefore harder to solve. In fact, it remains unsolved until today. The accumulation crisis of the 1970s overlapped with a more enduring one: a profitability crisis. For over a century (following the great crisis of 1873) the rate of profit for invested capital continued to drop, despite some temporary upturns. From staggering rates of profit during la Belle Époque and during the Glorious Thirty Years, from mid-century profit margins begin to significantly drop and by the turn of the millennium they were expressed in single digits (Roberts, Minqi Li).
The capitalist class blamed this on the workers and on state expenditure – that is, on the feeble, largely authoritarian and deeply imperialistic arrangement after WWII, devised, largely, to expand US military and economic hegemony globally. As mentioned earlier, neoliberalism was the short-term attempt to solve the issue – and it worked briefly. But the decline of profits (and of Atlantic hegemony, more generally) was a systemic and secular crisis and not (merely) a postwar phenomenon. Neoliberalism worked in the short term with the well-known consequences for workers and state budgets and enriched significantly parts of the capitalist class via the direct transfers of capital it stimulated. But profitability continued to remain low. Investment in production yielded meager returns. The response to this structural crisis was a well-known trick in the capitalist textbook: financialisation.
This should not be confused with neoliberalism, as it usually has been. It is entirely a different sort of response. Faced with declining rates of profit for invested capital, the capitalist (or to be more precise, the capitalist enterprise) avoids investment altogether and instead seeks to make money through money (the famous relationship C – C’ in Marx’s framework). This entails a series of opaque mechanisms to maximize profits, which fundamentally rests on the ability to speculate on future gains. The 2007-8 crisis was generated by such speculative mechanisms that came tumbling down when the bubble they usually create burst out. But this did not put an end to financialization and a restart of investment in production. Far from it! Paradoxically, the response of the states, under pressure from the capitalist class, was simply to throw even more cheap money into the system in order to save illiquid banks. This maneuver simply created even more incentives for capitalist enterprises to try to make money from money since there was so much of it floating around. Who needs the hassle of productive investment when speculating on future price increases can yield more profits? This long duree crisis of profitability is far from over, hence financial crises are certain to occur regularly and in shorter cycles.
The overlap between the short and long duree crises, and the capitalistic responses to it, engendered a global turbulence, uprooting previous arrangements and setting in motion new trajectories and structural pressures. The two crises converged in the 1980s, as an outcome of economic and political events in the 1970s that accelerated already existing tendencies. Hence the 1980s represented the decade in which both neoliberalism and financialization magnified and became the de facto policies of the capitalist class and they remained so, at a global scale, albeit in different configurations, at least until the financial crisis of 2008/9.
In Eastern Europe, this global turbulence overlapped with a regional one, and this is the second salient force: the exhaustion of socialist developmentalism led by the political monopoly of the communist parties. This did not happen in an instant – as the fixation with 1989 suggests. Instead, it was a complex and protracted process with unforeseen and contradictory outcomes.
To begin with, it would be a theoretical and historical mistake to consider the communist bloc as something radically different from the capitalist world. Although differences obviously existed between the West and the East (or between the North and South), the socialist East was inextricably part of the global economic system, which was capitalistic in nature. Ideologically, USSR and its satellites might have presented themselves as an alternative to capitalism and, even, in very limited cases, as anti-capitalist. In practice, however, they were as much part of the same system and, as such, equally prone to be affected by its turbulences and crises.
The political monopoly that the communist parties enjoyed over the economy and society enabled them to absorb the pressures differently and to postpone the moment when they had to deal with them properly. The crisis of the system predated the actual fall of these regimes by at least a decade, if not more. A cocktail of factors such as inertia, repression and central planning averted the inevitable dénouement at the expense of economic and societal degradation. The communist regimes collapsed like houses of cards, despite the apparent total control and hegemony the parties enjoyed. In fact, the internal structures of the state, economy and society were irremediably fissured. They could not cope neither with the internal pressures for continued economic growth and reform, nor with the external pressures of a global economy undergoing fundamental transformations.
This does not mean that these regimes were unsuccessful. In fact, they collapsed because they were too successful, or, to put it differently, they exited the historical stage once their mission was fulfilled. Despite the ideological confusion surrounding these regimes what they sought to do in practice, and largely achieved, was to speedily develop the agrarian countries of Eastern Europe (and of the Global South) in the immediate aftermath of WWII based on a model coined in USSR in the 30s. Variations obviously existed according to local circumstances but by and large these regimes were really successful in the 1950s and 1960s to temporarily close the gap of development between the West and the East. Heavy industry, mass employment, urbanization, large infrastructure and significant social welfare were some of the key features and achievements of these regimes. This severely altered the social landscape of the societies involved and led to the formation, in just one generation after WWII, of radically new social relations, institutions and lifestyles.
However, by the 1970s this model, in most of the communist countries, was already in crisis. The causes were both internal – largely an exhaustion of the growth rates based on continuous heavy industrial expansion – and external – the aforementioned changes in the global capitalist economy. In addition, the beginning of delocalization of industry from the west undercut the competitive advantages the communist states enjoyed: their cheap and disciplined labor force was nothing compared to workers in the Global South. As companies in the West diminished their costs of production through relocation, the communist regimes faced increasing costs for labor and resources. Their global competitiveness dropped and they began to face problems even for properly meeting the internal demands. Add to this the oil crises of the 1970s and the inflationary pressures they produced, the sudden exhaustion of cheap credit once the FED increased its interest rates at the end of the 1970s and the technological obsolescence of their industries that by the 1970s was endemic and cumbersome, and it becomes immediately clear why the communist regimes were in big trouble long before 1989.
The so-called transition period that followed was nothing short of a social catastrophe of historical proportions. Even after thirty years the complete human and social tragedy that the transition in Eastern Europe engendered is still not properly grasped and exemplified since anti-communism, an elite ideology is still hegemonic. Its function is not only to maintain the status quo but also to explain and justify it. In short, it legitimizes the economic and political control of the class faction that benefited from the fall of communism.
By contrast, for many people and strata of Eastern European societies, transition was an unmitigated disaster. What is more, the transition blew away even the modicum of social welfare and inclusive developmentalist strategy promoted by the communist regimes. In Eastern Europe, transition was a full-blown, large-scale social experiment in neoliberalism that was never experienced as such in the west. Also, compared to other parts of the world also ravaged by neoliberal doxa – for example, in Latin America – Russia and Eastern Europe were severely disadvantaged further. They had no protection mechanisms, no tools to fight back. Unlike Latin America, which developed large currents of opposition via a renewed leftist ideology, Russia and Eastern Europe went through an intellectual desertification. The left was outlawed and diabolized and ”Western integration” was codified as the only viable option. This only exacerbated the scale of the disaster.
Hence, a person who was born in the 1980s in Eastern Europe got the worse of two worlds. By the time she was born the communist regime was well in crisis and could not fulfill anymore many of its initial promises. This person would benefit from the early successes of communism only through her parent’s status or position within the system – which would then significantly determine the impact transition would have. The transition period, in turn, would maintain initially some of the old benefits (like free schooling), but as this person grew up she did so in a world that was unquestionably defined by competition, profit seeking and accumulation under the aegis of neoliberalism. With no real memory of the old world to offer guidance and armed only with the sort of practical knowledge offered by the new world, this person would become the epitome of a life lived in transition.
Finally, the third overlapping feature of this constellation is similarly a wide-ranging, global historical phenomenon: namely, the exhaustion of the rationalistic and revolutionary sequence opened by the 1789 French Revolution. This sequence was brought to an end once the global 1968 revolution failed and then dissipated into a myriad of ideologies, life-styles and political practices that were either coopted by neoliberalism or simply died out. This, of course, was a prolonged process and it is highly visible today with the proliferation of anti-rational, anti-scientific, anti-Enlightenment ideologies and practices. The much-lamented demise of the global left, its crises and ruptures, are in effect a symptom of this larger ideological shift.
In a sense, from this perspective, Eastern Europe was in avant-garde. Irrationalism, mysticism, disdain for truth, reason and science already permeated the communist regimes in their later stages. Also, the opposition to these regimes was rooted in nationalism, religious discourse and fervor, nostalgia for interwar fascism and a clear rejection of internationalism and the premises and promises of a leftist global revolution. Once the system fell, these trends came into the open with vengeance and they reigned supreme. Not only the left was demonized as a murderous ideology, but also materialism, empirical study and thinking itself came under attack. Anti-intellectualism was a badge of honor after 1989. Inspiration and genius replaced research and arguments. Memory and lived experiences trumped historical facts and accuracy. Thirty years later this seems to be precisely the reality of the whole world, ever more entrenched into myths, fake news, popular heroes and repulsion to anything that might resemble rational, collective action.
Hence, a person born in and around 1980 was immersed from the beginning into a local and global intellectual environment that was structurally adverse to the very notion of making sense of the world one lives in. Unsurprisingly then, for many people born around this year the moment of political subjection occurred precisely when trying to make sense of one’s world and one’s historical becoming – that is, of one’s structured biography. Therefore, for a person born in the 1980 every (auto)biography is necessary political and as such a product of sociological imagination in Mill’s sense.
Florin Poenaru is an anthropologist and co-editor of CriticAtac. He works on issues of class and post-communism.