We are constantly told that the reason why Marxist regimes degenerated is the ‘backwardness’ that existed in those countries. The working-class was not big enough, industrialization had not proceeded far enough, most of the population were still peasants, etc. This excuse is always trotted out by Trotskyists to excuse the failures of the Russian Revolution, which, we are told, could have been saved if only the revolution had spread to Germany and the ‘advanced’ countries of Europe.
What is overlooked is that the USSR was already getting plenty of economic support from the advanced countries of the West. German and American capitalists gave generous funding to Stalin’s industrialization drive during the late 1920s and 30s. More would have been forthcoming had Stalin not put all sorts of obstacles in their way, like harassing and arresting foreign engineers for being ‘bourgeois saboteurs’ and ‘agents of imperialism’. This coincided with the Great Depression, in which Western businesses were hungry for profits. As Stephen Kotkin puts it in his biography of Stalin:
Scholars who write of Moscow facing an “uncooperative world economy” have it exactly backward. Ideology and the party monopoly were the constraints; the global economy, the enabler. In fact, the global economic crisis was a double gift. Nothing did more to legitimate Stalin’s system. But Stalin had no idea that a Great Depression was around the corner, and that it would bring the foreign capitalists on bended knee.
Meanwhile, Mikhail Heller and Aleksandr Nekrich, in their brilliant book, published in 1986, Utopia in Power: The History of the Soviet Union from 1917 to the Present, concur with Kotkin:
Robert Conquest suggests, not without reason, that at the time of the Shakhty trial, the inclusion of German engineers among the accused was explained by the fact that in 1927 German technical aid had become predominant and the number of German engineers and technicians had grown too great. It was decided to teach them a lesson. The Shakhty trial implicated three German engineers, but thirty-two others were arrested at the same time. The very number of those arrested indicates the numerical significance of German personnel in the Soviet Union. After the trial, the Soviet government turned to the Americans for technical aid. In mid-1929 the Soviet Union had technical agreements with twenty-seven German firms and fifteen American firms. By the end of 1929, forty American firms were cooperating with the Soviet Union.
…The full extent of Western economic and technological aid to the Soviet Union will not be known until the Soviet archives are opened up. The Western firms that collaborated with Moscow have concealed the information almost as carefully as their Soviet partners. Nevertheless, the American historian Anthony Sutton has come to the conclusion, on the basis of German and English archives, that 95 percent of Soviet industrial enterprises received Western aid in the form of machines, technology, and direct technical aid.
The Soviet Union made skillful use of the competition among capitalist firms. “In the realm of technical assistance,” wrote Economicheskaya zhizn (Economic life), “we have neither an English, nor a German, nor an American orientation. We maintain a Soviet orientation….When we need to modernize our oil, automobile or tractor industries, we turn to the United States because it is the leading country in these industries. When we speak about chemistry, we approach Germany.” It was also able to turn for help to Germany, England, and the United States, even though Germany and England recognized the Soviet Union in 1921, while U.S. recognition did not come until 1933. The capitalist firms, who were competing bitterly with each other, rushed to offer their services: they gained concessions, supplied the latest equipment and technology, sent engineers and technicians, and took on Soviet trainees. The myth about a “blockade”, “economic isolation,” and the hostile attitude of the capitalist “sharks” toward “the socialist homeland” falls apart in the face of the facts. In the 1920s only aid from the West permitted the Soviet authorities to restore the economy rapidly, including transportation, all branches of industry, and the extraction of useful minerals. This aid was given in spite of the Soviet government’s policy, which puts all sorts of obstacles in the way of the capitalist firms and ended the concessions as soon as Soviet specialists had assimilated Western technology. The capitalist firms were always in a weak position; they had never before encountered a partner as powerful as a government, and they were thirsty for profits. Along the Comintern and pro-Communist organizations, these firms played the role of organizers of public opinion in favor of the Soviet Union. When Standard Oil decided to build an oil refinery in Batum, a top public relations expert was sent to persuade public opinion that a socialist country was a state like any other. Without knowing a word of Russian, this representative of Rockefeller’s knew everything after several days: The Russians (he always talked about the Russians, not the Soviets) are okay! That’s why the United States ought to recognize the Soviet Union and extend credit to it.
One of the important factors in the development of Soviet-capitalist relations was the activity of certain individual foreigners. First in line is Armand Hammer, son of Dr. Julius Hammer, one of the founders of the American Communist party. Young Armand Hammer arrived in Moscow in 1921 with a recommendation from Martens, the unofficial Soviet trade representative in the United States. He had brought with him a freightcar full of drugs and medicines as a gift to the Soviet government. He met with Lenin, who was drawn to the enterprising young American. Lenin advised him to assume management of the Alapaevsky asbestos mines on a concessionary basis, and he personally organized the immediate formation of this concession, which ordinarily would have taken months. Hammer did not limit himself to the first million he earned of his family (his wife, mother, brothers, and uncle) in Moscow. Hundreds of pages, the best of which are by Mikhail Bulgakov, have been written about the housing crisis in Moscow. Hammer rented a twenty-four-room house in Moscow and converted it into the unofficial embassy of the United States. He took out a concession on the production of pencils and pens. In 1926 his factory produced 100 works of art. Unlike all the other concessionaires, Hammer was able to convert his revenues to dollars. His example was infectious. He served as an intermediary in the conclusion of an agreement between the Soviet government and Henry Ford, an ardent enemy of the Communists. The American Consolidated Company (50 percent of the capital was Hammer’s; the other 50 percent was the Soviet government’s) conducted the affairs of “three dozen American firms” trading with the Soviet Union. The phenomenal successes of Armand Hammer, who made millions in the Soviet Union, could not fail to entice other capitalists.
The most convincing proof of the nonexistence of “aggressive capitalist plans” was the fact that the Red Army, which in 1929 numbered 1.2 million men, was equipped with prewar Russian and foreign armaments. Soviet industry was still in no condition to produce the necessary weaponry, so it was supplied by the Germans, English, Americans, and French: for example, heavy machine guns, like the Maxim and Colt; light machine guns, like the Browning and Lewis; artillery on a par with the American 76-inch howitzer; and Renault tanks, built in Fili with the help of the Germans. The first five-year plan was not implemented until after the contracts on plant construction and technical aid were signed with the Western firms.-pp.212-215
Trotsky and his followers asserted that only the spread of the revolution to the West could have gained the USSR the necessary economic and technical support to industrialize. Stalin proceeded to prove them wrong, implementing a rapid industrialization which stunned many of Trotsky’s supporters into changing tack and backing Stalin, whilst Trotsky was forced to disavow the project as soon as he heard what was actually happening to the peasantry. Still, as I point out in this post, Trotsky’s fierce denunciations are unconvincing. Stalin was implementing Trotsky’s policy in the only feasible way. Besides that, if a revolution had actually occurred in Germany at this time, it would have hurt rather than helped the USSR. A revolution would have caused immense destruction and economic disruption which would have lost the USSR the support of the German capitalists that were so generously funding its industrialization effort. The USSR and Germany had been closely cooperating since 1922, and the Rapallo Treaty saw the two outcasts of Versailles engage in close military and economic exchanges of great benefit to both sides. It is difficult to see how a communist revolution would have improved the USSR’s prospects in this area. In his 1936 work The Revolution Betrayed, Trotsky makes NO mention whatsoever of the role played by foreign capitalists in helping the USSR to attain its impressive record of industrial accomplishment. Instead he prefers to rattle off fake Soviet statistics and cite them as examples of the innate superiority of the planned economy. What intellectual dishonesty! For the rest of its existence, Soviet industrial growth would be based on stealing Western capitalist technology and then producing inferior copies, then trumpeting its magnificent achievements to the world. These are the same evil capitalists who were supposedly subjecting the USSR to a monstrous economic blockade and sabotage and preventing it from making economic progress. In fact, it was the USSR’s own ideology of anti-capitalism and autarchy that prevented it from being more successful. Throughout the 1920s, Western governments normalised relations with the USSR and sought to integrate it into the international system. Of course, the USSR was not a ‘normal’ state, but endeavoured to spread revolutionary socialism, so this normalisation effort was hampered by this very obvious fact. The USSR’s economic isolation was therefore utterly self-inflicted.
It is not ‘economic isolation’ or ‘backwardness’ that explains the degeneration of the Russian Revolution, but the inherent deficiencies of Marxism as an ideology. Marxist planned economies do not work, even with generous infusions of foreign support from wealthy capitalists. Cuba, a relatively developed country when it fell under Communist rule, is now one of the most backward countries in Latin America. Far from being ‘backward’, it was much more developed than Russia was in 1917. Yet there, communism has still degenerated. In Venezuela, one of the richest countries of Latin America when Chavez came to power, Marxist socialism was tried, albeit in a somewhat watered-down, gradualist fashion, and it still degenerated. When the German Communists seized power in Bavaria in 1918, their rule degenerated into a murderous tyranny which saw the rapid collapse of the economy and the alienation of the masses, such that the German army was greeted as a liberator when it finally arrived to put an end to the chaos. Throughout the Cold War the USSR imported food from the evil Yankees to keep its people from starving. Communist Poland relied heavily on Western loans in order to secure for its people a decent standard of living. It seems that regardless of the time and place, Marxism always fails.