A Concise Overview of the History and Ideologies of Communism (Part 7)
The Economic System of Communism
In the previous note, we mentioned that today only five countries officially call themselves communist including China, Cuba, Vietnam, Laos, and North Korea, but their reality differs deeply or maximally from the initial ideals of communism. China, as the world’s second largest economy, has adopted elements of capitalism with economic reforms since the 1980s, and has rescued more than 800 million people from poverty; although the Communist Party still holds power.
But on the other hand, Cuba and North Korea are facing economic challenges and global isolation, while Vietnam and Laos have also moved towards a global market economy.
It should also not be forgotten that the collapse of the Soviet Union and the 1989 revolutions in Eastern Europe marginalized communism, but its ideas still survive and continue to find their way in leftist movements and in criticizing global inequality and have not been able to completely remove it from the field.
Its history from Marx to the collapse of the Soviet Union, its variants from Marxism-Leninism to Maoism and left-wing communism, and its current status in the few remaining countries represent an adventurous journey; although the school is in decline in its classical form, its influence on world politics and economics is still a matter of debate.
In communist countries, most factories, banks, and other types of economic organizations were governmental, which communists called social ownership of the means of production. That is, in communist systems, local municipalities, etc. could own economic enterprises. This concept of social ownership had exceptions, such as the private perfume factory in East Germany, which was nationalized in late 1972.
Ownership in the suburbs was more complex; some farms were completely governmental and were called state-owned. People who worked on these lands had similar conditions to their counterparts in factories; therefore, they received a guaranteed minimum income from year to year, regardless of natural conditions, such as changing weather conditions, and were entitled to a state pension. Another type of farm was the collective farm. The main growth and development of these farms in the Soviet Union corresponded to Stalin’s approach to the modernization of the country’s economy. His commitment to this concept is reflected in the scale and speed of farm development. The number of collective farms increased from 33,300 to 100,211 between 1928 and 1931, and the percentage of peasant households working on these farms increased dramatically, from 1.7 to 52.7 percent, while the landowner on collective farms was the state. Machinery, buildings, seeds, animals, etc. were owned jointly by the farmers. The conditions of collective farm farmers were usually different from those of their counterparts on state farms. Their income was more variable; for example, it was affected by the weather, and many were not guaranteed a state pension. In the 1960s, Soviet collective farm farmers became eligible for pensions. One common feature of most state farmers and collective farm farmers was that both were entitled to small private plots of land on the farms. Albania was an exception, which did not allow such plots. Farmers were allowed to grow crops or raise animals on their small private plots for personal consumption. In addition, they were allowed to sell their surplus produce on private markets. It would have been very difficult for city dwellers in many communist countries to buy eggs, chickens, rabbits, and other types of food without these private markets.
Poland and Yugoslavia went even further in private ownership in their suburbs; most of their farms were privately owned and operated. Small private plots of land and their associated food markets were not the only forms of private economic organization. Again, with the exception of hardline Albania, where citizens were not even allowed to buy private cars, most communist countries in the 1970s also allowed small private economic activities in urban areas. There were a few privately owned shops, restaurants, taxis, and individual traders in many communist countries in later years. The general guideline was that these private enterprises should not be so large as to require a large number of employees; in such a way that the owner could live without working as a result of the work of others. This approach was said to be compatible with Marxism, since it prevented the emergence of large-scale capitalism or exploitation.
A number of communist countries also permitted cooperative ownership of housing, in which a group of citizens pooled their resources to build a (usually small) apartment complex and moved in. The communist justification was again that people were doing something together to get what they wanted, rather than producing capital and exploiting others. All the forms of ownership described so far were legal and public, but there was always an informal private economy—unregistered—part of which was illegal, sometimes involving payment to a businessman or other person who offered his services secretly, but a form of bartering took place other times; for example, a plumber might be willing to provide his services to a farmer in exchange for chickens. Such shadow economic activity is not recorded in any official economic statistics.
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