The Spectre of Communism (You Call THIS An Exit Plan?!)

A spectre is haunting Slovenia — the spectre of communism. At the very least, that is what one would think if one read the more fervent responses to a document, a group of scientists, a former ombudsman, a former politician and a civil servant (Marta Gregorčič, Matjaž Hanžek, Lučka Kajfež Bogataj, Lev Kreft, Ana Murn, Dušan Plut, Tine Stanovnik and Jože Trontelj) put together as a vision of a post-crisis Slovenia, a sort of an outline for a crisis exit plan.


Apparently written at the behest of prime minister Borut Pahor, the document called “Where to After the Crisis – A contribution to a sustainable vision of Slovenia’s future” outlines future economic development, society and human relations. To cut a long story short, authors (sociologists, a climatologist, a philosopher, a neurologist/academician, an economist, an ecologist and a civil servant) put forward what they see as propose a set of eleven fundamental policy changes aimed at establishing a new paradigm of a natural, mutual, responsible, regionally harmonious and sustainable development of Slovenia. I’m transcribing this, just so you get the feeling.

Problem is that quite a number of these policy changes are controversial. Among other things, they include redefining the relationship between public and private in favour of the former, a strong public sector, with possible nationalizations of key sectors, establishing policies for solidarity and wealth redistribution and – at the gist of it – redefining the relationship between work and capital, together with introduction of co-management by employees. There are other set of policies as well, but at first glance it seems that the above are the most controversial. Indeed the document drew a lot of flak from various blogs, including (but not limited to) from Žiga Turk minister of development during Janez Janša’s tenure (Slovenian only, I’m afraid). Several points of his post were already taken apart over at Drugi Dom (ditto for the language).

At the risk of oversimplification, most critics believe that the document advocates a return into ages past, notably a reintroduction of communism and, by extent, a resurrection of a totalitarian regime. They see the document as ideologically biased and thus fatally flawed, a springboard for populist measures which would lead nowhere but into an economic and social abyss of trying to create a classless society, without any regard for individual freedom and human dignity. The fact that the document is written under a left-wing government only serves to underscore their worries.


What the document actually does (rather than call for immediate re-establishing of a communist state) is that it analyses the flaws of an increasingly (neo)liberal structure of Slovenian society and defines (some) questions which will have to be tackled if this crisis is to be solved. In short, the document states that the existing patterns of development, wealth distribution, access to resources and whathaveyou can simply not be sustained. Thus, things need to be changed. The problem with this particular crisis, as opposed to most crises after WWII, is that it challenges the very fundamentals of a liberal/capitalist society. Paradoxically, the society (the Western way of life, if you will) is today challenged by itself, rather than by an outside threat, such as communism.

As we globally became a competing society (and, at the same time, a society competing globally), there were – in the immortal words of Tom Skerrittno points for second place. But since the race had no end it turned out to be a death-match, where ever more ludicrous bets were made by everyone (well, most players, anyway), up to the point where their egos were writing checks their bodies could just not cash. The result was an inevitable crash-and-burn which painfully demonstrated that Gordon Gekko was wrong and that greed (for the lack of a better word) is not necessarily good

However, despite everything that had happened neoliberalists, proponents of a free, privatised and ultimately unchecked economy (the market will take care of it) decided to ignore the fact that it was a free, privatised and ultimately unchecked economy which crushed many a people’s dream of “life, liberty and pursuit of happiness”. The market did not take care of it, rather it took care of those who had a lot to begin with. And yet, neoliberalists would address the failures of their approach to economy with – more neoliberalism, not realising (or not willing to realise) that the crisis of today is different from all other post WWII crises because it is global and this time around even capital has no place to hide. So, what we are faced with today is a massively different array of problems which – were they attempted to be solved by neoliberalist means – would quite probably quickly lead into another meltdown, followed even more quickly by yet another, in a sort of continuous “W”, only with pick-up periods becoming ever shorter and ever weaker, until the whole thing crashed forever, firmly putting neoliberalism where its evil twin brother communism rests in peace. Solving new problems by old methods leads to disaster.

Oddly (or maybe not that much) this is precisely what critics of the document are saying. The only difference is that they see the proposed policies as paving the way back to communism rather than towards the end of the crisis. But this is precisely the point where they make a huge mistake. They forget that communism is dead and don’t see that liberal democracy (as a societal concept, part of which are more or less strict forms of neoliberalism) is fast dying. Instead they pretend that lib-dem state is purring along quite nicely, thank you very much, and that communism is lurking in the nearest shadow, waiting to homp the lib-dem state into submission. The notion is wrong for several reasons.

1. Concepts which are proposed in the document are perfectly legitimate economic concepts and have been used regardless of the type of government. Just look at nationalization, which critics of the document scoff at. During the financial meltdown of 2008, states poured galactic amounts of hard currency into banks which played with funny money and effectively nationalised them. Things get a bit tricky with co-management and self-management since this country has a bad experience with the latter and the once-bitten-twice-shy reflex is quite understandable. But self-management, nationalisation and communism do not necessarily go hand in hand.

2. There is absolutely no evidence that a lib-dem state can turn communist. In fact, history suggests that a country with a fragile or failing democracy is likely to go fascist, especially since corporativist state structures are good for business. Paradoxically, a country is more prone to go communist if its preceding social structure resembles feudal societies or is, at the very least, industrially extremely underdeveloped.

3. Proposed concepts do not aim to replace capitalism, but rather amend it. True, this would mean discarding most (but not all) of neoliberalist mumbo-jumbo, but that in itself is neither a bad thing nor it is an end of a lib-dem/capitalist state. In fact, the ability of capitalism to adapt to new paradigms (such as the one proposed by Pahor’s team of intellectuals) is remarkable. In post-WWII western world capitalism found it remarkably easy to incorporate concept of the welfare state, the very thing which was thought to be the beginning of the Apocalypse in pre-war capitalist societies. The only problem is that the whole world had to go through one helluva economic meltdown and 60-70 million dead to figure that one out. OK, so that was not by far the only reason for WWII, but it played a part.

Regardless of capitalism’s adaptability, the continuous survival or a more-or-less healthy combination of lib-dem state and capitalism is far from certain. If modification of failed neoliberalist patterns is a priori disqualified as communist and as such unacceptable, we are bound to enter a self-induced position between a rock and hard place, where rock represents the failed neoliberalism, while communism is the hard place. With no place else to go, fascism will become increasingly appealing to the masses. Therefore it is necessary that neoliberalists shake themselves loose of their primordial fear of communism and stop seeing it everywhere. To put it in Freudian terms, sometimes a wage increase in just a wage increase.

When read sans this ideological filter, the document can be seen for what it is. An attempt at constructing new tools to amend, rather then to replace, the existing socio-economical patterns. Even less. The document is not a strategy. It is not even an exit plan. It is only an attempt at defining the questions this crisis poses to us all. And that is probably more than has been done to date to tackle the crisis in the long term. As every scientist knows, a well formed question is a big step towards finding a solution.

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13 thoughts on “The Spectre of Communism (You Call THIS An Exit Plan?!)”

  1. Interesting. Very interesting.

    You know, sometimes it is so much easier to be a German citizen…

    As such, you don’t bother with the communist rock and the neo-liberal hard place, even though this must be one of the most interesting debates going on at the time being, because you simply use different labels and also, you differentiate more.

    In this vein, the most pro-business party in Germany is not considered neo-liberal, just business-friendly. Before the last elections, they (the FDP) could reach out and grab a few topics that are generally considered “social” and make beautiful promises. No problem there. And they still stick to most of them, like “more money for the unemployed”. They are of course not liked very much and the expression “sharks” and “Apothekerfreunde” is never far away, still. They are certainly not the neoliberal hard place and there’s noone else to compete for the position. Not even CDU/CSU.

    The other side is a minority one, too. Die Linke (called “ex-Stasi” and other nicknames) doth want the money to be distributed freely among the Volk, but they are not taken seriously. Noone’s that stupid. Though SPD thinks it lost so many voters because it is not “red” enough, they shed most of that colour when proposing and carrying out an unemployment benefit scheme that’s been keeping job centers and social courts busy and the unemployed rather poor for the last 5 years.

    I am quite aware that I have just described a bunch of parties that simply went central, but what I really wanted to stress is: yes, it is not always just neo-liberal and communist, options and ideas do circulate regardless of their proponents position – as they should.

    Just like you said. 🙂

  2. @alcessa: options and ideas do circulate regardless of their proponents position – as they should.

    This is called an eclectic approach, no? I like 🙂

  3. I read the paper. I did not find it problematic. It just didn’t offer any real answers. The authors simply filtered out the moderate views of the Democratic Party of the United States and took the rest – and then tried to apply this to Slovenia. It lead to conceptual disasters and useless waste of taxpayers money.

    For example, they wrote about “higher level of solidarity”. How nice. The only problem is that they did this in a country with highest tax burden on work in the world (according to Forbes) and where active work population is already paying more, will receive less and work longer for the pensions then their parents. You can’t copy paste such nonsense from Krugmans ideological pamphlets into visions for Slovenia – it sounds ridiculous here.

    Even better is their view of negative influence of taking loans from future generations for investments. Instead we should take loans to be spend for -well- classic big government consumption. This was copy’n’pasted from classic Democratic criticism of Reagans policies. Which in my opinion is without ground.

    What makes it very funny in vision for Slovenia is the fact that we almost never took loans for investments. That would be a smart thing to do. But what is written in our “vision” is exact policy that we were following for the past 60 years. Including Yugoslavia years. We were borrowing and then spending money of future generations to buy votes and social peace via big government. Instead of investing.

    And the end result is not El Dorado of social justice. It is a country with almost no innovation, brain drain, 500 euro salaries and pensions and the absolute rule of the political class in every aspect of life.

    Neosocialism and neokeynesianism are not new to Slovenia. We’ve tried that. Didn’t work. You can’t try something that doesn’t work based on criticism of something that is not perfect.

    However my favourite part of the document is where they propose nationalizing industries. As if the states’ stake in companies wasn’t already at the level of early Soviet Union. It shows how little authors understand our reality and how ideologically trapped they are in fictional one.

    Their “in production quantity prevailed over quality” statement is so fundamentally wrong that it could only can come from a group of people that had zero exposure to private sector.

    So I googled the team. And found out that this is the case. None of them ever saw anything else then government or socialist party site office from inside as a work environment.

    And lets be intellectually honest. These people are not scientists. Or at least I wouldn’t can’t call someone with degree from Marxism earned in times of Socialist Federal Republic of Yugoslavia a scientist.

    The crisis in Slovenia today is not an echo of global crisis. It is a crisis of our welfare state. Global crisis was just the trigger we’ve been waiting for. Our model is failing. It has nothing to do with “neoliberal something-something” (didn’t really understand what you meant with “neoliberalists” being some sort of witches?)

    Slovenian model was built exactly as described in this document. I wouldn’t call it socialist. In fact this document is in Slovenia considered conservative. Its objective is to prevent any change from happening.

    We have highest taxes in the world. We have government run schools, health insurance, pension systems – all of them failing. With almost no private initiative. We have most important companies in government hands. Including banks. We have the structure of work force that did not adapt to modernity. It has been protected from market forces by the government. No new successful international private company was founded from Slovenia in the past 20 years. Our growth depended on real estate, mostly fueled by government intervention on real estate and financial markets.

    Last but not least – we have red governments in power for the last 58 out of 65 years. doing all the central planning and social responsibility. So what exactly is the point of that pamphlet?

  4. For the record: I somewhat agree with your criticism of “quantity prevailing quality”. Although this is perceftly arguable from the point of view of too small an added value, it can not in all honesty be considered an unequivocally prevailing fact. Also, we agree that there are no real answers in the document. But there are a lot of important questions.

    Having said that, there are a couple of points where you (if you don’t mind my saying so) fail to see the full extent of the situation.

    First of all, Slovenia is not the highest taxed country in the world. The oft cited Forbes article was based on a study by KPMG and only applied to yearly wages of 100k USD or more. Percentage of Slovenians earning a hundred thousand dollars is minimal. Otherwise, as you perfectly know, the personal income tax starts at 16 percent (and ends at 41%), while the corporate income tax is around 25%. Therefore, while the tax burden is admittedly high, it is not the highest. Not even close.

    Second. Save one, all authors of the text are are scientist. Most of them have Ph.D.s It’s just that there’s only one economist among them. Which is a welcome novelty.

    Third. To say that government share in the largest companies is on a par with Soviet Union is of course a blatant exaggeration. I respect the fact that you believe that state ownership is ineffective and inherently bad, but as we saw at the beginning of the meltdown, big business ran for cover into state’s arms the moment shit hit the fan. This is a clash between neoliberalistic theory and actual fact, that can not be reconciled. Government interventions are not inherently bad. That is something we need to accept.

    Fourth. The crisis has everything to do with failure of neoliberalistic approach. The market does not work of its own accord. It never will. If anything, we are witnessing a vindication of keynesianism. I’m not advocating this approach (it had its uses, but that was another time), but blaming “big government” (which I take it is actually a euphemism for big taxes) and welfare state (which, for you, is yet another euphemism for big taxes) is a simple case of mixing up cause and effect.

    Fifth. Your comment is a case in point of what I wrote in the post. Neoliberalists propose to correct failures of neoliberalism with even more neoliberalism. For two decades we’ve been hearing the same old story. Taxes are too high. Labour market too rigid. Government too interventionist. And yet, after all is said and done and when the devil still comes to collect, the only conclusion neoliberalists come to is that we didn’t do a good enough job. We need ever lower taxes. Ever less social security. Ever more privatisation. It is in fact the same mechanism we’ve seen time and again in communism, where nearly every failure, every clash between fact and theory, was put down to “lack of adherence to Marxism and socialist economic theory”. Which brings us to

    Sixth. I wrote that basically communism is neoliberalism’s evil twin brother. Neither can exist without the other one, which is why neoliberalists still tend to see communism in everything that is not strictly neoliberalism. The two were locked in a seemingly perpetual battle, but when communism finally gave way, neoliberalism defeated itself, because as it engulfed the entire world (including Red China, mind you), it ran out of space to expand to. And as we know, perpetual growth was at neoliberalism’s core. When one area (country, continent) stopped growing (i.e.: stopped returning expected profit), capital moved elsewhere. But this time around there is no elsewhere.

    As I said. New problems this crisis presents will not be solved by existing tools. What this document does, is it wonders what these new tools might be.

  5. Ad 1. Do check your figures again. Forbes tells you much more then that. Your argument about Forbes comparing incomes of 100.000 and above is practically flawed. In Slovenia progressions start very low. In 2009 (when the research was made) there was no difference in tax (highest rate 41% starting at 1.230 eur of taxable income) and social contribution (flat 22.1%) levels between someone earning 1.230 eur of taxable income per month and someone earning ten times this figure. Effective tax rate for someone earning 100.000 eur in Slovenia was 50% and effective tax rate for someone earning 50.000 eur was 47%. Assuming that no country has regressive taxation this means that from Forbes research you can conclude that we have highest (or -the possibility of this being minimal- one of the highest) taxed “single person belonging to middle class” in the world too.

    Ad 3. Blatant exaggeration as you call it is result of comparision of our goverments’ share today and share of government of Soviet Union in 1927 [Fraser, 2005]

    Ad 4. I have no idea what “neoliberalistic approach” is so I do not understand some of your points? I never saw “big government” as an euphemism for high taxes (an euphemism is supposed to soften the meaning) but as a synonym. Big government and its controlled entities spend large portion of GDP and regulate unecessarily increasing internal transaction costs. For practical purposes here are two examples of big government. 1. If government spends more then 35% of GDP it is considered big. 2. If a land without building permit is worth only 1/100 of a land with building permit and they are at approximately the same location then this is an illustrative example of big government in urban planning. Governments can actually be small in some things and big in other.

    Ad 5. Once again you are using term “neoliberalists”. There is no such political party in existence. There is also no “neoliberalist” economic school. It is a pejorative label, commonly used to describe classical liberalism. So I will respond from position of classical liberalism. The reason we are proposing “neoliberalistic” changes in Slovenia; for example: vouchers for schools and choice for parents, flexible labour markets, low taxation with flat income tax rates, lower government spending, less government employment (currently more then 1/3 above western average), more private initiative in health care, stronger reliance of pension system on individual savings is simply because none of these policies were ever applied in Slovenia. Once again – you can’t make conclusions about Slovenia with left-wing attitude towards a Reagan or a Thatcher period because we never had such periods. Our model has always been socialist-corporativism. We are not “curing neoliberalism with neoliberalism” because there is no “neoliberalism” in Slovenia. We are a great example of a country with 60 years tradition in socialist corporativism. We already live in a brave new world that Krugman is now conjuring in America. 🙂

    Ad 6. I’m sorry, but where do we know that “neoliberalisms core is perpetual growth” from? I’ve never heard of this wisdom. I thought that the core of “neoliberalism” is belief that interactions between free people tend to produce more optimal (not perfect) results then central planning does – and there is plenty of historical and new age evidence to that belief.

    To repeat myself – lack of perfection of an organization does make alternatives better. And until we have a good, working alternative to the four pillars of “neoliberalism” – free trade, rule of law, individual choice and private property – it is a vision worth following.

  6. Funny. I was always assumed that what you called classical liberalism died twice: first) at the beginning of the great depression and second) at the end of WWII, when even the most purely capitalist countries adopted the welfare state. Thus post-welfare-state liberalism is rightly called neoliberalism, personified by Milton Friedman and the Chicago School (more here)

    Comparing Slovenia today and Soviet union in 1927 is manipulative at best. As is your interpretation of the Forbes article, which seems to be doing a slightly different version of maths. And there’s a world of difference between the highest taxed country and one of the highest taxed countries. But that’s just me. The article also warns that there are other factors to be taken into account when comparing tax rates.

    But be that as it may. What I’m trying to say all along is that not every proposed alternative to neoliberalistic approach equals communism. The “four pillars of neoliberalism” or whathaveyou are not disputed. Not even under the scenario of nationalisation of some key sectors. What the document does is try to thing about how to avoid or dampen consequences of mindless implementation of neoliberalistic political-economic approach, one of the more brutal consequences being that in a globalised world capital moves freely, with regard for no one but its owners, creating havoc and destruction in its path.

    Capitalism and lib/dem state are admittedly still the best (least bad) socio-political forms, but they are not necessarily equal to neoliberalism.

  7. I like the fact that recently economists (from Marxist times) started accepting classic liberalism and are more and more only rejecting “undefined dire consequences of mindless implementation of neoliberalistic political-economic approach” (which is one big political “nothing”).

    At the end they will be driven to implement pretty much every one of Friedmans’ ideas from school voucher, via negative income tax and free trade between nations all the way to central banks as lenders of last resort – and yet they’ll still claim that they are somewhat different and that you reject the undefined vogue “neoliberalistic paradigm” that they so angrily criticized.

    What a classy way to do salto mortale and admit that they were wrong. 🙂

  8. Ya, right. You perceive the world around you strictly from a neoliberalistic point of view (what you call “classic liberalism”). In your universe, Friedman has all the answers and liberalism is inherently good. I accept that. But if you at least tried to look above the constraints of your line of thought, you’d have seen its many failures and stopped judging ideas of others only in terms of how well they conform to Friedman’s ideas. The world did not start with Milton, nor will it end with him (although it very nearly did).

  9. The use of term “neoliberal” itself implies faith. It was invented to evade concrete discussion – about flat taxes, small and efficient government, concrete deregulation, school vouchers, parent choice, concrete privatization, free markets – on basis of an artificial hollow construct – which can’t really be defined but has to be believed. That religion is perhaps the most childish part of the whole document.

  10. Huh? You lost me somewhere between “implies” and “religion”. The “debate” on these issues is nothing less than an attempt at dismantling the welfare state, effectively returning capitalism back to its pre-1930s state.

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