N°127: Transitory class and hegemony : Few comments on the sociology of the transition from state socialism to capitalism

Les groupes et classes dominantes “globales” n'ont jamais cherché à expliquer les causes et la base sociale des changements opérés au moment du démantèlement du “socialisme réel” autrement qu'en utilisant des arguments moraux, éthiques, émotionnels ou naturalistes. Ce qui a été facilité par le fait que, hormis les partisans du stalinisme le plus pur, ou, plus tard, de la pensée maotsetoung, peu de marxistes ont osé de leur côté analyser les structures de classe, et donc la lutte de classe au cours du processus de “construction du socialisme” qui s'est terminé dans le ...capitalisme ...périphérique.

Or, puisque nous constatons qu'il y a à l'Est, à la fois des “gagnants” et des “perdants” de la “transition”, en terme de pouvoir et de niveau de vie et donc des inégalités ...de classe, nous ne pouvons plus refuser aujourd'hui d'ouvrir et de faire ouvrir les yeux, et d'analyser la dynamique sociale qui s'est réalisée entre la fin du socialisme réel, le début d'un capitalisme local puis la généralisation des processus de mondialisation capitaliste à l'est de l'Europe et ailleurs. Ce qui repose la question des classes sociales émergentes puis parvenues dans l'immédiat après 1989, puis jusqu'à aujourd'hui. Ce texte, rédigé par un chercheur hongrois a été écrit en anglais, mais il nous a semblé particulièrement pertinent car il démontre que l'on a toujours pensé les processus sociaux à l'Est, mais qu'on a refusé, à l'Est comme à l'Ouest, de donner la parole aux hétérodoxes, à l'heure où pourtant, les mots “pluralismes”, “diversité” et “liberté” monopolisaient le discours dominant.

La Rédaction

Transitory class and hegemony

Few comments on the sociology of the transition from state socialism to capitalism

Reflections on the work of Iván Szelényi

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Hiver 2016

Attila Melegh

In the 1970s and early 1980s Iván Szelényi (in the beginning together with György Konrád) made very important empirical and theoretical claims concerning the rise of a new class within state socialist systems. According to him, part of the intelligentsia and part of the apparatchiks were on the way of forming a new class helped by two structural-historical preconditions, namely the existence of a “rational” redistributive economic system with a complex system of controlling production, allocation and reallocation processes and a pre-socialist social formation of east European intelligentsia with its special social and political roles. It was portrayed as a new class and to be precise it was seen as a class novel and special in a number of respects.

First it was new and special in the sense that the role of “knowledge” in social control was on the rise globally, but especially locally as a redistributive-bureaucratic system was in operation, which provided a new space for inequality mechanisms. Second this group relied on not on formal rationality, but “substantive“ rationality. That is to say, intervention into production and allocations in all phase of the production system in order to achieve certain social goals even disregarding formal constraints. Third it was an emerging class, as Szelényi put it was class in statu nascendi. Thus, the formation was not completed, other alliances were also possible and actually formed between the apparatchiks and that of the actors of “market”, or “private sector, most notably the so called “second economy”. Very importantly, it was understood as a class “in itself” and not “for itself”, thus it lacked class consciousness. These proposals were very important ones and here looking back at global-local history of Eastern European countries and most notably Hungary, I would like to reflect on three aspects of the idea of a new class. If we accept that this “new class” was a fertile approach in understanding social structures and very importantly social change in the period. I think it is possible, and the concept of a new class actually might allow a much better understanding of social change in the framework of global-local dynamics. I will reflect on three aspects of Szelényi’s analysis:

1. Szelényi argued that it was a class in the “making”. I would add it was a transitory class in the sense of coming into being for a certain historical period. In other words, possible class relations of state socialism were only activated and played out during a certain global-local historic period when actually it was finished. This was when property ownership was reactivated and the system itself was reintegrated into a global capitalist system after the long period of being in a status of property vacuum as Böröcz put it. In socialism it could only be in a statu nascendi and it needed to be reactivated when global capital markets absorbed the state property only formally owned by the “workers”.

2. Szelényi was right that in the beginning (1960s and 1970s) this “new class” had no class consciousness. I argue nonetheless that the East/West or “Europe” discourse partially filled this gap during the transition starting from the early 1980s, and this allowed to secure a discursive hegemony so much needed to form a transitory class position. This was a complex historical process and certainly we have to see this in a local and global interplay. I have to stress that that this process was NOT necessary, or there were OTHER options historically, so please do not read these comments as a deterministic interpretation. But Szelény’s ideas can enlighten how the “Europe” discourse was utilized and how it could become hegemonic in Eastern Europe and very importantly Hungary.

3. Szelényi also had an another very important remark. He said that this “new” class was interested in inhibiting the emergence of “other class ideologies” and the formation of an “organic intelligentsia” on behalf of the “repressed classes”. This, I think, is a key idea in understanding the development of ideas and discourses in Hungary and the particular hegemony which emerged and which has been later severely contested by new groups in the 2000s when the class positions were transformed.

Let us see how these points come together in terms of an interpretative experiment.

According to Szelényi’s analysis in 1982, there was a class-conflict, a clash of collective interests between the redistributive power and the direct producers. This clash of interest was much hidden or better to say it was just emerging during the 1980s. Remembering the current literature of reform economics analyzed among others by János Mátyás Kovács, this was exactly a period when the search for “real owners” was more and more on the agenda of intellectuals and reform apparatchiks. At the beginning of this debate, there was no room for any such clash of interests as the lack of a separate capital market did not allow more open conflict, then just the bargaining within the state redistributive system in which managers of state socialist companies had to “sell” their interests within planning mechanism. This unequal bargaining of larger companies was aptly written down by Erzsébet Szalai at that time.

This lack of autonomy of capital market was questioned more and more intensively in public and most importantly in semi-public discussion (remember the ideas of constructing Holdings, the Bauer debate, even the Liska ideas of shares) and interestingly, this articulation happened exactly when actually according to Szelényi there was a turn away from the process of a “new class” formation. I think Szelényi was right in saying that the alliances were more complex and, in the end, the redistributive system collapsed. So no COMPLETE new class was formed WITHIN state socialism, but I think his original observations can be useful to understand later dynamics.

And later developments are very important. The new class had no real option to practice property rights till the option was opened via the control of the state becoming an “auctioneer” state as Böröcz put it later. In this process of forming a transitory class, this control of the state was crucial and it was a non-repeatable historical moment. The state had to be paralyzed in defending the redistributive system and it had to be captured symbolically also to show that a new era was starting even before the formal collapse. The debt crisis itself and the constant symbolic crisis-talk in discussions on economic processes were key elements (it is just to be noted that at that time, our debt crisis was not worse than today, when nobody actually shouts the end of this system, so it was social constructed). In other words, it was crucial to find grounds to practice effectively the otherwise hidden property rights. This historic opportunity was partially due to a global change of course, most importantly a new cycle of global capitalism, the freshly guaranteed free move of capital (the dramatic global rise of the share of FDI). This made the debt crisis a globally legitimized turning point. Altogether, this led to and the exclusion of the “old” Party elite which was blocking the formation of a new class according to Szelényi. They could be completely delegitimized on the basis that they participated in the crush of various political revolutions in Eastern Europe.

But there were additional or related discursive changes which led to the hegemony for the emerging class of apparatchiks and intellectuals providing them a period when they could actually openly play out their class position and the could achieve political control, till this group and formation was radically transformed.

As argued by many of us (including Wallerstein, Said, Todorova Böröcz, Gagyi), the coming of the Europe or a renewed version of the East/West discourse was related to the new cycle of globalization, but it was not completely dependent on that. I argue here that this discourse was an important factor in this process of class formation.

In my earlier view around the 1980s, there was a shift from the previous configuration of the competition of modernities in which the quantitative modernization performance game of “Eastern” and “Western regions was played out and institutionalized. This older version could not have helped the fully fledged development of the this transitory class hegemony as it allowed the autonomy of the “East” as an alternative modernity, thus, east European socialism was seen as a viable option, which then could be used as an alternative ideological possibility. This sense of alternative modernity had to die first and this happened well before the collapse of state socialism.

This was replaced by a new East-West discourse which reinvented qualitative geopolitical and geocultural hierarchies. Once I summed up the role of this discourse in the following way: “The role of the East-West discourse and the East-West civilizational slope is to set the terms and rules of global and local positioning and to formulate cognitive perspectives and maps in which different actors can locate themselves, each other and their own societies in the late-modern capitalist world system or modern/colonial systems. In other words, the East-West slope is a dominant discourse for the articulation of identities and political programs and the creation of institutions in the struggle for control and/or social or political recognition. It appears in almost all areas of social and political life: individual careers, family life, institutional frameworks, scholarly works and major global political programs, and it creates a web of discursive arrangements “normalizing” our lives in the latest phase of world capitalism.” Here, I refer to the rise of “Europe” ideology in history writing, cultural studies and other social scientific areas. We can recall the Central Europe debate, which symbolically made the whole region “passive” and basically “non-existent”.

The (re)appearance of civilizational Europe discourses within and outside the region was very helpful for the rise of this class (once again I stress the process was not deterministic at all) and actually for a while it could truly become a class in the original Marxian sense. How it helped?

1. The key developmental issues were put on a cultural-civilizational ground and thus the role of the “intelligentsia” could be enhanced toward the larger segments of the society and also toward the other elite groups. This opportunity was quickly understood and grasped by the “intelligentsia”. It was aptly observed by Szelényi and his colleagues that after the change of the regime cultural capital was a key in being part of the elite: “Thesis 1. Post-communist society can be described as a unique social structure in which cultural capital is the main source of power, prestige, and privilege. Possession of economic capital places actors only in the middle of the social hierarchy, and the conversion of former political capital into private wealth is more the exception than the rule. Indeed, the conversion of former communist privilege into a post-communist equivalent happens only when social actors possess the right kinds of capital to make the transition. Thus, those who were at the top of the social hierarchy under state socialism can stay there only if they are capable of ‘trajectory adjustment', which at the current juncture means if they are well endowed with cultural capital. By contrast, those who relied exclusively on now devalued political capital from the communist era are not able to convert this capital into anything valuable, and are likely to be downwardly mobile.” I can only agree with this and add that an overall cultural-civilizational discourse helped many intellectuals to “adjust they trajectories” toward more articulate elite positions. The “translation” of the knowledge of the “Western model” (legal system, historical processes, market mechanisms etc. etc.) was a business for many at that time, and such knowledge could make get people into very important positions.

2. This discourse reshaped the understanding of history also: Pre-second world war was seen as a part of normalcy due to the lack of European divisions while “non-European” or “less European” alternatives came to be seen as abnormalities, as sideway from the mainstream. This shift could be utilized by the children and grandchildren of prewar middle classes who, after considerable oppression in the early phase of state socialism, found ways to reinterpret their personal and social history and thus could make new claims to power after 20-30 years in social “parking orbits” (Szelényi 1988). We have decent analysis on this period of “reinventing” previous and hidden identities.

3. It could disqualify on civilizational or racist grounds all other options then the one toward the West, and thus very importantly all preexisting links collapsed or got subordinated toward the progressive African and Latin American movements. Links between radical critique in the West and that of Eastern Europe also disappeared. This led to a focus on Europe and thus the postcolonial critique emerging in an interplay between the “West” and that of the relevant parts of the “Third World” did not reach Eastern Europe, or East Europeans did not want to listen. Actually, we know that senior intellectuals of the dependency school actually warned east European colleagues points toward the lack of listening (Gunder Frank diary). This could be strengthened by the mechanisms Szelényi was writing about when he said the new intellectual-apparatchik elite was interested in silencing all other intellectual options on behalf of workers or the “wretched of the earth”. I just recall the laughter at “toothless stupid Venezuelan protesters” or on a more intellectual ground this could explain why the early request of Böröcz for reconnecting the analysis of state socialism and its transition into a global analysis was completely ignored (for two decades at least). This “Europe” thus swallowed many of the local left wingers or would-be leftists in an era when actually postcolonial critique just opened throughout the world. Who remembers Dicházi or even Liska nowadays. I think Bockmann and Gil Eyal make a very important point when they argue that neo-liberalism was not just something learnt here, but it was made here (frodulat). The Szelényi idea of a new class can give the a social explanation, which we did not make yet.

4. The discourse was territorial and thus internal social conflicts were thus hidden by this discourse (there were no separate groups in Eastern Europe, just Eastern or Central Europe as such) or if social divisions were seen than they were either portrayed as natural or as issue to be solved later as it represented a local lack of “organic” development. Unemployment was natural, racism would disappear later when being properly European in this ideological construct. The territorial logic also pushed up minority and ethnic issues, which reformulated social debates into ethnic ones. The territorial symbolism and the territorial understanding of development did promote the activation of the state as a territorial authority. Thus, it did allow the state first to make property rights open (they could come over “property vacuum” via creating the technical possibilities of privatization”). Basically, they created the first organizations to practice and basically invent property rights without any control by groups representing rational redistribution.

5. These state organs and related “intellectual workshops” were very important organizations representing the class interests of the teleologically thinking, pro-market intelligentsia (very importantly, economists) and related apparatchiks so nicely analyzed by Helyzet Műhely in their issue of Fordulat. I refer to the analysis of Pénzügykutató by Agnes Gagyi: A „pénzügyes fiúk” munkássága nagyban beleillik abba a narratívába, amely szerint a szocializmus kritikája legitimálta a neoliberális nézeteket, és a neoliberális képzettségű szakértők segítették a komprádor szolgáltató szektort, azaz Drahokoupil (2008b) meghatározása szerint azokat a csoportokat, amelyek hazai szereplőkként operálva a transznacionális tőke érdekeit a helyi gazdasági és politikai érdekérvényesítés taktikai szintjére fordították le”. I do think that just beyond a colonial type of translation we have to integrate the idea of a new class into these interpretations. There was more force behind creating a pro-market hegemony, then just a learning from the West.

Altogether with these comments, I argued that the idea of an emerging new class is to better integrated into the critical writing on the transformation in Eastern Europe in the 1980s and 1990s and in case we combine relevant elements, then new interpretative possibilities emerge. The pioneering work of Iván Szelényi is to be continued as it might help to understand how the “transition hegemony” was created, how the critical left was silenced and how and why this hegemony collapsed later. Probably, there was a transitory class formation behind also, which utilized previous local developments of a redistributive economy and society in a dynamic relationship a global transformation.

* Sociologist, Historian, Karl Polanyi Center for Global Social Studies, Corvinus University, Budapest, Hungary.