Czech Republic: 25 Years of Capitalism. What Freedom?

The 17th of November 2014 marked the 25th anniversary of what’s known as the "Velvet Revolution" in the Czech Republic and Slovakia. To many it has positive connotations. The capitalist press hailed it as the end of a tyranny and the beginning of freedom and superficially this may seem like the general consensus. However a STEM agency poll in 2013 showed that 33% of Czechs still prefer the old regime to the new. 

It is necessary to understand the significance of this figure, which in other former Stalinist countries can reach even higher proportions, not to glorify the old regime but to give an objective balance sheet of what the re-introduction of capitalism really means to the working classes, the impoverished masses and the youth, who will determine the future of the country.

"Velvet" refers to the relative peace of which the exchange of power was made. Superficially with no reported deaths and a minimal amount of violence when compared to other power exchanges it seems like a fair title, but the idea that it has led to a fair and tranquil life for the masses is far from true.

On the 17th of November 1989, a demonstration marking the anniversary of the murder of students by Nazis in 1939 took place in Prague. Orders were given to not allow this demonstration to take place and protesting students were attacked. Word got around that one of the students had been killed (later turning out to be a hoax) and this was enough to spark mass demonstrations throughout the country within days, reaching estimates of 750,000 people on the streets. Up until the end of November, the Communist Party replaced its leaders various times in failed attempts to appease the masses. A two-hour general strike on the 27th of November was enough to push the regime over the edge and two days later, the Communist Party admitted defeat and resigned power. This is of course a brief description of events. A larger article would be needed to study the events of late November with the detail they deserve but it shows the relative and apparent ease of which the regime in its final days fell.

The mainstream story we are used to hear, that of the "fall of communism", is obsessively told as a story of good versus evil. The evil, undemocratic communists were eventually defeated by the fair and democratic will of the people who allegedly wanted to restore capitalism, i.e. democracy (used as synonyms). It was hailed as the triumph of “democracy”.

In fact, while certainly most people definitely wanted a democratic regime they could trust to defend their interests and aspirations, capitalism has proved not to be exactly what they expected.

Czechoslovakia was formed in 1918 after the fall of the Austro-Hungarian empire. The formally democratic regime of the republic was relatively short lived and by 1938 it was suppressed and the small state was de facto annexed to Germany by Hitler, with the consent of France and Britain. Democracy in Czechoslovakia was then dumped by the so-called democratic powers in favour of an appeasement with Hitler. The Munich Agreements imposed on Czechoslovakia Nazi rule and a full occupation was enforced in a few months.

Nazi occupation and the Second World War were the heavy price paid by the Czechs, the Slovaks and all the peoples of Europe for the cynical power game of the so-called “democratic” imperialists. Their aim, in order to contain German expansionism, was that of turning Hitler and the rising power of the German military machine against the Soviet Union and wait until they bled each other out, but the outcome of this mighty struggle didn’t turn out as they were anticipating.

The mass rebellion against Nazi occupation throughout Europe, the unheard of level of sacrifice and resistance of the peoples of the Soviet Union and the might of the planned economy were the main factors that undermined German power and turned the war dramatically in favour of the Soviet Union. Britain, the United States and their allies, who had cynically ignored the request by their main ally to open a second front to alleviate the burden on the USSR, had to suddenly rush and engage in a desperate attempt to meet the Red Army before they could get deeper into Western Europe.

The advance of the Red Army was met in one country after another with fear by the bourgeois. The ruling classes of occupied Europe were increasingly isolated and hated by the masses because of their collaboration with the Nazi occupiers. Most of the bourgeois fled with the occupying armies. On the other hand the advance of the Red Army was greeted with enthusiasm by the mass of the working class who rose against the Nazis.

In 1948, Ted Grant wrote a text called Czechoslovakia: The Issues Involved where he said:

"The workers could not but support the measures: nationalisation of all important plants that remained in private hands since the mass movement in 1945; 70 per cent of the printing establishments, the whole of the chemical industry, all refrigerator plants and all building concerns employing more than 50 persons, all big hotels and the wholesale trade. No firm employing more than 50 people in any trade or industry is now allowed to be privately owned."

The huge moral authority the Soviet Union had gained through the defeat of the Nazis and its successes in raising living standards for the majority of its population led to many workers looking towards the Communist Party. In March 1948 it claimed a membership of 2.4 million, a huge number in a country of 15 million. Only with active support from the working classes could nationalisations take place. However, the transition to a planned economy in the late 1940s was by no means a classical socialist revolution. The clumsy and repressive nature of the process paved way for a dissident layer in the future and gave moral ammunition to Western anti communist propaganda. However, even under these circumstances, at the time for the majority of the population this represented an advance. The western imperialists, experiencing radicalisation and even revolutionary movements at home were not in the position to effectively intervene. The contradictory nature of this process of deformed revolution was highlighted by Ted Grant further on in the same article:

"Having used the pressure of the workers against the capitalist class, the Stalinists will dispense with all the elements of workers’ control. The speed with which this is accomplished will depend on the resistance of the Czech working class, whose level of culture, because of the industrialisation of the country, far exceeds that of the Russian workers. The Stalinists cannot afford to allow a workers’ democracy in Czechoslovakia because of the inevitable repercussions on the Russian regime in the Soviet Union."

Five-year plans involving large-scale industrialisation had large degrees of success and created conditions which could offer the working classes and rural population stable employment and unprecedented level of access to health care, education, housing, etc.

However, like in the USSR, the state bureaucrats were unaccountable to the people, enjoyed a privileged life style above that of the workers and wanted to maintain this. This powerful bureaucracy curbed anything which challenged its status. This was not just pro market dissidents but included honest communists who were pushing for a more democratic planned economy and even included veteran volunteers who fought against Franco in the Spanish Civil War.

The new regime could not allow any form of workers' democracy, with calls for an international revolution from the traditions of the Russian revolution of 1917, but a bureaucratically planned economy modelled on the model of Stalinist Russia. The history of Czechoslovakia between 1948 and 1989 takes the character of very sharp contradictions between the success of planned collective production and the bureaucratic inefficiencies inevitable when the planned economy is not subject to the democratic control of the workers and the population, especially within the confines of a small nation state.

In a market economy, the law of supply and demand acts as a rough gauge on production. In a democratically planned economy the gauge would be the direct involvement of the producers and consumers, the working masses of the country. With a much more equal division of labour and the eradication of unemployment the average working day could be lowered to the point of allowing enough free time for workers to participate in the running of their workplaces and communities, cooperating together to democratically run the economy and society as a whole. However without this mass input, what was left in Czechoslovakia was a blind planning of the economy. Oversupplies of some products and undersupplies of others lead to huge inefficiencies and waste.

The inevitable social and political rejection of this lack of workers’ democracy and the attempt by the masses to conquer political control over their livelihoods were expressed at their peak in 1968 with the Prague Spring and its subsequent repression. This could have been a platform for either a social counter-revolution or a political revolution towards a genuine workers’ democracy or of course just a shift in the bureaucratic elite, with no fundamental change. However, the USSR bureaucracy wanted neither of these but wanted the sustenance of the bureaucratically planned Czechoslovakia with loyal stooges in charge and it used its immense physical force to squash the movement before it could win. This tragic event (See Czechoslovakia 1968: Stalinism Rocked by Crisis for a detailed analysis) is still engrained in the consciousness of the Czech people and played a big role in determining the anti communist and anti Russian nature of the movements in 1989.

After 1948 Czechoslovak trade with capitalist countries dropped sharply, due to embargoes and restrictions on the new state. For some years this was successfully compensated for by a sharp rise in trade with other planned economies of the eastern bloc increasing from 40% in 1948 to 70% a decade later. However by the late seventies the bureaucratic integration between these economies was reaching its limits and pressure from the capitalist world was becoming harder to resist. The capitalist recession in industrially developed countries led to a decrease in demand for Czechoslovak exports. The Soviet Union also suffering from the pressures of the world economy could no longer afford to provide energy to Czechoslovakia at the reasonable prices it had been able to before. The economy of the small state came under more and more pressure and the need to keep up with the world capitalist market.

The masses are able to tolerate a totalitarian state as long as it gives them a reasonable quality of life and hope that the future would be better. However, increasing shortages of basic goods, price inflation and the general lack of democracy, eventually had an effect on the consciousness. In such conditions, inefficiencies and repression of the state became sharper, more obvious and more intolerable and it was only a matter of time before people question and act. This was reflected in an increase of protests and demonstrations throughout late 1988 and 1989.

The regime was conscious of the mounting unrest and foresaw that even a small demonstration which was not even hostile to the regime in character, could give platform for such discontent to be expressed and therefore carried out a repressive crackdown. The repression was not a sign of strength but a sign of weakness and only further provoked the movement and giving it moral ammunition. The movement was also given a boost by the movement in East Germany, days previously.

The movement which overthrew the regime was mostly composed, not of anti communist dissidents but of ordinary workers, students and youth who could no longer bare the situation and were forced to take to the streets. This is clear when we compare the number of so-called dissidents earlier in 1989 estimated to be less the 5,000 to the hundreds of thousands involved in the movement. In fact a survey carried out in December 1989 by the Centre of Public Opinion Research, "which way should our society develop?" only 3% of Czech and Slovaks wanted capitalism. 41% still claimed to want socialism and 51% wanted “something in between”. Only a very small amount of those involved in the revolution consciously and explicitly called for capitalism.

Again in 1948 Ted Grant warned:

"In the long run, the Czech workers will not tolerate a tyrannous officialdom. Experience will teach them that Stalinism is not communism. They will recognise the need to overthrow the bureaucracy with its police apparatus and establish their own direct control of industry and the state in a workers’ democracy as outlined by Karl Marx. This is on the model of the Paris Commune, and carried into effect in the regime established by the Russian revolution in 1917."

The workers certainly did recognise the need to overthrow the bureaucracy and its police apparatus. Unfortunately to take the revolution to its full success and establish a healthy workers’ state, what was needed was a bold, conscious and committed leadership. Such a force would have needed to have been built up through years of agitation and organisation, winning the more conscious layers of the working class and the youth and preparing for when they move. What was needed was an organisation to lead the masses to a revolution which would have been political in character. The nationalised planned economy was already in place, it just needed to be taken into workers’ control. This would of course have been a very difficult task but not impossible. After all, the Bolsheviks managed to build such a successful revolutionary party amidst the repressive conditions of Tsarist Russia.

Unfortunately, no such organisation existed and despite the determination and self-sacrifice of the masses, what followed was not a revolution but a very savage social counter-revolution. By 1991 the government had announced the introduction of Phase one of the Market economy, which included a 390% rise in energy prices. Vaclav Klaus who was then the finance minister planned to sell off 100,000 state stores. Czechs were offered privatisation vouchers in a desperate bid for the state to rid itself of assets.

By 1993 Vaclav Klaus pushed through the undemocratic separation of Czechoslovakia, which benefited nobody but the ruling classes and in particular the German imperialists. Becoming the prime minister of the new Czech Republic, his motto was "any private owner is better than the state" and claimed that 80% of the economy was in private hands. This at the time was an exaggeration that Klaus made in order to portray the country as an ideal investment zone for imperialists and did not include investment from the national property fund and movement of assets from central state to local authority control. The Economist criticised the country at the time saying

"The remarkably low unemployment rate, below 5 per cent, suggests that so far it has failed to undertake much of the essential industrial restructuring the country needs."

This quote from the economist in 1995 quite clearly and brutally shows the counter posing interests of capital and the working classes. The Financial Times the same year quotes the words of Vaclav Brom, a Czech businessman:

"Many foreign companies came to the Czech Republic with one aim: to take part in our companies, to control the business, cancel R&D (research and development) and transfer work to themselves and to use us as cheap labour."

Today, the economy is still very much dependent on cheap labour. More than 400,000 live below the poverty line. Poverty is defined as someone on less than 9,330Kc (around £350 a month). The country came under criticism from Social Watch earlier this year who said the following

“The high number of unemployed people, reaching 630 000 registered at employment office at the beginning of 2014, appears hand in hand with long-lasting decrease of the real wage. There was a drop in real wage of 1,3 % in total in 2013. The number of precarious jobs is also increasing”

With economic poverty we also have a social and moral poverty. Local and national governments are riddled with corruption with new scandals and embezzlements being exposed every week. Parasitic Health Insurance companies demand public subsidies with people having to pay for health, send those who can’t afford it to an early death. In 2013 the Helsinki Committee expressed concerns for the worsening human rights in the country highlighting the lack of available health care and the persecution of the Romani people. The 2013 suicide rate was almost double of that of 2012. To put it simply, capitalism is pushing the country further into barbarism.

The dominant ideology of a society is the ideology of its ruling class. With its state apparatus, privately owned media outlets, educational religious institutions amongst its tools it is able to ensure this dominance for most of the time. The anti communist sentiment in the former Czechoslovakia is rife and often takes on a very hysterical character. In the 2013 Czech presidential election billboards naming and shaming of "ex communists" were to be seen throughout the city. Prague has a museum of “communism” which does a good job of smearing the name of bolshevism and the Russian revolution, deliberately and cynically mixing it up with the crimes of Stalinism.

However there is only so long the masses of The Czech Republic and Slovakia can be lied to. The media will continue to smother the consciousness of the masses with anti communist hysteria but the reality of capitalism is already penetrating through these lies and cynicism and the resulting change in consciousness will be explosive. The Czechs have not experienced a post war, successful capitalist boom. Unlike the working classes of the western countries, illusions in reformism will not be as strong and revolutionary conclusions may be reached with surprising speed.

Many times the workers of the Czech Republic and Slovakia have shown a radical and revolutionary instinct. The proud fight of the Partisans, the movement in 1948 and 1968, and even the movement of 1989 should act as a warning to the incredibly short sighted ruling class the people will not stand and take it forever. Even in recent years with the impressively radical TV journalist strike in 2002, 100,000 demonstrating on Wenceslas Square in 2012 against austerity, corruption and the miners’ strikes which led to the occupation of the OKD offices in 2013 show that amongst this hardship there is a bubbling and powerful discontent.

33% of Czechs would like a return to the old regime. If 33% support the idea of going back to a bureaucratically planned economy then how many would support a democratically planned economy as part of an international socialist federation? If it were to be posed seriously, if such a party with the ideas and belief in the already proven revolutionary potential of the Czech workers were to be a serious and present force in society then the working classes when they do move, could be lead to a victory they need and deserve.