integration of large numbers of property owners which eventually lead to the
concentration and centralisation of property in the hands of fewer people.
This trend persisted throughout the whole of the 19th century and
undoubtedly lead to the transition from the stage of free competition to the
stage of monopolisation of the market and its division amongst the
wealthiest owners.
The conclusion which the followers of Marx arrived at in response to
this issue was for the specific period logical. They concluded that
monopolisation destroys free competition, mutates development and opens the
way for the socialist revolution. For Lenin, Trotskiy and, in particular,
for Stalin the socialisation of ownership was tantamount to nationalisation,
for all private property to come under the control of the authority of the
workers peasants. It is now clear that this approach led to the real
desocialisation of ownership and its alienation from people. In Western
Europe and the United States the ownership development trends moved in the
opposite direction. Anti-monopoly legislation was introduced and the
practice of stimulating small and medium scale business was developed along
wtih the expansion small shareholder.
I find this process a brilliant confirmation of the thesis of the
dialectics of socialisation and autonomation as well as the unity of the two
categories of globalisation and localisation. However, there is also another
possible conclusion which is equally important - the process of
socialisation can and must develop not by means of nationalisation but by
means of market forces. Lenin's prediction that the over-concentration of
capital would increase the contradictions of capitalism which would collapse
of its own accord did not come true. The concentration and centralisation of
capital have a definite limit beyond which the process of autonomation and
deregulation begins anew. The whole of the history of mankind is filled with
such waves of concentration and then autonomation of social structures.
Let us take a look at a number of major trends in the development of
property during the last three or four decades. The first of these is the
change of environment in which the private property owner finds himself. At
the end of the 20th century the private owner in Scandinavia, Germany,
France or the USA has nothing in common with the private owner of the 19th
century. A whole series of social laws oblige the private entrepreneur to
observe the laws of a minimum wage, health and safety, social security,
environmental requirements, training and re-training of staff etc.. Small,
medium and large-scale property owners have found themselves in an entirely
new market and social context. Their activities are influenced by consumer
councils, quality control, trade unions, independent media etc..
The totalitarian regime persisted in maintaining a distance between
"national ownership" and "the ownership of all workers and peasants" and its
citizens. The industrialised nations of the West, however, shortened the
distance between ownership and the mass of the people. The change in the
environment, control via market forces and anti-monopoly legislation
increased the unilateral nature of private and social interests. In the
1980's the owner of small shop in Bordeaux, Boston or Gutheburg was much
more socialised and integrated within society than the director of a state
shop in socialist Bulgaria or Czechoslovakia. The "private" owner is subject
to more social rules than his counterpart in a state shop. The private owner
cannot change prices at a whim, he has to observe very strict rules relating
to discipline, hygiene, the police and, most importantly, competition which
requires him to aspire to the highest possible levels. On the contrary, the
director of a state shop is dependent only on senior management and is
little interested in the consumers or local public opinion.
I remember a shop in the suburb of Sofia where I lived in the 1970's
and 1980's. It was dirty and inconvenient. The staff were impolite and rude.
Everyone in the area was dissatisfied but they were obliged to do their
shopping there. There was no other choice and little possibility of the
staff being replaced. Similar examples can be given in all areas of state
owned bureaucracies. The conclusion is obvious: nationalisation does not
mean socialisation. Administrative and bureaucratic control is not a
guarantee for citizens to assume ownership responsibility.
This alienation was the specific basis for the collapse of the Eastern
European totalitarian regimes but emphasises the general trend which is
taking place in the West as well. This is a trend towards the socialisation
of ownership or, in other words, the more complete integration of private
owners into civil society. This process manifests itself via the increase in
horizontal control upon free private activity: through competition;
international integration of millions of owners and, what is by far and away
the most important element, the direct involvement of millions and millions
of citizens as owners and co-owners of the means of production.
In the East powerful state ownership isolated the majority of its
citizens from the ownership of the means of production, in the West, as a
result of the opposite process, people felt more involved in the system and
in society. Albeit to varying extents, citizens' involvement in private
ownership was the most common feature of all the developed Western
countries. Initially, this was a faltering process, resembling "peoples'
capitalism", but with time this trend became more and more tangible and grew
in strength. In 1929, there were a little over 1 million shareholders in the
USA with a share value of about 1.5 billion dollars. By the mid 1980's there
were 42 million individual share owners[42]. Although they mainly
represent small share packages, the trend is indicative. On the other hand,
through their involvement in pension funds, the citizens of the USA own a
significant part of the share capital of the country. It is a relatively
well-known fact that the pension funds of the USA own about 25% of the
shares of all the major companies traded on the major world stock exchanges.
We might take a look at the shareholders in the large industrial
companies in Germany (see table 3). Although as in the USA, France or the
UK, the majority of shareholders are small and their votes exert hardly any
influence on company management, these figures are very indicative. They
show a stable trend affecting all sides of life.
Table 3
The number of individual shareholders in the ten largest German
companies.[43]
Branch
Company
No.Shareholders
Share of ind.shareholders
Other major owners
Automobile, aviation, electronics
Daimler Benz
470,000
62.7%
Deutsche Bank (24.4%) The Government of Kuwait (12.9)
Electronics, telecommu-nications
Simenz
607,000
over 90%
The Simenz family (7%)
Automobiles
Volkswagen
none
over 80%
The government of Lower Saxony (16%)
Energy production, Transport
Bebe Holding
405,000
none
Allianz Holding (12%)
Energy production, petrol
RWE AG
210,000
none
Local governments
Chemical industry
BASF
370,000
over 85%
Allianz Gruppe (14.4%)
Chemical industry
Bayer AG
295,000
over 60%
Banks and Insurance companies (38%)
Mettalurgy, commerce
Tissen AG
240,000
64.9%
Foundations and families (35%)
Machine production, telecommu-nications
Manesman AG
200,000
Over 95%
-
Energy Production
Chemical Production
Transport
WIAG AG
100,000
45-50%
Government of Bavaria, banks
Although differing in some specific details, the situation in Japan is
somewhat similar. The anti-monopoly measures introduced in Japan directly
after the Second World War changed the economic structure of the country and
deprived the most powerful Japanese families (Mizui, Mitsubishi, Sumimoto
etc.) of direct control over management. Over the past 30-40 years the
Japanese directors have used their joint efforts to create a number of very
powerful conglomerates combining the concentration of resources with strong
decentralisation in the decision-making processes. Moreover, from a formal
point of view, private ownership has been separated from management via a
tiered system of share-holding involvement. I would like here to mention a
Japanese study carried out in the 1970's but which is still applicable
today. In a classification of 189 large Japanese enterprises carried out on
the basis of type of ownership, 90% of them were controlled by senior
management on the basis of long-term empowerment rights entrusted to them by
the shareholders (table 4). Of course, here as everywhere in the
industrialised world, the "ownership" was distributed amongst hundreds of
thousands and millions of people making it expedient for it to be conceded
to management. I relate these trends in the development of the world in
general to the changes in what we refer to as democracy and technical
progress. The new trends in ownership on a world scale have been stimulated
throughout the 20th century by the clear impossibility of guarantee
uncontroversial development without the need for bridging the enormous gap
between the poor and the rich and the exploitation trap. On the other hand,
changes in ownership have been stimulated also by the need for greater
efficiency and also the technological changes of the past 20-30 years.
Table 4
Classification of 189 major Japanese corporations according to type of
ownership
Type of ownership and control
Number of companies
% of the total
Private ownership
0
0
Ownership of the majority of the capital
3
2
Ownership by shareholders owning up to 10-50% of the capital
17
8
Control by senior management
169
90
Total
189
100
Source: T.Kono. Strategy and Structure of Japanese Enterprises
McMillan, 1987, p.51.
On the basis of an analysis of the experience of the most developed 7
or 8 countries the following generalisations can be made:
First. The world is undergoing a slow but steady process of
socialisation of private ownership or the transition of private ownership
into a new social framework as a result of the development of labour
legislation, competition, market structures, financial capital and the
intermixing of millions of enterprises and their finances. To this extent
the socialisation of ownership is inseparable from the progress and the
development of history in general.
Second. If private ownership is subjected to constant socialisation
this is due to the involvement of a growing number of people as owners and
co-owners of the means of production. Through the involvement of a growing
number of shareholders the ownership of the large economic structures
becomes diffused and the significance of the large family properties becomes
reduced.
Third. The management of ownership is subjected simultaneously to two
trends - socialisation or the combination of millions of owners in common
systems (or common regulations) and deregulation caused by the impossibility
of large socialised ownership to be centrally managed. Ownership is divided
between more and more people in the world. It is managed in a more
decentralised manner but it is also socialised through the voluntary
combination of millions of individual properties.
Fourth. The technological and social processes came into conflict with
the alienated form of ownership which existed in the Eastern European
countries until 1989. Inequality amongst the people living in the conditions
of totalitarian socialism led not only to a lack of stability and social
guarantees but also to alienation from authority and ownership. From a
purely formal point of view, all the citizens of these countries were the
owners of the means of production but in reality ownership was exercised by
a minority.
Fifth. The opening up of the world and globalisation have provided the
stimulus to international forms of ownership, to the intermixing of more and
more private, share-holding and mixed forms of capital.
These five irreversible trends are a direct expression of what I would
call a new synthesis. Private ownership in the manner in which the classic
proponents of political economics of the 19[th] century portrayed
it is dead. Social ownership or the "ownership of the people" as advocated
by Lenin, Stalin and Brezhnev no longer exists. It is practically absurd to
make contrasts between social systems divided on the basis of private versus
socialised ownership. Other forms of ownership which typify the genesis of
the Fourth Civilisation are coming onto the agenda. It is easiest to refer
to this type of ownership as "mixed". When in the 1950's and 1960's
P.Samuelson first used this term, it appeared at the time to be correct. At
that time the level of socialisation and autonomisation of ownership was at
such a level that the processes of "mixing" had indeed begun. However, this
was rather a fusion of state and private property (Western Europe and Japan)
and the large family enterprises and millions of private owners in the USA.
In the 1970's, 1980's and 1990's the process of deregulation and
socialisation of ownership entered a new phase caused by the acceleration of
globalisation, the appearance of new integrating technologies and the
related social processes. For this reason, to continue to use the
intermediate term "mixed ownership", in my opinion is inappropriate. There
is little doubt that today and in coming decades we shall have many, many
types of "mixed ownership". Mixed ownership is a recurrent theme during the
entire duration of the transition from the Third to the Fourth Civilisation.
Nevertheless it is a remnant of the past, a combination of the two
predominant forms of ownership which existed in the 19th and 20th centuries.
A typical feature of the Third Civilisation was private individual
ownership. For the duration of the transition between the Third and Fourth
Civilisations, the typical features will be the differing forms of mixed
ownership. A typical feature of the Fourth Civilisation will be integrated
(socialised) and multi-sector ownership.
By the term "integrated ownership" I do not mean corporate ownership
but the completion of the processes of corporatisation. Integrated ownership
is maximally individualised and maximally socialised ownership.
Individualised - with individualised rights (decision making, control,
profit sharing). Socialised - as a system of juridical, economic, social and
moral standards which each owner is obliged to observe and which places
individual, group, national and global interests in a common dimension.
Today the thousands of computerised companies involved in management,
software, legal services provide a prototype for the future. Their success
is due to the horizontal structures of management, share-holding involvement
in ownership, mutuality and the realisation of a commonality of interests.
These have been the dominant trends within the majority of modern companies
since the 1980's. They no longer have a single distinct owner as a result of
the appearance of a multitude of new industrial and institutional ownerships
in the industrial and financial corporations. Modern corporations, however,
are not only losing their single family owner, they are at the same time
restoring many of the rights of the professional shareholders and, most
significantly, control over management and allocation of profit.
To give an illustration of this I will use the well structured approach
of the American researcher D.Margota (table 5). While during the period from
the 1930's to the 1980's responsibility (management) and control gradually
passed into the hands of the managers, after the 1980's the predominant
trend has been for control to pass into the hands of the shareholders.
Computer technology and modern management schemes have allowed for these
developments. In general terms, modern corporations have been obliged
constantly to increase their capital. One result of this has been the
closure and disintegration of family ownership, the decentralisation of
management and control and the impositon of more and more rules from
"without". In the 1930's - 1980's we underwent a management revolution.
After the 1980's the revolution developed into two parallel revolutions -
globalisation and the blue collar revolution. The role of the highly skilled
worker has become more prevalent in ownership and control and will continue
to increase in significance in the coming decades.
Table 5
The development of control and responsibility in modern corporations.
Corporations pre 1930
Corporations 1930-1980
Corporations post 1980
Owner/Manager
Ownership, control, responsibility, (management)
-
-
Managers (non-owners)
-
Control
Responsibility (management)
Responsibility (management)
Owners of shares, employed in corporations
Ownership
Ownership
Ownership, control
Individual external owners
Ownership
Ownership
Ownership
Source: D. Margotta, The Separation of Ownership and Responsibility in
the Modern Corporation.
Business Horizons, Jan-Feb, 1989
What is happening in the millions of small and medium juridically
independent companies? In Western Europe, Japan and the USA they have been
appearing as spin-offs from the larger companies or entering into the
periphery of large-scale production processes within the distribution,
commercial or financial systems. The ideal private owner died at some time
between 1950 and 1970. The era of the old Grandee or other Balsacian hero
who spent every evening counted out his profits has passed. The time of the
standardised and integrated owner has come. He buys his franchise from
"Pizza Hut" or makes plastic mouldings for "General Motors" or sells pears
to "Kaufman". Everything and everyone is already involved in integrated and
intermixed forms of ownership. All are already socialised to some extent. If
anyone remains unintegrated, he will either die or become a member of the
group of social outsiders who are of use to no-one.
I have been speaking here of the determining trends which have come to
us from the industrialised nations and about what drives the transition and
defines tomorrow. Why do I believe that despite the enormous differences in
the economic levels of different countries these trends will impose
themselves? The reason is that these are trends which have appeared as a
result of modern technology, from the character of globalisation and which
have been valid for four fifths of world manufacturing history. Of course,
different societies will approach the common features of the Fourth
Civilisation gradually from different starting points and on different
paths. There is no doubt, however, about their common fate. This is the fate
of progress...
2. POST-CAPITALISM
In November 1989 when the Berlin Wall came down everyone proclaimed the
victory of capitalism. In actual fact, capitalism was itself beginning to
draw its last breath - slowly and quietly dying like a victorious warrior.
T
here are no frozen social systems, or eternal mechanisms of government.
The most dynamic element is technology and the least dynamic - economic
relations. The most lasting and conservative elements are the political
systems. However, there is no such thing as an eternal system. Capitalism
passed through an early feudal stage, reached its height when free
competition dynamised the whole system and then fell victim to the struggles
between empires, two world wars and hundreds of colonial wars.
Daniel Bell quotes a quite remarkable thought by the Arab philosopher
Ibn Haldun, "Societies pass through specific phases whose transformations
are a symptom of their own fall[44]. This is true of every
society. They develop, they achieve a certain level of progress and reach
their own heights of development. Then all . societies destroy themselves.
This does not always happen through revolutions, turbulence and violence but
through reforms and reformation of the roots and culture of life. Capitalism
in Western Europe and North America was different from capitalism in Japan
and probably more distinct from the forms of capitalism in Latin America.
Today there are similar processes taking place everywhere. They are perhaps
more rapid and remarkable in the USA, Europe and Japan, more anaemic in
Brazil and Argentina and more accelerated in South Korea etc..
What were the typical characteristics of capitalism? In the 19th
century and up until to the middle of the 20th century they were the
division of society into the bourgeoisie and proletariate: the growing
differentiation between the poor and the rich; the domination of economic
and political life by a group of monopolists and nationalism and colonialism
aimed at the economic and political division of the world. There are no
doubt many other features of capitalism which could be added. However, these
are the main features of what remains of classical capitalism.
The transformations of ownership mentioned above demonstrate clearly
that the bourgeoisie which existed 40-50 or even 100 years ago practically
no longer exists. It is not a homogenous class with a dominant place in
society or a single, unified attitude to the means of production, as Lenin
might have called it. The class of the rich has not disappeared in the USA,
Japan or in Germany. However, it is different in essence and character. Most
importantly, the traditional owners of the means of production are of much
less significance and have been replaced by managers, associated groups of
small and medium owners, media magnates, the stars of show business and
innovators. The division, diffusion and socialisation of ownership has lead
to the decay of the bourgeoisie. It has disintegrated into different groups
sometimes with conflicting interests. Significantly, the origin of ownership
is no longer based solely on inheritance. Indeed, the majority of the
wealthiest people mentioned in "Forbes" have not inherited their wealth but
have accumulated it as a result of their own enterprise. The most famous
example of this is Bill Gates, the creator and owner of MicroSoft. The old
bourgeoisie has its successors in the same way as the feudal aristocracy has
its own exotic representatives. None of these, however, fall within these
categories. One group of the former bourgeoisie which has not managed to
adapt to the requirements of modern competition has begun to resemble the
middle class in terms of income and way of life.
There have been more serious changes in what Marx and Engels referred
to in the 19th century as the "proletariate". In the 1930's and 1940's the
proletariate in the USA and Europe was still an homogenous group with a
clear place in society. Today, this class and even such a social group does
not exist. Technological progress has led to the disappearance of the
proletariate and divided it into different social groups. A large number of
former proletarians are now involved in the growing services sector. Today,
the number of traditional factory workers has declined to 20-25% of the
active population in the majority of the industrialised countries. The
workers themselves are more diversified and many of them are now employed in
intellectual rather than physical labour. "Intellectual workers and those
employed in the services sector", wrote P.Drucker with justification, "are
not classes in the traditional meaning of the word".[45] Neither
are they the proletariate in the Marxist meaning of the word. It is no
accident that the movements of employees and trade unions in the most
developed industrialised countries during the last 15-20 years have reduced
significantly.
In the most developed 24 countries of the world there is a large group
of citizens, in some cases more than 50-60% of the population with
relatively stable middle-incomes which permit a high standard of living. On
the other hand the ratio in income between the richest and the poorest has
begun gradually to reduce. 60 or 70 years ago the incomes of the richest
families were ten or more, even hundred time greater than the average
incomes of the poor. According to the statistics of the World Bank at the
end of the 1980's, the ratio of income between the richest and the poorest
20% of the population was as follows: USA 7.5; Japan 4.3; Germany 5.0;
Belgium 4.6; France 7.7 and Italy 7.1. The number of the extremely wealthy
and the extremely poor has begun to reduce significantly. There have been
changes in the social conditions of the unemployed. Social benefits for
pensioners and young people in Austria, for example, have reached levels
unheard of in Eastern Europe.
I am far from convinced that the developed nations of the West and
Japan have resolved all their social problems or that they have created an
harmonious society. I can, however, state clearly that the foundations of
capitalism have been destroyed and that the Western European countries have
outgrown capitalism. They are now in the process of transition to something
different, something new and clearly demonstrated by the evolution of the
market and market relations. The liberal market of the 19th and 20th
centuries was the basis of mature capitalism. Its zenith was symbolised by
the boom of electricity, internal combustion engines and the charm of Paris
by night. The main feature of the market was the free exchange of goods, the
formation of market values and, consequently, the stimulation of one or
other type of production. Monopolisation of production has modified the
basic categories of the market but has not abolished its role as the main
regulator of economic life. The major question is the development of the
market after the boom of small and medium scale business, demonoplisation
and the computer revolution. I believe that we are at the beginning of a
process of transition from post-monopolistic market to a situation of
horizontal market relations. I believe that J. K. Galbraith was the first to
turn his attention to such an idea. Many people who clearly seem to be used
to the concept of the market find it difficult to believe that this great
invention of the Third Civilisation might be replaced by something else.
Indeed, the market will not be replaced by any form of ready-made
committee-designed model. The market will simply be revolutionised by new
technology and the replacement of traditional supply and demand by the
super-organised planning of consumption, its stimulation and satisfaction
with a perfect system of organised manufacturing. In the developed countries
entire sectors of the markets are already being traded as futures; stock
exchanges react to the smallest of changes, managers act within the tightest
of limits and if they get it wrong they simply leave the game. This is true
of the automobile and plane building industries, space technology, computers
and practically types of high technology as well as many other sectors.
Credit cards, smart cards, cash dispensing machines and all methods of
electronic payment have been extremely influential on the transformation of
the market. They may by some be considered as merely new forms of market
mechanisms. However, in my opinion these technological innovations have
outlined a trend towards a transition from the basic market mechanisms to
principally new social relations and a new state of the market. For the
moment these are still only trends in the most developed parts of the world.
However, the improvement in efficiency which they offer will lead to their
inevitable expansion to other parts of the world in the same way as
electricity or the radio and television.
New computers and communication technologies have a multiplying effect
on all countries and markets. They are the basis of the fundamental changes
in the way in which business in done. This has led to a change in the nature
of supply and demand and the transition from the "trade in goods" to the
"trade in ideas". It will not be too far into the future when new computer
networks will allow consumers to place their orders even before a particular
article is produced, at the stage of its inception and design.
Consumers will become the managers of production. They will reject what
they consider unnecessary and predetermine the type, quantity and quality of
goods. In California there is already a computer trade network where
consumers can order goods in this way.The stage of exchange will become
strongly modified and the market will become a bridge between demand and
manufacture.
At the beginning of the 1950's Joseph Stalin in one his most
"remarkable" works[46] predicted the disappearance of the
relationship between goods and money. His approach of destroying money
through total nationalisation inflicted heavy damage to many Eastern
European nations and Asian peoples. By destroying the market and money
through bureaucracy, Stalin and his followers also destroyed freedom and man
himself. In 1986 in one of my early works I wrote that "money-goods
relations will disappear only when they reach the peak of their development,
when the market itself reaches a stage of perfection and not by moving
against the current of development." I believe that a similar process is
taking place today. With our new computer networks we now have the
exceptional opportunity of changing the nature of exchange and removing
inequality and monopolistic profits. I do not doubt that the new computer
networks (such as the Internet) will create a revolution in the market and
will transform us into an amazingly well organised environment for the
exchange of needs, ideas, opportunities and goods. Such possibilities are
being predicted for the financial markets and relations between banks and
between banks and their customers. At the beginning of 1996 the founder of
MicroSoft, Bill Gates outlined in one of his articles some exciting new
ideas which would revolutionise banking. No-one, not the bankers or the
corporations or small and medium business, not even show business or the
individual can ignore these changes.
What is happening to the capitalist society? Gradually, slowly, it is
become uprooted and changing its basic nature. P.Drucker came to the
conclusion that capitalist society is being re-born into a society of
knowledge and a society of organisations. I agree entirely with his use of
the term "the post-capitalist society".[47]
The question whether the most developed societies in Europe, America
and Japan have turned into societies of organisations is clearly much more
complex. Undoubtedly the process of globalisation which is taking place at
the moment via the transnational corporations (organisations) limits the
nation state while increasing their own role. However, I feel that this is
an inadequate description of post-capitalist societies under change.
I would make the following generalisation: there four major processes
which have changed and will further change the nature of capitalist
societies. The first of them is the socialisation and re-distribution of
ownership. The second is the profound nature of the changes in the social
and class structures, the disappearance of traditional classes and the
appearance of new social strata. The third is the integration of the market
economy and the replacement of the typical capitalist market with a highly
organised system of exchange and distribution of goods. The fourth is the
limitation of the role of the nation state and the globalisation and growth
in the role of organisations (manufacturing and non-manufacturing).
All these processes have progressed so far at the end of the 20th
century that it is possible already to speak of the evolutionary renaissance
of the capitalist society and the existence of post-capitalist relations in
all the industrialised countries (with the exception of the ex-communist).
Of course, there are slight structural exceptions, e.g. the management and
structural models of the USA and Japan. I also accept the distinguishing
features of the American and the Rhine model (Germany, France, Austria
etc.). There is, however, no doubt that all four processes are taking place
in the industrialised countries and a consequence of the global market is
that the differences between them are constantly reducing. They will not
disappear completely, in fact some of them may produce other differences.
Nevertheless, the common movement towards a new civilisation will continue.
Capitalism is indeed dying. Proudly and quietly, like a victorious
warrior in a pyrric victory.
3. POST-COMMUNISM
The post-communist countries had three possible directions of
development: backwards to the ashen illusions of neo-communism; forwards to
primitive capitalism; or towards the challenges of the Fourth Civilisation.
D
uring the first years after the collapse of the Eastern European
totalitarian regimes, certain more avid supporters of the former communist
parties began to state publicly their beliefs that communist ideology after
all was not such a bad thing and that in reality communism had not really
been implemented properly. The systems which had existed in Russia and the
other smaller Eastern European countries had been a mutated form of
socialist ideas. They developed their beliefs that at some time in the
future communism might reappear. These are not only the ideas of demagogues,
but hypocrites. It is true that the society which existed in Eastern Europe
was, according to official doctrines, not "communist" but "socialist", and
that this was the "first stage of communism", the "first, lowest stage of
communism". All of us who lived at that time in Eastern Europe had to
believe that sooner or later the "glorious future" would arrive. I mention
this at the beginning since I have met critics who categorically reject the
term "post-communism". Nevertheless, the term post-communist means that
communism has been overcome and that it will never return. It is not only a
rejection of a doctrine but also a specific way of thinking.
The post-communist period for the whole of Eastern Europe, Russia and
to a large extent such countries as China and Cuba is indeed unique. Not to
understand this uniqueness is one of the greatest errors of the 20th century
which has caused and will continue to cause much damage to the Eastern
European nations. When I speak of uniqueness, I mean that at the end of the
1980's the countries of Central and Eastern Europe and Russia possessed an
integrated material and technological infrastructure. At that time the GDP
per head of population in Eastern Europe was between 2 and 6 thousand
dollars, i.e. at the level of the medium developed countries. At the time of
the changes these countries had a well-educated population, highly developed
culture and significant social benefits.
Should the post-communist countries have accepted the ideology and
forms of development more typical of primitive capitalism? Everything which
I have said until now is a clear indication that the global changes at the
end of the 20th century have a common, civilising approach not merely a
change of regime in Eastern Europe. There were two main choices for the
post-communist countries after the failure of perestroika: either to reject
their past and begin afresh with the development of capitalism or to join
the common movement towards a new civilisation. The first of these paths was
more attractive in terms of ideology but much more short-sighted. The second
meant to accept the forms of development of post-capitalism and on this
basis to begin the conscious reconstruction of the former socialist
societies.
In practice the revolutionaries of 1989 did not stop to ponder this
dilemma. The collapse of perestroika threw the Eastern European countries
into political battles, conflicts and the collapse not only of the
totalitarian structures but also of the major management, industrial and
social mechanisms. This collapse in practice led to the universal
predomination of emotions and political conflicts over rational and sensible
economic changes. In the first few months after the fall of the Berlin wall,
in Prague, Sofia and in Bucharest nothing was sacred. Their entire past
history was rejected - decades during which several hundred million people
had lived were rejected. The old nomenclature was purged in the most
impulsive manner and replaced by new, inexperienced leaders. It took some
time for emotions to settle and for the stress of the "gentle revolutions"
to subside.
On the whole 1989--1991 in Eastern Europe was the beginning of an
abrupt, impulsive process of capital accumulation. For a certain period a
number of extreme anti-communist movements gained popularity. Some wanted
revenge, other wanted radical revolutionary reforms. The movements copied to
greater or lesser extents the solutions and models of the beginning of
capitalist development. As a result, all the Eastern European countries
found themselves facing similar phenomena - falling production, the
destruction of regional economic links, widespread crime and corruption and
the indiscriminate re-distribution of capital. These phenomena were
particularly marked in Russia, Bulgaria, Albania and to a certain extent in
Rumania. The countries of the Visegrad group and Slovenia were less
affected.
The greatest contradiction of the "liberal" anti-communist model was
the re-distribution of ownership. For half a century (in Russia 70 years)
the citizens of Eastern Europe had lived in conditions of uniformity and the
domination of egalitarian ideas. To a large extent the gentle revolutions of
the end of the 1980's were based economically on the fact that the communist
elite had accrued vast privileges for themselves and had become transformed
into an economically dominant social stratum. This was the pre-dominant
propaganda which was used in the majority of the Eastern European countries
in 1989-1990.
For the same reasons the populations of these countries did not accept
the rapid disintegration of society into rich and poor and the usurping of
former "socialist" property by a small group of the nouveaux riches.
Legislation guaranteeing the restitution of property in Bulgaria, Rumania,
Hungary and elsewhere created in many people a sense of revenge. Even after
the processes of mass privatisation in the Czech Republic and Russia the
majority of the population felt deceived and did not receive any direct
economic dividends from the economic changes. It was not so much the
absolute scale of poverty but the nature of social differentiation and the
collapse of social guarantees which led to a tangible level of
dissatisfaction amongst the populations and a move towards the left. After
the return to power of the former communist parties in Poland, Hungary,
Slovakia and Bulgaria, however, the processes of social division continued.
The new capital accumulated at the beginning of the 1990's attempted to play
the leading role in the processes of privatisation and to accrue more and
more wealth. Mass privatisation, most significantly in Russia, led to the
concentration of privatisation vouchers in the hands of a small group of
extremely wealthy owners who acquired the ownership of enormous production
potential for a fraction of its real value. To a lesser extent the same
thing happened in Czechoslovakia and a similar picture of social division
can be expected in Bulgaria after mass privatisation.
The post-communist countries are experiencing a common crisis of
identity and profound political contradictions. If they lead to a
stratification of society into a small group of wealthy people (5-7%) and a
large group of people deprived of any ownership of the means of production,
this will be a backwards step. In reality these countries will return to a
state from which the industrialised countries have already progressed and to
outdated social models. If the division of ownership in Eastern Europe
creates class divisions then it is extremely possible for this to create a
chain reaction with exceptionally adverse consequences for the process of
reform and the transition to a Fourth Civilisation. Clearly the collapse of
the Eastern European societies into classes will not send them into the New
Civilisation but will hold them back in the grips of the old. The peoples of
these countries will have to experience its contradictions and to struggle
with the problems which the Western countries have already overcome. This
will cause difficulties for the socialisation of ownership and will render
the reconstruction of the market impossible leading to a revival of
bureaucracy and the bureaucratic state. We should not be surprised that such
a transition will not only return the former communist parties to power but
also the "strong hand" governments of corrupt politicians and combinations
of the two. This will be extremely unfavourable for the development of the
Eastern European states and at the same time it will be a retarding factor
for the whole of world development, especially if such processes are allowed
to take place in Russia, China and other larger countries.
The question arises whether it is at all possible for the former
totalitarian states to make the transition directly to the Fourth
Civilisation. My response is entirely positive. The relatively good material
infrastructure of the Eastern European countries, the high level of
education and culture of the population as well as the experience of
communism as one type of social development are all factors which create a
basis for the transition to new types of relations without passing through
the phase of initial capital accumulation. The technology of such a
transition has been inadequately researched but it is absolutely applicable
on the basis ofthe results of the period between 1990-1995.
Above all, in order to accomplish such a process of development and to
approach the level of the industrialised countries and the trends of the
Fourth Civilisation it will be necessary to achieve some sort of minimal
political consensus. If confrontations and instability continue, and if
behind the facade of the "political struggle" corruption and crime is
allowed to flourish, the post-communist countries will regress at least
30-50 years into the past. Only common will and the consolidation of society
will redirect their material and cultural heritage towards the framework of
the emerging new civilisation.
The second great problem is the redistribution of ownership. As I have
already mentioned, this process has begun with restitution, or the return of
property nationalised at the end of the 1940's. This process, if it takes
place within real limits, will throw the post-communist states into serious
conflicts which are unnecessary at the end of the 20th century. The example
of the Bulgaria is particularly indicative. However, even if privatisation
is carried out without restitution, as in Russia and if it is carried out
with the out-dated methods of the time of "wild capitalism", this will not
lead to any positive results. The main aim of privatisation is to dynamise
the post-communist societies, to form civil societies and for the majority
of the citizens to receive some form of ownership of the means of
production. A society of voluntarily associated owners is the alternative to
totalitarianism, the class society and primitive capitalism. In order to
concentration and centralisation of property in the hands of fewer people.
This trend persisted throughout the whole of the 19th century and
undoubtedly lead to the transition from the stage of free competition to the
stage of monopolisation of the market and its division amongst the
wealthiest owners.
The conclusion which the followers of Marx arrived at in response to
this issue was for the specific period logical. They concluded that
monopolisation destroys free competition, mutates development and opens the
way for the socialist revolution. For Lenin, Trotskiy and, in particular,
for Stalin the socialisation of ownership was tantamount to nationalisation,
for all private property to come under the control of the authority of the
workers peasants. It is now clear that this approach led to the real
desocialisation of ownership and its alienation from people. In Western
Europe and the United States the ownership development trends moved in the
opposite direction. Anti-monopoly legislation was introduced and the
practice of stimulating small and medium scale business was developed along
wtih the expansion small shareholder.
I find this process a brilliant confirmation of the thesis of the
dialectics of socialisation and autonomation as well as the unity of the two
categories of globalisation and localisation. However, there is also another
possible conclusion which is equally important - the process of
socialisation can and must develop not by means of nationalisation but by
means of market forces. Lenin's prediction that the over-concentration of
capital would increase the contradictions of capitalism which would collapse
of its own accord did not come true. The concentration and centralisation of
capital have a definite limit beyond which the process of autonomation and
deregulation begins anew. The whole of the history of mankind is filled with
such waves of concentration and then autonomation of social structures.
Let us take a look at a number of major trends in the development of
property during the last three or four decades. The first of these is the
change of environment in which the private property owner finds himself. At
the end of the 20th century the private owner in Scandinavia, Germany,
France or the USA has nothing in common with the private owner of the 19th
century. A whole series of social laws oblige the private entrepreneur to
observe the laws of a minimum wage, health and safety, social security,
environmental requirements, training and re-training of staff etc.. Small,
medium and large-scale property owners have found themselves in an entirely
new market and social context. Their activities are influenced by consumer
councils, quality control, trade unions, independent media etc..
The totalitarian regime persisted in maintaining a distance between
"national ownership" and "the ownership of all workers and peasants" and its
citizens. The industrialised nations of the West, however, shortened the
distance between ownership and the mass of the people. The change in the
environment, control via market forces and anti-monopoly legislation
increased the unilateral nature of private and social interests. In the
1980's the owner of small shop in Bordeaux, Boston or Gutheburg was much
more socialised and integrated within society than the director of a state
shop in socialist Bulgaria or Czechoslovakia. The "private" owner is subject
to more social rules than his counterpart in a state shop. The private owner
cannot change prices at a whim, he has to observe very strict rules relating
to discipline, hygiene, the police and, most importantly, competition which
requires him to aspire to the highest possible levels. On the contrary, the
director of a state shop is dependent only on senior management and is
little interested in the consumers or local public opinion.
I remember a shop in the suburb of Sofia where I lived in the 1970's
and 1980's. It was dirty and inconvenient. The staff were impolite and rude.
Everyone in the area was dissatisfied but they were obliged to do their
shopping there. There was no other choice and little possibility of the
staff being replaced. Similar examples can be given in all areas of state
owned bureaucracies. The conclusion is obvious: nationalisation does not
mean socialisation. Administrative and bureaucratic control is not a
guarantee for citizens to assume ownership responsibility.
This alienation was the specific basis for the collapse of the Eastern
European totalitarian regimes but emphasises the general trend which is
taking place in the West as well. This is a trend towards the socialisation
of ownership or, in other words, the more complete integration of private
owners into civil society. This process manifests itself via the increase in
horizontal control upon free private activity: through competition;
international integration of millions of owners and, what is by far and away
the most important element, the direct involvement of millions and millions
of citizens as owners and co-owners of the means of production.
In the East powerful state ownership isolated the majority of its
citizens from the ownership of the means of production, in the West, as a
result of the opposite process, people felt more involved in the system and
in society. Albeit to varying extents, citizens' involvement in private
ownership was the most common feature of all the developed Western
countries. Initially, this was a faltering process, resembling "peoples'
capitalism", but with time this trend became more and more tangible and grew
in strength. In 1929, there were a little over 1 million shareholders in the
USA with a share value of about 1.5 billion dollars. By the mid 1980's there
were 42 million individual share owners[42]. Although they mainly
represent small share packages, the trend is indicative. On the other hand,
through their involvement in pension funds, the citizens of the USA own a
significant part of the share capital of the country. It is a relatively
well-known fact that the pension funds of the USA own about 25% of the
shares of all the major companies traded on the major world stock exchanges.
We might take a look at the shareholders in the large industrial
companies in Germany (see table 3). Although as in the USA, France or the
UK, the majority of shareholders are small and their votes exert hardly any
influence on company management, these figures are very indicative. They
show a stable trend affecting all sides of life.
Table 3
The number of individual shareholders in the ten largest German
companies.[43]
Branch
Company
No.Shareholders
Share of ind.shareholders
Other major owners
Automobile, aviation, electronics
Daimler Benz
470,000
62.7%
Deutsche Bank (24.4%) The Government of Kuwait (12.9)
Electronics, telecommu-nications
Simenz
607,000
over 90%
The Simenz family (7%)
Automobiles
Volkswagen
none
over 80%
The government of Lower Saxony (16%)
Energy production, Transport
Bebe Holding
405,000
none
Allianz Holding (12%)
Energy production, petrol
RWE AG
210,000
none
Local governments
Chemical industry
BASF
370,000
over 85%
Allianz Gruppe (14.4%)
Chemical industry
Bayer AG
295,000
over 60%
Banks and Insurance companies (38%)
Mettalurgy, commerce
Tissen AG
240,000
64.9%
Foundations and families (35%)
Machine production, telecommu-nications
Manesman AG
200,000
Over 95%
-
Energy Production
Chemical Production
Transport
WIAG AG
100,000
45-50%
Government of Bavaria, banks
Although differing in some specific details, the situation in Japan is
somewhat similar. The anti-monopoly measures introduced in Japan directly
after the Second World War changed the economic structure of the country and
deprived the most powerful Japanese families (Mizui, Mitsubishi, Sumimoto
etc.) of direct control over management. Over the past 30-40 years the
Japanese directors have used their joint efforts to create a number of very
powerful conglomerates combining the concentration of resources with strong
decentralisation in the decision-making processes. Moreover, from a formal
point of view, private ownership has been separated from management via a
tiered system of share-holding involvement. I would like here to mention a
Japanese study carried out in the 1970's but which is still applicable
today. In a classification of 189 large Japanese enterprises carried out on
the basis of type of ownership, 90% of them were controlled by senior
management on the basis of long-term empowerment rights entrusted to them by
the shareholders (table 4). Of course, here as everywhere in the
industrialised world, the "ownership" was distributed amongst hundreds of
thousands and millions of people making it expedient for it to be conceded
to management. I relate these trends in the development of the world in
general to the changes in what we refer to as democracy and technical
progress. The new trends in ownership on a world scale have been stimulated
throughout the 20th century by the clear impossibility of guarantee
uncontroversial development without the need for bridging the enormous gap
between the poor and the rich and the exploitation trap. On the other hand,
changes in ownership have been stimulated also by the need for greater
efficiency and also the technological changes of the past 20-30 years.
Table 4
Classification of 189 major Japanese corporations according to type of
ownership
Type of ownership and control
Number of companies
% of the total
Private ownership
0
0
Ownership of the majority of the capital
3
2
Ownership by shareholders owning up to 10-50% of the capital
17
8
Control by senior management
169
90
Total
189
100
Source: T.Kono. Strategy and Structure of Japanese Enterprises
McMillan, 1987, p.51.
On the basis of an analysis of the experience of the most developed 7
or 8 countries the following generalisations can be made:
First. The world is undergoing a slow but steady process of
socialisation of private ownership or the transition of private ownership
into a new social framework as a result of the development of labour
legislation, competition, market structures, financial capital and the
intermixing of millions of enterprises and their finances. To this extent
the socialisation of ownership is inseparable from the progress and the
development of history in general.
Second. If private ownership is subjected to constant socialisation
this is due to the involvement of a growing number of people as owners and
co-owners of the means of production. Through the involvement of a growing
number of shareholders the ownership of the large economic structures
becomes diffused and the significance of the large family properties becomes
reduced.
Third. The management of ownership is subjected simultaneously to two
trends - socialisation or the combination of millions of owners in common
systems (or common regulations) and deregulation caused by the impossibility
of large socialised ownership to be centrally managed. Ownership is divided
between more and more people in the world. It is managed in a more
decentralised manner but it is also socialised through the voluntary
combination of millions of individual properties.
Fourth. The technological and social processes came into conflict with
the alienated form of ownership which existed in the Eastern European
countries until 1989. Inequality amongst the people living in the conditions
of totalitarian socialism led not only to a lack of stability and social
guarantees but also to alienation from authority and ownership. From a
purely formal point of view, all the citizens of these countries were the
owners of the means of production but in reality ownership was exercised by
a minority.
Fifth. The opening up of the world and globalisation have provided the
stimulus to international forms of ownership, to the intermixing of more and
more private, share-holding and mixed forms of capital.
These five irreversible trends are a direct expression of what I would
call a new synthesis. Private ownership in the manner in which the classic
proponents of political economics of the 19[th] century portrayed
it is dead. Social ownership or the "ownership of the people" as advocated
by Lenin, Stalin and Brezhnev no longer exists. It is practically absurd to
make contrasts between social systems divided on the basis of private versus
socialised ownership. Other forms of ownership which typify the genesis of
the Fourth Civilisation are coming onto the agenda. It is easiest to refer
to this type of ownership as "mixed". When in the 1950's and 1960's
P.Samuelson first used this term, it appeared at the time to be correct. At
that time the level of socialisation and autonomisation of ownership was at
such a level that the processes of "mixing" had indeed begun. However, this
was rather a fusion of state and private property (Western Europe and Japan)
and the large family enterprises and millions of private owners in the USA.
In the 1970's, 1980's and 1990's the process of deregulation and
socialisation of ownership entered a new phase caused by the acceleration of
globalisation, the appearance of new integrating technologies and the
related social processes. For this reason, to continue to use the
intermediate term "mixed ownership", in my opinion is inappropriate. There
is little doubt that today and in coming decades we shall have many, many
types of "mixed ownership". Mixed ownership is a recurrent theme during the
entire duration of the transition from the Third to the Fourth Civilisation.
Nevertheless it is a remnant of the past, a combination of the two
predominant forms of ownership which existed in the 19th and 20th centuries.
A typical feature of the Third Civilisation was private individual
ownership. For the duration of the transition between the Third and Fourth
Civilisations, the typical features will be the differing forms of mixed
ownership. A typical feature of the Fourth Civilisation will be integrated
(socialised) and multi-sector ownership.
By the term "integrated ownership" I do not mean corporate ownership
but the completion of the processes of corporatisation. Integrated ownership
is maximally individualised and maximally socialised ownership.
Individualised - with individualised rights (decision making, control,
profit sharing). Socialised - as a system of juridical, economic, social and
moral standards which each owner is obliged to observe and which places
individual, group, national and global interests in a common dimension.
Today the thousands of computerised companies involved in management,
software, legal services provide a prototype for the future. Their success
is due to the horizontal structures of management, share-holding involvement
in ownership, mutuality and the realisation of a commonality of interests.
These have been the dominant trends within the majority of modern companies
since the 1980's. They no longer have a single distinct owner as a result of
the appearance of a multitude of new industrial and institutional ownerships
in the industrial and financial corporations. Modern corporations, however,
are not only losing their single family owner, they are at the same time
restoring many of the rights of the professional shareholders and, most
significantly, control over management and allocation of profit.
To give an illustration of this I will use the well structured approach
of the American researcher D.Margota (table 5). While during the period from
the 1930's to the 1980's responsibility (management) and control gradually
passed into the hands of the managers, after the 1980's the predominant
trend has been for control to pass into the hands of the shareholders.
Computer technology and modern management schemes have allowed for these
developments. In general terms, modern corporations have been obliged
constantly to increase their capital. One result of this has been the
closure and disintegration of family ownership, the decentralisation of
management and control and the impositon of more and more rules from
"without". In the 1930's - 1980's we underwent a management revolution.
After the 1980's the revolution developed into two parallel revolutions -
globalisation and the blue collar revolution. The role of the highly skilled
worker has become more prevalent in ownership and control and will continue
to increase in significance in the coming decades.
Table 5
The development of control and responsibility in modern corporations.
Corporations pre 1930
Corporations 1930-1980
Corporations post 1980
Owner/Manager
Ownership, control, responsibility, (management)
-
-
Managers (non-owners)
-
Control
Responsibility (management)
Responsibility (management)
Owners of shares, employed in corporations
Ownership
Ownership
Ownership, control
Individual external owners
Ownership
Ownership
Ownership
Source: D. Margotta, The Separation of Ownership and Responsibility in
the Modern Corporation.
Business Horizons, Jan-Feb, 1989
What is happening in the millions of small and medium juridically
independent companies? In Western Europe, Japan and the USA they have been
appearing as spin-offs from the larger companies or entering into the
periphery of large-scale production processes within the distribution,
commercial or financial systems. The ideal private owner died at some time
between 1950 and 1970. The era of the old Grandee or other Balsacian hero
who spent every evening counted out his profits has passed. The time of the
standardised and integrated owner has come. He buys his franchise from
"Pizza Hut" or makes plastic mouldings for "General Motors" or sells pears
to "Kaufman". Everything and everyone is already involved in integrated and
intermixed forms of ownership. All are already socialised to some extent. If
anyone remains unintegrated, he will either die or become a member of the
group of social outsiders who are of use to no-one.
I have been speaking here of the determining trends which have come to
us from the industrialised nations and about what drives the transition and
defines tomorrow. Why do I believe that despite the enormous differences in
the economic levels of different countries these trends will impose
themselves? The reason is that these are trends which have appeared as a
result of modern technology, from the character of globalisation and which
have been valid for four fifths of world manufacturing history. Of course,
different societies will approach the common features of the Fourth
Civilisation gradually from different starting points and on different
paths. There is no doubt, however, about their common fate. This is the fate
of progress...
2. POST-CAPITALISM
In November 1989 when the Berlin Wall came down everyone proclaimed the
victory of capitalism. In actual fact, capitalism was itself beginning to
draw its last breath - slowly and quietly dying like a victorious warrior.
T
here are no frozen social systems, or eternal mechanisms of government.
The most dynamic element is technology and the least dynamic - economic
relations. The most lasting and conservative elements are the political
systems. However, there is no such thing as an eternal system. Capitalism
passed through an early feudal stage, reached its height when free
competition dynamised the whole system and then fell victim to the struggles
between empires, two world wars and hundreds of colonial wars.
Daniel Bell quotes a quite remarkable thought by the Arab philosopher
Ibn Haldun, "Societies pass through specific phases whose transformations
are a symptom of their own fall[44]. This is true of every
society. They develop, they achieve a certain level of progress and reach
their own heights of development. Then all . societies destroy themselves.
This does not always happen through revolutions, turbulence and violence but
through reforms and reformation of the roots and culture of life. Capitalism
in Western Europe and North America was different from capitalism in Japan
and probably more distinct from the forms of capitalism in Latin America.
Today there are similar processes taking place everywhere. They are perhaps
more rapid and remarkable in the USA, Europe and Japan, more anaemic in
Brazil and Argentina and more accelerated in South Korea etc..
What were the typical characteristics of capitalism? In the 19th
century and up until to the middle of the 20th century they were the
division of society into the bourgeoisie and proletariate: the growing
differentiation between the poor and the rich; the domination of economic
and political life by a group of monopolists and nationalism and colonialism
aimed at the economic and political division of the world. There are no
doubt many other features of capitalism which could be added. However, these
are the main features of what remains of classical capitalism.
The transformations of ownership mentioned above demonstrate clearly
that the bourgeoisie which existed 40-50 or even 100 years ago practically
no longer exists. It is not a homogenous class with a dominant place in
society or a single, unified attitude to the means of production, as Lenin
might have called it. The class of the rich has not disappeared in the USA,
Japan or in Germany. However, it is different in essence and character. Most
importantly, the traditional owners of the means of production are of much
less significance and have been replaced by managers, associated groups of
small and medium owners, media magnates, the stars of show business and
innovators. The division, diffusion and socialisation of ownership has lead
to the decay of the bourgeoisie. It has disintegrated into different groups
sometimes with conflicting interests. Significantly, the origin of ownership
is no longer based solely on inheritance. Indeed, the majority of the
wealthiest people mentioned in "Forbes" have not inherited their wealth but
have accumulated it as a result of their own enterprise. The most famous
example of this is Bill Gates, the creator and owner of MicroSoft. The old
bourgeoisie has its successors in the same way as the feudal aristocracy has
its own exotic representatives. None of these, however, fall within these
categories. One group of the former bourgeoisie which has not managed to
adapt to the requirements of modern competition has begun to resemble the
middle class in terms of income and way of life.
There have been more serious changes in what Marx and Engels referred
to in the 19th century as the "proletariate". In the 1930's and 1940's the
proletariate in the USA and Europe was still an homogenous group with a
clear place in society. Today, this class and even such a social group does
not exist. Technological progress has led to the disappearance of the
proletariate and divided it into different social groups. A large number of
former proletarians are now involved in the growing services sector. Today,
the number of traditional factory workers has declined to 20-25% of the
active population in the majority of the industrialised countries. The
workers themselves are more diversified and many of them are now employed in
intellectual rather than physical labour. "Intellectual workers and those
employed in the services sector", wrote P.Drucker with justification, "are
not classes in the traditional meaning of the word".[45] Neither
are they the proletariate in the Marxist meaning of the word. It is no
accident that the movements of employees and trade unions in the most
developed industrialised countries during the last 15-20 years have reduced
significantly.
In the most developed 24 countries of the world there is a large group
of citizens, in some cases more than 50-60% of the population with
relatively stable middle-incomes which permit a high standard of living. On
the other hand the ratio in income between the richest and the poorest has
begun gradually to reduce. 60 or 70 years ago the incomes of the richest
families were ten or more, even hundred time greater than the average
incomes of the poor. According to the statistics of the World Bank at the
end of the 1980's, the ratio of income between the richest and the poorest
20% of the population was as follows: USA 7.5; Japan 4.3; Germany 5.0;
Belgium 4.6; France 7.7 and Italy 7.1. The number of the extremely wealthy
and the extremely poor has begun to reduce significantly. There have been
changes in the social conditions of the unemployed. Social benefits for
pensioners and young people in Austria, for example, have reached levels
unheard of in Eastern Europe.
I am far from convinced that the developed nations of the West and
Japan have resolved all their social problems or that they have created an
harmonious society. I can, however, state clearly that the foundations of
capitalism have been destroyed and that the Western European countries have
outgrown capitalism. They are now in the process of transition to something
different, something new and clearly demonstrated by the evolution of the
market and market relations. The liberal market of the 19th and 20th
centuries was the basis of mature capitalism. Its zenith was symbolised by
the boom of electricity, internal combustion engines and the charm of Paris
by night. The main feature of the market was the free exchange of goods, the
formation of market values and, consequently, the stimulation of one or
other type of production. Monopolisation of production has modified the
basic categories of the market but has not abolished its role as the main
regulator of economic life. The major question is the development of the
market after the boom of small and medium scale business, demonoplisation
and the computer revolution. I believe that we are at the beginning of a
process of transition from post-monopolistic market to a situation of
horizontal market relations. I believe that J. K. Galbraith was the first to
turn his attention to such an idea. Many people who clearly seem to be used
to the concept of the market find it difficult to believe that this great
invention of the Third Civilisation might be replaced by something else.
Indeed, the market will not be replaced by any form of ready-made
committee-designed model. The market will simply be revolutionised by new
technology and the replacement of traditional supply and demand by the
super-organised planning of consumption, its stimulation and satisfaction
with a perfect system of organised manufacturing. In the developed countries
entire sectors of the markets are already being traded as futures; stock
exchanges react to the smallest of changes, managers act within the tightest
of limits and if they get it wrong they simply leave the game. This is true
of the automobile and plane building industries, space technology, computers
and practically types of high technology as well as many other sectors.
Credit cards, smart cards, cash dispensing machines and all methods of
electronic payment have been extremely influential on the transformation of
the market. They may by some be considered as merely new forms of market
mechanisms. However, in my opinion these technological innovations have
outlined a trend towards a transition from the basic market mechanisms to
principally new social relations and a new state of the market. For the
moment these are still only trends in the most developed parts of the world.
However, the improvement in efficiency which they offer will lead to their
inevitable expansion to other parts of the world in the same way as
electricity or the radio and television.
New computers and communication technologies have a multiplying effect
on all countries and markets. They are the basis of the fundamental changes
in the way in which business in done. This has led to a change in the nature
of supply and demand and the transition from the "trade in goods" to the
"trade in ideas". It will not be too far into the future when new computer
networks will allow consumers to place their orders even before a particular
article is produced, at the stage of its inception and design.
Consumers will become the managers of production. They will reject what
they consider unnecessary and predetermine the type, quantity and quality of
goods. In California there is already a computer trade network where
consumers can order goods in this way.The stage of exchange will become
strongly modified and the market will become a bridge between demand and
manufacture.
At the beginning of the 1950's Joseph Stalin in one his most
"remarkable" works[46] predicted the disappearance of the
relationship between goods and money. His approach of destroying money
through total nationalisation inflicted heavy damage to many Eastern
European nations and Asian peoples. By destroying the market and money
through bureaucracy, Stalin and his followers also destroyed freedom and man
himself. In 1986 in one of my early works I wrote that "money-goods
relations will disappear only when they reach the peak of their development,
when the market itself reaches a stage of perfection and not by moving
against the current of development." I believe that a similar process is
taking place today. With our new computer networks we now have the
exceptional opportunity of changing the nature of exchange and removing
inequality and monopolistic profits. I do not doubt that the new computer
networks (such as the Internet) will create a revolution in the market and
will transform us into an amazingly well organised environment for the
exchange of needs, ideas, opportunities and goods. Such possibilities are
being predicted for the financial markets and relations between banks and
between banks and their customers. At the beginning of 1996 the founder of
MicroSoft, Bill Gates outlined in one of his articles some exciting new
ideas which would revolutionise banking. No-one, not the bankers or the
corporations or small and medium business, not even show business or the
individual can ignore these changes.
What is happening to the capitalist society? Gradually, slowly, it is
become uprooted and changing its basic nature. P.Drucker came to the
conclusion that capitalist society is being re-born into a society of
knowledge and a society of organisations. I agree entirely with his use of
the term "the post-capitalist society".[47]
The question whether the most developed societies in Europe, America
and Japan have turned into societies of organisations is clearly much more
complex. Undoubtedly the process of globalisation which is taking place at
the moment via the transnational corporations (organisations) limits the
nation state while increasing their own role. However, I feel that this is
an inadequate description of post-capitalist societies under change.
I would make the following generalisation: there four major processes
which have changed and will further change the nature of capitalist
societies. The first of them is the socialisation and re-distribution of
ownership. The second is the profound nature of the changes in the social
and class structures, the disappearance of traditional classes and the
appearance of new social strata. The third is the integration of the market
economy and the replacement of the typical capitalist market with a highly
organised system of exchange and distribution of goods. The fourth is the
limitation of the role of the nation state and the globalisation and growth
in the role of organisations (manufacturing and non-manufacturing).
All these processes have progressed so far at the end of the 20th
century that it is possible already to speak of the evolutionary renaissance
of the capitalist society and the existence of post-capitalist relations in
all the industrialised countries (with the exception of the ex-communist).
Of course, there are slight structural exceptions, e.g. the management and
structural models of the USA and Japan. I also accept the distinguishing
features of the American and the Rhine model (Germany, France, Austria
etc.). There is, however, no doubt that all four processes are taking place
in the industrialised countries and a consequence of the global market is
that the differences between them are constantly reducing. They will not
disappear completely, in fact some of them may produce other differences.
Nevertheless, the common movement towards a new civilisation will continue.
Capitalism is indeed dying. Proudly and quietly, like a victorious
warrior in a pyrric victory.
3. POST-COMMUNISM
The post-communist countries had three possible directions of
development: backwards to the ashen illusions of neo-communism; forwards to
primitive capitalism; or towards the challenges of the Fourth Civilisation.
D
uring the first years after the collapse of the Eastern European
totalitarian regimes, certain more avid supporters of the former communist
parties began to state publicly their beliefs that communist ideology after
all was not such a bad thing and that in reality communism had not really
been implemented properly. The systems which had existed in Russia and the
other smaller Eastern European countries had been a mutated form of
socialist ideas. They developed their beliefs that at some time in the
future communism might reappear. These are not only the ideas of demagogues,
but hypocrites. It is true that the society which existed in Eastern Europe
was, according to official doctrines, not "communist" but "socialist", and
that this was the "first stage of communism", the "first, lowest stage of
communism". All of us who lived at that time in Eastern Europe had to
believe that sooner or later the "glorious future" would arrive. I mention
this at the beginning since I have met critics who categorically reject the
term "post-communism". Nevertheless, the term post-communist means that
communism has been overcome and that it will never return. It is not only a
rejection of a doctrine but also a specific way of thinking.
The post-communist period for the whole of Eastern Europe, Russia and
to a large extent such countries as China and Cuba is indeed unique. Not to
understand this uniqueness is one of the greatest errors of the 20th century
which has caused and will continue to cause much damage to the Eastern
European nations. When I speak of uniqueness, I mean that at the end of the
1980's the countries of Central and Eastern Europe and Russia possessed an
integrated material and technological infrastructure. At that time the GDP
per head of population in Eastern Europe was between 2 and 6 thousand
dollars, i.e. at the level of the medium developed countries. At the time of
the changes these countries had a well-educated population, highly developed
culture and significant social benefits.
Should the post-communist countries have accepted the ideology and
forms of development more typical of primitive capitalism? Everything which
I have said until now is a clear indication that the global changes at the
end of the 20th century have a common, civilising approach not merely a
change of regime in Eastern Europe. There were two main choices for the
post-communist countries after the failure of perestroika: either to reject
their past and begin afresh with the development of capitalism or to join
the common movement towards a new civilisation. The first of these paths was
more attractive in terms of ideology but much more short-sighted. The second
meant to accept the forms of development of post-capitalism and on this
basis to begin the conscious reconstruction of the former socialist
societies.
In practice the revolutionaries of 1989 did not stop to ponder this
dilemma. The collapse of perestroika threw the Eastern European countries
into political battles, conflicts and the collapse not only of the
totalitarian structures but also of the major management, industrial and
social mechanisms. This collapse in practice led to the universal
predomination of emotions and political conflicts over rational and sensible
economic changes. In the first few months after the fall of the Berlin wall,
in Prague, Sofia and in Bucharest nothing was sacred. Their entire past
history was rejected - decades during which several hundred million people
had lived were rejected. The old nomenclature was purged in the most
impulsive manner and replaced by new, inexperienced leaders. It took some
time for emotions to settle and for the stress of the "gentle revolutions"
to subside.
On the whole 1989--1991 in Eastern Europe was the beginning of an
abrupt, impulsive process of capital accumulation. For a certain period a
number of extreme anti-communist movements gained popularity. Some wanted
revenge, other wanted radical revolutionary reforms. The movements copied to
greater or lesser extents the solutions and models of the beginning of
capitalist development. As a result, all the Eastern European countries
found themselves facing similar phenomena - falling production, the
destruction of regional economic links, widespread crime and corruption and
the indiscriminate re-distribution of capital. These phenomena were
particularly marked in Russia, Bulgaria, Albania and to a certain extent in
Rumania. The countries of the Visegrad group and Slovenia were less
affected.
The greatest contradiction of the "liberal" anti-communist model was
the re-distribution of ownership. For half a century (in Russia 70 years)
the citizens of Eastern Europe had lived in conditions of uniformity and the
domination of egalitarian ideas. To a large extent the gentle revolutions of
the end of the 1980's were based economically on the fact that the communist
elite had accrued vast privileges for themselves and had become transformed
into an economically dominant social stratum. This was the pre-dominant
propaganda which was used in the majority of the Eastern European countries
in 1989-1990.
For the same reasons the populations of these countries did not accept
the rapid disintegration of society into rich and poor and the usurping of
former "socialist" property by a small group of the nouveaux riches.
Legislation guaranteeing the restitution of property in Bulgaria, Rumania,
Hungary and elsewhere created in many people a sense of revenge. Even after
the processes of mass privatisation in the Czech Republic and Russia the
majority of the population felt deceived and did not receive any direct
economic dividends from the economic changes. It was not so much the
absolute scale of poverty but the nature of social differentiation and the
collapse of social guarantees which led to a tangible level of
dissatisfaction amongst the populations and a move towards the left. After
the return to power of the former communist parties in Poland, Hungary,
Slovakia and Bulgaria, however, the processes of social division continued.
The new capital accumulated at the beginning of the 1990's attempted to play
the leading role in the processes of privatisation and to accrue more and
more wealth. Mass privatisation, most significantly in Russia, led to the
concentration of privatisation vouchers in the hands of a small group of
extremely wealthy owners who acquired the ownership of enormous production
potential for a fraction of its real value. To a lesser extent the same
thing happened in Czechoslovakia and a similar picture of social division
can be expected in Bulgaria after mass privatisation.
The post-communist countries are experiencing a common crisis of
identity and profound political contradictions. If they lead to a
stratification of society into a small group of wealthy people (5-7%) and a
large group of people deprived of any ownership of the means of production,
this will be a backwards step. In reality these countries will return to a
state from which the industrialised countries have already progressed and to
outdated social models. If the division of ownership in Eastern Europe
creates class divisions then it is extremely possible for this to create a
chain reaction with exceptionally adverse consequences for the process of
reform and the transition to a Fourth Civilisation. Clearly the collapse of
the Eastern European societies into classes will not send them into the New
Civilisation but will hold them back in the grips of the old. The peoples of
these countries will have to experience its contradictions and to struggle
with the problems which the Western countries have already overcome. This
will cause difficulties for the socialisation of ownership and will render
the reconstruction of the market impossible leading to a revival of
bureaucracy and the bureaucratic state. We should not be surprised that such
a transition will not only return the former communist parties to power but
also the "strong hand" governments of corrupt politicians and combinations
of the two. This will be extremely unfavourable for the development of the
Eastern European states and at the same time it will be a retarding factor
for the whole of world development, especially if such processes are allowed
to take place in Russia, China and other larger countries.
The question arises whether it is at all possible for the former
totalitarian states to make the transition directly to the Fourth
Civilisation. My response is entirely positive. The relatively good material
infrastructure of the Eastern European countries, the high level of
education and culture of the population as well as the experience of
communism as one type of social development are all factors which create a
basis for the transition to new types of relations without passing through
the phase of initial capital accumulation. The technology of such a
transition has been inadequately researched but it is absolutely applicable
on the basis ofthe results of the period between 1990-1995.
Above all, in order to accomplish such a process of development and to
approach the level of the industrialised countries and the trends of the
Fourth Civilisation it will be necessary to achieve some sort of minimal
political consensus. If confrontations and instability continue, and if
behind the facade of the "political struggle" corruption and crime is
allowed to flourish, the post-communist countries will regress at least
30-50 years into the past. Only common will and the consolidation of society
will redirect their material and cultural heritage towards the framework of
the emerging new civilisation.
The second great problem is the redistribution of ownership. As I have
already mentioned, this process has begun with restitution, or the return of
property nationalised at the end of the 1940's. This process, if it takes
place within real limits, will throw the post-communist states into serious
conflicts which are unnecessary at the end of the 20th century. The example
of the Bulgaria is particularly indicative. However, even if privatisation
is carried out without restitution, as in Russia and if it is carried out
with the out-dated methods of the time of "wild capitalism", this will not
lead to any positive results. The main aim of privatisation is to dynamise
the post-communist societies, to form civil societies and for the majority
of the citizens to receive some form of ownership of the means of
production. A society of voluntarily associated owners is the alternative to
totalitarianism, the class society and primitive capitalism. In order to