The Soviet Union had always experienced cyclical downturns as a result of attempts to accumulate too rapidly, as we saw in the previous chapter. But as with the major Western capitalisms in the long boom, the downturns had not turned into economic contraction, a "real recession." Now these became more dificult to avoid as the slowdown in growth had its impact.
Poland and the foretaste of a dire future
Two young Polish Marxists, Jacek Kuron and Karol Modzelewski, produced a pathbreaking study of the economic contradictions in an Eastern bloc country in 1964. They pointed to the findings of certain East European economists about the way over-accumulation affected the rest of the economy. Accumulation came up against three "barriers". The "inflation barrier" signified that too rapid expansion of investment had led either to normal inflation (as the state printed money to pay for it, so raising prices and cutting living standards) or to "hidden inflation" (as cutbacks in the supply of goods to the shops led to shortages, queues and a growing black market. ) The "raw material barrier" signified that there were just not enough inputs for production to reach the projected level. The "export barrier" meant that attempts to make up for the shortages of inputs by importing from abroad led to foreign exchange crises. Kuron and Modzelewksi concluded that a point was soon going to be reached in which the internal reserves would no longer exist for accumulation to continue without creating an immense social crisis. They argued against those who looked to reform:
What we have here is not a contradiction between the objectives of the plan and the anti-stimuli resulting from faulty directives, but a contradiction between the class goal of the ruling bureaucracy (production for production) and the interests of basic groups who achieve the production (maximum consumption). In other words, it is a contradiction between the class goal of production and consumption, and it results from existing conditions, not from mismanagement.57
The End of the Golden Age
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