Modern Societies 1612056679, 9781612056678

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Modern Societies

Modern Societies A Comparative Perspective

Stephen K. Sanderson

Paradigm Publishers Boulder • London

All rights reserved. No part of this publication may be transmitted or reproduced in any media or form, including electronic, mechanical, photocopy, recording, or informational storage and retrieval systems, without the express written consent of the publisher. Copyright © 2015 by Paradigm Publishers Published in the United States by Paradigm Publishers, 5589 Arapahoe Avenue, Boulder, CO 80303 USA. Paradigm Publishers is the trade name of Birkenkamp & Company, LLC, Dean Birkenkamp, President and Publisher. Library of Congress Cataloging-in-Publication Data Sanderson, Stephen K. Modern societies : a comparative perspective / Stephen K. Sanderson. pages cm. — Includes bibliographical references and index. ISBN 978-1-61205-667-8 (hardcover : alk. paper) 1. Organizational sociology. 2. Sociology. I. Title. HM786.S26 2014 302.3’5—dc23

2013051045

Printed and bound in the United States of America on acid-free paper that meets the standards of the American National Standard for Permanence of Paper for Printed Library Materials. 19 18 17 16 15 1 2 3 4 5

Contents Prefacevii 1. Rich Democracies, I: Economy, Work, and Class Premodern Prelude  1 Being and Becoming a Rich Democracy  3 Occupation and Stratification  6 Modern Welfare States  13 From Industrial to Postindustrial Society?  14

1

2. Rich Democracies, II: The Polity Early Modern States  19 The Increasing Size and Scope of the State  21 From Autocracy to Democracy  25 The Rarity and Difficulty of Democracy  33

19

3. Socialist and Postsocialist Societies The Nature of State Socialism  35 Leninist Regimes  39 Reform and the Transition to Postsocialism  42 The Great Collapse  44 Postsocialism 47 Does Socialism Have a Future?  51

35

4. The Less-Developed World The Nature of Underdevelopment  53 Why Underdevelopment?  57 Development in East Asia  61 Development in Latin America  66 Sub-Saharan Africa and the Failure of Development  70

53

v

vi     Contents

5. Race and Ethnicity Race in the United States  75 Race in Brazil  79 Race in South Africa  81 Ethnic Homogeneity and Heterogeneity  84 Ethnicity and Its Discontents  88

75

6. Gender Roles and Relations The Patriarchal Past  95 The Great Gender Transformation  96 The Contemporary Situation  102

95

7. Marriage and Families The Traditional Family in Asia and Europe  111 The Evolution of the Modern Family System  112 The Contemporary Family Revolution  115 From Large Families to Small  120 The Modern Family: Change or Decline?  125

111

8. Modern Mass Education Education in Historical Perspective  129 The Emergence and Expansion of Mass Education  131 Explaining Educational Expansion  137 Credentialism and Its Consequences  140

129

9. Religion in the World What Religion Is  145 The World’s Religions  146 Religious Groups in Modern Societies  151 Religion in the United States and Europe  153 Religion in Latin America  157 The Secularization Controversy  159

145

10. Globalization (with Arthur S. Alderson) What Globalization Is  166 Globalization and Its Critics  170 Is Globalization Something New?  175

165

11. Assessing Past and Future Have We Progressed?  181 Are We Happier?  187 Nine Predictions in Search of a Future  190

181

References199 Index 215

Preface There are approximately two hundred societies in the world today. Modern Societies: A Comparative Perspective explores the nature of many of these societies by comparing and contrasting their basic institutions and patterns of social organization. The book’s distinctiveness lies in its comparative and global perspective. It allows students to situate the United States in global context—to see how their society is both similar to and different from other societies. Modern Societies mixes description with theory, and rather than discussing theory at the beginning, it compares and contrasts competing theories in individual chapters. This is designed to give instructors maximum flexibility in using the book. Modern Societies is suitable for courses in introductory sociology, social institutions, and comparative sociology. Major topics include

• • • • •



• •



• •



• • • • •

How the rich democracies became both rich and democratic Governments and welfare states The growth of democracy in the twentieth century The collapse of Communism and the transition to postsocialist societies The circumstances of less-developed countries, with attention to those that are developing rapidly as well as those that continue to lag far behind the rich countries Racial and ethnic divisions and conflicts worldwide The gender revolution of the past fifty years and contemporary patterns of gender inequality throughout the world Major shifts in family patterns and the transition to below-replacement fertility The global spread and expansion of mass education and educational credentialism Worldwide patterns of religious belief and practice The controversy over the secularization thesis Economic, political, and cultural globalization The nature of social and economic progress over the past two centuries Nine predictions concerning the short-term and long-term future of the world

vii

viii  Preface Contents

The book provides detailed and fully up-to-date statistical data in forty-five tables. Students and instructors will find data from countries throughout the world on such topics as

• • • • • • • • • • •

Economic development Government expansion Democracy Racial segregation Gender empowerment Fertility levels Single-parent households Educational enrollments Religiosity Religious pluralism and religious freedom Happiness

As a pedagogical aid, discussion questions for each chapter are posted on the book’s companion webpage at www.paradigmpublishers.com/Books/BookDetail .aspx?productID=393431. I am grateful to Rosemary Hopcroft and Rae Lesser Blumberg for their critical comments on drafts of several chapters. They were especially helpful in suggesting important revisions to the chapter on gender.

Chapter 1

Rich Democracies, I Economy, Work, and Class Premodern Prelude As everyone knows, humans did not always live in the kinds of societies most people live in today. For the vast majority of human history and prehistory, humans survived entirely by hunting and gathering. Hunter-gatherer societies were small (usually comprising no more than a few dozen members), had a very simple division of labor (men did most of the hunting and women most of the gathering), and limited technology (e.g., spears, bows and arrows, traps). People moved around a lot, sometimes every few days or weeks, sometimes only three or four times a year. This depended to a large extent on how abundant resources were in a given place and on such things as seasonal changes. Then about 10,000 years ago, the earliest forms of agriculture began to emerge throughout much of the world. People began to settle down and live in villages, which were permanent or semipermanent. These earliest agricultural societies are best called horticultural societies, which are societies that depend on the gardening of relatively small plots of land, using simple tools such as digging sticks or hoes. In horticultural societies women do most of the cultivating, although men usually prepare the land so that crops can be planted. The simplest horticultural societies usually possess a lot of land, so they tend to cultivate a garden for only a few years and then abandon it, moving their garden somewhere else. But as populations grew over thousands of years, land became increasingly scarce and people could not be so casual about cultivation. They had to cultivate any given plot of land for a longer time and move their gardens less often. Sometime after 5,000 years ago, the plow was invented, allowing people to farm the land more intensively and to cultivate larger plots. More food could be grown to feed more people, which was essential because there were many more people living on the planet. We call societies that use the plow agrarian societies 1

2  Chapter 1

and the people who do the plowing peasants. In these societies most peasants live at a subsistence level, although there are often peasants who may be fairly well off, that is, “rich” peasants. Peasants face a major problem with not only getting enough food to eat for themselves but satisfying the demands made on them by landlords. Where there are agrarian societies, there are always peasants, and there are always landlords. If peasants are lucky, they may own their own land, but if they are not so fortunate, the land is owned by a landlord, and they are considered mere renters or tenants. In any case, landlords exert a lot of control over what peasants can do. Even if landlords don’t own the land, they control it, and they can use this control to exact concessions. Peasants usually must produce enough to turn over part of their product to the landlord, and they often have to provide labor services by working on the landlord’s own land part of the time. Landlords get rich, and peasants stay poor—at least, this is what happens most of the time. In some areas of the world there is not enough rainfall to sustain agriculture of any type, and peoples living in these dry regions have taken to depending only (or at least primarily) on stock raising, that is, animal herding or pastoralism. Animals raised for food, such as sheep, goats, or cattle, cannot be eaten very often because they are capital investments. People therefore live principally on animal products, especially milk and its processed forms, such as cheese. They may also bleed their animals periodically and drink the blood. When animals die a natural death, they will be eaten, and occasionally a healthy animal will be sacrificed. But there is another way to make a living—by buying and selling goods. Craftsmen can make goods, and merchants can buy them and sell them to someone else at a higher price than their cost. In order for these things to be possible, a society has to have a market, or a set of rules and procedures for economic exchange. Hunter-gatherers have been found to practice very small-scale trade, but they don’t have markets, and small-scale horticulturalists don’t either. Some more advanced horticultural societies have long had them (for example, in the Andes before the Spanish conquest in the early 1500s and in West Africa), but markets didn’t really get going until the rise of agrarian societies. Merchants are the key figures in markets; they buy, sell, and trade. In the earliest markets goods were traded locally or within relatively small regions. But gradually trade expanded to larger regions, and different world regions became linked to each other in long-distance trade networks. Eventually, after several thousand years, the stage was set for the development of modern societies. When did modernity begin? Most sociologists would say it was during the Industrial Revolution of the late eighteenth and early nineteenth centuries, after which people began to work in factories or offices. This makes modern societies no more than two hundred years old at the most. However, the major features that we associate with modern life did not really develop until the twentieth century. As late as 1900, the majority of people were still working in agriculture rather than in factories or offices. People drove not cars but horses and buggies. Most people did not have telephones, and televisions and modern conveniences like automatic washers and dryers, refrigerators, and electric vacuum cleaners were still decades away.

Rich Democracies, I  3



Electricity was relatively new, and many people did not yet have it. And the standard of living was very low compared to today. But over the twentieth century, the most developed societies became rich, and they became democracies. This chapter and the next tell the story of the rich democracies and how they got that way. Being and Becoming a Rich Democracy A rich democracy is a modern society with very high levels of social and economic development, along with a democratic mode of governance. Here we discuss the social and economic side, leaving the democratic side for the next chapter. A society’s level of economic development can be measured in a number of ways, several of which are shown in Table 1.1: the level of economic productivity as assessed by Gross Domestic Product (GDP) per capita, the percentage of the labor force working in agriculture (LFA), the infant mortality rate (IMR), life expectancy (LIF), and the level of literacy (LIT). GDP is the total value of goods and services produced by a country per person per year. There is also a composite measure known as the Human Development Index (HDI), which is a weighted average of life expectancy, educational attainment, and GDP. The first column of Table 1.1 shows per capita GDP levels for countries that qualify as rich democracies. All of these numbers are extremely high. Most people have a great deal of disposable income and can actually be considered rich by the standards of previous centuries. Even people who live below an officially designated poverty threshold have much more than the vast majority of people in these earlier times. Table 1.1 Characteristics of Rich Democracies Country

GDP

LFA

IMR

LIF

LIT

HDI

Australia

37,433

3.6

4.8

81.9

100

.937

Austria

39,131

5.5

4.4

80.4

99

.851

Belgium

37,384

2.0

4.4

80.3

99

.867

Canada

38,439

2.0

5.0

81.0

100

.888

Denmark

50,702

2.5

4.3

78.7

100

.866

Finland

39,855

4.9

3.5

80.1

100

.871

France

36,546

3.8

3.3

81.6

100

.872

Germany

35,270

2.4

4.0

80.2

99

.885

Iceland

53,029

4.8

3.2

82.1

100

.869

Italy

31,495

4.2

5.5

81.4

99

.854

Japan

34,022

3.9

2.8

83.2

100

.884

Netherlands

40,167

3.0

4.7

80.3

100

.890

Norway

66,964

2.9

3.6

81.0

100

.938

Sweden

42,553

1.1

2.8

81.3

100

.885

4  Chapter 1 Table 1.1 Continued Country

GDP

LFA

IMR

LIF

LIT

HDI

Switzerland

51,032

3.4

4.2

82.2

100

.874

United Kingdom

38,849

1.4

4.9

79.8

100

.849

United States

44,155

1.8

6.3

79.6

99

.902

Legend: GDP = Gross Domestic Product per capita calculated in US dollars (2008); LFA = percentage of the labor force employed in agriculture (2004–2010); IMR = infant mortality rate, calculated as the annual number of deaths of infants in the first year of life per 1,000 infants born (2009); LIF = life expectancy at birth (2010); LIT = percentage of the population age fifteen and older that is literate (2008); HDI = Human Development Index, a weighted average of life expectancy, educational attainment, and GDP (2010). Sources: HDI and LIF from United Nations (2010); IMR from Central Intelligence Agency (2009); GDP and LIT from World Bank (2011); LFA from Central Intelligence Agency (2011), World Resources Institute (www.wri.org).

In rich democracies only a tiny number of people make a living from farming, with a low of 1.1 percent in Sweden and a high of 7.0 percent in New Zealand (the average in the table is 3.8 percent). Most people work in factories or offices; they manufacture things or sell people a wide range of services. People also live a long time, in most cases more than eighty years (in the case of women, about eighty-five years). The main reason is advanced medical care and lifesaving drugs, but good prenatal care for pregnant women is also important. The infant mortality rate is the number of infants who die in the first year of life for every 1,000 infants born. We can see from the table that Sweden and Japan have extremely low infant mortality rates, in both cases 2.8. This means that only 0.28 percent of infants die in their first year. In the United States infant mortality is 6.3, which amounts to just 0.63 percent of infants dying in their first year. These are extremely low numbers when we consider that the United States in 1850 had an infant mortality rate of approximately 160 (16 percent of infants dying in their first year). In terms of literacy, in rich democracies virtually everyone can read and write. The Human Development Index (column six of Table 1.1) provides an overall view of the extent to which any society is a rich democracy. It was constructed by the United Nations and intended as an indicator of a society’s overall level of well-being. A deeper understanding of modern rich democracies can be gained by looking at them in historical perspective. After all, today’s rich democracies not so long ago were neither rich nor democratic. Table 1.2 shows per capita GDP levels for twelve current rich democracies from 1500 to 1990. The figures are all given in 1990 US dollars, which allows inflation to be taken into account. It can clearly be seen that in 1500 today’s rich democracies were poor, in 1700 they were only slightly better off, and in 1870 they were still far from rich. It has mainly been in the twentieth century that today’s most developed countries became the highly developed, affluent countries they are today. The last column in Table 1.2 shows the multiple of 1500 GDP and 1990 GDP. The numbers indicate how much wealth has multiplied over those five centuries. In 1990 these countries had between 14 and 37 times the national income they had in 1500, the average being 25.3. Rich democracies indeed!

Rich Democracies, I  5



Table 1.2 Long-Term Economic Growth in Twelve Rich Democracies Country

1500

1700

1870

1990

Multiple

Austria

707

993

1,863

16,792

23.8

Belgium

875

1,144

2,691

16,807

19.2

Denmark

738

1,039

2,003

17,953

24.3

Finland

453

638

1,140

16,604

36.7

France

727

910

1,876

17,777

24.5

Germany

688

910

1,839

18,685

27.2

Italy

1,100

1,100

1,499

15,591

14.2

Netherlands

761

2,130

2,757

16,569

21.8

Norway

610

722

1,360

16,897

27.7

Sweden

651

750

1,359

17,695

27.2

Switzerland

632

890

2,102

21,661

34.3

United Kingdom

714

1,250

3,190

16,302

22.8

Note: Figures are given in constant 1990 US dollars. Source: Maddison (2010).

How is this massive economic growth over the past five centuries, often referred to as “the Rise of the West,” to be explained? There is no widely agreed upon answer to this question. My own interpretation emphasizes a combination of geography, feudalism, the presence of autonomous towns, a particular type of interstate relations, and a long-term commercialization trend (Sanderson 1994). Europe was highly favored by its geography. It was a relatively small continent that had the Mediterranean at the southern and eastern ends, the Atlantic to the west, and the North and Baltic Seas to the north. The presence of large bodies of water favors trade, especially maritime trade, which is much more efficient than overland trade. Much more can be traded, and much more wealth can be created. Europe also had a political system known as feudalism, in which there was really no central government. Feudal lords had limited power over limited territories. This decentralized political system encouraged commerce and the growth of towns because highly centralized bureaucratic states tend to constrain commerce. Europe’s towns became highly autonomous. And during the long period of feudalism, usually known as the Middle Ages, a lot of commercialism developed. Trade and markets expanded. By the sixteenth century, Europe had developed a market economy that was on the verge of breaking out into something on a much larger scale. Europe was also favored because it consisted of many small countries that competed with each other. Actually, many of these countries had not yet become unified states; what became Germany was a collection of small states and bishoprics until 1871, and Italy was divided into hundreds of very small city-states. The Netherlands was composed of seven provinces, the largest being Holland. And Switzerland had several dozen cantons. In any event, economic competition in Europe was fierce, and such competition was highly favorable to economic growth.

6  Chapter 1

These were important preconditions favoring the development of capitalism, an economic system devoted to producing goods for sale on the market in which the objective of the producers is to make a profit, and as much profit as they can. But we still need to ask why capitalism developed when it did? Why only after about 1500? Why not earlier? The answer begins with the recognition that merchants and commerce occupied a low status in the agrarian societies that dominated world history for thousands of years. As we have seen, in these societies landlords controlled the economy and made their living primarily by using peasants to create wealth for them. Landlords have almost always disdained merchants, whom they have regarded as dirtying their hands in the search for “filthy lucre.” But landlords also needed merchants to provide many of the luxury goods they wanted. And so merchants were controlled but could not be eliminated. This gave merchants an opportunity to improve their lot, if only slowly and by fits and starts. Over the centuries they increased in number and in the scope of the trade they engaged in. More goods were traded, and they were traded over larger territories. I call this process expanding world commercialization. By about 1500 the level of commercialization had become large enough to create a kind of critical mass or tipping point in those societies that had the most favorable preconditions for a full-blown capitalist economy. Once a high-powered capitalist system got going, the Industrial Revolution of the eighteenth and nineteenth centuries was a logical outcome. This was a technological revolution that introduced machines to substitute for the human hand. It increased productivity enormously and thus increased profits. The economy shifted from one based on farmers, small merchants, and traders to one based on factories. The factory system aggregated people in cities, and a huge rural-to-urban shift began. Today’s rich democracies are largely urban societies, as is clearly indicated by the very small proportion of the labor force that is made up of agricultural workers. Europe was first in making the breakthrough, but there were important offshoots, especially the four British settler colonies: the United States, Canada, Australia, and New Zealand. These societies inherited the economic and political institutions of Britain and occupied lands that were very thinly populated. There was a huge amount of land that no one owned. Most indigenous populations were either hunter-gatherers or simple horticulturalists who had no concept of individual property in land. People could take over unoccupied land and cultivate it for themselves or push small-scale and weaker societies off the land. Towns also formed, and small merchants were concentrated there. In time these four societies were able to re-create what was happening in Europe. Occupation and Stratification The core of every modern society is its occupational structure and the position each person or household occupies within it. This should be obvious, because people have to earn a living before they can do anything else. Let’s look at how people do this in one modern society, the United States, and then make some comparisons.

$80,000+

Sources: Wilensky (2000); Rossides (1990).

$229,000+

Income

18

Mid-level officials and managers, members of learned professions (e.g., medicine, law)

1

Upper Middle

Representative High-ranking Occupations managers and officials of large corporations, banks, and insurance companies; large-scale entrepreneurs

Percentage of Population

Rich

$50,000– $79,999

Semitechnical and semiprofessional workers, small-scale entrepreneurs, clerks, salespeople, mid-level government workers, school teachers, social workers

24

Lower Middle

$30,000– $49,999

Skilled manual workers in manufacturing, building trades, trucking, maintenance, and repair

24

$16,036– $29,999

Semiskilled workers in similar categories as upper working class

20

Upper Working Lower Working

Table 1.3 Occupational and Class Structure of the United States, 1996

Less than $16,036 (official poverty line)

Low-paid manual and service workers, farm workers, domestic workers, watchmen, janitors

14

Lower



Rich Democracies, I  7

Class Structure and Economic Inequalities

All modern societies have a stratification system based on their occupational structures and the social classes that correspond to specific types of occupations. Harold Wilensky (2000) has mapped out the overall occupational and class structure of the United States as it looked at the end of the twentieth century. Table 1.3 depicts this structure. As can be seen, the rich and the middle classes do largely mental work in offices, whereas the working and lower classes do largely manual or physical work in factories, construction, transportation, domestic services, and the like. As we move from high to low, there is a gradient in skill or ability level and, by and large, the challenging or rewarding nature of the work, the amount of income people receive, and the level of prestige they enjoy.

8  Chapter 1

Because modern societies are highly stratified by occupation, income, and prestige, they are beset by social and economic inequalities, a matter of significant concern to sociologists. There are two main ways of assessing a society’s level of inequality. The more common one is the Gini coefficient. This is a number varying from 0 to 1.0, with 0 indicating that everyone has exactly the same income and 1.0 indicating that one household has all of the income. The higher the number, the greater the degree of inequality. Obviously no society can be at 0, and certainly none can be at 1.0. Gini coefficients for various years between 2000 and 2010 are shown in Table 1.4. Here we see that the developed countries have lower levels of inequality than the less-developed countries. We also see that some developed countries have less inequality than others. Sweden has the lowest level, whereas the United States has the highest. Norway also has a relatively low level, and, although not shown in the table, so do the other Scandinavian countries. Table 1.4 Income Inequality in Selected Countries Country

Gini

Norway Austria United States Netherlands Canada Sweden Germany United Kingdom France Spain Italy Japan Hungary Poland Russian Federation China Philippines India Egypt Iran Morocco Argentina Mexico El Salvador Kenya Ghana Senegal

.250 .260 .408 .309 .321 .230 .270 .340 .327 .320 .320 .376 .280 .349 .423 .415 .458 .368 .344 .445 .409 .414 .482 .524 .425 .394 .413

Ratio of Top 10 Percent to Bottom 20 Percent 6.0 6.8 15.0 9.2 9.5 6.2 6.9 13.6 8.3 10.2 11.7 4.5 5.6 8.7 12.8 21.8 15.5 8.6 8.0 16.9 11.9 35.0 24.6 55.4 18.6 13.7 12.4

Note: Figures are for various years between 2000 and 2010. Source: Central Intelligence Agency, CIA World Factbook, various years.



Rich Democracies, I  9

The other method for assessing income inequality is to calculate the ratio of the top 10 percent of the income bracket to the bottom 20 percent. Table 1.4 shows these ratios. These numbers correspond closely to the Gini coefficients. Once again we see that Sweden and Norway have the lowest ratios, with the top 10 percent earning about six times the income of the bottom 20 percent. In the United States the top 10 percent earns much more than the bottom 20 percent—fifteen times more. The society with the most inequality is El Salvador, where the top 10 percent earns fiftyfive times the income of the bottom 20 percent. Yet these numbers must be interpreted cautiously. Despite the large income inequalities in the United States and some other advanced capitalist societies, the extent of social mobility (discussed below) in all of these countries means that the richest and the poorest individuals are in most cases not the same people from one period to another. Paul Kingston (2000: 84) shows that in the short space of the seven years between 1971 and 1978, there was a striking movement of people between income quintiles (fifths): “More than half . . . of the top quintile in 1971 fell from this level by 1978, and more than a fifth had moved to the lower three quintiles. . . . Indeed, across the entire range of income levels, mobility was a common occurrence. Overall 60 percent moved to a different income quintile, and almost a quarter moved at least two quintiles.”1 Thus, although the gap between rich and poor is very large, not all of the rich remain rich; nor do all of the poor remain poor. Many of those in the bottom quintiles improve their income situation over time, and many of those in the top quintiles (or even deciles) suffer appreciable income declines. This takes some of the edge off income inequality. Lisa Keister (2000a, 2004; Keister and Moller 2000) has developed an additional way of measuring inequality, in this case the unequal distribution of wealth (total net assets) rather than income. Keister’s research shows that the top wealth quintile owned nearly 85 percent of total wealth as of the early 1990s. However, this ownership was heavily concentrated within the upper segment of the top quintile, as the top 1 percent of wealth owners possessed almost 40 percent of total wealth and almost 50 percent of financial assets. In 1989 the Gini coefficient for wealth inequality was an extremely large .890 and in the late 1990s the Gini coefficient for financial wealth was a huge .940 (Keister and Moller 2000; Keister 2004). Keister has also looked at changes in wealth inequality between 1962 and the 1990s. There is a clear trend toward greater inequality in wealth. In 1962 the top 1 percent of wealth owners possessed 34 percent of the total wealth, but that had increased to 39 percent by 1995. The percentage of the US population owning no wealth increased from 11 to 19 percent during the same period, and the Gini coefficient increased from .800 to .870. For a long time the United States had less wealth inequality than several European countries, but during the 1990s the United States gained the dubious distinction of being number one in the unequal distribution of wealth. Who are the wealthy, and what do they own? In 1962 the average wealth per household of the top 1 percent was $3.2 million, and this had more than doubled in constant (inflation-adjusted) dollars to $6.7 million by 1995. This compares to a

10  Chapter 1

total wealth of only about $31,000 for the average household in 1962, a figure that had risen to $41,000 in constant dollars by 1995. In 1995 the extremely wealthy held about two-thirds of their wealth in business assets and stocks and bonds, whereas the largest item of wealth for the average household was its primary residence (amounting to about 30 percent of its wealth in 1995) (Keister 2000a). Keister argues that the stratified nature of American society becomes more evident when wealth inequality is added to income inequality. Interestingly, wealth inequality and income inequality are rather weakly correlated. However, this may be due to the fact that the very wealthy receive much of their income from various kinds of investments, whereas the average household likely receives none of its income from investments. Be that as it may, Keister believes that wealth inequality is a truer measure of the real extent of economic inequality. As she (2000a: 9) puts it, When wealth (rather than income) is used as an indicator of family economic well-being, a different picture of advantage and disadvantage emerges; this suggests that our understanding of social inequality and social mobility has been limited by our nearly total focus on income. Moreover, because of the financial security and other advantages associated with wealth ownership, the control of wealth has been an important determinant of well-being throughout history, and the truly advantaged are still signaled by high net worth.

Keister goes on to remark that income is really a measure of short-term economic security, whereas wealth involves more permanent and long-run security. Since income and wealth inequality are weakly correlated, and since wealth inequality is substantially greater than income inequality, Keister argues that the United States is actually a more unequal society than it is usually considered to be. Keister also presents evidence showing that wealth mobility is much more limited than mobility from one occupational and income group to another; this suggests to her not only a highly unequal society but a very rigidly stratified one as well. Social Mobility Social mobility is the upward or downward movement of individuals along the socioeconomic ladder. An important distinction is that between intragenerational and intergenerational mobility. Intragenerational mobility means movement from one’s first job to the job one holds in, say, mid-career. Thus, if a man’s first job was as a clerk in a company’s mailroom, but twenty years later he has become a leading manager in the same company, then he has been upwardly mobile in an intragenerational sense. Intergenerational mobility is movement up or down relative to the class position one was born into, that is, the class position of one’s parents. If a woman is a lawyer and her father was a salesperson or ran a small business, then she has been intergenerationally upwardly mobile. If a man’s father was a salesperson and he himself is a semiskilled worker, then he has been downwardly intergenerationally mobile. Most studies of mobility examine intergenerational mobility.



Rich Democracies, I  11

Paul Kingston (2000) has summarized the results of several major studies of mobility in the United States, especially those of Peter Blau and Otis Dudley Duncan (1967), David Featherman and Robert Hauser (1978), and Robert Erikson and John Goldthorpe (1993). He shows that mobility is a pervasive feature of American society. For example, in looking at the composition of the upper middle class in 1973, Kingston shows that only 29 percent of its members were themselves upper-middle-class in origin. The remaining 71 percent came from the lower middle class (17 percent), the working class (42 percent), and the farming population (12 percent). Similarly, only 16 percent of the lower middle class had themselves been born into that class; 15 percent came from the upper middle class, 52 percent from the working class, and 18 percent from the farming population. These findings concern what are called mobility inflows—the extent to which a social class is composed of people with origins in other social classes. We also need to look at mobility outflows—the degree to which people born into one social class end up in another. In the United States in 1973, for example, we find that 59 percent of individuals whose origins were upper-middle-class remained in that class, whereas the remainder were downwardly mobile into other classes. Of the lower middle class, only 17 percent remained there; 45 percent moved into the upper middle class, and 38 percent moved down into the working class or the farming population. Similar patterns are found for the working class: most people who start out in it end up elsewhere, with fully 27 percent moving all the way into the upper middle class. Kingston shows that, overall, more than two-thirds of individuals end up in a social class they did not start out in, with 51 percent being upwardly mobile and 17 percent downwardly mobile. This indicates a very high level of mobility indeed, a good deal of it being over moderate to long distances. It is sometimes argued that the United States is unusual in its high mobility rates, but an examination of other industrial capitalist societies shows that this is not true. Mobility rates are very similar across all of these societies. Total mobility outflow rates range from a low of 62 percent in West Germany to a high of 73 percent in Sweden, Japan, and the United States (Erikson and Goldthorpe 1993; Kingston 2000), with an average of 69 percent. Even less industrialized Ireland and Northern Ireland, as well as Hungary and Poland, former state socialist societies, have comparable rates. Why is there so much mobility in industrial capitalist societies? Part of the answer involves changes in the occupational structure that are induced by constant technological advance. Throughout the twentieth century, all industrial capitalist societies, for example, greatly expanded the number of white-collar jobs available. Many of these jobs could be filled only by recruiting persons from lower social classes—manual workers and farmers. As Kingston (2000: 63) remarks, Technological change, not some democratic opening up of the system, was the prime instigator of social mobility. . . . Americans can’t congratulate themselves on creating much opportunity beyond what was systematically demanded by economic transformation.

12  Chapter 1 Were it not for the unintended consequences of technological change, social mobility—the sine qua non of opportunity—would be much lower than the actual rates that we experienced.

Kingston is basically right, but his argument applies more to technological changes in the first half of the twentieth century than in the second half. Moreover, his argument applies largely to upward mobility. Little downward mobility can be explained by changes in the occupational structure. Most studies of mobility have considered only men for the simple reason that most full-time workers were men when these studies were conducted. Now that women are much more prominently represented in the full-time occupational structure, studies of mobility among women are beginning to be conducted. These show that mobility among women is just as common as mobility among men. However, more complexity is now introduced into the study of mobility patterns because husbands and wives often perform different kinds of work and thus, in a sense, belong to different social classes. This makes it more difficult to identify the class origins of the sons and daughters of such couples and thus more difficult to identify the extent of their mobility or even whether or not they are mobile. It is hoped that in time this new problem in the study of mobility will be ironed out. The Long-Term Decline of Inequality Agrarian societies of the past had the most extreme inequalities of any known type of society. There was usually a very small nobility, made up primarily of landlords, and a very large and often highly impoverished peasantry. Differences in social status, standard of living, and overall style of life were glaring. Things have changed dramatically with the transition to industrial societies (Lenski 1966). The inequalities of modern industrial societies are still wide and deep, but they are much less so than those of agrarian societies of the past. Robert William Fogel (2004) has shown that, in England, the Gini coefficient was approximately .65 around 1700, fell to about .55 by around 1900, and then fell considerably further, to .32, by 1973. A similar trend can be found in all of the advanced industrial countries; the average Gini coefficient in 2001 for ten Western European societies plus the United States, Canada, Australia, and Japan was .31. Fogel also assesses inequality by looking at the gap in life expectancy between the British elite and the population as a whole. For the age cohort born in 1875, this gap was seventeen years, but by the end of the twentieth century it had declined to only four years. Fogel looks as well at data on height. Around 1815, an average adult male member of the British working class was some five inches shorter than an average adult male of the British elite. Today, however, the gap is only about one inch. Finally, Fogel considers the incidence of homelessness. Around 1850 in Western Europe, between 10 and 20 percent of the population was officially classified as homeless vagabonds and paupers, and the figure was about the same for people living in major US cities. Yet today only about 0.4 percent of the US population is officially classified as homeless. This may seem odd to readers

Rich Democracies, I  13



of this book, given the amount of attention that has been paid to homelessness in recent years. One might think that homelessness has actually increased. But what has changed is sensitivity to the plight of the homeless, not their numbers. It is important to add that this decline in inequality is a long-term decline— that is, one occurring over several centuries. It is well known that in the past three decades there has been an increase in inequality in the United States. Sociologists and others have lamented this fact. But it is unclear whether this represents some sort of reverse long-term trend. The recent upturn in inequality may be only a blip. In any event, it is too early to tell. Modern Welfare States In the twentieth century all modern industrial capitalist societies have created largescale welfare states that, to one extent or another, have been designed to improve the situation of various groups in society, in particular the working class. But there is no single type of welfare state. Gøsta Esping-Andersen (1990) has identified three different welfare state clusters. First there is what he calls the liberal welfare state. This type of welfare state is a “minimalist” system in that the government provides citizens with meager to modest income support and a limited amount of assistance in other ways. The clientele consists largely of the lowest-income segments of the working class. Strong work ethic norms prevail, and entitlement rules are strict. The United Kingdom, the United States, Canada, and Australia are the best examples of this type of welfare system. Conservative welfare states are found in such European countries as Austria, France, Germany, Switzerland, and Italy. Here social benefits are provided to the large mass of the population, but these are highly status differentiated. There are numerous social insurance schemes, each with its own particular rules, finances, and benefit structure. For example, in Germany in the late nineteenth century “Bismarck’s pension for workers was not to be blended with that for miners and certainly not with the social policy for civil servants or for white-collar employees” (Esping-Andersen 1990: 60). Social insurance normally excludes nonworking wives, and family benefits are designed to encourage motherhood. Day care and other types of family services are poorly developed. The final type of welfare state, the social democratic state, provides the greatest number and degree of benefits. This “maximalist” welfare state is at the opposite pole from the liberal welfare state. The social democratic welfare state aims to provide a high level of social and economic equality for all citizens, with the working class enjoying the same benefits as the members of higher social classes. As EspingAndersen notes, everyone benefits, and everyone feels obligated to pay for the benefits that all receive. This type of welfare state is most characteristic of Sweden, Denmark, Norway, and, to some extent, the Netherlands. Esping-Andersen argues that the most critical feature of a welfare state is the degree to which it has decommodified work. Capitalism is the essence of commodified

14  Chapter 1

work. Work is commodified when its function is to provide the labor that will produce profits for capitalists and when little or no provision is made for the well-being of the worker. Work is decommodified to the extent that the debilitating effects of its profit-inducing capacities are counterbalanced by concerns for the quality of life of the worker. This means that workers enjoy extensive benefits in regard to such things as medical insurance and sick days, maternity or parental leave, educational leave, unemployment insurance, and retirement (early or otherwise). As Esping-Andersen (1990: 23) puts it, work is decommodified when “citizens can freely, and without potential loss of job, income, or general welfare, opt out of work when they themselves consider it necessary.” These are benefits that are normally enjoyed by civil servants and other white-collar workers, but in the most advanced welfare states, they are extended as well to the working class. Thus social democratic welfare states are the most decommodified and liberal welfare states the least decommodified. As EspingAndersen (1990: 141) explains, the most decommodified type of welfare state has deliberately abandoned the minimalist philosophy, and espouses entirely new principles with regard to its proper role in the life-cycle, now often committing itself to optimize people’s capacities to work, to find work, and even to count on a good job with good pay and working environment. The goal is to allow individuals to harmonize working life with familyhood, to square the dilemmas of having children and working, and to combine productive activity with meaningful and rewarding leisure. In some countries, at least, this philosophy has buttressed recent decades of social-policy development; indeed, it often underpins the legitimacy and common understanding of many contemporary welfare states.

Why have different types of welfare states developed in different countries in the Western world? Esping-Andersen has carried out statistical analyses to answer this question. His analyses show that conservative welfare regimes have been most common in societies with a long history of authoritarian or highly autocratic governments and very large Catholic populations. Liberal welfare states have been the outcome in societies in which the power of left-wing political parties, especially parties representing the working class, has been relatively weak. Social democratic regimes have emerged under opposite circumstances from liberal welfare regimes: where left-wing or workers’ parties have been well organized and politically powerful (cf. Moller et al. 2003). From Industrial to Postindustrial Society? One of the most influential sociological works of the past forty years is Daniel Bell’s The Coming of Post-Industrial Society (1973). Since Bell’s work was published, the term postindustrial society has appeared frequently and approvingly in numerous sociological textbooks and other works. Bell argues that a new type of society, the



Rich Democracies, I  15

postindustrial society, has in recent decades begun to emerge in the most economically advanced nations of the West, the United States in particular. The most fundamental feature of this type of society is its emphasis on the production of services rather than goods, especially of certain types of services. Whereas the industrial society delivers services in such areas as transportation, utilities, and telecommunications, the postindustrial society emphasizes services involving health, science, and education. The emergence of a postindustrial society thus involves a major transformation in the very economic foundation of society. An industrial society, Bell argues, is based on property; a postindustrial society, on the other hand, rests on knowledge, particularly theoretical knowledge. This change in the basis of social life is also marked by a change in the class structure. The new dominant social class is now not a capitalist class but a “social intelligentsia,” a class of highly educated individuals whose social dominance rests on their possession of advanced forms of theoretical knowledge. The most important members of this class are teachers, physicians, lawyers, scientists, and engineers, people for whom work has become a “game between people” rather than a game between people and things. For Bell, then, the postindustrial society is one whose overall character is vastly different from industrial or capitalist society. The desire for profit is no longer the driving force of economic and social life. Life becomes oriented around the accumulation of knowledge and its use for human betterment. Corporations come to be subordinated to what Bell calls the “sociologizing mode.” This means that their emphasis shifts toward providing extensive benefits for their employees as well as toward their “social responsibility.” In addition to and in conjunction with these changes, the postindustrial society gives a new emphasis to leisure. People acquire advanced forms of education not only for their important social uses but for enjoyment and intellectual uplift. In general, a postindustrial society is far better educated than an industrial one. Although Bell’s ideas have gained widespread acceptance among many contemporary sociologists and other social scientists, there are some reasons for skepticism. Many of the developments discussed by Bell appear to represent the emergence not of a new type of society that is opposed to capitalism but rather of a new phase of capitalist development (Berger 1974). Krishan Kumar (1995: 32) argues that the new information technology “is being applied within a political and economic framework that confirms and accentuates existing patterns, rather than giving rise to new ones.” “The instruments and techniques may change,” Kumar notes, “but the overriding goals and purposes of capitalist industrial societies remain the same as before.” These goals and purposes are, of course, those of maximizing profits and generating economic growth. On the other hand, Bell is clearly right in identifying a trend involving the decline of manufacturing and the increase of services. Table 1.5 shows the dramatic changes in the occupational structure of the United States in the period between 1860 and 2010. As the table shows, the manufacturing and construction sector peaked at 33 percent of the economy in 1950 and declined by about half to 17 percent by 2010. Transportation, trade, finance, and real estate peaked in 1970 and have also

16  Chapter 1

declined, although only slightly. But notice the dramatic increase in the service sector. It grew slowly between 1860 and 1950, then spurted to 38 percent by 1990 and to 54 percent by 2010, making up over half of the economy. Table 1.5 Composition of the American Labor Force, 1860–2010 Occupational Sector

1860 1880 1900 1920

1940 1950 1970

1990 2010

Agriculture, forestry, and fisheries

59

50

37

27

17

15

5

3

2

Mining

1

2

3

3

2

2

1

1

1

Manufacturing and construction

18

23

25

31

29

33

31

25

17

Transportation, trade, finance, and real estate

7

12

17

20

24

29

32

28

27

Services and government

12

12

11

16

21

21

33

38

54

Note: Figures should be treated as approximations because not all sources and time periods use the same definitions for enterprises; nor do they all have data of equal reliability. Totals do not add up to 100 percent because minor occupations are not included. Sources: US Department of Commerce (1975, Series D: 57–71); US Bureau of the Census (1971, 2001, 2012). Data for 1850 to 1970 were originally compiled by Collins (1979).

In addition, since Bell wrote forty years ago, it has become increasingly apparent that the type of social intelligentsia he described has grown larger and more influential. The new intelligentsia includes teachers and university professors, scientists, artists, government workers, journalists, lawyers, architects, writers, and publishers, among other occupations. Many of the members of the new intelligentsia are economically privileged, and some live in gated communities walled off from the rest of society. Members of this new class are of course found in all large cities, but there are some cities where they are especially prominent, making up a large percentage of the population: Boulder and Aspen, Colorado; Portland, Oregon; San Francisco and Santa Barbara, California; and Burlington, Vermont. Boulder, Colorado, for example, has more PhDs per capita than any city in the United States. Has this class become the new dominant class, as Bell suggested—what Marxists like to call the “ruling class”? No, not exactly, but its members have become very politically engaged and influential. One of the most remarkable things is the political outlook of this class: its members are left of center, often strikingly so. Many are highly critical of capitalism, even though they themselves have benefited greatly from it. This seems profoundly ironic, but such an outcome was predicted many years ago by the great economist Joseph Schumpeter in his classic Capitalism, Socialism, and Democracy (1947). Schumpeter (1947: 151) pointed out that in modern

Rich Democracies, I  17



democratic societies, “freedom of public discussion involving freedom to nibble at the foundations of capitalist society is inevitable in the long run”; he added that “the intellectual group cannot help nibbling, because it lives on criticism and its whole position depends on criticism that stings; and criticism of persons and of current events will, in a situation in which nothing is sacrosanct, fatally issue in criticism of classes and institutions.” Note 1. In recent years in the United States, however, productivity gains have gone disproportionately to the top of the top, especially the top 1 percent of the income distribution. And especially following the “economic meltdown” that began in September 2008 and spread around the globe, the levels of mobility among Americans have declined. Whether the more equal distribution of income and higher mobility rates that characterized the United States from the end of World War II to the early 1980s will return after the economy has recovered is a subject of controversy among social scientists today.

Chapter 2

Rich Democracies, II The Polity

After considering the economic dimensions of rich democracies, we now turn to consider the political dimensions. We look first at the formation of national states just prior to modern times, then turn to the growth in the size and scope of these states over the past two centuries. Early states were not democracies, being headed by kings, emperors, and noblemen. But beginning in the late nineteenth century, these autocratic states started to democratize, slowly at first and then more rapidly in the twentieth century. We trace this historical process of democratization and try to explain why states became increasingly democratic. Early Modern States In his pathbreaking work Coercion, Capital, and European States, A.D. 990–1990 (1990), Charles Tilly has identified three major types of states that existed in Europe during the millennium between 990 and 1990 CE: large territorial states; small states with extremely limited sovereignty, such as city-states and urban federations; and national states. Tilly has shown that these states were not randomly situated in space and time; on the contrary, each type of state was found in a particular time and associated with a particular form of economic life. The large territorial states were found in regions where the landlord class was overwhelmingly dominant in the economy and where capital was weak and capitalists were few. Russia, Poland, Hungary, and Brandenburg Prussia (now part of modern Germany) were states of this type. Here there was an extremely strong alliance between the landlord class and the state. City-states and urban federations, by contrast, were found where there were many powerful capitalists who had concentrated large amounts of capital. As a result, there was a strong alliance between capitalists and the state, and the state was largely devoted to 19

20  Chapter 2

serving the economic interests of capitalists. City-states and urban federations were most characteristic of what Tilly has called the inner geographical core of Europe, especially the Italian city-states and the Dutch Republic. These two different forms of state were found in the first half of the millennium we are considering—from 990 to 1490 CE. After the latter date, national states began to form. During the first half of this millennium there was nothing resembling a national state, that is, a large, centrally coordinated state closely identified with a particular nationality—for example, what today we call England, France, or Germany. In fact, during these earlier times England, France, and Germany did not yet exist. These regions and many others were divided into hundreds of smaller states. As Tilly (1990: 39) has said, there was an “enormous fragmentation of sovereignty then prevailing throughout the territory that would become Europe.” There were perhaps as many as five hundred states within the boundaries of Europe. In the Italian peninsula there were between two and three hundred independent city-states, and in what is now southern Germany, there were sixty-nine free cities and numerous bishoprics, duchies, and principalities. What a contrast with the present, where there are, not counting very small mini-states, only thirty-seven sovereign European states. According to Tilly, the national states of Europe formed as a result of the strong concentration of both capital and military might. The new national states beginning to evolve in the sixteenth century were massive structures compared to most of their predecessors. Huge state bureaucracies were built, and these bureaucracies were devoted to both economic and military activities. They played a large role in managing and guiding the economy and making war against other national states. Large standing armies were created to replace the relatively small private armies characteristic of feudalism. Historians have commonly referred to these new national states in their early years as forms of absolutism or absolutist monarchy. Perhaps the most important of the new monarchies were Spain, England, and France. In Spain, beginning in the late fifteenth century, the Hapsburg Dynasty came to power with the marriage of Ferdinand and Isabella. The Hapsburgs concentrated their attention on plundering the wealth of the New World through the establishment of colonies in the Americas. The treasure controlled by the Hapsburgs was greatly swelled by the precious metals shipped back to Spain from its overseas colonies. Absolutism in France was the result of a gradual development dating as far back as the fourteenth century (P. Anderson 1974). But it was in the late seventeenth century, under the reign of Louis XIV, that French absolutism reached its zenith. Louis XIV was the supreme symbol of absolute rule throughout all of Europe. He is reputed to have said, “L’état, c’est moi” (“I am the state”). Although he may never have uttered those exact words, such language clearly expresses his view of his own power. The weakest and shortest-lived of all the Western European absolutisms was formed in England. Absolutism began there in the late fifteenth century with the rise to power of the Tudors, who were eventually replaced by the Stuarts at the beginning of the seventeenth century. English absolutism was not to survive past the end of that century.

Rich Democracies, II  21



Thus it was that, after the sixteenth century, a system of interlocking yet highly competitive states was created—what we today call the interstate system. This system was initially confined to Europe, but by the late twentieth century, it had spread to encompass the entire world. The world is today divided into nearly two hundred sovereign states that engage in numerous economic, political, and military interactions with one another. The Increasing Size and Scope of the State Once national states formed, they steadily grew larger and more all-encompassing. Michael Mann (1993) has examined the growth of the state from a quantitative standpoint from 1760 to 1910, and I have added data for the period from 1920 to 1988. Table 2.1 summarizes the size of central government expenditures throughout this period for four Western nations. These data show an enormous increase in state spending. In France, state spending increased 8-fold from 1760 to 1910, another 53-fold from 1910 to 1940, and then another 21-fold between 1960 and 1988. In Germany, there was a 44-fold increase in state expenditures between 1760 and 1910 and another 104-fold increase from 1910 to 1988. In the United Kingdom and the United States, state spending increased even more dramatically. In the United Kingdom, there was only a 9-fold increase in expenditures between 1760 and 1910, but from 1910 to 1988 spending increased by a factor of 809. In the United States, state expenditures increased 89-fold from 1800 to 1910 and an enormous 1,089-fold between 1910 and 1988. Table 2.1 Central Government Expenditures of Industrial Societies, 1760–1988 Year

United States

United Kingdom

France

Germany

1760

—

18

506

61

1800

11

51

726

106

1850

45

56

1,473

252

1900

607

144

3,557

1,494

1910

977

157

3,878

2,673

1920

6,358

1,188

39,644

145,255

1930

3,320

814

55,712

8,392

1940

9,055

3,954

204,000

—

1950

40,000

3,417

­—

11,613

1960

92,000

6,157

60,034 (new francs)

30,820

1970

196,000

14,086

162,233

87,602

1980

591,000

76,200

624,000

218,000

1988

1,064,000

127,000

1,231,000

278,000

Note: Figures are given in millions of units of national currency. Sources: Mann (1993, Table 11.1); Mitchell (1992, Table G5; 1993, Table G5).

22  Chapter 2

Mann (1993) has suggested that these data may be misleading because they do not control for price inflation and population growth. He therefore examined state spending as a percentage of national income from 1760 to 1910, and I have extended the data to 1985 (Table 2.2). As we can clearly see from these data, Mann is correct; growth in the size of the state no longer appears so dramatic. In fact, between 1760 and 1910, state spending actually declined as a percentage of national income: in France from 12 to 11 percent, in Germany from 35 to 6 percent, and in the United Kingdom from 22 to 7 percent. In the United States, state spending remained essentially the same at 2.4 percent of national income in 1800 and 2.5 percent in 1910. Table 2.2 Central Government Expenditures as a Percentage of GDP, 1760–1985 Year

United States

United Kingdom

France

Germany

1760

—

22

12

35

1800

2.4

27

9

23

1850

1.7

10

9

9

1900

2.8

8

12

5

1910

2.5

7

11

6

1920

5.5

19.1

25.5

—

1930

4

16.6

14.3

10.2

1940

11.1

66.1

—

—

1950

12.3

25.6

—

10.2

1960

15

22.9

18.2

10.8

1970

16.5

24.1

19

11.5

1980

16.3

31.9

20.8

14.1

1985

18.4

33.5

23.6

14.1

Sources: Mann (1993, Table 11.3); Mitchell (1992, Table G5); United Nations (1948, Table 139); Webber and Wildavsky (1986, Table 13); Lane, McKay, and Newton (1991, Table 5.9).

So, although the state was growing in absolute terms during this period, it was not growing relative to the increasing size of national income. However, in the second period we are considering (1910–1985), state spending clearly increased in size even in relative terms: in the United States from 2.5 percent of national income to 18.4 percent, in the United Kingdom from 7 to 33.5 percent, in France from 11 to 23.6 percent, and in Germany from 6 to 14.1 percent. These numbers appear even more dramatic when we consider that national income increased greatly between 1910 and 1985: state spending was taking an increasing proportion of a quantity of funds that was itself increasing dramatically. The state was growing enormously. Why did relative state spending decline between 1760 and 1910? The reason seems to be a decline in the frequency of war. In the earlier part of this period,

Rich Democracies, II  23



the bulk of state expenditures was for military purposes, and with the decline of war relative state expenditure declined (Mann 1993). Mann asks why relative state expenditures did not decline even more, answering that the state was increasing its spending on civilian functions. He calculates that in 1760 about 25 percent of government spending was of a civilian nature and that this figure had increased to about 75 percent in 1910. Mann (1993: 376) remarks that this marked a political transformation that was unparalleled in world history: The broadening of scope was occurring across European states of very different constitutions and levels of economic development. The nineteenth century introduced major nonmilitary government expenditures. In contrast to previous centuries, civil expenditures increased through periods of peace instead of being, as in the past, a by-product of war. In 1846, the civil expenditure of the British state was more or less what it had been in 1820 and in every intervening year. But from 1847 on, a steady increase occurred in almost every year, war or peace. The pattern is confirmed in all available national statistics. War was no longer the only ratchet of state growth.

What, then, were civilian expenses actually devoted to? Education and transportation were the main items, followed closely by welfare spending. Postal and telegraph services were also important. Table 2.3 extends Mann’s analysis to 1975. Here we can see that civilian spending has continued to claim a larger and larger portion of all government expenditures. In the United States civilian expenditures made up 75 percent of all expenditures in 1975, in the United Kingdom 86 percent, in West Germany 89 percent, and in France 92 percent. And the particular nature of civilian spending has changed. Education absorbs much less than it did a century ago, and much more is being spent on health and welfare services, especially on social security and other old-age pension programs. Table 2.3 Central Government Expenditures by Type, 1975 Country

Defense

Education Health

Social Housing Economic Other Security

United States

24.6

3.4

9.3

36.6

2.9

8.7

14.4

United Kingdom

13.7

2.6

12.9

21.7

3.5

12.4

33.3

France

7.6

West 10.5 Germany

9.9

15.0

40.8

3.2

9.5

14.0

1.1

19.6

48.9

0.3

8.7

10.9

Note: Numbers represent the percentage of total expenditures spent on each government function. Source: Lane, McKay, and Newton (1991, Table 5.35).

24  Chapter 2

These figures refer only to central or federal government expenditures. If we add in expenditures from local, state, or provincial governments, the same pattern of state growth is seen. Just in the short period between 1950 and 1985 (Table 2.4), total state expenditures increased from 20 to 35.3 percent of national income in the United States, from 30.1 to 44.9 percent in the United Kingdom, from 26.7 to 49.4 percent in France, from 28.3 to 43.4 percent in West Germany, and from 14.6 to 26.9 percent in Japan. In three of these countries, total government expenditures amounted to nearly half of national income in 1985. Table 2.4 General Government Expenditures as a Percentage of GDP, 1950–1985 Year

United States

United Kingdom

France

West Germany

Japan

1950

20.0

30.1

26.7

28.3

14.6

1960

25.0

29.3

30.2

28.2

13.6

1970

30.3

33.2

34.7

32.6

14.0

1980

33.5

42.3

43.1

42.8

25.4

1985

35.3

44.9

49.4

43.4

26.9

Source: Lane, McKay, and Newton (1991, Table 5.6).

Table 2.5 extends the data to 2009 for a larger set of countries. Here we see that, except in France, state spending dipped somewhat between 1990 and 2000, then resumed its onward-and-upward course. In 2009, government expenditures exceeded half of GDP in France, Italy, the Netherlands, Sweden, and the United Kingdom. In Canada, Germany, Spain, and the United States, expenditures were close to half of GDP. For the four societies that appear in both Tables 2.4 and 2.5, total government expenditures nearly doubled in this period, from an average of 26.3 percent in 1950 to 49.3 percent in 2009. Clearly government is becoming a bigger and bigger part of the lives of individuals as the years drag on. Table 2.5 General Government Expenditures as a Percentage of GDP, 1990–2009 Country

1990

2000

2009

Canada France Germany Italy Netherlands Spain Sweden United Kingdom United States

48.8 49.4 — 52.9 54.9 42.8 60.1 41.5 37.2

41.1 51.6 45.1 46.1 44.2 39.1 57.0 36.6 33.9

43.6 55.6 47.7 51.7 50.3 46.3 56.2 52.1 41.5

Source: US Bureau of the Census (2011, Table 1359).

Rich Democracies, II  25



From Autocracy to Democracy In addition to the increasing size and scope of the state, the second great political trend of modern times is the development of democratic government, or what is best called parliamentary democracy. What is democracy? Dietrich Rueschemeyer, Evelyne Huber Stephens, and John D. Stephens (1992) suggest that it involves the following features:

• Parliamentary or congressional bodies with a power base separate from that of presidents or prime ministers • Regular, free, and fair election of government officials to office by means of universal suffrage (i.e., the entire adult population maintains the right to vote) • Responsibility of the remaining segments of government to the parliament or congress • The granting of individual rights and freedoms to the mass of the population and the general honoring of these liberties

Table 2.6 outlines the early development of democratic government in eleven Western societies and Japan. In the formation of modern parliamentary democracies, the parliamentary dimension emerged first, and suffrage (voting rights) followed considerably later. In the sixteenth and seventeenth centuries in Britain and France, for example, there were parliamentary bodies that served as a counterpoint to the power of the king (Downing 1992; Yerby 2008). In most cases it was not until the middle of the nineteenth century that universal (male) suffrage began to be established in governments that already had parliamentary bodies, and true universal suffrage— suffrage for both men and women—did not emerge until after about 1920. As can be seen from the table, the first three governments to grant full voting rights to at least the male segment of the population were Switzerland (1848), France (1848), and Germany (1871). Denmark, the Netherlands, Belgium, Italy, Norway, and Sweden established full manhood suffrage between 1900 and 1921. The United Kingdom enacted manhood suffrage in 1918, but it was not fully equal because some citizens (property holders) were allowed two votes. Japan only established full and equal suffrage in 1946, after its defeat in World War II and occupation by US military forces. Table 2.6 Development of Mass Suffrage in Industrial Societies Country

Year

United States

1776

Milestones in the Development of Mass Suffrage

Restricted manhood suffrage (restricted by property or taxpaying qualifications, which varied from state to state and by race) 1792– Elimination of property and taxpaying restrictions; by end 1863 of period, restrictions removed in all but four states; after Mississippi in 1817, no state entered union with a property or taxpaying qualification

26  Chapter 2 Table 2.6 Continued Country

Year

United States 1865 (cont.)

Belgium

Denmark

France

Germany

Italy

Milestones in the Development of Mass Suffrage Restriction by race eliminated but not effectively implemented in southern states

1920

Universal suffrage for adult men and women (but still de facto racial restriction in southern states)

1965

Universal suffrage for adult men and women (de facto racial restriction finally abolished in southern states)

1831

Equal but restricted manhood suffrage

1894

Universal but unequal manhood suffrage (additional votes for house owners and citizens with higher education)

1919

Universal and equal manhood suffrage for men over age twenty-one

1948

Universal and equal suffrage for all men and women over age twenty-one

1849

Equal but restricted suffrage for male citizens age thirty and older (exclusion of servants and farm laborers without their own households and those receiving public relief)

1918

Universal and equal suffrage for all men and women age twenty-nine and older

1815

Almost universal and equal manhood suffrage

1824

Restricted and unequal suffrage for male citizens age thirty and older (general electorate restricted by high direct tax minimums)

1831

Restricted but almost equal manhood suffrage for citizens age twenty-five and older

1848

Universal and equal suffrage for all male citizens age twenty-one and older

1945

Universal and equal suffrage for all men and women age twenty-one and older

1848

Universal and equal suffrage for all male citizens (with minor exceptions)

1871

Universal and equal suffrage for all male citizens age twenty-five and older

1919

Universal and equal suffrage for all men and women age twenty and older

1861

Equal but restricted manhood suffrage (limited to citizens age twenty-five and older who were literate and paid minimum taxes)

1913

Almost universal and equal suffrage for male citizens age thirty and older and for male citizens age twenty-one and older who had completed military service or had done one of the following: finished primary school, paid a minimum tax, or exercised official functions

Rich Democracies, II  27

Table 2.6 Continued Country

Year

Milestones in the Development of Mass Suffrage

Italy (cont.)

1919

Universal and equal manhood suffrage for citizens age twenty-one and older; suffrage also for all men who had participated in war, regardless of age Universal and equal suffrage for all men and women age twenty-one and older Equal but restricted manhood suffrage for citizens age twenty-three and older (restricted by payment of high direct taxes) Equal but restricted suffrage for male citizens age twentyfive and older (restricted by property) Universal and equal suffrage for male citizens age twenty-five and older Universal and equal suffrage for men and women age twenty-five and older Equal but restricted manhood suffrage (restricted by high occupational and property requirements) Almost universal and equal suffrage for male citizens age twenty-five and older (suffrage temporarily suspended in cases of bankruptcy and receipt of public relief) Universal and equal adult suffrage for men and women age twenty-three and older Equal but restricted manhood suffrage for citizens age twenty-one and older (restricted by high economic qualifications) Almost universal and equal suffrage for male citizens age twenty-four and older (exclusion of those receiving public relief) Universal and equal suffrage for men and women age twenty-three and older Universal and equal suffrage for male citizens age twenty and older Universal and equal suffrage for men and women age twenty and older Restricted and unequal manhood suffrage for citizens age twenty-one and older (restricted by income and property qualifications) Reduction of income and property qualifications (England and Scotland only) Reduction and standardization of qualifications throughout United Kingdom Universal and almost equal suffrage for male citizens age twenty-one and older and for women age thirty and older who were householders or wives of householders (some citizens permitted two votes)

1946 Netherlands

1849 1897 1918 1922

Norway

1815 1900 1921

Sweden

1866 1909 1921

Switzerland

1848 1971

United Kingdom

1832 1868 1885 1918

28  Chapter 2 Table 2.6 Continued Country

Year

Milestones in the Development of Mass Suffrage

United Kingdom (cont.) Japan

1928

Universal and almost equal suffrage for men and women age twenty-one and older (some plural voting still permitted) Restricted suffrage for males age twenty-five and older (restricted by minimum tax payments) Restricted manhood suffrage for citizens age twenty-five and older (exclusion of the indigent) Universal and equal suffrage for all men and women age twenty and older

1889 1925 1946

Sources: Flora (1983); Hane (1992); Porter (1918).

The earliest democracies to develop outside Western Europe emerged in the United States, Canada, Australia, and New Zealand. All of these societies were settler colonies that hived off from Great Britain. Britain had perhaps the earliest and most fully developed parliamentary and constitutional government, and all of its settler colonies were therefore inheritors of that political tradition. The US situation was peculiar because of slavery. Between 1792 and 1863 full manhood suffrage was established in the individual states, but it was restricted by race until 1865, at which time it was removed. However, the removal of the restriction was not acknowledged in the southern states, and de facto exclusion of blacks from voting rights therefore continued. Most of the countries with early democracies were able to consolidate and build on them. However, the fledgling democracies in Austria-Hungary, Spain, Italy, and Germany collapsed after a brief period, with fascist movements in Italy and Germany in the 1930s and 1940s. Democracy was eventually restored in these countries, although quite late in Spain. Highly relevant to this discussion is the distinction between restricted and unrestricted democracy (Rueschemeyer, Stephens, and Stephens 1992). A restricted democracy is one in which the four principles mentioned above prevail in general, but there is some restriction or limitation placed on them. For example, individual rights and freedoms may be limited in various ways, or the right to vote may be restricted to certain segments of the population by such criteria as property ownership, gender, or race. All of today’s societies with the most highly developed democracies began as restricted democracies. Over time property restrictions were the first to be eliminated, followed by gender restrictions. It is interesting that two of the first societies with full manhood suffrage did not allow women to vote until quite late: France in 1945 and Switzerland in 1971. Another important distinction is that between formal and substantive democracy. A formal democracy is a government that has officially declared itself to be a democracy but whose actions are inconsistent with its declarations. Formal democracies are governments that lack genuine democratic behavior and are democratic in name only. Elections are held, but they are neither fair nor free.

Rich Democracies, II  29



Political rights may be acknowledged in principle, but officials of the state frequently ride roughshod over them. Many of the societies in today’s world that call themselves democracies are actually just formal democracies. Most of the so-called democracies of the less-developed world fall into this category. Substantive democracies, by contrast, are genuine democracies—democratic in both name and deed. The societies of Western Europe, North America, Australia, New Zealand, and Japan, along with a few other countries, have substantive democracies. Table 2.7 helps bring us up to date on the level of democratization in the world’s countries. The Finnish political scientist Tatu Vanhanen (1997) has calculated democracy scores for most of the world’s countries for every decade since 1848. He has formulated an Index of Democracy that is based on a combination of the proportion of the population voting in elections and the degree of political party competition. The table shows the scores of selected countries, both advanced industrial and less-developed, for two periods, 1948 and 2000. Two things are immediately apparent. First, it is the most economically developed countries that are the most democratic—hence, the main title of this and the previous chapter, “Rich Democracies.” It is these countries that have the highest democracy scores, and it is the least developed countries that have the lowest scores. Second, many countries with low democracy scores in 1948 had attained higher scores by 2000. Spain and Portugal emerged from their authoritarian pasts to develop stable democratic regimes. Throughout Latin America most governments were authoritarian and repressive in 1948, but the majority of these had made significant democratic strides by 2000; for example, Argentina improved from 7.7 to 26.1, Brazil from 6.4 to 27.4, and Mexico from 2.2 to 20.8. On the other hand, societies in the Islamic world were almost all highly authoritarian in 1948 and remained so in 2000, with democracy scores at or only slightly above zero. Table 2.7 Levels of Democracy in Selected Countries, 1948 and 2000 Country

1948

2000

Australia

31.8

35.3

Belgium

16.3

42.7

Canada

25.1

24.2

France

33.4

35.5

Italy

29.6

45.6

Netherlands

34.1

38.4

Norway

28.4

37.9

Portugal

0

28.1

Spain

0

31.9

Switzerland

18.3

40.0

United Kingdom

24.8

30.2

United States

24.4

34.5

Japan

24.0

24.4

30  Chapter 2 Table 2.7 Continued Country

1948

2000

Argentina

7.7

26.1

Brazil

6.4

27.4

Chile

5.1

23.1

Colombia

7.7

16.5

Ecuador

5.5

14.2

Guatemala

1.5

5.5

Mexico

2.2

20.8

Saudi Arabia

0

0

Egypt

0

3.0

Iran

0.3

5.2

Iraq

0

0

Syria

4.8

1.4

Jordan

0

0.8

Afghanistan

0

0

Burma/Myanmar

0.7

0

India

1.8

16.8

China

0

0

Thailand

0

15.2

Philippines

6.0

21.5

Liberia

0

5.2

Ethiopia

0

4.2

Note: Democracy scores are calculated as the rate of voter participation multiplied by the extent of political party competition, with the product then divided by one hundred. Source: Vanhanen (n.d.).

Caution is required in interpreting the numbers in Table 2.7. Most importantly, we need to remember the distinction between formal and substantive democracy. Many of the countries with low scores in 1948 and moderate or high scores in 2000 have yet to develop true substantive democracies. Although democracy scores are now generally moderate or high throughout Latin America, in most of these countries there is much more formal than substantive democracy. A crucial part of substantive democracy is the existence of civil liberties and political rights, which do not form a part of Vanhanen’s measure of democracy. Thus, a country can have a high score on his measure (participation and competition) but limited respect for liberties and rights. Also of great importance is the matter of democratic consolidation. Many less-developed countries, especially those in sub-Saharan Africa, have developed fledgling democratic institutions only to see them collapse in a short time. Building a genuine substantive democracy that lasts is a difficult task.



Rich Democracies, II  31

Why has democracy emerged only within the past 150 years? After all, virtually all large-scale societies throughout human history have been anything but democratic. As already noted, democracy has evolved in close conjunction with the development of modern capitalism. Indeed, every advanced capitalist society in the world today is, without exception, characterized by a genuine substantive democracy. What is the connection? Is it because democracy is a form of government suitable to the economic interests of capitalists, as some Marxian theorists have argued (Szymanski 1978)? This does not appear to be the reason. In an excellent comparative and historical study, Capitalist Development and Democracy (1992), Rueschemeyer, Stephens, and Stephens have shown that, although capitalists have been favorably disposed toward parliamentary government, in most cases they have been opposed to the political inclusion of the large mass of the population. They have feared the power that workers might acquire through the vote to alter the economic balance between workers and capitalists in favor of workers. If capitalists have been hostile to mass suffrage, then why has it developed most extensively in those societies with the most advanced capitalist economies? Rueschemeyer, Stephens, and Stephens’s answer is that capitalism has created large working classes that have organized themselves and pressed hard for citizenship rights, especially the right to vote. The authors show that democracy developed earliest and most fully in those societies that were in the forefront of industrial capitalist development and thus had the largest and best organized working classes. Democracy was most strongly resisted, on the other hand, in those societies in which industrialization was retarded. Because industrial development came later and occurred more slowly, the working classes remained small and politically anemic. Moreover, such societies were ones in which some type of landlord class still held considerable economic and political power, and this class is virtually always hostile to democracy. Landlords are engaged in the exploitation of peasants through their direct submission and political subordination—what Rueschemeyer, Stephens, and Stephens call labor-repressive agriculture—and as long as landlords remain important in the economy, democracy can advance but little. The Western European societies that experienced democratic collapses—Austria-Hungary, Spain, Italy, and Germany— were those in which landlords retained considerable economic power well into the second half of the twentieth century. Of these four, Spain was the last to develop democratic institutions, and it was a society whose landed upper class was very slow to disappear. Rueschemeyer, Stephens, and Stephens argue that the route to democracy in the British settler colonies was somewhat different. These were societies that inherited the political achievements of Great Britain, which gave them a favorable and early start. In addition, the enormous availability of cheap land allowed for the development of a large class of independent farmers. Except for slavery in the US South, there was no system of labor-repressive agriculture, and thus the government was not controlled by a landed upper class. These societies all began as societies of small-scale independent farmers and merchants, conditions that were highly

32  Chapter 2

favorable to the development of full substantive democracy. The authors also look at the failure of much substantive democracy to develop in Latin America until recent times, arguing that the great economic power of the landed upper classes in this region has been a severe barrier to democracy. Rueschemeyer, Stephens, and Stephens’s work represents an important advance in our understanding of the evolution of modern democracy. However, the authors may have missed some important parts of the story. In the most extensive research on democracy ever undertaken using quantitative data, Tatu Vanhanen (1997, 2003) has looked at democratization in a large number of nation-states between 1850 and 1990. Vanhanen’s most basic argument is that governments in complex societies will be authoritarian or autocratic when the large mass of the population lacks resources that can be used to force states to become more democratic and sensitive to their needs and aims. Vanhanen proposes six types of resources that are useful to populations in struggling for more democratic governments: large nonagricultural populations, large urban populations, ownership of farms by independent families, high rates of literacy, high rates of university enrollments, and the deconcentration of economic resources. The first five of these are fairly obvious, the last less so. When economic resources are deconcentrated, their ownership and control are spread throughout many segments of a population, not being monopolized by a powerful state or by a small handful of extremely wealthy individuals. Vanhanen combines all of these factors into a large superfactor that he calls the Index of Power Resources (IPR). He then correlates the IPR with levels of democratization in 172 countries in the mid-1990s, revealing an extremely close relationship. Informal analyses of Vanhanen’s data I conducted myself reveal that the IPR is closely related to levels of democratization throughout the entire period between 1850 and 1990. Vanhanen’s conclusion is that states will become democratic when the population acquires power resources and remain authoritarian when people lack these resources. As is clear from earlier discussion, Vanhanen conceives of democracy as not simply an either/or situation. Societies can have a wide range of levels of democracy, from zero (no political rights, no suffrage) to very high (extensive political rights and freedoms, universal adult suffrage). The greater the extent of people’s power resources, the higher the level of democratization is likely to be in their society. Unfortunately, Vanhanen makes the unwarranted assumption that the six power resources are of equal significance in promoting democracy. Skeptical of this assumption, I used Vanhanen’s data to examine the separate effects of each of these resources throughout the period between 1900 and 1990 (Sanderson 2009). I found that the single most important power resource was the degree of economic resource deconcentration. This was true throughout the entire period. In 1900 and 1950, it was the deconcentration of agricultural resources that was important, but by 1980 this was no longer the case. In 1980 and 1990 it was the deconcentration of nonagricultural economic resources that was most important. Why should economic deconcentration be so important for democracy? The answer seems to be that it reduces the political influence of rich landlords (agricultural



Rich Democracies, II  33

deconcentration) and rich industrial and finance capitalists (nonagricultural deconcentration) and increases the probability that the rest of the population can begin to exercise some political influence. Ownership is more dispersed, and this gives a larger segment of the population important economic resources that can be used in the struggle for democracy. But economic deconcentration by itself is not sufficient to produce very high levels of democracy—to put a country into the group of the world’s most advanced democracies. In additional research I have conducted using different statistical methods, I found that all of Vanhanen’s power resources are needed in combination for a country to become an advanced democracy (Sanderson 2009). Literacy is especially important because it provides people with both political knowledge and the possibility of communication and organization for political goals. The greater people’s political knowledge and the more they can communicate about vital political matters, the greater the chances they can pressure their governments to expand political rights and suffrage. It is also helpful if a society belongs to international economic and political organizations that include many democratic societies and if a society is surrounded by democratic neighbors. The Rarity and Difficulty of Democracy Even a cursory examination of world history reveals that democracy is almost exclusively an achievement of the modern era. The bands and tribes studied by anthropologists often have a kind of primitive democracy, in which leaders have little or no real power or authority, in which tribal councils arbitrate disputes, and so on. But once we reach the level of complex and highly intensive horticultural societies, rule by the few over the many becomes the norm. And in the agrarian states of world history, autocracy was virtually universal and often took extreme forms. Ancient Greece and Rome have often been called democracies, but this is a considerable overstatement. It is true that these societies had senates that checked the power of rulers, but senators were elected only by members of the citizen class, not by the population as a whole. Moreover, no rights or liberties in the modern sense existed in Greece or Rome. Why is democracy so rare and so difficult to achieve? Following Albert Somit and Steven Peterson in their book The Failure of Democratic Nation Building (2005), I contend that the human species is just not naturally predisposed toward it. When dominance hierarchies form, those attaining the top rungs want to stay there, exercising power both for its own sake and for the other benefits it will bring, such as status and wealth. Although in general people dislike being dominated, many are not hesitant to become the dominators, should circumstances permit. In short, people who seek power will be autocratic to the extent that they can get away with it. It might be objected that since small-scale societies usually have minimal dominance hierarchies and are highly egalitarian in resource distribution, autocratic rule cannot be part of our human heritage. However, dominance hierarchies remain

34  Chapter 2

minimal in small-scale societies because these societies do not have the economic, political, and military resources necessary for powerful rulers to emerge. The people who would otherwise be subjected to such power are able to organize themselves to prevent this from happening. Leaders whose leadership becomes objectionable to everyone else can be shamed, ostracized, removed from their positions (if there are formal positions), or even in some instances killed. But in preindustrial states, rulers do possess and control critical resources, the most important of which are property (the means of economic production, in this case mostly land) and military weapons (the means of violence). The vast majority of people lack the resources needed to neutralize the power of those who possess these resources. Should the people try to remove state leaders from office, it is they who can be killed, not the leaders. It is only with the coming of the modern era in the past century and a half that this situation has been at least partially reversed, as the resources necessary to force autocratic states to become more democratic became available to large numbers of people. And in most of the world’s societies, which are not advanced democracies (or in many cases not even democracies at all), enough people still do not possess a sufficient number of these resources to shift the balance appreciably in a democratic direction. Moreover, democracy is very difficult not only to attain but to sustain, especially in its earliest stages, and for the same reasons. There are many examples in the twentieth century of states that developed fledgling democracies only to have them collapse in a short time. The cases of Germany, Austria, Italy, Spain, and Japan are the best-known examples from the 1930s, but in Latin America fledgling democracies collapsed in the 1970s and 1980s. Although democracy revived in this region, most Latin American democracies are still not full democracies on the EuroAmerican model. A few African states have made some strides toward democracy in recent years, only to collapse in short order. And we have the recent examples of countries like Belarus and Russia. It appeared in the 1990s that Russia might democratize following the collapse of Communism, but it is rapidly returning to autocratic rule under Vladimir Putin. Even in advanced democracies like the United States, recent decades have witnessed steadily increasing attempts by the executive branch of government to take more and more power unto itself at the expense of the legislature, and government is intruding more and more into the lives of ordinary citizens. The European Union is also usurping power from its member states and acting in some respects as an autocratic body, behavior that is likely to intensify over time. Some people talk of the desirability of a world state that would regulate the world economy for the benefit of all countries and reduce the likelihood of war. But a world state, when you stop to think about it, can be an unnerving prospect. A single state with no real opposition from an equally powerful state is extremely unlikely to remain democratic, no matter how democratic it might be at the outset.

Chapter 3

Socialist and Postsocialist Societies The world’s first socialist society was born in 1917 when Russia underwent the Bolshevik revolution, leading to the formation of the Soviet Union. Elsewhere in Europe other socialist societies began to emerge in the mid- to late 1940s, largely as the result of military occupation by the Soviet Union. In the less developed part of the world a number of socialist societies arose somewhat later, mostly in the 1970s. In analyzing these societies, we first discuss their economic structure during their classical state socialist phase, then consider the extremely repressive states that have characterized them. At a later point we look at the economic reforms they experienced in the 1970s and 1980s that led to the dramatic economic and political upheavals of 1989 and 1991. This allows us to consider them as they are now. In this chapter we are primarily concerned only with those socialist societies that have undergone substantial industrialization: the Soviet Union and the socialist societies of Eastern Europe. The Nature of State Socialism Table 3.1 lists the major socialist societies of the world, the time at which they became socialist, and their current status. As can be seen, of the twenty-eight societies shown in the table, all but six have abandoned socialism, and two of these, China and Vietnam, have abandoned most socialist economic planning in favor of more market-oriented economies. All of these societies were (or are) ones in which MarxismLeninism was (or is) the dominant political ideology and the Communist Party was (or is) in control of the state. (There are or have been a few other societies claiming to be socialist in a sense other than Marxist-Leninist. These are not included here.) These societies are perhaps best termed state socialist because of the strong role the state plays in the direction of the economy. To complicate matters, after 1989 in Eastern Europe and 1991 in the Soviet Union, many of these societies abandoned 35

36  Chapter 3

state socialism (at least in its classical version) and shifted markedly toward a more capitalist, market-oriented economy. The Communist Party lost its monopoly of power, and substantial political liberalization was achieved. For the sake of terminological clarity, we propose to use the term state socialism to refer to these societies as they were before 1989 (Eastern Europe) or 1991 (Soviet Union) and to use the term postsocialism to refer to them after these dates (Kornai 1992). Table 3.1 State Socialist Societies in 1989 and Their Current Status Society

Year of Transition to State Socialism/ Leninism

Current Status

Soviet Union

1917

Abandoned Leninism and fragmented into Russia and other successor states after 1991

East Germany

1949

Abandoned Leninism in 1989 and reunified with West Germany in 1990

Czechoslovakia

1948

Abandoned Leninism after 1989 and separated into the Czech Republic and Slovakia in 1993

Hungary

1948

Abandoned Leninism after 1989

Poland

1948

Abandoned Leninism after 1989

Yugoslavia

1945

Abandoned Leninism after 1989 and fragmented into Bosnia and Herzegovina, Croatia, Macedonia, Slovenia, and Serbia and Montenegro

Bulgaria

1947

Abandoned Leninism after 1989

Romania

1948

Abandoned Leninism after 1989

Albania

1944

Abandoned Leninism after 1989

China

1949

Remains Communist

North Korea

1948

Remains Communist

Vietnam

1954/1975a

Remains Communist

Mongolia

1921

Abandoned Communism in the 1990s

Cuba

1959

Remains Leninist

Democratic Republic of the Congo (Zaire)

1963

Abandoned Communism in the 1990s

Somalia

1969

No permanent national government

South Yemen

1969

Abandoned Communism and reunified with North Yemen in 1990

Benin

1972

Abandoned Leninism in 1990

Ethiopia

1974

Officially a federal republic but still dominated by the Ethiopian People’s Revolutionary Democratic Front

Socialist and Postsocialist Societies  37

Table 3.1 Continued Society

Year of Transition to State Socialism/ Leninism

Current Status

Angola

1975

Abandoned Communism in the 1990s

Kampuchea

1975

Abandoned Communism in the 1990s and reinstated its former name, Cambodia

Laos

1975

Remains Communist

Mozambique

1975

Abandoned Communism after 1989

Afghanistan

1978

Communist regime collapsed in 1992

Nicaragua

1979

Abandoned Communism in 1990

Zimbabwe

1980

Abandoned Communism in 1990

Guinea-Bissau

1980

Abandoned Communism in 1991

Madagascar

1972

Abandoned Communism in 1992

The date 1954 refers only to the northern part of the country. The southern part became Communist in 1975, when Vietnam again became a unified state. Sources: Kornai (1992); Ramsay (2001); Goldman (2001); Norton (2001); Collinwood (2001); Goodwin (2000); Spencer (2001); Central Intelligence Agency (1998, 2011).

a

In the classical exemplar of state socialism, the Soviet Union, private property was almost completely eliminated, with the exception of consumer goods. Thus, one could own one’s own house, car, or wardrobe privately (as items of personal property), but one could not privately own the means of economic production. Most of the industrial sector and part of the agricultural sector were nationalized. Indeed, all sectors of the economy, except for small plots of land cultivated by collective farmers, were brought under the control of national economic planning. The very core of the Soviet economy was its state sector; all major industries were state owned and state operated in the areas of mining, heavy construction, railroads, communications, power production, urban retailing, large cooperative farms, and others. The major means of production were thus publicly owned, and all employees worked for the state. The private enterprises that did exist, such as small farms operated by small-scale artisans in remote areas, were very limited (Lane 1985; Kornai 1992). The Eastern European state socialist societies were based more or less on the Soviet model, but they had a tendency to be somewhat more open to market-oriented economic activity, particularly after 1970 (Abonyi 1982). This was especially true in Hungary and Yugoslavia. However, the classical state socialist system kept market activity to an absolute minimum and gave overwhelming emphasis to state management and economic planning. As János Kornai (1992: 115) has written, in classical state socialism “the ‘life or death’ of a firm as a collective organization or organism is determined not by the ‘natural selection’ of market competition but by the bureaucracy. There is a complete absence of . . . entrepreneurs who introduce new products or new technologies,

38  Chapter 3

establish new organizations, and conquer new markets, while obsolete production and ossified organizations are squeezed out.” This absence of a market principle was perhaps nowhere more salient to the functioning of the economy than with respect to money and prices. Classical socialism was, according to Kornai (1992), not even a fully monetized economy; it was only a semi-monetized economy. Money existed, but it did not act as a universal means of exchange in the way that it does within capitalism; nor was it convertible into foreign currencies. And prices were set not by market principles but rather by bureaucratic decree. This means that they were not sensitive to the basic laws of supply and demand and thus could not be used as indicators of how much of what products to produce. As we shall see, these economic characteristics had dramatic consequences for the functioning and evolution of the state socialist system. Industrialization in the state socialist societies took place under the close control of the state (Gershenkron 1962). In the Soviet Union, the major drive toward industrialization occurred from the late 1920s through World War II under the leadership of Josef Stalin. In a very short time, the Soviet Union was transformed from a predominantly agrarian society into a largely industrial one. The speed of industrialization in the Soviet Union, and the fervor with which the Soviet leaders carried it out, took a terrible human toll. Millions of peasants were either killed or sent to labor camps in order to make the transition from agriculture to industry. This was one of the sorriest sagas in human history. By the second half of the twentieth century, the state socialist societies came to resemble the industrial capitalist societies in several important respects. To a large extent, industrialization created notable similarities in the basic social patterns of both types of society. However, the state socialist world was never able to achieve the truly high levels of economic prosperity characteristic of modern capitalism. Table 3.2 lists eight state socialist societies and several of their development characteristics as they were in 1989, just at the time of their collapse. For purposes of comparison, averages are given for ten industrial capitalist societies. As can be seen, the levels of per capita income in the state socialist societies were less than a third of those in the capitalist nations ($5,448 versus $18,783). Moreover, more than five times as many people in state socialist societies were still working in agriculture (25.8 versus 4.7 percent), and infant mortality rates were nearly three times as high under state socialism (21.6 versus 7.5). Table 3.2 Development Characteristics of Eight State Socialist Societies in 1989 Society

GDP

LFA

IMR

Albania

1,200

60

52

Bulgaria

5,710

17

14

Czechoslovakia

7,878

12

11

Hungary

6,108

19

15

Poland

4,565

28

16

Socialist and Postsocialist Societies  39

Table 3.2 Continued Society

GDP

LFA

IMR

Romania

3,445

28

19

Soviet Union

9,211

20

24

Yugoslavia

5,464

22

22

Average for eight state socialist societies

5,448

25.8

21.6

Average for ten industrial capitalist societies (not shown)

18,783

4.7

7.5

Legend: GDP = Gross Domestic Product per capita in US dollars; LFA = percentage of the labor force in agriculture; IMR = infant mortality rate, calculated as the annual number of deaths of infants in the first year of life per 1,000 infants in that age group. Sources: Central Intelligence Agency (1990) for socialist societies; United Nations (1992) for average of capitalist societies.

In addition, by the 1970s state socialism seemed to run up against severe constraints on further economic development. State socialist economies began to stagnate and suffer from a variety of ills. These ills led to various programs of economic reform that culminated in the postsocialist transition of the late 1980s and early 1990s. I shall return to discuss these reforms shortly. Leninist Regimes One of the most striking characteristics of state socialist societies was the nature of their political regimes: in all instances these societies had highly authoritarian and often brutally dictatorial states in which a single party, the Communist Party, monopolized rule. These states have been called Leninist regimes (Jowitt 1978; Chirot 1986). They have the following basic features (Chirot 1986: 265):

• The Communist Party claims an absolute monopoly of political power. • All key sectors of the economy are controlled and operated by the state. • There is a formal commitment to creating an industrially advanced and highly egalitarian society. • The regime legitimizes itself by appeal to Marxism-Leninism as an overarching political ideology. • The Communist Party regards itself as the ultimate interpreter of scientific and political truth, and its decisions and actions are not subject to question or criticism. • There is close regulation of the daily lives of individuals, and sharp limitations are placed on their freedom of movement, speech, association, and philosophical or ideological commitment.

40  Chapter 3

A recent book by the French historian Stéphane Courtois and his colleagues, The Black Book of Communism (1999), shows that these features of Leninist regimes are only part of the story. Courtois et al. have attempted to enumerate the human consequences of Leninist regimes in terms of the number of people who lost their lives as the direct or indirect results of these regimes’ actions. As the authors note, Leninist regimes virtually turned mass crime into the ordinary operation of the state. They estimate that approximately 100 million people died as the result of such things as executions, the slaughter of rebellious workers, and mass starvation of the peasantry. This, of course, ignores the immense suffering of millions of others in forced labor camps and the like who did not die. Courtois et al. break down the 100 million dead approximately as follows:



• In the Soviet Union, 20 million died. Tens of thousands of hostages and prisoners who were never tried were executed, and hundreds of thousands of rebellious workers and peasants were murdered in the period between 1918 and 1922. Five million died as a result of the famine of 1922. Tens of thousands were murdered in concentration camps between 1918 and 1930. There were 578,000 criminal convictions in 1926, 709,000 in 1927, 909,000 in 1928, and another 1,778,000 in 1929. And then the real horrors started when Stalin came to power and began the forced collectivization of agriculture. In the early 1930s, 2 million peasants were deported, many of whom died as a result. Six million peasants died as a result of the great famine of 1932–1933. These deportations and deaths resulted from an ongoing struggle between peasants and the state. The peasantry wanted to retain enough of their harvest to provide for their own needs, but the state demanded that they give up more. When the peasants refused, they were deliberately starved out. In 1937–1938 some 700,000 people were executed for any type of political deviation from the party line. Finally, the 1930s witnessed a dramatic expansion in the system of concentration camps. In 1935 there were nearly 1 million prisoners in the camps, a number that nearly doubled by 1941. These were mostly political prisoners. • China subjected its population and its political dissidents to severe repression in the form of selective arrests, public humiliations, beatings, and imprisonment in so-called reeducation camps. Between the Communists’ rise to power in 1949 and the death of Mao Zedong in 1976, perhaps as many as 65 million people died. Between 1959 and 1961, China experienced the greatest famine in all of world history, with somewhere between 20 and 43 million estimated to have died from it. Courtois et al. blame this on total government incompetence in agriculture. The concentration camp system in China was huge. There were at least 1,000 camps, and as many as 50 million people passed through them; some 20 million died in the camps. During the famous Cultural Revolution of 1966 to 1976, the government engaged in extreme anti-intellectualism, persecuting teachers, scientists, and technicians in large







Socialist and Postsocialist Societies  41 numbers and killing many. There was an extreme emphasis on ideological conformity, and, as in the Soviet Union, any kind of political deviation was severely punished, often with death. • Cambodia’s experience with Communism was horrendous. Renaming the country Kampuchea, Pol Pot, on coming to power, attempted to implement a type of socialist society overnight. Agriculture was collectivized in just two years. To accomplish this, the government inaugurated a campaign to move people out of the cities and back into the rural areas, passing through a series of deportation camps in the process. There were many purges and massacres and possibly 1 million executions. Courtois et al. describe Kampuchea as a nightmare world in which all human values had been destroyed and all human compassion and decency lost. People were reduced to cannibalism, stealing food from pigs, and eating rats, ants, and spiders. • North Korea has been described as the “most closed state in the world.” Its people were subjected to the usual purges, executions, and prison camps. No Communist state has ever engaged in such total and consistent ideological indoctrination of the masses. Like other Communist states, North Korea has experienced severe famine, with possibly as many as 2 million people dying from starvation.

These are the most extreme examples of the dire human toll of Leninist regimes, but all Communist or Leninist societies have been engaged in political repression, including the execution of real or perceived political dissidents. In Eastern Europe as a whole, at least 1 million people died as a result of execution or incarceration in labor camps, another million died in Vietnam, and nearly 2 million died in African countries that had adopted some variety of Leninism. Perhaps the most “benign” of all Leninist societies has been Cuba, but it too has not escaped political repression, jailing and sometimes executing dissidents. Why have the state socialist societies been so politically repressive, and why have their human consequences been so horrendous? In the case of Eastern Europe, of course, totalitarian regimes were originally imposed, and to a large extent maintained, from the outside by the Soviet Union. But what then is the reason for the totalitarian character of the Soviet Union itself? A well-known explanation is at hand in the view of the state held by the great early twentieth-century sociologist Max Weber. Weber thought that socialism would inevitably lead to extensive bureaucratic centralization of power in the hands of a ruling minority because such centralization would be necessary to manage a socialist economy. Thus, socialism would inevitably become much less democratic than capitalism. Bureaucracy encourages the concentration of power, and once such power has developed, it becomes self-perpetuating, and its stranglehold is extremely difficult to break. Along similar lines, and as we saw in Chapter 2, Tatu Vanhanen (1997) argues that states will be authoritarian when the mass of the population lacks the resources to force them to be more open and democratic. His Index of Power Resources shows extremely low values for Leninist

42  Chapter 3

states compared to the very high values for Western democracies. The average IPR for twelve major Leninist societies in 1980 was 1.53 (the highest was for Yugoslavia, at 15.7; if we exclude Yugoslavia, the average was a mere 0.35). By contrast, the average for eighteen liberal democracies was 42.1. So it seems clear that a major reason Leninist societies are so repressive is that the vast majority of the population has few, if any, power resources to prevent them from becoming so. Virtually all states throughout human history have been authoritarian, and this seems to be endemic to the human condition when the governed lack political resources (Somit and Peterson 2005). Leninist regimes are therefore much closer to the norm of human history than are democratic regimes. Nonetheless, modern Leninist regimes have been repressive and brutal on a scale never seen before in the world, and this extremity must be explained. Does it have to do with the modern military and communications technology available to Leninist regimes, making severe repression and brutality all the easier? Is it the result of the extreme measures deemed necessary to catch up with Western capitalism in a short time, as seemed to be the case with Stalin’s forced industrialization of the 1930s? These factors may play some role, but a psychological factor, extreme ideological zeal and the “cultlike” nature of the new regimes, is very likely an important part of the story. Of course, this zeal must itself be explained, but it is beyond the scope of the discussion here. Reform and the Transition to Postsocialism As early as the 1970s the socialist economies of Eastern Europe began to combine state economic planning with considerable private ownership and market-oriented economic policies. They were well ahead of the Soviet Union in making this move. Nevertheless, by the mid-1980s the Soviet Union itself was spurred into the same basic kind of action. Economic reform in the Soviet Union began in earnest with the rise of Mikhail Gorbachev in 1985 to the position of general secretary of the Communist Party, the most powerful political office in all of Soviet society. Gorbachev pursued a strategy known as perestroika, or economic restructuring. The most fundamental aspects of this plan of economic reform were the following (Lapidus 1988; Kushnirsky 1988; Leggett 1988; Zemtsov and Farrar 1989):



• Although centralized economic planning was to be maintained as a guiding policy, individual firms were given increased responsibility to make decisions about their production activities. These firms were required to compete with each other, with the level of profitability being the main criterion of success. Firms that were not sufficiently profitable would be eliminated. • The wage structure was to be overhauled in the direction of greater wage differentials, which were designed as an incentive for workers to work harder and better. As a further incentive, workers could be fired for poor work and excessive absenteeism.



Socialist and Postsocialist Societies  43



• New joint ventures with Western firms were to be undertaken in order to attract Western capital and enhance the production of consumer goods.

What all of these changes had in common was obviously a recognition of the limitations of centralized economic planning and thus an increased reliance on the market (Lapidus 1988; Aganbegyan 1988, 1989). The changes were designed to shift the Soviet economy in a more “capitalistic” direction. What lay behind the reforms? Why were they undertaken at that particular time? A large part of the answer obviously involves the deteriorating economic conditions that the Soviet Union began to face in the 1970s, conditions that had reached crisis proportions by 1985 (Leggett 1988; Lapidus 1988; Zemtsov and Farrar 1989; Kaneda 1988; Mandel 1989). This crisis was accompanied by a serious demoralization of many segments of Soviet society. Robert Leggett and Tatsuo Kaneda summarize the dimensions of the problem: Growth has been trending downward for several decades as the economy experienced repeated harvest failures, bottlenecks in industry, shortages of energy and labor, and chronically low productivity. GNP growth during the 11th Five-Year Plan (1981–85) had its worst showing of any five-year period since World War II. . . . Meanwhile, improvements in living standards have tapered off as a result of the worsening performance of the economy, and popular discontent has grown. The latter has manifested itself in declining worker morale, more materialistic attitudes, an increase in “deviant” and “delinquent” behavior by Soviet youth, rising crime rates, alcohol and drug abuse, and a rising anti-Russian nationalism among ethnic groups. (Leggett 1988: 23, 25) Soviet leaders face the wastefulness of their entire economy; a decrease in the Soviet capacity for technological development; dependency on the technological progress of the West; a drop in international competitiveness; chronic shortages of basic necessities; the existence of black markets; widespread bribery and corruption; growing debt; feelings of alienation and habitual drinking among the people, who avoid work and whose rates of illness and mortality are increasing. (Kaneda 1988: 81)

But then, if a severely deteriorating economic situation motivated Gorbachev’s economic reforms, what were the underlying causes of the economic problems? János Kornai (1992), one of the world’s leading experts on the political economy of state socialism, has argued that these difficulties were inherent in the classical socialist system from the beginning, even if they took decades to fully manifest themselves. According to Kornai, bureaucratic economic planning in the absence of a market principle had especially severe consequences primarily because it failed to provide a rational pricing system that was sensitive to the basic laws of supply and demand. Because prices were not determined by consumer demand, there was no way for

44  Chapter 3

economic planners to know how to adjust supply so that it was in harmony with demand. Indeed, the system worked so that whatever was produced would always be consumed, and therefore producers had no incentives to increase supply. This led inevitably to a situation of chronic shortage. Moreover, Kornai argues, in contrast to capitalism, the state socialist system had always given priority to the production of means of production—those things, such as machinery, that are used for the production of goods—rather than to the production of consumer goods, which meant that the standard of living increased slowly. Two other features that Kornai sees as inherent in state socialism are, first, the existence of little incentive to create a domestic technology and therefore the need to borrow most of it from the West, a situation that severely reduced economic innovation, and, second, a strong emphasis on the quantity rather than the quality of goods produced, which led, of course, to severe problems with product quality. Why did state socialism have so much difficulty producing large amounts of high-quality consumer goods? In its first several decades, the Soviet economy worked reasonably well and was in fact capable of generating industrialization on a scale sufficient to narrow the gap between itself and Western capitalism (Szelenyi 1992; Chirot 1991). However, the Soviet economy and state socialism in general ran up against inherent limitations after a certain period. By the middle of the twentieth century, the Soviet system was successful in creating an industrial economy based on steel, electrical machinery, and organic chemistry—a stage of industrialization that such economic powers as the United States and Germany had attained in the period between 1870 and World War I—but it became stagnant at that stage. It was never capable of moving into the next stage of industrial development, which in Western capitalism involved the production of such things as automobiles, consumer electronic goods, and services (Chirot 1991). The Great Collapse Once Gorbachev introduced perestroika, everything changed, and quickly. Perestroika was accompanied by the political reform known as glasnost, which was essentially devoted to greater “openness” in political and social life. The mass media were given more freedom to report events accurately and thoroughly, there was more toleration of intellectual and artistic freedom of expression, some elections of public officials were held, and some political prisoners were released. Glasnost cannot be understood as simply some sort of philosophical or intellectual sea change based on a sudden awareness of the humanistic implications of democracy. It seems much more appropriate to think of it as the political counterpart of perestroika: it was the political expression of the Soviet Union’s shift in the direction of market principles. Gorbachev and other Soviet leaders seemed to think that the return to free market capitalism required a much greater degree of political openness than had previously been permitted—that a more liberal economy required a more liberal state (Kumar 1992).



Socialist and Postsocialist Societies  45

However, glasnost was only the beginning of the political changes. In the autumn of 1989, Poland, East Germany, Czechoslovakia, and Romania experienced major transformations in their authoritarian regimes. The political monopoly of the Communist Party was ended, and significant steps were taken in the direction of democracy and openness. Then, in 1991, after a right-wing attempt to overthrow Gorbachev failed miserably, the Soviet Union was publicly delegitimized, the Communist Party lost its monopoly of power, and Gorbachev was removed from office and replaced by his principal ultraliberal opponent, Boris Yeltsin. What happened in Eastern Europe in 1989 and the Soviet Union in 1991 was, quite literally, the collapse of Communism as a political and social movement and a state ideology. This collapse was complicated and exacerbated by intense waves of nationalism all over the former Communist world. The Soviet Union disintegrated as a single state as a result of many of the old Soviet republics’ claiming political sovereignty (the largest and most politically significant of these new sovereign states is, of course, Russia). Czechoslovakia separated into two states, the Czech Republic and Slovakia. And, in the most horrendous fashion, the state once known as Yugoslavia was entirely broken apart, succumbing to some of the most virulent nationalist movements the modern world has ever seen. The collapse of Communism beginning in the fall of 1989 took almost everyone—social scientists, journalists, political commentators, and ordinary citizens—by great surprise. No one expected that a political party with the level of political and military control that the Communist Party had achieved could be so swiftly and decisively thrown out of power. How do we account for such a profound and surprising political transformation? One well-known explanation has been advanced by Randall Collins and David Waller (1992; Collins 1986: Chapter 8; Collins 1995). They view the collapse of the Soviet Union as the latest historical instance of what is known as a state breakdown. This is a severe crisis within a state that leads to widespread political conflict and the collapse of a state’s capacity to rule (Goldstone 1991). Collins and Waller root the breakdown of the Soviet state in the overextension of its “empire”—the incorporation of many different nationalities into the USSR after 1917 and again after World War II and the military domination of its Eastern European satellites. This overextension created severe economic costs, especially in military buildup, which simply became unbearable over time. The system was ultimately unsustainable. Collins and Waller are saying, in essence, that the immediate causes of Soviet state breakdown were economic, but these economic problems resulted from the geopolitics of the Soviet empire rather than from any inherent feature of state socialism as an economic system. Collins and Waller’s argument has a good deal to recommend it. One thing the theory clearly does help to explain is the wave of nationalist movements that have erupted all over Eastern Europe. It also gives us one of the pieces to the puzzle of the Soviet Union’s severe economic problems. But the economic difficulties of state socialism cannot simply be laid at the door of the Soviet Union’s geopolitical arrangements. As noted earlier, there are serious problems inherent in state socialism

46  Chapter 3

as an economic system. As Kornai (1992) has shown, the intrinsic nature of state socialism turns it into a permanent shortage economy and produces economic difficulties that feed on themselves and worsen over time. Although state socialism was reasonably successful for a time in generating a great deal of industrialization in Eastern Europe and especially in the Soviet Union, it was not an economy well suited to making the move into the production of mass consumer goods and services, and thus it began to fall ever farther behind Western capitalism. Gorbachev and his allies within the political elite introduced perestroika and glasnost in an attempt to counteract the extreme inefficiencies of centralized economic planning and the downward economic spiral of Soviet society. However, the Gorbachev regime unleashed political forces it could not control (Hahn 2002). Once reforms were initiated, political infighting began within the Soviet political elite, and it was this infighting that was the immediate cause of the collapse of the Soviet Union (Hahn 2002). As for Eastern Europe, by 1989 it had become obvious to many members of these societies that the Soviet Union was no longer willing to intervene militarily to quell popular discontent (Kumar 1992). And with the Soviet Union’s military control over Eastern Europe removed, people no longer had to fear that popular protest would be extremely dangerous, as it had been in the past. They took to the streets and demanded an end to the long-hated regimes, which even many members of the Communist elites in Eastern European countries wanted to see ended. To many observers, it seemed as if the collapse had occurred overnight. But in fact things had been brewing under the surface for many years and finally came together in one explosive push. Were these state breakdowns then “people’s revolutions”? That the collapse of Communism was due in large part to popular rebellions by the masses has been a widespread interpretation among both intellectuals and journalists (Chirot 1991). However, despite all the popular discontent throughout Eastern Europe, it is doubtful that this played more than a small role in bringing Communist regimes down. The movements against the regimes, to the degree that they can be called revolutions at all, were not people’s revolutions but rather what are known as “revolutions from above”—revolutions initiated by one segment of the political elite against another (Hahn 2002). These revolutions occurred both because of the shifting economic (and hence political) interests and outlook of an elite segment and because the Soviet Union had greatly relaxed its military and political domination of Eastern Europe. A look at the past makes the point. In 1956 there was a people’s uprising against the Hungarian Communist regime, and in 1968 an attempt at liberalization of the Communist regime in Czechoslovakia was made. Both movements were quickly crushed by Soviet military force. What changed between 1968 and 1989? The answer is that the Soviet elite, or at least a significant segment of it, had come to view things in an entirely new way. Indeed, it has been shown in some detail that Gorbachev and his supporters either desired or easily tolerated the regime transformations that occurred in Eastern Europe in 1989 (Kumar 1992: 345–349). Popular discontent figured in the downfall of these regimes only at the very end, when everything had



Socialist and Postsocialist Societies  47

basically been decided, and then more as show than as real substance. Krishan Kumar (1992: 320–321) has captured the situation almost perfectly: Is it not the case rather that it is only when the upper classes cannot maintain the old order that we find the clear evidence of the determination of the lower classes to end it? Does this not suggest that causal priority has to be assigned to the problems of the existing power structure and the existing power holders in society—that is, to the distemper at the top rather than at the bottom of society? Discontent, latent or manifest, among the lower classes can be taken as the more or less given of most stratified social orders. Regimes can be peppered with popular rebellions without succumbing to them, despite these expressions of manifest disaffection on the part of the people. This has been the case with the majority of the agrarian empires of the pre-industrial world. It is only when the ruling structures of society are in a clear state of decay or dissolution that popular discontent can express itself in a confident way. Then we usually find spokesmen from the upper classes urging on popular feeling against the regime. Revolutionaries, often released from prison or returned from exile abroad, busy themselves with organizing the mass discontent. After the success of the revolution, the idea of a popular uprising against a hated tyranny becomes the official myth of the new regime. This conceals the fact that the old regime has died, often by its own hand, rather than been overthrown in a popular outburst of indignation.

(It is sometimes said that US president Ronald Reagan put an end to Communism when he said, “Mr. Gorbachev, tear down this wall,” referring to the Berlin Wall. But Reagan was not the cause of the events. He did accelerate military buildup between the two countries in order to intensify the Soviet Union’s economic difficulties, but at best this only hastened the collapse by a few years, if that. As Kumar points out, the system was already in a state of advanced decay, and it took little more than a tap on the shoulder to bring it down.) Postsocialism One of the most important things that has happened in the postsocialist societies is the transition from Leninist regimes to democracies. Table 3.3 shows democracy scores for eight state socialist countries for the period between 1980 and 2005. It is clear that following the Communist collapse there has been a substantial movement toward democracy in a majority of the postsocialist countries. However, in the case of Russia the situation is different. After what appeared to be the beginning of democracy in Russia, between 1993 and 2005 democracy declined there, and it has continued to deteriorate since then. Russia is a country with a very long history

48  Chapter 3

of highly authoritarian states and political corruption. Vladimir Putin, the current president of Russia and former head of the old Soviet KGB (the Soviet secret police), is not at all committed to democratic governance. Indeed, he has a serious interest in rebuilding the old Soviet Union and has expressed an admiration for Josef Stalin. Table 3.3 Democracy Levels in Eight State Socialist Societies, 1980–2005 Society

1980

1993

2005

Albania

0

7.7

26.3

Bulgaria

0

35.4

28.5

Czech Republic

0

40.3

30.1

Hungary

0

27.4

30.4

Poland

0

19.6

20.7

Romania

1.1

27.5

25.3

Russian Federation

0

27.0

17.3

Yugoslavia

0

20.7

—

Source: Vanhanen (n.d.).

What then of the economic situation of postsocialist countries? Table 3.4 shows development characteristics of postsocialist countries for the period between 2004 and 2010. It is easily seen that some two decades after the Communist collapse, these societies still lag considerably behind the rich democracies on most measures of development. In fact, in some respects the gap is even greater. In terms of GDP, the rich democracies have expanded their lead over the former socialist countries. Whereas in 1989 the rich democracies had approximately three and a half times the national income, by 2009 the ratio had stretched to five times as much ($37,741 versus $7,399). Even if we consider only the six postsocialist countries with the highest per capita GDPs—Slovenia, the Czech Republic, Hungary, Slovakia, Estonia, and Croatia, with an average per capita GDP of $12,282—the rich democracies are still far ahead with three times the national income. Some postsocialist countries are in very bad shape; Albania, Bosnia and Herzegovina, Georgia, Serbia, and Ukraine have an average per capita GDP of only $2,665. Table 3.4 Development Characteristics of Selected Postsocialist Societies, 2004–2010 Country

GDP

LFA

IMR

Albania

2,911

48

19

Belarus

3,802

14

6

Bosnia and Herzegovina

2,980

21

9

Bulgaria

4,089

7

18

Croatia

9,611

5

6

Czech Republic

13,877

3

4

Socialist and Postsocialist Societies  49

Table 3.4 Continued Country

GDP

LFA

IMR

Estonia

10,083

3

7

Georgia

1,701

56

16

Hungary

11,226

5

8

Latvia

8,056

13

9

Lithuania

8,768

14

7

Poland

8,887

17

7

Romania

5,645

21

23

Russian Federation

6,932

10

11

Serbia

3,453

24

7

Slovakia

10,223

4

7

Slovenia

18,674

2

4

Ukraine

2,278

16

9

15.7

9.8

2.5

4

Average for postsocialist societies 7,399 Average for ten industrial capitalist societies (not shown)

37,741

Legend: GDP = Gross Domestic Product per capita calculated in US dollars (2009); LFA = percentage of the labor force employed in agriculture (2004–2010); IMR = infant mortality rate, calculated as the annual number of deaths of infants in the first year of life per 1,000 infants in that age group (2009). GDP figures for Estonia, Latvia, and Lithuania are estimates. Sources: GDP from World Bank (2011); LFA from Central Intelligence Agency (2011) and World Resources Institute (www.wri.org) (in the few instances of significant discrepancies between the two sources, the average was taken); IMR from Central Intelligence Agency (2009).

The postsocialist countries on the whole (and especially Georgia, Albania, Serbia, and Romania) have a much higher percentage of the labor force working in agriculture (15.7 versus 2.5 percent). Infant mortality is also higher in most of the postsocialist countries compared to the rich democracies, with an average of 9.8 versus 4.0. It will be instructive to look in more detail at Russia, by far the largest, most prominent, and most geopolitically significant of all postsocialist societies. Throughout the decade of the 1990s, Russia’s economic situation deteriorated (Ericson 1995; Castells 1996; Kargarlitsky 2002; Stiglitz 2003). GDP declined by 29 percent between 1991 and 1992 and by another 12 percent by 1993. Total economic investment fell by 40 percent in 1992 and by another 16 percent in 1993. The rate of economic accumulation fell by 34 percent in 1989, by another 32 percent in 1992, and by yet another 26 percent in 1993. In 1993 Russian foreign debt amounted to 64 percent of GDP and a huge 262 percent of annual exports. Between 1991 and 1998 total agricultural and industrial production declined by about 50 percent, and capital

50  Chapter 3

investment in 1996 was only some 24 percent of its 1990 level. There was a huge flight of capital amounting to more than $150 billion between 1992 and 1999. Moreover, science and technology decayed badly; the production of oil and gas, a crucial part of the Russian economy, was in a state of disorganization and decline; and the infrastructures of telecommunications and transportation badly needed repair and suffered from a lack of equipment. In sum, “by the mid-1990s the military-industrial sector, the heart of Soviet industry, was essentially wrecked” (Castells 1996: 139). David Lane (2009) points out that, despite original intentions and hopes, Russia has made no progress in entering the world economy as an important player. Foreign direct investment in Russia in 2006 was $198 billion, compared to $502 billion for Germany (with half the population) and $1.14 trillion for the United Kingdom (with less than half the population). Fortune magazine’s rankings of the world’s top 500 companies in 2008 listed 153 US companies, 64 Japanese companies, and 29 Chinese companies—but only 5 Russian companies (1 percent of the total). In a larger list of 2,000 companies constructed by Forbes magazine, using an index representing a combination of assets, sales, profits, and market value, Russia had a mere 20 companies, again just 1 percent of the total. And most of these were energy and metallurgical companies rather than manufacturing or financial companies. The Russian economy is heavily skewed in the direction of energy (oil and gas), with a very small manufacturing sector and a serious deficiency of high-tech companies. It also lags far behind the West in research and development (R&D). Russia is spending only about $4.3 billion on R&D, whereas Volkswagen alone invests that much, and Ford Motor Company spends nearly twice as much at $7.2 billion. The United States, Japan, and Germany account for nearly three-quarters of the world’s seven hundred largest R&D firms, and Russia is not even on the list. Commenting on Russia and Ukraine, Lane (2009: 114) says that “the globalization of companies and the role of transnational companies have been limited. Russia is becoming a hybrid economy with a large primary exporting sector and a declining undeveloped manufacturing one. The Russian energy sector is integrated into the world economy and a few noteworthy transnational companies are emerging.” However, “Unlike the dominant Western based transnationals, they lack significant foreign affiliates. Other elements of the economy, manufacturing and particularly agriculture, are in decline” (Lane 2009: 114). The Russian social scientist Boris Kargarlitsky (2002) contends that Russia’s grim economic situation is the result of the unique political and economic situation that arose during perestroika and that intensified with the collapse of Communism and the transition from Gorbachev to Yeltsin. A new economic oligarchy formed that was not a true capitalist class and that was wholly unprepared to promote economic development. This oligarchy was inextricably intertwined with a Russian state that, despite glasnost, became anything but democratic. The state perpetuated and greatly intensified the old Soviet pattern of corruption; it rigged elections and engaged in actions that were purely designed to maintain itself in power and to benefit economically from the changed situation. Despite the privatization of industry, the state continued to perform most of the functions of ownership, and a good deal



Socialist and Postsocialist Societies  51

of privatized property became renationalized beginning as early as 1995. Russia actually resembles a feudal-bureaucratic society more than a capitalist society, Kargarlitsky claims, one in which parasitic politicians who work through bribes are much more important than entrepreneurs. Entrepreneurs benefit more from exporting their capital than using it for domestic investment and economic development, and perhaps as much as half of the Russian economy has fallen into criminal hands (Remnick 1997). In the words of Kargarlitsky (2002: 32–33), To the degree that Russia is now part of the world [capitalist] system, included in the processes of globalization, it is a capitalist country. But neither the production that is occurring in Russia’s internal market, nor the labour relations and other social relationships that exist with the domestic economy, can be described as capitalist. . . . The present day “success stories” of Russian exporters have not been based on copying Western methods of enterprise management. The largest corporations have retained all the features of traditional Soviet enterprises. The elite that has chosen such a model of “integration into the world system,” however, is not able to modernize the country. On the contrary, the elite has a vital interest in maintaining Russia’s backwardness and its archaic social structures, albeit with “European” stage scenery.

Kargarlitsky argues that this archaic and extremely corrupt state structure must be overthrown before serious economic development and modernization can begin in Russia. The oligarchs and the Russian state have led the country into a dead end, he says, and the only way out is through a new revolution that will destroy the oligarchs and create an entirely new type of state. Kargarlitsky may well be right, but doing this will be very difficult; as a result the situation looks bleak in Russia for the foreseeable future. Does Socialism Have a Future? With the collapse of Communism in its twentieth-century form, what is the future of socialism as a political philosophy and worldwide sociopolitical movement? Is it dead and buried once and for all, as many observers have been claiming? Perhaps it should be, but in fact it isn’t. Many Western Marxists and other leftist intellectuals remain committed to a socialist future, but one that is much more humane and democratic than the old decayed socialism. Immanuel Wallerstein (1998), for example, argues that capitalism has perhaps only fifty or so years left in it and that we are heading toward a great historical transition. Capitalism will encounter insurmountable problems that will bring it crashing down. In Wallerstein’s view, it will in all likelihood be replaced by a type of global socialist system, which may or may not be an improvement on capitalism (although Wallerstein clearly hopes, and no doubt privately believes, that it will be better). Wallerstein envisions a new world

52  Chapter 3

system in which all economic structures are nonprofit enterprises, some controlled by the state and some by other means. He argues that since nonprofit hospitals, for example, have operated under this kind of system and remained efficient, there is no reason in principle why other economic enterprises could not. These economic structures would not need to be internally autocratic or authoritarian in organization, could provide for worker participation in high-level decision making, and could build in safeguards against sloth and incompetence—one of the major undoings of the old state socialism—by penalizing them. Similarly, Terry Boswell and Christopher Chase-Dunn (2000) see capitalism as unsustainable in the long run, but, unlike Wallerstein, they have mapped out a fairly detailed plan for constructing a global form of socialism that will retain many of the market principles of capitalism. These scholars and many others like them view the old state socialism as a perversion of socialist ideals that failed for a variety of reasons, chief among them being the pressures of the surrounding capitalist world economy. They remain optimistic that socialism can still work and be a substantial improvement on capitalism if it is constructed with an eye to learning from the errors of the past. My view is that this optimism is unjustified and guided more by wishful thinking than by careful and objective analysis. The lesson to be learned from socialism’s abysmal record is that it is simply an unworkable system. It might sound good when it is drawn up on paper, but the reality of making it work is utterly different. As of today, it seems that there is really no viable alternative to capitalism. The big obstacle that seems to stand in the way of constructing a viable socialism is the “human nature” problem. The evidence from all over the world is that people, or at the very least a large number of them, are power, status, and wealth seekers. In small-scale hunter-gatherer and horticultural societies, those who strongly seek these things are not allowed to pursue their ambitions, and they lack the means to prevail against the will of the majority. But in societies of larger scale—agrarian and industrial societies—this is no longer the case, and significant inequalities become universal. If a socialist system along the lines imagined by Wallerstein or by Boswell and Chase-Dunn were to be established along relatively egalitarian lines, it is difficult to imagine it remaining that way for long. And it is much more difficult to eliminate sloth, incompetence, and bureaucratic centralization than Wallerstein imagines. One can be a socialist by philosophical principle but at the same time recognize that it is extremely difficult, if not impossible, to make socialism work in practice. This is why there may be no realistic alternative to some form of capitalism.

Chapter 4

The Less-Developed World If we exclude all of the mini-states, there are about two hundred nation-states in the world today; of these, only about thirty-five can be considered rich democracies. The rest are either poor countries or countries with only moderate levels of social and economic development. The world’s poorer countries have been variously called the Third World, underdeveloped, developing nations, less-developed, or the Global South (most of the rich democracies being located in the so-called Global North). The best terminology, I think, is the phrase “less-developed,” and we can refer to the condition of being such a country as “underdevelopment.” This chapter is about these countries. It shows how they differ from the rich democracies and also seeks to explain why the less-developed countries lag behind the favored few. The Nature of Underdevelopment Table 4.1 shows levels of development for a selected set of less-developed countries, using the same categories used in Chapter 1 (Table 1.1), with one added. We can clearly see that most of the less-developed nations have per capita GDPs that are quite low when compared to those of the rich democracies. The average per capita GDP of the less-developed nations shown in Table 4.1 is $3,195, obviously much lower than the average for the rich democracies, which is $37,741. But there are also significant differences among different regions of the less-developed world. Latin America is best off, with an average per capita GDP of $4,410; Asia is next with an average of $3,932; Africa lags far behind at $1,242. Actually, this figure for Africa is misleading, for there are major differences in geography and culture between Africa north of the Sahara and sub-Saharan Africa. North Africa is dry, inhabited largely by Arab populations with a history of agriculture and pastoralism, and mostly Islamic in religion; sub-Saharan Africa, by contrast, is tropical or subtropical and inhabited by a wide range of societies with mostly horticultural economies (although pastoral economies have been found throughout the drier parts of East Africa). These two parts of Africa belong to essentially different worlds, and their levels of economic 53

54  Chapter 4

development reflect this: North Africa’s per capita GDP is $2,248, whereas subSaharan Africa’s is a much lower $638. Table 4.1 Characteristics of Selected Less-Developed Countries, 2004–2010 Country

GDP

LFA

IMR

LIF

LIT

HDI

POV

Mexico

5,051

16.5

18.4

76.7

93

.750

4.0

Brazil

5,659

20.0

22.6

72.9

90

.699

5.2

Latin America

Venezuela

6,730

10.1

21.5

74.2

95

.696

3.5

Bolivia

1,194

40.0

44.7

66.3

91

.643

11.7

Argentina

5,471

5.0

11.4

75.7

98

.775

3.4

Uruguay

5,827

9.0

11.3

76.7

98

.765