POSTSOCIALIST STATES IN THE SYSTEM OF GLOBAL CAPITALISM: A COMPARATIVE PERSPECTIVE

David Lane

University of Cambridge

David Held and Andrew McGrew, in a widely accepted definition, refer to globalization as "the historical process which transforms the spatial organisations of spatial relations and transactions, generating transcontinental or interregional networks of communication." One might distinguish between the economic dimension, made up by transnational and international corporations, and the cultural ideological sphere, embracing a market ideology and a consumerism ethic. This chapter is restricted to the economic dimension of global transformation of the countries of Eastern Europe and the former USSR, and comparisons are made with the advanced Western countries, Latin America and China. After outlining the role the state socialist countries played in the world system, I consider the place of the economies of the postsocialist countries in the world economy. The focus of this chapter is on the extent of economic globalization of countries and their economic corporations. Since 1989, important differences have developed between the postsocialist states with respect to economic penetration and exposure to the world market. Greater participation in the global economy is a characteristic of the Central European states and Estonia; whereas Russia has a hybrid social formation containing elements of state economic control, national capitalism and global capitalism. The outcomes have not fulfilled the expectations of those advocating entry into the world economy. There has been a decline in their relative economic and welfare positions, though some countries have fared worse than others. While there are important differences between the countries of Central Eastern Europe and Latin America, it is concluded that they have many common features distinguishing them from the core capitalist countries and China and Russia. It is contended that some countries of the "semi-periphery" have possibilities for development without being part of the core states of the world system. To substantiate these viewpoints, I evaluate the global presence of the former state socialist societies. My focus is on the transnational companies in a comparative perspective of the core capitalist countries. Transnational influences are also surveyed in terms of foreign investment dependency on foreign company affiliates. Innovation and economic advance is measured by the spending on research and development (R&D). Finally, the effects of transformation on human development are considered.

State Socialism and the World System

The world system orientation conceptualizes the world economy in three main sectors: the hegemonic core (the dominant "Western" capitalist countries), the periphery (developing countries of the South) and the semi-periphery – countries with industrial capacity and national capital outside the capitalist core. The semi-periphery is regarded as a transitionary formation.

State socialist countries were part of the semi-periphery; there were no "socialist economies." Wallerstein claims that the world capitalist economy included the "entire world, including those states ideologically committed to socialism." It is contended that state socialist systems were not socialist modes of production, but interacted with the capitalist world economy. The socialist state, which exhibited some features of socialism (e.g. employment security, comprehensive welfare provision) nevertheless became a major player in capitalist accumulation, which in turn provided a basis for reintegration into the world capitalist system beginning around the 1970s. Following the World War II, such writers argued that international capital had penetrated the socialist bloc and had undermined it. This line of reasoning would lead to grouping the socialist states with those of the dependent countries of the South, such as Latin America. It also carries the implication that the transformation itself was not a qualitative change from socialism to capitalism, but rather a shift between different forms of capitalism.

There are two main economic arguments put forward in support of the thesis of incorporation into the world economy. First, the increasing levels of imports – and consequent high levels of foreign debt – created dependency on the Western capitalist system. Second is the growth of communist transnational corporations, which led to an internal capitalist dynamic. I discuss these in turn and conclude that the Soviet bloc was not part of the world capitalist economy.

From the 1950s to 1985, the socialist countries increased their trade at a higher rate than developed capitalist economies. But these developments do not, as contended by world system theorists, involve a high level of dependency on the world capitalist market. If we disaggregate the trade by different blocs, we find that the state socialist societies were far from being included into the world economic system. Consider data for 1983, before...