Cities After Socialism

Urban and Regional Change and Conflict in Post-Socialist Societies

Gregory Andrusz, Michael Harloe, Ivan Szelenyi, Gregory Andrusz, Michael Harloe, Ivan Szelenyi

• Publisher: Wiley-Blackwell
• Year: 2011
• ISBN:
  9781444399158
• Edition: 1
• Topic: Ciencias sociales
• Subtopic: Sociología urbana

Cities After Socialism is the first substantial and authoritative analysis of the role of cities in the transition to capitalism that is occurring in the former communist states of Easter Europe and the Soviet Union. It will be of equal value to urban specialists and to those who have a more general interest in the most dramatic socio-political event of the contemporary era - the collapse of state socialism. Written by an international group of leading experts in the field, Cities after socialism asks and answers some crucial questions about the nature of the emergent post-socialist urban system and the conflicts and inequalities which are being generated by the processes of change now occurring.

1

Cities in the Transition

Michael Harloe

Writing about the February Revolution in Russia, precursor to the October Revolution that swept the Bolsheviks to power, Trotsky (1967/1932–3: 141–5) highlighted the leadership role played by the Petrograd workers and the crucial importance of political developments in the capital city. He writes ‘[i]t would be no exaggeration to say that Petrograd achieved the February revolution. The rest of the country adhered to it. There was no struggle anywhere except in Petrograd.’ He adds, ‘[i]f the capital plays as dominating a role in the revolution as though it concentrated in itself the will of the nation, that is simply because the capital expresses most clearly and thoroughly the fundamental tendencies of the new society’ More prosaically, he points out that in Russia as elsewhere’ the ruling class and those who sought to overthrow them naturally concentrated in the capital city, so, not to paraphrase Trotsky, this was where the action (mainly) was.

The Soviet system was born, therefore, as an immediate consequence of an urban-based struggle for dominance. Between 1989 and 1991 it died in similar locations. Much of the drama of these years was played out in the capital (and other major) cities of the Soviet Union and the state socialist countries of East and Central Europe. Inevitably those of us who observed as amazed and stunned onlookers from the West remember the television images of the struggle in the cities – the destruction of the Berlin Wall, the Velvet Revolution in the streets of Prague, the resistance in the streets of Moscow to the 1991 coup that marked the final spasm of the Soviet system.

However, the role of cities and urbanization in the formation of capitalism and socialism, and the two transitions between them that we have witnessed in the East in this century, go far beyond the immediacies of the street politics of revolution. Behind the phenomenon of the Petrograd proletariat lay capitalist industrialization and its consequences, urbanization and the creation of a new class structure, together with a system of political domination that was essentially city based, in terms of its ruling elites and the state apparatus. Likewise, state socialism, with its emphasis on industrialization under the control of a centralized one-party state, created cities and ruled from them. Therefore, the cities of capitalism and socialism both shape and are shaped by their respective forms of economic organization, class formation and political structures. The socio-spatial organization of cities, their politics and administration, their housing and property markets, their patterns of social interaction are directly linked to the major features of the socialist and capitalist orders.

This book is concerned to identify and analyse some of these links and how they are changing in the process of transformation now occurring in Eastern Europe and the territories of the former Soviet Union (FSU). As will immediately become evident to the reader, this is no easy task, as it involves drawing conclusions about phenomena and processes that are still evolving at a rapid rate and, frequently, under chaotic circumstances. However, there are two reasons why periods of such tumultuous social and urban change pose a challenge to social science which ought not to be ignored. The first concerns the contribution that social science can make to policy debate and prescription. In the current case, as several of the following chapters demonstrate, a new urban society is evolving that is deeply but mistakenly influenced by drastically over-simplified and even dangerous attempts to reject and/or ignore the significance of persisting legacies from the socialist period. Similar dangers also lie in the over-eager adoption of presumed characteristics of capitalist economies and urban systems. The doctrines of neo-liberal economics, tried and found wanting in the West during the 1980s, are having a rerun a decade later in the East, One purpose, then, of this book is to substitute analysis for ideology in the task of understanding the urban transition that is now under way, and thus contribute to counteracting the belief that a new social order can be produced according to the neo-liberal (or any other) rule book.

A second aim links to the first but is more ambitious. It is to understand more about the distinctive nature of cities and urbanization in differing social formations, namely in the now abolished state socialist societies, in Western capitalist societies and, crucially in the context of this book, in the emergent forms of capitalist urbanization now occurring in the East. What were socialist cities, and what is succeeding them? What are the dynamics of this transition? Are these remade cities similar in most respects to those in the ‘advanced’ capitalist world? Or might they be more like the peripheral capitalist cities of the Third World, or some hybrid or new form? What, if anything, is the legacy of the old socialist urbanization for the emergent one? Is urbanization best understood as a functional consequence of advanced industrial societies, with technologically derived uniformities that far outweigh in importance the impact of capitalist and socialist modes of domination?

In this book some of these questions receive clearer answers than others, understandably, given the historical conjuncture in which it has been written. Some of the questions have only come on the agenda for urban social theory and research since the collapse of state socialism, others have been pursued by urban analysis since the early days of (what was) the ‘new urban sociology’ of the 1960s and 1970s. Discussing the debate on the nature of socialist urbanization some fifteen years ago, the current author suggested that it was at times of crisis that the nature of urban regimes might most clearly be revealed, hence their value in a research context (Harloe, 1981: 190–1). Subsequent work on the evolution of social housing in Western Europe and America has also shown the crucial significance of periods of societal crisis and restructuring in the longer-run determination of aspects of urban development (Harloe 1995). The crises associated with the transformation in the societies and cities of former state socialism, therefore, offer an opportunity to gain fresh insights into the nature of socialist urbanization and to lay the foundations to an understanding of the nature of its successor. And, in so far as the new bears some marks of the old upon it, a study of the transition period is, of course, essential.

THE NATURE OF THE TRANSITION AND THE SIGNIFICANCE OF CITIES IN IT

This last point leads naturally to an issue which is of much wider relevance than simply its significance for understanding the emergent patterns of urbanization. This concerns the theory of transition itself, what is involved in transition, how it proceeds and how it relates to the previous histories of the societies in which it takes place – does it involve a simple negation of the previous social order or a more complex mixture of rejection and adaption? Given the central place occupied by cities and urbanization in both state socialism and capitalism, sketched out above, it may readily be seen that these questions are just as applicable to the urban sphere as they are to society more generally.

In this introduction to a study of cities in transition, it would not be appropriate to provide an in-depth review of the rapidly burgeoning literature which is exploring the nature of the transition and the questions outlined in the last paragraph. Only some brief indications of key issues and perspectives can be attempted here. A useful starting point is to outline the three principal features of state socialism, the blueprint, as it were, for the system that developed in Russia after 1917, was more or less forcibly imposed on Eastern Europe after 1945, and was variably achieved in practice. These features were, first, state monopoly ownership of the means of production and of most of the means of collective consumption as well, together with the substitution of centralized planning for market-led distribution of investment, incomes and consumption goods and services. Second, there was the political domination of the Communist Party, acting through a centralized state apparatus, which sought to control and order every aspect of social, economic and political life. Finally, there was the development of a distinctive class structure or socialist rank order, with the elimination of the bourgeoisie as a distinctive social category, the creation of a modestly differentiated broad ‘middle mass’ of the population, a politico-military, industrial and intellectual elite, and an equally limited stratum or ‘underclass’ of those who were excluded from the mainstream of society.¹

In a few short years at the end of the 1980s the centrally planned economies of state socialism disintegrated, although this was of course merely the culmination of a longer-term crisis in their functioning. At the same time, the Communist parties lost their grip on the state and soon ceased to exist at all (although some spawned successor parties). Finally, although this takes longer, transformations are under way in the class structure.

With some nuances this description of the nature of the ancien regime and its fate would be accepted by most of those seeking to explain the nature of the transition. But at this point a broad division occurs between what is probably the majority of social scientists (including those economists who have a serious track record of research in the former state socialist countries) and a wide range of public opinion (in both East and West), many of the international agencies now involved in the East, such as the World Bank and the IMF, the plethora of Western consultants and advisors who desire to act as the midwives of the new order, many in government and the public administration whom they advise, and so on.

What the latter group, more powerful by far than the former, has insisted upon, especially in the early years of neo-liberal economic ‘reform’ and privatization, is the notion, even the necessity for political and economic reasons, of the fastest possible abandonment of all aspects of state socialism and its replacement by (neo-)liberal democracy, with the least possible role for the state (and as decentralized an administration as possible) compatible with free markets and the private ownership and exploitation of capital. In short, as mentioned above, it insists upon the substitution for state socialism of capitalism wrought in the image of Reagan and Thatcher, Hayek and Friedmann.

From the start many social scientists were as sceptical about the viability of this destination for the societies of Eastern Europe and the FSU as they had been for its viability in the West in the previous decade. More importantly, as processes of economic, political and social restructuring unfolded, the empirical validity of the ‘big bang’ theory of the transition was soon called into question. Among the most valuable of the empirical studies of recent years have been those into the nature and effects of privatization. In a series of seminal contributions Stark (for example, 1990, 1992b) and his colleagues have drawn on earlier theories of institutional change in the context of enterprise privatization in a number of Eastern European countries, to point to the ‘path-dependent’ nature of the economic transition now occurring.² In his remarkable book on regional government reform in Italy, Robert Putnam (1993) has also pointed to its varied, hence path-dependent nature – as he says, path- dependence is just another way of saying ‘where you get to depends on where you’re coming from’ (ibid.: 79). This is no less true when we enquire into the varied processes of economic reform after state socialism. It means that we cannot turn our backs on the legacy of the past if we want to understand the present. Nor can we accept, as some do, that ‘state socialism’ was a cross-nationally identical phenomenon, or that a similarly uniform description and analysis can be provided of the transition. Equally important is the remainder of the quotation from Putnam started above, ‘and some destinations you simply cannot get to from here’. In other words, while it may be true but almost trivial to note that the transition is from state socialism to capitalism, what sort of capitalism it will turn out to be is an open question to which there are likely to be some varied answers.

This insistence on the value of recognizing the path-dependent nature of the transition, and therefore of paying heed to the impact of the past on the present and likely future, is one that informs the approach taken in this book. Socialist cities had their own physical and social structures; they do not just change overnight into capitalist cities, as unlike their predecessors as apples are to oranges. So the early part of our book reviews what were socialist cities, and many later contributors return to these matters as an essential component in their analyses of aspects of the urban transition.

Putnam’s work is also thought-provoking when we come to consider the nature of political and class restructuring in the transition. His argument is that effective democracy requires strong, community-based networks of civic engagement which serve to engender societal trust and co-operation, and that this trust, the norms on which it is based and the networks in which social action based on trust is embedded, amount to a form of ‘social capital’.³ He writes:

[s]tocks of social capital, such as trust, norms and networks, tend to be self-reinforcing and culminative. Virtuous circles result in social equilibrium with high levels of cooperation, trust, reciprocity, civic engagement, and collective well-being. These traits define the civic community. Conversely, the absence of these traits in the wwcivic community is also self-reinforcing. Defection, distrust, shirking, exploitation, isolation, disorder, and stagnation intensify one another in a suffocating miasma of vicious circles. (Putnam, 1993: 177)

Putnam suggests that societies may evolve towards the former or the latter of these situations. He adds that societies which are characterized by dense networks of interpersonal communication that are ‘horizontal’, that is joining agents of equivalent status and power, have the facility for developing the social capital that is the basis for democracy. However, societies that are dominated by Vertical’ networks, ‘linking unequal agents in asymmetric relations of hierarchy and dependence’ (ibid.: 173), are likely to demonstrate the traits of the uncivic community as noted above.

The relevance of this to the former state socialist countries is evident, for they were dominated by the vertical networks imposed by the one-party state. As several of the chapters in this book demonstrate, this was certainly the case with respect to urban development and urban life generally. For example, social organizations were controlled and manipulated by the regime, and most of the members of these bodies had litde influence over their operations and objectives. A great deal of urban social provision, including much housing, was controlled by the managers of the economic enterprises, who were embedded in a vertical system of control and direction, at the head of which were the ministries in Moscow or other state socialist capitals.

As Putnam shows, in this situation there are various forms of resistance to domination, based on particularistic networks constructed, for example, around ethnicity or kinship groups that people feel they can trust. These networks and what they imply are in fact forms of social capital, but not the communitarian variety which Putnam sees as a precondition for effective democracy. In the former state socialist countries the development of the second or black economy, endemic favouritism and corruption neatly parallel the conditions which Putnam and others have found in southern Italy and in other vertically integrated polities and societies. In a passage which explicitly makes the comparison, he writes:

[w]here norms and networks of civic engagement are lacking, the outlook for collective action appears bleak. The fate of the Mezzogiorno is an object lesson for the Third World today and the former Communist lands of Eurasia tomorrow, moving uncertainly towards self-government... For political stability, for government effectiveness, and even for economic progress social capital may be even more important than physical or human capital. Many of the former Communist societies had weak civic traditions before the advent of Communism, and totalitarian rule abused even that limited stock of social capital. Without norms of reciprocity and networks of civic engagement, the Hobbesian outcome of the Mezzogiorno – amoral familism, clientilism, lawlessness, ineffective government, and economic stagnation – seems likelier than successful democratisation and economic development. Palermo may represent the future of Moscow. (Putnam, 1993: 183)

Such considerations are of equal significance when we consider the emergent class structure of these societies in transition. Here, the outcomes of the mass privatizations of formerly state-owned assets, including in the context of this book housing and land, are of central importance. The actual terms of the conversion and redistribution of these assets differs gready from the idealized models of most Western advocates of this process. In many cases it is those who have access to various forms of social capital, networks, connections and information, who are able to benefit at the expense of those whose stock of social capital is limited. Ex-members of the nomenclatura, the managers of (former) state enterprises, and those who were successful in the second or black economies of the former socialist societies (and frequently there were close links between all three groups) are likely to be among the beneficiaries, while others who lack their opportunities and connections lose out. Stark’s (1990) study of the early progress of enterprise privatization in Hungary, subtitled ‘From plan to market or from plan to clan?’, illustrates just this process, showing for example how the managers of the former state enterprises were able to manipulate the situation to transfer the ownership of these assets to themselves – as he states, ‘a process by which political capital is converted into economic capital’ (ibid.: 366) – aided by contradictory legislation and conflicts between the various agencies which sought to control privatization.

Stark’s conclusion is that privatization will not necessarily lead to the establishment of a Western-style free market economy in these countries. This is because of the ability of powerful social groups and their networks to impede marketization and capture the assets released by privatization for themselves. Hence the suggestion that the transition may be from plan to clan rather than to market. Other studies also show how privatization does not necessarily result in the establishment of Western-style economies. For example, Burawoy and Krotov’s (1992) detailed research into a Russian furniture factory led them to conclude that a form of ‘mechantile capitalism’ was developing, founded on particularistic networks linking enterprises based on barter and not on the market. This involved the conversion of the former state bodies controlling industry into ‘parastatal’ centres of economic power and a system founded on trade, speculation and extortion, rather than any form of ‘rational’ modern capitalism.⁴ And Sik’s (1994) study of the former ‘second economy’ in Hungary, an economic system based on the same types of economic transaction found by Burawoy and Krotov, shows how it ‘lubricated’ the first economy under state socialism and how it now shapes the institutional conditions and the behaviour of those entering the new supposedly market economy. The networks, skills and behavioural patterns learnt in the second economy are a form of social capital used to gain position in the new economy and class structure. Detailed empirical work has shown just how significant this social capital can be. Thus Benacek’s (1994) work on the structure and origins of Czech private entrepreneurs showed that ‘there is a very strong link between the incidence of having been a communist bureaucrat in a top or middle rank managerial position and membership in an emerging class of private capitalist entrepreneurs’ (ibid.: 162).

As already noted, this complex and cross-nationally (even regionally and locally)⁵ varied redistribution of capital and power lies at the heart of the transformation of the class structure. In this process, access to capital and to social capital (and the successful conversion of the latter into the former) is central. Cities can be seen as stocks of physical assets whose privatization forms a large part of the capital involved in new class formation. But equally the dense networks of relationships which linked powerful actors in the state socialist cities, whether they were politicians, managers and bureaucrats with positions in the first economy, or families, ethnic groupings and other ‘clans’ in the second economy, are a form of social capital which can potentially be converted into actual capital. Of course, such capital is not confined to the urban population but, given the central role of the city in the economy and polity of state socialist societies, it may reasonably be asserted that much social capital is concentrated there.

In a recent paper which also draws on the concept of social capital to explore the process of class restructuring, Kolankiewicz (1995: 2) points to the need to ‘examine how market, work and to a lesser extent status situation are being constructed through a combination of macro-policy and micro-practice as actors seek to adapt to the emerging market regime with the resources available to them and which they have taken from the redistributive system of state socialism'. Among the key changes highlighted by Kolankiewicz are the reduction of the relationship between the worker and his or her firm to one which is based on labour in exchange for wages, from the situation under state socialism in which, as several chapters in this book demonstrate, the enterprise was also responsible for the provision of many other collective and individual items of welfare – housing, medical services, child care, leisure provision and so on. So, as we shall see, privatization has immediate impacts on many aspects of urbanization and urban services. As Kolankiewicz also notes, this entails a new role for local government in (trying) to provide such services, a shift ‘from place of work to place of residence and the local community as the focus of individual's lives’ (ibid.: 3), and the simultaneous depoliticization of the workplace and politicization of local government. Echoing other themes noted by the contributors to this book, he adds that with the explosion of consumerism and the provision of leisure, recreation and cultural consumption by the market, new values are placed on activities previously subsidized by the state. Access to these goods will, of course, be on the basis of ability to pay and, as he states, ‘style of life based on social separation will gradually overcome the social heterogeneity of socialist urban life and social-spatial segregation will reflect the emerging class order’ (ibid.: 3–4).

Therefore, a process is occurring by which some goods and services that workers received under state socialism, determined partly through wages but also substantially through access to cheap housing, urban and other services and so on, and under direction of the one-party state according to its priorities, are being dismantled and a new redistributive order is emerging. As Kolankiewicz (ibid.: 5) comments, ‘this hierarchy of redistribution did incorporate employees around a structure of rights and privileges and their dismantlement through market forces is… a politically and socially contentious process. Nowhere is this contention more evident, as we shall see, than in the struggle over the privatization of the physical assets of the city – land, housing and other real estate. But more generally the search for a new basis for citizenship in the urban context is evident, in the pressures on local authorities, for example, and in the growth and role of urban social movements. At the regional level the rise of nationalistic and ethnic populism is also linked to the search for forms of citizenship (and for forms of exclusion).

An obvious consequence of the new economic order, of considerable significance in cities, is the growth of mass unemployment and poverty, together with the process of exclusion and segrega...

Table of contents

• Cover
• Series page
• Title page
• Copyright page
• Dedication
• Contributors
• Preface
• 1: Cities in the Transition
• 2: Structural Change and Boundary Instability
• 3: The Socialist City
• 4: Urbanization under Socialism
• 5: Privatization and its Discontents: Property Rights in Land and Housing in the Transition in Eastern Europe
• 6: Housing Privatization in the Former Soviet Bloc to 1995
• 7: From the Socialist to the Capitalist City: Experiences from Germany
• 8: Environmental and Housing Movements in Cities after Socialism: The Cases of Budapest and Moscow
• 9: A New Movement in an Ideological Vacuum: Nationalism in Eastern Europe
• 10: Cities under Socialism – and After
• Bibliography
• Index