The Evolution of Communism Author(s): Bartomiej Kamiski and Karol Sotan Reviewed work(s): Source: International Political Science

Review / Revue internationale de science politique, Vol. 10, No. 4 (Oct., 1989), pp. 371-391 Published by: Sage Publications, Ltd. Stable URL: http://www.jstor.org/stable/1601080 . Accessed: 25/11/2011 12:49
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InternationalPolitical ScienceReview (1989), Vol. 10, No. 4, 371-391

The Evolution of Communism

BARTEOMIEJKAMINSKI AND KAROL SOITAN

the evolution of communism. We suggest that the politico-economic system of communist regimes may be usefully seen as an institutionally and ideologically constrained bargaining game. We distinguish three stages of the development of this "game"-pure communism, late communism, and constitutional communism. Pure communism is characterized by an aspiration to the total control over society, and a strong commitment to ideology. Constraints on bargaining weaken in late communism, resulting in a system with distinctive economic and political features, which we describe. Constitutional communism is an ideal type based on the current wave of reform, in which the power of communists is limited without being undermined. Its chief ingredients are the rule of law, separation of powers, communist corporatism, glasnost, and the market.

ABSTRACT. The paper presents a framework for understanding

Marxist-Leninist regimes seem to be on the verge of major changes, prompted chiefly by economic stagnation. Facing deteriorating economic growth and the prospect of being left out of a changing world economy, a number of communist countries have started looking for ways to alter some of the basic tenets of central planning and of the existing modes of governance. In spite of different political and economic circumstances, as well as different levels of industrialization, the blueprints now being considered have one feature in common. They all envisage some retrenchment of the party-state from direct control over the society and the economy. The party-state apparatus is to be streamlined and its authority to make decisions curtailed. Proposals for economic reform have been increasingly accompanied by recognition of the need to curb the dominance of the party, and by the introduction of other serious institutional reforms in a number of spheres. Our scholarship has not caught up with these developments. In marked contrast to the modernization theory which dominated comparative communist studies in the 1960s, the current focus has been narrowed to the study of the politics of economic reform.1 These studies fall short on several accounts. First, they tend to be descriptive rather than analytic. Second, the links among law, politics, and economics tend to
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be ignored or underplayed, despite the obvious significance of politico-economic integration in communist regimes.2A proliferationof theories and concepts explains various aspects of contemporary changes or gives an account of some periods of the As a result, evolution, without setting them within a broader theoretical framework.3 these studies fail to offer reliable clues as to the possible trajectoryof change and the likely shape of the political and economic future. In this paper we propose an alternative way to understand change within communism. In a general politico-economic frameworkwe construct a typology of (or totalitarian communism), late communist regimes, distinguishing purecommunism
All three share the basic "official" and constitutional(orjuridical) communism. communism,

identifying properties of a communist regime, the leading role of the party and public ownership of the means of production. We use this typology to identify what we consider the central tendencies of evolutionary change under communism. The first tendency takes us from pure to late communism; the second leads to constitutional communism. These are not inevitable tendencies, of course. A return to the pure communist type is always possible (though costly, in various ways). There are also the alternatives of stasis or revolution. But in this paper we focus on the potential for reform of communist regimes. It is crucial in this task to show that the constitutionalizationof communism, the self-imposition of limits by communist rulers, can be in the interest of those rulers and can even enhance their power. We do this below (see p. 384). Thus prospects for reform do not depend (at least not entirely) on the public-spiritedness of those rulers, or their commitment to socialist ideals. They depend in part on those rulers' desire to preserve and enhance their power, a far more reliable motive. The identification of communism with its totalitarian version (with what we call "pure communism") makes it all but impossible to understand changes within communism.4 Many other commonly used concepts are of little use as well. At best, they "evoke considerable nostalgia, especially when the model happens to be called 1988: 46). Or, as 'bureaucratic' and the theory is that of 'convergence' (Korbonuski, in some recent loose applications of concepts developed to understand Western democracies (e.g., pluralism or corporatism), they have a mostly distorting effect on our view of communism. Our suggestion is that we shift to a higher level of abstraction and think of the different types of communism as (weakly or strongly) constrained bargaining regimes, or bargaining games. The simplest pure case of a bargaining game is the standard two-persongame that has been the foundation of formal theory of bargaining since Nash (1950) and others. A game with minimal structure, it features two players, their interests, the set of possible outcomes, and perhaps a status quo point. The poverty of structure is one reason why formal bargaining theory has developed relatively slowly. As Schelling pointed out (1963), outcomes in real bargaining are heavily influenced by various aspects of the background to the bargaining not recognized in the formal model. Institutional, cultural, and ideological factors constrain bargaining in this way. A bargaining game is thus better characterized not simply by the nature of the players and the range of possible outcomes, but also by these backgroundconditions, which we call "constraining factors." The level of complexity increases dramatically,of course, as we move from a simple two-person bargaining game to a whole politico-economic system. But we need not modify the basic model. A politico-economic system can be thought of as a bargaining game identified by the nature of the players and of the background constraints.

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Different politico-economic systems, in this view, are identified by the internal structure of the bargaining regime itself (who are the players, and what are the rules of the game) and by the institutional constraints within which the bargaining operates. In capitalist democracies important sources of such constraints are electoral procedures, the market, and the rule of law (Rechtstaat). In pure communism the chief sources are repressive dictatorial procedures and ideology. What we call late communism, by contrast, is characterized by all-embracing patron-client relationship networks and the weakness of all constraints on bargaining. In its extreme form, it is a bargaining regime gone rampant. Indeed, in many ways communism is best seen as caricature. Pure (totalitarian) communism is, among other things, a caricature of bureaucratic and dictatorial tendencies which are universal, but are elsewhere in various ways under control. Late communism, in a similar way, presents a caricature of the tendencies toward unconstrained bargaining many observers also see in the West.5 The view of communism we develop here can be seen as a contribution to the newly (re-)emerging institutionalist perspective in political science and political economy (March and Olsen, 1984; Smith, 1988; Ordeshook and Shepsle, 1982). The
old "society-centered" (Nordlinger, 1981) view of democratic regimes saw political

outcomes as a product of bargaining among groups. A politico-economic system was simply a bargaining game. Differences of view between class theorists, elite theorists, neo-corporatists, pluralists, and others concerned only who the significant players were and how they played the game. The new institutionalist tendency affirms, against all of the above, the relative importance of institutional constraints on this game. It affirms in particular, in the Western context, the importance of the state and the market. Communist politico-economic systems can also be seen as constrained bargaining regimes. But the constraints on bargaining are differentunder communism, and they weaken as we move toward late communism. Constitutional communism is a form of communism in the making, with new types of constraints on bargaining, especially the rule of law. The dividing lines among the different forms of communism are fuzzy, and the transitions between them not orderly. Revolutionary change has been either halted externally (Hungary in 1956, Czechoslovakia in 1968) or domestically contained, because it directly threatened the rule of the party (Poland after October 1956) or because it imposed unbearable political and economic costs (the Cultural Revolution in China, 1966-76). As a result we have seen mostly incremental evolutionary change. The pattern has been one of progression and occasional regression, with the transition between forms difficult to pinpoint. Despite these difficulties it is possible, we believe, to identify three ideal types of a communist regime, and to show the logic of the transition from one type to the next.

Pure Communism The ideal type of pure (or totalitarian) communism is characterized by two properties: an aspiration to total control by a political center backed by an extensive and active repressive apparatus, and a central role of Marxist-Leninist ideology. These provide a (relatively) effective restraint on bargaining: a procedural restraint (unilateral, top-down authority) and a substantive restraint whose sources are the main texts of Marxist-Leninism.

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Aspirationto Total Control The aspiration to total control of the society and the economy is shown most vividly in pure communism's opposition to every important mechanism for social control of unilateral authority (in the state or any other organization). Thus pure communism is (1) anti-market, (2) anti-democratic, and (3) anti-law. The communist take-over of the economy has been associated with two Anti-market. interrelateddevelopments-the (partial) elimination of the market and nationalization. The bureaucraticmechanism of central planning has replaced the market, and the nationalization of capital assets has given the socialist state the status of the organizerof production. The introductionof central administrativeplanning as a tool for coordinating economic activity, and for allocating resources, has produced a symbiotic relationship between the political regime and the economy. The economy becomes fused with the party-state. Neither money nor consumersinterferein this relationship. Real money is replaced by "vouchers,"and enterprisescannot spend them unless a project is included in the plan. Domestic convertibilityof monies for both enterprisesand consumer is limited; internationally, they are not convertible at all. Allocation through money is thus, in the case of the dominant state-owned sector, fully replaced by administrative allocation, albeit, in line with Lenin's recommendation,money is retained as tool of control and accounting. Berliner (1976) aptly calls it a "documonetary"economy. The subordination of an enterprise to the marketplace and to consumers is ruled
out in favor of the plan, that is, a political regime. The discipline of the Gulag

substitutes for the discipline of the market. An enterprise is shielded from both
domestic and international competition. Economic goals are simple and well-defined. Prior to industrial modernization, the economy is simple to manage. The existence of hidden unemployment in agriculture allows rapid gains in social productivity, once those reserves are put into use. The regime's capacity to mobilize resources (acquired thanks to the fusion of the state and economy, and to the Gulag as source of discipline) combined with the growth potential of catch-up dynamics produce rapid economic growth. Pure communism rejects democracy and calls for a highly centralized Anti-democracy. vanguard party based on a military-like organization. Procedures and institutionalto the ized rules give way to the whims of party leadership which-according to act as an agent for the proletariat. ideology-is In spite of claims to the contrary implied by Lenin's principle of democratic centralism, there is no room for democracy within the party. Officials are always chosen from above, never from below as in democratic systems. The choice of top leaders is governed by the system of nomenklatura,which is the institutional interpretation of the basic regime principle of the leading role of the party. Lower level party organizations rubber-stamp decisions made at the top, and members are required to implement them. Although representative organs are maintained, their only function, as the Soviet Theses for the 1988 All-Union Party Conference admitted, is "to sanction questions which have in fact been decided in advance" (CPSU, 1988: 45). The party seeks to monopolize all possible sources of social initiative and to destroy independent social organizations. Organizations are allowed to exist only as long as they are

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"transmission belts" of the party line. All forms of collective action organized from below are banned; change can come only from the top.

Anti-law. Soviet courts under Stalin were adorned with posters proclaiming: "Law is what is good for the Party." They expressed well the anti-law bias of totalitarian communism. It was a system in which the discretional intervention by the party and the state, including extensive reliance on repression and terror, replaced the rule of law. The task of the top authorities was to revolutionize society and to create a new man. The revolution that began from below, or from abroad, was now continued from above. Since revolution is a war-like struggle, a revolutionary organization such as the Communist Party must be like a good military organization, centralized and disciplined. But above all it must allow flexibility for its top leaders. Hence revolutionary organizations disdain both bureaucracy and law. Yet in order to execute the grand social and economic designs called for by Marxist-Leninist ideology, the party controls the economy and society through hierarchical state administrative structures. There are two overlapping hierarchies-the state administration and the party apparatus. The first operates through formal bureaucratic procedures, while the latter introduces exceptions. We see a dual world of formal and quasi-formal procedures governing state administration, and informal procedures followed by the party apparatus in its political interventions. The party apparatus temporarily revokes formal bureaucratic procedures and intervenes directly across institutional lines. Since the efficiency of discretional intervention is critically dependent on ad hoc decision-making, this arrangement exacerbates disdain for law. Thus, the essence of the system of curbing administration is anti-legal.

The CentralRole of Official Ideology

The basic regime principles of communism are contained not in constitutions or other law-like texts (as in constitutional democracies, for example) but in texts of political and social "theory." The party leadership provides authoritative interpretation of the texts. The party is committed to propagating the communist world outlook and to discrediting alternative political theories and orders. Ideological education aims to convince everyone of the superiority of communism. An important constraint on change in communism is the relative immunity of its ideology to rational development. A system of ideas basic to political life can be more or less rational, in the simple sense of openness to rational argument, depending on a number of factors. First, it depends on the extent to which the institutions which perform the authoritative interpretation of texts and of ideas are conducive to such argument. Courts of law, for example, are designed (in part) to promote the role of such argument. The communist party in a pure communist system, by contrast, is designed for effective combat against the class enemy. It is not conducive to rational argument. Second, there are always contradictions between basic regime principles and practical necessities. But the more serious these contradictions, the greater the risk that rationality will be undermined. Thus, for example, American courts have been able to give a meaning to the First Amendment of the US Constitution that takes account of the practical needs of government. The contradictions between absolute

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freedom of speech and the practical requirements of governance have been made manageable without ritualizing the Constitution or turning it into a dogma. But pure communism was faced with these contradictions in a much more extreme form. The ideological claims have persistently flown in the face of the "objective" necessities of the political situation. The regime principle of the withering away of the state, for example, had to face the urgent practical need for extensive repression.Similarly, the principle of the erosion of commodity relations, that is, the de-monetization of the economy, had to reckon with the need for cost accountability of enterprises and the need to provide incentives to managers and workers. Even a ritualized ideology whose rational development is blocked, however, is capable of performing some important functions. Thus the ideology of pure communism neutralizes some of the potential opposition to the regime in the of the regime population at large. In this regard the ideologically-based paternalism plays a central role, providing security as a substitute for autonomy. The ideology also maintains the integrity of the regime in the face of the potential and actual pressure of powerful narrow interests.

Late Communism
The line between pure and late communism cannot be clearly drawn, but the movement from one to the other can be identified. This movement-uneven, more pronounced in some countries and in some spheres of social life than in others-has perhaps gone furthest in Poland. For a number of reasons, whose discussion would go beyond the format of this paper, communism in Poland from its inception displayed more of the characteristics of lateness than elsewhere. In part, because of the strength of the Catholic Church, the attempt at total control, characteristic of pure communism, failed in Poland. The Communist Party did not succeed in imposing cultural and political hegemony and had to accept the existence of alternative sources (the Catholic Church) of social values; as Stalin observed, communism fitted Poland like a saddle a cow. Pure communism was born in a weak form in Poland, and today that country constitutes the best example of late communism and of its fundamental inconsistencies. But the same tendencies are visible throughout the communist world. The common denominator of these tendencies is a movement toward a weakly constrained bargaining regime. of the characteristicfeatures of Late communism is distinguished by the weakening aspiration to total pure communism. It can be characterized in terms of a weaker commitment to both ideology and the notion of "class warfare." control and a weaker Totalitarianism becomes increasingly leaky, until it fails to hold. The authorities in late communism are forced to accept the fact that, in order to impose their will, they have to bargain. As we will see later, this leads to a shift from a highly constrained to a relatively unconstrained bargaining regime. Symptoms of a weaker aspiration to total control include granting some rights of free action to individuals and accepting some degree of autonomy for economic actors. The shift from such maxims as "who is not with us is against us" or "whatever is not explicitly authorized is forbidden" to "who is not against us is with us" and "whatever is not forbidden is permitted" indicates not only a weaker proclivity to use "revolutionary"criteria in personnel policy. New groups are invited to cooperate with the regime without making prior ideological commitments.6New independent activities within the existing legal frameworkare allowed. As the Polish ideological

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motto has it: the authorities let live (wladze daja iyc). This new tolerance, however, is not based on established and rigid principles; it is instead continually subject to negotiation and renegotiation. In response to the mass terror of pure communism, there is an effort to introduce constraints on the repressive apparatus. Thus, one of the main legacies of deStalinization has been the provision for physical security of the communist ruling elites. In his secret speech to the XXth Congress of the Soviet Communist Party, Khrushchev noted that the only way of avoiding the repetition of Stalin's crimes would be to observe Leninist party norms and the Soviet Constitution. But the approach to law under late communism remains discretional, selective, and instrumentalist. General wording and loopholes in various legal acts allow the authorities to use selective terror at their whim. Law does not acquire an autonomous status; it is still used instrumentally to protect the influence of central authorities over the society and the economy. There are no restrictions on the proliferation of bureaucratic laws and regulations.7 Nonetheless, the sphere of permissible individual actions has expanded, as compared with pure communism. The weaker aspiration to total control may well be driven by economic imperatives. It is certainly reflected in how the administration of the economy is transformed. In a pure communist system the authorities operate free from the restrictions imposed by the market. The link between cost and profit is eliminated. Since this also means freedom from the imperatives of economic efficiency, its negative impact on economic performance is bound to become visible at some point. It occurs when the macroeconomic efficiency gains achieved by mobilizing resources come to be outweighed by the losses in macroeconomicefficiency. The move toward greater demonetization of the economy, in accordance with the ideological principle of vanishing commodity relations, can only aggravate the task of managing the economy. The only feasible change in this respect introduces greater cost accountability, which in turn implies a reversal of the process of de-monetization and a less crude form of central control. The elimination of global output as a measure of enterprise performance, and the revival of the enterprise as a cost unit (limited financial accountability), have marked the beginning of a trend toward greater reliance by central planners on financial instruments, on monetary rewards and penalties, to assure the fulfillment of plans. The objective is to enhance the discipline of economic actors through replacing direct "physical" commands by financial instruments transplanted from market economies. The economic reforms in communism thus produce different combinations of directives and financial instruments. Substituting and complementing "individually addressed" directives with financial instruments constitutes the most striking common feature in the changes of economic mechanism in communist regimes as they move toward their late communist phase. No reform so far, however, has succeeded in replacing the administrative bargaining mechanism of resource allocation with the market. Financial instruments are not responsive to market forces but are determined by the central planning hierarchy. In all reformed communist economies the survival of an enterprise is more a product of its ability to bargain with the state than of market success (Kornai, 1986; Kaminski, 1988). This is true even though reforms paving the way to late communism have produced greater concern among enterprise management for profitability. Crane (1987), for example, observes that enterprise management in Poland pursues simultaneously two objectives: the maximization of output and of

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after-tax/subsidy profits. A similar argument for Chinese enterprise management is developed in Wulf and Goldsbrough (1986). Because the market instruments of the state's control over the economy are used in a non-competitive environment, enterprises are subject to a soft financial constraint (to borrow Kornai's phrase). More significantly, they are in a position to negotiate "market parameters" to assure their financial survivability. Instead of adapting to external conditions, they adapt those conditions to their needs. The result is not a real competitive market but a more widespread and less constrained bargaining regime, although some reform measures may sharpen the constraints.8 A weaker aspiration to total control is combined in late communism with a weaker commitment to ideology. As an important symptom of this trend "pragmatists" take over from " ideologues" the party leadership positions, as the demand for "technocratic" skills increases. Simultaneously, the enlargement of the state administration required by the increasing complexity of the economy calls for assigning a greater role to experts. The monitoring and controlling function of the party apparatus, carried out through ad hoc interventions across institutional lines, is eroded because of growing fragmentation and the pursuit of local interests by the party apparatus itself (A. Kaminski, 1989). The authorities, facing loss of control due to information constraints, have to rely increasingly on experts rather than on ideologues. This in turn further erodes ideological zeal, a significant constraint on the bargaining regime of pure communism. The constraints on bargaining characteristic of pure communism thus lose their strength. This applies both to procedural constraints, such as the dictatorship by top party officials, and to substantive constraints due to ideology. The chief emerging feature of late communism is the relatively unconstrained bargaining between the central authorities and various groups. This change has prompted some interpreters of communism to speak of it as pluralist or corporatistY But late communism differs from these Western systems on at least two counts: the structure of the bargaining itself, and the institutional and ideological constraints under which it operates. The players, the rules of play, and the environment are all quite distinct.

The Structure of Bargaining

The structure of bargaining under late communism has important properties which combine to distinguish it from bargaining as a method of resource allocation in noncommunist systems. First, the bargaining groups are narrow, whereas the scope of bargaining is wide. The typical neocorporatist pattern by contrast is bargaining among much more encompassinggroups with the scope of bargaining much more narrowly defined. Due to the "logic of collective action" (Olson, 1965), the impediments to the achievement of public purposes (such as economic growth) are especially severe when bargaining groups are narrow. 10 It is compounded by economic efficiency losses when the scope of bargaining includes domains taken care of by the market mechanism in non-communist countries." Second, the degree of authoritative recognition and formalization of bargaining is minimal. Bargaining is often sub rosa, making its regulation much more difficult. The neocorporatist pattern, by contrast, is that of systems of bargaining that are public, fully institutionalized, and often recognized by the law. The bargaining of late communism is ad hoc rather than organized. Often it does not even take place between continuing social units; the partners are rather ad hoc coalitions. Thus not

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even the continuity of players is guaranteed. This makes it far more likely that shortterm perspectives will dominate. These attributes distinguish the bargaining regime of late communism both from the neocorporatist regimes of the West and from state corporatism (see Schmitter, 1974). These properties of the structure of bargaining in late communism can be seen as by-products of their origins in pure communism. It is a system of bargaining among a wide range of narrow groups, conducted outside public control, and regulated from the top down. The structure is plainly different from any of those found in democratic and capitalist countries.

Constraintson Bargaining
At least some versions of the pluralist doctrine held that public interest could be the product of the balance of power among organized groups each pursuing their narrow interests. The more we understand about such bargaining the more implausible this result seems."2 In fact, pluralists looking at democratic capitalist systems, and at the United States in particular, are looking at very constrained bargaining games. The constraints in the West are in the form of electoral systems, markets, and rigid law. They place limits on the discretion of politicians and corporate managers. Critics of pluralism, such as Lowi (1979), have noted the weakening of those constraints, and its disastrous consequences. But the constraints have not disappeared, even under "interest group liberalism." In the West they continue to be the sources of "equilibrium points" in politics, ones not provided by a pure bargaining game. The bargaining regime of late communism is characterized, in contrast, both by the absence (or extreme weakness) of the constraints typical of Western systems, and by the weakness of the constraints that gave integrity to pure communism, central control and Marxist-Leninist ideology. The constraints derived from pure communism still operate in late communism, but they do so in a debilitated form. A more serious source of constraint on bargaining, and of pressure for change, comes from outside. Even a bargaining regime relatively free of domestic constraints, like late communism, is not free of constraints. Communism exists in a non-communist world, and this world has a deeply destabilizing effect on communist regimes simply by virtue of being there, not being communist, and refusing to conform to the predictions of Marxist-Leninist ideology about its social and economic disintegration. The existence of a technologically and economically superior non-communist world imposes several constraints on communism. First, the bargaining regime of late communism must preserve national security in a potentially hostile world. Second, it has to make progress, or at least maintain position, in the international economy. Third, it operates as a member-state of the international political community and is therefore sensitive to world public opinion. Last, it has to survive in a system of relatively free-flowing world communications (TV, radio, press). The efforts to sustain an information monopoly of the communist regime have been increasingly ineffective, thus limiting its control over political thinking. Military and economic competition, as well as the population's exposure to world communication and the regime's vulnerability to world public opinion, provide an incentive to change the institutional framework of bargaining, though (admittedly) the incentive is not a very strong one.

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The solution to the problem of security is the militarization of communism, but the second problem, due to the constraints of international markets and of international debt, cannot be so easily resolved. While domestic economies are isolated to the maximum extent possible, the international economy remains a crisisprovoking external constraint on late communism. There are also no easy ways to avoid the other constraints the external world imposes on communism. International agreements, such as the Helsinki Accords, restrict to a certain degree the uses and abuses of power open to the regime. Information flows are increasingly freed from central control. ' 3 The failure to integrate with the world economy and to sustain economic growth have been driving forces in the evolution of communism. The limited capacity of communist economies to innovate and to adapt, as well as the accumulated international debt, force authorities to consider seriously greater integration with the world economy. This has led many communist regimes to renounce a number of sacrosanct ideological principles. Under the pressure of international indebtedness in the 1980s, Hungary and Poland became members of such Western multilateral economic institutions as the IMF and World Bank, organizations not known for their commitment to the communist model of development. Although the full impact of these organizations remains to be seen, it is likely that they will indirectly affect the framework of bargaining.' Under the same pressures some countries have opened their economies to foreign direct investment and to multinational corporations, traditionally portrayed as a vehicle of capitalist-imperialist penetration and exploitation.

The Political Economyof Late Communism

The politico-economic system of late communism can be summarized in two brief phrases. Its economy is the economy of shortages. Its politics is the politics of an aimless bully. The Economyof Shortages.In the economy of late communism the main players are the central and local authorities, the enterprises and to a lesser extent, trade unions and professional organizations. The main institutional context is an administrative mechanism for the allocation of resources. Under pure communism, the directives of the central authorities are mainly in the form of commands expressed in physical units, specifying not only what should be produced, and in what quantities, but also what inputs should be used. Under late communism, the scope of "physical" commands is curtailed. They are replaced by financial instruments transplanted from market economies."5 This shift from physical to financial instruments recognizes the impossibility of all-embracing and detailed central planning (because of informatiobut does little to reduce the scope of negotiations between nal complexity),16 economic actors and the central authorities. If the central planners had perfect knowledge of all production functions, there would be little room for bargaining, nor would there be shortages. But they do not, and their ability to control economic activities is far from satisfactory. Relative informational simplicity of central planning, and the use of terror, limits bargaining under pure communism. With the expansion of the economy and the diminished willingness to use force, however, bargaining proliferates.

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The object and scope of bargaining is shaped by a number of factors. The major determinants are the tools of macroeconomic intervention by the state. With increased use of the financial instruments of intervention, formulas and magnitudes of financial parameters come to be the main object of negotiations between enterprises and planning authorities. Even prices are mainly set by the authorities, and not by the interplay of supply and demand. Profitability can also be negotiated. Thus, for example, although the 1980-81 reform in Hungary aimed to introduce competitive prices,17 Kornai (1986) has shown that it has not changed previously existing relationships in profitability levels. New tax rates and other specific subsidies were renegotiated to maintain the same level of profits. In China also, price changes have had an insignificant impact on state-owned enterprises. Thus direct controls and allocation through bargaining continues to prevail even in the most reformed economies of late communism. Prices set at market-clearing levels are a necessary although not sufficient condition for economic efficiency. If they are not set in this way, access to resources has to be administratively determined, thus making it subject to bargaining. If there were overabundance, this would not be a problem, but we live in a world of scarcity. Similarly, if the administrative allocation of resources were governed by clearly defined, rigid and general rules, the rationing would be free of bargaining, but central planners' rationality requires flexibility, not rigidity. Hence the administrative interventions are invariably ad hoc. Shortages and bargaining are two sides of the same coin; they are both necessary consequences of administrative controls. Shortages are bred by taut planning, the only available substitute for competition to combat inertia and low macroeconomic efficiency. To elicit maximum effort, planners set "ambitious" targets. But there are other mechanisms of shortage generation, as well (Kornai, 1986). Even less ambitious plans would not eliminate shortages since an unconstrained bargaining regime creates strong incentives for excessive hoarding of materials. Materials are useful not just in production but also in bargaining. Products are more valued than money, which is not fully convertible domestically. In the absence of markets, no mechanism exists for moving "excessive inventories" from one producer to another. Furthermore, uncertainties about the current and future availability of productive inputs, as well as the possibility of unplanned extra tasks (usually well rewarded), increase the propensity to hoard materials. Bargaining thus feeds upon shortages when allocation is not subject to strictly defined rules. But because of the multiplicity of independent negotiations and the dominance of ad hoc macroeconomic interventions, attempts to impose constraints on bargaining by introducing legal procedures result in a hybrid system of regulations too complex to be followed. In order to avoid a collapse, rules have to be circumvented. This produces a situation in which actors are subject to a soft law constraint,an inevitable counterpart of the soft budget constraint. As in the case of an enterprise's budgetary constraint, the degree of its softness is a matter of administrative decision. The Regime as an Aimless Bully. Late communism is no longer totalitarian. It is instead, like a bully, rough on the weak but compliant toward the strong. We should not expect anything else from unconstrained bargaining. If you have something to offer, or an effective threat, you will be treated well; if you don't, you will be exploited to the fullest.

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Strength in late communism is a function of the vulnerability of the regime to external pressures and its dependence on cooperation with various groups and individuals. This cooperation has to be bought; it can no longer be forced upon domestic actors, as it could under pure communism. Nor can public opinion in the West be ignored. It is reasonable to suspect, for example, that the pressure of Western official creditors entered the considerations of Jaruzelski's government on how to "normalize" Poland after the imposition of martial law in 1981. In the Soviet Union, Sakharov was released from internal exile presumably as part of Gorbachev's public relations efforts aimed at the West and also, perhaps, at the Soviet intelligentsia. More generally, reports on the human rights situation in various communist countries (compiled by Helsinki Watch Committees) seem to indicate that dissidents not known in the West are subject to much harsher treatment than those who have gained some notoriety abroad. A similar differentiation occurs in the case of domestically strategic groups. The police and army traditionally occupy privileged positions in communist regimes, as do the central and local administrative authorities, and the transition from pure to late communism often enhances their position. New laws and regulations often contain loopholes or are vaguely worded, their interpretation left to the discretion of authorities. Those who can return favors obtain preferential treatment, while others are given short shrift. An analogous asymmetry can be observed at the bottom of the hierarchy of power. The burden of economic adjustment usually falls on those social groups least likely to threaten political stability. Thus, for example, despite a 2 percent increase in average real wages in Poland in 1983, the real wages of about 45-50 percent of the workforce fell. The losers were mainly employed in small industrial plants which, unlike the large ones, could not organize visible and economically costly strikes. The weak suffer, while the strong are both feared and respected. Yet if the regime has turned into a bully, it is an aimless and lethargic one. The unconstrained bargaining regime adds an ironic twist to the Leninist principle of the primacy of politics over economics: from being masters, politicians become slaves of the arrangements of their own making. The old Marxist-Leninist justification for total control has been to promote revolutionary changes, accelerating the development of productive forces and moving society toward material abundance. To achieve this, institutional arrangements have been created to make the regime both omnipotent and omnipresent. These same arrangements, however, coupled with a dramatic loss of ideological purposefulness and society's partial emancipation from the regime's control, produce a profound inertia and curtail the capacity to adapt and to change. Despite the official rhetoric, late communism is conservative and relatively inactive.18 The regime's stability is maintained less by the successful pursuit of widely shared purposes than by undermining various possible standards for the evaluation of decisions. Without such standards, whether their source lies in economic efficiency or Marxist-Leninist ideology, it is hard to formulate objections to decisions. It is hard to tell what does, and what does not, promote efficiency in late communism. And few people take the ideology seriously. But the price of the resulting stability is aimlessness and stagnation.

Constitutional Communism
Two closely related tendencies define the move from late to constitutional communism, as we see it. Their common denominator is an organized retrenchment,

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not just a de facto withdrawal, of the regime from the aspiration to control directly all domains of public life. It is motivated not by "socialist humanism," but by the growing inability of the regime to govern. Thefirst trend is toward replacing ideology as a constraint on bargaining and a guarantor of regime integrity with a reliance on law. This tendency toward law is already present in the earlier transition from pure to late communism, but initially it produces only a more complex and intricate jungle of bureaucratic regulations. Constitutional communism, by contrast, introduces elements of the rule of law, law that can limit bureaucracy, instead of extending it. The second tendency replaces the weak aspiration to total control characteristic of late communism by an institutionally limited aspiration to control. It involves a de jure abdication from the control of selected activities, contrasted with de facto abdication under late communism. More limited control is no longer a product of temporary weakness and shifting policy; rather, it comes to be a more fully institutionalized regime principle.

Ideology Partially Replaced by Law

Law and ideology are partial substitutes as constraints on bargaining in any politicoeconomic system. Comparisons of administrative agencies in the United States, for example, show a similar pattern. Agencies left less discretion by the law, but also those more directly driven by a clear ideology (as the Environmental Protection Agency, for example), maintain their integrity more easily, and resist capture more successfully. But not all kinds of law can serve this function. In the legal literature a distinction is commonly made between bureaucratic and autonomous law (Nonet and Selznick, 1978; Unger, 1976). Bureaucratic law is simply a systematic instrument of authority. Autonomous law (guaranteed by an independent system of law interpretation and enforcement) can be, by contrast, a method for controlling and limiting authority. Law of this kind must be general and rigid. Instead of crafting rules to meet the specific demands of each situation and each actor (a typical late communist pattern), law-making (and bargaining) is concerned with more general rules, moving toward a more autonomous law characteristic of constitutional
communism.

The move introduces into communist regimes elements of a legal, as against a purposive, rationality. The first favors rigid rules, while the second accords priority to flexibility in the service of purpose. Purposive rationality, the chief aspiration of communist officials in pure and late communism, but also of managers in capitalism, represents a managerial and pragmatic point of view, but it can also be revolutionary and anti-legal.'9 It aims to get things done, and rigid rules are for it only possible impediments. Flexibility is important in order to be able to adapt to new and unpredictable situations. In pure and late communism the party apparatus (as against the state apparatus) aims to provide such flexibility by arranging exceptions to bureaucratic rules and thus making it possible to get things done. This principle of the bending of the rules (Hirszowicz, 1980) can work well when effectively restrained by a coherent set of purposes, such as those provided by Marxist-Leninist ideology. Purposeful rationality without strong commitment to purposes cannot work, however. So, as ideology weakens, the party's capacity to arrange exceptions comes to be simply an opportunity for unrestrained bargaining-which (literally) serves no purpose. As the experience of late communism amply shows, the solution to the problem of

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of Communism TheEvolution

unconstrained bargaining lies not in more rigid bureaucratic law but in autonomous law; not in the more rigid control of every sphere of social life, but in a more rigid refusal to control at least some spheres. The logic of this move is simple. One can sometimes achieve more by restricting what one is capable of doing. It rests on Schelling's (1963: 22-28) observation that the ability to constrain oneself may be a source of power. One can gain power not simply by having more numerous, more powerful, and more credible threats or promises, but also by having firmer and more credible commitments. The central authorities of communist regimes can resist the pressures being brought to bear on them by being credibly committed not to do certain things. A capacity to resist pressure in this way will allow more effective pursuit of those more limited purposes which are given official and legal recognition. The problem is to make such self-limits credible, its solution is autonomous law guaranteed by autonomous courts. Various official statements, usually voiced during periods of upheaval, seem to suggest that communist authorities have not been oblivious to the potential inherent in the rule of law. Perhaps because he is a lawyer, this is especially true of Gorbachev. In his program, as outlined in the Theses of the CPSU Central Committee for the 19th All-Union Party Conference (CPSU, 1988), the "rule of law" theme clearly dominates. Gorbachev's reforms call for a strict observance of the law: the "fundamental trait [of the socialist state] is the supremacy and triumph of law expressing the will of people . .. and . . . all party organizations must act within the framework of the USSR Constitution and Soviet laws" (CPSU, 1988: 43, 47). We find an almost identical statement in Zhao Ziyang's report to the 13th National Congress of the Communist Party in 1987: "the Party must conduct its activities within the limits prescribed by [the] Constitution and [the] laws" (Zhao, 1987). In some countries the movement toward the rule of law has gone substantially beyond the stage of slogans and proposals. In Poland, for example, though the problem is seldom discussed, potentially significant institutional changes have already been implemented. New institutions such as the Constitutional Tribunal and the Sejm Ombudsman have been set up to give citizens some protection against the abuse of power by the administration and to curtail the discretion of the Sejm and the administration in issuing and interpreting new laws. In 1980, the Administrative Tribunal was set up to control administrative activities. All these institutions lay the groundwork for subjecting the relations within the administration and between the regime's bureaucracy and individuals to transparent legal procedures. Too short a period of time has elapsed, however, to gauge their impact on the regime. Other changes have not been conducive to the rule of law. Some legislation, enacted in the 1980s, has effectively extended the scope for arbitrary action by the state and restricted civil freedoms (Cave, 1983). Although these new laws (such as the law on the police and the Security Service, or the amendments to the Constitution extending the circumstances under which a "state of emergency" may be introduced) provide greater room for arbitrariness by the state, they do not automatically neutralize progress in civil rights, nor do they necessarily imply more repression. These powers are new not in practice, but in law; they provide a legal basis for activities previously pursued without a legal basis. It is possible, therefore, that this extension of state authority contains the seeds of a future transformation toward a fuller respect for the rules of law, making them something more than a simple instrument of repression. Another trend accompanying the transition from pure to late communism that

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may contribute to the emergence of constitutional communism is the increasing independence of courts. Kowalik (1987) has argued that this occurred in Poland after the 1956 "explosion of freedoms" and, more generally, that it was a component of the process of de-Stalinization. At first, we see only more selective political interventions in the judicial system. The regime of late communism is more likely to refrain from dominating the judicial system, although it retains influence over it. Gorbachev's program goes a step further, calling for independence of the judiciary: prosecutors and judges "must be subject to law and to the law alone" (CPSU, 1988: 47). The void created by the decay of ideological discipline thus has been partially filled by law. While law is still a soft constraint on the bargaining regime of late communism, there is also a growing recognition among decision-makers that this constraint should be "hardened" if the regime is to retain an ability to implement its own designs, especially in the economic sphere. The common denominator of the economic reform wave in the 1980s was the search for solutions to the problems of "soft budget" and "soft law."

Control Institutionalized Limitsof Government

The rule of law is a central component of constitutionalism, but it is not the only component. Constitutionalism broadly means the limitation of power, and this applies also under constitutional communism. The regime's aspiration to total control, which was its driving force in pure communism, and was substantially weakened (though not abandoned) in late communism, is now authoritatively limited. Key components of this tendency, if a transformation to constitutional communism were to be accomplished, include the separation of powers, the institutionalization of bargaining (communist corporatism), the institutionalization of freer information flows (glasnost), and the introduction of clearly defined rules of state intervention in the economy (market). All are capable of reinforcing each other. If they do so, they could remove the basic source of the decay of late communism. of Powers.The separation of powers has always been a central doctrine and Separation an important goal of the constitutionalist tradition. It is achieved in part when courts become more independent from outside interference, as is essential for the emergence of autonomous law. But more than independent courts is required. We must also see that governance through general laws replaces governance through more direct and specific commands, with two immediate effects. The first is the withdrawal of central control from those areas where governance through general rules is simply impossible. This is combined with a separation of executive and legislative functions, making the legislature, the body that makes those general rules, a more important element of the regime. In a constitutional communism we can expect that the leading role of the party will be increasingly exercised through control of the legislature, less through direct administrative commands and control of the repressive apparatus. Movement in this direction can be seen clearly in current reforms and proposals for reformin the Soviet Union and Poland, to takejust two examples. We see an effort to establish legislatures that are more important law-making institutions, possible channels for opposition and criticism, signs of limited democracy, but still firmly controlled by the party.

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The basic regime principles of communism can certainly accommodate a legislature of this sort. CommunistCorporatism. Official recognition of bargaining groups, and of bargaining, accepts limits on the power of central authorities, but also facilitates the regulation of bargaining in order to make it serve public purposes. Such recognition allows the central authorities to act as a mediator among competing interests. The interests become institutionally organized and subject to well-defined general rules. This kind of change recognizes a variety of functions, organizational forms, and particular interests that organizations should serve, without necessarily introducing democratic pluralism. Since the purpose of participating organizations is well defined, as are the links between the organizations and the central authorities, this would be a fullunlike the late communist pattern of the Brezhnev era depicted fledged corporatism, as corporatist by Bunce (1983). There are some signs in contemporary communism of the recognition of independent social activity. In the Soviet program, the creation of a legal framework for "de-statized" public organizations is a logical extension of glasnost. Thesis 9 promises the encouragement of "any public activity that is carried out within the framework of the Constitution and does not contradict the interests of the development of the Soviet socialist society" (CPSU, 1988: 48). The goal is to break up social apathy and indifference, the results of society's alienation from power. Chinese reformers seem more directly concerned with changing the relationships between the party and other government and non-government institutions. Zhao Ziyang (1987) called for the gradual institutionalization of the relations between them. In Poland, grass-root pressures have prompted the authorities to register some "ideologically hostile" independent organizations (the Cracow Business Association, for example) and to begin legislative work on the rules of their creation and
registration.

Glasnost. Glasnost denotes an opportunity to voice dissatisfaction with an objectionable state of affairs, and therefore challenges the communist tradition of secrecy. Its acceptance by the regime is tantamount to a rejection of the claim that the party has the monopoly on truth and an unlimited control over information. A policy of glasnost recognizes the value of dissenting voices in choosing policies, and may thus improve the quality of decision-making. It could open the regime to rational argument and public debate, something notably absent under both pure and late
communism.

In addition, the creation of extra channels of control through the mass media facilitates the regulation of local authorities and other groups whose main bargaining weapon has been control of local information. The strategy of informationwithholding becomes more difficult to carry out successfully. As a result, the regime, or the central authorities, improve their administrative capacity. The move toward "public openness" is not confined to the Soviet Union. By the standards of the 1970s there is an unprecedented openness in the official mass media of Hungary and Poland. The Czechoslovak regime is also reportedly under pressure to loosen its control over information.20 Combined with an end to the jamming of programs broadcast from the West, these developments point to a reluctant reconciliation with a loss of information monopoly. In certain cases the limits to the authorities' control have been institutionalized, as in the Polish censorship law.21

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Market. Neither communist corporatism nor glasnost is likely to be viable in the long term as long as the economy remains fused with-he state, instead of being separated by a market.The market distributes resources according to "non-negotiable" criteria, unless the state chooses to intervene. In the market economy, the state may choose to intervene to protect an enterprise from the destructive market forces. But in a (non-market) communist economy, an enterprise exists solely because of the conditions created for it by the state; its survivability is directly in the hands of the state. Without the necessary information, and without general and rigid rules of allocation, there is no effective way to mediate among conflicting claims on resources allocated through the state. Decentralization and competition, indispensable conditions for the existence of the market, can be effective only when there are rigid restraints on government action. Autonomous law has the capacity to provide such restraints. The exclusion of the economy from the direct reach of politics and the hardening of the law are crucial conditions for the emergence of constitutional communism. The market requires a clear and general specification of the rules of political intervention in the economy. This does not require abolishing of the state-owned sector; the stateowned sector may exist, but it has to be autonomous. Direct state intervention cannot be a rule, it must be an exception. When this happens the scope of bargaining will decrease dramatically. Bargaining may still involve weakening or strengthening of anti-trust regulations, or restricting exit by bailing out ailing enterprises, but it will not involve individual prices, tax rates, interest rates, or the size of subsidies. In short, the importance of allocation through bargaining will decrease, as the role of the market mechanism increases.

Conclusion
Constitutional communism does not yet exist anywhere. We do see a growing recognition that governing becomes easier when the rule of law applies not only to the ruled but also to the rulers. But autonomous law has not yet developed. We do see a growing openness and diversity in the political system. But it still does not provide for effective restraints on bargaining. We also see a significant remonetization of economic relations, but the market as a dominant mechanism has not been allowed to develop (Marer, 1987). There is no alternative to creating a market economy (or, more precisely, a mixed economy) if the economic viability of communism is to be restored. And to create markets one must effectively restrain governments from engaging in case-by-case economic decision-making. This is the chief economic importance of the rule of law. Markets can be destroyed easily, but their creation presents formidable economic and social problems. Moves toward a market and toward the rule of law are likely to be blocked by various narrow interest groups who will be adversely affected, or who at least will become more insecure, under a reformed system.22 Thus the road to a market, and to the effective use of autonomous law as a tool of governance, may yet take several twists and is likely to be long, if indeed it will be taken at all. There are strong forces pushing in the opposite direction. Still, the present wave of reforms in communist countries, though not without precedent, marks a significant departure from past efforts, such as the changes that undermined pure communism. The reforms are not limited to the economy, but are linked with a promise of greater freedom and of the rule of law. They do not simply

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reflect a more pragmatic attitude among the policy-makers, but show instead some serious commitment to institutional reform, in a constitutionalist style. The attempt itself, even if it does not succeed, is a new development for communist regimes.

Notes
1. See, for instance, Colton (1986) on the Soviet Union, Lapidus and Haslam (1987) on the Soviet Union and China, and Perry and Wong (1985) on China. 2. There are some exceptions. See, for instance, contributions to Comisso and Tyson (1986), A. Kaminski (1989), Nuti (1979), and Poznanski (1988). 3. For a review, see Taubman (1974). 4. For a critique of the totalitarian "paradigm" from the perspective of modernization theory, see contributions to Johnson (1970). 5. An excellent example is Lowi (1979), but the point is developed also in the work of Olson (1982), the Virginia school of political economy (e.g., Brennan and Buchanan, 1985; Buchanan and Tollison, 1984) and others. 6. The only requirement is that they work "within the framework of the system but [they are] manifestly critical of ruling institutions and independent" (Wiatr, 1988: 12). 7. For instance, Fallenbuchl (1988: 118) notes that the 320 legislative acts regulating the Polish economy enacted between 1982 and 1984 generated 12000 interpretations by various levels of central administration. 8. For instance, the bankruptcy law strengthens the position of the authorities vis-a-vis an enterprise (Poznafiski, 1988). However, they may encounter enormous resistance in imposing it on a politically powerful (large) enterprise. The law also widens the scope of bargaining, since factors determining the financial situation of an enterprise are largely shaped directly by the authorities. 9. For an excellent analysis of the methods used by the Brezhnev regime to coopt groups considered vital to economic performance, see Bunce (1983). 10. A good example is investment policy in Poland in the 1970s. The voivodship party authorities (their number increased as a result of the reform in territorial management) sought to maximize the share of their respective region in the national investment fund. Although a region's gain, more often than not, would far outweigh losses resulting from inefficient allocation of capital, they pushed for further investment since losses are spread over the whole economy. 11. The usual form of rewards in corporatist states are micro-economic side payments, such as restricting entry to a given sector, weakening anti-trust regulations, and restricting exit. In late communist economies both entry and exit are highly restricted in spite of bankrupcy laws. The rewards have to be in a different form. 12. See, for example Olson (1965, 1982), Aranson and Ordeshook (1985). 13. To a great extent, this is the case in Poland. Faced with a combination of information flows from outside and strong underground publication activity, the authorities drastically relaxed the grip of censorship over official media. 14. The publicity given in Poland to the first World Bank study on the Polish economy (published in August 1987), in spite of its critical assessment of the state of economic reform, suggests the willingness to use it as an argument in favor of more meaningful institutional changes. Reportedly, the IMF/World Bank membership has been also of assistance to reformers in Hungary. 15. This also represents a contraction in ideology. Recall, for instance, that in the 1950s those advocating the use of interest rates in capital project evaluation were accused (quite rightly) of revisionism. In the 1980s, a number of communist countries require the use of interest rates in investment project assessments. 16. See Birman, 1978; Nove, 1986; Winiecki, 1987. 17. For a detailed analysis, see Balassa (1982) and Marer (1986).

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18. Similar tendencies can be seen in market-oriented democracies, but in a weaker form. Loosely constrained bargaining regimes are difficult to change because they provide an effective veto power to many groups. 19. In the legal literature this pragmatic point of view is best represented by legal realists (for a review, see e.g., Purcell, 1973). Its more radical counterpart is now developed in the Critical Legal Studies Movement (see, for instance, Kelman, 1987). 20. See Jackson Diehl, "Czechs Get Whiff of 1968 'Prague Spring' in New Economic Reforms," The Washington Post, November 16, 1987. 21. For a discussion, see Kalabifiski (1984) and Hauser (1984). 22. For an analysis of problems facing Gorbachev's economic reform, see Hewett (1986) and Nuti (1988).

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Notes Biographical
BARTtOMIEJ KAMIRSKI,Assistant Professor, Department of Government and Politics, University of Maryland, College Park, MD 20742, USA. Has published recently on economic developments of centrally planned economies and East-South relations. His main research interests are in international political economy, and political economy of Soviet-type societies. KAROL SOETAN, Associate Professor, Department of Government and Politics, University of Maryland, College Park, MD 20742, USA. His main research interests are in political economy, and political and legal theory. Has published recently on justice and on different forms of democracy. His book, The Causal TheoryofJustice was published in 1987. An earlier version of this paper, "The Evolutionary Potential of Late Acknowledgment. Communism," was presented at the 1988 Annual Meeting of the American Political Science Association, Washington Hilton, September 1-4, 1988. This version benefited substantially from the comments of F. Eidlin, J. A. Laponce, John Meisel, M. So-tan, and an anonymous referee.