IT’S BEEN twenty years since the collapse of the self-described communist regimes of Eastern Europe, a process that began with the sweeping electoral victory of the opposition Solidarity movement in Poland in June 1989 and the abandonment of one-party rule in Hungary a few weeks later, and ended with the Bulgarian Communist Party also giving up one-party rule in February 1990, following a series of mass demonstrations. In between there were massive protests in East Germany, Czechoslovakia, and Romania, leading to the fall of the Berlin Wall on November 9, the televised execution of Romanian dictator Nicolae Ceausescu and his wife on Christmas Day (after he had unsuccessfully attempted to crush the protests in his country with military force), and the appointment of dissident playwright and former political prisoner Václav Havel as president of Czechoslovakia on December 29.

The Eastern European revolutions were undoubtedly of world historic importance. They accelerated the demise of the Soviet Union two years later, leading to the end of the Cold War and a major shift in the global balance of power. But the revolutions have also been widely seen as proof of the idea that socialism cannot work in practice.

The collapse of communism—or, more accurately, Stalinism—in the Eastern Bloc certainly resulted in triumphalism among supporters of Western-style capitalism, and led to widespread demoralization among large sections of the left, because they shared the belief that these regimes were in some sense socialist or “workers’ states.” But this characterization of the Eastern European countries was based on the questionable assumption that socialism can be defined simply in terms of state ownership of the economy.

For Karl Marx and Frederick Engels, by contrast, socialism was fundamentally about “the self-emancipation of the working class”—the mass participation of the majority of society both in the seizure of political power and the day-to-day organization of a post-revolutionary society. As they put it in the Communist Manifesto, “the first step in the revolution by the working class is to raise the proletariat to the position of ruling class to win the battle of democracy.”

Certainly, once that battle is won, the working class “will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state, i.e., of the proletariat organized as the ruling class,” but for Marx and Engels socialism could not exist unless it was based on workers’ democracy, and it could not be equated with state ownership by itself.

Engels in particular was quite explicit that state ownership is not the same as socialism. As he noted in 1877, “of late, since [the conservative German Chancellor] Bismarck went in for state ownership of industrial establishments, a kind of spurious socialism has arisen…that without more ado declares all state ownership, even of the Bismarckian sort, to be socialistic.” But, “if the taking over by the state of the tobacco industry is socialistic, then [French emperor] Napoleon and [right-wing Austrian political leader Prince] Metternich must be numbered among the founders of socialism.”

THE ESTABLISHMENT of the Eastern European “people’s democracies” in the aftermath of the Second World War, however, had nothing to do with popular power or democracy. Instead, it was based on an agreement by the Allied powers—the U.S., Britain, and the USSR—to carve up Europe into distinct spheres of influence. In his memoirs, Churchill wrote about an October 1944 meeting he held with Stalin in Moscow:

The moment was apt for business, so I said, “Let us settle about our affairs in the Balkans. Your armies are in Romania and Bulgaria. We have interests, missions and agents there. Don’t let us get at cross-purposes in small ways. So far as Britain and Russia are concerned, how would it do for you to have 90 per cent predominance in Rumania, for us to have ninety percent of the say in Greece, and go fifty-fifty about Yugoslavia?”

Churchill reports that he then wrote down on a half sheet of paper the suggested division of power for these countries and for Hungary. “I pushed this across to Stalin, who had by then heard the translation. There was a slight pause. Then he took his blue pencil and made a large tick upon it, and passed it back to us. It was all settled in no more time than it takes to set down.”

Underlying this deal with the USSR was the fact that the U.S. and Britain feared the possibility of mass revolutionary movements in a number of European countries, including France and Italy, at the end of the war, and needed Moscow’s help to prevent this from happening. As the British socialist Duncan Hallas notes, “A red Europe was a real possibility and in these circumstances the Communist Parties, which had gained tremendously in numbers and still more in influence, would play the key role—for revolution or for the restoration of the old order.”

Under Stalin’s orders, the communist parties assisted in the restoration of the old order. As Hallas puts it,

They helped to disarm the resistance movements, they pushed “no strike” pledges in the trade unions. They even (in Belgium and Italy) opposed the abolition of pro-fascist monarchies. In short, they ensured the defeat of the revolutionary possibilities by using their “red” reputations for counter-revolutionary ends. This was what Churchill and Roosevelt bought at Yalta and Potsdam. The price was Russian dominance in Eastern Europe. From the U.S. and British governments’ point of view it was a good bargain.

Meanwhile, in Eastern Europe, the Russians also worked to restore order and to forestall the possibility of a revolutionary upsurge. In Bulgaria, for example, the army had mutinied in 1944 and the old political system was breaking down. In response, a new government was chosen by the Soviet foreign minister Molotov, headed by military figures who had supported the previous fascist regime. The new war minister, according to a report at the time, “issued a stern order to the troops to return immediately to normal discipline, to abolish soldiers’ councils and to hoist no more red flags.”

The story was similar in Romania, where former fascists were also placed in the government. Elsewhere in Eastern Europe, the Russians relied on more mainstream right-wing political figures to ensure stability, while the communist parties in the various countries did their best to build popular support for governments of “national unity.”

The Cold War did not break out until the threat of revolution in Western Europe had receded in 1947. The U.S. then used the offer of Marshall Plan aid in an effort to pull some of the Eastern European countries out of the Russian sphere of influence. In response, the Soviets initiated the state takeover of most industries and pushed right-wingers out of government, leaving power in the hands of the local communist parties.

As Hallas points out, “[A]bout three years elapsed between the establishment of the people’s democracies and nationalization measures. In those three years, all open opposition, working-class, peasant middle-class and old ruling-class opposition alike, had been suppressed. The nationalizations were carried out (Czechoslovakia partially excepted) by edict, without any popular participation, let alone control.”

REVOLUTIONARY SOCIALISTS who opposed Stalin’s dictatorship and who stood in the tradition of its main left-wing opponent, Leon Trotsky, attempted to come to terms with the new Eastern European regimes in the 1940s, but they were hampered by Trotsky’s own analysis of the Soviet Union.

Trotsky, along with Lenin, had been one of the main leaders of the Bolshevik Party that led the Russian Revolution of 1917. The Russian working class won political power in the revolution, but Lenin and Trotsky knew that without outside support from successful revolutions in other parts of Europe, it would be impossible to build socialism in backward Russia. Instead of receiving outside support, however, Russia was invaded by foreign armies and plunged into a civil war that destroyed the economy and atomized the working class. The new regime survived, but at a terrible cost; Lenin described it as a “workers’ state with bureaucratic deformations.”

After Lenin’s death in 1924, however, Stalin declared it was possible to build “socialism in one country.” In practice, this meant crushing the remnants of workers’ democracy, purging the old revolutionary leadership of the Bolshevik Party, and instituting mass repression in the countryside resulting in millions of deaths, with the goal of turning the USSR into a major industrialized power capable of holding its own against other Western powers.

Trotsky—who was sent into exile in 1929—opposed such policies. He opposed the rising bureaucracy as antithetical to real socialism, but he resisted the conclusion that the rise of Stalin amounted to a full-blown counterrevolution. The bureaucracy, in his view, was not a new ruling class, but a social layer that gained its power from balancing between rich peasants, speculators, and middlemen on the one hand, and workers on the other.

At first, Trotsky argued that it could be removed by peaceful means. But after Stalin’s disastrous influence on the German workers’ movement helped the Nazis to power in 1933, Trotsky concluded, “the policy of reform is exhausted.” The bureaucracy now had to be overthrown, but, according to Trotsky, this would only amount to a political revolution. A more thoroughgoing transformation was not required since Russia remained a workers’ state by virtue of the abolition of private ownership.

Trotsky predicted that world war would unleash social convulsions around the globe that would result in the disintegration of the Stalinist bureaucracy, thus demonstrating its purely transitory nature. But Trotsky was assassinated by a Stalinist agent in 1940, so did not live to see that Stalinism extended itself at the end of the war by occupying the countries of Eastern Europe and imposing its own socio-economic structures upon them.

Initially Trotsky’s followers maintained that the Eastern European countries were still capitalist because there had been no workers’ uprisings to take control of society. But as the economy came under state control, there was no longer any substantive difference between these regimes and the Soviet Union itself. This left Trotsky’s followers with a choice. Either call these new regimes workers’ states, on the grounds that, as in Russia, the economy was state owned, or abandon Trotsky’s theory of the USSR.

It was the first of these options that was accepted by the “orthodox” Trotskyists of the Fourth International (a network of socialist groups established by Trotsky in 1938). They argued that the Eastern European countries were workers’ states that were deformed from birth. This enabled them to maintain the letter of Trotsky’s analysis of 1930s—but only at a price.

The orthodox Trotskyists found themselves forced to reject the view that socialism can only be achieved by workers’ self-activity, since the Eastern European “revolutions” had so obviously been imposed from above. They were also compelled to jettison Trotsky’s claim that “[t]he bureaucracy which became a reactionary force in the USSR cannot play a revolutionary role on the world arena.”

An alternative analysis was put forward by the dissident Trotskyist Tony Cliff (a Palestinian Jew living in Britain). In Cliff’s analysis, Russia and the Eastern European countries were not workers’ states, but, rather, bureaucratic state capitalist societies. Although the market had been suppressed within the USSR, Cliff noted that military competition with the West still imposed the logic of capital accumulation on the Soviet economy, compelling it to brutally exploit its own workforce. The same dynamic was at work in the rest of Eastern Europe.

From this perspective, Cliff predicted that the Soviet bloc would be subject to economic imbalances and uneven growth rates just as much as—or perhaps more than—the Western capitalist economies, and that sooner or later this would give rise to class conflict on a mass scale. From the 1950s onwards, this was exactly what happened, with major crises and workers’ uprisings in East Germany, Hungary, Poland, and Czechoslovakia. On most of these occasions it took the intervention of Russian troops to restabilize the regimes. But by the late 1980s, the USSR was undergoing its own profound internal crises, making it unable or unwilling to intervene directly again.

Without a clear revolutionary leadership or strategy, the revolutions of 1989 did not bring the working class to power and instead eventually led to one variety of capitalism being replaced by another. But far from discrediting the idea of socialism, they reaffirmed the essential Marxist idea that exploitation makes class struggle—and, in the long run, revolutionary challenges to the system—inevitable.