This is a guest post by David Priestland, author of The Red Flag: Communism and the Making of the Modern World (Allen Lane, £35)
In the many discussions of the anniversary of the fall of communism in Europe, much more attention has been given to the revolutions of 1989 than to the lessons of the communist experience itself. John Gray, however, in his very generous review of my history of communism The Red Flag in the New Statesman, did address this central question of 20th-century history. Communism, he argued, was a "radical humanist" project, and its failures marked the death of progressive politics. It is therefore no surprise that "left progressives are beached", even though the recent crisis of financial capitalism should have given it the best opportunity in decades.
Gray, I believe, is right to argue that the communist experience is intimately connected with the leftist tradition. But I think he is wrong to insist that the failures of communism discredit the leftist project as a whole.
Certainly, we should not be surprised that the collapse of Marxist regimes has caused a crisis of the broader, non-communist left. Communists departed from Marx's thought in many ways, but they did pursue two projects which are very much part of the progressive tradition: they promoted a radical form of equality by means of revolution, and they favoured technocratic, state-led modernisation. As I showed in my book, communist reigmes tended to zigzag between the two, but both had serious drawbacks: the first caused chaos and a great deal of violence, while the second created an ossified bureaucratic caste and economic failure.
But state involvement in the economy, and popular participation in politics, were not utopian ideas in themselves. Rather, the communists' failures were caused by their love of absolute solutions: their belief that the bourgeoisie was evil and had to be destroyed completely; and their view that an alliance of mobilised masses and state officials could rule without the market. By demonising the market, they ignored its uses -- as a spur for innovation, and as a balance to an overmighty state. It was this extreme, class-warrior view of the world that led to both the violence and economic stagnation of the communist world.
Nevertheless, these undoubted Marxist failures do not invalidate two central progressivist insights: first, that left to themselves, markets reinforce inequalities, which lead to blighted lives, economic stagnation and sometimes popular anger and violence. And second, that the only effective counter to the uncontrolled market is an alliance of popular action from below and the state.
The history of the 20th century, and of communism, bears out both of these lessons. Communism and revolutionary violence arose when capitalists supported aristocratic or imperialist regimes -- whether in pre-1789 France, pre-1917 Russia, or the Nazi, Japanese, European or postwar American empires. Stark social or racial inequalities caused anger and violence.
But even when capitalists disentangled themselves from aristocrats and generals and pursued more liberal, laissez-faire politics -- as in the 1920s in the United States -- they created dangerously unequal societies, and destabilised capitalism itself. Finance was let off the leash and money poured into speculation. The result was super-profits, high levels of inequality and massive indebtedness. The bubble inevitably burst, and the state had to step in to stave off starvation and revolution.
Prosperity and justice have flourished most when the state has accepted the market, but imposed strict controls on it, as in the two decades after the Second World War. Capitalists had discredited themselves -- both by collaborating with the Nazis, and by their irresponsibility during the 1920s. And governments believed that western Europe was on the verge of becoming communist. They were therefore willing to regulate the market, and share power and profits with trade unions and other popular groups. In doing so, they presided over one of the most prosperous eras in the history of the west.
The post-1945 system of course had its failings. It was too technocratic. It also excluded large groups -- including women, the young and the global "south". And it was seriously challenged when it failed to cope with the economic crises of the 1970s. But rather than seek to adapt the post-1945 system to new conditions, an American-led global elite has sought to dismantle it and return to the world of the 1920s. The defeat of the USSR and the end of communism were seen merely as proof that the progressive project was dead and untrammelled markets would be the world's saviour.
The result has been predictable. As in the 1920s, businessmen preferred to invest in financial speculation and assets rather than job-producing industries. The result has been rocketing inequality, with a small group of global rich bidding up house, art and oil prices, and a stagnating middle class encouraged to take on debt to keep up. Now the bubble has burst, and the west seems set for on a long period of relative decline.
Thus, the progressive left, far from having no answers, has the only solution: markets must be tamed. So why is the left so weak? Why is the right winning throughout Europe, while the Conservative Party astonishingly claims that the state has to be cut back?
In large part, the problem is that the present generation of centre-left leaders entered politics during the defeats of socialism and the fall of communism in the late 1970s and early 1980s. Under Bill Clinton, Tony Blair and Gerhard Schröder, the traumatised left became true believers in the free-market faith. Meanwhile, former Trotskyists such as Alistair Darling, or socialists such as Gordon Brown, swapped one rigid ideology for another. It is, ironically, easier for the paternalistic right of Nicolas Sarkozy or Angela Merkel to use the language of state intervention -- even if they are unlikely to do much in practice.
But the progressive left is also to blame. It, too, needs to learn the lessons of the communist experience, and show how the state can co-ordinate the economy without the rigid technocracy of the past. It also needs to make the decentralised democracy championed by the young Marx and abandoned by his successors seem practicable.
Even so, new ideas are emerging that challenge the dominance of market thinking. Theorists of "deliberative democracy" are considering effective ways of involving citizens in decision-making. Meanwhile people such as Elinor Ostrom, winner of the 2009 Nobel Prize in Economics -- are showing how local collectives can manage scarce resources more effectively than either markets or state bureaucracies.
There is a real danger that we fall back into the ways of 1930: a year after the shock of the financial crisis, governments have recovered their balance and are returning to politics as usual. Keynesian ideas are more influential now than they were then, but even so we are far from a new, truly international Bretton Woods-style agreement, in which states guarantee a new, just and fair economic order. The result will be stagnation, high unemployment and, possibly, political extremism. Ultimately, it took six years of war and 55 million deaths before Keynes's ideas were fully accepted. We can only hope that history does not repeat itself.