Khabarovsk: An Instructive Experience in Crisis and Transition

This week’s article is about little known events that occurred in the Russian Far East in the early 1990s, events that offer an important perspective on what’s required during a time of system change — that is, a perspective on what will be required to transition from capitalism to a life-centered society.

The People’s Academy of Sciences in the Russian Far East was established during the Glasnost era. The members of this institution were forward-thinking intellectuals, with their principal center in the Russian Far East city of Khabarovsk.

A New Social Vision

In 1990, as the Soviet communist system was collapsing, I was invited by the People’s Academy of Sciences to give a seminar on the Progressive Utilization Theory (PROUT), a social philosophy that emphasizes economic democracy and economic decentralization, and that values the welfare of all.

My presentation met a very favorable reception, and leaders of the Peoples Academy of Sciences decided to take a close look at PROUT as a possible successor to communism. Neoliberal capitalism had no appeal to them as it would have meant loss of control of their resources (mostly mineral) to transnational corporations and loss of the social solidarity and social security in their society, which they valued.

They wanted a society that maintained social equity but with economic vitality. PROUT calls for a market economy with strong productivity incentives while guaranteeing basic necessities, privileging cooperative enterprises, and decentralizing economic planning. This spoke to their values and aspirations.

They acquired some PROUT literature, had it translated, typed and circulated carbon copies (there were no copy machines), and collectively deliberated PROUT’s ideas and values. They were impressed enough that they decided to take a further step toward evaluating PROUT as a social philosophy to replace communism.

Popularizing the New Social Vision

I was invited back, this time with a few colleagues. For two weeks, we had an active program of meetings and presentations with diverse constituencies in Khabarovsk — labor leaders, staff at the military academy, Peoples Assembly of Deputies, economic planners, etc. The public presentations were often standing room only, reflecting the keen interest people felt in finding a new direction for their society.

Explicating the Operations of the New Social Vision

As a result of this public exposure and PROUT’s growing appeal, the Governor extended an invitation to the Prout Institute to draft a report that would propose a developmental vision for Khabarovsk Krai, the principal state in the Russian Far East.

Three of us worked on this report. My two colleagues were Carla Dickstein, a professor at the University of West Virginia who specialized in cooperative economics, and Niels Holck, who later founded the visionary Green Island Group.

We had three weeks to complete the report, which took intense focus — especially as we started with little knowledge of local conditions. Fortunately, the Peoples Academy of Sciences arranged for us to consult with specialists in agriculture, forestry, mineralogy, technology, cultural development, etc. so that we could obtain a rudimentary understanding of the workings of the local economy and society.

People had heard the broad values and principles of PROUT. Now they wanted to see how PROUT would function in practice. So the matters addressed in the report were oriented toward economic policy and institutional functioning — trade policy, sources of capitalization, environmental protection, enterprise structure, incentives systems, etc.

LOTUS — A Support Organization

We managed to meet the deadline for submitting the report to the governor. While not a refined product, its report’s substance was sound, and it made an impact on the leaders of the Peoples Academy of Sciences, who then approached the Prout Institute with a proposal to form a joint venture, named “LOTUS,” which would have the mission to facilitate the transition to a Prout-like society in the Russian Far East within 15 years.

This was an incredibly ambitious objective. I recently came across old photos of me signing the LOTUS memorandum of agreement. From this distance in time, and with all that’s gone down in Russia (and in my life), it’s hard to relate to it as fully real.

But it was very real at the time — particularly for our Russian colleagues. The Russian economy was shattered; people were struggling. (Once my translator for an important lecture showed up late because she’d gotten word of a truckload of cabbages that had arrived in town — cabbages for her family, pre-empting her translation gig.) The need to put the society on a new track was of paramount importance.

Also, the leaders of the Peoples Academy were astute enough to realize that the future was in play — that their regional economy could become an outpost of the neoliberal global order, or that old mentalities could arise to reassert Russian nationalism.

These were not personally ambitious people, but they were socialized to shoulder collective responsibility and they rose to respond to their historical circumstance while there was still opportunity.

Between 1990 and 1993, I took six trips to the Russian Far East. Often, other travelers on my Aeroflot flights were representatives of transnational corporations. On one flight, I was awoken from a nap by two oil company reps arguing over how to present a proposal for an oil-drilling operation on Sakhalin Island. In contention was whether to include bathrooms for the oil workers. “You have to get with the times! We need to include basic things like this to make our proposal forward looking.”

“Let Us See a Working Model”

During the Soviet era, the Russian people had experienced many reforms, one new program after another coming with glowing promises, but none having particular success. This made the people wary of new ideas. They wanted us to show them models that successfully demonstrated the operations of a PROUT economy.

To give credibility to PROUT’s cooperative system, we showed a BBC documentary on Spain’s Mondragon Cooperative Federation. This had an unusual emotional impact on many in the audience, as they saw in the Mondragon cooperatives a nicely working expression of the egalitarian socialist society that had been their dream – as opposed to the nightmare of the Soviet command economy.

The Prout Institute also got a tremendous assist in presenting the workings of a cooperative enterprise system from two world class experts in worker managed economies: Emil Rudyk from Moscow and Jaraslov Vanek, professor at Cornell University and author of the seminal works, General Theory of Labor-managed Market Economies and The Participatory Economy.

On my last trip to Khabarovsk, I jointly presented, along with Emil Rudyk, a week-long training in cooperative enterprise. At this stage of the work, LOTUS was aspiring to implement the Mondragon cooperative vision.

A Failed Mission, an Invaluable Lesson

But there were at the time much larger forces at play in Russia. A new order was beginning to coalesce, and the ambitious (but relatively insignificant) efforts of LOTUS were soon swamped by these forces. The wave of interest we had created around a new kind of society was drowned as people, driven by pragmatism and opportunism, scrambled to find a place in the emerging Russian oligarchy.

LOTUS was insignificant – not even a tiny footnote – in the history of the transformation from Soviet Communism to Russian oligarchy. But it is very significant as an historical lesson in what is needed to bring system change. Its history reveals that five arenas of action were required to make an impact and advance societal transition.

• First, we had to communicate, and disseminate, a new SOCIAL VISION based on new social values. This was a main focus in the beginning stage.

• Second, we had to flesh out understandings of the practical OPERATIONS of a PROUT society — the required policies, institutional structures, etc.

• Third, we had to show examples of working MODELS of PROUT’s cooperative economy.

• Fourth, we had to create the POPULAR SUPPORT to get political leaders to take PROUT seriously and request us to draft the PROUT developmental vision for Khabarovsk

• Fifth, an organizational vehicle — LOTUS — was required to provide SUPPORT FUNCTIONS to advance a practical program of action. These support functions included training, communications, funding, program development, decision-making, etc.

Preparing to Seize the Opportunity to Transition

Soviet communism had internal contradictions which led to its collapse. Neoliberal capitalism has its internal contradiction — between the needs of the many and the overaccumulation of the few — as well as an external contraction with the workings of the natural world. It too will collapse.

History doesn’t repeat itself; capitalism’s collapse will not mirror communism’s collapse. But, as with communism’s collapse, it will certainly present opportunities to transition to a new social system. The future will be in play.

At that time, those who feel called to seize the moment to guide the transition to a life-centered society will need to attend to the same five arenas of action as the PROUT Institute encountered in Khabarovsk.

Together these five arenas of action, or something close to them, form a holistic framework for advancing a system change response when the time comes.

Massive collective pain comes with the collapse of a world system. When the foundations of capitalism crumble, the suffering will be immense. The effects of climate change will only add misery. The sooner the five-point systems change framework can be built up and given robust form, the better positioned we’ll be to shorten human suffering, meet people’s needs, and create a new society.