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PROBLEMS OF COMING OUT OF SOCIALISM (Lessons for the New Millennium)
Professor GAVRIIL POPOV, President of the International Union of Economists

Professor GAVRIIL POPOV, President of the International Union of Economists

PROBLEMS OF COMING OUT OF SOCIALISM (Lessons for the New Millennium)

CONTENTS

Introduction.

1. Necessity of coming out of socialism and its conceptions.

1.1. Necessity of coming out

1.2. Ideas about the process of coming out in the socialist countries

1.3. Ideas about coming out of socialism in the West

1.4. Starting situation

1.5. Formulating of the conception of coming out in the USSR

2. Practical experience of coming out of socialism of the socialist countries and perspectives of development

2.1. Experience of the European countries

2.2. Perspectives of development of the European countries

2.3. Experience of Russia

2.4. Perspectives of the development of Russia

2.5. Experience and perspective of development in China

3. Lessons of coming our of socialism

3.1. Necessity to generalize experience. Goals and moving forces of the reforms

3.2. Lessons out of the starting reforms

3.3. Lessons out of the state reforms

3.4. Lessons out of the economic reforms

3.5. Lessons of the non-production sphere

Conclusion.

Introduction.

In the process of realization of the Millennium Development Goals, adopted by the World Community, we may distinguish three sub-processes:

-improvement of post-industrial society in the developed countries;

-transition to the post-industrial society of the countries of the third world (ex-colonial and dependent states);

-transition to the post-industrial society of ex-socialist countries.

The present report at the Annual Meting of the International Union of Economists is devoted to the realization of the Millennium Development Goals by the ex-socialist countries.

The subject of the report is analysis of the process of transition of the ex-socialist countries to the post-industrial society.

The main notions, used in the report are:

-Socialism - system of the state socialism;

-Countries of socialism - the countries, which called themselves socialist countries. These are the following countries: the USSR, East-European countries, China and socialist countries of Asia, Africa, and America;

-Postindustrial society - a society as an alternative to capitalism, as well as to socialism, adopted in the USA and in the developed Western courtiers of our planet;

-Transition to the postindustrial society by the socialist countries is called "coming out of socialism".

Of course, there are some countries with tremendous theoretical and practical particularities. It is not less important an attempt to find out common features, that are present in the experience of all socialist countries. This will help each country to realize its own way of development.

Unfortunately, neither in the ex-socialist countries, nor in the Western countries, nor in the frames of the United Nations and other international organizations there was put a task to identify to a full extent common problems of coming out of socialism. That was one of the reasons for serious difficulties of practical coming out of socialism in different countries. Different countries had the same problems and are having same diseases.

The report gives summaries of many scientific conferences, round tables, seminars and symposiums. The organizer was International Union of Economists individually and in cooperation with other organizations. They were held in Russia, the USA, France, FRG, Switzerland, Austria, Cuba, Mexico, South Africa, Croatia, Bulgaria, and Estonia and in other countries. Those meeting were held in the Kremlin State Palace, in the House of trade unions in Moscow, in the conference halls of the IUE Headquarter, in the premises of UNESCO and in the United Nations organizations. There were thousands of participants at some meetings and groups of professionals at other events.

Prominent members of IUE took the floor during the meetings: Abalkin, Assaul, Blazh, Bronshtein, Georguev, Degtyarev, Dubenetsky, Evstratjev, Egorov, Zadornov, Zimin, Zotov, Rayumov, Krasilnikov, Kudrin, Livov, Luzhkov, Malitikov, Martirosov, Megrelis, Mokry, Norkin, Raevsky, Roca, Sytaryan, Stepashin, Stroyev, Mrs.Tibaijuka, Tolkachev, Topfer, Urasbaev, Faminsky, Cherny, Chernomyrdin, Chychkanov, Chubais, Shmelev, Shtern, Cherbakov and others.

In the Annexes 1 and 2 there are lists of all speakers at the meetings of the IUE, which were devoted to the subject of the report - different problems of coming out of socialism). That was why we put that subject as the theme of the jubilee 15th meeting of IUE, that topic was one of the main directions of the work of IUE during all those years.

The report consists of three parts:

-The first part describes problems related to the necessity of coming out of socialism and conceptions of that process before it's beginning;

The second part describes the practical way of coming out of socialism and the problems related to it;

-The third part represents an attempt to formulate lessons of coming out of socialism.

We hope, that the report and its discussion would help to implement "Millennium Development Goals", adopted by the United Nations and all the World Community.

1.Necessity of coming out of socialism and its conceptions.

1.1. Necessity of coming out.

Capitalism in the XIX century demonstrated remarkable achievements of scientific and technical development. But its economic and social contradictions, as analysis by Karl Marx showed, led capitalism to the tremendous crisis, which resulted in the First World War. Dozens of millions of wounded, poisoned with gas, killed, gigantic destruction of material values put the problem of overcoming of capitalism, as a system.

The mankind was proposed three models of the world organization to overcome capitalism, and they were realized in practice.

First of all, the model of Lenin of the international socialism - transition of all the world countries to socialism.

Second, national-socialist model of Hitler and Mussolini. That model recognized only some countries, worth of socialism: those countries were selected by the race features.

Third, a model of the "New course" of Roosevelt, a model of postindustrial system.

Both international socialism and National Socialism connected their future with the world war and victory in it. The Second World War was finished by the total defeat of National Socialism. But the victory united all anti-fascist forces, thus allowed to keep international socialism, and to expand it to Europe and Asia.

Internal logic of the development of the Western countries and pressure from the socialist camp finished formation of the post-industrial system in the developed countries. Analysis of the post-industrial system is not the subject of the report. The report uses the interpretation of the post-industrial system, which presupposes:

-Creation of three sectors in the economy, including private sector, state sector and the sector, based on the collective property;

-Correspondingly, combination of the market and state regulation becomes an economic mechanism of the development;

-Political mechanism under conditions of pluralism of the property forms might be only democracy of particular post-industrial type;

-Democracy presupposes free voting of citizens, a consequence of which becomes a social orientation of the market and of the whole economic development.

The world postindustrial community represents a common system. However, the components in that system significantly differ from each other, although having common, global processes.

Postindustrial countries demonstrated greater economic and social successes. On the contrary, countries of the socialist position spent quickly reserves of that system and strained its contradictions.

There appeared crisis of the state socialism. Export of raw materials, first of all energetic, to the Western countries, and import of the food products, lending (and often stealing) of scientific-technical achievements prolonged that crisis, but were not able to overcome it.

It became evident, that the countries of the socialist world should also enter the postindustrial system, thus, to come out of socialism.

1.2. Ideas of coming out of socialism in the socialist countries.

The first direction. They tried to separate themselves from the real socialism: from its practice and theory. They tried to rebirth "true socialism". Those were attempts to come back to the "true" Lenin, or to the "true" Marx.

The second direction. To build "developed Socialism". That way was proposed by the reformers in the USSR, first of all, by the leaders from the CPSU. The last of them was Mikhail Gorbachev. Generally speaking those conceptions might be determined as "capital repair".

The fourth way was under development in China. "Chinese socialism" or "socialism with Chinese specifics" was proposed.

In the whole, there was no conception of coming out of socialism in the socialist countries. Historical turn, making conclusions of the state-socialist experiment in the XX century, appeared to be without integral ideological base.

1.3. Ideas about coming out of socialism in the West

Same situation was not only in the socialist courtiers, but also in the West.

The first direction united recipes, proposed by the West for overcoming crisis of socialism. There was a whole specter of such recipes. There were ideas of full restoration of capitalism, as well as reforms to approach post-industrial system.

The Western proposals didn't give any finished scheme, as in the case of the military victory of the West, socialism would be eliminated, but not reformed.

The second direction was euro-communism. The sense of that direction was to prove that the Western European countries needed "its own" variant of socialism, different from the Soviet.

Emigrants from socialist countries, who came to the West, proposed the third recipe, close to the western. It might be called "restoration": to restore pre-socialist political and economic system; to return property, first of all land, to the ex-owners; to expel communists bureaucrats from all spheres; to organize courts.

The next popular that way was among the countries of the Eastern Europe and in the Soviet Baltic Republics. Its main foundation consisted of the alive careers of the past under restoration.

But those ideas suffered from the radical simplifying of the problem. In the 50-es the Russian scientist Ivan Ilyin, working in the West, showed in full extent complexity and contradiction of the problem of overcoming of socialism. He put forward in one of his numerous works (his collection consists of more than 30 volumes) as a main problem absence of the personnel necessary for the formation of any non-soviet system. How to create anti-soviet system with the soviet staff? Unfortunately, the works of Ilion were exceptional and they didn't attract necessary attention.

1.4 Starting situation.

The level of development of socialist countries was different. They might be united in several groups.

The first. Socialist countries from the Eastern Europe. The common thing for them was relatively recent adoption of socialism. It was imposed by the USSR. But traditions of the previous system were also alive, and the people who were ready to revive those traditions.

The second. China. Chinese communists took the power themselves and made experiments with the ways of socialism. Independent course made China to create powerful military industry with nuclear rocket-potential. The leaders in China were characterized by extraordinary dynamism and pragmatism. The major part of the population in China, first of all peasants retained traditions of the old system.

The third. The Soviet Union. That was the main socialist country with almost a century experience of life under socialism. Generations of the leaders and of population fully lost traditions of entrepreneurship, of economic interest; they were used to live in accordance with the central directives and under socialist dependence. The main feature of the society socialism was deeply monopolized economics. The heart of which formed centralized military-industrial complex. Another feature - dependence of all the life of the whole country on the export of raw materials, first of all on export of oil and gas. In reality it was a kind of dependence, similar to drug dependence.

The fourth. Internal system of the USSR was not uniform. Russia advantageously embodied the symbol of the USSR. The Ukraine and Byelorussia were close to Russia.

But there were three Baltic republics in the USSR, which were closer by their type to the Eastern Europe. There were three Caucasian republics and four republics of the Middle Asia. And the problems of coming out of socialism of those parts of the USSR differed greatly.

The fifth. Countries of socialist orientation in Asia, Africa, America. The common feature of those countries was that they appeared on the basis of ex-colonies or dependent countries. That influenced the character of the problems of coming out of socialism.

1.5. Formulating of the conception of coming out in the USSR

Russia met all the great turns in its history, including the peasant's reforms of 1861 and revolutions of 1905-1917 with ideological conceptions of reforms. That time the country appeared to be blindfold.

When Interregional Deputy Group (IDG) of the first democratic soviet parliament tried to formulate the platform of changes, it was lost in debates and disputes. A.D.Saharov proposed the way out. As we couldn't formulate the positive aspects, he proposed to determine the negative aspects, attitude to which might unite the group. That "negative" common aspect was a slogan to dismiss the CPSU from the power. IDG and the "Democratic Russia", which appeared later, chose that way - the way of minimum demands.

It was enough in order to unite all the opponents of the CPSU, liberals, and anarchic-communists and to eliminate the soviet system. But that predetermined separation among the winners over CPSU in the first days of victory.

When I speak about absence of the theory of coming out of socialism, I mean the absence of the common, coordinated theory, adopted by the majority of the reformers.

There were, of course, separate conceptions. There was a project of new Constitution of A.D. Sakharov. There was also a project, prepared by myself from the position of co-chairman of the Interregional group and the Chairman of Moscow Council. I would like to say a few words about it.

The first group of problems was democratization. It meant elimination of the mechanism of the single-party democracy and dismissing of the CPSU.

The second group of problems was de-socialization. Transition from the soviet system, which rejected the idea of differences between three branches of power, to the traditional democratic structure with clear identification of three branches: representative, executive and judicial.

The third group of problems is denationalization. In the center - transition of the significant part of the state property into the private and collective.

The fourth group of problems - transformation of the national structure of the USSR, "defederalization". The USSR as a formal union state, in the reality was a federation. Defederalization presupposed, that state structures would gain real self-independence in the free elections, thus republics would decide themselves to stay in the USSR or not.

Applying to all the four main blocks of transformations of the socialist system I proposed people's democratic way. For example, I suggested to make privatization democratic by distributing property on the base of equality among all the citizens of the country and free of charge. The same way as the Western lands in the USA were distributed after the civil war.

Two other ways of reforms I called liberal and bureaucratic.

Liberal way of coming out of socialism presupposed the leading role of private owners. Bureaucratic way presupposed the leading role of bureaucracy that could be under the soviet conditions only a part of the ex-soviet party bureaucracy.

Unfortunately, conception was not even discussed neither at the USSR level, nor by Russia. Even in Moscow, when I became a Mayor, that scheme was not realized.

2. Practical experience of coming out of socialism of the socialist countries and perspectives of development

2.1. Experience of the European socialist countries.

The first important particularity of the European countries coming out of socialism was restriction on participation in the political life of the main categories of socialist bureaucracy - first of all, for the personnel from the Party and from the State Security organs.

The European countries managed to hold de-communization, because they had non-communist staff: inside the country (among ex-owners, politicians and bureaucrats) and emigrants. Non-communists reserve of personnel for the new bureaucracy was an important feature of the coming out of socialism, for the European countries.

2.2. Perspectives of development of the European socialist countries.

What is awaiting socialist countries at their way of coming out of socialism?

The first perspective is that instead of independence those countries would be again in the block. It would not be a soviet block, but a new one, which might be a military block of NATO, an economic-social block of the EU and they would demand realization of the standards, which had been elaborated by their members and on the basis of which the block is functioning. That is not simple. Besides that block has encounted the crisis. The EU was not able to adopt a new Constitution.

The gap in the level of economic development in the EU is very big. Even the FRG after spending billions of German Marks didn't "assimilate" "its" German GDR. Inclusion of other ex-socialist countries into Europe will create more complicated problems and will demand big reforms.

Ethnic and international collisions in the leading countries of the Western Europe are increasing.

After entering into the EU the problem of personnel became sharper. The level of wages in the EU countries is significantly higher. This will bring two consequences. First of all, outflow from ex-socialist countries of both skilled and non-skilled personnel. Second, their return to the Motherland with the money reserve, significantly different of those who didn't leave the country. It would increase instability. But in those countries, where they would continue to work, instability would be increased as well.

2.3. Experience of Russia.

The USSR was a country, which lived for dozens of years under conditions of socialist system. There were no other starting positions for post-industrialism, except socialist. And correspondingly the only possible transition was by reforms of the communist bureaucracy.

However, supporters of the reforms appeared to be in minority among the CPSU leaders. In order to come to the way of postindustrial transformations they had to apply for the help to the people, to the population. Actually, it was a revolution. People ensured dismissal of the conservative majority of the communist bureaucracy. There were no chances for victory of the people's democratic way of post-industrial reforms in Russia. The country as a result of the people's revolution entered the way of nomenclature-bureaucratic reforms.

At the first stage during ten years the reformers from bureaucracy, feeling their weakness, attracted as partners the arising capital under the cover of some groups of liberals. That stage might be called nomenclature-oligarchic.

At the second stage from 2000 nomenclature refused from allies-oligarchs and from allies-liberals and began to govern the country itself, formulating the system of nomenclature governing democracy.

In the state mechanism that presupposes combination of external forms of democracy with supremacy of bureaucracy in reality.

The obligatory percentage of those who comes to the elections was reduced, thus representative organs, elected by the minority, loose their influence. The executive power is strengthening and takes control over the juridical system and over the fourth power - mass media, primarily electronic. And at last, among the Heads in the executive branch of power, the ratio of those elected becomes less in comparison with those appointed.

The capture of power by nomenclature made it possible to realize reforms of coming out of socialism in economics in the forms advantageous for bureaucracy.

Population was dismissed from privatization of land and from the rent. Privatization was realized in the way that gave bureaucracy directly or by the oligarchs control over privatized property.

The main expenses were put to the major part of population. For example, billions of capitals of population, which might have been used for the development of small and medium entrepreneurship, were devaluated.

Inevitable and logical companions of bureaucratic reforms became corruption and criminalization.

Corruption is fed by several factors. First of all, by the absolute power of bureaucracy and the absence of democratic control over it. Second, by careless and undeveloped laws; that creates a possibility to interpret and even to overcome the laws. This in its turn gives rise to the tyranny of bureaucracy depending on the size of bribes.

Criminalization is related to the weakness of new State machinery, which comes to be ineffective in protecting interests of private owners, especially of small business. Criminalization becomes a companion of corruption, as the criminal either protects corruption, or is "fed" through it.

2.4. Perspectives of the development of Russia.

Realized in Russia postindustrial transformations during 15 years gave important positive results. In the country appeared political parties, elections, and opposition. Private sector, large and small, began its formation. Millions of people obtained an opportunity to live independently on State. Free visits abroad became possible. Privatization of housing permitted millions of citizens managed to obtain property.

Those and other changes all together created situation, when restoration of the state socialism became impossible as a system. At the same time contradictions become stronger, related to the nature of nomenclature coming out of socialism.

Nomenclature as it was under socialism, became the owner of the enterprises and the whole branches with all consequences, known in the past.

Democracy, supported by voting, where majority consists of the electorate, dependent totally on the State, becomes an actual instrument of bureaucratic power. The main base of democracy - the civil society, independent of the State - is absent in the country.

Economic reforms and first of all privatization didn't create the main - the market, which is functioning according to the laws of competition.

Realization in Russia of a nomenclature way of transition to post-industrial system creates and strengthens social tension in the country. Millions of citizens, whose incomes in the state sector are rather lower than minimum of the living standard, don't have possibility for self-realization in the private sector, first of all, in small business.

There is no long-term program of development of Russia in the XXI century, ensuring Russia to keep its position among the leading countries in the post-industrial world.

As you see from the report at the Congress of Free Economic Society of Russia without such program and under the present situation, post-industrial reforms would be very slow with immense costs and growth of social tension that might create a threat for Russia itself in the XXI century as an integral state.

2.5.Coming out of socialism in China and perspectives of China.

Although China didn't declare formal coming out of socialism and transition to post-industrial system, actually that process takes place.

The first feature of transition of China to post-industrial system is the leading role of the Communist party.

The Communist party suppressed attempts of opposition to participate in the governing of the country. The result - stability of the governance.

That stability of governance permitted to realize a consequent programmed of the reforms.

The achievements in China are impressive: in the economic growth, in attracting of foreign investments, in the foreign trade and international economic relations etc.

Chinese leaders kept low standard of life of the main population, first of all peasants.

Payment for the economic growth became growth of tension in China.

Regions in China have very different levels of development.

There are low salaries of the workers and insufficient measures of labour safety protection.

The gap between the town and the country is very large. Chinese's peasantry has lower life standard in comparison with the town.

But the main problem of Chinese way is the question of relationship among private owners and the party-state bureaucracy.

Overcoming of the difficulties is realized in several directions.

First of all, admission of the private owners into the CPSU. Getting a share in the membership in the party, private owners early or late would like to have its share among the governing bodies and among the leaders.

Another way is to introduce representatives of the communist bureaucracy into the Boards of mixed and private companies. But there is a danger of promoting by them the interests of their private structures.

Stability and rates, reached by the Chinese way of reforms also have potential constraints. In the USSR the New Economic Program "NEP" was slowed down because of the fears of new soviet bureaucracy for its leading position in the party and in the state.

3. Lessons of coming out of socialism.

3.1. Necessity to generalize experience. Goals and moving forces of the reforms.

The subject of the third section of the present report is related to the lessons of coming out of socialism. These lessons may become a base for the theory of the transition from socialism to the post-industrial system.

But there is a question on the necessity of theory for the historical process, which is coming to the end?

It should be noted that in reality the process is not coming to its end. Actually two main countries of socialism: Russia and China are at the initial stages of the transition period.

But other countries - European and ex-republics of the USSR, countries of the third world with the theory may act more efficiently.

I present my own analysis, taking into account the results of researches of my colleagues in Russia.

These lessons are united in five blocks.

The first block consists of goals and moving forces of the reforms. The second - lessons of the start of reforms. The third - lessons of reforming of the state. The fourth - lessons of reforming of the economy. The fifth - lessons of reforming of non-production sphere.

Initial problem is formulation of goals of postindustrial transformations. It concerns the choice of the type of post-industrial system, which ex-socialist country is going to choose.

For example, the goal of Russia relates the solution of the question: to be a great country in the postindustrial world. Liberal reforms of the first years after the crash of socialism indirectly (and sometimes) directly came out of the idea of the refusal of Russia from the perspective to keep position of the great country. At the new stage, on the contrary, the idea to stay the great dominates.

Similarly, the wish of separate ex-socialist republics to enter the European Community predetermines the whole process of the post-industrial reforms.

Socialism is supported by the citizens, employed by the state. Such society may be only the base for totalitarism.

Thus, the main and the first aim of all postindustrial reforms is formation of the civil society.

The backbone of the civil community is based on citizens, economically independent on the State.

An important problem - moving forces of the transition period.

At the beginning it is necessary to unite all opponents of the state socialism and to mobilize the people.

Then the main moving force is the part of the nation, supporting reforms: including bureaucracy, intelligentsia, business, especially small etc., supporting reforms. That part for years was in the minority in the society.

Particularity of coming out of socialism is that the nomenclature bureaucracy or the old, pre-socialist bureaucracy, or a part of the nomenclature of socialism heads it. The main difficulty consists in the fact, that the governing bureaucracy has to build society, in which it won't be, any more the leader.

In order to follow that direction, a powerful pressure is needed on the bureaucracy. And first of all of those, who represents the interests of the future.

This is intelligentsia. Its non-governmental organizations. This is small business and its organizations. This is a private sector in education, science, culture, sport, health protection and its organizations.

3.2. Lessons of the start of reforms.

The first problem of the start - what to do with the state bureaucracy of socialist countries? There may be three solutions.

The first is to give to it governance of transition period. It will simplify transition from one part. But there are difficulties of transforming of one part of socialist bureaucracy, used to be the Head of the society, into the post-industrial bureaucracy, that relates more to the sphere of service of the society, and the other part - into private owners.

The second way - full exclusion of the communist bureaucracy from the state and political life in the transition period. Experience of full purge of the political life of the country from its ex-owners - in the FRG from the nazists and in some Eastern European counties from communists, showed advantageous of that way.

At last, the third way represents a combination of the first and the second.

In economics the main problem of the start is monopolism.

The structure of economics of socialism is principally different from the structure of the market economy, as socialism imposed world-wide monopolism, eradicating the base of the competitive economy - duplicating industries.

Another problem of the beginning in the economics is a big share of military-industrial complex.

Thus, demilitarization and demonopolization are needed at the start.

Serious complex of problems at the beginning is in the social sphere. Socialism as a system put a person under conditions, when he practically could not spend money on medicine, on education, on the preparation to the old age. The state took all those expenses on its charge. Attempts to ignore all these, created particular difficulties.

3.3. Lessons of the reforms of the State.

The first lesson is necessity to form civil society. Absence of civil society makes impossible democracy in the State. Without democracy there is no base for independence of the third and fourth branches of power.

Another part of the lessons of the reforms deals with national problems. Formation of the national communities, independent on the administrative-territorial structures, must be basic. National-cultural autonomy must become the main. National-territorial division should be eliminated from the structure of the State, by the example of the USA.

In the post-industrial society is needed a complex of measures, ensuring true independence and the third power branch - juridical, and the fourth - mass media. The base of their independence consists of special sources of financing as special taxes. Another base of their independence is formation of all structures inside those branches by the judjes themselves and by journalists. It should be noted, that developed postindustrial countries didn't find yet corresponding to the new system the forms of the fourth power.

In organization of all the mechanism of the state power during transition period the determining factor is that there is a big part of the population, who lives at the expense of the State.

As known for many years in the USA, for example, those who were paid by the State - office workers and the army - were not allowed to the elections. There is logic in such approach.

More efficiently to find an alternative with two types of the electoral bodies. Those that are elected by the people who pay the taxes and those, elected by the citizens. The first organs might be responsible for the budget. Others for the questions of war and peace call to military service etc.

During transitional period it is necessary to provide additional influence of those, who are in minority at the beginning, but with whom future development and structure of post-industrial society is connected. It is especially important to augment the role of intelligentsia (as it was at the first Congress of the peoples' deputies in the USSR) and of the small business.

In the transition period the voting of majority may have only consultative importance.

It leads to the conclusion that populist voting of the majority of population is not appropriate for the transition period. They are necessary only for the starting decision - about coming out of socialism.

In the transition period a populist democracy, which is good for economic developed postindustrial countries, is not necessary; it is important a system of some kind of democratic authoritarism of the reforming forces, who stay in minority at the main line of the transition period.

Mechanisms of providing reformers in the State should be found. Then it might be possible to step back from the populist democracy.

Mechanisms of control of non-bureaucratic forces of the civil society over reforming bureaucracy would become an alternative of the populist control.

3.4. Lessons of the reforms in the economy.

The first problem is the land. Is it possible to keep specific for socialism the state property on land, ensuring functioning of the private sector? Or it is necessary to give part of the land to the private property.

The second concerns the natural resources and the rent.

Is it necessary to privatize mineral resources? If not, who would be in charge of them: specially created bodies of the society or the bodies of the acting state? If the State, then who would be on its behalf: central organs, regional organs, and local organs? If the owner is represented by the State organs, which of its branches then - legislative or executive?

In any way the question of rent appears. As is known from the economic theory the rent comes out of the general system of economic relations. Demand for the oil and its price show situation in the world. Thus, what part of rent might be given to the owner, making the product? What part might be received by the system that created situation for the rent? What part might receive that, who is the owner of the land with mineral resources?

All solutions demand analysis of pluses and minuses. Besides, the world community should be kept in mind as well. For example, there are tendencies today to keep space as international object. The main part of the world ocean system is common. Similar situation is with Antarctica. It might be one day that the world community would take a decision about international character of mineral resources in some form or another.

The next complex of economic reforms might be characterized by the notion of privatization.

What part of the economy should become private? How to realize privatization: free of charge or paid?

If paid, then a problem of long-term credit arises, as citizens from socialism don't have necessary financial means to buy property. Then who and why would get the credit?

If free of charge, then it is necessary to give property to all citizens of the country by equal portions. Then appears a problem of transition of property from participants of the division to those, who would like and really is ready to manage privatized objects. When privatization is free of charge, participants sold their parts to future economic objects.

During privatization there should be not only a private sector, but also a market sector with real competition, selecting the best, and destroying the worst.

The next block of economic reforms relates to the formation of the state sector. The state sector in the post-industrial society is absolutely new formation. This is not something that nobody wants to make private, it is not the dump of the state property.

The state sector of the post-industrial economy has two functions: to develop the branches, which are ignored by the private sector or it is dangerous to believe in it. The second function - to become the foundation of the state in its activity of regulating economy.

Serious disease appears, when post-industrial state starts to consider the state sector its child. Thus, another important task is to formulate in the post-industrial society the state sector.

The State in the post-industrial system has state regulation as one of the main functions. State regulation differs principally from the administrative commands under socialism. The basis of such regulation is financial key factors.

The next problem of the transition to the post-industrial system is connected with the reform of all the system of incomes and taxes.

The problem of coordination of levels of salaries among those who work at the market and those who work for the budget is arising. From one part, raise of the level of the budget rates is necessary, but it might destroy the market. Thus, bureaucracy, when starting its care about those working for the salaries from the budget, should begin not with raising salaries, but with determination of the really needed number of those personnel.

Post-industrial system gets from capitalism and socialism progressive taxation. However, there are no positive arguments, except declarations about un- usefulness of the wealth and usefulness of equality.

When the share of citizens in the creation of the state budget is different, those who pay, more necessitate additional rights for spending the incomes.

Another way is also possible: two taxation systems. A citizen pays a part of the tax, equal for all to the state. The other part he would also pay, but the question is, how to spend it - on science or culture, on courts or hospitals - that a citizen decides himself.

It should be noted, that in the developed post-industrial countries, systems of taxation are far from fundamental basis of the new system.

3.5. Lessons of reforms in non-production sphere.

Conditionally all the complex of the reforms of political and economic spheres might be called reforms in non-production sphere.

It includes the following blocks: a housing reform and municipal economy, support of socially weak layers and members of the society, reforms in health protection, education, science and culture.

Housing reform and the reform of the whole branch, which takes care of housing is one of the basic post-industrial reforms. That was strengthened by low level of salary and communal payments (which in turn permitted to pay low salaries).

Market economy needs free labour market. The level of salary should determine the change of work. In order the place of life doesn't interfere the process, salary must include all expenses, necessary for buying and rent of housing.

Thus, privatization of the housing, that a citizen already has, is the first social reform in the process of coming out of socialism. That privatization may be free of charge, or paid, or mixed.

Then the market of housing appears. It permits to buy housing by one payment or by installments.

Together with the housing market, there are reforms in the housing communal economy. There should be solved two related problems of transition to the market economy: elimination of monopolism in communal service and establishing communal economy market prices. Along with this, elimination of monopolism is a base, because an attempt to raise prices on services up to the market prices under monopolism turns to be tyranny of bureaucracy in the housing sphere.

Post-industrial reforms should include the system of support of socially weak layers and groups of society, as well as separate citizens. Socially weak people are invalids, children without parents, dying out peoples, those who are infected with the incurable diseases etc.

As post-industrial society presupposes a limited role of the state, that system of support includes state system and the non-governmental. In case with the state system, socially weak people will be under full control of bureaucracy.

The ideal way: the state must give resources, and those resources should be managed by special public structures, with representatives of those under word ship. Then there should be a system of different charitable funds, devoted themselves to the support of the weak. At last there should be a system of measures to stimulate production of commodities for the poor with minimum of profit and at cost price, as well as free of charge or preferential tickets and places in the cultural and educational institutions, etc.

Among social programs there should be programs, which support not the weak but special groups of the society. This is youth. These are elderly people, women. In Russia, for example, must be a program of augmentation of birth rate. In the countries with eastern mentality there should be a program of equality of women. In the transition period there should be a program of support of the retired, who worked the important part of life under socialism and didn't accumulated money. There should be a program of adaptation of ex-officers from the army etc.

The next spheres of reforming in the post-industrial non-production field are health protection and education. Their common feature is that they concern practically all citizens.

Because these branches relate to all - there should be a block, equal and available for all and thus free of charge for the citizens.

As these branches serve also for the wealthy people, there should be a section in them, requiring payment, organized according to the demand and its money equivalent.

At last, science and culture also needs postindustrial reforming.

In the process of postindustrial transformations science, as economy should consist of three sectors: state, private and collective.

State part of science should cover preferentially defense researches.

Private part of science would be financed and organized by the private sector.

And at last, science in the post-industrial society should have a big sector of independent non-governmental science. It should be financed by the budget and the private sector, but the scientists should determine the fields of studying. These are theoretic researches in natural sciences, theoretic studies of humanitarian sciences, applied humanitarian researches (archeology or philology), for the development of which it is difficult to find private investors. Formation of such non-governmental sector of science is the most important task of post-industrial reforms.

Similar reforms should take place in the sphere of culture as well.

Here there is no need in the governmentally organized part of culture. Private cultural institutions function as private. The main part of culture in the post-industrial sector - independent public sector. The state has responsibilities to provide it with resources in the whole. And the cultural activists would distribute those resources themselves. This fund has also other grants.

Only with such organization of science and culture it is possible to convert science and culture into the separate spheres of society, putting them aside of conceptions and tyranny of bureaucrats and private owners.

CONCLUSION

Analysis of experience and lessons of such worldwide historical process as coming out of socialism of the one third of the mankind represents, first of all, great historical interest.

They might be regarded as a system of special kind of theory -a study about the problems of the process of coming out of socialism.

The lessons and theoretical generalizations have also practical interest.

First of all, for Russia and China, who are at the initial stages of the transition period from socialism to the post-industrial society.

Second, for other ex-socialist countries.

Third, for the countries of the third world, which are also in the process of transforming to the post-industrial system and they encounter the problems, similar to those of coming out of socialism.

Fourth, and the last, for the future development of the post-industrial system. Experience of coming out of socialism put forward serious problems of future development of post-industrial system.

Among such problems of special attention are the following:

-Problem of forming of civil society, as the first institution by importance relatively to the state, and as the main counterbalance to bureaucracy;

-Problem of strengthening the role in the post-industrial society of intelligentsia and taxpayers to restrict populism and bureaucracy;

-Problem of ensuring with independence of the fourth branch of power, mass media, first of all electronic;

-Problem of ensuring of social orientation of public development without formal populism;

-Problem of making such sectors in the society as education, health protection, science, culture, sport into public sectors taking them from the control of bureaucracy.

That problem became especially actual in the light of experience of coming out of socialism.

Thus, there are fundamentals for the conclusion, proposed by the leaders of the International Union of Economists for this annual Meeting - about necessity to continue in the frames of our Union elaboration of experience and lessons of coming out of socialism.

We also would like to propose, that IUE addresses the Economic and Social Council of the United Nations in relation to the elaboration of the problems of coming out of socialism as one of the main goals of the New Millennium.

Professor GAVRIIL POPOV, President of the International Union of Economists