Universitatea BucurestiFacultatea de Stiinte Politice

Greater Romania : Politics, Economics and Society

Neoliberal and Social Democratic Theories of

Development

– The Zeletin - Voinea Debate –

Realizat de:Ivanov AlexandraSimionescu Diana

Stefu Ruxandra

1. Introduction to Politics in Greater Romania

The influence World War I had over Romania shows in the transformations it suffered, demographically, socially, territorially, and consequently, in the sphere of politics. The general context of political instability between 1918 and 1930 is demonstrated by the frequent changes of government, the division of parties, and the leap political personalities made from one party to another.

The reforms taken hastily on account of the war or the country’s prominent expansion set back the political parties from becoming national after the unification in 1918. Thus, “the achievement of national territorial unity in the absence of national parties destabilized rather than stabilized Romania’s political system”1, as Paul Shapiro mentions, while observing that after the war, all parties claiming to be “national”, actually remained regional in outlook.

After the war and the demise of the Conservative Party, drawing support from the landowning class, the National Liberal Party, perceived as the party that negotiated the return of Bukovina, Banat and Transylvania, became the most prestigious, oldest and strongest interwar party and thus managed to dominate Romanian politics. Pursuing most of the same ideals since 1848, the Liberals, with their “through ourselves alone” motto, advertised state-led industrialization, an economic program from which mostly their affiliated industrialists and financiers benefited, but also a nationalism more moderate and conservative that the radical version promoted by the younger generation.

During the 21 years of peace, the Liberals were the only party to end its government corresponding time (1922-1926; 1933-1937), and managed to achieve their highest successes through the Ion I. C. Bratianu government (1922-1926), which solved most organizational problems of the newly formed state, of the unification of the four regions, both administrative and legislative. It is also remembered as a time of economic recovery and reform enforcement, concluded with the Constitution from 1923, concentrated on unification, centralization and nationalization issues.

However, the 1920s Liberal program faced criticism, mostly from the new provinces and the minorities. As argued by some historians, “the acts of unification and

1 Paul A. Shapiro, Romania’s Past as Challenge for the Future: A Developmental Approach to Interwar Politics, in Romania in the 1980s, ed. Daniel N. Nelson (Boulder, Colo.:Westview, 1981), p.21.

centralization were to the advantage of the Old Kingdom as against the provinces, of the Rumanians as against the minorities, and of the Liberal party as against all comers”2. Consequently, the opposition, constituted in the other historical party, the Social Democrat Party, divided in several organizations, later reorganized(in 1927) and cooperating with movements from other parties such as the Peasant parties, finally taking shape as the National Peasant Party, won the elections in December 1928, with an overwhelming majority. In spite of its much more democratic ideology, and thoughts of sustained development, the party failed to manage the economic crisis from 1929-1930 and to find popular and effective solutions in order to maintain the country’s relative prosperity. The start of the descend was marked also by the return of King Carol to the throne on June 6th, 1930, who gradually widened his authority until he reached dictatorial powers (1938-1940), thus creating the perfect path towards fascist and authoritarian government.

2. Theories of development

Contemporary debates concerning various theories of development have identified, as Daniel Chirot briefly mentions in his article, three issues worth pursuing.

The most theoretical of all consists in the main perspective on the history of economy and of societies in general, as it refers to the existence of similar stages of development through which societies pass. It is a search of patterns and analogies between different evolution moments, eras or strategies. The more practical inquiry is about the most suitable economic strategy applicable for developing countries, about choosing between open and closed strategies, between free trade and neo-mercantile denial. The last concern, presenting no longer much contemporary interest, is the question whether or not democratic government can work in developing societies.

On account of the various struggles Romania faces in the 1920s, it is remarkable how some intellectuals engaged in controversies that continue to be debated 50 years later, among scholars, politicians and intellectuals throughout the world. Stefan Zeletin (1882 - 1934), member of the Peoples’ Party during the interwar period, is the one to theorize the basis of Romanian sociology, as the most significant bourgeois sociologist of the time. His main struggle is to prove that the future of the

2 Henry Roberts, Rumania: Political Problems of an Agrarian State (New Haven, Conn.: Yale University Press, 1951), p.118.

country in “neoliberal”, constituted not through the socialist party, but through the “Romanian oligarchy”. Thus, his major work, Burghezia română, originea şi rolul ei istoric. The main thesis identified in Zeletin’s book is that in the 1920s Romania there was an urging need of objective development towards the industrial civilization, seen as a society of neoliberalism. In order to prove his idea, with arguments based on his reading of Marx, the author produces his own sociological theory, which argued that in all states there are fixed stages of national development. Also, he claims that since democracy would only put off the capitalist oligarchy leading the country into modernity, there is an urging need for economic closure.

Serban Voinea (1893 - 1969), member of the Social Democrat Party during the interwar period, as a follower of Constantin Dobrogeanu Gherea, represents the socialist criticism of Zeletin’s neoliberalism. However, he does not so much propose his own theory concerning Romania’s prospects for the future, as he rejects Zeletin’s arguments, while ridiculing the oligarchic bourgeois interpretation of socialist sociology. His major work, Marxism Oligarhic, proves his point by underlining the differences between the stages of evolution between the western and eastern capitalism, and thus rejecting every theory of universal stages of development. Voinea also sustains the genuine pluralist democracy in developing Romania, as it is thought to be supported by the creative role of an open economy.

Stages of development

When discussing the controversies about Romania's prospects in the 1920s, we firstly ought to observe whether there is a resemblance between different developing steps that all societies must take in order to move forward from agrarian to a huge economical change, based on industry and if these developing steps walk hand in hand. It is of high relevance to conclude whether there are so called "fixed stages" in the development of every society through its way to modernization.

While graphically representing the "fixed stages", Daniel Chirot questions if every single society must take these steps in its process of modernization.

According to this theory, in all societies there are stages of development in which societies move from A to B, B to C, and so on. All

societies must go through all these stages once they begin the process of modernization. Of course even the strictest follower of the uniform evolutionary theory recognizes that the world changes, and that societies going through stage A at times 2 or 3, are different from the ones going through the same stage, at a different time (1), but basically, the similarities between stage A, as experienced by society I, and as experienced by society II, are more important than the different aspects f experiencing the same stage at different times.

However, followers of such theories acknowledge that time frames are not uniform, and that, as different societies move forward in different periods of time, they are likely to move from one stage to another more quickly, and by the acceleration of the process, societies advance more rapidly than they might have done in the past.

Although we can rely on obvious proofs that there are differences in the processes of development, the existence of uniform stages is not to be denied.

It is fair to mention Walt Rostow3 as an adept of this idea. As he sustains, on economic grounds, the stages societies go through can be divided into:

-traditional societies-the preconditions for take-off

-the take-off-drive to maturity

-the age of high mass consumption 1.Pre-Newtonian science and technology characterizes the TRADITIONAL SOCIETY, in which Newton is pictured as capable of productive manipulation. A traditional society is based on technical innovations, industry and agriculture.

2.PRECONDITIONS FOR THE TAKE-OFF. Refer to societies in process of transition. This kind of society, according to Walt Rostow, includes the beginning of modern science.

3.We can associate the TAKE-OFF with economic progress and modernization and political business high order.

4.In the DRIVE TO MATURITY we focus not only on the growing economy but also on the extent of modern technology, the improvement of technique, and acceleration of new industries.

3 Contemporary economic historian and promoter of linear stages theory of economic development.

5.After the maturing of the societies in the 20th century, people relied on mature economy, and in this stage of maturity (THE AGE OF HIGH-MASS COSUMPTION) societies start their political process.

Important stages of development require elasticity of demand because of the desire of rapid growth. In different periods of time the development process varies greatly from one society to another, and from one sector to another. It is very probable for one society to develop faster agriculturally, while another flourishes through its industry. Based on each society’s main resource, Rostow examined a chain of strategic choices.

Uniformitarian theory has deep roots in some social philosophers as Saint-Simon, Compte, Spencer, and Marx. The last one found historical epochs among the birth of humanity on its way to modernization. He mentioned four different stages:

-agrarian-feudal

-industrial-capitalist

According to him, except for the agrarian society, all have an oppressor and an oppressed group. Marx predicted that when the working class will finally be aware of its exploitation it will opt for a socialist society and revolt against the capitalists.

On the contrary, there is the theory of no FIXED STAGES on each society’s way to modernization, at least in the domain of industrial and social changes. The Western view on modernization is uniformitarian. However, Max Weber and his disciples Reinhard Bendix and Guenther Roth share some kind of skepticism on these strict evolutionary laws.

In opposition to the “fixed stages” theory, there are Charles Maurras, through his “Action Francaise” , the Slavophil with “Russian soul”, and Mihai Eminescu with some political articles. They all share the idea that modernization, foreigners and industry are bad, whereas the only good remaining things are the land, the soil and the past (customs).

In Romania, Stefan Zeletin is one of the defenders of the theory that “fixed stages” do exist. From his point of view, in order for Romania to be led into modernization, its democracy would have to step backward and temporary be substituted by capitalist

oligarchy. In his debates, Zeletin underlined some oppositions: -reactionary elements opposed to progress -the masses ( there was a struggle between masses organized by the Peasant party and those organized by the socialists) In their way to obstruct the capitalist oligarchy, the peasants were in fact fighting for progress, their demands consisted in bigger wages and protection. This aspect was thought to be the failure of industrialization. Trying to argue Zeletin, Voinea completely disagrees his interpretation. His argument on the theory he sustained was the major work of Constantin Dobrogeanu Gherea, Neiobagia(Bucharest, 1910). He had strong other arguments as his own interpretation.

Although there are more than 50 years since, the debate between these 2 major figures is still of relevance.

In the 20 century Romania was the best example of a peripheral society, with no way out from the modern capitalist world and both analysts were aware of the issue that this will represent in their country’s future.

Zeletin, Voinea, just as Dobrogeanu Gherea went ahead of Immanuel Wallerstein with the issue of uniformitarian evolution. In Burghezia Romana we find such an example.

Zeletin’s stages of development in Romania correspond to the stages of capitalist development in Europe. In accordance, the first stage, the invasion of foreigners groups corresponds to the “usurious capitalism” in England in the 13th century.

Zeletin underlined two sources of opposition to capitalist development: -reactionaries ( junimists ) -socialist and popular peasants. As a member of the Liberal Party, Zeletin’s work could not be put in use after 1944. However, positions similar to Zeletin’s on the issue of fixed stages in the development of states still survive in some backward societies. On the other hand Voinea has gained important points having Gherea as an ally and assuming most of his version of Romanian history.

Strategies

All development processes are based on certain strategies, presenting huge influence in final outcomes. Thus, the importance of economic strategies when discussing Romania’s prospects in the 1920s.

According to Paul Samuelson4, most contemporary analysts agreed on David Ricardo’s theory presenting the advantages of maintaining an open economy. The positive aspects he takes into consideration are : the ability to make trade mutually profitable in a more efficient way, the possibilities to reach and use modern technologies, the stimulation of economic growth by facilitating access to exterior capital, and the contributions more advanced societies bring throughout modernizing processes.

However, problems concerning the gap created between the advanced and the backward economies remain to be solved. This is the basis on which thinkers such as Friedrich List sustains that for a backward society to develop its industry, it must protect against the far more efficiently produced items from advanced economies, which would maintain their advantages, while backward ones remain dependent. Though he stands against free-trade doctrines, List does not defend protectionism (closure) and was therefore considered weak in his thesis by those with more radical approaches, like the Marxists.

They stand for closed theories of development concluding that open development is beneficial only for the more advanced economies by this meaning that rich economies have a greater control on international trade. The most negative aspect they highlight is the fact that open economies imply open societies. This is definitely a major cause of preoccupation because the final result is maintaining what is ready achieved and not striving to develop own economies.

If backward economies take the choice to remain open the obvious feedback will be recognized in the slower rate of national integration and stagnation.

The answer to this issue is still unclear for many of us as the debate on open vs. closed economies is overwhelming.

Despite this , the general view of the open vs. closed economies was of great importance to Romania in the late 19th and much of the 20th. When speaking about

4 Samuelson's most famous piece of work, Foundations of Economic Analysis (1947), one of the grand tomes that helped revive Neoclassical economics and launched the era of the mathematization of economics.

Romania this issue spread its influences in noneconomic as well as in strictly economic domains.

The first to understand this major issue was Stefan Zeletin and what was to be called his analysis was a major contribution to Romanian mentality. His arguments are based on the fact that, to his mind, closure was necessary for the industry of Romania and in order to fulfill modernization Romania would have to be transformed in a closed country. Zeletin encourages own means of production .

Zeletin’s ideas resemble Dudley Seers’ theory based on the fact that open economies finally end as a big trouble where capital is out of the country and political pressure is born. Seers goes on in his theory but this time he classifies closure as the cause of severe problems. Shortages ,devaluation and inflation are major processes that occur in this vicious circle. In this way the desire for a reopened economy appears again. The strategy suggested by Seers has similarities with the one that Romania adopted despite Zeletin‘s approval.

Zeletin’s theory was just in part accepted by Voinea. He comments upon the possibility that a bourgeoisie oligarchy could carry out a program of closure in a very effective way. In his vision Voinea said that the Romanian bourgeoisie should not be misinterpreted. Closure was not an answer and it was inefficient on long term.

Gunnar Myrdal5 ,a modern social democrat comes to support Voinea’s arguments against Zeletin. He presents striking similarities between South Asia and Romania and also makes a classification of the different kinds of states mentioning the hard and soft state.

The Zeletin – Voinea debate on closure still remains a subject of actuality. The reasons for which this is important are especially practical ones.”Open economies” have no supporters in the contemporary societies but oligarchy still exists in many states because are consider to be more suitable in the ruling and modernizing process. This debate is an appreciated one.

5 Karl Gunnar Myrdal (6 December 1898 – 17 May 1987) was a Swedish economist, politician, and Nobel laureate. In 1974, with Friedrich Hayek, he received the Nobel Memorial Prize in Economic Sciences for pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena.

Tribute to Zeletin theory is his ideology that survives in many backward societies . He was considered an enemy worth being attacked and despite the fact that the arguments were not so clear Voinea speculated this wisely.

As Zeletin predicted in his book "Burghezia Romana" ,Romania approached a new political direction. The author’s theories were not put in practice and Romanian events that followed gave birth to a policy of closure.

Democracy

The concept of democracy has lost much of the value it had in the 1950s, when presented as mandatory in discussing the prospects of any new nation. By the late 1960s, as Gunnar Myrdal emphases in his “Challenge of World Poverty” (New York, 1971), in the context of developing societies, democracy is associated with corruption and stagnation, as opposed to dynamic economic growth.

While focusing on backward India, Barrington Moore6 observes that: “The atmosphere of action became a substitute for action. For the sake of democracy, some sacrifice in speed is necessary.”7, thus marking both the positive and negative influences of comfortable democracy, opposite to the brutality of communist modernization.

Considering political orientation of the ruling party, as also occurred in 1920s’ Rumania, one can identify liberal as well as socialist types of democracies. While liberal democracy emphases the ability of the representatives, elected by will of the majority, to exercise power as subject to the rule of law, socialist thought claims to counteract and put off all social inefficiencies and injustice, through state regulation and reformation. The same ideology separation was identified in the cases of Zeletin and Voinea, and had high influence on their theories of development. However, the limited knowledge the 1920s provided led to many mistaken assumptions.

According to the neoliberal perspective Zeletin presents, liberalism is the one to refocus state life, from center towards its periphery, by taking sovereignty from the centralized power and giving it to the individuals, to the people in general. Consequently, modern democracy appears as a political expression of the economic 6 Barrington Moore Jr. (12 May 1913 - 16 October 2005) was an American political sociologist, who put a base to what is today called “comparative-historical analysis” in the social sciences.7 Barrington Moore Jr., Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World, Boston, 1966, p. 407.

liberalism. Also, he claims that the evolvement of democracy was subordinated to the rise of bourgeois capitalists, and therefore, impossible in the short run, as no shape of social life is eternal, though it also doesn’t disappear before finalizing its historical part. Therefore, all opposition to the bourgeoisie was anachronistic and antithetical to progress, since the supremacy of the oligarchy cannot be suppressed by any political activity and it would dissolve on its own, as step in the evolution process the society faces. The far-sighted vision Zeletin actually had still shows in the part democracy yet plays in developing countries, as such democratic forms still exist in less developed states like Sri Lanka, India, Venezuela, Costa Rica, Turkey, or Gambia.

As opposed to Zeletin, Voinea presented an even more limited vision, through his view on democracy, which claimed that all the country’s problems might be solved if only the workers and peasants organized socially, in a democratic state, also joining minorities, in order to control the oligarchy and awaited for the western socialist revolutions to take place. As Chirot ironically mentions, Voinea was too sincere a believer in democracy to take into account the more obvious solution against the corrupt and inefficient oligarchic regime, comprised in closure and constrained industrial growth.

3. Conclusion – Debate Outcome

The main importance of the debate between Stefan Zeletin and Serban Voinea is that their conclusions have a great political role. Even though today we have merely no adepts of open strategy of development ,several states consider themselves as being capitalist, nationalist and progressive.

Zeletin - an advocate of the bourgeoisie, of the capitalism and the revival of the nation through the death of our pastoral past, in whose ideology Serban Voinea saw a pure enemy, but failed to find persuasive arguments.

By naming as „oligarchic” the group of political individuals holding the power in a state, and by dening any connection they might have with the bourgeoisie, intellectuals of the beginning of the 20th century only prove their lack of interpretational capacities, and narrow visions, as neighter did Zeletin nor Voinea manage to clearly observe that the oligarchy was merely the political shape of the bourgeoisie’s and ladowners’ interests.

Zeletin, an aknowledged defender of the Liberal Party, which was in power at the time he wrote most of his work, in spite of his use of propagandistic and analytic powers, never received the recognition he expected. Although in the development of his idea, he manages to capture the core of neoliberalism, with relevance for the contemporary world just as well, understand the and analize the reactionary aspects of the romanian culture, while presenting his own perspective on the marxist view of history, the thesis failed to work in practice. Eventually, Voinea’s thesis proved to have more validity than Zeletin’s, as he understood Romanian history better and foresaw its outcome.

In agreement with Daniel Chirot’s opinion, I have come to conclude that in spite of his elegant, more sophisticated ideology combination between the uniformitarian theory of development and neomercantilistic doctrine, Zeletin’s neoliberal hopes for the ruling oligarchy could never be achieved. Also, in spite of his appealing political ideology, Voinea wronged in considering social democracy as the leftist alternative to neoliberalism, when the corresponding regime was actually communism(a people’s democracy).

All in all, in the light of tragic events that overwhelm all backward societies (as 1920s Romania), the Romanian debate on the country’s future prospects and on the issues of development merely mark out deliberate historical distortions, fanatically appliance of ideologies, in disregard of any popular wishes and mostly the limited scope of options contemporary narrow-mindness provided.

Bibliography

Daniel Chirot, Neoliberal and Social Democratic Theories of Development: The Zeletin-Voinea Debate concerning Romania’s Prospects in the 1920s and its Contemporary Importance in Kenneth Jowitt, ed., Social Change in Romania: A Debate on Development in a European Nation (Berkeley: University of California Press, 1978), pp. 31-52.

Stefan Zeletin, Burghezia română, originea şi rolul ei istoric, Bucuresti, ed. Humanitas, 1991

Serban Voinea, Marxism oligarhic, Bucuresti, 1926

Irina Livezeanu, Cultural Politics in Greater Romania: Regionalism, Nation Building & Ethnic Struggle, 1918 – 1930 (Ithaca: Cornell University Press, 1995), pp.1-48.

Friedich List, The National System of Political Economy, 1841, http://www.socsci.mcmaster.ca/

Karl Marx, Selected Writings, 2nd edition, David McLellan (ed.), Oxford: Oxford University Press, 2000

Paul A. Samuelson, Economics: An Introductory Analysis, 7th ed., New York, 1967

*** http://cepa.newschool.edu/het/home.htm

*** http://blds.ids.ac.uk/

*** http://www.econlib.org/