What if…there existed a genuine democratic socialist country?

When workers turned the world upside down | Red Flag

Welcome to MittelEuropa, the former Communist central European republic that peacefully transitioned from a communist dictatorship to a democratic socialist state. Unlike its neighbours, the republic maintained state control over most of its economy, and decided not to join the European Union. As a result, living standards remained at Soviet levels, with a large outflux of younger citizens seeking great opportunity leading to the nation aging substantially compared to its neigbours. Remittances sent back to families by emigrants cause tension in the country as the government seeks to tax them as income to subsidise the socialist welfare state and the state’s industrial sector. A heavy tariff and customs wall against imports protects indigenous industry and agriculture, but also leads to higher prices due to limited supply. A growing black market, based on Deutschmarks and Francs, provides more luxurious European and American products. 

In the first free elections the Social Democratic Party, made up of former Communist reformers who led the peaceful 1989 revolution are elected with a comfortable majority in parliament. The government introduces modest free market reforms, allowing for small businesses to exist and make modest profits, but the majority of the economy and all large commercial operations remain in public ownership. Newspapers and other media operations are strictly regulated in terms of market share, and the state broadcaster remains the largest media operator in the country, although its board is appointed in direct proportion to the share of party seats in parliament.

Housing remains 100% owned by the state, with rent deducted directly from state employees pay or pensions. Unemployment remains almost non-existent as heavy subsidies of state companies ensure there is employment available for all. There is no state unemployment benefit, although individuals can purchase private unemployment insurance if they so wish. The state housing stock, from the Soviet era, is plentiful but dilapidated. 

By European standards, the country is free and democratic, and within ten years there is a strong centre-right opposition party advocating privatisation, free trade, and membership of the European Union. Its opponents point to the collapse of the old industrial giants in the rest of the former Warsaw Pact countries, and the selling off of assets to western asset strippers. MittelEuropeans are, of course, free to holiday abroad, but most cannot afford to, the MittelEuropean Zloty being worth little. Those who do travel tend to do so as guests of family members who have done well for themselves in EU countries. They tend to be very self-aware when they travel, that their clothes are old fashioned, and European shops tend to be very expensive but offer choices far in excess of anything in most of their shops, even the small privately owned boutiques. MittelEuropeans are not living in a disconnected bubble: they see the same TV shows as the rest of Europe and are aware that they pay a price for the equality that socialism has brought. They know they have far fewer consumer goods, and less choice, but there is also no homelessness in the country, and access to healthcare for all is not based on income.

The country enters the 21st century in a state of perpetual fiscal crisis. The aging population is sharply pushing up pension costs and health costs, as does the perpetual lossmaking state heavy industries. They remain shielded by heavy tariffs on imports, but also find their exports are crippled by a European and American retaliatory tariffs on their exports. MittelEuropeans know they are living in a nation with a guaranteed safety net, but one which guarantees a 1950s standard of living. MittelEuropa took in its fair share of refugees from the Yugoslav civil war, but admitted that they added to the strains the country was enduring.

The country chose to declare itself neutral, and its relations with Russia, its largest neighbour, are tense. The army is underfunded and reliant on aging Soviet equipment. Russian tourists are welcomed and spend big, but the Kremlin leans heavily on the state to allow more private investment (that is, Russian purchases of property and business). The army begs the politicians for a closer relationship with the west and access to modern western weapons, but the price tag is simply too high.

Tourism remains the primary source of foreign earnings as the country’s quaint underdevelopment becomes a selling point for EU citizens, who enjoy the nostalgia of the old Soviet architecture and thirty year old vehicles on the streets. The large state-run hotels, alongside the smaller private ones, have managed to turn their obsolescence into an advantage. The government looks the other way as pretty MittelEuropean girls hang around the hotels in the hope of meeting a prospective husband.  

The now traditional exodus of young MittelEuropeans ensures that the aging voter base of the SDP keeps the party in power, although a new type of socialist is emerging. He or she has travelled and lived abroad, speaks foreign languages, and sees MittelEuropa as a possible centre of innovation for technology and climate change action. She sees the country with its mountains and rivers as a model for renewable energy, but is also frustrated by the inability of the country to attract the billions needed to build that infrastructure. She is also frustrated by the old socialists who point blank refuse to give power to the undemocratic bond markets (“Who elected them?”) by borrowing from them, or close the old steel mills and coalmines because of the economic disruption and unemployment it would cause. Spending the limited coffers of the state on wind turbines or broadband means there will be less money for coal or steel subsidies or the state pension, and the older socialists reject her “neoliberalism”. The old socialists denounce the unwillingness of MittelEuropean ex-pats to return and pay the high income taxes of their homeland as unpatriotic.

It’s all so frustrating. This is not Communist China or Cuba or North Korea. She can happily speak about her ideas on state television or in the state-subsidised newspapers, and run for election on the list of any number of non-socialist parties for parliament. But the enemy is not left or right. It’s change, and the great irony is that socialism has made MittelEuropa the most conservative country in democratic Europe. 

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