The Class Nature of the Stalinist States (discussion document)

20.

( SECOND PART OF ' "Capitalism - State-Capitaliam - Bureaucratic Collectivism)

The Laws of Motion of State Capitalism - From State capitalian to'Burraucratic

Collectivism'::

In his ‘Imperialism and World Economy'(1915) and (Eoonomics of the Transition Period! (1921),° Bukharin. had formulated an extensive theory of state capitalism. As a consequence of his formulist 'scholastic' method, which Lenén had occasion to sharply criticise, he fails to theoretically dis¥inguish between developed forms of state monopoly capitalism. and’ state capitalism. In the fortier work, in reference: to "war economies, he argues: .

'Pinance capital seizes. the: entire country in.an iron grip. ‘National 8: economy! TURNS INTO ONE.GIAGANTIC COMBINED TRUST whose partners are

. the financial groups and the state.) SUCH FORMATIONS WE CALL STATE

. CAPITALIST TRUSTS, OF COURSE THE LATTER FORMATIONS CANNOT BE IDENTIFIED WITH THE STRUCTURE OF A TRUST IN THE PROPER SENSE OF THE WORD; A TRUST IS A MUCH MORE CENTRALISED AND LESS ANARCHIC | 7 i ORGANISATION. To a certain degree, however, particularly in comparison with the preceding phase of capitalism, THE ECONOMICALLY DEVELOPED STATES HAVE ALREADY ADVANCED FAR TOWARDS A SITUATION WHERE THEY, CAN BE LOOKED UPON AS A BIG TRUST-LIKE ORGANISATION OR, AS WE HAVE TERMED THEM , STATE CAPITALIST TRUSTS. We mat therefore speak at present about the concentration of capital in state capitalist trusts as component parts of a much larger socio-economic entity, world economy.’ (28)

Although Bukharin makes a quantitative, empirical distinction between a ‘state capitalist trust' and a ‘trust proper' according to the degree of centralisation and abolition of internal tanarchy', he argues, in effect, that the imperialist war economies. of the First World War formed concrete historical. approximations to Single state capitalist trusts and that consequently they could be theoretically ‘Looked upon' as such. He elaborates this conception in the ‘Economics of the — Transition Period':

. ‘STATE CAPITALISM is a completely specific and purely historical category, in spite of the fact that it exhibits a 'SOCIAL RATIONALITY' as well

' “as an 'ANTI-CHRENATISTIC (ie. literally anti-money making and thus

' - conmodity producing) tendency'. For it constitutes at the same time a species, THE 'NOST PERFECT!’ SPECIES, .OF CAPITALISM. The basic relation of production in the capitalist order .is the relation between the capitalist who owns the means of production and the worker who sells his labour power to the capitalist. IT IS IMPOSSIBLE, INDEED ABSURD, TO IGNORE THIS BASIC CLASS SHARACTERISTIC IN A CONSIDERATION OF STATE CAPITALIST STRUCTURE." (29)

Lenin: makes an important observation on this passage in his notes on Bukharin's work, -Commenting on the last point concerning the essential class relation of . State “capitalism, Lenin remarks 'completelt true', but adds that:

‘(Perhaps a definition of state capitalism would be in order. A CAPITALISM WITHOUT STOCKS AND TRUSTS (AND PERHAPS WITHOUT MONOPOLIES). The "0%. author gives neither a concrete nor an economic judgement! (30):

Lenin ‘notes the same problem 4s Trotsky: nobody knows what the term ‘state | capitalism! means. He is quite correct in his tentative proposal that state .| capitaliem, correctly defined, involves the absense of the capitalist monopolies, which point Bukharin does not specifically deal- with in any depth; he does not deal -with the question of nationalisation at all. But he does discuss the forriation of state, as opposed to private, monopolies, ana consequently. conceptualises completed state capitalism ‘as one ‘giant state monopoly. :

Bukhae also provides, for what it is worth, a coneréte POLITICAL judgement :

‘tthere arises a ‘new model of. state power,’ the CLASSICAL MODEL OF THE IMPERIALIS?T STATE; which relies on state capitalist relations of - production. HERE. *ECONOMICS'IS ORGANT SATIONALLY FUSED WITH 'POLITICS';

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THE ECONOMIC POWER OF THE BOURGEPISIE UNITES ITSELF DIRECTLY WITH ITS POLITICAL POWER; the state ceases to be a simple protection of the process of. exploitation and becomes A DIRECT CAPITALISE COLLECTIVE

: EXPLOLTER, “OPENLY OPPOSED’ 0 THE PROLETARTAT' (31)

He therefore characterises the imperialsit form of the state in general by the ven COMPLETION of. ite FUSION with the’: ‘eapHtalist, glass and. not by the. PROCESS.. of . such “A fusions”

.Purther,: Bukharin does, :in fact, provide ‘an ECONOMIC judgement, hinted at above in.

his remarks, concerning the. anti - ‘anarchic’ ‘and 'anti-chrematistic' nature of ‘state capitalism, themes. he expands upon. He: argues that state capitalism involves ‘the — abolition of NATIONAL commodity production, exchange and competition. Instead thése

. features. of the, epoch of free‘competition reappear in heightened form INTERNATIONALLY ,

in WORLD ECONOMY. He proceeds to draw a conclusion which at’ first sight appears staange, but which is in fact both explicable and common to,many theories of state capitalism: that - ‘the law of value no longer operates in this regime. From this he draws the theoretical inferende that, the tategories of Marxist. political economy

no longer apply. to, bedome redundant for, the scientific analysis. of state capitalism,

This is a..very peculiar argument indeed, for Harxist political econony is nothing but the science of commodity production in. general, ‘and capitalism in its tiost. concentrated 'peneralised'. form,:iniparticular. Bukharin asserts that. state capitalism is the

‘most perfect! form of capitalism. .in-. general.’ “ Clearly, there is either. something

very wrong. with ;the luarxist:science of. political economy , or with this, ‘the ‘most

perfect’ form.of, capitalism | itself.

harx's “definition of capitalism’ included its. nature as generalised commodity production and exchangé, the. “Laws: ‘of which ‘are ‘mediated, through | competition. Compared with this, Bukharin!s argument , despite the saving clause concerning: competition at the level of world’ economy, reduces itself,:in fact, :‘to.the assertion that ‘state capitalism" ‘is

not capitalism, - Consequently his' theory". jumbles: ‘together ’ in‘’an untidy’ fidlange, three quite distinct’ historidal and conceptual Sbagest | ‘state monopoly capitation,

state capitalism, and: non-capitalisms Ported she

Essentially, Bukharin's ‘conéept of state ‘eapitalian , already contains all the elenints present in that of. Tony Cliff arid the SWP(GB), and indeed, ultimately, of state. capitalist theories of the Stalinist states in general. Bukharin even includes the conception. that. competition: in: the imperialsit epoch is transformed into military competition pure and, simple, and ‘thus, as a consequence, provides the essential elements of the so-called | permanent ‘arma: economy’, In 'State Capitalism in Russia' Cliff relies explicitly on Bulcharin's' arguments, © Indeed, ‘it will become clear, superficial. appearances not. withstanding, - that Cliff arrives at the same ‘judgement concerning the usefulness: of Marxist political economy in the analysis: oF state capitalisme su: . ao

Of course,’ ‘Clift’ and other such ‘theoreticians! approach the distinction between

state monopoly capitalism and state capitalism more concretely than Bukharin, although the SWP seem increasingly inclined to define the imperialsit regimes as state _. capitalist, once. again following im his footsteps. But Bukharin’has one distinct advantage (and one might add, many/partially: valid excuses) in comparison with” his’ conscious and unconscious epigors,:-he at least.attempted a theoretically consistent demonstration of the development of state capitalism, from the inner ‘tendencies of capitalism in general and the imperialsit war economies: in particular.

It is here, with ‘the imperialist..war economies, -the culminating moment of capitalist crisis in the imperialist epoch, that we confront the:theoretical. possibility ofthe evolution of a completed. ‘state capitalism, cand concretely, its relation to ard, place in world economy’. The ‘imperialist: crisis necessarily develops: through a precipitate slump in world production and trade, with a concomitant intensification of: wa international capitalist , competition,. We ‘Know both. theoretucally. and .as.a consequence of the ‘experience of the imperialsit, crisis of 1 930s that, this inevitably leads: bain world-wide errection of tearrif ‘barriers and intensified. preparation for war,.’ ee expanded arms production. In short, the creation of autarchic national capitalist units geared towards the attempte. to redivide the world on a new basis, or the: * attempt to defend the existing imperialsit divisions. Therefore, the imperialist crisis inevitably inv, ves the fracturing and disintegration of. capitalist: world

27 « economy, ‘the tendential undermining of the world division of labour and market.

But the creation of this completely inter-dependent world economy aws the great progressive hidtoric mission of the capitalist mode of production arising out of, and being a decisive element in, the capitalistic development of the productive forces on | a world scale. A national state capitalist regime would complete the autarchic it r isolation of national from world economy, it would be 'capitalism in one country'. .

This alone signifies that state capitalism marks a gigantic historical, regression,

a crippling and outright destruction of world productive forces. For not only is socialism not possible in one country, or in one part of the globe, neither is capitalism which emerged historically on the basis of an already developed world division of labour and market which it proceeded to revolutionise in its own image. Marx remarked that ‘capitalist production never exists without foreign trade'(32). This is another decisive aspect in which state capitalism in in the process of ceasing to be capitalism. .

It is therefore a theoretical absurdity to define the capitalist nature of state capitalism from the point of view of its relation to world economy, to a world commodity production, circulation and capitalist competition which must be in an 7 advanced stage of disintegration as, for example, in Bukharin's conception. This is not to suggest that the completion of state capitalist regimes would occur simultaneously throughout the world. On the contrary, the process would inevitably be uneven, Wt its primary developments would occur in the weakest links in the capitalist chain, © |) pritain for example. If other imperialist powers still Maintained relatively healthy Myon private ‘capital accumulation, in say.a re-unified German imperialism, then the (we ! ‘possibility exists that this power's economic and/or military competition might undermine the development or existance of the British state capitalist regime. Under these conditions the holdings of the British capitalist class, instead of remaining in the * hands of its own state, would be swallowed whole by another section of world monopoly capital. Here, the state capitalist regime would prove, for a while, to be a merely conjunctural passing phenomena. The theoretical possibility of such a conjunctural state capitalist regime is important in two ways.. First, it demonstarates a . supplementary reason why the particular capitalist class might voluntarily go over to ai state capitalist regime in order to attempt to avoid expropriation by another section of the world capitalist class. Second, because conjunctural regimes of this nature have existed, as we shall see in the ‘last sections of this document, which tended under imperialsit pressure to collapse back into private capitalism.

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However,- this concrete eventuality is theoretically excluded, in general, by the assured severity of the world-wide capitalist crisis. Although one imperialist nation, here Britain, completes the state capitalist evolution first, this very fact presupposes the advanced state of economic decay of the other state monopoly capitalist regimes. This would signify the latter's inability to ECONOHICALLY undermine the British state capital and that the effort of a military intervention would lead to an ‘organised Europe', a limited 'multi-national' state capital of short historical duration. ‘

Bukharin is left with no consistent grounds for defing the capitalist nature of state capitalism, for he has asserted that in national economy the law of value ceases to operate, but it also clearly ceases to operate internationally. Yet we wish to : establish here the still capitalist nature (albeit in the process of destruction) of such a regime in just such a world economic conjuncture. There remains only one wes possibility, the law of value does not cease to operate at the level of national fo. | sess . . Indeed, it is precisely here that Bulharin falls into ‘a’ major contradiction, a theoretical error repeated in most state capitalist accounts of the stalinist states. His’ assertion that the law of value ceases to operate in national state capitalist ““ economy completely underimines his own argument, which Lenin agreed with, and which corresponds to Engelgé! definition of a theoretically possible state capitalism, that the direct producers remain WAGE-LABOURERS, proletarians, who SELL the COMMODITY __ labour-power to the (state) capitalist class and consequently produce a surplus product ‘in the form of a CONNODITY, of SURPLUS-VALUE. As Bukharin himself said: 'it is impossible, indeed absurd, to ignore this basic class characteristic in a consideration of state capitalist structure'. Yet it is equally absurd to ignore the specific

historical form: of the. ‘capital. relatidn; which is,. exactly what He’ does. .

4s Marx argued in’ his definition’ of capitalism, it is. precisely’ this determinate form of surplus: labour’ ‘appropriation, thé exploitation of a class of direct. producers in the form of wage-labour, that detérmines the entire character of the mode of production. The determinant of’ the specific form of wage~labour is the 'free' character of the exploited class». ‘Treet ina double sense: free from all means of. production and ‘means of subsistence, and consequently 'free' to sell their labour-~power as a , commodity. In other words, as we have ‘clearly. seen, the production, scale and purchase of this commoddty. is itself governed by the law of value, as is the résultant process

of exploitation. . no.

To argue that the law ‘of value is abolished in the shereof capital relation and to combine this with the assertion that there continues to exist a class of exploited direct producers, is, in effect, to argue that this class is not a class of wage~ labourers but a class of slaves, the property of the ruling class. The relation of . appropriation of. ssurplus~value is thus considered merely as the appropriation of surplus labour: and, the resultant ° surplus product.

' Consequently, the retention of the capital relation, of a class of wage-labourer's. engaged in capitalist. commodity production, the-production of surplus value; forms the © theoretical point of departure for establishing the laws of motion of a national state regimes, .

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Here, it is necessary. to deal with a fundamental element of Marx's definition of capitalism in general in more detail... Hé states that commodity production presupposes commodity exchange, or rather, the interdependent process of individual exchanges ‘which in turn involves the development of. the universal commodity, money; insun,. the: “circulation process. ‘ Although commodity production, and thus the single conitiodity,

the commodity product, can and must be considered in abstraction from circulation -nelations in the analysis of capital in general, this doesnot signify that’

commodity production, or capitalist commodity. production, can ever actually EXIST in the absence of commodity circulation. On. the contrary, this abstraction, the’ single ‘commodity, remains a commodity only because it is a tise-value purposely produced for exchange; for the market. The production of a single commodity. involves the production of VALUE, but this does not appear immediately in this. single use-value but only in’ its relation to another commodity, in exchange. This EXCHANGE VALUE is the necessary form of appearance: of VALUE. Marx noted in his definition that:

The characteristic 4) of the PRODUCT AS A CONMODITY, and 2) of the COMMODITY as a PRODUCT OF CAPITAL, ALREADY IMPLIES ALL CIRCULATION RELATIONS, ie. a definate social process through which the products MUST PASS and in. which they assume definate ‘social characteristics; it likewise implies definate relations of production agents, by which THE VALUE?EXPANSION OF THEIR PRODUCT AND ITS RECONVERSION, EITHER INTO | EEANS OF: SUBSISTENCE OR INTO NEANS OF PRODUCTION, are determined. ' (33)

; fn the last sentence’ Marx - intimates that to analyse ‘all circulation relations", based

- on capitalist commodity production, it is necessary to deal with the capitalist reproduction process as a whole. These. two combined elements form none other than the subject matter’ of 'Capital' Volume Two, part. three,of which deals with the probleia in

- its’ concentrated, nost developed for. - Here, Marx expands the idea presented in the definition: ,

1, ‘The circulation of the commodity capital invoves the circulation: of “ “s" fsurplus-value, AND THEREFORE THE PURCHASES AND SALES BY WAY OF ‘WHICH... "i THE CAPITALISTS FEDIATE THEIR INDIVIDUAL CONSUMPTION , the consumption of. surplus value. The circuits of the individual. capital, therefore, ‘when considered as combined into the total socail capital, ie. considered in ‘their’ - totality, do not encompass just the circulation of capital, ‘BUT ALSO © COMMODITY CIRCULATION IN GENERAL. Iu its fundamentals, ‘the; latter ean consist of. only two components: 1) the specific circuit .of capital, “and 2) the-cireuit of those commodities ‘that go, into INDIVIDUAL CONSUMPTION; I.E. THE COMMODITIES ON WHICH -THE WORKERS SPEND THETR | WAGES AND THE CAPITALISTS THEIR SURPLUS-VALUE (OR PART OF IT). The circuit of capital, in fact, itself comprises the circulation: of surplus~ value, in as much as this forms part of the commodity capital and it

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Similarly includes the transformation of variable capital into labour power, the payment of wages. But the expenditure of this surplus-value and wages on commodities does not form any . part of the circulation : of capital,’ even though the spending of wages, ‘at least, depends on this oO circulations! (34)

We must now examine the national state capitalist regime from the point of view’ of: capitalist production as generalised commodity production, and consequently, ‘as Harx notes as GENERALISED COMMODITY CIRCULATION.’ I assume here’ the theoretically pure’ ‘ completion of this regime; the national capital is literally that, one unified state enterprise: exploiting a wage-labouring class. To this degree at least it is a conception also common to both Bukharin and those who hold the Soviet Union, etc to be, fundamentally, individual state capitals.

First, ‘it is necessary to examine the specific circuit of capital in such a regime. With this goal-in mind it is useful to adduce a further passage from Marx which both defines this circuit more closely and draws an important conclusion upon which it is necessary to elaborate:

‘Commodity production presupposes commodity circulation and commodity circulation presupposes the representation of commodities in money, . monetary ditculation; THE DUPLICATION OF COMMODITIES INTO COMMODITIES INTO MONEY IS THE LAW OF THE EMERGENCE OF THE PRODUCT AS A COMMODITY. Capitalist commodity production, for its part, whether we consider it socially or individually, similarly presupposes CAPITAL IN THE MONEY

FORM, OR MONEY CAPITAL, both as the PRIME MOVER for each business

when it first begins, and as a PERMANENT DRIVING FORCE. CIRCULATING CAPITAL , ESPECIALLY, presupposes the constantly repeated appearance,

at short intervals, of the motion of money capital. THE ENTIRE CAPITAL VALUE, ADVANCED, I.B. ALL COMPONENTS OF THE CAPITAL THAT CONSISTS OF - COMMODITIES. - LAOBOUR~POWER, MEANS OF LABOUR AND MATERIALS OF PRODUCTION ~ MUST ALWAYS FIRS? BE BOUGHT WITH MONEY AND LATER ON PURCHASED AGAIN. - What holds here for the individual capital, holds also for the social capital, WHICH OPERATES ONLY, IN THE FORM OF MANY INDIVIDUAL CAPTTALS.' (35)

We have established that there is no, or in a historical approximation, negligible, international commodity, or more particularly, capital circulation in the state capitalist regime. But because there is only one national state capital there are no. circulation relations between individual capitals in national economy either. However, Marx has just informed us that the total social capital 'operates ONLY in the form of many individual capitals'. This is the point which must be elaborated, and its theoretical and historical significance grasped.

Because the state capital is an isolated individual capital which confronts only the working class and itself, it cannot either purchase or sell ‘means of labour and materials of production', in sum, the OBJECTIVE elements of the means of production. As.a consequence, constant capital cannot exist in the form of MONEY CAPITAL, the purpose of which is to purchase such means of production, IT DO#S NOT CIRCULATE. Thus the objective elements of the means of production are produced and reproduced within the sphere of production of the individual state capital, and thus, in turn, reappear in the realm of circulation as @OMMODITY CAPITAL. Obviously,. this is a. severe cutailment of generalised commodity circulation.

This does not mean, however, that capital does not circulate at all. The state capital must still purchase the SUBJECTIVE element of the means of production, the commodity labour-power. It must therefore still advance variable capital as MONE CAPITAL, or money wages. This money capital continues to circulate in the exchange between capital and labour. At this point we pass naturally to what Marx refers to above as the second aspect of generalised commodity circulation : ‘the circuit of those commodities that go into individual consumption,i.e. the commodities on which the workers spend their wages and the capitalists their’ surplus-value (OR PART OF

IT)’. (B6)

The working class receives a wage, money, with which it purchases means of subsistence, produced by itself, from the capitalist class, in this case from the state capital. Through-the consumption of these means of subsistence the commodity labour-power is produced, and. reproduced... Consequently, the means of subsistence are originally in

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the hands of the state capital as commodities, as commodity capital which is exchanged against the money in the hands of the working class, the means of subsistence circulate as commodity capital.

Similarly with the capitalist class. In its historical evolution state capital has 'compensated', ‘in money form, the old private capitalist class and assimilated it to the state buraucracy. This bureaucracy, in turn, historivally received its — consumption fund in the form of money, as a salary. Thus the consumption’ funds of ‘the

capitalist class and the state bureaucracy are fused in the consumption fund of the

capitalist class/bureaucracy.

This stock of money in the hands of the exploiting class cannot take the form. of toney capital, for it cannot be used to purchase the objective elements of the means of production which are. in the hands of the state, nor to purchase labour-power, at’ least, not for the purpose of producing surplus-value. It can only be utilised ‘to purchase means of subsistemce and luxuries, produced by the working class, from state capital. Again, these products, means of subsistence and luxurkes, destinéd ° for the individual consumption of the - capitalist class, circulate in the form of commodity capital exchanged against money » This consumption fund of the capitalist class, Marx notes, represents that class's surplus-value ‘or part of it'!. As we shall discover, under state capitalism it represents ALL OF IT; a decisive change from the situation under private capitalism. Oo

The result of the still extensive relations of capital and commodity circulation is such that although the objevtive elements of the means of production do not directly circulate as capital, their value, on the other hand, ultimately does. ‘The value of constant capital is transfered in the process of capitalist PRODUCTION to the product; in the total process of social reproduction all means of production produce means of subsistence and luxuries or produce means of production which, in turn, produce

means of subsistence and luxuries, and so on. The commodity product thus necessarily embodies a ‘portion of value which represents the transfered value of the constant capital, plus portions pepresenting the replacement of the value of the variable capital and a surplus-value ( C+V+S). Consequently, the total capital’ value ultimately circulates even though there is only one individual state capital. This generalised commodity circulation is maintained in a one~sided form.

Nonetheless, it must not be forgdtted that Marx did say that the total social capital proper can only exist in the form of many individual capitals. To plmb ‘the depths

of this real contradiction it is necessary to subject the implications of a passage in the 'Grundrisse', where Marx expands on this point to a close scrutiny:

‘Since value forms the foundation of capital, and since it necessarily exists only through exchange for COUNTER-VALUE, it thus necessarily repels itself from itself. A UNIVERSAL CAPITAL, one without alien capitals confronting. it, with which it exchanges - AND FROM THE PRESENT. STANDPOINT NOTHING CONFRONTS IT BUT WAGE LABOURERS OR ITSELT - IS THEREFORE A NON-THING. The reciprécal repulsion between capitals - is already contained in capital as REALISED EXCHANGE VALUE. '(37)

The decisive point here concerns REALISED exchange value. Before turning to it, however, it is useful to examine a comment made by Rosdelsky in 'The Making of Marx's Capitalt on this passage:

‘Hence ‘state capitalism! would only be possible with SEVERAL CAPITALS

ORGANISED BY THE STATE, confronting each other.' (38)

Rosdolsky suggests that we must concludé from Marx's formulation the idea that a single state capital is THEORETICALLY IMPOSSIBLE. In essence this objection is very similar to Trotsky's objection to state capitalism's PRACTICAL POSSIBILITY. ‘Indeed, it is more than likely that this was what Rosdolsky had in mind when he formulated this conception.

What, exactly, is Harxx saying ? He remarks. that, ‘from the present standpoint!

nothing confronts. social capital but itself and the working class. But, of course, this is none other than the ‘standpoint’ presented here. This is no accident. Marx is referring to a definate stage in the analysis of the capitalist mode of production. It is the first stage in the analysis of ‘capital in general' as opposed to 'many

Ale capitalist, a logical stage which abstracts from all circulation relations and competition between individual capitals; it considers capital simply from the point of view of its relution to the working class. It is a paradox that Rosdolsky, whose min concern was to explain and develop the vital methodological significance of the stages of analysis of ‘capital in general' for Marx, should here actually undermine it.

For Marx's simplest concept of 'capital in general' is not simply a ‘logical’ stage

of analysis, the FIRST; it is also simultaneously, a historical concept, a historical stage towards which capital tends to approximate in its actual development, in the LAST stage of its history. As we have seen, it tends towards this point in an | , extremely contradictory and antagonistic fashion. Its REALISATION, its approximate creation, is simultaneously the point at which it ceases to be, at which it becomes

a non-capitalist, non-thing. This may be either in the form of barbarism or socialism. It is the process of transition to barbarism we are interested in here and which Rosdolsky's argument proscribes us from theoretically approaching.

Indeed, his argument tends to imply that the whole of Merx's analysis, summed up in the initial concept of ‘capital in general', is itself a 'non-thing', or in this case A 'non-concept'. Clearly, this cannot be Rosdolsky's intention for it undermines his own correct anclysis of iwarxts method. However, despite this flaw, his brief comments contain important ideas. The regime which he conceives, consisting of several state capitals within a given nation, is quite compatible with the conception of state capitalism presented here. It would be a concrete historical approximation to such

a regime and, as such, would manifest all its laws of motion and arrive at the same historical result. For the historicnl relntions of the FORMS of capital circulation, and further, the FORHS of competition in the relations between state enterprises, would not at all signify the existence of private capitalist monopolies under a state monopoly capitelist regime. Rosdolsky already, in effect, argues this when he notes that state ownership of ALL the individual capitals signifies that their mutual relations are torganised' by the stnmte. In other words, these forms are remnants of ionopoly capitalism, sobordinnted to the state, which intervenes directly in production as na whole and effectively forganises!, that is, plans it. The obvious analogy here is with the degenerated workers! state, where the existence of capitalist categorics like circulation, price, colupetition and profit, in the relations between stateowned onterprises, do not at all, as yet, signify a return to capitalism. Indecd, it is highly unlikely, to say the least, that state capitalism could even be realised

in the 'puxe' form presented here, but that it would precisely retain certain categories of capital circulation and competition. This in no way detracts from the correctness of analysing it in its 'pure' form, any more than it detracts from Marx's analysis

of ‘capital in genernl' in its pure form.

After this necessary detour, let us return to the problem of 'renlised exchange value! of capital and commodity circulation, where a state capital confronts only itself and the working class. First, the. circulation of variable capital, money capital, as woges, and the resultant purchase of means of subsistence, as commodity capital, with this money by the working class. On the one hand, the realised exchange value of these commodities embodies a total value representing C+V+S; on the other, it is clear that the capitalist class never receives from the working class more money, more exchange value, than it itself first lnid out in the form of wages as varlable capital. The money capital in the hands of the stcte capital is the same quantity after it has bought labour-power and put it to use as before. The reflux of this toney capital, therefore, werely allows the laying out of variable capital once again. Consequently, even though surplus-value is realised through the sale of the individual commodities in which it is embodicd to the working class, in total no surplus-value, no exchange value, in excess of the quantity of the original variable capital, can be so realised. In criticising D T for arguing that it could, Marx conmented critically; 'dow the capitalists are supposed to get rich in this way is anybody's guess'(39). The capitalist class does not 'get rich', appropriate surplusvalue, through the sale of the means of subsistence to the working class, but by forcing it to produce a commodity product of greater valie and use-value than enéérs into those commodities destined for the individual consumption of the working class.

Second, it is therefore clear that the portion of the total conimodity product which enters into the. necessary and luxury consumption of the capitalist class is, as Marx noted above,,, atl Syurplus~ ~value and is realised as such in its sale to that class. Once? agains of course, “the: individual goumodity,! 8 exchange value represents the

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values of C+V+S cmbodicd in them. ‘This is werely to say that the consumption fund of the capitalist is surplus product in the specifically capitalist form of surplus value.

Wheat is striking in this case of the single stcte capital is the fact that the surplus-value REALISED through the sale of necessaries and luxuries to the capitalist class / bureaucracy, forms not a PART of the total REALISED surplus-value, but all of it. There exists no other sphere of circulation than those examined here. In. order that more sur lus-value should be REALISED than the total exchange value of) the commodities destined for the individual consumption of the ruling class, there would have to exist relations of exchange, capital circulation, between privately owned individual capitals. Means of labour and materials of production would have to be produced by these individual capitals ns commodities embodying surplus-value which could be realsied in exchange with other individual capitals. This, we know presupposes the odvancement of constant capital in the form of money capital to purchase these objective elements of the means of production. But this is precisely what cannot take place where there is 2 single state capital. This decisive : argument forns the point of departure for grasping how the non-existence of many individual orivate capitals already signifies that capital itself is, as Marx put it, a none thing', is in the process of ceasing to be. For established here, in. the form ofa single state capital in its circulation and reproduction process, is the formula of capitalist SIMPLE REPRODUCTION as analysed by Marxx in ‘Capital! Volumes One, Two’ ond Three. Thus:

‘As a periodic increment of the value of capital, or a periodic fruit borne by capital-in-process, surplus-value acquires the form of a REVENUE arising out of capital. If this revenue serves the capitalist ONLY AS A FUND TO PROVIDE FOR HIS CONSUMPTION, AND IF IT IS CONSUMED

AS PERIODICALLY AS IT TS GAINED, then, other things being equal, SIMPLE: © REPRODUUTION takes place.' (40)

But in Volume Two Marxx ernphoasises that there is something peculiar about simple reproduction in regard to the nature and analysis of capitalist accumulation which is defined historically by EXPANDED REPRODUCTION, and more, EXPANDED REPRODUCTION AT AN INCREASING VELOCITY as has been emphasised in this document. Consequently :

'Simple reproduction on the same scale seens to be an abstraction, in the sense that the ABSENCE OF ANY ACCUMULATION OR REPRODUCTION ON AN EXPANDED SCALE IS AN ASSUMPTION FOREIGN TO TH APITALIST BASIS,..... The supposition is that a social capital of a given value supplies tts same mass cf commodity t7lues and satisfies the same quantity of needs in both the current year and the previous years, even if the forms of the commodities may change in the reproduction process. But since, when accumulation

takes place, simple -reproduction still remains a part of this, and as

a real factor in accumulation this can also be considered by itself.' (41)

A few pages later Marx clarifies the 'foreigness' ¢f simple roproduction to ‘capitalist accumulatiwn:

‘SIMPLE REPRODUCTION IS ORIENTED BY NATURE TO CONSUMPTION AS TITS AIIM. Even though the sqeezing out of surplus-value appears as the driving motive of the individual capitalists, this surplus-value - no matter its proportionate size - can be used here, in the last analysis, ONLY FOR ... INDIVIDUAL CONSUMPTION.! (42)

As a consequence, it is clear that the driving aim and motive of production in the national state capitalist regime remains the appropriation of surplus-value IN FORM, based as it is on the exploitation of a wage-labouring class. But, IN CONTENT, the aim and motive of the exploiting class is no longer the production of surplus-value for its own sake, accumulation for the sake of accumulation, but is production for the sake of CONSUKPTION - the luxury consumption of the ruling class and , its necessary basis, the subsistence consumption of the exploited class. This is, therefore, exactly the opposite aim and driving notixze to that of ‘normal! capitalism and the ‘nomial! individual! capitalist, who:

‘in so far as he. is capital personified, HIS MOTIVATION FORCE IS NOT THE ACQUSITION AND ENJOYENT OF USE-VALUES, BUT THE ACQUISITION AND AUGMENTATION OF EXCHANGE VALUES, He is fanationily intent on the

336

valorisation of value; CONSEQUENTLY HE RUTHLESSLY. FORCES ‘THE HUMAN RACE TO PRODUCE FOR PRODUCTION'S SAKE. IN THIS WAY HE SPURS ON THE DEVELOPMENT OF SOCIETY'S PRODUCTIVE FORCES, AND THE CREATION OF THOSE MATERTAL CONDITIONS OF PRODUCTION WHICH ALONE CAN FORM, THE REAL BASIS OF A HIGHER FORM OF SOCIETY...' (43)

The’ state capitalist class / bureaucracy is therefore characterised by a feature common to all NON-CAPITALIS® exploiting classes; its aim and motive is not surplus~ value production and realisation as such, but the appropriation of a ‘surplus product serving for ruling class consumption. But, 28 Marx notes, it is precisely this ruthless appropriation of surpblus-value for its own sake which determines the decisive progressive and revolutionary role of capitalism in developing the productive forces as compared with all previous modes of production.

Capital accumulation has a duni character: on the cne hand it is valorisation of value for its own sake, which inevitably involves, on the other hand, production for production's sake. The development of the productive forces this gives rise to forns the material basis for 2 higher form of society, communsim, which, in its highest

‘stage is charactersied not by production for production's sake but by production for

the sake of consumption. Not, of course, production fer the luxury consumption of a winority and subsistence consumption for the majority, as with state capitalism, but forthe development and satisfaction of all human needs. State capitalism is the roactionary opposite of the lower stage of communism, socialism, for it inevitably: involves a decline in the productive forces and all human culture, as compared with capitalism in its phase of economic upturn. It forms a transitional stage on the

road to 'bureauerstic collectiviow'. ww (y Woke

The theoretical route by which this conclusion has been reached dues not invole a underconsumptionist argument, superficial appearances not withstanding. TI have established that a national state capitalism and its SPECIFIC FORM, which excludes the REALISATION of surplus-value over and above the value of the consumption fund of the ruling class, arises HISTORICALLY. on the basis of the crisis of state monopoly capitalism. This, the imperialist crisis, involves the destruction of surplus~-value PRODUCTION through the destruction of capital values. State capitalish arises on this basss as an EFFECT, and only then as a new cause of further decline.

The imperialsst form of capitalist crisis, especially in its most developed stage, 48 war economy, Signifies not expanded reproduction, not,even simple reproduction, but contracted reproduction: the absolute destruction of capital values and productive forces. Reproduction contracts the more arms production expands, for arms production is analogous to luxury production. Arts neither enter into the means of subsistence, and thus production and reproduction, of the working class, nor in to the production of new means of production. Rather, arms are unproductively (more exactly, destructively) 'cousumed', used by the capitalist state.

“That the FORM of total capital and commodity circulation in state capitalism is the

form of simple reproduction, cosequently does not signify that a static, no-growth | economy is the real CONTENT of this form. It merely signifies that state capitalism is, in its very form, a BARRIER to the re-establishment of expanded capitalist | ~ reproduction, which can only occur on the basis of the existence of many individual capitals, of private monopoly capitalism. This is another expression of the fact that state capitalism is a transitional stage to a new regressive-made of. of production. —

This demonstration that the content of state capitalism is the appropriation of surplus product geared to consumption. still existing in the old, fundamentally out-Lived,

form of surplus~value appropriation, literally invites a striking historical analogy

which, in turn, is a validation of this conception : an analogy with the transition from foudalism, to capitalism. There are two fundamental aspects which correspond to the division of labour between town and country under feudalism. First, feudal ground-rent, the feudal form of appropriation of surplus-labour and surplus-product which ‘developed, as Harx demonstrated through three historical forms: labour rent,

. rent in kind, and money rent. The latter, most historically developed form, presupposes

an-already developed sphere of commodity production, circulation and. underdeveloped forms of capital (merchant and userous capital). It forms, as Marx argues, the ‘final form, and simultaneously, the form of dissolution! (44). of foudal ground rent; it isa transitional form to capitalist ground rent, the. form of appropriation of

34, ‘

surplus-value for its own sake in capitalist agriculture proper. In as timch as the feudal surplus product appears in the form of money, as money rent, it thus appears in the form of exchange value. But surplus product in the form of exchange value is nothing other than surplus product in the form of SURPLES?VALUE. This does not Signify that the feudal landowner becomes a fully~fledged capitalist landlord, for his determining aim remains the gratification of his own needs, his own consumption, (expanded 2s this may be in the circumstances). The content of the feudal relation remains the appropriation of a surplus product vrientated to the consumption of the feudal ruling class. It is a transitional form of appropriation in which the OLD content, surplus. production for consumption, appears in a NEW form, that of surplus value. The distinction from the transitional form of state capitalism is that these the OLD form is filled with a NEW content. Wonetheless, state capitalism is a 'FINAL form’, and SIMULTANEOUSLY the form of dissolution of capitalist production.

Second, in the feudal town a new form of production developed vut of the growth in division of labour in the feudal countryside, guild production. Guild production

sas the feudal form of urban industry which presupposed highly developed feudalism

as its basis. Guild production was largely orientated, from its origins to the market, to commodity production. Despite the ownership by the individual journecymen/ handicraft workers of the tools of their trade, they may, and must eventually,

become wage-labourers in the pay of the guild master, originally one journeyman among many, who therefore stands in an embryonic form of capital relation to the guild workers. Marx cumments that:

‘In this case THE HERE MAINTENANCE OF LIFE WOULD BE THE PURPOSE OF

TTS PRODUCTION, NOT THE INCREASE OF WEALTH. But capitalist production presupposes: the increase of wealth..... A certain stage of capitalist production necessitates that the capitalist be able to devote the whole of the time during which he functions as a capitalist, i.e. as capital personified, to the appropriation and therefore the control

of the labour of others, and to the sale of the products of that labour. The guild system af the Middle Ages, therefore, tried forcibly to prevent the transformation of the naster of a craft into a capitalist by Limiting the number of workers a single master could employ to a very low minimum. Hence the possession of money or comavodities actually turns inte a capitalist only where the minimum sum advanced for production greatly exceeds the known medieval maximum. Here, as in natural science, is shown the correctness of the law discovered

by Hegel, in his 'Logic', DIFFERENCES PASS OVER BY A DIALECTICAL INVERSION INTO QUALITATIVE DISTINCTIONS.' (45)

liarx refers here to the necessity of the guild master freeing himself from productive labour in order to become a fully fledged capitalist. For this the quantity of surplus-value produced must be sufficient to provide the means of subsistence for the master. Only beyong this point may he act as capital personified. The correction with the formula for simple capitalist reproduction is obvious here. Once again, the form of surplus value appropriation evolves before its content, on the basis of

the appropriation of surplus product for consumption. It is no accident that Marx should have chosen this particular passage to eriphasise the importance of the dialectical transformation of quantitative into qualitative change discovered by Hegel, for here he deals with the.decisive moment in the economic transition from feudalism to capitalism. Sinilarly, the state capitalm®ét regime destroys and restricts the QUANTITY of surplus-value appropritated, destroys capital, to a point where it gives ridge to a QUALITATIVE transition to a new class mode of production.

Of course, this does not signify that feudalism develops out of the decay of capitalism. Although there is a real historical reversal involved in the development of state capitalism which forms the material basis for an accurate historical analogy amenable to extension, it does not imply a parallel, if reversed, re~run of past historical stages, The latter would involve the transition fron monopoly capitalisna through free competition capitalism into feudalism. This is impossible. The transition from feudalism to capitalism, considered in reverse, and the transition from state capitalism to a new class mode of production have directly opposed historical points of departure: infant, progressive, capitalism on the one hand and senile, decaying capitalism on the other. Opposed historical points of depsrture

35

wust, within limits, give rise to opposed historical results.

It is now necessary to consider how the state capitalist regime inevitably becomes a new clagssmode of production. Fisst, in the relation between the individual capitalist/bureaucrat and his own collective self, his own state. In accordance with the most likely course of events I assumed that the state capitalist class/ bureaucracy possesses a definite quantity of money with which it purchases its means of subsistence and luxuries from the state capital. This quantity of money is finite, consequently in its expenditure it must all eventually end up in the hands of the state capital Approximately simultaneously the ruling class will have consumed all its purchases. In order that this necessary process of consumption may be repeated the state capital wust give the individual mewbers of the ruling class this "money" back, i.e. in exchange for nothing. The money thereby ceases to be uoney in either form or function. It becomes, if retained, merely state issued tokens by means of which the members of the ruling class draw their share of the product from the class's total consumption fund. This portion of the social product is therefore no longer distributed according to the law of value in any shape or form, i.e. as commodities, but via a state plan. Thus through the simple, quantitative, repetition of this particular process of circulation a qualitative change takes place.

Second, and decisively, in the transformation of the relation between the state capital and the wage-labouring class. Again it is necessary to return to the historical origins of state capitalism, here to the fascist counter-revolution which forms its political point of departure.

In The New Economics Pr Om bag beSks s of the limited experience of Italian fascism at his tine of writing, Brasped Wiel true prescience the historical tendency of

fascist dictatorship in relation to the economic and social position of the working class:

"as an indication of the degeneration of the law of value as regulator of economic life, attention must be drawn to the consequences in the economic sphere of the degeneration of the borgeois-parliamentary type of capitalist state into the state of the fascist dictatorship. This degenerationaffects one of the most importont points ~ or rather the most important point - of market relations, the relation between the sellers of the commodity labour-power and its buyers . In the period when free competition reigned in the sphere of ‘gconoinic relations ; the period when capitalism was describing an upward curve, atcould permit itself the luxury of buying organised labour-power on the basis of the value of this labour-power. In the period of capitalist decline, however, with reduced reproduction and the growth of unproductive demand, it is obliged

to. intoroduce a new type of Labour - discipline conpulsoriTyorganised and sub~

apna nga ann pene ete te enone

the Solo ting classs,. From thia iinection, Choretore, the law OF value anders goes a considerable change and distortion as compared with epoch of classical capitalism." (46):

But to restrict the operation of the law of value in the relation between state capital and wage labour is to restrict the 'freet character of this wage labour, is to tend towards it direct enslavement, to ‘compulsorily organise! and "subject! it to the fascist state. We shalllsee how far and in what combined forms this tendency appeared in the Nazi war economy in hbhe final section of this document.

Ta connection with this tendency emerges the importance of the retention of elements of competition, not circulation as such, between individual state enterprises as in Rosdolsky's formulation of theproblem. Only if the individual enterprises compete for the commodity labour-power on the maket which is necessarily combined withcompetition between the sellers of this cormmodity can the individual worker be 'free! to move from enterprise to enterprise under compulsion from the law of value as opposed to a state plan. On ly under such conditions can the price of labour-power fluctuate around its value thus effecting the distribution of the total social labour-power between thedifferent branches of production.

But this specific form of the distribution of labour~power stands in cotradiction tothe planned character of production in the completed state capitalist regime. State

36

capital must by nature attenpy to distribute labour-power compulsorily, according to a state plan. This would already be fundamentally the case even with ‘competition! between state enterprises. The wage-form could be retained but once again the ‘money! changing hands would cease to be money in either form or function as labourpower would no longer be a commodity. The state would planfully distribute the means of subsistence to the direct producers. State capitalism would be simultaneously the final form and form of dissolution of capitalism, of the capital relation, which prsses over into a form of slave production and exploitation organised by a new state ruling class. Here content would no longer be in contradictaon with form; the form of surplus-value production disappears along with all its corresponding circulation and distribution relations.

Here the significance and validity of a passage in the Grundrisse concerning capitalist competition becomes particularly clear and relevant:

"Conceptually, competition is nothing othre than the inner nature of capital i+3 essential character, appearing in and realisedas the reciprocal action of many capitals with one another, the innar tendency as external necessity. (Capital exists and can only exist as many capitals and its self-determination therefore appears as their reciprocal interaction with one another.)."

(47)

Again we confront theconcrete methodological reasons why such a conception should not be understood to exclude the analysis of a realised state capitalist regime, a regime in the process of ceasing to be capitalist.

THe decisive point made by Marx is thatcompetition always remains merelyan ext~ ernal appearance of the inner nature of capitalist commodity production. It is which has never been undrstood or accurately formulated in state capitalist theories of the Stalinist states. Thus Cliff can argue:

"if one examines the relations within the Russian cconomy, abstracting then from their relations with the world cconomy, one is bound to conclude that the source of the law of value, as the moor and regulator of production,

is. not to be found init. In essence the laws prevailing in the relations between the enterprises and between the laborers and the employer~state would be no different if Russia were one big factory managed directly from one centre, and if all the labourers received the goods they consumed directly, in kind." (48)

-.@his is an acute, if unconscious, self-refutation. Cliff is arguing that the USSR ‘can be conceptuallised as a single state capitalist enterprise. Furthermore, when this enterprise is considered in abstraction from world economy then the source

: of the law of value is’ not to be found in it. Therefore, according to him, the

: theoretical abstraction from the world market, circulation and competition dues

; not leave a conceptual residue in the form of capitalist commodity production,

and after all where else is the 'source' of the law of value to be sort, but rather

a system of use-value production. He himself explicitly adnits this a fow pages on. But Marx abstracted from exchange and competition in Capital both in the analysis

of the single commodity, the point of departure of his exposition, and in the whole

of Volume One, excluding the sale and purchase of labour~power, where he deals with "capital in general! independent of circulationand competitive relations be tween individual capitals. In this way Marx considered the total social .capital

as one integrated process of capitalist production, as, if you like, a single cap-

italist enterprise. He did not make such an abstraction in oder not to find and

conceptually elaborate the scurce of the law of value or its operation within this

‘enterprise' but precisely in order to uncover e:.d conceptualise in detail this

law's most fundamental inner nature.Essentially, Marx abstracts from the whole

process of the realisttion of exchange value,and surplus value, in order to arrive at the determinants of value, that is value producing labour, commodity production, and not simply hhe conmon material substratum of all human production, use valuc production.

What does’ determinethe! capitalist! character of the 'USSP itd.'for our 'theoret~

37

ician once he puses the problem in this peculiar manner. His own admission that

the Soviet economy produces use-values but but not commodities signifies that he has not the temerity to suggest that it is capitalist commodity circulation, i.c. exchange on the world market which forms the decisive determinant. He is uneasily aware that the Soviet economy does not produce, in the main, for export, for the capitalist world market, and that nor does it , in the main, purchase its means of labsur and materials of productioncen it. Isn't this a very strange capitalist enterprise? Here, as everywhere, the analogy with capitalist production speaks against the state capitalist theory itself.

As a consequence Cliff is left with only on avenue by which to explain the!capitalist' character of the USSR: competition or nore precisely, military competition at an international level. He fails to notice that this military competition, which of course nobody can deny, is not, in itself, . specifically capitalist form of competiticn. Jn order to prove that in this‘case it is Cliff would first havé ti demonstrate that. thar the sucisl formation engaged in the arms raceis capitalist. Of course he argues in exactly the opposite direction, he tries to demonstrate that the USSR is capitalistform its military competition with imperialism. Let us remind - ourselves what Marx said about those political economists , who had an advantage

over Cliff in that they, at least, were analysing capitalism, who attempted to ex- - Plain its, jaws from _the point of _ View, of comptetition:

Pres: : SMT fb By ! "Competition executes the inner laws o f capital; males them into ‘compulsory laws toward the inditidual capital. UT IT DOES NOT INVENT THEM. If vealises them. To try to explain them simply as the results of competition therefore

means to concede that one does no understand them'! (49)

Cliff}s complete lack of understanding comes to a head in his analysis of the relation bteween the exploiting and exploited class, the tcapital’ relation in the Soviet Union. Consistent with his arguemnt that the law of valuc is not to be discovered internal to the Soivet Union, he explicitly argues that labour-power is not a commodityy and that as a consequence, in effect, the workers reveive their means of subsistence 'IN KIND! { Cliff has clearly never noticed that proletarians do not recieve their means of subsistence in kind. All of which can only signifiy, if the direct producers remains an exploited class, that these is no class of 'free! wage-tabourers in the Soviet Union, but a class of slaves, the property of the state enterprise. This becomes crystal clear in a consideration of cpaitalist competition and the 'free' movement of labour between individual capitals. If the Soviet Union, or any Stalinasst State, was really comparable with an individual capital, them the labour force would be free, under compulsion from the world law of value, to move from it to ohher indididual capitals in the workd economy. Nobody, I think, would venture to suggest that this, in general, is the case.

In 1960 the Stalinists completed a 'wall', cutting Europe in half, consisting of machine gun nests, mineficlds, electrified and barbed wire, etc, etc, in order ppecisely to stem the flood of labour, particularly East German labour, to the boomning, relatively high waged, capitalist economy of West Germany. The same phenomena is to be observed in Cuba which, of course, has a natural barrier between its-~ elf and imperialist, and also on the border between China and Hong kong, in fact everywhere where Stalinist states front directly onto World capitalism.

+»: If a capitalist enterprise in Britain built a compound within its walls for its workforce which it kept inside by forcible methods such as those outlineed;’: khere,would not every thinking person conclude that the direct producers had ceased to be wage-labourers and become slaves? Yet this is precisely the situation with the Slatinist 'state capitalist! enterprises. How then is it possible to theroretically justify the argument that there remains . PROLETARIAN class in the Stalinist states? On one condition only: that this citass has ceased to be an EXPLOITED class, in the strict scientific sense, but has not thereby yet ceascd to be a class. In other words, that the working class in the stalinist states is a historical product of capitalsm which is in transttion to socialig, a class whose class character | is in the process of whithering away. Here its exploited character has.disappeared, | but its character as a politically dominatcd class has=not, on the contrary, the latter aspect gorws and threatens the reintroduction of captalist exploitation.

- 36 ~ oe ; Tt is, of course, precisely this transitional, and highly contradictory, position of the working clnss in the Stalinkt states which Cliss and all state capitalist theories cegceet. If one thing is clear to hem all, it is that the Stalinist regime remains a reg ime of CLASS EXPLOLTTATION. This point of depsarture inevitably signifies that unconsc=- viusly state capitalist theories lead to the conclusion that this form of exploitathon is NON-CAPITALIST, State cmpitalist theory necessarily topples over into new class theory just as state capitalism in rcality would necessarily topple over into a new class mode of production. The label 'capitalism' remains an empty form in which a directly opposed content secretly lurks.

Tt is ner obvicus why all the state capitalist theories must be mere cpigones of Bukharin. Although Uliff argues that the Law of value in world cconomy determines the developncnt

of Soviet economy, he in fact proves exactly the opposite (which is ancidentally cqually fulse ond one-sided). This is exactly Bukharin's oxplicit arguenmnt. Consequently Cliff cou cite approvingly a passage from the Rukharin's "Imperialism and World Economy":

"The capitalist mode of productiscn is based on a monoploy of the means of pruduction in the hands of the class of capitalists within the general framework of comiodity exchange, THERE IS NO DIFFERENCE IN PRINCIPLE WHATSOEVER WHETHER THE STATE POWER TS A DIRECT EXPRESSION OF THIS MONOPLOY OR WHETHER THE MONOPOLY IS

'p 'PRIVATELY' ORGANISED. (£4 at Least this absurd argument is paculaarly Bukharin's ~ Q.R.). In cither case there remains COMMODITY ECONOMY (IN THE FIRST PLACE THE WORLD MARKET (~!)) and, what is more important, THE CLASS RELATIONS BETWEEN THE PROLETARTAT AND THE BOURGEOISTE. (Here there fullows a foutnate which is what Cliff achually cited: ) Werc the COMMODITY CHARACTER OF PRODUCTION TO DISAPPEAR (FOR INSTANCE THROUGH THE ORGANISATION OF ALL WORLD ECONOMY AS ‘ONE GIGANTIC STATE TRUST, THE IMPOSSIBILITY OF WHICH WE HAVE TRIED TO PROVE, IN OUR CHAPTER ON ULTRA-IMPERIALISM, WE WOULD HAVE AN ENTIRELY NEW ECONOMIC FORM, “his would be CAPTTALISM NO MORE, for the PRODUCTION OF COMMODITIES WOULD HAVE DISAPPEARED; still lcss would it be socialisu, for the power of one class wver the other would have remained (AND EVEN GROWN STRONGER (N.B. !). SUCH AN ECONOMIC STRUCTURE WOULD MOST OF ALL, RESEMBLE A SLAVE? OWNING ECONOMY WHERE THE SLAVE MARKET IS ABSENT't (50).

: Cliss argues with Bukharin that only in its relation to world cnpitalist econony dees tstate capitalism! remain capitalist. ‘abstract' it from the world capitalist economy, or in this case, imagine it . is one unificd world regime, and it suddenly becones what it conepuslly always was - sleve production. But both also agree that such a vegime is cither impossible (Bukharin) or at least highly unlikely (Cliff). Why? Becouse.of the disruptive consequences of national and social conflict, This answer is s sure indication of the therorctical light-nindedness with which both authors approach the prebler.

We know that state capitalism would involve the decisive fracturing of the unified world capitalist economy due ts the destruction of and decline in the level of development of world productive forces. This forms both the ultimate historioal cause and effect of state capitalism. Ccnsequnotly a new slave ncdce of production arising out ofkex the collapse of state capitalism could not possible ‘organise! world economy in the form of a single trust precisely becouse it is the result of this effect, the further ducline av procuctive forces, a high Level of development of which isthe essential historical pretiise for planification (?? ~ typist) of natdhonal, let alone wereld, economy. This does mot signify that this new class mode of production is impossible on a world scale, far from it, but cnly that it weuld not, could not, form a tworld economy!', a world div+ ision of labour, of interdependent parts.

Further, the abolition of tapitalist competition would aut involve the abolwéion cf competition as such between members ox the new exploiting class. On the contrary, the precipitate decline in preductive forces and human culture in general would necessavily signffy heightencd competition for a declining total surplus perduct. The coti~ binaticn of declining productive forces and heightened competition would in turn inevitably lead to the fracturing of national economy and the centralised naticnal state foun~ ded upon it. The national economy would thereby come to be planned, and thas, ultimately, te be teollectivist'.

' For with the near total destruction of commodity producthon, and hence the law of value, in any spehere, the ruling class ceases to be, in any sense, capitalist, butit also thereby ceases to be beuraaucratic in any sense. The relaticn between the now cxwie dbines alace nnd tte sinves would he anninsous tu that of the mature feudal strte: on

volised staté apparatus. Out of state property, the collective private property . ruling class, would grow 2 new form of private property, new property relations. Tn “ig a new class mode of productivna gorwing out cf the decay of capitalism would he either ‘bureaucratic! nor 'tcollectivistt.

The TERM 'burcaucratic collectivisn' in so far as it is not, in itself, a class chnracterisation , is thus merely an accuratc(if superficial) empkrieal description of tne planned systen cf economy in the Stalinsit states. The very fact that they are indeed both bureaucratic and collectivist precludes them fro being new class modes of vvoductiin. The summation of this theocrectically possible course of historical develop tient present us with a double-edeyed analogy. This historncal process of BOURGHOIS COUNTER?REVOLUTION carried through toa the end is a SOWUAL COUNTER-REVOLUTION which necc-

essarily canbines two oppused elements. It is simvulatcnously the INVERSION of the proletarian revolution and the REVERSAL vf the bourgeois revolution. It combinos the ‘cestruction of the procltarian revoluticn with the destruction of all social and polivienl gains of the bourgeoise revolution, and is thus, in toto, the permanent revolution stecd on its head, a precess of uninteruppted PERMANENT COUNTER-REVOLUTION.

Tt might be cbhjected that this theury of SOCIAL COUNTER ‘REVOLUTION cutradicts the harxist theory of the state, f.r it dves nut invilve the smashing vf the eppitalist state, Dut rother its transofrmatie-n inline with the trans:frmed nature “of the ruling class. But mot every social revelution involves the smashing of the eld form of state, far from it.

As Marx and Engels pointed cut many times, the bourgevis social revolution did net have

3. smash the old bureaucratic absulutist state, but instead the bourgesisic dead hold of it, purging and transofraing; it, as Marx noted in the "Civil War in France!

"But the WORKING CLASS cannot sinply lay hold of the ready-made. state mobhinery, and wiled it for its own purpose. The centralised state power, with its ubiquitcus organs of standing army, police, bureaucracy, clergy and judicature = organs wrought after the plan-of a systernatic and hierarchical division of labour - ORIGINATES FROM THE DAYS OF ABSOLUTE MONARCHY, SERVING NASCENT MIDDLE CLLSS SOCTHTY AS A MIGHTY WEAPON IN ITS STRUGGLE AGAINST FEUDALISM. Still its development remained dogged by all nanner of medieval. rubbish, seipnorial rights, local privilepes, municipal and guild monopolies and provincial constitutions The pigantic breem of the French revolution of the 18th century swept away oll these relics of bysone tines, THUS CLEARING SIMULMENEOUSLY THE SOCIAL SOIL OF ITS LAST HINDRANCES TO THis SUPERSTRUCTURE OF THE MODERN STATE EDIFICE raised under the First Eupire, itself? the offspring of the condition wars of old semifeudal Eurepe against modern France..At the sane pace at wlicih the progress of nodern industry develepec, widened, intensified the class antagonism between capital and labour, the state power assumed more and move the character of the rational power cf capital over labour, ofa public force orvanised for secial enslavenent, cof an engine of class despotism... The direct antithesis to the Eapire was the Commune! (51).

It is, as Marx makes abundantly clear, the working class, socialist, revolution which nube saash the cld state forn, not the bourgeois revolution,

. Again, the analugy with boursecis revolution, the transition from feudalisn t capitalism, in rverse, holds good: the state is not smashed, rather its form is alterc:. Thus counber-rev.lutionery process begins with the wictery of fascism, basing itself ts this or’ that dorreee om the enraged petty bourgeois plobians, ‘that sucial movement which Tooteky, asing the very same analogy when referring toa the Nagi struggle for power, called the brown-shirte ‘'Jacobins!' of the bourgeois ceounter-revoluti.a. This victory of fascism 18 simulatancously the inversion of the proletarian revolutici; instead of the workius ee gs swashing the capitalist state, the capitalist state smashes the working class; ins-

road of the workin: class using its state power t? expropriate the bourgcoisic, the sourpeoisie usces its state power te expropriate, enslave, the workin, class, For the fascist counter-revelution hrs its own inner lugie which tendentially drives it boycad political te sucial counter-revoluticon, a logic which we know Preobrashensky mrasped ad carly as 1925. ,

The bourgeois countererevoluti-n dees not innaujsurate the withering away of the state, but rather its transfomaation and development in a new form. On tho «ther hand the’ state plan which arises under state capitalisa is conreenitally deformed and sickly, it is born in order merely to dée, to wither away. This is the exact vpposite of the transition to, and developacnt of, communisn. The dictatorshiy; of the proletariat is horn as both shate and non-state, it is born in the process of whitherings away. On the other

= 4G

nad, planned yroduction inaugurated in “he transition period between capitalism.and

socialism, under the dictatorhsip, develops extensively and intensively in the process, lossing its initial class and state character, untik it becomes the simple social ‘administrattion of things’.

These opposed historisal laws of motion are ultimately determined, of course, by opposed lines of development of productive forces. “he bourgeois counterprevolution lead to their absolute decline, consequently being analagous both to the transition from feudalism to capitalism in reverse, and the development of communism which presupposes a massive development of productive forces.

This decline in productive forces ra&ses another, thearetically significant, opp~ osition between the development of sommunism and the new class mode of production out of the antagonistic development of capitalism itself. Much move cffort is requ+ ired, more labour, to roll a large rock up the sid» of a mountain, than is needed to dislodge this same rock precariously balanced on the top, or at a decisive turning point on the skope, of the maountain, and consequently to se t it tumbling under its own momentum to the foot once again. The whole of human history passing through world capitlism and subsequently the transition to and development of communism involves just such a mighty cffort, a massive expenditure of human Labour in order to develop the productive forces. Thas the transition from capitalism to sccialisin add from . ‘ socialism to communism , are unavoidable ineivtable stages on this path, on a worktd scale. This or that nation, region, geographical area of the world may combine stages in some forn a. spondent on the period when they enter the process, in comparison with other nations ete, and their level of development already attained by this nistorical point of departure, but none of this changes the general law.

Things are very different, however, in the transition to a nuw class mode of production. State capitlaism, for example, is NOT an INVETTABLE stage on the road to this historic goal. This is quite simply because what is involved is the destructhen of old rather than the creation of new praductive forces.

T£ the working class shovld suffer decisive dcfcat on a world scale, and the theoretical possibility outlined here actually was realised, then the whole courso of human history would be retrsopectively summed up in the tragic myth of the labour of Sisyphus. Whether the human race, like that tormented being, would begin the arduous uphill climb once again, is, of course, impossible to predict.

This would depend, not least, on the divelopment of wars in the final stages of imperialist disintergation, a question abrstracted fromhere. We know the economic and political causes anc consequences of production for war in the period of imperialist crisis, but we have left asido the consequnces of modern, nuclear, warfare itself. This is not a disadvantage, nor on the contrary is it a great adwantage tu have demonstrated the " aevolophent of ‘barbarism’ independent of the destructive potential of imperialist war itself. This potential ss so great that it could net only eradicate whole stages in the precess of historical detline, it could bring it to 20 absolute abrupt halt, to aboslutely nothing. There ism howverm not a lot thah can be said, theoretucally, about such a terminal point of human histery, only thet the working class, fur the sake of all humanity, must prevent it s cccurence at all cost.

The Stalinist States; Stake capitlaist, ‘bureaucratic collectivist, or dggoners ated

Oren cea ae nn ten nen ne cent ne ne cece rane amen miner clone Ronan thie eal Aen pnt natge aden ataae annaattcanasnr mm Sate a atime mae nt

_workers “states?

On cssenee this questisn has already been answered. However it is now both possible and useful to. -« return to our original problem: the extension of the production and property relations, originating in the October reovlultion, after the end of the Second World War; the creation uf new 'd-formed', or more correctly, as Wohlforth demonstrates, dcgenerated workers states.

In the 'Preface to a contribution to the critique of political economy? , Mars established that:

"' fn broad outline, the Asiatic, ancient deudal and modern bourgeois imudes

of production way be designated as epcohs MARKING PROGRESS in the econcuic development of society. Tho bourgeois mode of pruduction is the LAST

~ 4d

ANTAGONISTIC fowm of the social process of production = antagonistic not

in the sense 6f individual antagonism but of an antagonism that emanates from the individual's social conditions of existence - but the productive forces? developing within bourgeois society create also the material conditions for a solution of this antagonism. The prehistory of human society, accordingly closes with this social formation! (52)

Trotsky, as we saw, confronted the question whether admitting 'buzcaucratic collectivism' as a theoretcial possibility, constituted a revision of Marxism. If itz does then it must surely be in regard tou this passage. Marx says quoite wnequivyp ocally that capitalism forns the LAST antagonistic mode of production, and such a conception of the historical place of a mode of production is after all an essential elemént of its 'definition'. However, he also comments in the previous sentence that the succession of antagonistse modes of production culminating in the historical development of capitalism all mark PROGRESSIVE stages in human history, in the development of the productive forces.

In order to dcepren and extend, but not revise, Marxts central iden it gs is nlerely necessary to combine the conceptual pivots of both sentences; Capitalism, in all eventualities, fyrpus the LAST PROGRESSIVE ANTAGONISTIC mode of production. The hastorical realisation of a new class mode of production would signify a tremendous historical REGRESSION, an absolute and precipitate decline in the level of developwent of the productive forces, Consequently it would be an actual revision of Marx only to argue that a new class mode of production could be PROGRESSIVE compared with capitalism.

But bureaucratic collectivist/new class theories of the Stalinist states have always oscillated giclently and uncerdtdéinly between the arguments that the regime is historically progressive or regressive. Shactman, for example, argued during the imperialist a war that the 'tbureaucratic collectivist? USSR was historically progressive in relation ts imperialism. Yet he maintained a defeatist position with respect to this ‘progressive! social formation. “e fefused to defend a progressive new class system against an old renctionary one. Trotsky had lone since pointed cut to Craipeau in 1947 (53) that the consistent plitical conclusion to be drawn from such a theoretical starting point was principled defencse of the Soviet Union against imperialisn. ,

Thus, in facty: Shactman was not differentiaking historically between bureaucratic collectivism and imperialism at all. For he apllied the same practical conclusion and theoretical measuring rod to the USSR and its durect imperialist antag onists, Germany and Japan, in regard to which he was also defeantist. It just so happened, of course, that Germany and Japan were also at the time enemies of US imperialism. Without any theoretical or principled justification Shachtman coripletely revised his characterisation of bureaucratic collecitvisia at the end of the war. According to hiin the Soviet Unicon was now regressive social regime, a new Form of tbarbarism'., He still remained a defcatist in rel&tion to the Sowiet Union, this was immutable. However, he no longer remained a defeatist in relation to the USSR's main inperialist enemy which, strange to relate, was now US imperaalism, on the contrary he came to openly back it against this 'gegressive! regime.

Obviossly Shachtman's arrival at this 'correct' thecrét&éal characterisation of "bureaucratic collectivism! as historically regressive even in comparison to imper~ jalsin did not at all flow from his correct saethod on principled Marixst politics, but rather from his capithlaticn to every twist and turn of US imperialism's foreign policy. This is not to say. however, that there exists no other material and theoretical toots to this slide from one mutually exclusive historical characterisnati.n to another. The problem thet plagues the theory is that the actnal historical dev-~ eoplment of the Stalinist states all too cbviously contradicts the conclusion towardss which the inner logic of the theory drives. [It is quite clear that the prvducti.n and property relations established as a result of the October Revhlution, despite the consequent growth of the parasitic Stalinist bureaucracy, gave a treticndous inpulse to the devlopment of the productive forces in an area of the world where capitalism could not possiible have achieved such results. Coneretly, historically, tho

~ WD.

Soviet Union and the other Stalinist states are clearly fundamentally progressive 502+ jal regimes. But in the abstwact, theopetically, consistent new class theoires mus: lead to the conclusion that they are regressive.

The very same contradiction must, and indeed does, plague state capitalist theories. As a consequence ®1iff manages to reproduce the smae mutually exclusive theoretical variants as Schei.ntman.

A national ctate capitalist regime would mark a historically regressive step in the development of the productive forces and the economic and political position of the working class, it would be a new barrier erected on the road to socialism even

though it would remain within the epoch of decaying capitalism, of imperialisn.

In 'State Capitalism in Russia! Cliff raises the question whether the rggime is progressiv: or regressive, a question which by the very ‘capitalist! nature o* the regime signifier its tendencies of development, where is ££ going? Cliff mamages to give no less tha. 3 mutually exclusive answers, the same thres as Shachtman. Yirst, the unconesious sontent of his axgument demonstrates that the Soviet Union is in fact a new non-capitelist mode of production. But is his Yebate with Shachtman Cliff argued many times, quite correctly, that a mew class mode of production must by def~ inition be reac’ ionary as compared with capitalism, that it would indeed be barbarism.

Second, his swn explicit, conscious, thepretical arguemnt plays hide and s°kk with Marxism, ‘os carefully avoids coming down on either side, the implication being that state capitalism is ntither progressive nor regressive in the potential possibilities it opens up for revolutionary working class transformation as compared with 'norral! state monopoly capitalism, with imperialism. In princple therefore there ss no. funcamental distinction between Amexican and Soviet ‘imperialism! which Leads to the re; etetition of Shachtman's initial political stance, defeatism oil round, Yet in ris first, in truth basic, conneption, he proves that on every fund:~ wental point 'e rte capitalism’ is different from ‘normal ' imperialism.

This ‘eads, “thirdly, to the surreptitious inclusion of the FACT that the USE is historically progressive. He argues that the massive cocnetration of the Sovic: working class f vms the historcal premise for the establishment of socialism. This concentration i. in turn the result of what for him is the hisotrical process of primitive capit: vist accumulation in Russia, in short, industrialisation. But where, one is compeble” to ask, does this leave the theory of permanent revolution which took as its poict of departure the inability of wither indiegnuonus Russian, ox foreign capital to carry through the tasks of the bourgeois social revolution in ta territories of the old Czarist emprire. For the economic tasks of this revolr sion is precisely to clear the ground for the completéon of primitve capital accu .ntion. Implicit in Cliif's conception, therefore, is 2 refutation of tho theory of vc che anent revolutic:. and the assertion bhat capitalism, in its 'state!' form, reiio” 1s historically pry -sressive on a world scale.

Yery wisely. Cliff omits any mention of permanent revolution in"State Car’ -alisa in Russia’, but elsewhere he makes the implicit argument explicit, he gives i. a the» oretical form ‘“ the conception of the ‘deflected permanent revolutisn'. Herre, in what is in faci the process of structural assimilation of other areas of world ec~ onony to the pr duction and property relations of the USSR, he argues that this process involves Vie Stalinist state capitalists in solving the economic tasks of the boungeois revol ttich when the capitalist class proper has already lost, and the working. class 1%t yek gained the capacity to do so. What is this if not historically progressive? And precisely because it is, there is a grain of tnuth in Cliff's conception. However,.be fails to grasp that the elements of progress is ANTT-capitalist and that asa consequence the process of structural assimilation necessarily gces beyond the solving fo captialist tasks, to the creation of a degenerated workers state bared cn 2ew. productien and property relations

Furtler, this process has nothing to do with the historic inacpacity of th. working Jeass %u' these countries, but is a funstdon of the crisis 6f£ revolutionary leadershin. I° is precisely the expansion of the production relations of the USSR after the seoo. . world war, the formaticn of new national degenerated workers’ states, which forms th most elementary and decisive test ofthe contending thepries

Fe ae pr emt cee cere ee ce ee te, rpctienrs ey ee as ethercemeagen vate re ie eee Sota ecgea on

- 4S e

scrutinised here. Firét it is necessary to emphasise that structural assimilation, as Wohlforth presuasively domonstarteos, was not carrierd through in any country of the East European buffer, with the partial exception of Yugslavia, before 1947-51. Until then the Stalinist bureaurcacy attempted to reconstruct and prop up 'freindl¥! capitalist reginies ia the entire aree under its contro., What then was the impulse which dorve the Stalinists to completely change course and carry through a gooial over-turn? The inauguration of the Marshall plan in 1947, the flooding of American capital into the devastated post-war world econonty and partichlarly the Buropean economy from which US imperialism did not ob all intend to exempt its Eastern region.

1947 marked a decisive turning point in the post-war history of imperialism. The Marshall plan was the open egpression of the economic and political re-stabilisation of world captialism under the hegemony of US imerpialism, . stabilisation which to a large degree was the work of the stalinist bureaucracy itself. On this basis, imperialism felt strong sanough to open a new offensive against the USSR. It was under the pressure of this re-established, relatively health, imperaalism, that the Stalinists carried through the process of structural assimilation, There is a striking opposition here. In the years 19/47 when world imperialism was in the throes of acute economic and political crisis, the Stalinist bureaucracy mainéained a strategic pro-imporilaist policy. Only when imperialism overcame its own internal difficulties did the Stalinists — - . defensively structurally assimilate an important area of the world economy.

This tendency chracterises the whole post-war period. For the Marshall Pian formed the basis for a LONG-TERM stabilisation of the capitalist world economy and consequenectly the basis for the most intensyve and extensive boom in the history of capitalism. A boom which, in its turn, presupposed and grew out of the most massive crisis in the hastory of capitalism.

Tt was precisely throughout the period of this gigantic boom, and its staggered ending, that the process of struttural assimilation was consolidated in Eastern Europe and extended into other areas of the world, China, Vietnam, Cuba, etc ete in a historical and geographical arc sweeping through tothte 'S0s encompassing every major populated oontinent with the possible oxception of Africa, and even here the possibility exists of structural assimilation, in Angola in particular.

The Stalinist states did not simply survive the economic upswing mn world inperialism precisely because simply surviving, standing stall, under such massive pressure was impossible. Insteadm in order to survive, it was necessary toc xpand and expand they didy ona world scale. What is more, the USSR taken on its own grew in the same period into an economic and military power second only to US inaperialisia ibself,

But the massive development of productive forces this entailed has by no means been restriced to the origgnal workers state, despite the striking faeat hhat the international consoslidation and extension of natinnalised production relations has been limited to the backward, clonial and semi-colonial regions of the globe, with the exception of Eastern Europe itself,, always the popr relative of Europcan imperialiwm, which was devastated by the Nazi war cconomy and the ravages of war itself. In general it was these very areas of world economy which the capitalist boom in the centres of impcrialism would not have developed but ravaged afresh. In other words in areas of the world which in general would not, indeed for. many ycars in some cases did not, see any fundamental development of productive forces under the aegis ofthe imperialist boom, did sce such a development under the rule of the Stalinist bureaucracy. Only a fundamentally progressive social regime could achieve such a result wnder these conditions of imperialist economic and consequent political, ideological and -° military pressure. This is the decisive point which all state capitalist and new class theories must explain and in a manner consistent with the theorietically possible dvelopment of state capitlaism and new class regimes from a decaying capitalism. And this is precisely what they can never consistently explain. “ ,

A Marxist, Trotskyist, thoppy of the degenerated workers! state on the other hand took as its point of departure the fact that the productiona dnd property relations established on the basis of the October Revolution had not been destraycd

amd that corsequently the social regime remained fundamentally progressive, trans~ itional between capitalism and socialism. On this basis, because of its back~ wardness and isolation, grew 2 regressive, counter-revolutioanry, bourgeois, political formation, a bourgedis state form representing a decisive step on the road ty capitalist resotration, but not the restoration itsetf. It was this contradictory combined social formation with its revoltuionary economic Soundation and counter revolution :ry political superstructure which was extended as a whole on a wokkd scale inth: post-was process of structural assimikation. This very pypcess was proéf of the fundamentally international, that is progressive, character of the rleations of production themslevies. The Stalinist bureaucracy was the active agent of this process not beacuse of its own revolutionary character, not because of the existnece of socialist in one country, but in spite of themselves, precisely becuase of tae impossibility of contructing socialism in one country, or: oven of maintianing the parasitic priveleged position of the bureaucracy tin one country!. Despits the fact that Trotsky did not foresee the post-war survival of the

USSR, and certainly not the exended process of internatinnalisation of its production relations along with their bureaucratic parasite, its is nonetheless his theory of

the first degenerated workers state which has stood the ultimate test, history tself. In fact to focus on ths aspect of Trotsky,s 'faihure! in prognosis

is one-sided for its root lay in his lack off consideraticn of a theoretically possible cont:yued ‘co-existence! of the dogenerated workers state and imperialism, growing ovt of the war. This in turn followed from his belief that imperialism itself could not survive the war, and its immediate . . sa@cinl and economic consc~ ggRu quences. More precisely, Trotsky did foresee the possibility of imperialism surivivng in a crippled barbaric form if the working class was defeated he did not foresee the contracted reproduction, the expanded production of arms combined with their desiructive utilisation would go so for as to destroy sufficient capital

value and old productive forces on the scale necessary to create the conditions for an upturn in world capital accumulation on a new techinical basis, but not so far that it distroyed the social and technical :basss for capitalist production altogether, A very na: row line separated these eventwalities. American industry witnessed the fastest rate of contracted reppoduction, of expanded arms production, in the world. Yetits queltiatively and quantitatively higher historical starting point.. plus its

‘ immunity to military intervention ensured that it did not fall as low as the cther imperialist powers, i.c., ensured its victory.

If German imperialism has achieved the alliance with British imperialism that it, suite correctly, wanted at the beginning of the war, and which it was not so very far from achieving, then the war between the Axis powess and US imperialism

would undaubtedly - have been more protracted, for the latter would have found it wiuch more difficult to form a bridgehead on the Eurasian land mass, Under these conditaons buth contracted : reporducts.n and atomic warfare would

inevitabl:, have ensured wider scope, not to mention the revolutionary possibilityes such a development wohld have unleabhed. Assuming the defeat of the working class, barhbrism would have become almost inevitable, -

The pirfticular conjuncture of inter-imporialist ankagonisms and alliances which inevitably drew the USSR on to one side,in the end the side which happened to be gx victoricvs, also deterimined the survival of the USSR and its oppertunity to struc~ turally aesimilate the buffer zone. If an alliance with Britain had been secured by Germay, this would have secured the latterts western and southern flanks, which covld have tipped the scales deciseively in its struggle with the USSR.

In the eventm the victorious imperialist puwers were too exhausted to imount ar immediate attack on the USSR in 1944-5, and sc they settled for a short perivd of econonic and military preparation which, however, also allowed the Stalinist bureaucracy a respite and opportunity to consolidate its influence in Eastern Europe. When this period came ts an end in 1947, the imperialists discovered, mach to iheir own amazement, that the period of stabilisation had created, or rather unceverec the already existigg, conditions for an upsurge in world capitalist accumulaimhon, Consrquently the whele period of the tmperialist boom was character= ised by ihe not very 'peaceful co-existence’ of imperialism and the Stalinist burcaucre.cies resting on the foundathons of the. workers sgkates..

| 1 ! i [ !

~ 45 ~

The renewed imperialist crisis agains places on the order of the day the survival of the workers states;, threatened by imperialisn add-the.usurping Stalinist bureaucracy, and the world wide alternative: socialism or barhhrism.. The very fact that this alternative has not been remeved from the historical agenda by the postwar developments is the surest sign of the fundamental CORRECTNESS - of Trotsky's prognosis. ;

Those ‘reforiists Like Geoff Hudgsen, for example, who accuse Trotsky cof 'fatal-~ isa' and ' catastrophism' for failing to foresee the parttcular historical outcorne of the war, are consequently very wide of the mark indeed. Tronically these critics theuselves are true fatalists. They treat.the outcome of the imperialist war,with the advantage of hindsight, as INEVITABLE. It was nothing cf the surt. In fact,

aS we can see, it was a highly improbable olitcome of a highly impppbable concat~

chation of world conditions, as very complex interdependent conjuncture. Highly improbably events do cecur; they do not thereby, in hindsight, caase to hate been

~hubehly hiaprobable and becone inevitable. Just how much more probable, oven if in

the event neither occurred, *secialism or harbarisn’ was as the outcome cf

7 hte. imperialist war,will becone clearer in the next section.

"Theoretical possibility and Historical reality - the acttal devclopment of state

capitalist and slave x regimes"

The aim of this final section is to elaborate more closely the validity and practs ical relevance of this analysis in regard to the defeat of German imperialisn at the end of the second World War, and the process of stractural assimilation, which beginnings grew out of it. TI hope to d monstrate the fundamental theoretical and principle strengths of Wohlforth's analysis of the process, while outlining a major theorttical ommission, the rectification of which facilitiates a more profound grasp of structural assimilation in general, and its concrete historical form in Cuba in particular.

1) German, Imperialism in , Retreat

In 1935, Trotsky chractecrised the Herman imperialist war econony, hoth from the point of view of its political preconditions and its cconomic consequences, in a wanner in which in essence accords with everything argued here:

"While during the epoch of the capitalist upswing to which the war put

an end, it was possible - under certain political preconditions - to regard the varivus forms of statification as progressive manifestatti ns that is to consider that STATE CAPITALISM acts to lead socicty forwards and facilititates the future economic labour of the prolotarian dictatorship, the present ‘planned economy! must be viewed as a a stage that is RBEACTIONARY THROGGH AND THROUGH: STATE CAPITALIGH strives to tear the economy away from the world-wids division of labour, to adapt the productive forces to the Procrsutean bed of the national state, to constrict .i. ot production artifically in some branches and to create just as artificially other braiuches by means uf ENORHOUS UNPROFITABLE EXPENDITURES. The economic policies 6£ the present state - beginning with tarriff walls upon the anceant Chinese pattern, and ending with the episodes of for~ bidding the use of machinery under Hitler's 'planned economy! - attain an unstable REGULATION @t the cost of causing the NATIONAL ECONOMY TO DE? CLINE, bringing CHAOS INTO WORLD RELATIONS and completely disrupting he monetayy system that will be very much needed for socialist planning. The PRESENT STATE CAPITALISM neither prepares nor lightens the futube work

of the socialist state, but on the contrary, creates for it colossal additional difficultics, The proletariat let slip a series of opportune periods for the siezure of power. THROUGH THIS it has created the conditions for FASCIST BARBARISM IN POLITICS nad for the DESTRUCTIVE WORK OF 'STATE CAPITALISM! IN ECONOMICS. After the conquest of power bhe prbhetariat will have to pay economically for its political lapses." (54)

Again we have here the loose use of terminology which has plagued thediscussion of state capitalism. Trotsky is quite clear, unlike Bukharin, that he uses the term "state capitalism" to mean state"regulation" of capitalist economy

| and not, as such, state ownership of capital. As a consequence in the more precise definition of state capitalism in The Revolution Betrayed he was compelled to revise the terminology, if not the central conception, in the continua’ion of the passage already citedin that work:

| ‘During the war and especially during the experiments in fascist economy,

| the term "state capitalism has oftenest been understood to mean a system of | state interference and regulation . The French employ a much more suitable

| term for this - etatiam.There are undoubtedly points of contact between

i state capitalism and "state~ism", but taken as systems they are oppositerather

i than identical. State capitalism means the substitution of state property

| forprivoace property, and for that very reason remains partial in character.

: State-is1, no matter where - in Italy, Mussolinin, in Germany, Hitler, in America, Roosevel:, or in France, Leon Blum - means state intervention on the basis of

private vroperty and with the goal of preserving it. Whatever be the programme

of the government: , stats-ism inevitably leads to a transfer of the damages of

the decaying system from strong shoulders to weak. It "rescues" the small proprietor from complete ruin only to the extert that his existence is necessaryfor the preservation of big property. The planned measures of state-ism are dictated not by the demands of a development of the productive forces, but by a concern for the oreservation of private property at the expense of the productive forcws,

! which are in revolt against it. State-ism means applying brakes to the development of technique, supporting unviable enterprises, perpetuating parasitic social strata.

In a word, state-ism_is completely reactionary in character.'! (55)

Unlike Bukharin Trotskyclearly recognises the opposed characters of "state~ism", extensively regulated state monopoly cnpithlism, and state capitalism. Only now he tends tc over-estimate the opposition because he holds, as a consequence of his practical exclusion of the possibility of a compltted state capitalist regime, and thus that the latter can only be "partial". Another example of how this way of posirg the question excludes the analysis of how the "points of contact" between state-ism and state capitalism can lead to the one being transformed into the other, how the former develops into its opposite, of demonstrating that state capitalism is a developed, if opposed, form of state-ism.

Tt noi etheless remains obvious that Trotskypresents a consistent conception which iss compatibté Bhat presented here concerning the historically retrogrde nature cf state capitalism. We must agree with him further: to the very end the Nazi war economy remained fundamentally 'state-St" capitalism, state monopoly capitalism in a very advanced stage of decay.

The Nozis had no programme of nationalisation, quite the contrary. In its first five yeoes the fascist regime de-nationalised large sectors of heavy industry and banl ing «nationalised during, and bo some degree before, the slump of 1931 (56). D.spite the establishment in 1937 of the Herman Goering Werke with the purpose of exploiting unprofitable German iron ore mines to the benefit poth of the profits ofthe monopliies and the production of arms, in 1938 state investment accounted for only 1.6% of capital in the mining industry and 0.41% in metals. Even the arms industry itself, unlike in fascist Italy, was left in the hands of its privatemonopoly capitalist owners. The fascist state regulated and directed nationa?. production for war by means of state contracts and credits, the faious system of "mefo-bills'which individually became as good as hard currency. These methods achieved the aims of German imperialism sumaed up in Goerings phrase "guis not butwer".

The initial programme of de-nationalisation was possible because previously unprofitable ‘sectors of capital were wade profitable again. ‘Not the least important reason “or this was the destruction of all independent working class organisation and the maintenance of the atomisation of the class by Ley's Labour Front which enforce | a massive increase in the rate of exploitationin production. This was supplem nt3d by the statefixing wages, in a period of inflationary credit policy,

Ae

at a level well below bhose of the "austerity" regimes of Bruning, Papen, and Schleicher which had preceded the Nazis victory.

The German war economy necessitated the distribution of the whole labour force which combined maximum arms and munitions production with maximum profitability, maximum expoitation. To this cand a system of work place passports was introduced criminalising the "free movement of individual workers form employer to anothrr. The reserve army of labour the regime inherited, the massive pool of unomployed, was compulsorily drafted into the system of "public works" geared to war economy. A strict military discipline was introduced into the factories with the legal recognition of the capitalist monopolists or their funcfionaries as the "“fuhrer" the place of work. Thus the Nazi regime, from the very beginning,manifested its tendency to go beyond smashing the working class's organisations to its very enslavement.

This process was, however, riddlcd with profound contradictions. By 1938 the huge reserve arny of labourof 1943 ha¥becn sucked into the war economy, i.e. in the majority into unproductive branches of the economy. Suddenly the capitalist class found itself short of labour in its competitive struggle to secure lucrativestate contracts. and credits. As a consequence the capitalists themselves began to sub vert the fascist labour laws. They attempted to attract workers from their compet~ itérs by raising wages above the legal maximum and conniving with workers in the undermining of the passport system. Thus the law of value in the labour market, seriously distorted by the intervention of the fascist state, re-asserted itself through the competitive struggle between individual private capitals. This is a striking concrete example of the impossibility of enslaving the direct producers, in in general, while their continues to exist a private property owning capitalist class.

This is not to deny the extensive development of slavery under the Nazis, far from it, for it was the real secret of the massive development of the concentration camp system in the war years. The military effort of the first two years of war based wpon war economy, contracted reproduction, crippled the German cconony but it also brought withit a partial solution to the problem.As the armics advanced eastwards German imperialism attained the capagity to plunder a vast area including the west of the Soviet Union with its agricultural and industrial regions. This plunder included the enslavement of sections of the indigenouspopulations and prisoners of war. This was tke period of the establishment of the infamous eastern concentration camps.

As the front extended su the supply of slave labour increased and every major German nionopaly took its share. T.G. Farben the giant chemical concern, for exnanple, was instrumental in the establishment of the Auschwitz concentration camp. When the Nazi empire was at its most extended in 1942 I.G. Parben's workforce approached half a willion many thousands of whom were slaves. By 1944 7.5 willion non-

tt

Gernan slaves were cuployed by Gerwan firms on Reich territory with approximately

double this number in the occupied castern areas employed in both private ahd state enterprises. Hitler hiuself calculated the total number of foreign slaves at 20 million!

This slave workforce was literally. worked to death, wore exploited in a mannner which took no account of their physical production and reproduction. Their labour was by nature of thevery lowest skill and productivity. It could only have been - utilised in a regime in which the general productivity of labour was falling catastrophically. Far from being a sign of strength it was the sure indication of the impending catastrophic defeat of German imperialism at the hands of the "tallies!! which, in general , had net had to resort to such measures to maintain

‘their war ccononmies.

Despite the very extensive sweep of slave production under the Nazi regime it never becaue.the dominant mode of production , it remained subordinated to the capitalist mode the aim of which remained the maintenance of imperialist war economy and the profitability of the German monopolies. A sharp division was maintained between the Gertinn working class, its conditions of life and work, its relation to Gertian capital, and those of the foreign slave labourcrs it was compelled to work alongside. There.was a division of labour between the two forms of exploitation,

- 48 - of

The German woricers carried out the semi-skilled and skilled tasks while the slaves. were drafted in to replace-destroyed productive forces, the mast menial and bestial of tasks replaced machinery. -To have reduced the German workers to the same level as the slaves would have signified the immédiate collapse of imperaalist war economy.

The German war economy thus developed tnto a peculiarly combined system of production, combined both socially and geographically. The slave economy developed most extensively in Eastern Rurope, wheras in the Westy a much more "normal" relation was established ‘between, for example, the German and French monopoly capital and the French working class.

Tt is of no little significance that this system was crushed from the West by the "allied" imperialists and from the East by the Soviet Unton. A USSR itself showing marked featur s of a social and ezonomic decay into "barabrism" under the blows of the Nazi occupation

and the contracted reproduction involved in its own form of war economy. In 1941 the forced Labour Camps employed 4.5 million labourerd supplying 1.2% of Soviet industrial production. Immediately after the war this figure was much higher (57).. Again, this embryonic system of slave labour remained subordinate to the progressive produ ction and property relations of the USSR and was gradually phased out after 1950.

Thus was the general accuracy of Trotsky's conditional prognosis to the effect that: "Fastism on the bne hand, degeneration of che Soviet state on the other outline the social and political forms of a neo-barkarism". (58) borne out. Everyone knows by what methods and what relations of rpoduction were re-established in Western kurope by the invading imperialists. What requires further examination is the system of production established in Eastern Europe between 1944 and 1949/8 , ie before the process of structural assimilation in the area dominated by the Red Army and /or the indigenous Stalinist apparati.

2.) Stalnism on the advance.

Previously we analyased briefly 5 basic historically possible variants growing out of the monopoly stage of capitalism, only 4 of which could be correctly tenmed state capitalist regimes, None of these 4 theoretical varaants have so far emerged historically, but others have, The explanation of this apvarently paradoxical disparity between the historiaal and theroetical development is qgite simple: so far we have considered only the Sunamental capital relation, the class relasion of developed capitalist social format-: lions, ie that of imperialist nations. In other words, we have left unexamined, absbracted from, the possibility of such regimes in colonial or semi-colonial countries hwere the bourgeois revolution remains incompleted due to imperalaist domination and the consequent level of development of class and nathonal antagonisms. Also abstracted from was the historical exis ence and development of one or more degenreated workersstates with their Stalinist bureaucracies and antagonistsc relation to world imperilasnm.

This far from signifies that the whole o analysis of state capitalism was irrekevaiit. On the contr ray, the concrete red&lisation of state capitalist regimes, historical app:oximations to those analysed here, have so far always been bound up with the fate of the Stalinist bureuacracy not infrequently combined with the distroted ' guper-- cession of the bouregeois revolution's tasks in the colonial aad semi-colonial countries.

It is the conrete existence of such state capitalist rewimes, of no little scientific and practical significance, which Wohlforth failes to theories in his otherwise acute analysis of the post-war process of structural assimilation. Before approaching the question of the rectification of thés error, it is first necessary to emphasise where his tua fundamental, theroetically extrememly acute, correctness lies.

State capitalist theories, like that of Cliff, assert not incorrectly that their strongets 'Marixgb! theoretical card lies in the argument that to conceive of the Stalinist states created after WW2 as workeers states, degenerated, deformed, or obhermise, necessarily signifies a complete revision of the Marxist theory of the state and the proletarian revolution which must lead in turn to a complete revision of Marxist revolutionary striate . esye Where and when, these theories insistently ask, were the capitalist states smashed, was the revolutionary working class, hekhagency of this smashing, With its soviets, the independent democratic organs of this class, the instruments of this smashing, and conse quently the new working class state itself in the process of the formation of these ‘workers states'? Nowkere and at no time, they reply.

The superiority of Wohlforth's,as opposed to Mandel's answer lies in the fact that Ae does not gloss over or deny this hisotircal fact, but rather successfully explains it »y am acute utilisation of the dialectical method in the spehereof the Marxist theory of ‘he

state. His analysis demonstrates in passing that theoreticians like Cliff are capable of tirning the most profound and decisive achievements of the Marcist method into the most

vanal toying with categories and definitions, or in short how the dialectical method is

subject to dialectics itself, how it can decay, turn into its opposite: formalism.

Wohlforth theoretically..graunds. his. argument on Trotsky's fundamental conception of the degenerated “workersistaté developed’.in’ most detail, in. 'The revolution. betrayed", | which is itself goundéd in -the extension of Marx's theoretical prognosis’ conerening’ the’ transition to thte higher stage of’ communism ia 'The Critique of the Gotha Programme't and in Lenin's

‘state and revolution'. Trostky grapsed that the Stalinist bureaucracy in the USSR was

in FORM a capitalist state apparatus whose basis, whose real CONTENT, still lay’ in the progressive production and property relations created by the OCtober revoltuion. Here too, of course, froma and content interpenetrate.

The Stalinsit bureaucratic apparatus is a capitalist state form because it is a surdome Fival of capitalist bureweracy drawing its consumption fund, its material privileges, on as'a caste, from the 1 +. distribution of the surplus product, not directly from its

rate nN ee

role in its production. The laws of Soviet production are thus not determined by the satisfaction of the bureaurracy's necessary and luxury consumption, as under state capitalism. This consumption fund forms only a portion of the surplus rpoduct, the production of which is determed, as Preobrashensky demonstrated, by the law of primitive socialist accumulation. The vary nature of thés law of the nationalised economy necessitates‘ that the Stalinist bureaucracy plans, directs and controls production and distribution, and is therefore subfect to this lwa itself. In this respect the Stalinist bureaucrcay is quite ‘unlike the capitalist state FORM which functmons on the basis of the law of value, ovt-— Side and alongside production, Ov the other hand the cppitiaist FORM of the state deter- ‘ines a definite distertion of planned ecenomy which tends towards the restablishement of

camitalist production.

From this profoundly contradictory character of the Soviet political formation, Wholforth deducestheoretcially and established historically that the Stalinist bureueracy did not, indeed could not, smash the capitalists states in the buffer countries because in : WORM these state super-structures were ass&milable to the buemeuacracy itself. ALL that pe Ne wes necessary for the process of structural assimilation at the Level of the state was the transofrmatoon of some of its institutions, the grafting on of some new ones, and its \AB | ihcneoun yruging to rma it of ail elements hostile to the Stalinists, that is’ tied to nw the old capitlast class, At the level of the economy, of course, this ‘prodess had to be “complenented by the exproprietion of the capitalist class through Mationalisation and the introduction of Stalinist planning, thus, tn toto, creating in Lenin's presicaent phrase in 'State and Revolution’, a 'bourgecis state without the bourgeoisie'.

Yet beofreo tapitalist property can be expropriated and the capitalist state transformed in ths particular combined fashion, both must exist in an appropriate social and political conjuncture. Wt is here that Wohlforth's analysis is both at its most.concrete and where serious difficulties arise. He omits a theoretical treatment of state capitalism, firstly, in the period between 1944-7 in Eastern Rurope. Yet the subject can be dealt with largely in his own words, for his account of the events themselves signpost the correct theoretical conclusion. Referring th - . 7 Hkastern Burope he notes: ,

tWWith individual variations from country to country, it can be said

that the Red A,my entered countries in which large sectuons of the capitalist class.had either been destroyed or were in flight; in which the state administration structure was either almost non-emistent or severely weak~ ened and eundermm&ned; and which as a-genpral problem in 'allied' as well as

axis! countries, the captlasit class as a social forces was weak and dis~ eredited, The arrival of the Red Army waas greeted everywhere with revolutinnary action of thé masses, who on their own initiative seized large sections of the land a nd factories... Thiis capitalism as a social system was seriously eroded in these areas, and a deeply revoiuionary situation existed. Everywhere a large part of the real pow: in the country, especjially Hust prior to the entry of the Soviet Ripiom gs troops, was’ in the hands . of committees of one sort or another (National Lib-ation Front, Fatherland Fro ht etc), Within these committees, despite the non-working class line imposed on them, the predominant wwikt of the working class and peasntry

was felt. If the Red Army had only protected the area from imperialist interference (they were really too weak to ser@ously interfere anyway) and tolerated a revolution, one would have occurred.. The result would have been to establish genuine deomcratic workers states throughout Eastern Europe - and in fact throughout all of Europe. Had this happened modern history would have taken a fundamentally different course - the scales would have really (?) tipped in*favour of revolution and the Soviet burcaucracy iself would not have lasted more than a short while.

This did not happen, and for this reason today we face sm the danger of tot- ‘al annihilation through unclear war’ (59)

Despite the hint in this passage, taken on its own, of an under~estimation of the role of the Marxist party in such an alternative revolutionary development, we have to agree with Wohlforth's assessment of the social and political conjuncture in Eastern Europe in 1944-5, The weakness of the capitalist class in the entire region was due oo a combination of the .. - vagaries of war, slave war economym imperialist plunder in general and the collaboration of the local bouggeoisie, elements which varied ‘ jm each country depending on its ‘allied' or taxis' position e#c. In sum, the Stalinist bureaucrcacy faced a very difficult task in re-establishing stable capitalist regimes in the area, faced with the collapse of capitalist economy, the flight of the capitalist class and therevolutionary ferment. The compeletion of this task signified, first, the reconstruction and propping up of the aapitalist stae aprratuses which had been either largely destroyed or had disintegrated in order, second, to ensure the continued existe.ce of capitalist production and property relations. These combined takses actually involv: considerable nationalistions in the yerars 1944-5, ie long before the process of structursl assimilation, a fact which Wohlforth alludes to himself:

Nat is inpoctnat to realise that naticnalisation was simply forced upon the stalinists because of a combination of the fact that many of the factories in this whole area were owned by the Germans AND THAT IN ADDITION MANY FACTORIES WERE SIMPLY SEIZED BY THE WORKERS. THEREFORE AN MANY CASES THE STATE NATIONALISED A FACTORY IN ORDER TO TAKE IT OUR OF THE HANDS Of THE WORKERS AND SOMETIMES EVEN PUT THE OLD CAPITALIST OWHERS BACK IN AS 'MANAGERS'. It is also important to relise that the state adiminstering these nationalised factories was ruced by a coalition government onculding the bourgeois parties" (60)

It was no accident that these intial nationalisations attained thw widest sweeop in those contries which suffered most dis-location and plundering at the hands of the # Nazia or were countries with large non-German populations:

"In Poland close to 90% (!0 of all industry was nationalised within the first

yesr of ‘liberaion'! and Czechoslovakia followed this pattern relatively closely. In Hungary, howevr, the banks were not nationalised until dan 1948, Interestingly

Germain, writing in 1946, quite correctly pointed out that nationalisation was on

the same lev@t in Finalnd as it was in Bulgaria and Rumania. Austria was

listed as befmg much more nationalised thah any of these three countries.

As history was to show, both Finland and Austria were to pass into the cap~

italist orbit definitively, while Rumani and Bulgaira were to be transformed

into deformed workers states4 (61)

Thus Wohlforth presents a striking account of the evolution of the East European regimes between the period of the entrance of the Red Army in 1944/5 and their struc~ tural asssimilation in 1947/8. It is an account of the evoltuion of differnet degress of state ce zitalist with Poland and Czechoslovakia as definite candidates for complejed state sapitiaist regimes. He doomstartes that these regimes grew out of thetremendous collapse of private capitalism in the area which ievtably gave rise to the revolutionary mobilisation of the working masses. He further demonstartes that the Stajinst bureaicracy impose these elements of state capitalism on state capitalist regimes in a COUNTER REVOLUTIONARY manner, designed to crush the revolutionary froms of workers control etc, instigated by the = insurgent masses. Yet strikingly Wohlforth never gived these regimes in this period an economic or political characterisation, beyond arguing that they repereseated 'phantom-like', very weak, forms of capitilasist rule and exploitation. ;

He always remains quite clear about the ®APITALIST naute of the regimes up to 1947-8, and thus grasps that the transformation at the elevl of state superstructure was decisive

~ 54m wis the actual period of structural assimilation.

"Tt is imprtant to emphasise here that this process did not result in most

cases in a formal resumption of rule by a single party. Rather, rump ‘coalitdons continued of parties that were essentially tools of the Stalinists.- The very real procéss that occurred was THE DESTRUCTION OF THE INBEPENDENT POLITICAL

ARM OF THE BOUREGOIS AND PETTY BOURGEOIS FORCES IN THE COUNTRY. This was acccn= panied by the wholesale jailings of the effective leaders and politcal’

cadres (?) of these parties and all those suspected of being their agents within the state administaation. Thus this political process seriosly pruned back the social power of the bourgeois elements by effectively eliminating their direct, voice withtin the political superstructure. This process BY ITSELF would no more have destroyed the real social rule of the bourgeoiseis THAN THE NATION? ALISTIOANS OF THE EARLIER PERIOD HAD DONE...

The completion of the destruction of the economic underpinning of the bourgeois focres in these countries did not represent such a daastic change as the destiuction of their polifical power. IN MOST OF THESE COUNTRIES, BY 1947, THE COMMS ANDING HEIGHTS OF INDUSTR WERE IN THE HANDS OF THE STATE. THUS THE CRITICICAL QUESTION WAS IN WHOSE HANDS THE STATE WAS, RATHER THAM THE MOPPING UP OPERATICN ON THE REAMINS OF PRIVATE CAPITALIST? HOLDINGS. Still this period masked(? could be'tmarked'"'~ typist) a renewed nataonalisation drive in those countries which still had substantial private capitalist operations" (62).

Despite this clear recognition his failure to give a finished theoreticall expression to the nature of the East European regimes between 1944-5 and 1947-8 led to Wohiforth's downfall in his attempts to get to Brips with the process in Cuba. His analysis was suffciently acute and developed to theoriese the process as expansion of the Stalinist bureaucracy along wibh its progressive social foundation AFTER THE PROCESS HAD BEEN COMPLETELLD. In. the midst of the Cuban process, howver, which had inspired him to grapple with the problem in the first placem his analysis broke down. This is a serious criticism of a Warxist whose task.it ism after all, to antervene in the historical process, in the present, on a solid theorétical foundation in order tereby to shape.the fubure. The importantce ef his theoretcial ommission beocemes obvious, although it must ne said in his deence that we now have the same advantage in relation to Cuba as he had with the buffer countries.

Once again, however, Wohlforth had already provided the soluttion to his own probkem, in a raw, unfiflished, theoretical form. . He argued with great force that af. the Gistinct nateonal process ,of strucural assimilation were grasped in their unity, in their historical order of development, then no insurmountable problems arose in the anaylsis off each successive case. He could not apply his own method to the Cuban case bacuse it posed the question of state capitlaism as a stage point-blamk, ard ha had not theorised he stage of state capitalism in the process in general, and further in the forms in took in Yugoslavia, Albania nad China.

He adduced that strucutral assimilation took plage in China between 1952-6, and that in 1949 the military vistory of the Stalinists signified that:

' "While much of industry was taken over in the period immediately following the coming to power w&xkkz BECAUSE IT HAD BEEN DESERTED BY THE BOURGHOISIE, there remained substantial bourgeois holdings throughout the country. Mao himself proclaimed in 1949: ‘Our policy is to restrict capitlism and not to eliminate it...' The importanvge of these capitalist holdings can only be understood within the framework of the existence pf a bourgeois state apparatus over large sections of China and the CCP's policy of rule through a coalition government, even if the bourgeois representative within this coalition were quite weak. It was this in the inter-connection of these various levels of bourgeois influence that the bomrgeoises continued to xa have influence in China in this period" (63)

Although * . the ehements of state capitalism were not in existence, as for example in Poland or Czechoslovakia, and thus it wauid seem to be incorrect to characterise China as state capitlaist as such in the year 1949-52, the general line of development is clear enoug

As in Yugoslavia and Albania, the indtegouns Chinese stalinists had created a peasnt based army which deafeated the pro~imperialists Chinese forces, and thus prepared the gopund for the later process of. strucutral assimilaticn, all without the decisive military intervention of the Red Army. The Cuban case only differs from thse in one fundamental

vegpect, which Wohlferth would have xgrasped immediately if only he had theorised the

52

state capitalist stage common, to this or that degree, to them all. It was not the Stalinists but the petit bourgeois nationalist duly 26th Movement, led by Castro, which formed aguerrila army based largekxy on the peasantry and which, with more or less passive support from the Cuban workéng class, overthrew US imperialismks Batista regime in revolutionary fashion in 1959. Castpp's movement did not swahs the capitalist state, which was very. weak, but pruged and re-organised it thereby actually broadening its social base end strneghtening its institutions.

The July <6th Movement had no anti- capitalist programme and non anti-capitalist intentions. Yet in 1960 under the pressure of mass desertion of Cuban and American bouregoise and a trade. beycott by US imperialism, CAstro was teft with no option but to respond with & programme of massive nationalisations in both the industrial and argicultural sectors. 482 major enetrpises and banks were nationlaiséd, including the American owned Telephone Go, which was worth $800 million, and 36 sugar mills and refineries,alongside expropriation of the latifundists. 1960 threrefore swa the creatuon of a failr developed state

capitalist regime in Cuba not the creation of a degenerated workers state: that required other social forces than the July 26th movement.

In essence this revokutionary process carrying through approximately to 1962 was one of a bouggeois revolution, a struggle for Cuban national liberation against US imperialism, analagous, inronically enough, with the American war of indpendence in the 18th gantruy,

' directed against English colonialism. It was no accident that Castro expounded the radical

tdeas of the American revolution in oppositdon tO American imperialism. Indeed, from one angle, tje -Cyuban national state capitalist regime was analagous to the 'state-ist' and state capitalist elements in the national capitalist economies in the epoch of ppimitive capitlist accvimlation, in the epich of 'classical' bouregois revolutions. These elements

wré historice!ly progressive. because they served to’ -- spur on the deevlopment of th: nationalzsk c.pitalist economiss. But Cuban state. capitalism arse got in the ep.ch of pramitve capitlist accumulation, but in the epoch of imperialism.

As a consequnec its state capitalism was much .. ~_ more pronounced due to the

insuperable obstacles it face inthe already degeloped nature of world capitalist ‘eceonny. In its degrees #£ statification and its national isolation, Cuban ‘capitalism in one country! was veactionary. Its porgessive and reactionary sides were inextricably combined, if had not future, it was purely a conjunctural regime. Clearly the Cuban development

was tied in with the ppocess of permanent revolution.

its life span would have been very short once the USA broke off trade reltaions in mid1960, if it bad remained economically isolated, This at least was what the imperialists

‘calaculated, put they reckoned without the heroism of the Cuban masses and, most decisively ‘in the event, without the Stalinist bureaurcacy and the degenerated workers states. For

Cuban state capitalism did not remain economically isolated. In fact none of the pos-war state capitleit reg mes approximate to completed state capitalist in this decisive respect. They were all conkunctural regimes which orgginated, it is true, with a decisive econcmic rupture with imperialism, but not thereby with the world division of labour and market,

for. these are not identical. The economic ties with imperialims were replaced with ties

with the USSR and, later, other degenerated workers states, themselves part of the world econonry. .

The USSR and China bougtit the Cuban sugar which US imperialism had blockaded. The USSR, in particular, provided credits, techincal aid, machinery and, of coursem ill-starred military 'aid'. Indeed all these meadures were totally inadequate geared as they werem not to the development of the Cuban economy but to the interests of the stalinist bueeaucracy. Nonetheless without it Cuban statecapitalism could not have survived, let alone grown =s it did in the years between 1960 and 1965. ;

Ultimiataly, howver, just like the state capitalist regimes in Eastern Euopre in 1947, raced with rie pressure of resurgent Allerican imperialism, there was only three possi-le alternatives. therr independent developitient was out of the question. _

i) Defeat at the hands of imperialism, with he resultung. destruction of statified economy. 2) Working ‘lass revdlution and the abtablishmest of a workers state.

3) Structure”. assimilatéon.

I, all the degenerated workers states the third possibility was realisedm itself an acute expression of the ciris of revolutioary keadership.

From 196) the Stalinist bureaucracy, especkally the Soviet bureaucracy, had ever reason militarily, .conomic and political, to strategically assimilate Cuba, However, such things

are not aclieved at the drop of a hat or of a nuclear missile. Not least of the bueac=- racy's problems was the weakness of the Cuban stalinists who were completely discredited by their passive support of Batista and suffered attacks at the hnads of the Castwists at the very time Sf the natioanlisation of American property.

In: 9161, 1963 and 1965, the Cuban stalinists, materially aided by their Soviet brethren, made successive attempts to construct a unified, monolithic, Stalinist apparatus with a : fim prop on the state, in 1965 with the formation of the Cuban Coomygnist Party, they , were on the orad to victory. The failure to scundly base the «=... Integrated Revol~ utionary Organisation in 1961 and the United Revolutionary S cialist Party in 1964 grew out of the contradictions involved in assimilating the July 26th Movement which had largely lost its peasant base and become firmly rooted in the capitalist state apparatus. The wwhole 6f this apparatus could not be assimilated. It would appear that its successful .ompletion combined elements of the destruction of bouregois political parties, the unification with the’ social decomracy, and to rooting out of sympathisers from the state apparatus of the process in Eastern Europe. Until 1965, the decisive step on the road in this process, stuctural assimilation, could not hape begun.

| Ty 1968 Cstro launched the 'Great Revolutionry Offensive', culminating in the naticaalisation of trade and services. This may not have been very importnat economically; if this is correct, then it forms an eleihent common | to the process of strucutural assin~ jlation in many countries, as Wohlforth noted:

"More significant were steps taken to BESTROY THE SOCIAL POWER OF THE PREITY BOURGEOIS CLASSES. These included the virtual takeover of wholesale trade and the takeeover of a large section of retail trade" (64)

In a highly provis@pnsla conclusion open to the verification of the results of further investigation, it could be argued that the process of structural assimilation took place between 1965 and 1968. A feature which obscures the whole prosess if the continuity of Castro's leadership, &* his transformation into a Stalinist. There is, however, another side of this cotm which the Cuban stalinists have attempted to bury beneath a mountain of les add pleasant myths,: the removal from office of Che Guevaza in 1965. The questio deserves attention.

Consuequentaly we must draw the conclusion, contrary to that of Westoby in his supcr. ficial discussion of the Cuban events which ends up back in the very 'Pabloism' Wohlforth was combatting, that Wohlforth and the SLL were correct at the time (1964?) to see Cube as a capitalist state of 'a special type’. Once again, howver, they failed to draw the necessary conclusions from this essentially negative charactermsation. Absurdly, the }RP still holds this position today. But what does Wohlforth think?

If he had grasped theoretically what was specific to Cuba and the significance of « stete capitalist, state-ist, stage in the pnocess of the post-war expansion of Stalinisn in general, he would Bave grasped in 1961-3, the time of writing of 'The Throeyr of Structurla Assimilation’ the significance of the Stalinist manoevures of those years. AS a consequence he would have been able to firmly counterpose the proletarian revolution ond the smashing of the Cuban capitalist state to either the gictory of American imper.alism or the counter-revolutionary ppocess of strucutral assimilation, of the rise of the Stalinist bureaucracy to power. |

The advantages of the solution presented here are obviuus. First it does not appear to violate the course of historical events iteslf. Second, nor does it violahe the Marxist conception of the state or of the essentail role of an international revol.- utionary working class party. The July 26th Movement did not, could not, overthrow capit= alism "s or smash the capitalist state; the Stalinist bureaucracy did, and could, achive the former, but not the latter. This peculiar fact common to the process of structura:. assimilation in general is a striking confirmation of the correctness of the Trotskyis* programme of for political revolution in the degenerated workers states. °

Programmatic Conclusions Fctehd —tieccea catatonia teatanei cence

On many occaisions, Marx pointed out that Bourgeois political revolutions were com-~- bined, limited, xemapikakukiwaaryx recapitalutions of the bourgeois SOCTAL revolution. just like the latterm the former involved the transfer of the bureaucratic state apparatus from one pair of hands to another, from one faction of the political representatives

of the bourgeoisie to another, factions which themselves usually represented

Bh *

~_

adifferent fractions of the capitalist class. The victorious party, of course, always placed its own men in the key positions in the state apparatus, replacing thosd of the a defeated, The bureaucratic machine and its privileges was the spolls of the victor.

Tt must new be absurdly clear that the PROLETARTAN POLTICAL REVOLUTION ‘in the USSR will be a combined, limited reaapitulation of the proletarian SOCIAL revolution of October 1919, and its social results. But the proletarian revolution is distinguished from the bourgeois: revolution , at the level of the political superstructure, by the fact that the former smashes while the. latter lays hands on theold bureaucratic state machine. A similar distirction must be drawn between the prolteraian and bourgeois political revolh

tions. ‘Precicely because the Stalinist bureeaucratic state apparatus is a capitalist state iu form, arising out of the political expropriation of the working class, it must be SMABHED.in the political revolution.

Concretelys the Tortskyist programme for the USSR leads directly to thas same practical conclus! on: the establishment of svoiets as independnet organs of woking class strugglc,the exclusion of the Stalinist bureaucracy from the Soviets, the freeing of the trade vnions from the bureaucracy, the arming of the Soviets, the insurrection based on the roviets and organised by the Trotskyistsparty, add the establishment 6f

_complete soviet power as the form of the workers state. Yet this is not the manner in which Trotsky vosed the question theoretically in "The Revolution Betrayad!":

This seco)

ibility of EXACTLY THE OPPOSITE RROCESS TO THAT OF STRUCTURAL ASSIMILATION &.

S#alinist burcaucratic state apparatus is capitalist in form, the BOURGHOIS SOCIAL

COUNTER-REVOL! destruction o revolution.

This form

basic methodic process of st. f the Marixs::

have to smash class must do itical revolv mentally ”

conception,

The Sovie:

Yerst the cld sionaries, ce. tionary party unavoidable.

“ee -etained. to use. this fe Ve

‘efully and ruthlessly selected and controlled by the.

‘In order better to understand the character of the present S viet | Union, let us make two different hypotheses about its future. Let us assume first that the Sovéét bureaucracy is overthrown by a revolutionary party having all the attributes of the old Bolshevism, enriched moreover by the workd experience of the present period. Such a party would begin with the restoration of democracy in the trade unions and Soviets. It would be able to, and have to, restore freedom of Soviet parties. Together with the mass, and at their head, it would carry out a RUTHLESS PURGATION OF THE STATE APPARATUS" (65)

and

" Tf to adopt a second hyptohses - a bourgeois party were to over-

throw the ruling Soviet caste, it would find no small number of ready scrvants amongst the present bureaucrats, administrators, technicians, directors, party secretaries and priveleged’ upper circles in general.

BUT A BOURGEOIS RESTORATION WOULD PROBABLY HAVE TO CLEAN OUT FEWER

PEOPLE THAN A REVOLUTIONARY PARTY. THE CHIEF TASK OF THE NEW POWER

WOULD BE TO RESTORE PRIVATE PROPERTY IN THE MEANS OF PRODUCTION" (66). .

2" formulation of the theoretical possBecause tlie

A hypothesis is striking! It isa

TION would NOT have’ to SMASH it but purge it. Is main task woitld be the the production and property relations, whose origins lay in the October ©

‘lation, on its own, is a marvellous theoreticaly confirmation of Wohlforth's

gical and conceptual insight. But if Trotsky is oprrect, and the complete uchural assimilateon itself is in turn a striking confirmation that he is, theory is to be maintained, then the fact that the bourgeoisie would not

the Stalinist state leads inexorably to the conclusion that the working

80 on the road to socialism. In 28 other words, the working class pol-

ion is not simply a question of purging a state apparatus which is funda-

Qne may be sure in advance that some '“rotskysitt! will attenp ys

emulation, against the whole spirit of the Trotskysit programme and Trotsky 'd a justification for a progaamme of poljtical reform in the USSR.-

of the October Revoiutio some of the old funue masses and the revolusuch measures are ,

political revolution will be a true recapitaluatdon bureaucratic machine will be smashed, only THEN will

‘be utliised by the workers state to the.degree that