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Russia, Lenin and State Capitalism

From Dave Perrin’s history of our companion party in the UK. The development of the WSPUS’s thinking developed on identical lines:

The World’s First Socialist Revolution?

When Jack Fitzgerald of the SPGB wrote in the Socialist Standard that the Russian upheavals of March and November, 1917 were by far the most important events of the First World War, he was stating an opinion which, with hindsight, seems a self-evident truth.1 But the extent to which these important upheavals would actually affect the SPGB itself, and the entire political tradition which had spawned it, could hardly have been appreciated or predicted at that time. As has already been noted, the practical debate within the working class movement before the Bolshevik seizure of power had centred on the efficacy of reformist and revolutionary strategies for the achievement of a social transformation. The Russian Revolution, however, seriously muddied these waters and brought to the world’s attention a political theory – Leninism – which, perhaps for the first time, sought to systematically reappraise and reinterpret Marxism rather than simply reject it outright in the pursuit of piecemeal reforms.

There had certainly never been any doubt that there was room for interpretation – indeed the SPGB showed at its foundation the type of synthesis possible between various strands of broadly Marxist thinking, its outlook and political strategy bearing the influence of such diverse elements as Kautsky and De Leon, Engels and Morris. But the Bolshevik Revolution went further than this and challenged some of the very foundations on which pre-1914 Marxism had been built. The perceived need to achieve mass socialist consciousness among the working class, the role of a mass socialist party as both a spur to, and an expression of, that consciousness, and the necessity of a developed economic basis of society for a successful socialist revolution, all came into question.

The apparent triumph of the Bolsheviks in backward Russia sent the Marxist movement into turmoil. Moreover, previously impotent political organisations across Europe and North America showed themselves to be more impressed by the sudden and unexpected Success of revolutionaries in the midst of bloody world war, than concerned for the event’s potential impact on core elements of Marxist theory as they had always understood them. Contrary to legend,2 the SPGB was initially affected by this feeling like other radical parties.

The SPGB’s reaction to the Bolshevik seizure of power contrasted with its position on the earlier, openly pro-capitalist, March Revolution. On that occasion the Socialist Standard clearly said that the revolution was:

… but another example of the capitalists using the discontent and numbers of the working class in Russia to sweep away the Feudal rules and restrictions so strongly symbolized in the Czar and the Council of Nobles, and to establish a system of government’ in line with modern capitalist needs and notions.3

The Socialist Standard’s first editorial commenting on the Bolshevik Revolution, however, did not proceed on the basis that the working class was ing used or manipulated in any way for the benefit of higher forces. Having prefaced its remarks with a note of caution regarding the scanty and possibly sleading information available to it, the Standard’s praise was fulsome enough:

Whatever may be the final outcome, the Bolsheviks have at all events succeeded in doing what all the armies, all the diplomats, all the priests and primates, all the perfervid pacifists of all the groaning and bleeding world have failed to do – they have stopped the slaughter, for the time being at all events, on their front. How much more than this they intended to do the future may reveal. They may have higher aims, yet to be justified by Success or condemned by failure; but is an astounding achievement that these few men have been able to seize opportunity and make the thieves and murderers of the whole world stand aghast and shiver with apprehension.4

The ending of the war, at least on the Eastern Front, was considered by the SPGB to be the principal success of the Bolsheviks, and an act directly in the rests of the working class. But as for the nature of the Bolshevik seizure of power itself, the SPGB was noticeably more cautious than its political rivals in ssing its supposedly socialist content. The Socialist Labour Party in particular, which had long harboured vanguardist ambitions, saw itself as the British embodiment of the Bolshevik revolutionary strategy, possibly even before its Russian success. Along with Sylvia Pankhurst’s Workers’ Suffrage Federation (WSF), the SLP had been represented at the Leeds Soviet Convention of June 3, 1917, and joined with the WSF in calling for workers’ and soldiers’ councils to be set up in Britain. After the Bolshevik takeover, The Socialist ran pieces such as The Triumph of SLP Tactics in Russia,5 claiming that its industrial unionism and desire to educate the mass of the working class in socialist ideas rested easily with the spirit of Lenin and the Bolsheviks.

The SLP and the anti-parliamentary WSF were not alone in their admiration the Bolsheviks and their declared aim of constructing the first socialist state – the conference of the British Socialist Party in the spring of 1918 also expressed support for the November revolution together with initial Bolshevik measures for the “reorganisation of Russia under the control of the working classes”.6 That the SPGB did not share many of these attitudes towards the new Russian regime Soon became clear when the Party’s early praise for the Bolshevik anti-war strategy had run its course.

What focused the SPGB’s attention above all were the lavish claims made on the Bolsheviks’ behalf by their supporters in Britain. The first detailed analysis of the Russian situation, written by Fitzgerald, appeared in the August 1918 Socialist Standard under the heading ‘The Revolution in Russia – Where It Fails’. It tackled the claims of the SLP by outlining why the Bolshevik takeover could not lead to the establishment of socialism in Russia. The article asked:

Is this huge mass of people, numbering about 160,000,000 and spread over eight and a half millions of square miles, ready for socialism? Are the hunters of the North, the struggling peasant proprietors of the South, the agricultural wage-slaves of the Central Provinces, and the industrial wage-slaves of the towns convinced of the necessity, and equipped with the knowledge requisite, for the establishment of the social ownership of the means of life?

Unless a mental revolution such as the world has never seen before has taken place, or an economic change has occurred immensely more rapidly than history has ever recorded, the answer is ‘No!’ … What justification is there, then, in terming the upheaval in Russia a Socialist Revolution? None whatever beyond the fact that the leaders in the November movement claim to be Marxian Socialists.

In fact, as Buick and Crump have noted,7 the SPGB identified as many as five key reasons why the establishment of socialism in Russia by the Bolsheviks was impossible.

• First, as indicated above, the mass socialist consciousness demanded by the SPGB before a successful socialist revolution could take place was noticeably absent in Russia, as elsewhere. Fitzgerald seized on a remark by Litvinoff which suggested that the Bolsheviks did not really know the views of the entire working class when they seized control, only some sections of it such as the factory workers of Petrograd.
• Second, it was not even the case that the working class was in a numerical majority in Russia, a society dominated by its peasant economy. How could a majority socialist revolution be carried out when, the workers were still in a minority and when the largest social class were the. largely illiterate peasantry? While illiteracy did not entirely preclude the spread of socialist understanding, it certainly made it more difficult. In any event, the peasants had long shown themselves more interested in ridding themselves of the heavy tax burden on land, and increasing the size of their plots, than in demanding common ownership.
• Third, socialism could not exist in an economically backward country where the means of production was not sufficiently developed to support a socialist system of distribution.
• Fourth, and crucially, it was not possible to construct socialism in one country alone, given the nature of capitalism as a world system with a world-wide division of labour. Isolated ‘socialism in one country’ would be doomed to failure, no matter how honorable the intentions of the revolutionaries involved.
• The fifth reason advanced for the non-socialist nature of Bolshevik Russia by the SPGB went to the very root of its political differences with Bolshevism: socialism could not be achieved by following leaders.

Leninism and the Politics of the Vanguard

Lenin’s conception of the role of the political party in a proletarian revolution differed fundamentally from that of the impossibilist SPGB, and from the social democratic movement out of which it had emerged earlier in the century. While the Bolsheviks initially claimed to be part of this same social democratic political current, and though Lenin frequently used the terminology of Marx, Bolshevik theories on political tactics and party organization owed far more to the various strands of nineteenth century Russian revolutionary thinking embodied in the Populist movement.” Underlying these Populist theories was the basic assumption of vanguardism – “the doctrine that a given group’s emancipation depends crucially on some other, much smaller group’s leadership, guidance, or domination in some stronger form”! That such a vanguardist approach was deemed necessary was a product of Lenin’s belief that the achievement of a mass socialist consciousness in the working class was impossible before a proletarian revolution, when the dead-weight of capitalist ideology could be lifted. (In this sense, the basic assumption of Bolshevism was the same as that of reformist social democracy, differing only in the means adopted to achieve working class power.) Lenin strove to justify this assumption in What Is To Be Done?:

The history of all countries shows that the working class, exclusively by its own effort, is able to develop only trade-union consciousness, i.e., the conviction that it is necessary to combine in unions, fight the employers, and strive to compel the government to pass this or that necessary labour law, etc. The doctrine of socialism, however, grew out of the philosophic, historical and economic theories elaborated by educated representatives of the propertied classes, by intellectuals… in Russia, the theoretical doctrine of Social-Democracy arose altogether independently of the spontaneous growth of the working-class movement; it arose as a natural and inevitable outcome of the development of thought among the revolutionary socialist intelligentsia. 10

Throughout his political life, Lenin refused to accept that the working class “in the mass” could achieve a socialist understanding, arguing that socialist consciousness could only come “from without”. At the Congress of Peasants’ Soviets in 1918 he claimed that if revolutionaries had to wait for the intellectual development of the working class they would not see socialism for at least five hundred years. To avoid this calamity, a centralized and politically mature core of revolutionaries was necessary to initiate social change when the working class in the mass was not yet conscious of its interests – “the Socialist political party, that is the vanguard of the working class, must not allow itself to be halted by the lack of education of the masses.”11 This outlook, which undoubtedly reflected the undeveloped condition of the working class in Russia, was eloquently expounded by the Bolshevik apostle Karl Radek in Socialism From Science to Practice:

In no country can the revolution begin as the act of the majority… the most active are always the first to rise… the creative and impulsive force of the revolution is required to rouse the great body of the people to liberate them from. their intellectual and spiritual slavishness under capitalism, and to lead them. into a position where a defense of their interests can be made.12

This ‘minority action’ perspective clearly mirrored the nineteenth century anti-Tsarist view of Russian Populism, as elaborated, for instance, by Peter Tkachev:

A real revolution can only be brought about in one way: through the seizure of power by revolutionists… The revolutionary minority, having freed the people from the yoke of fear and terror, provides an opportunity for the people to manifest their revolutionary destructive power.13

Commenting on the apparent triumph of Bolshevik principles from its position in Britain, the SPGB claimed that the Bolshevik vanguardist outlook reflected the political and economic immaturity of Russia, and the minority position of the Russian working class. The Bolsheviks had taken the opportunity to seize power in a war-ravaged country promising ‘peace, land and bread’, but contrary to the rhetoric of their fervent admirers in Britain Bolshevik tactics had evidently failed to establish socialism and were most certainly inappropriate for the more developed capitalist states in Western Europe. Unlike groups such as the British SLP, who considered Bolshevism al exciting confirmation of the Marxist theory they had sought to promote in Britain, the SPGB recognized the theoretical dangers inherent in the Bolsheviks’ vanguardism and denied the applicability its supporters contended for it in Britain.14 It was a hostility spurred by the knowledge that key elements, orthodox Marxist theory were really being fundamentally challenged, rather than developed, and from a hitherto unexpected source. In ‘A Socialist View of Bolshevist Policy’ the SPGB commented:

Ever since the Bolshevik minority seized the control of affairs in Russia we have been told that their ‘success’ had completely changed Socialist policy. These ‘Communists’ declare that the policy of Marx and Engels is out of date. Lenin and Trotsky are worshipped as the pathfinders of a shorter and easier road to Communism.
Unfortunately for these ‘Bolsheviks’, no evidence has yet been supplied to show wherein the policy of Marx and Engels is no longer useful, and until that evidence comes the Socialist Party of Great Britain will continue to advocate the same Marxian policy as before… We shall insist on the necessity of the working class understanding socialism and organizing within a political party to obtain it.15

The SPGB saw Lenin’s vanguard ism as a fundamental denial of the basic socialist – and Marxist – proposition enshrined in Clause Five of the Party’s Declaration of Principles, that the emancipation of the working class “must be the work of the working class itself”. The SPGB was adamant that for a society of social ownership and truly democratic control to exist, the cooperation of the . majority of society was necessary, and there could be no cooperation without both understanding and agreement. There was certainly no question that a cooperative socialist society could be created by a minority vanguard party, and so Bolshevik tactics were quite useless from the socialist perspective – even dangerous, given the violent insurrectionary scenario promoted by Lenin and then fatally attempted by the Spartacists in Germany.

Almost alone in the years after the Bolshevik Revolution, the SPGB set about countering the view, supposedly hidden in the writings of Marx and Engels and revealed to the world by Lenin, that the correct path to working class emancipation lay in the vanguard of the working class rising up to smash the bourgeois state, then creating a ‘proletarian dictatorship’ replete, if necessary, with press censorship and the banning of other political parties. To the SPGB, Lenin’s ‘Dictatorship of the Proletariat’ was not, as Marx had envisaged in his Critique of the Gotha Program, an expression of the democratic will of the great mass of the majority class in society, but a dictatorship of the vanguard party , over the working class and the peasants. Lenin was equated with the minority, conspirational theorists of the past – Blanqui, Buonarroti and Weitling – men who thought it madness to wait for mass political consciousness when revolutions could be created by hardened tacticians and conspirators. In an article in the Socialist Standard on Democracy and Dictatorship in Russia, the SPGB sought to demonstrate the Blanquism of the Bolsheviks by quoting Lenin’s proud claims from The New International of April 1918, that “Just as 150,000 lordly landowners under Czarism dominated the 130,000,000 Russian peasants, so 200,000 members of the Bolshevik party are imposing their proletarian will in the interest of the latter.”16 The SPGB counter-posed these views with the warnings of the mature Marx and Engels, who themselves had flirted with minority tactics as politically inexperienced individuals in the 1840s. Engels in . particular had become explicit in his warnings against the type of vanguard ism and elitism identified by the SPGB to be at the root of Bolshevik tactics, stating in his Introduction to Marx’s Class Struggles in France 1848-50:

The time is past for revolutions carried through by small minorities at the head of unconscious masses. Where it is a question of the complete transformation of the social organization, the masses themselves must participate, must understand what is at stake and why they must act. That much the history of the last fifty years has taught us. But so that the masses may understand what is to be done, long and persistent work is required… even in France the Socialists realize more and more that no durable success is possible unless they win over in advance the great mass of the people. 17

Its arguments against the Bolsheviks’ vanguardist conception of revolution notwithstanding, the SPGB had to deal with a Bolshevik-inspired resurrection of the view that its ‘parliamentary’ road to socialism was outdated. Having studied the methods of the Bolshevik takeover, the opponents of the SPGB’s revolutionary strategy in Pankhurst’s WSF and in the groups that went on to found the Communist Party of Great Britain in December 1920, put an old argument in a new, improvised form – namely that the Russian example had shown that attempts to take over parliament and the capitalist state machine’ were almost entirely useless. Russia had demonstrated that the working class could set up its own organs of power in the form of workers’ councils (soviets). A justification for this view was given by Marx, it was said, in The Civil War in France, where notice was given that “the working class cannot simply lay hold of the ready-made state machinery, and wield it for its own purposes”.18

The SPGB did not dispute, and had never disputed, this particular dictum of Marx. Its own Declaration of Principles expressly stated that the state machine that had been used by the capitalists to ensure their class domination of society would have to be “converted from an instrument of oppression into the agent of emancipation” (emphasis added). What the SPGB disputed was the new interpretation put on Marx’s words in the light of the events in Russia. To the SPGB, creating new organs of working class power in opposition to the might of the capitalist state would be folly and was certainly not what Marx had in mind. Engels had settled the issue for the party in a letter to Bernstein, saying it was “simply a question of showing that the victorious proletariat must first refashion the old bureaucratic, administratively centralized state power before it can use it for its own purposes”.19

In recognizing the unique role played by the soviets in Russian society in the absence of legitimate bourgeois parliamentary government, the SPGB argued that they were a specific product of backward political conditions, and were used by the Bolsheviks, as the best organized and most effective political group, for their own purposes. They did not in themselves constitute bodies that could be of use to the working class in all situations. In an article entitled Parliament or Soviet? A Critical Examination, the Socialist Standard argued in the manner of the Communist Manifesto that the precise application of socialist principles would vary according to the degree of political and economic development reached in various countries, saying that it was absurd “to condemn or uphold the Soviet system irrespective of the conditions out of which it arose” and that by adopting the Soviet model for their constitution, the Bolsheviks had not invented a grand new system but had accepted an already established fact.20

Though the SPGB pointed out the electoral disparities that could make the soviet system open to manipulation 21 and denied its similarity to the Paris Commune, 22 it is noticeable that the SPGB was not as hostile to the idea of the working class organizing soviets in conditions of backward political development as were some of its opponents at the thought of using parliament and ‘bourgeois elections’ for socialist purposes in countries like Britain. To the SPGB, Russia did not prove its opponents’ contentions that soviets could be successfully set up in opposition to an established bourgeois parliamentary state, only that they could function as a partial substitution for one in a backward country lacking the means for democratic expression. As the Menshevik leader Martov had written, the Bolsheviks and their supporters had sought to detach the rise of spontaneous working class organs of democracy from the undeveloped political conditions that spawned them, proclaiming them as a ‘universal form’ to be used by socialist parties in all future revolutions:

As soon as the slogan ‘soviet regime’ begins to function as a pseudonym under the cover of which the Jacobin and Blanquist idea of a minority dictatorship is reborn in the ranks of the proletariat, then the soviet regime acquires a universal acceptation and is said to be adaptable to any kind of revolutionary overturn. In this new sense, the ‘soviet form’ is necessarily devoid of the specific substance that bound it to a definite phase of capitalist development. It now becomes a universal form, which is supposed to be suitable to any revolution accomplished in a situation of political confusion, when the popular masses are not united, while the bases of the old regime have been eaten away in the process of historical evolution. 23

For the SPGB, the ultimate irony (and justification for its position) occurred, when Lenin and the Bolsheviks – by now dubbed “the opportunist weathercocks” – abolished the power of workers’ councils in the factories in January 1920, and instructed their followers in the more advanced capitalist states to adopt the tactic of ‘revolutionary parliamentarism’, aiming not to smash the bourgeois state and transfer power to malleable councils of workers, but to capture control of the state machine without specific recourse to the ‘universal form’ of the soviet.” This proved to the SPGB that the real ‘universal form’ for the Bolsheviks was the dictatorship of the vanguard party. The soviets, originally thrown up as products of popular will and democratic intent under autocratic Tsarism, proved to be the dispensable means to this end.

The Economic Basis of Soviet Russia

The SPGB’s analysis of the economic foundation of Soviet Russia under the Bolshevik dictatorship rested on a firmly materialist basis. As socialism could not be established in backward, isolated Russian conditions where the majority of the population neither understood, nor wanted, socialism, the position of the Bolsheviks was judged to be a necessarily precarious one. A precipitous takeover of power had put the them in a position where the achievement of their ultimate goal of a communist society was not a realistic prospect. The Socialist Standard commented in A Socialist View of Bolshevist Policy that with socialism necessarily absent from the immediate political agenda in such a situation, “the minority in power in an economically backward country are forced to adapt their program to the undeveloped conditions and make continual concessions to the capitalist ‘World around them”,25 thus echoing the words of Marx in his Preface to the First Edition of Capital:

One nation can and should learn from others. Even when when a society has begun to track down the natural laws of its movement … it can neither leap over the natural phases of its movement nor remove them by decree. But it can shorten and lessen the birth pangs. 26

In the absence of world socialist revolution, there could only be one road forward for semi-feudal Russia – the capitalist road. With the virtual elimination of the small Russian bourgeoisie, it would be necessary for the Bolsheviks to develop industry through the state ownership of enterprises and the forced accumulation of capital. In The Impending Catastrophe and How to Combat It, written before the November revolution, Lenin had envisaged just such an approach to the Russian crisis. According to this document, Lenin saw that immediate measures required included nationalization of the existing banks and the formation of a single state bank, together with the nationalization of all insurance companies, the nationalization of the monopolies and all other key industrial concerns. The Socialist Standard took the opportunity. to again cast doubt on the supposed general applicability of Bolshevik actions – in this instance, the development of ‘state capitalism’ as a precondition for the establishment of socialism:

If we are to copy Bolshevik policy in other countries we should have to demand State Capitalism, which is not a step towards Socialism in advanced capitalist countries. The fact remains, as Lenin is driven to confess, that we do not have to learn from Russia, but Russia has to learn from lands where large scale production is dominant. 27

Lenin’s essential claim was that state-monopoly capitalism provided the necessary technical conditions for the advance to socialism. (The SPGB’s ire was raised further by apparent references from Lenin to the already ‘socialist’ nature of Russia, though such references were later exposed to have usually been incorrect renderings by overly enthusiastic translators of occasions when Lenin actually talked of ‘state capitalism’ .)27 In fact Lenin made the nature of the economic structure to be developed in Russia quite clear in April 1918:

What is state capitalism under Soviet power? To achieve state capitalism at the present time means putting into effect the accounting and control the capitalist’ classes carried out. We see a sample of state capitalism in Germany. We know that Germany has proved superior to us :.. state capitalism would-be our salvation; if we had it in Russia, the transition to full socialism would be easy, would be within our grasp, because state capitalism is something centralized, calculated, controlled and socialized, and that is exactly what we lack… Only the development of state capitalism, only the painstaking establishment of accounting and control, only the strictest organization and labour discipline, will lead us to socialism. Without this there is no socialism. 28

As the SPGB took great pains to point out to its opponents, Lenin hero admitted that the social formation in Soviet Russia was essentially state-capitalist, albeit under the guidance and control of an imperfect ‘proletarian state’. For Lenin, the nature of the revolutionary polity in such circumstances was the crucial determinant of the type of social system in existence. Without what Lenin termed “revolutionary democracy”, state capitalist monopoly would remain state capitalism. With workers’ control of production and control of the proletarian state by the vanguard party of the working class, however, socialism would be a reality. According to The Impending Catastrophe and How To Combat It, socialism was merely “state-capitalist monopoly made to serve the interests of the whole people”, a definition generally accepted by the organizations of orthodox, possibilist social democracy, who also viewed state-monopoly capitalism based on the nationalization of industry and state planning of the economy to be the foundation of a socialist system of society. Indeed, out of this arose the peculiar situation whereby Lenin attacked the ‘parliamentarist’ social democrats for advocating state capitalism without working class control, while Kautsky for the social democrats threw the charge back by accusing the Bolsheviks of advocating state capitalism in the form of a nationalized economy under the stifling rule of a vanguardist dictatorship. 30

As Lenin had commented, the precise aim of the Bolsheviks was to build up a form of state-monopoly capitalism on the German model, under the political control of a ‘revolutionary democratic’ state. Nationalization of key productive and distributive units was judged to be an essential prerequisite for the advance towards socialism, with Lenin writing in The State and Revolution that a “witty German Social-Democrat of the seventies of the last century called the postal service an example of the socialist economic system. This is very true… To organize the whole economy on the lines of the postal service … under the control and leadership of the armed proletariat – is our immediate aim.” 31 The SPGB viewed this as state capitalism, no matter what political conditions appertained. To the SPGB, nationalization and state direction of the economy was state capitalism in Germany, state capitalism when advocated by the British Labour Party, and most certainly state capitalism under the dictatorship of the Bolsheviks. The existence of supposedly benevolent governments and ‘workers’ states’ could not in itself change the exploitative character of the economic basis of society. As for the German postal service under Bismarck being an example of embryonic socialism, Engels in Socialism: Utopian and Scientific had ridiculed Bismarck’s extension of state ownership in the economy as “spurious socialism”, a description the SPGB was happy to endorse.

More than twenty years after the Bolshevik seizure of power, the SPGB was to show it remained unconvinced that state capitalism was really socialism even if presided over by those who proclaimed themselves socialist:

… the chief characteristics of Capitalism [in Russia) have not disappeared and are not in the process of disappearing. Goods are not produced for use but for sale to those who have the money to buy, as in other countries. The workers are not members of a social system in which the means of wealth production are socially owned and controlled, but are wage-earners in the employ of the State or of semi-State concerns, etc. The Russian State concerns are no more ‘socially owned’ than is the British Post Office or the Central Electricity Board, or any private company… The Bolshevik attempt to usher in Socialism by ‘legal enactments’ and by ‘bold leaps’ before the economic conditions were ripe, and before the mass of the population desired Socialism, has been a total failure. In course of time that failure will become obvious to the workers inside and outside Russia. 33

Capitalism, based on the separation of the producers from the means of production had not been abolished, nor could it have been. Production still took place as a system of exchange involving the circulation of capital. Capital was self-expanding at the point of production consequent on the exploitation of wage labour, and articles of wealth were still being produced for sale on the market with a view to the realization of surplus value. Indeed, much of the SPGB’s early analysis of the economic basis of the Soviet system reflected a desire to demonstrate the similarities between Russian state capitalism and the British private enterprise based capitalism the SPGB was most familiar with. Until the late 19285 and Stalin’s extensive programs of forced accumulation and the collectivization of agriculture, the SPGB tended to cautiously characterize the Soviet system as being a mixture of private and state capitalism. Articles in the Socialist Standard seized on official Soviet statements and publications showing the existence of rent, interest and profit in Russia, a striking confirmation to the SPGB that Russia was still a part of world capitalism and that the Russian workers were exploited by capitalists. One such piece in the Socialist Standard entitled Russia: Land Of High Profits pointed to increased Russian trade with the major capitalist powers, and the “staggering profits”, on average 81 per cent for 1926-7, gleaned by the Concession Companies from the exploitation of Russian workers. 34 The SPGB mocked the 1917 Bolshevik slogan of ‘Down with the foreign bondholders’, saying that though the foreign bondholders had been well and truly ‘downed’ with the initial repudiation of the National Debt built up under Tsarism, they had been replaced with Russian bondholders – “a distinction without difference from the standpoint of the Russian workers”. 35 The right of inheritance and massive income inequality served to further reinforce the Party’s view that “Russian capitalism, although administered by the Communist Party dictatorship, reproduces almost down to the last detail the paraphernalia of the capitalist world as we know it here’? The SPGB had thought it likely right from the Bolshevik ascension to power that the new Russian rulers would have to compromise with the capitalist world, particularly to attract finance necessary for the schemes of forced industrialization undertaken, and to obtain much needed foreign currency. But despite the adoption of the New Economic Policy in 1921 and the move back towards some forms of small scale private enterprise, state capitalism in its various forms proved to be well and truly established in Soviet Russia, and the more open compromises with world capitalism entered into by the Communist Party in the 1920s were understandable given the task undertaken by the Russian rulers – to drag backward Russia into the twentieth century through the development of capitalist relations of production after the almost complete destruction of the tiny Russian bourgeoisie in 1917.

It was evident to the SPGB that under the guise of ‘proletarian revolution’, the Bolshevik dictatorship had taken over the historic role of a largely absent capitalist class. In this sense, the SPGB viewed the Bolshevik ascent to power as not so much a socialist revolution as a coup carried out by a political minority when the rule of Tsarist autocracy had already been overthrown pending the full development of bourgeois political democracy. Lenin and the Bolsheviks had put themselves in a position which Engels had warned against as far back as 1850, and the growth of state capitalism was the necessary consequence:

The worst thing that can befall the leader of an extreme party is to be compelled to take over a government when society is not yet ripe for the domination of the class he represents and for the measures which that domination implies. What he can do depends not upon his will but on the degree of antagonism between the various classes, and upon the development. of the material means of existence, of the conditions of production and commerce on which class contradictions always repose. What he ought to do, what his party demands of him, again depends not upon him or the stage of development of the class struggle and its conditions. He is bound to the doctrines and demands hitherto propounded which, again, do not proceed from the class relations of the moment … Thus, he necessarily finds himself in an unsolvable dilemma. What he can do contradicts all his previous actions and principles, and the immediate interests of his party, and what he ought to do cannot be done. In a word, he is compelled to represent not his party or his class, but the class for whose domination the movement is then ripe. In the interest of the movement he is compelled to advance the interests of an alien class, and to feed his own class with talk and promises, and with the assertion that the interests of that alien class are their own interests. He who is put into this awkward position is irrevocably lost.37

‘Transitional Society’ or ‘Political Period of Transition’?

While the SPGB certainly took the view that’ the ‘Bolsheviks were “irrevocably lost”, the Bolsheviks, together with their supporters in Britain, argued that those who failed to heed the lessons of the remarkable Russian triumph would be doomed to irrelevance. For a tiny organization on the fringes of the labour movement, however – and for all its alleged irrelevance – the SPGB’s presence in the political arena was an important one. With the devastating split in the Socialist Labour Party in 1920-1, when over a third of the SLP membership joined with the British Socialist Party and other radical left-wingers to form the pro-Bolshevik Communist Party of Great Britain, the SPGB remained the one organization that could plausibly and persistently challenge the claims of Lenin’s followers in Britain to be the bearers of a truly Marxist perspective. During the politically turbulent 1920s and 30s, the SPGB proved to be the Communist Party’s harshest critic,’ denouncing at every turn the “Leninist distorters of Marx”, and in so doing provoking officially sanctioned verbal and physical abuse from Communist Party members. 38

To the SPGB, nowhere had Leninists distorted Marx more than on the question of the revolutionary transformation of capitalism into the future society based on common ownership. A whole new political vocabulary had arisen with the ascent of Lenin, Trotsky and then Stalin, and this had found principal expression in the phrase ‘transitional society’, a term employed with increasing frequency by the would-be Bolsheviks in the Communist Party of Great Britain. As the Russian experience had apparently demonstrated the impossibility of immediately replacing capitalism with communism, the CPGB argued for the necessity of a society in transition from capitalism to communism, which would exhibit features of both systems without being either. In this transitional stage, the working class through the active role of the vanguard party would be the ruling class in society, and would build up a socialist system, which, as frankly admitted by Lenin if not generally by his supporters, was really “state monopoly capitalism made to run in the interests of the whole people”. While the wages system would still exist under this ‘socialist system’, it was claimed that the exploitation of the working class would not, and though buying and selling would continue, commodity production would be abolished with the adoption of a centralized plan of production. By way of justification, it was claimed that this transitional society was what Marx had referred to as the “political period of transition” between capitalism and communism. 39

The SPGB enthusiastically set about refuting these claims that Marx had advocated such a ‘transitional society’ or that the creation of such a system was a desirable working class aim in Russia or anywhere else. Nowhere, it was true, had Marx use the term ‘transitional society’ or referred to socialism as a transitional mode of production between capitalism and communism. On the contrary, both Marx and Engels had used the terms ‘socialism’ and ‘communism’ interchangeably to refer to a system of society based on common ownership, democratic control, and production for use. In his 1888 Preface to the Communist Manifesto, Engels had described why Marx in particular preferred to use the word ‘communism’, though there was no real difference in meaning between the two, with ‘common ownership’ and ‘social ownership’ being synonyms.40 Marx had certainly written of the ‘higher’ and ‘lower’ phases of communist society, but these were precisely phases of communist, and not some other, society. In both phases of communism/socialism, the wages system would have to have been abolished along with commodity production, the market, money and the state.

Any talk of a ‘transitional’ mode of production, often called ‘socialism’ by the Bolsheviks’ supporters in Britain, was nonsensical to the SPGB. To them it was simply not true that communist relations of production could permeate capitalism in the same way that capitalism had slowly evolved out of, and eventually eclipsed, feudalism. Private property societies could permeate one another in such a manner, but the change from private ownership of the means of living to common ownership would have to necessitate a definite break in the form of a social revolution carried out by the working class capturing state power and using it to socialize production. The SPGB considered that the period in which the working class wields state power in order to establish socialism/communism corresponds to the “political period of transition” referred to by Marx in the Communist Manifesto and elsewhere, in which the economic basis of society is implicitly still capitalist. The length of this expressly political transition period would depend primarily on the level of development of the forces of production. Marx and Engels envisaged a lengthy political period of transition in their early years and a much shorter one when the productive forces had already developed to a sufficient degree to make the introduction of socialism/communism (initially with the labour-time voucher system of rationing) immediately possible. 41

The basically state capitalist program of measures advocated by Marx and Engels in 1848 in the second section of the Communist Manifesto was explicitly designed to raise the level of the productive forces “as rapidly as possible”, but with the advent of the second industrial revolution Engels could already write in 1888 that no special stress was placed on these measures as “this program has in some details become antiquated”. 42 By the twentieth century, this was most definitely the case, and in the eyes of the SPGB this meant that the political period of transition was reduced to being of a fairly negligible duration. This point was made most clearly by Gilbert McClatchie for the SPGB in an authoritative article in the Socialist Standard just after the Second World War. 43 Once a class-conscious proletariat had captured control of the state institutions of the various major countries of the world, common ownership could be almost immediately enacted. Hence the ‘transition’ to socialism could be said to take place under capitalism itself, with capitalism developing the forces of production to a sufficient degree to make a socialist society based on an abundance of wealth possible, while simultaneously providing the conditions which would give rise to, and then help to power, the socialist movement. The conditions foreseen by Marx and Engels in the Communist Manifesto a century earlier whereby a politically mature working class came to power in the major industrial countries before the economic basis of society was ready to sustain a socialist/communist mode of production no longer applied, and therefore neither could the lengthy political period of transition when the working class would develop the productive forces under capitalism before socializing production. In the epoch of the truly world capitalism of the twentieth century, the SPGB judged that although a very short political period of transition between capitalism and socialism/communism was necessary to expropriate the bourgeoisie and socialize production, this no longer needed to be the more lengthy period countenanced by Marx and Engels in the mid nineteenth century. 44 As for a ‘transitional society’ between the two systems, this was a Leninist distortion never to be found in Marx and without any applicability for the socialist movement whatsoever.

The Capitalist Class in Russia

If, as the SPGB asserted, capitalism existed in the Soviet Union under the political dictatorship of the Communist Party, and not ‘socialism’ or some sort of ‘workers’ state’, it was reasonable for the Party’s opponents to demand who or what constituted the exploiting capitalist class there. 45 Clearly, the fledgling bourgeoisie had been expropriated after the Bolshevik seizure of power and no longer had private ownership rights and property titles to the rapidly developing means of production. As the SPGB pointed out, however, this did not mean that all investment was conducted through state channels and the SPGB devoted much time, especially in the inter-war period, towards publicizing the amount of investment by private capitalists in the Soviet economy. As one writer in the Socialist Standard commented:

… investment, in the National Debt, in the cooperatives, and in the trading concerns, etc. are forms of exploitation of the Russian workers. They, like the workers everywhere, carry on their backs a class of property owners, receiving incomes from property ownership.46

In the early years of the SPGB’s analysis of Soviet Russia, the Party concentrated on the more peripheral, though not insignificant, forms of non-state ownership in the Soviet economy and the manner in which the Communist Party rulers were forced to compromise with investors and financiers from both inside and outside Russia. More significantly, the SPGB also argued that the capitalist nature of Soviet Russia and its necessary trading and investment relations with the rest of the capitalist world meant that it had a developing internal class system that was far removed from the amicable relationship between “the only two classes in Russian society, workers and peasants” referred to by Stalin in his statement on the new Constitution of 1936. The Socialist Standard claimed:

… this statement… dismisses the cleavage of interests between peasants and workers, and it leaves out of account, as if they did not exist, the elaborate arrangements by means of which an officially favored minority of Russian citizens can enjoy a very high standard of living, which stands in increasing contrast to the conditions of the great majority. In this, and in the investment system, and in the laws which permit the inheritance of property, Russia is facing a progressive differentiation into classes.47

Ammunition for the SPGB’s view of the class nature of Soviet Russia was provided by supporters of the Russian dictatorship such as Reg Bishop in his book Soviet Millionaires,48 where it was claimed that the existence of ‘rouble millionaires’ was proof of economic success and the rapid progress of Russia under the Communists.

Inequality of wealth was a chief target of the SPGB and as the Russian state became even more centralized and dominant this increasingly necessitated an analysis of what under Stalin became the most noticeable source of privilege, the party/state machinery itself and the nomenklatura system based on it. The SPGB was not slow to attack the privilege and riches accruing to the top Communist Party bureaucrats, military officials and factory managers who were variously referred to as “the ruling clique”, the “new bureaucracy” and “the ruling class”. This latter term became the SPGB’s standard reference to a Russian elite clearly privileged both in control of the means of living and in consumption. Strangely, however, it was not until well after the departure of Khrushchev that the SPGB systematically referred to this ruling elite as a specifically capitalist class. In earlier SPGB texts this was sometimes implied,49 but the Party always stopped short of actually labeling this privileged group openly ‘capitalist’. This was, in fact, a fundamental contradiction in the SPGB’s analysis that tended to mar the Party’s otherwise clear critique of Soviet state capitalism. How could, for instance, a privileged ruling class in a major capitalist country, in the very epoch of world capitalism, not be a capitalist class? A ruling class, taken to mean a social class exercising control of the state machine through its hold on political power, could not rise to its dominant position in society divorced from the material conditions of production. Given the by now large-scale development of capitalist industry in Russia, the ruling class certainly was not the peasantry and explicitly not the working class, which had not in Russia or anywhere else won the “battle of democracy” and was not in a position to socialize production. As the SPGB itself had affirmed early on, the Bolsheviks in Russia had been forced by circumstances to take the capitalist road and to perform the historic functions of the capitalist class in their attempts to defeat backwardness through the development of industry and the forced accumulation of capital.

The failure of the SPGB to identify the Soviet ruling elite as a specifically capitalist class paradoxically stemmed from the view that capitalists lived off unearned income accruing from the exploitation of the working class which was consequent on their ownership of the means of living. The Russian ruling elite did not possess legal property titles to the means of production in Russia, and furthermore appeared to receive their income in the form of wages and salaries rather than in the ‘holy trinity’ of rent, interest and profit. To compound the Party’s theoretical contradiction, many SPGB members therefore judged that the Communist Party bureaucrats were members of the working class dependent on the sale of their labour power – who also constituted a privileged ‘ruling class’ keeping the working class as a whole in subjection.

This issue of the nature of the Russian ruling class was not resolved until the SPGB’s Annual Conference in 1969, when a motion was carried that “the ruling class in state capitalist Russia stands in the same relationship to the means of production as does the ruling class in any other capitalist country (viz. it has a monopoly of those means of production and extracts surplus value from the working class) and is therefore a capitalist class”. 50 The proponents of the motion, generally younger members who had entered the Party in the 1960s, argued that the Communist Party bureaucrats, enterprise managers and other top officials performed the functions of a capitalist class in that they monopolized the means of living by only allowing others access to it via the operation of the wages system, and also accumulated capital out of the value created in the sphere of production by wage labour, a value greater in magnitude than that paid in wages and salaries as the price of labour power. Although it was not essential to their status, capitalists invariably had greater incomes on average than workers because of their privileged position in the productive process as the “functionaries of capital”. These SPGB members argued that the state capitalist class, like the privately owning capitalist class in the West, was privileged in consumption, receiving bloated ‘salaries’ that were not the price of labour power but a portion of the total surplus value created by the working class. The state capitalist class in Russia was also judged to be privileged because of the multitude of benefits and perks open to them, including access to exclusive consumption outlets such as expensive shops and restaurants from which the working class was physically denied access. 51 The opponents of this view in the SPGB pointed out the extent to which private enterprise operated in Russia, with ‘non-official’ economic activity accounting for up to one quarter of the total. These members claimed that a private enterprise capitalist class certainly existed in Russia, and that to say that it was the bureaucracy who were the collective capitalists overlooked this. Indeed, it was prophetically argued that the long-term ambition of many in the bureaucracy was probably to convert themselves into a privately-owning capitalist class’ on Western lines operating in a mixed state/private enterprise economy that would be more efficient than the then already stagnating Soviet system. 52 .’

Those who took this position and opposed the 1969 Conference motion, largely the older Party members with more formal and legalistically based definitions of the capitalist class, argued that both Marx and Engels had opposed the view that privileged managers and bureaucrats were actually capitalists. Edgar Hardcastle (‘Hardy’), a member particularly revered by the membership for his extensive knowledge of economics and who had been an editor of the Socialist Standard for most of the period since the early 1920s, said that Marx and Engels had held that under state-owned capitalism the capitalists were forced out of control by salaried officials. 53 Engels had commented that although the transformation of enterprises into state concerns “does not do away with the capitalistic nature of the productive forces” and also that “the more [the state] proceeds to the taking over of the productive forces, the more does it actually become the national capitalist, the more citizens does it exploit”, at the same time” All the social functions of the capitalist are now performed by salaried employees. The capitalist has no further social function other than tearing off coupons, and gambling on the stock exchange… “54 Marx, too, had written of the progressive separation of the functions of the capitalist on the one hand as a manager, and on the other as “a mere owner, a mere money capitalist”, saying that “the manager’s salary is or should be simply the wage for a certain kind of skilled labour, its price being regulated in the labour market like that of any other labour.” 55 In one particularly apposite passage of Capital Marx had written that:

Capitalist production has itself brought it about that the work of supervision is readily available, quite independent of the ownership of capital. It has therefore become superfluous for this work of supervision to be performed by the capitalist. A musical conductor need in no way be the owner of the instruments in his orchestra, nor does it form part of his function as a conductor that he should have any part in paying the ‘wages’ of the other musicians. 56

Given the structure of the nineteenth century English industrial capitalism analyzed by Marx, it can hardly be surprising that he identified the capitalist class as the private owners of capital with legal property titles to the means of living. There was, though, a definite recognition on Marx’s part that even in the ’1840s a “new swindle” of dubious management and supervision was arising in joint-stock companies, the remuneration of which was not the price of labour power at all, and ‘wages’ in name only. Directors and managers were already beginning to use their position of control to command a portion of the surplus . value for their own consumption needs, with Marx wryly stating that “the wages of supervision are in inverse proportion, as a rule, to the actual supervision exercised by these nominal directors.” 57

As the majority in the SPGB pointed out, the view that. the Russian ruling bureaucracy simply carried out the role of managers and trustees clearly overlooked their emergence as a controlling class holding sole responsibility for the accumulation of capital, making key decisions about what to produce, how much to produce, where to produce it, and, if possible, the rate at which it should be produced. This controlling class could not be equated with the supervisors and managers referred to by Marx who received a wage based on the amount needed to produce and reproduce their labour power. On the contrary, this class of bureaucrats was using its position of control to perform the functions carried out by individual capitalists in earlier phases of capitalism’s development and to command a privileged income derived from surplus value. Though it did not have legal title to the means of production, and was not able to bequeath property, it was, as the proponents of the motion at SPGB Conference argued, clearly a possessing class of the type mentioned in the SPGB Declaration of Principles, exercising a “monopoly… of the wealth taken from the workers”.

The prevailing view in the SPGB came to be that the nature of a class could not be determined simply by legal forms or even by methods of recruitment (the Soviet possessing class was not recruited via inheritance but by other, more meritocratic methods, that have not been entirely unusual for possessing classes in history). 58 The Party, or certainly the vast body of its membership, ultimately concluded that although the state capitalist class did not have legal property titles to the means of production, it nonetheless constituted a capitalist class exercising a collective ownership of the means of production and distribution. What was judged to be of prime importance, therefore, was the social reality of capitalism rather than a particular legal form. The opponents of the theory of state capitalism, to the SPGB, had never been able to see beyond the latter.

State Capitalism as a Theory

While the SPGB was the first political group in Britain, and possibly the world, to identify the state capitalist direction taken by Russia under the Communist Party dictatorship, many others came to the same conclusion, if not always for the same reasons. Unlike the SPGB, most of these groups stood in the Leninist tradition or at least showed a willingness to. identify positive aspects of the Bolshevik takeover that could be applied by the socialist movement elsewhere in the future. In particular, the Leninist conception of socialism as state ownership and direction of the economy under the control of a vanguard party operating through the political medium of workers’ councils was readily accepted by most of these groups. Hence they only later ascribed a ‘state capitalist’ characterization to Russia when they judged that state ownership no longer coincided with ‘proletarian democracy’ and the power of the soviets. This was essentially the analysis initially put forward by ‘council communists’ such as Otto Ruhle who saw in the crushing of the soviets the rise of “commissar despotism” and state capitalism 59 (Ruhle himself later realized the inadequacy of this position and came to view nationalization and state regulation as intrinsically state capitalist). The largest ‘left communist’ group in Europe, the German KAPD, developed a similar perspective. It identified capitalism as the private (specifically non-state) ownership of the means of production, and, like the council communist Workers’ Socialist Federation in Britain, praised the Bolsheviks for their construction of socialism in the industrial centers of Russia. Later, the KAPD became critical of the Soviet system with the final crushing of the soviets and the introduction of the New Economic Policy, 60 which it thought heralded a ‘reversion to capitalism’.

Despite the initial excesses of left communist and council communist groups who invariably let their early admiration for the Soviet political form dominate their analysis, the worst example from the SPGB perspective of the conflation of socialism with state ownership plus ‘revolutionary democracy’ came from the Trotskyists. Ironically, the Trotskyist theories of state capitalism, being by far the most fragile, are the most well known. C. L. R. James and Raya Dunayevskaya from the American Socialist Workers’ Party were the first Trotskyists to break with Trotsky himself and identify the state capitalist nature of the USSR 61 though perhaps the most widely known theory was that elaborated by Tony Cliff and circulated as a discussion document within the Revolutionary Communist Party of Britain in the period immediately after the Second World War, before being published as Russia: A Marxist Analysis. Cliff’s reasons for breaking with orthodox Trotskyism by identifying the Soviet Union as state capitalist were plain enough:

When I came to the theory of state capitalism I did not come to it by a long analysis of the law of value in Russia… Nothing of the sort. I came to it by the simple statement that… you cannot have a workers’ state without the workers having power to dictate what happens in society. 62

Cliff’s analysis was firmly rooted in the idea that the USSR was a form of ‘workers’ state’ before Stalin’s first Five Year Plan of 1928 established the bureaucracy as a new class consuming surplus value. Like all the Trotskyists that have followed him, Cliff did not identify the USSR as a society developing along state capitalist lines from 1917 but only from Stalin’s ascension to power under Lenin Russia was supposedly a society in transition from capitalism to communism, based on working class power. For Cliff, a perceived change of political controlled to a fundamental change in economic structure, to what in fact amounted to a ‘reversion to capitalism’. Perhaps surprisingly, those Trotskyists who remained faithful to Trotsky’s own view when in exile of Russia as a “degenerated workers’ state” made some of the most pertinent criticisms of Cliff’s analysis, particularly his conclusion that the economic structure of the Soviet system had changed in 1928 and had assumed a capitalist basis. Foremost among these critics was rival British Trotskyist Ted Grant:

If Comrade Cliff’s thesis is correct, that state capitalism exists in Russia today, then he cannot avoid the conclusion that state capitalism has been in existence since the Russian Revolution and the function of the revolution itself was to introduce this state capitalist system of society. For despite his tortuous efforts to draw a line between the economic basis of Russia before the year 1928 and after, the economic basis of Russian society has remained unchanged… money, labour power, the existence of the working class, surplus value, etc. are all survivals of the old capitalist system carried over even under the regime of Lenin… the law of value applies and must apply until there is direct access to the products by the producers.” 63

This conclusion was certainly rejected by Cliff and all the other Trotskyist state capitalist theorists, though not of course by the SPGB.

It should also be recognized that other elements emerged, primarily from the left communist tradition, who revised their analysis of Russia to such an extent that they were able to recognize that Russia under Bolshevik rule had never been anything but capitalist, in their view because of the backwardness of the economy and the isolated nature of the ‘proletarian revolution’. This was the view developed by those elements that emerged from the Italian left communist milieu after the Second World War, some of whom in political exile were to group together in the Gauche Communiste de France. The GCF’s journal, Intemationalisme, clearly expressed this perspective, arguing, very much in the manner of the SPGB before them, that events in Russia had shown that it is not enough for socialists to expropriate the private bourgeoisie, and to concentrate capitalist production in the hands of the state, if production itself is to continue on a capitalist basis:

The most far-reaching expropriation may lead to the disappearance of the capitalists as individuals benefiting from surplus value, but it does not in itself make the production of surplus value, i.e. capitalism itself, disappear. This assertion may at first sight appear paradoxical, but a closer examination of the Russian experience will prove its validity. For socialism to exist, or even a move towards socialism, it’s not enough for expropriation to take place: what’s essential is that the means of production cease to exist as capital. In other words, the capitalist principle of production has to be overturned. The capitalist principle of accumulated labour commanding living labour with a view to producing surplus value must be replaced by the principle of living labour commanding accumulated labour with a view to producing consumer goods to satisfy the needs of society’s members. 64

Today, many council communist, left communist and Trotskyist political groupings identify Soviet Russia, certainly post-Lenin, as having always been essentially state capitalist, and like the SPGB, they have applied their analysis of Russian society to other ‘socialist’ countries exhibiting similar features in Asia, Africa and Central America” 65 That the SPGB was not alone in identifying the capitalist nature of the USSR does not of course diminish its status as the one organization which promoted a state capitalist analysis of the events in Russia at the time of their happening, and not merely with the benefit of hindsight. What is more, the SPGB has remained one of the few organizations committed to such a critique of the USSR and similar regimes, never seeking to adopt or promote the Leninist vanguardism which so clearly led to that state capitalist outcome.

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