The Invading Socialist Society. C L R James and Raya Dunayevskaya 1947

Chapter II – State Capitalism

“In the trusts, freedom of competition changes into its very opposite – into monopoly; and the production! without any definite plan of capitalist society capitulates to the production upon a definite plan of the invading .socialist society.” – ENGELS, Socialism, Scientific and Utopian

(a) The Revolution Thirty Years After

The state in State and Revolution is the state of state-capitalism. In 1923, Lenin, near the end of his working life, could say: “Whenever I wrote about the New Economic Policy I always quoted the article on state-capitalism which I wrote in 1918.” In the article referred to (note the date, 1918) Lenin said categorically that from petty-bourgeois capitalism “it is one and the same road that leads ... to large-scale state-capitalism and to socialism, through one and the same intermediary station called ‘national accounting and control of production and distribution.’ Those who fail to understand this are committing an unpardonable mistake in economics.” In 1916 Lenin in Imperialism, a popular outline, did not go beyond plain monopoly capitalism. He was careful to point out the difficulties of capitalist planning by trusts. By 1917, he noted in many places the rapid acceleration to state-capitalism and in State and Revolution he modified his conception of planning. By October he moved still further and declared that the imperialist state could organise production “according to a general plan.”

Trotsky, under the influence of the Russian experience, attacked the idea of national accounting and control by the capitalist state. In the few pages devoted to state-capitalism in The Revolution Betrayed, he was careful, however, to leave the theoretical possibility open. But Trotsky at any rate did not live to see contemporary Poland, Yugoslavia and Czechoslovakia. The old argument used to be that there was a qualitative difference between the most advanced statification by the bourgeoisie and the state property of Russia achieved and achievable only by social revolution. The argument used to be that because of the antagonisms of private ownership, the capitalists could not plan. But today in Eastern Europe all the basic industries are in the hands of the state. Germain now gives a motley variety of ridiculous reasons why planning will be impossible in Yugoslavia, Czechoslovakia and Poland. They are already a mill-stone around his neck. For Yugoslavia has published its plan and it is modeled on the blueprint of Stalin.

Behind all the evasions of all that Marx, Engels and Lenin said on state-capitalism, behind the evasions of the Yugoslavian reality, so humiliating to contemplate, is hidden a desperate fear that should the bourgeoisie or, for the sake of argument, any other agency, hold all the capital in its hands, then it would be possible to “raise the level of the productive forces.” Then the proletariat would not be the gravedigger of capitalism. Then Marxism would be Utopia. It is in this theoretical graveyard that the bureaucratic collectivists dance their witches’ dance.

The Proletariat as Economic Force

The history of Stalinist Russia has demonstrated in life that the only solution to the basic antagonism of capitalism, on which rest all other antagonisms, is the emancipation of labor. The proletariat is the greatest of all productive forces. It is its creative power which alone can raise the productivity of labor and establish society on new foundations. It is precisely the necessity to suppress this un-paralleled economic force which is the basis of totalitarianism.

Germain will not listen to us – then maybe he will listen to this:

“Democracy is a form of state... at a certain stage in the development of democracy, it first rallies the proletariat as a revolutionary class against capitalism, and gives it the opportunity to crush, to smash to atoms, to wipe off the face of the earth the bourgeois, even the republican bourgeois, state machine, the standing army, the police and bureaucracy; to substitute for all this a more democratic, but still a state machine in the shape of the armed masses of workers who become transformed into a universal people’s militia.

“Here ‘quantity is transformed into quality’: such a degree of democracy is connected with overstepping the boundaries of bourgeois society, with the beginning of its socialist reconstruction. If, indeed, all take part in the administration of the state, capitalism cannot retain its hold. The development of capitalism, in turn, itself creates the prerequisites that enable indeed ‘all’ to take part in the administration of the state. Some of these prerequisites are: universal literacy, already achieved in most of the advanced capitalist countries, then the ‘training and disciplining’ of millions of workers by the huge, complex and socialised apparatus of the post-office, the rail-ways, the big factories, large-scale commerce, banking, etc., etc.” (Selected Works, Vol. VII, p. 91.)

We hope, but we doubt very much, that this is clear to you, Comrade Germain. The universal literacy, the training, disciplining, etc., these are the new economic forces. Do you doubt it ? Then read on.

“With such economic prerequisites it is quite possible, immediately, overnight, after the overthrow of the capitalists and bureaucrats, to supersede them in the control of production and distribution, in the work of keeping account of labour and its products by the armed workers, by the whole of the armed population.”

All the emphases are Lenin’s. Is it any wonder that Germain here takes refuge in an impenetrable silence, a silence as deep as his silence on the state-capitalism of Engels? Here is Lenin again.

“To elucidate the question still more, let us first of all take the most concrete example of state-capitalism. Everybody knows what this example is. It is Germany. Here we have ‘the last word’ in modern large-scale capitalist technique and planned organisation, subordinated to Junker-bourgeois imperialism. Cross out the words in italics, and, in place of the militarist, Junker-bourgeois imperialist state, put a state, but of a different social type, of a different class content – a Soviet, that is, a proletarian state, and you will have the sum total of the conditions necessary for socialism.” (Selected Works, Vol. VII. pp. 364-5.)

Lenin saw to the last inch the class and human difference in production by the bourgeois revolution and by the proletarian revolution.

“The positive, or creative work of organising the new society was carried out by the property-owning bourgeois minority of the population. And the latter carried out this task relatively easily, not-withstanding the resistance of the workers and the poorest peasants not only because the resistance of the masses that were exploited by capital was then extremely weak owing to their scattered character and ignorance, but also because the fundamental organising force of anarchically-constructed capitalist society is the spontaneously expanding’ national and international market.”

Today the workers are no longer ignorant. The world-market is in chaos. What must be substituted?

“In every socialist revolution – and consequently in the socialist revolution in Russia which we started on November 7 (October 25), 1917 – the principal task of the proletariat, and of the poorest peasantry which it leads, is the positive or creative work of setting up an extremely intricate and subtle system of new organisational relationships extending to the planned production and distribution of the goods required for the existence of tens of millions of people. Such a revolution can be successfully carried out only if the majority of the population, and primarily the majority of the toilers, display independent historical creative spirit.” (Selected Works, Vol. VII).

Ethics or Economics

Note the words “intricate and subtle system of new organisational relationships.” The proletariat and the proletariat alone can reorganize the social relations of labor. The average American worker laughs at the boasted efficiency of American production. Once his mental subordination is destroyed, he can point out means and ways of increasing the productivity of labor which are impossible in the relation between exploited, hounded, degraded, antagonistic labor and the oppressive and merciless supervision which is capital.

Not in Marx’s theories but in life, this, with its superstructural relations, is the problem of the day, and with it mankind comes of age. Germain in 1947 fears that the transformation of private property into state-property, with the situation of the worker unchanged, is a solution to the economic problems of society. If is this that blinds him to the full significance of the revolutionary mass movement that has been developing under his eyes. He cannot meet it, analyze it, understand it and help it to understand itself. The workers control of production is the only emancipation of labor, the only reorganization of society on a new productive basis. History will record that nowhere was this idea fought more bitterly than in the revolution vanguard itself. And this it did because it had to defend -God help us! – the revolutionary aspects of Stalin’s dual-charactered bureaucracy, not in 1940 but in 1947.

(b) The State Thirty Years After

Rut if the revolution has thus matured thirty years after 1917, so has the counter-revolution. The achievement of state-capitalism is at the same time the beginning of the disintegration of capitalism as a social system, and today we can watch the process at all stages of development. We have a perfect and concrete example of it in Stalinist Russia. Our analysis of Stalinist Russia, including the victory in or around 1936 of the counter-revolution over the proletarian state in Russia, can be found elsewhere.* [*Internal Bulletin of the Workers Party, March 1941; Resolution on the Russian Question.. October 1941; “Russia – A Fascist State,” New International, April, 1941; “Russia, and Marxism,” New International, Sept. 1941; “An Analysis of Russian Economy,” New International, Dec. 1942, Jan. 1943, Feb. 1943; “The Nature of Russian Economy,” New International, Dec. 1946, Jan. 1947; “After Ten Years – a, review of Trotsky’s Revolution Betrayed.” New International, Oct. 1946.] Here we are concerned with the theoretical conclusions for world development as a whole which must be drawn from the experience of Russia.

In the early stages of capitalism, the objective movement, i.e., the expansion of surplus value, and the desire for profit on the part of the capitalists, the phenomenal expression of this objective movement, coincide. The capitalists therefore, have a subjective interest in the system. The power of private capitalists over the social conditions of1 production and the power of capital as a general social power are one and the same thing. This is what is known as private or free enterprise. And the system can work because it finds in it a class of human beings, individuals who freely represent it. They take the lead in the struggle for social progress, the extension of their own democratic rights and even the democratic rights of the population as a whole.

With the increasing development of capitalism, however, the law of value undergoes violent and incessant revolutions. A discovery like atomic energy alters the value composition of capital and throws disorder into all economies.

“To the extent that such revolutions in value become acute and frequent, the automatic nature of self-developing value makes itself felt with the force of elementary powers against the foresight and calculations of the individual capitalist, the course of normal production becomes subject to abnormal speculation, and the existence of the individual capitals is endangered. These periodical revolutions in value, therefore, prove that which they are alleged to refute, namely, the independent nature of value in the form of capital and its increasing independence in the course of its development.” (Capital Vol. II, p. 120.)

Capital, as state-capital, is the exact reverse of planned. It is independent as never before and runs riot. The dominating force of society becomes the objective movement of the self-expansion of capital which crushes everything that stands in its way. Which capitalists or bureaucrats can control this? Russia shows anew that these are, as Marx and Engels continually pointed out, the target of its destructive malevolence. It destroys them.

“The contradiction between capital as a general social power and as a power of private capitalists over the social conditions of production develops into an ever more irreconcilable clash, which implies the dissolution of these relations and the elaboration of the conditions of production into universal, common, social conditions.” (Capital, Vol. III, p. 310.)

The capitalist is only the personification of capital, and not only small capitalists but all capitalists lose all right to existence before the sway of capital as this strange, independent, elemental social power. In reality, it is the nature of capital itself to destroy capitalists. It throws out small capitalists, then one group of capitalists (the Jews) then wipes away practically a whole capitalist class as in Germany, tears whole sections of them out of Poland, Yugoslavia, Czechoslovakia. The terror of capital against the capitalists is only exceeded by its terror against labor. Its highest peak is the incessant purges among the rulers of Russia themselves. To continue to believe that this is not due to production relations is to make these men masters of their own fate and inhuman monsters. [Sooner or later this question will arise.]

The terror is rooted in the relations of production and the need to control workers. When the workers reach the stage that they are today, then the relations of production demand a terror which spreads through all society. It is because of this, and not because of the wickedness of the Stalinists and the Nazis, that the modern barbarism is the most barbarous history has ever seen. It is suppression of the democracy of the modern masses, the mightiest of economic and social forces, which compels totalitarian savagery.

Idealism, Not Historical Materialism

Trotsky gave the motive power of the economy as the “prestige, power and revenues” of the bureaucracy. This is wrong in theory and practice. How do you measure prestige and power in economic terms? The proportionate revenues of the bureaucracy are no more and in all probability are much less than the revenues of any other ruling class.

Within the categories of Marxian political economy, if is the machinery, the industrial plant, its need for constant expansion, its rapid obsolescence and renewal in the competition on the world-market – it is this (c – constant capital) that dominates both the wages (v – variable capital) and the surplus (s – surplus value). Not man but capital rules. How is it possible for Marxists today not to see that in Russia it is the drive for constant expansion, the drive of capital for self-expansion, the competition with United States capital, the need to renew capital according to the law of value; how is it possible not to see that this is the economic driving force of Stalinist economy and not prestige, power and revenues? Today every politician and economist governs himself by this.

The refusal to recognize this is beginning to stifle our movement. Germain* [*The absurdities of Germain’s political economy in regard to Russia, the crudities of his underconsumptionism cannot detain us here. See Appendix.] must say that social relations of production in Russia are superior to the productive relations of capitalism. This means “the will and intelligence” of men are no longer subordinated to the objective movement of production. They have risen superior to it. That is what is meant by the capacity of the bureaucracy to plan.

But this supposed advance, this first step into the realm of freedom, has resulted in the most horrible, the most degrading, the most monstrous tyranny mankind has ever known, and worst of all, a tyranny that competes for world power, is now in Berlin and aims at the Atlantic. As long as Germain persists in limiting its crimes to the sphere of consumption, he has to continue to say that the bureaucracy plans badly, it cheats, it distributes unequally. Its human capacities and human sensibilities become social agencies. This is not even vulgar, far less historical materialism. It has a long history both in philosophy and political economy. It is idealism. Even before Marx, Hegel recognized this mode of thought and its political consequences.

The Johnson-Forest tendency made this precise characterization of Trotsky’s position on Russia in 1941. Now in 1947, as we see the results of false theory in our movement, we reaffirm our positions. For us, production in Russia is subject to the laws of the capitalist world-market. The bureaucracy is as subjected to the basic laws of capitalism as is any capitalist class. All the monstrosities of the Stalinist society are rooted in the laws of the capital-labor relation which reach their highest expression in Russia. If not, then the road is open to subjectivism, the interchanging of the dialectical role of party and masses, exaggeration of the power of Stalinism in Russia and in Western Europe; inability to base theory undeviatingly on the objective movement of the proletariat. From end to end our movement in varying but substantial degrees, the process is at work. The theoretical remedy is to kill it at the primal root – the production relations in the factories of Russia.

Terror for Workers and for Rulers

“The authority assumed by the capitalist by his personification of capital in the direct process of production, the social function performed by him in his capacity as a manager and ruler of production, is essentially different from the authority exercised upon the basis of production by means of slaves, serfs, etc.”

Modern social authority is the slave of capital.

“Upon the basis of capitalist production, the social character of their production impresses itself upon the mass of direct producers as a strictly regulating authority and as a social mechanism of the labor process graduated into a complete hierarchy. This authority is vested in its bearers only as a personification of the requirements of labor standing above the laborer. It is not vested in them in their capacity as political or theoretical rulers, in the way that it used to be under former modes of production."(Capital, Vol. III, p. 207).

For a period the capitalistic authority .appears to be separate from the political, which intervenes only periodically, at first to help in the release of constricting forces (reform and revolution) and later by counter-revolution to discipline the always growing revolt of the proletariat, the revolt against the suppression of what capitalism itself creates. In its latest stages capital as a regulating authority of the labor process and particularly of socialized labor, must bring the state and all social relations and manifestations directly under its control. But the contradiction between the capitalistic productive forces and the social relations are not destroyed, they cannot even be sup-pressed in the developed stages of state-capitalism. They are now no longer inherent, existing in essence. They take on reality, they appear. The antagonistic social relations, relations between people, in Russia are not suppressed. The relation becomes the actual daily struggle of the active antagonism driving to its resolution, perpetual revolution and counter-revolution. The modus vivendi of the economy can only be political counter-revolution – the daily purges, the daily destruction and corruption of workers, workers organizations and of managers. This is the national existence. The political struggle assumes the form of the ruthless antagonism of production. At a certain stage, the traditional functions and organizations of the state, army, judiciary, administration cannot serve their purpose. Power rests in the secret police, Gestapo or N.K.V.D. The industrial reserve army assumes the form of political prisoners. Political prisoners become the form of the industrial reserve army. Capital which, in Marx’s words, came into the world dripping blood and dirt, now functions only in blood. And as this barbarism spreads its shadow over Europe and Asia, and driven by its own logic, reaches its tentacles out to the proletariat of the world, Germain continues to repeat that this is the regime transitional to socialism, that nationalized property is progressive, that this quintessence of social tyranny has its root in the struggle of men over the distribution of food and clothing. Thus, his analysis of Stalinist Russia today is the direct repudiation of what Marx struggled all his life to establish: the objective basis in production relations of all the subjective manifestations of human evil.

Under state capitalism, the Russian bureaucracy is no “dual-charactered” hybrid, product of its revolutionary origins and capitalist destination. It is the naked counter-revolution. Trotsky’s analysis is that the growth of the bureaucracy and the power of the Stalinist state are due to the struggle over consumption, that the Stalinist state is organized nine-tenths for stealing, that the coming revolution is not a social but a political revolution. All this cannot stand repetition today. The Stalinist state is organized on the basis of capitalist production in the epoch of state-capitalism. The revolution will be profoundly social – an economic revolution, the release of economic forces, the creative and productive forces of the proletariat.

(c) The Communist Parties of Russia and Eastern Europe

The analysis of the economy defines the ruling party. The Russian Communist Party exists on the backs of the defeated proletariat. But the proletariat in Russia contains within itself the same explosive qualities as the proletariat in Western civilization, subjectively more so because of the experience of three revolutions. The main purpose of the party, therefore, is to keep the proletariat subjected to the process of capitalist production.

But such a process is not achieved overnight. It was achieved | and is maintained in Russia by the bloodiest, the most savage, and j the most cold-blooded counter-revolution in history. And it is this d which explains the role of the Communist Parties in Eastern Europe, j They are the creatures of the Red Army and the economic, political and diplomatic power, and discipline and training of Stalinist Russia. It is under the protection of the Kremlin and the Red Army that they are seeking to complete as fast as they can and with whatever allies they can put their hands on, the transformation that has already taken place in Russia.

These are colonial regimes. Not in an article but in a decree written on the day after the day after the revolution in October, Lenin defined the colonial regime:

“If any nation whatsoever is forcibly retained within the boundaries of a given state, if, in spite of its expressed desire – no matter whether that desire is expressed in the press, at popular meetings, in party decisions, or in protests and revolts against national oppression – it is not permitted the right to decide the forms of its state existence by a free vote, taken after the complete evacuation of the troops of the incorporating or, generally, of the stronger nation, without the least pressure being brought to bear upon it, such incorporation is annexation, i.e., seizure and coercion.” (Selected Works, Vol. VI, pp. 401-2.)

When a Marxist is unable to accept this and cannot apply it to regimes like Poland, Yugoslavia and Hungary, then it is time, Comrade Germain, for him to stop arguing with his opponents and reexamine his own premises.

The Polish individuals who rule Poland and administer its laws and direct its armies are not Poles at all. They are as Russian as the Kremlin, tied to it not only by training, fear, and the solidarity of crime, but by the far deeper recognition that within society as they see it they must be vassals of Russian or Anglo-American imperialism. Their allegiance is not subjectively to the Kremlin but objectively to the centralized capital of Russian state-capitalism.

Let Germain deny this and add yet another to the coils of steel-wire in which he is assiduously entangling himself. Any support of the Communist Parties as they are is a betrayal. They play and must play the same role as the Communist Party of Russia, with the added burden of a colonial dependence as necessary to them as it is to the imperialist power.