Source: New International, Vol. VII No. 8, September 1941, pp. 213–216, C.L.R. James under the name of J.R. Johnson.
Transcribed and Marked up: Damon Maxwell.
Proofread: Einde O’Callaghan (January 2103).
THE RECENT ARTICLE by W. Kent (The New International, August 1941), places before us a certain approach to Russia. To quote a key passage:
For, if the worker is not free in the double Marxian sense of the word – free from means of production and personally free; if he cannot dispose of his labor power as his own (and only) possession, his commodity; if he cannot sell it on the free market; if the price of his labor power (and other commodities) are fixed, not according to the law of value, but according to government decision for “planned production” – then, in the precise Marxian sense, there is no longer value, there is no longer capital and not a single word of the Marxian analysis applies. Of course there still is the surplus product which is appropriated by the exploiter, but there is no surplus value. Of course there is exploitation but it is not capitalist exploitation.
Comrade Johnson’s mistake is that his definition of capitalism is so broad that all exploitation fits into it and therefore all specific characteristics of capitalist disappear.
Here it is in writing. Let us add to this another characteristic passage by Marx himself:
Furthermore, the entire process of capitalist production is regulated by the prices of products. But the regulating prices of production are in their turn regulated by the equalization of the rate of profit and by the distribution of capital among the various spheres of production in correspondence with this equalization. [Capital, Volume III, Part VII, Chapter 51]
Now obviously, this is not happening in Russia! On the other hand, read this:
Rigid control of all prices means government control of the entire economy. The government will decide how much profit the capitalist will make, how much rent the landlord should receive, how much wages the worker should get. The government, in effect, will decide where industries are to be built, whose capital and how much of it will be used to build the necessary war industries, what workers will work and where they will work and under what conditions they will work.
This appeared in Labor Action, August 4, signed by Frank Demby. It is a description of Germany. No one can write that and say that the distribution of capitals is regulated in the manner Marx described. Even the average rate of profit is fixed by law.
Take Gates’s article in The New International for May 1941. On page 89 he quotes de Wilde: “... the state has not, with few exceptions, assumed direct charge of production. It was decided what was to be done ...” This is the point. The state decided what was to be done. In Germany a man who wishes to buy an overcoat must bring back the old overcoat. No capitalist can extend his business over 10,000 marks without permission from the Minister of Economy. The worker, as Demby describes, does not “freely” sell his labor power. He is a slave. The capitalist produces so much, according to the raw material he is allowed, and his profit is in his name in the bank, but the state decides what shall be done with it. Why, then, is Germany not a “new” society? Whereupon, the reply comes back: “The capitalists own in Germany, but the bureaucracy does not own in Russia.” That proves exactly nothing and is no reply at all. A simple historical episode will show the error.
Marx claimed that the agglomeration of small capitalists in a joint-stock company was a concentration of capital. Bernstein denied it. To Bernstein the fact that many people owned shares showed that there was a dispersal of capital instead of a concentration. Rosa Luxemburg pilloried him with a precious precision:
By capitalist, Bernstein does not mean a category of production but the right to property. To him, capitalist is not an economic unit but a fiscal unit. And “capital” is for him not a factor of production but simply a certain quantity of money.
Later in the same pamphlet, Reform and Revolution, she wrote:
By transferring the concept of capitalism from production relations to property relations, and by speaking of simple individuals instead of speaking of entrepreneurs, he moves the question of socialism from the domain of production into the domain of relations of. fortune; that is, from the relation between capital and labor to the relation between rich and poor.
That is the Marxist approach to “production relations” and “property relations.” In Germany there is nationalized production without nationalized property relations. Lenin wrote of this repeatedly, notably in The Threatening Catastrophe.
Germany is a capitalist state basically because of its productive relations, and unless we know precisely why it is as it is today, we are preparing the way for an immense and destructive confusion. Capitalism, we must remember, is not a thing at rest; it is a thing in motion. And its motion is toward socialism. The socialist society grows within capitalism, due to the increasing concentration of capital and the consequent socialization of the labor process. The inter-relations of production at last reach a stage where they call for a plan and regulation. This plan society must have. The capitalist class in its own interest realizes that it cannot leave the economy to be regulated by the market any longer. This is the significance of Engels’ statement in Anti-Duhring as far back as 1878, that the increasing socialization of production compels the capitalist class to treat the productive forces as social forces so far as that is possible within the framework of capitalist relations. In a dialectic sentence he describes the capitalist class as compelled to capitulate to the necessity for a plan of the invading socialist society. It adopts the technical forms of socialist production while evading its entire content. Today that capitulation is plainly visible. The capitalists more and more turn against their own system, except in one respect. They cannot remove the worker from his increasingly degraded situation in the labor process, and society will continue to decline as long as “the workers remain wage-earners, proletarians.” As Lenin said, there is no “pure capitalism.” Today it is very, very impure. But its impurity stops at one point. The workers remain proletarians.
This state capitalism is no war baby. The war accelerates the motion, but war or no war, we are headed for it. Lenin gives a brilliant description of it. In the last two pages of Imperialism he writes:
Ownership of shares and relations between owners of private property interlock in a haphazard way. But the underlying factor of this interlocking, its very base, is the changing social relations of production. When a big enterprise assumes gigantic proportions and, on the basis of exact computation of mass data, organizes according to plan the supply of primary raw materials to the extent of two-thirds or three-fourths of all that is necessary for tens of millions of people; when these raw materials are transported to the most suitable place of production, sometimes hundreds or thousands of miles away, in a systematic and organized manner; when a single center directs all the successive stages of work right up to the manufacture of numerous varieties of finished articles; when these products are distributed according to a single plan among tens of hundreds of millions of consumers (as in the case of the distribution of oil in America and Germany by the American “Standard Oil”) – then it becomes evident that we have socialization of production, and not mere “interlocking” that private economic relations constitute a shell which is no longer suitable for its contents, a shell which must of necessity begin to decay if its destruction be postponed by artificial means; a shell which may continue in a state of decay for a fairly long period (particularly if the cure of the opportunist abscess is protracted), but which must inevitably be removed. (Emphasis mine – J.R.J.)
All basic production in Germany is planned that way.
Lenin (it was 1916) was writing very cautiously. By 1919, however, he had drawn the analysis to its furthest limits. That is why in the Communist Manifesto of the Third International appeared (I have emphasized some words) the following passage:
If free competition, as regulator of production and distribution was replaced in the principal fields of economy by the system of trusts and monopolies, several dozens of years before the war, the development of the war has snatched the role of regulator and director from economic groupings to transmit it directly to the military and governmental power. The distribution of raw material, the extraction of petrol from Baku and Rumania, or oil from Donetz, of wheat from the Ukraine, the utilization of locomotives, railway cars and automobiles from Germany, the supply of bread and meat to famished Europe, all these fundamental questions of the economic life of the world are no longer regulated by free competition nor even by combinations of trusts or of national and international cartels. They have fallen under the yoke of military tyranny.
There follows a passage denouncing the opportunists who counsel the proletariat to class collaboration. Then: “If such preachings are able to influence the working masses, the development of capital will pursue its course, sacrificing numerous generations, with new forms, still more concentrated and still more monstrous ... to a new war.” We know this today. Without the revolution there will be others still more monstrous. How fascism comes is one thing. The thing itself is an economic phenomenon, foreseen as an economic culmination by all the great Marxists (somewhat prematurely). The Manifesto continues: “The statification of economic life ... is a fact ... The only question is who will henceforth take hold of the statified production: The imperialist state or the victorious proletarian state.”
The statified production, in a most monstrous form, is present in Germany. The enslaved worker, the planned apportionment of capitals, the limitation and distribution of commercial profit, industrial profit, interest, etc., all of which, however, are only parts of the total surplus value – that is the road of capitalist society. So urgent is the need for some sort of plan, so strong the economic challenge of the socialist order, that capitalism must ultimately assume the complete external form and regulation of socialism and would only be so much nearer to barbarism. That is the significance of the Engels quotation on the state in Anti-Duhring, especially in the schema of social development which he added to the original in Socialism, Utopian and Scientific.
If we, today, when the degradation, slavery, so consistently foretold by Marx, what Lenin called “compulsory labor duty” and “penal servitude” under capitalism, if, when we see it we fail to understand and acknowledge the dialectical movement, through fear of having to call Russia the same, we cut ourselves off from any capacity to interpret the future. It is this increasing slavery which compels the revolution. To live, capitalism must enslave.
When this development reaches a definitive stage in any country, does the law of value operate? Does it operate in Russia? It most certainly does.
It is the elementary definitions that count. As can be seen in the first three pages of the chapter on Primitive Accumulation, the double sense of free labor is very specific. “Free laborers, in the double sense that neither they themselves form part and parcel of the means of production, as in the case of slaves, bondsmen, etc., nor do the means of production belong to them, as in the case of peasant proprietors; they are, therefore, free from, unencumbered by, any means of production of their own.”
In Wage Labor and Capital, Marx expresses his thought most clearly when he says that the class which makes the means of production into capital is “a class which possesses nothing but the ability to work.” That is the Russian worker today. In 1921, as Lenin repeatedly said, he owned the means of production. If the worker in Germany is “attached” to the factory, then he is part of the fixed capital and not of the variable, and we have to start writing a new political economy.
And if he is not “attached” in Germany he certainly is not “attached” in Russia. Furthermore, a successful general strike in Russia for higher wages and restoration of the conditions of 1937 would, it seems, make the laborer in Russia a “free” laborer once more. An endless contusion awaits those who follow Kent. But at least it is not so bad as the confusion which carefully points out that labor in Russia is “slave” labor but that Russian economy is progressive, a confusion which will one day call upon the “free” American worker, not to fight in defense of his freedom, but if possible to die in defense of “progressive” Russia with its slave labor. That is the kind of thing that happens when you operate with a scientific method whose basic definitions are not clearly and precisely understood.
Kent asks if the law of value operates. Certainly it does. As can be seen in Marx’s letter to Engels, January 8, 1868, the law of value counts for very little “directly” in bourgeois society. This is so in many respects today and as bourgeois society develops the law operates less and less directly. But the law of value is a phenomenon of capitalist society, that is to say a society which is first and foremost in the environment of the world market. In theory, or to use Engels’ admirable word, “technically,” Stalin can fix the price of labor at far above the cost of its production and reproduction and manage the economy according to labor time. In reality, as Molotov himself has said, Stalinist economy is regulated by wages and those wages are governed by the law of value. For, owing to the enormous expenses of a class society in the modern world; the need to keep up with other states in the constant technical revolutions of production and the competition on the world market; the choice between autarchy (with enormous increase in cost of production) or penetration into the world market (and being thereby subjected to all its fluctuations); the imperialist struggle and a backward economy; all these compel Stalin to treat labor exactly as in Germany, to treat it as a commodity, paid for at the cost of its production and reproduction. And Hitler and Stalin would both be in concentration camps instead of where they are if they attempted to control all commodities but allowed labor power, the most important commodity, to run around as it pleases. Obviously this capitalism is very different from classic capitalism. We must remember Lenin’s dictum that there is no “pure” capitalism and that it is always mixed with something else.
The moment, however, we leave the direct application, the content of the law is seen in full force. For the pivotal question of the law of value is the antithesis between use-value and exchange-value. On a comprehension of this, according to Marx himself, all comprehension of the facts and of political economy depends. That antithesis dominates Russian society and is the cause of all its contradictions. International capitalist society, at the stage which it has reached, is fully capable of organizing for use-value (consumption), whereas in Russia and elsewhere it is organized and must be organized for the production of surplus value (production for the sake of more production). It is the contradiction between these two antagonistic tendencies that is tearing society to pieces, in Russia and elsewhere.
It is when Kent says that my “definition of capitalism is so broad that all exploitation fits into it and therefore all specific characteristics of capitalism disappear,” that I know he is wrong and gravely misunderstands the basic concepts of Marxism. It is good to have the point so explicitly stated. For until the point is clear, confusion will persist.
A capitalist society is an exploiting society in which capital is the dominating economic factor in production. How then could my definition apply to all societies? Capital is accumulated labor. In all previous societies the dominating factor of production was land. Merchants’ capital existed, but first it was accumulated in the process of circulation (the market) and not in the process of production; secondly, it was distinctly subordinate to landed property. Society needed the creation of the world market and the accumulation of a comparatively large quantity of accumulated labor by feudal merchants to make capitalist production possible. When a Marxist says that a society is capitalist he therefore defines it historically by that word alone. By emphasizing accumulated labor, Marx excludes societies where landed property dominated. Land, which met the serf or slave in the process of production, was not accumulated labor. The land was always there. Once accumulated labor assumed command there could only be two definitive societies. Accumulated labor using living labor or living labor using accumulated labor. That is the significance of passages like the following from the Communist Manifesto: “In bourgeois society living labor is but a means to increase accumulated labor. In communist society accumulated labor is but a means to widen, to enrich, to promote the existence of the laborer.” There is in Wage Labor and Capital (Chapter V, which contains all the essentials of Marxism) a still more superb formulation. “It is only the dominion of past materialized accumulated labor that stamps the accumulated labor with the character of capital.” The phrase “accumulated labor” excludes primitive, serf and slave societies. The word “dominion” excludes socialist society. In that single sentence there is, explicit and implicit, the history of human society, past, present and future. If Kent understood these great triumphs of Marx’s method and personal genius he would not find my definition of capitalism too broad.
But if exact definition is essential to analysis, definition itself is no proof. Marx declared that in any society where accumulated labor dominated, the main aim of production would be nothing else but the expansion of this accumulated labor. In feudal society and serf society, living labor was a means of producing food, clothes, etc., for the masters of society. Its aim was not to increase accumulated labor. Neither will socialist society have as its main aim increasing accumulated labor. It is capitalist society and capitalist society alone where the surplus labor, necessary to all societies, is produced for the specific purpose of increasing accumulated labor. It is this specific form of surplus labor which Marx defines as surplus value. Marx strove desperately to prevent misunderstanding of this, his central thesis.
It will not do to represent capitalist production as something which it is not, that is to say, as a production having for its immediate purpose the consumption of goods, or the production of means of enjoyment for capitalists. This would be overlooking the specific character of capitalist production, which reveals itself in its innermost essence. – (Capital, Vol. III, p. 285)
This is the essence, and this is what we must look for in Russia, and say yes or no or maybe, and not lose ourselves in pointless discussion as to whether Stalin personally owns capital or not. That Kaganovitch does not personally own has not altered the essence, or his role in production or the situation of the laborer. The bureaucracy owns the capital collectively though not by legal title. The strictest definition would be that it possesses it, and possession is nine-tenths of the law. What is important is that the workers do notown it. Under those circumstances, therefore, and particularly in a backward economy, in the present stage of the world market, the bureaucracy is compelled to make the main aim of production, the production of surplus labor for the specific purpose of increasing production. I therefore call it surplus-value, for under those conditions what could labor be but a commodity paid for at the cost of its production and reproduction? In my view it would be a perversion of fact and sense to say that the bureaucracy, unlike the capitalist class, produces for its enjoyment or consumption, and not to expand the existing capital. Every modern exploiting society will be compelled to do that and when Marx said that the bourgeois relations of production were the last antagonistic relations, he was not guessing. That, however, is as yet no proof. But Marx claims that in a capitalist society, the accumulated labor will increase only at the cost of the increasing misery, degradation and enslavement of the worker. That is what he calls the law of motion. That will be therefore the empirical proof of my analysis. Is it so in Russia? My reply is: Look and see. This capitalist law of motion, however, unites and disciplines the workers for the proletarian revolution and socialism.
But, says Kent finally, “The position of the Russian worker calls to mind rather the position of the slave – of a modern slave, however, who works, under conditions of a developed economy, in large enterprises, and who belongs not to one slave-owner, but rather to the slave-owning class.” Very fine! But it is precisely the fact that he works under those specific historically defined conditions which Kent describes so well that causes Marx to define the worker as a modern slave, a wage slave. Engels, in describing the British working class, wrote 97 years ago: “The only difference, as compared with the old outspoken slavery, is this, that the worker of today seems to be free because he is not only sold once for all, but piece-meal, by the day, the week, the year, and because no one owner sells him to another, but he is forced to sell himself in this way instead of being the slave of no particular person but of the whole property-owning class.” Almost the same words that Kent uses. But Engels’s definition is categoric: capitalism. It is my view that the analysis of Russia, according to the basic Marxian categories, not only will illuminate Russia but clarifies and settles many hotly disputed points of Marxian doctrine; crisis, the market, the mass and the rate of profit, etc. But far more urgent is a classification of what Marx’s scientific contribution has been. That knowledge is obviously succumbing to the pressure of the Russian degeneration and the growth of world reaction. Proof? Marxists, who for nearly a hundred years have echoed Marx in ridiculing the so-called freedom of the wage-slave, are now emphasizing this freedom. It seems at present only a theoretical error. But as our history of the last dozen years has shown, a theoretical error can take drastic toll.
Last updated on 26.1.2013