Encyclopedia of Anti-Revisionism On-Line

Martin Nicolaus

Critique of Red Papers 7: Metaphysics Cannot Defeat Revisionism

RU Document Fails to Show Essence of Capitalist Restoration

First Published: Class Struggle, No. 2, Summer 1975.
Transcription, Editing and Markup: Paul Saba
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Publisher’s Note: The following article is a critique of a pamphlet published by the Revolutionary Union (RU) on the restoration of capitalism in the Soviet Union. The author, Martin Nicolaus, was formerly the foreign editor of the Guardian newspaper. His serialized Guardian article, “Is the Soviet Union Capitalist?” will soon appear in a pamphlet published by the October League.

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Over the past few years our movement has made quite a bit of headway in exposing revisionism and Soviet social-imperialism. The more progress we make, however, the more sharply is the need felt to raise our analysis to a higher level, to advance from “exposure” or “propaganda” articles to the level of theory. Experience shows that only by working out mainly through our own efforts a comprehensive, scientific theory of capitalist restoration in the USSR, can we isolate all the tendencies that defend or conciliate with revisionism and Soviet social-imperialism in various ways. Only in this way can we unite all those who can be united against the two superpowers.

The pamphlet “How Capitalism Has Been Restored in the Soviet Union and What This Means for the World Struggle,” (Red Papers 7, Revolutionary Union, October 1974) arouses interest because it promises to be a contribution along these lines. A full third of its 156-page text (chapters I-III) is devoted to analyzing the restoration process and to outlining the basic features of Soviet capitalism today, as the authors perceive them. It is an effort to go beyond the piecemeal exposure method and to avoid empty sloganeering.

How well does the effort succeed? Not very well, in my opinion. Instead of clarifying the situation, the work tends to make it more obscure. Near the conclusion of their analysis, the authors themselves admit that “at times this account has been necessarily quite complicated, reflecting the complex process of class struggle and capitalist restoration, and some readers may have found parts a bit confusing. In the course of examining all this, it is easy to lose sight of the forest for the trees.” (p. 53, column a). There is in truth a great deal in the analysis presented in the work that is quite confusing. In my opinion, however, the reasons lie not so much in the complexity of the subject matter as in the weaknesses in the theory and method that the authors bring with them.

At key points in their analysis, the authors abandon Marxist principles of political economy and discard the materialist dialectical method. They drop potentially strong weapons against Soviet revisionism in favor of weaker ones, and frequently miss the real target, doing injury to friends. They allow themselves to be persuaded by quite a bit of revisionist propaganda about the nature of the USSR today, and present a seriously distorted account of the internal developments of the past decade. And not only the past decade; for, as a result of approaching the transformation of Soviet socialism into capitalism in a way that shows little dialectics, the authors end up throwing up considerable confusion about whether or not the USSR was really a socialist country beforehand, and skirt very close to a Trotskyist view of Soviet history. Instead of demonstrating that capitalism has been fully restored, as the authors say they set out to do, they literally end up saying that in fact it has not yet been restored, but is only being restored or “will inevitably be restored,” which is quite another matter. Fundamental weaknesses and errors also mar their analysis of Soviet social-imperialism and fascism. All in all, regardless of its intentions or pretenses, the work does not advance the struggle of Marxism-Leninism against revisionism, but rather drags it backwards.


The real task for Marxist-Leninists, in analyzing Soviet development, comes in showing the transformation of Soviet socialism into its opposite. Many different ideological tendencies agree with the thesis that the USSR was a socialist country before Khrushchev or Brezhnev. Others agree that it is essentially a capitalist country today. The modern revisionists, for example, hold that the USSR was “red” yesterday; many Trotskyist and anarchist trends say that it is “white” today. The revisionists, however, say that it is still “red,” while the Trotskyists say it was always “white.” Both deny its transformation from one political color into the opposite. Both erroneous tendencies see twentieth-century Soviet history since the Bolshevik revolution as basically a continuum, a straight-line development in which there have been some changes of degree and changes in leading personalities, etc., but no fundamental qualitative rupture. Altogether lacking in dialectics, such people “analyze” Soviet history by painting the whole historical canvas a muddy pink. As a result, their views of both socialism and capitalism of yesterday and today, are blurred, metaphysical, and subjective; they serve reaction and obscurantism, not science and progress.

The authors of Red Papers 7 claim not to suffer from this problem. They assert repeatedly that there has been a qualitative change, a reversal, a transformation of socialism into its opposite. As far as their general formulas go, they are faultless. Scientific theory, however, is more than the repetition of general formulas and well-known universal theses. It is when the authors go more deeply into the particulars and attempt to master the question concretely that they reveal their confusion. The first thing to look at is how, concretely, they analyze Soviet society before the transformation, i.e., Soviet socialism.

In the authors’ treatment of Soviet socialism there are quite a few omissions, errors and misstatements whose effect is to blur over the distinctions between socialism and capitalism, and to raise doubts whether the USSR was really a socialist country in the scientific sense of the term. Among the more important shortcomings are their theory of “stages within socialism,” their definition of socialism, their description of the role of finance under socialism, their description of socialist planning, and their overall characterization of the socialist period.


The basic principles of the authors’ analysis of Soviet socialism are laid out in the first chapter, pp. 8-9. Here they put forward a theory of “stages within socialism,” as well as a “definition of socialism.” Both are misleading, for the following reasons:

The authors correctly say (p. 8, bottom of column a) that socialism is a “long period of transition from capitalism, the most highly developed stage of commodity production and of class society, to communism which represents the complete overcoming of all vestiges of commodity economy and of all class distinctions.” This is elementary Marxist theory. But they then add a new element by asserting that “within this transition there are, of course, different stages.” On the basis of this assertion they then draw a distinction between, on the one hand, societies which we call socialist “in everyday language,” and on the other hand, “full socialist society” or “fully developed socialist society.” (p. 8, column b) With this distinction in mind, they classify Soviet society both under Lenin and Stalin, as well as China, in the former category. Soviet socialism in the past and Chinese socialism today, they say, could be called socialist only in the popular sense, in “everyday language,” but not in the strict scientific sense.

This is quite incorrect. The “theoretical” objections the authors advance on this score, drawing on Engels’ Anti-Duhring, are misplaced and inappropriate, as was already pointed out by Stalin against “certain comrades” in Economic Problems of Socialism (Peking ed., pp. 9-18). The authors’ discussion of this theme lacks all concreteness and specificity, and amounts to a broad slur on past Soviet and present Chinese socialism. The authors’ belief that Marx and Engels would not have called these societies “socialist” is without foundation.

The authors reveal a serious lack of principle when they attempt to bring in Lenin to speak on behalf of their view. When “we” say that the USSR was “socialist” not in the scientific sense but only in “everyday language,” the authors say, “we are following the lead of Lenin who said that the use of the ’term Socialist Soviet Republic implies the determination of Soviet power to achieve the transition to socialism, and not that the new economic system is recognized as a socialist order.’” (p. 8b)

This is an impermissible misuse of Lenin’s words. The passage, of which the authors quote only’ a fragment without citing its source or context, is taken from a pamphlet Lenin wrote in May of 1918, just a few months after the revolution. Lenin reproduces long excerpts from this pamphlet, including the cited passage, in the May 1921 pamphlet “The Tax in Kind,” which was the charter document of the New Economic Policy. (See Lenin, Collected Works, Vol. 27, p. 335; Vol. 32, p. 330.) The “new economic system” to which Lenin was referring as being not socialist was the NEP. As Lenin makes .very clear in the same passage (in parts not quoted by the authors of Red Papers 7) and elsewhere, this economic system was of course state capitalism, not yet socialism. The authors’ unhistorical, undialectical treatment of Soviet socialism obscures the fact that the dictatorship of the proletariat in the USSR was compelled to resort to state capitalist production relations for a time and that socialist production relations did not become predominant until the end of the 1920s.


In this way the authors merge socialism and state capitalism into a single economic blur. While this is their inalienable right, the authors had no right to twist the words of Lenin out of context and stand them on their head to suit their purposes. While the authors later on (p. 30) justly condemn the current revisionist ruling clique in the USSR for “carefully selecting and pruning their quotations” from Lenin during the NEP period, and for indulging in “obscene distortions,” they permit themselves to indulge in the same sort of practice. The difference is that the modern revisionists distort Lenin to paint the current Soviet system as socialist, when it is not, while the authors of Red Papers 7 distort Lenin to make the previous system appear not really socialist, when it was.

A similar blurring of distinctions, lack of science, and distortion of reality marks the authors’ effort to present a “definition of socialism” of their own, in place of the so-called “everyday language” (and hence allegedly unscientific) definition drawn from Lenin. “Socialism exists,” say the authors in italics, “where the working class actually holds state power, where the sphere of operation of the law of value is being reduced to the maximum degree permitted by economic and political realities, where the initiative of the working class in developing new relations of production including a new division of labor is actively fostered by Party and state, and where the revolutionary transformation of all aspects of society is vigorously carried out under the leadership of the working class and its Communist Party.” (9b)

There is little science but a lot of wind in this “definition.” What is the need of the “actually” in “working class actually holds state power?” Does the law of value dominate the relations of production or are they dominated by planning? What is the specific content of “new” relations of production, a “new” division of labor? The “revolutionary transformation of all aspects of society” sounds very r-r-r-revolutionary, but its only content is what Lenin described as “left-wing childishness” and phrasemongering.

The weakness of this definition is twofold. In the first place, by this definition, Soviet state capitalism during the early NEP period definitely qualifies as “socialism.” (The law of value was being “reduced to the maximum degree permitted by realities,” and there were plenty of new relations, new division of labor, and revolutionary transformation everywhere. Since the working class “actually” held state power, it fits the authors’ definition of socialism. Unfortunately, there were also hundreds of thousands of unemployed, rampant profiteering and speculation, no overall economic plan, etc.) At the sametime, by this definition, it is extremely doubtful whether Soviet socialism, once established as the predominant economic form, could (by the authors’ description), be considered socialist:

–“relatively less emphasis was placed on developing a new division of labor;” (p. 1lb), that is, the Soviet Communists “were somewhat lax” (p. 1lb) on this score, rather than pursuing it “vigorously.”

–“Stalin failed, almost from the beginning, to develop the means and forms for the workers themselves to be increasingly involved in initiating and working out the planning process and not just fulfilling its tasks.” (p. 21).

In short, on the basis of these and similar evaluations given in the text, it would be justified to conclude that Soviet socialism failed to meet at least two of the four criteria in the authors’ definition of socialism, particularly on the score of “revolutionary transformation vigorously carried out,” etc. This kind of phrasemongering, “revolutionary” as it may sound, is really a concealed form of denigration and elitist contempt for what was the Soviet socialist system.

To be sure, the Soviet socialist system had its weaknesses; but these were not of the kind or magnitude to disqualify it from being properly termed socialist, as the authors of Red Papers 7 are inclined to think. It is noteworthy that the authors, in discussing the weaknesses of the system, go to the extreme at one point of fabricating a key weakness where it did not exist–moreover, where the evidence they themselves cite shows the true state of affairs. On page 11, they quote extensively a bourgeois renegade’s account of a production conference in a Soviet factory, in the course of which the assembled workers reject the plan targets coming from above and initiate a plan of their own with higher targets. Despite the distortions introduced by the storyteller, this account shows in a very vivid manner that under Soviet socialism the workers were actively involved in the planning process.

The authors of Red Papers 7 do not grasp this aspect of it, though it lies plainly before their eyes. Instead they sympathize with the teller of the story, who became quite frustrated at this display of workers’ initiative: “This scoundrel had a point,” they say. The authors assert that the party leadership in this situation also sided with the frustrated technicians and planning “experts” against the workers, whereas the opposite was true, as the renegade himself testified by leaving the country. It is incredible that, in the face of the evidence they themselves publish, the authors can conclude that “Stalin failed almost from the beginning to develop the means and forms for the workers themselves to be increasingly involved in initiating and working out the planning process and not just fulfilling its tasks.” (p. 21). This is essentially a gratuitous slander; it is not a criticism but a blind vilification. It is impossible to come to clear, definite scientific conclusions by such methods.


Lack of precision, the method of blurring two into one, also characterizes the authors’ treatment of financial relations and commodity-money relations under socialism, both in general and in the USSR. In their account of how planning is allegedly done (bottom of 8b) they say, for example, that “monetary value and physical magnitudes...are used by the state planners to allocate resources and measure production.” This muddles up the rather crucial fact that in Soviet socialist planning, the allocation and measurement of resources and of production in physical terms played the leading and decisive role, while the financial system played the passive role of bookkeeper and expediter. Many other aspects of the description given by the authors of how the Soviet economy worked are erroneous or similarly misleading. As regards the role of commodity relations generally (“market forms,” law of value, etc.), the authors in summing up the basic theoretical principles, reduce the difference between capitalism and socialism to one of degree only. Under socialism (or what “we” call socialism), they say, “the law of value continues to operate in a somewhat limited manner.” (p. 8a) They ignore the qualitative difference that is brought about in the relations of production when commodity exchange and its laws are suppressed in the field of allocation of the means of production, and they do not grasp the full significance of what it means when commodity laws no longer apply to labor power, under conditions when the working class owns the means of production. These differences are not reducible to differences of degree.


In these and other ways which there is not space to detail, the authors have made it “easy” for themselves to “solve” the problem of how socialism could turn into its opposite. Reduced to its essentials and stripped of its veneer, the authors’ answer is that the transformation was possible because Soviet society was never “really” socialist to begin with.

The reader who knows Soviet socialism only through Red Papers 7, particularly its key chapters, comes away with little or no sense of loss. The contrasts between it and capitalism are dimmed out or blurred over; the weaknesses of the Soviet leadership, when they are not fabricated, are magnified out of proportion to the strengths. The whole period is painted a dull grey; and indeed the authors characterize this span of years simply as “the first period in the restoration of capitalism.” (15a) This basic approach is very near in spirit and method to the Trotskyist view of Soviet socialism, much as it pays lip-service to Stalin. Trotsky held, after all, that “real” socialism could not be built in the Soviet Union. The authors of Red Papers 7 are engaged in a more sophisticated rehabilitation of this bankrupt viewpoint.

Having painted socialism in such a way as to make it next to indistinguishable from capitalism, the authors naturally need not trouble themselves to examine the events of the transition. They dismiss the dramatic power struggles of 1956-57, culminating in the palace coup of June, 1957, in two brief paragraphs (23b) which give hardly a hint of the role that military force played in clinching the revisionist seizure of power. Nor, curiously enough, do the authors address themselves to the new relations of property created when the state was taken over by Khrushchev forces. This event, hidden though it was, was perhaps the largest-scale single transfer of property in all of history: the expropriation of the Soviet working class, the transfer of all major means of production into the hands of bourgeois rulers. The whole transitional process, in the authors’ view, appears much smoother and less consequential, much more a change of degree, than the earth-shaking rupture that it really was.


The authors’ theory of what constitutes capitalism is made up of half an ounce of Marxism and a pound of bourgeois idealism and metaphysics.

“Only under capitalism does commodity production, production for sale, become the decisive, the predominant form of production,” the authors correctly point out, quoting A. Leontiev. (p. 4a) A bit later, quoting Lenin, they also correctly state that “By capitalism is meant that stage of development of commodity production at which not only the products of human labor, but human labor power itself becomes a commodity.” (p. 5a) This is the half ounce of Marxism in the authors’ analysis. It still leaves out the other half, namely that capitalism is distinguished from other systems of commodity production in that not only labor power, but also the means of production become commodities–a point to which the authors pay no systematic attention. Nevertheless, had they built their case on this one distinguishing feature of capitalism alone– labor power as a commodity–they could not have failed to make a very strong proof that capitalism had been restored in the Soviet Union.

Instead the authors consistently downgrade and neglect this feature both in their general theorizing and in their study of the 1965 “reform” measures in the USSR. Despite the fact that Lenin had identified the commodity character of labor power as a distinguishing feature of capitalism, the authors proceed to invent a “distinguishing feature” of their own which has nothing in common with Lenin’s. Later on, when they analyze the 1965 “reforms,” they ignore some of the plainest evidence which shows that the conversion of labor power into a commodity was one of its key aspects. In their summary of the key elements that made the 1965 measures into a capitalist program, they omit this aspect altogether (p. 50b), focusing instead on more indirect, abstruse elements, and approaching the question in a roundabout way rather than head on. They neglect the stronger weapon in favor of weaker ones.

Just as the authors rejected the Leninist definition of socialism and substituted for it an “original” one of their own, so they are dissatisfied with Lenin’s word on what distinguishes capitalism. Writing in italics to underline their importance, the authors offer the following substitute:

“It is the creation of surplus value by the workers and the appropriation of this value in various forms by the capitalist class, to be disposed of according to the needs and desires of that class, which is the distinguishing feature of the capitalist system.” (p. 5a) A few pages earlier, pruning for the purpose a quotation from Marx, the authors had written in a similar vein that “Property is capitalist...when it is based on the right on the part of the capitalist to appropriate the unpaid labor of others or its product.” (p. 3a) Later on they say that this state of affairs is not merely the distinguishing feature of capitalism, but also its “fundamental law.” (p. 49b)

In other words, a system is capitalist when it has capitalist relations of property; and relations of property are capitalist when capitalists appropriate! This definition, needless to say, is the purest tautology. It begs the question. As a result, when the authors investigate the economy of the contemporary USSR, they have no firm idea in mind as to what to look for, what is important and what is unimportant. They flounder around from one aspect to another, getting no satisfaction, and cannot find the target.

Besides this central area of metaphysical thinking as regards capitalism, the authors in their theoretical introduction commit a number of auxiliary blunders. As is plain from their definition of “capital export,” (p. 6b) they are unable to distinguish between the export of capital and the export of commodities, as well as between capital in the form of money and capital in the form of means of production. This wreaks confusion later on. They are murky and inconsistent on what constitutes the category of finance capital, defining it first as the merger of bank capital and industrial capital (forgetting the aspect of monopoly), (p. 6b) and then later in the account setting “finance capital” (when they really mean bank capital) in opposition to “industrial capital.” (p. 49b) There are numerous other errors, half-truths, misused quotations, non sequiturs, and other blunders in the “theoretical” exposition.

It is remarkable also that the authors, while attempting to trace the development of capitalism from its competitive stage into its monopoly stage (imperialism), avoid any discussion of the concept of state-monopoly capitalism, even though this phenomenon was well known and analyzed already by Lenin. To have gone at all deeply into this question would have forced the authors, however, to challenge their implicit belief in the identity of state-capitalist and socialist relations of production, or their inability to distinguish between the two.


Outfitted with these theoretical weapons, the authors set out in the third chapter into the maze of empirical fact and allegation to hunt the minotaur of capitalist restoration in the USSR.

It would take a book to straighten out all the confusion, mutually contradictory assertions, non sequiturs and other weaknesses in the authors’ analysis of the 1965 “reform” measures. Who could make heads or tails–to cite just one small illustration–out of an account that says the “reforms” strengthened centralism (p.50), that they weakened centralism (p. 51) and then again that they strengthened centralism (p. 53); and that calls the second-stage “reforms” of 1973 a move toward centralism (p. 51) but a “decentralization” move on p. 53? It would have done little harm had the authors kept this “seven-legged stereotyped party essay” to themselves, but to foist all this muddle and nonsense onto the public under the guise of Marxism-Leninism is an act of irresponsibility.

What are the key features of the reform, according to the authors; and what form does capitalism in the USSR take? These are the main questions.

The “key features” of the 1965 measures were “the introduction of profit maximization as the goal of production and the consequent realignment of the economy according to the dictates of the law of value, and also the institution of capital charges and interest leading to the treatment of the means of production as capital.” (p. 51b)

Well and good, as far as it goes. But what form does Soviet capitalism take as a consequence of the “reforms,” according to the authors? It did not become in any meaningful sense, the authors say, a “market economy” in which there is “competition” between different enterprises (p. 49b). The authors even make a point of declaring that “certain aspects of the ’reforms’ which do introduce elements of the market” were not “key links” and did not have much significance (p. 50). Just the contrary, they say, “central planning was retained and control of the economy continues to rest in the hands of the Party and state leaders who, in the final analysis, direct the planning process.”


In these statements, the authors’ penchant for combining irreconcilables into a single muddle is again revealed. For, on the one hand, they assert that the law of value was put in command of the economy (as would be necessary to put profits in command of each enterprise), but on the other hand they deny the significance of the market relationships through which alone the law of value can operate.

It is the same with the question of interest rates or capital charges (two names for the same economic category). By forgetting the difference between capital in the form of money and capital in the form of means of production, they magically convert funds received from the bank into machinery, and thus money capital into the so-called “productive” capital. In reality it is not so easy. Before the enterprise can convert money into means of production, intending to use the means of production as capital, it must first obtain them as commodities. There has to be a market in means of production. The authors deny that there is one. (p. 50b)

What the authors assert is that the USSR shows certain capitalist forms of appropriation (profit, interest, rent) without, however, the basic relations of production and of exchange on which alone these forms of appropriation can arise. This profoundly metaphysical notion leads the authors to quote at face value, and even embroider on, a number of nonsensical revisionist statements, e.g., Kosygin and Bachurin, p. 50a. They just parrot revisionist propaganda on this point.


Something whispers to the authors, however, that they must ultimately choose–either the supremacy of the market or the supremacy of central planning– and choose they do, with a vengeance. Basically, they say, the 1965 measures strengthened central planning and central control of the economy. In this, they say–and not in the revival of certain market forms–lies the “really capitalist essence” of the “reform.” (p. 44a)

As for those who would insist that “whatever strengthens the market strengthens capitalism,” they “really miss the point,” the authors say, (p. 50b), forgetting that earlier in the chapter they had quoted Lenin to the effect that “commodity exchange and freedom of trade inevitably imply the appearance of capitalists and capitalist relationships.” (p. 30b) But never mind.

The authors’ picture of the capitalist system created by the 1965 measures is that of a single industrial-banking monolith, a single state-bank/state-plan finance capitalist institution, which owns and controls all industrial means of production, governs the flow of all surplus value, and only leaves a few juicy but tiny crumbs for its underlings to eat or play with. The capitalist system which the authors describe contains only this one super-capitalist, none others worth mentioning (p. 49b).

In reality, no such kind of capitalist system has ever existed or could ever exist, nor is this anywhere near the reality of what the 1965 “reforms” brought about. This theory is only the authors’ reproduction in another form of the revisionist Karl Kautsky’s theory of “ultra-imperialism”–the theory of the unification under a single center of all the imperialists and imperialist powers of the whole world, in place of struggles and antagonisms among them. It is, as Lenin said, “ultra-nonsense.” The super-monolith theory of Soviet capitalism is in the same category.

From this false assumption, the authors are directly led into a related fallacy, namely the thesis that (under capitalism) the state or the capitalist ruling party holds supremacy over the major economic interests, i.e., that “politics” commands “economics” under capitalism. By this theory one is led to believe that economic crises are the result of political mismanagement, or that imperialist wars are due to imperialist-minded politicians. In the authors’ view, the imaginary omnipotent industrial-banking monolith they conjure up is controlled at the top by party and state officials. “Under the ’reform,’ ” they write, “central planning was retained (they forgot it had been abolished-ed.) and control of the economy continues to rest in the hands of the Party and state leaders, who, in the final analysis, direct the planning process.” (p. 49b). As far as the relation of power between politics and economics is concerned, the authors thus see no change from the period when the USSR was socialist, and when politics really did command economics. All that has changed, in the authors’ view, is the policies of the men in command. This is the Kautsky-style thesis of “capitalist restoration” in a nutshell.

The authors reach the depths when they equate this (imagined) setup with that of the German economy and state during the Nazi period. “In fact,” they say, “the Soviet economy bears a lot stronger resemblance to the fascist economy of Nazi Germany.” This is quite true – but not at all in the way the authors believe. “Under the Nazis all sections of German imperialism were subordinated to the state bureaucracy run by the Nazi party...The economy, of course, remained thoroughly capitalist but the state played the leading role.” (p. 51a)

Here the authors have not only presented the fallacy of state supremacy over monopoly capital (what class does the state represent, in that case?) in the most glaring form, they have also discarded any semblance of a Marxist-Leninist theory of fascism. In place of Dimitrov’s correct thesis that “fascism in power is the open terrorist dictatorship of the most reactionary, most chauvinistic and most imperialist elements of finance capital,” the authors resurrect one of the myths about Nazism that is most suitable to the public-relations efforts of the monopoly capitalists themselves. The authority on whom the authors lean for this “inspiration,” a certain Tim Mason, advanced this notion in the West Berlin political review “Das Argument” nearly 10 years ago, and was soundly thrashed in the ensuing controversy. Irrefutable evidence from historical research showed concretely and vividly that the Nazi party was nothing more than the servant and lackey of the most reactionary, most chauvinist sections of German finance capital, not their master. After the world war, of course, it suited the Krupps and Thyssens to have it thought that the Nazis gave them the orders and they had no choice but to obey. The authors of Red Papers 7 deserve sharp condemnation for propagating this dangerous pro-fascist notion in any form, much less under the guise of Marxism-Leninism.


At the end of 8/9ths of their chapter purporting to prove the restoration of capitalism, the authors are forced to admit that “...some readers may have found parts a bit confusing. In the course of examining all this, it is easy to lose sight of the forest for the trees.” (p. 53a)

Hear! Hear! This frankness is refreshing. But the blame should not be laid on the readers. If the readers are lost, it is because the authors have led them astray. In the present case the confusion comes from going around in a circle. The authors had promised to lead the expedition from Point A to Point B. Instead we are right back at Point A again.

The authors led the party through miles of underbrush. They sprayed bullets in all directions, wounding friend and foe alike without making a kill. They even went on their knees and begged, “Will the real bourgeoisie please stand up? ” (p. 49b). But what have they got to show for these antics? One single alleged capitalist, who moreover takes orders from bourgeois politicians.

The authors’ theory of the economic monolith commanded by reactionary politicians takes the investigation right back to where it was when the politician Khrushchev in 1956 seized state power and thus gained control over the Soviet economic structure. Before Khrushchev, a centralized monolith; during Khrushchev, “decentralization;” after Khrushchev, a centralized monolith again! Or so it seems to the authors. Unable to distinguish from the outset between socialist and state-capitalist production relations, mesmerized as they are by the empty forms of “centralism” and “decentralization,” the authors have altogether lost their bearings. In the dim light of their perception, all “monoliths” look pretty much the same, and the goal of proving the transformation of socialism into capitalism, which seemed so near, has truly vanished into the far-off distance.

The few pages of “summary” that follow this tacit declaration of bankruptcy are an exercise in political conmanship that has to be read two or three times to be seen through. It is not a “summary” at all, but a political adaptation of the old bait-and-switch consumer fraud, in which the customer is sold an item of quality merchandise but watered goods are substituted on delivery.


The reader pays $2.50 for this booklet on the strength of the title, which promises a defense of the thesis that capitalism has been restored. The chapter title, even more explicitly, promises “the full restoration of capitalist relations of production.”

What is actually delivered is not this thesis. At the very last moment, the authors quietly withdraw this assertion, and advance in its place the watered-down thesis that capitalist relations of production “will inevitably develop,” that they “are developing rapidly,” that economic units will “soon” behave in a capitalist way and “to some degree, no doubt, they already do.” (p. 56)

In place of the full restoration of capitalism, past tense, the authors assert merely the inevitable restoration of capitalism, future tense! In place of history, prophecy.

An incredible retreat – but, given their points of departure, the authors really had no choice but to make it, or else abandon hope of making any credible demonstration of capitalist restoration at all. In their discussion of the 1965 “reforms” they went to strenuous lengths to assert that these measures did not mean the restoration of a market, that they did not allow for competition between enterprises, because everything was owned and controlled by a single center. In reviewing basic theory in the final summary, however, the authors could not but face the elementary fact that capitalism is a system of commodity production, that commodity production implies commodity exchange, and that a system of commodity exchange is a market. Trying to prove a restoration of capitalism with the “monolith” thesis is picking up a rock to drop it on one’s feet. “Ultracapitalism” is no capitalism at all.

What to do? Deny that capitalism is a form of commodity production, and become a laughingstock? Or scrap the monolith notion and have a closer look at the ’65 reforms? The authors must choose, and they ought to choose the latter. Unwisely, but all too characteristically, they cast about for a third solution, and appear to hit upon it in the economic measures of 1973, which amalgamated nearly 50,000 enterprises into around 5,000 “Production Associations”–trusts and combines. This measure, in reality an enormous concentration of capital, appears in the authors’ view as really a “decentralization,” (p. 53b) and with this as a guiding thread, using the “Production Associations” as their vehicle, the authors begin ever so deftly to insert into their model of the Soviet economy the elements of commodity exchange and the market.

Ever so matter-of-factly, as if they had not been expounding the direct opposite six pages earlier, the authors now say that “once production is no longer regulated by a true socialist plan...then it can only be regulated by a capitalist market–by what will bring the most profit.” As if they had always made the distinction between socialist planning and capitalist “planning” when in fact their monolith theory was based on not making this distinction, the authors casually continue: “Even where a capitalist ’plan’ for development exists, including a state ’plan’ designed to ensure the profitability of key monopolized industries, the laws of commodity production/exchange, including especially the law of value–the blind force of the market–will still remain dominant. This means that competition between various capitalists controlling different sectors of the economy and different ’pieces’ of the surplus will inevitably develop too.” (p. 56a)

In this flim-flam fashion, the single super-capitalist of 1965 turns into the “various capitalists” of 1973, the absence of competition in 1965 turns into the competition that “will inevitably develop” after 1973, the central planning in the abstract of 1965 turns into the capitalist “planning” of 1973–in short, and in sum, the thesis that capitalism has already been fully restored subtly turns into the watered-down goods that it is being restored as of 1973, and its elements are “developing rapidly.”


There is not space here to explore all the contradictions and tangles which the authors create for themselves with this switch. The authors would have been better off simply to advance their thesis of partial restoration only in the broadest generalities, as do the “theoreticians” of the so-called Communist Labor Party, or better yet to put it on paper without giving a shred of reasoning or evidence at all, as do the editors of the Guardian.

Facts are stubborn things. Try as they might to interpret the 1965 “reforms” in such a way that it comes out to be anything other than a real restoration of capitalism, the authors – or rather, the publishers – cannot quite conceal the truth.

In describing the ’65 measures, the authors stressed that these strengthened central planning and control; that they allowed the enterprises no significant financial independence; and that there is no significant market in means of production in the USSR – among other points, (p.50)

Yet a radical economist who recently visited the USSR, and whose highly informative report is stuck on as an appendix to the authors’ theoretical labors in Red Papers 7, brings back quite a different picture:

...In our discussions with enterprise managers, two important features of the planning process came out. First, all plans originate at the enterprise level, and are then submitted to higher authorities for review. In no case were we told of an example where higher authorities altered the submitted plan in any important respect.

Secondly enterprises are allowed to keep one-third of their after-tax profits for reinvestment outside the plan; i.e. managers are free to invest profits in expanding capacity or buying up other plants in the same branch of industry...in any way that seems most profitable. Any productive capacity built or acquired then comes under the plan for production, but these plans again originate with the enterprise. (p. 141b)


More truth about the 1965 “reforms” is packed into the visitor’s two paragraphs than can be sifted out of 20 pages of the authors’ analysis. The authors’ much-vaunted central control by the plan, it turns out, is pretty much a myth: the plan is passive, it follows where the enterprises lead. The financial independence of the enterprises, strenuously denied by the authors, is much more real and substantial than allowed. The market in means of production, pooh-poohed by the authors as insignificant, in reality is alive and flourishing: the enterprise directors can not only buy productive capacity in general, they can “buy up other plants”. The visitor’s report shows vividly how, on the basis of the existing market in means of production, the bigger enterprises gobble up the smaller.

Those are facts; and there is a wide body of other evidence from Soviet sources to back them up. They are facts that expose the authors’ interpretation of the 1965 measures as superficial, stilted, distorted and fanciful. All the time while the authors were tramping through the forest, the real restoration of capitalism in unmistakable form was going on all around; even the very “trees” were turning capitalist. The authors failed to perceive its features; or when they did perceive them, denied the evidence of their eyes, pretending (as with the market in means of production) that it wasn’t there; or when they could not deny the evidence (as with the conversion of labor power into a commodity) they denied that it was a “key feature” of the 1965 transformation. Instead of a concrete analysis of concrete conditions, they fabricated a fairytale of an imaginary, supercapitalist, ultracapitalist monolith.

All metaphysics implies a certain politics; it arises from a bourgeois class stand, and in turn it reinforces one or another tenet of bourgeois political thought. Unable to grasp and to apply concretely the basic law of materialist dialectics – the unity and transformation of opposites – the authors’ final thesis of incomplete restoration ends up carrying grist to the political mills of “centrism,” of conciliation with revisionism and Soviet social-imperialism, and of the fashionable opportunism and dilettantism that tries to “unite everybody” with a bit of Marxism-Leninism here, a bit of revisionism there, a snatch of Trotskyism and a dash of anarchism.

The authors of Red Papers 7 have “made the break” with revisionism on the level of sloganeering and muckraking. But on the level of theory, of basic principles and method, revisionism and Red Papers 7 are like newborn twins.

A movement, much less a party, built on the theory that is put forward in Red Papers 7 is incapable of defeating the ideological and practical influence of modern revisionism and Soviet social-imperialism. You cannot defeat these enemies with warmed-up Trotskyism, with neo-Kautskyism, with reactionary myths about fascism, and with flim-flammery about the “inevitable” restoration of capitalism “soon.”