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International Socialism, Summer 1968


Chris Arthur

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From International Socialism, No.33, Summer 1968, pp.15-16.
Transcribed & marked up by Einde O’Callaghan for ETOL.


I have never had any patience with the theory of State capitalism. To apply the category ‘capitalist’ to a society largely lacking capitalists and capital (as an economic category not as hardware of course) seems perverse in the extreme, a childish refusal to face unpleasant facts.

It is this question that spoils what was otherwise a fine article by Kidron in IS 32. Following Cliff in his book on Russia, Kidron concedes perhaps more than he need do, by granting the supercession of the law of value in internal economic movements of these countries. Fortunately he does not take up Cliff’s bizarre and ludicrous suggestion that the law of value works via the arms race (as if the healthiest workers’ State in the world would not need to defend itself!) Instead he lays stress on the world market – arguing that to plan the economy of a single State merely displaces the anarchy of capitalist production to the level of the international economy, but still leaving ‘the spontaneity of competition’ dominant. ‘Planning is reactive, not autonomous.’

A breathtakingly false analogy is involved here (all arguments for State capitalism I have ever seen rest on similar strained analogies.) The argument starts from Marx’s remark that ‘anarchy in the social division of labour and despotism in that of the workshop are mutual conditions, the one of the other.’ Then an analogy is made between the workshop and the USSR. It is only the scale of the planning not its essential character that has changed.

This analogy breaks down at many points. Let us start with scale. Let us note first that Marx twits the capitalists for being unwilling to recognise in society the virtue of the rational planning of resources that they recognise inside their own enterprises. This indicates that he did favour one side of the disjunction ‘Law of Value and planning.’ Nevertheless Kidron wants to argue that such planning as does exist today is capitalist planning which is still vulnerable to international economic events – the world market.

But at some point, even Kidron must admit, quantity changes into quality. As a reductio ad absurdum let us imagine that all the economic resources of the world were integrated and planned except those of Australia. Trade, a world market if you like, goes on between the two pieces. Even Kidron, I take it, would draw back from the conclusion that because World-less-Australia is ‘subject to the world market’ it is no better than a capitalist workshop? Very well, where do we draw the line between this situation and that of a single workshop – say a watch factory – which is obviously absolutely at the mercy of the market?

One criterion that suggests itself is that of the capacity of the unit to sustain itself without any reliance on the world market – so that if it does enter the market, it does so from choice not compulsion. It is obvious that unlike the single workshop, the USSR could easily sustain a trade boycott – a set-back and slower growth certainly – but it would survive. However while Kidron should draw the line for himself, I am not too interested in it, for another breakdown in the analogy supervenes – which is that the economic and social basis, and the purpose, of the planning are quite different. This is a point which is also overlooked by those who use the opposite argument to Kidron’s. He makes the State-capitalist character of the USSR depend on external relations – others concentrate on the internal analogy with the workshop. I once heard John Palmer say indignantly that planning proves nothing because a factory is planned and no one would call that socialist. But why not? Marx certainly thought planning at this level was a positive feature – taken in isolation the organisation of productive forces in a factory could not be identified as capitalist. What makes it capitalist is that the ends it serves are determined by its character as private property as capital – i.e. the production of commodities for the sake of capitalist accumulation. The despotism of the factory resides in the exclusion of the workers from the ownership of the means of production and hence in their exclusion from setting its ends.

In the case of even a small workers’ State, like Cuba, however, it cannot be said that the planning that goes on is directed towards maximising the capital accumulation of private interests. It would not qualify as State-Capitalist even if an economic blockade would kill it, because the ends for which it organises itself and participates in the world market are quite different, and set by quite different people, to those of the large capitalist corporations. For instance it could export goods ‘at a loss’ in order to acquire exchange for other goods essential to developing the economy.

Even the smallest producers’ cooperative cannot be called capitalist, just because it is totally dependent on the market. However the difference would be largely formal and aspiratory. Because of the competition it will probably have to duplicate the conditions of other, capitalist owned, works. A country the size of Cuba has considerably more leeway to use its resources for priorities other than those of profit on a market. The analogy of the capitalist workshop with the USSR breaks down because, although they are both ‘despotic,’ the one is, and has to be, directed to profit, the other can be directed, within physical limits, by the bureaucracy for quite other aims – readying the country for the Second World War, lining the pockets of the bureaucracy, getting a man on the moon, even attending to the welfare of the people or developing a world-beating tiddleywinks team if they want. Kidron tries to argue that the goals are not set by human agencies but by the world market. However, as I have said, this is just not correct for a country as independent for its needs as the USSR. Mike Kidron should in any case, think very carefully before defining a country as State-capitalist, not in virtue of its internal economy but solely in terms of its place in the world market. For this seems to have the paradoxical consequence that such a country would pass from capitalism to socialism without any change in its internal regime when the world market was abolished. Let us imagine that the USSR had been

able through the Red Army to overcome nationalist resistance and integrate each and every new conquest of the revolution into its economy – finally the whole world economy is integrated. There is now no market, therefore it is clear that capitalism, its law of value, its anarchy, its crisis, is gone and yet all without any revolution inside the so-called State capitalist countries. A miracle at least as extraordinary as Bruno R’s transition from Bureaucratic collectivism to communism. This picture is also quite defeatist because it means that it is impossible for a proletarian revolution to succeed in South Vietnam, Bolivia or anywhere else, including here, because – don’t you see – the new State would be subject to the world market which would determine its planning, so it would be no better than a despotic capitalist workshop. We seem to be left with a simultaneous world revolution or the above mentioned peaceful transition.

A more interesting false analogy occurs in Cliffs piece in the last issue. Dealing with the problem of how a capitalist country can have no capitalists, only bureaucrats, he draws attention to the large quantity of Church land in feudalism and argues that the non-hereditary method of recruiting clergy does not make the mode of production any the less feudal.

’Thus the big difference between the mode of appropriation and recruitment of the Russian bureaucrats and that of the bourgeoisie does not at all prove that Russia represents a non-capitalist society ...’ The false analogy here is rather more subtle. Even though the clergy were salaried, the form of property was identical to that of the Lords – the only difference was that a person was replaced by an Institution. In the case of the bureaucracy however it cannot be maintained that their relation to the workers is mediated by the same form of property as that of the capitalists. The real analogy would be with the Church Commissioners or any other ‘non-profit making’ institution that might buy out an individual capitalist. In this case the form of property would remain intact and the situation of the workers no different even though the ‘capitalist’ was in fact an institution. Indeed the weight of the institutions in today’s stock market is considerable. The whole point of such investment remains similar to that of the capitalist tout court.

It is clear that neither the CPSU nor any other institution of the bureaucrats has invested in the economy, nor does its power over the workers rest on such capital – even its collective power. The bureaucracy even as an institution does not own the economy – they cannot sell it to Rockefeller. Their control over the workers is not mediated via the institution of property, it is essentially administrative in character. Once the means of production become socially owned the centre of decision-making passes to the political institutions. It is because the workers are excluded here that they suffer materially. They are kept from socio-economic power not by their propertylessness but by traditional State instruments, secret police, censorship, etc.

I conclude, it is no more plausible to regard the bureaucracy as an institutional capitalist than as individual capitalists. In spite of their participation in the world market, I persist in taking the workers’ States in this position to be the germ of the new society in the old.

Finally, we must resist the temptation to laugh off the hell that is the USSR as capitalism’s responsibility and recognise soberly that bureaucracy can take the root and spread in the workers’ movement itself.

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