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Raymond Challinor

“State Capitalism – a New Order”

(June 1948)

From Left, No. 140, June 1948.
Transcribed by Christian Hogsbjerg for Marxists.org 2007.

The recent timely discussion conducted in the columns of Left on recent developments of Russia, both internally and in relation to the other Great Powers, call for a re-analysis and clarification of position on the part of most socialists. The fact that this has led to some divergence of opinion is almost inevitable, since we are witnessing a hitherto inexperienced historic phenomena, namely, how the first Workers’ State, founded in an economically backward country, has reacted to the pressure of hostile Capitalism.

In such a re-evaluation three possible alternatives almost automatically come to the fore:

  1. That the conquests of October, although slightly marred, remain intact. Those who maintain this traditional position, such as Comrade Coyler and Co., unconsciously place themselves in the position of defending Stalin’s Nationalistic Theory of “Socialism in One Country,” and of proving that Lenin’s thesis, i.e., “We do not merely live in a State but in a system of States and the existence of the Soviet side by side with imperialist states for any length of time is inconceivable” (Vol. 16, p. 102) is no longer valid. This none of them has done.
  2. The second alternative is mainly resorted to by eclectics who have abandoned Marxism and rely almost on the crimes and manoeuvres of the Kremlin bureaucracy as their empiricalist yardstick. These people rightly consider the nationalisation of al1 the means of production the most ruthless form of exploitation, when not operated under Workers’ Control, and therefore term Russia State Capitalist. In so doing, it may be argued, they attribute to Capitalism a resiliency and adaptability which it does not seem to warrant.
  3. The third alternative, that Russia is a new form of exploitative society, strangely enough, has not been raised by anybody during the discussion. Briefly it is this: the economic system cannot be characterised as Capitalism or Socialism in the ordinary sense of the terms, and so it must be something else. Some consider a bureaucratic collectivist state, the result of an historical accident, a bastard social formation due to the enmeshing of trends and influences unlikely to be seen again by this world.

The bureaucratic collectivists in denying that “the bourgeois relations of production are the last antagonistic form of the social process of production” (Marx), make a mistake much akin to that of Bernstein in his revision of Marxism two generations ago, which may help to throw some light on the Russian question.

In Das Kapital, Marx set himself the task of defining what Capitalism is, showing how the inner contradictions would ultimately lead to its downfall, and forecasting how it would develop till then. Bernstein saw that Capitalism was not developing entirely in the same way as Marx had envisaged, e.g., the emergence of joint stock companies. From the fact that Marx’s prognosis was wrong, Bernstein logically deduced his diagnosis was also wrong, and Capitalism was gradually eliminating its contradictions. This was not true: as Lenin ably demonstrated in his booklet on Imperialism, although Capitalism had acquired certain new features due to certain quantitative factors causing qualitative changes, the inner contradiction of Capitalism far from diminishing had greatly increased.

Now, reverting to the question of Russia, it does not follow that the theory that Russia is State Capitalist is invalidated by the fact that certain characteristics of Monopoly Capitalism are not present. The fact that a bureaucratic collectivist denies that Russia is either Socialist or Capitalist means that he denies Marx’s prognosis, and if he had the courage of his convictions, he would also deny Marx’s diagnosis.

But for those amongst us who have not abandoned Scientific Socialism for hysteria, it is important for us to see who controls the productive forces. Is it the workers or the bureaucracy? The workers to exert any effective influence over the means of production must have organs of expression – a political party, a trade union, or a factory committee, which are not in existence in Russia. Instead, the workers have to resort to riots, sabotage, absenteeism and slowing down work, that can hardly be described as weapons of a victorious proletariat.

Kravachenko, in his book, I Chose Freedom, vividly describes the conditions of the Russian workers, whom he divides into two groups: (i) the workers who remain nominally free and are under the same compulsions as in a capitalist economy, only their standard of living is relatively lower, and, with a ruling class on their backs living in greater comparative luxury then their British or American equivalents; (ii) a slave army of 10 to 15 million who are destined to meet a slow and gruesome death, many because they have fought this criminal regime on behalf of their class. These conditions of abject misery, exploitation and degradation are called by some Socialism. Colyer chooses Socialism; I choose Freedom.

These crude forms of exploitation are the economic consequences of Soviet isolation and its inevitable subordination to the economic laws of surrounding World Capitalism. But, due to the low productivity of the Russian worker, Russian Capitalism had to take a far more ruthless form than its Western European counterparts: it had to remain in the hands of the State – world conditions did not permit anything else other than State Capitalism.

Even Lenin acknowledged that State Capitalism existed within the framework of the Workers’ State since the theory of value, which is the theory of the world market continues to operate. Only if the worker intervenes in the process of production through workers’ control could effective blows be delivered at the theory of value.

However, with the revolution in the more advanced countries failing, this theory began to reassert its dominance again. Stalinists recognised this fact: in 1943 Leontiev, author of Outline of Political Economy, asserted that the theory of value, which inevitably means to a Marxist the existence of an exploitative class, functioned in Russia. Either the comrades who maintain that Russia is Socialist must dispute the facts admitted by Leontiev, and the Marxist conclusions he had already drawn in his hook, or they must break with the fundamentals of Marxism. Comrades, what is it to be?

We must assume they have adopted the latter course since in their haste to defend the Soviet Union they have carelessly discarded the very concepts of Marxist thought. To show this it will he necessary to state briefly the Marxist conceptions of society, Socialist, Capitalist and the transitional state.

Marx based his analysis on the activity of men engaged in the process of labour, so, when he came to deal with Capitalism his principal criticism lay in the fact that man’s labours were not fulfilling their proper purpose, the advancement of man, but were alienated and used for exactly the opposite purpose – the increased subjugation of man, which, in turn, led to the increased rebelliousness of man.

“Modern industry,” says Marx, “compels society under penalty of death to replace the detail worker of today crippled by lifelong repetition of one and the same trivial operation, and thus reduced to a mere fragment of man, by the fully developed individual, fit for a variety of labours, and to whom different social functions he performs are but so many modes of giving free scope to his own natural and acquired powers.” (Marx, Capital I, p. 534.) So it is a matter of life and death for society – Marx never used these words lightly – that man should be given the opportunity to develop into a human being. Now, making allowances for the backwardness of the Russian worker, can any evidence be produced to prove that he is being given more scope “to his own natural and acquired powers” in the Soviet Union? No – from the cradle to the grave he is intensely exploited.

He is probably born into a large family (abortion is no longer sanctioned as in Lenin’s day), he is then used as cheap labour by the exploiters in the evening, whilst in the daytime, unless his father is in a position to pay the exorbitant fees to send him to the Russian equivalent of Eton or Harrow, he receives a class education designed to keep him in the class where he was born. Kravachenko’s account of his adult life has already been given; he has to work exceedingly hard, unless his rich uncle has left him the family fortunes in the form of tax-exempt Soviet bonds.

I submit: the life of an average Russian worker shows there is no fundamental difference between the Russian economy and that of any other capitalist country, the only difference at all being that certain features of classical Capitalism cannot grow in an economically backward country warped to compete with other great powers.

“If the crises revealed the incapacity of the bourgeoisie any longer to control modern productive forces (as it did in Russia in 1917 – R.C.), the conversion of the great organisations for production and communication into joint stock companies and state property show that for this purpose the bourgeoisie can be dispensed with. All the social functions of the capitalists are now carried out by salaried employees (the Stalinist bureaucracy in Russia – R.C.).” (Engels, Anti-Duhring, p. 304.)

The transformation of private property into state property does not deprive the economy of its capitalist character. Indeed, the modern state is essentially a capitalist machine: for it means government of the capitalist, by the capitalist and for the capitalist. The more productive forces it takes over, the more citizens it exploits. The worker remains a wage slave, and the capitalist relationship is not abolished: it is rather pushed to the extreme.

The ruthlessness of Russian State Capitalism can be seen most markedly in the foreign policy he pursues, that flows from the inner needs and contradictions of the economy. As Russia is the most highly developed and hideous form of Capitalism, “the general contradiction of Capitalism” which as Marx says, is the falling of surplus value in relation to total capital, has reached its most advanced state of decline. To even retain the profit rate at a ridiculously low level it is necessary to plunder the means of production and labour power everywhere and in every conceivable way. It has plunged Russia into an expansionist policy that can only be described as bureaucratic imperialism.

The fact that it is not accompanied by the export of finance presents no difficulties. For with the decline of Capitalism a new trend in imperialism becomes discernible. Lenin noticed it over thirty years ago. Nations began to seize land from various political, economic or strategic motives, even that of merely preventing others from gaining it, and not necessarily for the exportation of capital.

Bureaucratic imperialism manifests itself in five ways:

  1. The acquisition of land. The Russian Empire gained 275,000 square miles of territory inhabited by 25 million people as well as extending its influence over the whole of Eastern Europe. (At this point, we may inquire what is the nature of the economy of the Eastern European countries, Socialist or Capitalist? If the latter, how do the “apologists” explain away the existence of three capitalist countries, Latvia, Estonia, Lithuania, within the Soviet Union?)
  2. Reparations are demanded from the Italian and German workers even greater than those demanded by the other capitalist powers, for the crimes of Fascism. Contrast this with Lenin’s attitude to imperialist demands at the end of the First World War.
  3. Slave labour. The dependence of Russia on slave labour is shown up by the use of the best German and Japanese workers, sadly needed at home, in unknown quantities. The Soviet economy is the first economy since Roman times which is based on slave labour.
  4. Trade agreements, bearing remarkable resemblance to those of Germany before the war with the Eastern European countries, have been made. These usually are dictated by Russia.
  5. The wholesale looting of Eastern Europe and Manchuria, depriving the workers of these countries of their tools and increasing the possibilities of starvation.

I therefore submit: from the above evidence it is criminal to call Russia Socialist. This harms not only the cause of the Russian worker but also that of Revolutionary Socialism. The only thing to do is to tell the truth about Russia and to show it has nothing in common with Socialism.

I am of the opinion that Socialism can only be achieved on world scale. After the conquest of power the principal task, that of changing the productive relationships, still remains. That task, as the leaders of October so often stressed, cannot be achieved within the confines of one State. If it is not achieved, as it was not achieved in Russia, the result is a monstrosity.

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