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Chris Harman

Prospects for the Seventies

The Stalinist States

(February 1970)

From International Socialism (1st series), No.42, February/March 1970, pp.12-20.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).


It is now more than 40 years since Stalin eliminated all rival tendencies in the Communist Party and State apparatus and set the Russian society on the course of industrialisation in competition with the West. Since then regimes on a similar model have been imposed (by the Russians) on six States in Europe and one in Asia (North Korea) and have come to power through indigenous movements in at least five countries (Yugoslavia, Albania, China, North Vietnam and Cuba). No analysis of the possibilities for socialism on a world scale can be complete without some analysis of the dynamic that determines the development of these regimes, the domestic and foreign policies of their rulers, and the likelihood of socialist revolution within them.

The underlying dynamic behind the various external and internal policies of these regimes results from their participation in a competitive struggle with other ruling classes (both private capitalist and, increasingly, state capitalist as well) for control over productive forces. No national ruling class can survive this struggle unless it continually expands its military potential by expanding the productive forces at its disposal. If it can do this it can subordinate other ruling classes to itself; if it cannot it will be subordinated. The result is that each ruling class

  1. behaves internally like any capitalist firm, organising production so as to continually force down the price paid for labour power to an historically determined minimum and to transform the surplus over and above this into capital;
  2. utilises whatever opportunities exist for imperialist exploitation of neighbouring nations. This is evident with the large, highly developed Russian bureaucracy, but is a trait that exists in embryo in the others – witness for instance Yugoslav attempts to dominate Albania in the early post-war period. [1]

The Russian economy: The Stalin period

During Stalin’s lifetime the forced development of the Russian economy so as to provide the basis for arms competition with the Western powers meant that there was a continual overall adjustment and readjustment of production inside Russia to changes taking place elsewhere. Its insertion in an international competitive system meant, in Marxian terms, that the law of value applied to the Soviet economy as a whole. [2] The bureaucracy had continually to relate the production costs of the economy as a unit to production costs in the capitalist world.

At the same time, however, within the different branches of the Russian economy various factors prevented a fully rational calculation of production costs. [3]

  1. Workers did not freely dispose of their own labour power. Their ability to do so was restricted by legal constraints against absenteeism, lateness and changing jobs without prior permission. For those in the labour camps (up to 10 million, i.e. about a third of the size of the industrial working class in the 1930s) there was no control at all over their own labour power.
  2. Labour power was often paid at below the historically and culturally determined subsistence level (in Marxist terms, below its value). [4] Again the most extreme instance of this was in the case of slave labour.
  3. The form of organisation of planning led each ministry, glavk, trust and firm to attempt to achieve a high degree of autonomy. This followed from the authoritarian nature of the planning system. Those in charge of each section of industry were bent on achieving the highest level of physical production. This was dependent upon maintaining a regular flow of production, which in turn was dependent upon a continual flow of components and resources. This was only guaranteed if production of such resources was directly under the authority of the particular section. Hence, each ministry, glavk, etc., attempted to produce as many of the resources it required as possible itself and to reduce its dependence on the rest of the economy. [5] The result was a continual tendency to departmental autarchy, with continual duplication of production processes.

The cumulative effect of these three factors was that while there was a degree of control over outputs from the economy, fitting these to the needs of competition with the West, there was also a wasteful division of inputs. The pricing system reflected these irrationalities, rather than real production costs. This in turn made any rational comparison of costs within or between productive units impossible.

During Stalin’s lifetime these inefficiencies hardly seemed to matter. The economy expanded at a virtually unprecedented rate. And most of this expansion was concentrated in the crucial heavy industry sector. All this was possible because of the huge spare natural and human resources that were available. [6]

In the 1950s, however, many of these excess resources began to be used up. Although labour productivity was increasing, in terms of what crucially mattered – its relative level compared with the US – it was still the same 40 per cent in 1950 as in 1937-9. [7]

The rate of economic growth could not be maintained unless there was:

  1. An overcoming of at least the worst irrationalities in the allocation of resources. This was partly achieved in the mid-1950s with the ‘freeing’ of the labour force – the liberating of the majority of those in the camps, and the removal of legal sanctions against changing jobs, absenteeism, etc.
  2. A raising of the level of labour productivity. But this was impossible without raising the level of consumption of the workers. Such was the case particularly in those productive processes too complex to be easily supervised from the outside. Wherever production demanded the attention, initiative and therefore the commitment of the worker, crude external threats of the sort that typified the Stalin period could not raise real labour productivity – at best they could result in a quantitative increase in the number of shoddily produced goods. In these areas productivity could only be increased by permitting a devolution of initiative to those actually engaged in the production process while increasing their commitment to production through improved standards of living, etc. [8]

This is particularly true of two sorts of productive processes: on the one hand agricultural production, particularly animal husbandry, on the other the sort of technologically sophisticated production associated with an advanced economy. One of the most striking aspects of the Stalin period was that while industrial production rose at an unprecedented rate, agricultural production stagnated. Even though Stalin could claim that Russia would be the greatest grain-producing country in the world within three years in 1929 and again in 1935, and though Malenkov claimed in 1952 that a target of 130 million tons of grain had actually been achieved, after Stalin’s death Krushchev [9] made clear ‘that as regards grain production the country remained for a long time at the level of pre-revolutionary Russia’. He gave the following figures to back up what he said:


Crop Yield per Hectare

Total Grain Return







Thus the harvest in 1949-53 was only 91.7 million tons, despite the fact that the population had grown 30 per cent. Such is the efficacy of Stalinist ‘planning’. As regards livestock farming the situation was even worse. Production actually fell during the Stalin period.







Once further development of industry became dependent upon raising real wages, the problem of agriculture became central. For unless more foodstuffs were produced, with the best will in the world, the Russian bureaucracy could not increase substantially the consumption levels of its workers. At the same time the problem was aggravated by the fact that to even achieve existing levels of agricultural production, a very large proportion of the population that would otherwise have been available to raise the level of industrial production had to be employed there – in 1956 43 per cent of the Russian population were employed in agriculture, compared with the mere 9 per cent required to feed the population of the US.


All these factors produced growing pressure for economic reforms after the death of Stalin. These involved both changes in the emphasis in production – from heavy industry to light industry and agriculture – so as to raise labour productivity and the long term growth rate of the economy, and changes in methods of control over the labouring population, ie’ changes in ‘managerial techniques’ from those employing the ‘stick’ of crude authoritarian control to those using the ‘carrot’ of incentives combined with some devolution of responsibility.

But any such changes faced the following set of problems:

1. The existing form of planning presupposed the subordination of agriculture and light industry to heavy industry, even where this was not immediately demanded by need of arms competition. Left to itself the economic structure and those bureaucratic interests associated with it would automatically continue to expand heavy industry at the expense of light industry, regardless of plan targets:

Percentage Fulfilment of Plan Targets in New Productive Capacity [10]







Electric power


Pig iron






Rolled metals



Iron ore


Saw mills



Textile mills






In the 1959-65 seven-year plan, while producers’ goods output was increased by between 8 and 12 per cent higher than planned, consumers’ goods output increases fell short of the target by between 2 and 5 per cent. [11] (If a further distinction, between producers’ goods for agriculture and light industry and producers’ goods for producer goods industries is introduced, the gap is even greater. [12])

This tendency for heavy industry to hog resources available for growth could only be overcome by a conscious effort on the part of the central apparatus to change the pattern of economic organisation.

2. Any attempt to change the organisation of the economy, however, of necessity involves a political struggle against important interests within the bureaucracy. In particular those who gained enormous power with the central role the repressive apparatus played in achieving the economic goals of the bureaucracy in the Stalin period resist any changes likely to diminish this role. They are backed by bureaucrats associated with heavy industry and by all those throughout the bureaucracy who identify their own power and prestige with old methods of control.

This central contradiction between the class goals of the bureaucracy (the relentless expansion and transformation of its own economic base) and its, form of class organisation (in a frozen, centralised, totalitarian structure) between the forces of production and the relations of production, cannot be overcome, even partially, without attempts to reform the bureaucracy itself. This will be resisted by those, associated with the old structure, often best placed politically to resist reforms.

In order to try and overcome conservative sections of the bureaucracy opposing reforms in the 1950s, the central political apparatus (or a section of it) attempted to mobilise other elements in the bureaucracy. This was the real significance of the anti-Stalin campaigns of 1953, 1956 and 1962. But there were clear limits within which this was possible. Much of the conservative resistance could not be overcome without the danger arising of the repressive apparatus vis-à-vis the rest of society being paralysed, thus unleashing forces that might easily turn against the bureaucracy as a whole (as in East Germany in 1953, in Poland and Hungary in 1956, in Czechoslovakia in 1968-9 and in China in 1966-7). In Russia itself the bureaucracy stopped short of taking measures that might have had such disastrous effects from its point of view. But this of necessity meant failing to carry through reforms wholeheartedly.

3. At the same time, the pressures of continued short-term military competition with the West (and, increasingly, with other state capitalist countries, eg China) provided arguments for those who oppose reforms. For this means that any deployment of resources towards light industry and agriculture in order to raise long-term labour productivity is likely to mean a slowing down of the short-term rate of accumulation and a weakening in the military sphere. Failures to carry through the redeployment of resources to improve living standards are blamed on the needs of ‘defence’, as for instance with the failure of agricultural investment to grow at the planned rate in 1968. [13]

4. Because the reforms are only reforms, not a complete transformation of the system, and in any case are only carried through half-heartedly, they never achieve the results prophesied by their proponents. They never do more than tinker with the fundamental cause of the problems: the alienation of the worker from the production process and therefore his refusal to display the commitment to his work needed for increased labour productivity in both agriculture and areas of advanced technological production. Like their equivalents in the West the most advanced reformers will talk about ‘workers’ participation’ but not about real control. Even a limited devolution of initiative from the central apparatus to plant managers, allowing them to relate the tempo of production to the possibilities of profitable exchange of products between themselves, the State and the consuming population (so-called ‘market socialism’) has to be carefully controlled by the centre, although it might lead to more efficient employment of resources, lest it also allow managers to make decisions in opposition to the class goal of the State capitalist bureaucracy as a whole: accumulation in competition with other ruling classes.

The result is that reforms introduced cannot come to terms with the real roots of these problems. For instance, two of Khrushchev’s chief attempts to come to terms with the agricultural crisis – the Virgin Lands scheme and the Maize Campaign – merely involved an extension into new areas of bureaucratically controlled production. For this reason they were easy for the bureaucratic mentality to carry through. But they also necessarily reproduced all the failings of the bureaucratic approach to agriculture. Again, in industry, Khrushchev’s attempts to overcome the irrational autarchy of ministerial departmentalism by organising industry on a regional basis through Sovnarchozy merely resulted in new forms of autarchy. Hence the piecemeal dismantling of that system.

At the same time, any attempt to introduce new planning mechanisms alongside old ones may merely mean that the worst of both worlds results. For instance, a weakening of central control over investment and pricing decisions may remove what constraints there are forcing the natural expansive tendencies of those running heavy industry to take account of the needs of the whole economy. The result is then likely to be (as in Czechoslovakia in 1968) disproportionate growth and inflation.

The lack of efficacy of such reforms serves to reinforce the arguments of those who anyway fear change. This makes it more likely that further reforms will be carried through in a hesitant, half-hearted manner and lack success.

The Situation Today

The overall result of these differing pressures has been:

1. Reforms have only been introduced slowly within Russia itself. Many of the most important ones introduced during Khrushchev’s rule were abandoned after his fall (due in turn to the failure of reforms, particularly in agriculture). The reforms introduced in industry since have been brought in on a very tentative basis, and there are continual reports of their frustration by sections of the apparatus. The disproportion between the growth of industry and agriculture certainly has not been overcome.

Percentage Achievement of Plan Targets

Plan IV


Plan VI

Plan VII

Gross industrial output





Gross agricultural output




2. The rate of growth has slowed down. According to Russian sources it has fallen from 8.2 per cent in the period 1956-62 to 6 per cent 1961-65; according to American sources from 6 per cent 1956-60 to 4 per cent in the 60s. In either case, the rate of growth is nothing like the level displayed during the Stalin period, and is in fact less than that displayed by several Western economies. The difficulty Stalinist economic structures face once a degree of industrialisation has taken place is graphically illustrated by a table showing the growth rates of the different East European states ordered according to their degree of industrialisation:

Eastern Europe: Compound Annual Growth Rates
of National Income




East Germany
































The origin of these difficulties quite clearly lies in the fact that as accumulation takes place, unless there is a more than equivalent increase in productivity, the increasing proportion of dead labour to living labour (the organic composition of capital) will result in a relative decline in the amount of value produced.

Average Annual Increment of Output per rouble
of Investment
(in roubles)




National income




Gross industrial output




Gross agricultural output




The implication of these figures is that unless there is a considerably increased rate of exploitation of labour, the rate of profit in Russian industry will undergo a drastic decline, and hence also the resources for further investment and growth of industry. Hence the concern of the central apparatus to prevent factory managers giving wage increases above the level of productivity increases.

The overall result is that the Russian economy faces a chronic crisis of slowing growth rates. A solution to this would only be possible by raising productivity at a faster rate than at present. But this is impossible in industry unless the Stalinist heritage in agriculture is overcome. This, however, is in turn impossible without ploughing into agriculture resources from heavy industry and arms production. Since the overthrow of Khrushchev, the Russian leadership has had certain successes in the agricultural field.

Agricultural Production [16]






Wheat production (thousand tons)




Maize production (thousand tons)




Hens’ eggs (millions)












Cows (millions)







This has permitted a small increase in the average annual rate of growth – according to Russian sources from an average of 6 per cent 1960-4 to an average of 6.9 per cent 1965-7. [17] But this improvement in agriculture does not seem to have been due to factors that will endure. The level of investment in agriculture seems to have fallen below the level of Khrushchev’s last two years. In 1964-6 it only rose 15 per cent as opposed to 17 per cent in 1962-64. Similarly fertiliser deliveries increased in 1964-6 only 39 per cent and in 1967 by 10 per cent as opposed to 53 per cent in 1962-4. The major change leading to improved production, in fact, seems to have been the fact that for various reasons the agricultural work force which fell by 9 per cent in 1962-4 rose slightly in 1964-6. [18] This, however, is not an advantage that Russian agriculture is likely to have for long. [19] At the same time the constant total work force figure hides two important facts: firstly the work force is an ageing work force, with a continual drain of youth from the countryside [20]; secondly, it does not contain nearly the required number of skilled personnel required for increasingly mechanised agriculture – while the estimated demand for specialists in 1970 is 2 million, the number in 1966 was only 770,000 and was increasing at a decreasing rate. [21]

Finally, the factor that has permitted improvements in agriculture cannot but increase the problems of industry. In the past if long-term plans calculated for increases in labour productivity were impossible under the existing structure, this was to a large extent compensated for by an absolute growth in the labour force ‘by a percentage varying from 13 to 21 per cent of total employment ... in absolute figures, from 6 to 10 million people’. [22] But ‘in 1966 for the first time since the war available manpower fell short of the annual plan (by 100,000 men) and in 1967 ... by 600,000 men’. [23] This perhaps explains why the current five-year programme is being underfulfilled in industry as well as agriculture and why for the first time in 40 years heavy industry is suffering. [24]

All this means that the resources of the Soviet bureaucracy can be expected to grow at a declining rate, while the demands on these resources increase – through military competition threatening to attain unlimitable levels with ABMs and MIRVs, and the conflict with China, through the need to invest in new areas if productivity is to be forced up, through the need to placate the demands of a working class continually growing in numbers, experience and self-confidence.

Because of this. increasing strain on resources, the more grandiose of the promises to the workers of the Khrushchev era stand no chance of being fulfilled. Although wages and conditions for workers have improved, they still remain relatively meagre. Thus despite considerable increases in minimum wages over the last 10 years, they are still low, at 60 roubles [25] (on a rough calculation about £20) a month. [26] Again, increases in paid holidays in 1968 meant that 40 per cent of workers only received a total of 15 days per year.

In housing, despite attempts to overcome the abominable overcrowding of the Stalin period (in 1950 average housing space per inhabitant of the USSR was about a quarter less than in 1923) Khrushchev’s 1957 ‘aim of ending the housing shortage in 10 to 12 years’ is no nearer accomplishment than comparable claims by British housing ministers in the same period. The 1959-65 plan for housing was underfulfilled by 15 per cent, the 1966 plan by 11 per cent and the 1967 plan by 12 per cent. A considerable proportion of this consists of private and co-operative house building, both of which would seem to favour well-to-do bureaucrats at the expense of ordinary workers. [27]

Reforms – New Problems

If the introduction of economic reforms does not yet seem to have done much to release more resources for the Russian bureaucracy, it does promise to confront them with new problems. Limited improvements in the living standards and cultural level of workers, while not overcoming their fundamental lack of commitment to the regime, are likely to increase their independence and morale. This can only raise the level of self-confidence and combativity of the masses. At the same time the promise of reforms, the limited destruction of an authoritarian routine, arouses expectations that the regime cannot fulfil. This will inevitably mean the development of class militancy among Russian workers. This will be intensified by the fact that the reforms imply new sorts of hardship for workers. For instance, increased concern with labour costs can only mean a growth in frictional unemployment. ‘As the reform develops, surpluses of manpower will increase, but the element for its absorption – capital investment – may even be reduced in comparison with the initial drafts (of tire current five-year plan). Problems of placing a large number of people in jobs will arise ...’ [28] There is no dole in the USSR, only a fortnight’s pay upon dismissal, although the average period between changing jobs is about 24 days. [29] In addition the reforms make even more transparent the exploitation of the workers in the factories. In the first year of the most recent batch of reforms in 699 out of 703 enterprises subject to them, productivity rose by 8 per cent, but earnings of industrial-production personnel by only 2.8 per cent. In 522 enterprises payments from the ‘material incentives fund’ amounted to only 0.5 roubles per month for workers, as against 4.2 roubles for all personnel. [30]

The National Question in the USSR

Finally, successful implementation of reforms can only heighten the forces leading to discontent among the non-Russian nationalities inside the USSR (who now constitute a majority of the total population). The major factors providing a basis for national oppression inside the USSR since the rise of the Stalinist bureaucracy in the 20s have been:

  1. The determination of the central apparatus based on Moscow to prevent any tendencies towards autonomy and independent decision-making by sections of the apparatus elsewhere. This means continually curtailing and limiting the powers of local party chiefs, etc (a tendency already manifest as early as 1923 in the disputes over the Georgian question). Local bureaucrats have continually to prove that their major concern is central bureaucratic interests, not those of the local population.
  2. The centralised bureaucracy identifies its ability to dominate and extract surplus value with its ability to prevent other social forces mobilising. This means preventing the formulation and communication of alternative ideologies to its own. This implies continual imposition of a homogenous culture and is aided if there is a single dominant language, for the urbanised areas at least. Hence the continual attempts at Russification of national minorities, the discrimination against them within the bureaucracy, etc.
  3. ’Divide and rule’; by discrimination against the minorities and in favour of the Russified, the bureaucracy strengthens the ideological basis of its own rule. This is particularly clear in the case of anti-semitism.
  4. Within the lower ranks of the bureaucracy cultural background undoubtedly determines the likelihood of rising upwards. This, on the one hand, gives millions of petty bureaucrats an interest in maintaining great Russian dominance, on the other it increases the resentment of those from non-Russian backgrounds.

Successful implementation of reforms will add to these at least two more factors. Firstly, as the level of technology advances, those with the most advanced culture (in the main the Russians) will be favoured. At the same time, the increasing stress upon efficiency, productivity and the optimal deployment of resources is likely to concentrate further industrial advance in the most industrialised areas. Already in the late 50s ‘it was a repeated source of criticism that ministries found it convenient to direct investments, wherever possible, to developed regions, to save overheads’. [31]

National pressures can thus be expected to grow on two new bases. There will be increasing anti-Russian feelings among minority nationalities who increasingly find themselves deprived of possibilities for material and cultural advance. And the local sections of the bureaucracy, resentful at the low priority given to the development of the areas of industry under their control will try and trade off this discontent so as to blackmail the central apparatus into providing more resources for investment. There is already a prototype for such developments in the growth of Slovak national feeling within Czechoslovakia prior to the ousting of Novotny. The Slovak bureaucrats were willing to co-operate with the Czech reformers, even though they were suffering from the effects of reforms already implemented and because of the low level of development of Slovak industry saw no need for them, provided they were promised an increased cut of total national investment for their industry. This was crucial in cracking the hold of the central apparatus in 1968.

Russia and the Other Satellites

Although the bureaucracies throughout Eastern Europe (except for Yugoslavia and Albania) and in North Korea were put into power by the Russians, they were never integrated into the social structure of Russia itself. Instead, Stalin gave them a high degree of control over the internal running of the economy, providing they subordinated themselves to the Russian bureaucracy as far as the output of the economy was concerned. This meant copying the Russian emphasis on production of means of production (at least as far as the industrially advanced satellites were concerned), passing a proportion of this product straight to the Russians (through reparations, mixed companies, commodity transactions at token payments, etc [32]) and permitting the Russians a near monopoly of their trade.

These bureaucracies were thus established in business on their own, even if by a more powerful partner. They developed interests of their own in developing industry at the fastest possible rate so as to provide themselves with the bases for economic and military independence. They willingly accepted the policies imposed on them by the Russians insofar as they facilitated these goals.

But the interests of the bureaucracies in’ the satellites (and also in the countries where they came to power without Russian aid) can clash with those of the Russian bureaucracy. When this happens the outcome is invariably ideological dispute, giving way to raucous insults, military preparations and even armed conflicts. For instance, economic disagreements played a key role in the split of Tito with Stalin in 1948; the split of Mao and Hoxha with Khrushchev in the early 60s was at least in part motivated by economic questions; the question of the allocation of resources within Comecon underlay the split of Rumania with Russia; and the development of what might be called ‘national bureaucratic’ trends in Poland and Hungary (in 1956) and Czechoslovakia (1968) was similarly motivated.

The result is that there is a shifting pattern of alignments between the differing Stalinist States, depending on the needs of accumulation at a particular point. This might mean a particular national bureaucracy acquiesces in Russian dominance for quite a long period (as the Czechs did during the 50s when their economy grew at a fast rate due to the ability to sell its produce in the rest of Eastern Europe) but it also means that there can never develop a stable State capitalist bloc. Only one other factor can tie a particular national bureaucracy to the Russians for any long period (apart from the crudest of physical threats) – its lack of a viable national base of its own without Russian support (hence the acquiescence of most Eastern Europe bureaucracies to intensified Russian exploitation in the 1948-53 period and Husak’s support for the Russians today).

Permanent Revolution

In the past the pressure for reforms has been stronger in Eastern Europe than in Russia itself, for various reasons – the higher level of economic development; the outflow of resources to Russia (particularly in the early period); the greater importance of foreign trade and therefore of trade balances; the deeper traditions of militancy within the working classes; and the shallower roots of the ruling class. While the crisis of state capitalism has been chronic inside Russia, in three cases in Eastern Europe it has taken on an acute form. Events in Poland and Hungary in 1956 and in Czechoslovakia in 1968 reveal a stereotyped pattern of development:

  1. The failure of the economy to achieve balanced growth results in a split within the apparatus. One section begins to demand wholesale reforms and also to question the relationship with Russia.
  2. The ‘reforming bureaucracy’ cannot take over control without immobilising its enemies, who normally control the police apparatus. It therefore begins to demand for itself the right to organise within the party and looks for allies to back it up.
  3. At a certain point the ‘reforming bureaucracy’ calls in certain intermediate strata (intellectuals, journalists, students) to help it paralyse the apparatus and let it take over.
  4. But this permits, even encourages, extra-bureaucratic classes (above all the workers) to mobilise, at first behind the slogans of the ‘reforming bureaucracy’, but increasingly on their own account through workers’ councils, etc. The revolution becomes permanent and its demands take on a new significance.
  5. The ‘reformers’ having come to power try to ride the storm. But they can only do so by reasserting the basic class structure of the society. [34] This means destroying whatever gains the workers have made. At first the ‘cold’ method of ideological hegemony is tried (e.g., Gomulka successfully, and Nagy, unsuccessfully, in 1956 and Dubcek in 1968); if this fails, then the ‘hot’ method of armed repression, based upon Russian troops follows (Kadar in 1956, Husak in 1969).
  6. In any case, the reforming section of the apparatus is forced to come to terms with its enemies, internal and external, and their methods, if it is to avoid complete dissolution by the forces it itself has unleashed. It is forced to reimpose relations of production that, despite modifications, are in contradiction to the maximal development of the national economy.

China and Russia

The Chinese bureaucracy faces a crisis similar in some ways to that confronting the Russians, but at a quite different stage in its development.

Mao Tse Tung took power 20 years after Stalin in a country considerably more backward than Russia in 1929. The gap between the forces of production at his control and those in the hands of the Western imperialist powers was immense. In addition from the beginning there was the need to contend with the inclinations of the Russian bureaucracy to dominate China. [35] In sum, the pressures on the Chinese bureaucracy to industrialise have been even greater than those on the Russians.

At the same time, however, the objective possibilities for industrialisation have been much less. The industrial base Mao took over was considerably smaller than Stalin’s in 1929. The specific nature of most Chinese agriculture made primitive accumulation more difficult; rice culture demands intensive care and is not readily accessible to external, authoritarian control. Attempts to force up the surplus through, the crudest sort- of exploitation, in imitation of the Russians, inevitably leads to considerable drops in total production, threats of famine, etc. As a result attempts to overcome Chinese backwardness by a voluntaristic approach to industrialisation have collapsed in disarray. For instance, by any standards the ‘great leap forward’ of 1958-60 was a failure. It has been estimated that with the retreat from this policy agriculture, that had constituted 39.2 per cent of the national product in 1957, rose to 47.1 per cent in 1962, while industry fell from 20.3 per cent to 14.5 per cent. [36] During the period of Mao’s rule the agricultural population has been growing (by about 75 million between 1952 and 1957) not declining, as in Stalin’s Russia, or indeed, in almost any other country undergoing industrialisation.

The Russian bureaucracy has never been willing to aid the Chinese in their difficulties. They gave the Chinese loans of only $300 million in 1950 and $130 million in 1954 (considerably less than to non-Communist countries like Egypt) and Mao’s reported request for a third loan when he visited Moscow in 1957 was rejected. ‘Far from being free, Soviet aid to China was rendered mainly in the form of trade and that is certainly not a one-way affair ... even the war material supplied in the war to resist US aggression in Korea has not been given gratis.’ [37] Nor did the Russian bureaucrats hesitate about exploiting the Chinese: ‘The price of many goods we imported from the Soviet Union were much higher than those on the world market’, complained the Chinese government. [38] Finally, the sudden withdrawal of Russian technicians from China in the early 1960s did incalculable harm to the Chinese economy.

The reasons for the refusal of the Russians to offer aid to the Chinese were clear. To have done so would have diverted resources which, faced with falling growth rates, they preferred to invest more profitably in the. USSR, or at least in wooing uncommitted countries like Egypt. To give in to Chinese demands for more aid would also have encouraged other state capitalist countries to resist the over-riding demands of the Russians. At the same time this attitude could not fail to have an impact on Chinese policies. A growing resentment against the Russian leaders and their policies was inevitable. So was a rejection of the ideology of ‘peaceful co-existence’, with its implication that belt-tightening in order to carry through primitive accumulation was not necessary. The Chinese bureaucrats felt they had nothing to lose by challenging the ideological pretensions of the Russian leaders. Besides which, a propaganda war with the Russians provided a climate in which cohesion needed for industrialisation could gather support.

It should not, however, be thought that the Chinese bureaucracy is intrinsically more revolutionary than the Russian. Although it rejects ‘peaceful co-existence’ as a proclaimed policy, it is willing to pursue it in many individual cases. Hence, the role of the Chinese Communists in tying the Indonesian party to the regime of Soekarno, the undeviating support for the military regime in Pakistan throughout a revolutionary situation there and the ‘cultural revolution’ in China, the support for Boumidiene against Ben Bella in Algeria, the refusal to support the left wing of the Palestinian guerrilla movement. In fact, the Chinese bureaucracy is willing to turn to any ally for support, providing that by doing so it does not weaken its own national independence. [1*]

Finding industrialisation immensely difficult because of the policies of the major capitalist or state capitalist powers, the Chinese bureaucracy is forced into a seemingly revolutionary opposition to all of them. At the same time, its desperate search for friends leads it into support for some of their nastiest lieutenants in the ‘third world’.

Within China itself the dangers of economic stagnation have produced the ‘cultural revolution’. In order to try and break forces he considers an impediment to China’s industrial advance, Mao has felt compelled to try to carry through from above a massive reform of the Chinese bureaucracy. So as to pressurise existing office holders he has unleashed a massive mobilisation of strata transitional between the bureaucracy and the rest of the population (the ‘red guards’ – students and school children). To this extent his methods are similar to those of the ‘reformers’ in Eastern Europe. However, the possibilities of improving the economic situation in this way have been much fewer. If anything, the development of the economy and of the level of culture has been harmed by the turmoil of the ‘cultural revolution’. (It is difficult to know for certain, seeing it is many years since statistics on economic performance were last published.)

The most significant result of this mobilisation of the ‘red guards’ against a section of the bureaucracy, that like the efforts of the reformers in Eastern Europe, it permitted masses of workers to mobilise against the bureaucracy as a whole (in December and January of 1967). Again, as in Eastern Europe, the ‘reformer’ Mao beat a sharp retreat in the face of this danger and came to a reconciliation with many of his enemies, setting up the ‘revolutionary committees’ and restoring order with the use of the army.

The outcome of the ‘cultural revolution’, like the retreat from the ‘great leap forward’ before it, illustrates the extent to which the Chinese bureaucracy finds itself in a blind alley, finding industrialisation increasingly difficult, but unable to relinquish its class goal and submit to the embraces of the great powers. It cannot take effective action to solve its problems. All it is capable of is irrational voluntarism at home, and propaganda unaccompanied by meaningful deeds abroad.

A limited confrontation with Russia aids the Chinese bureaucracy in its attempts to maintain ‘national unity’, ie, its own control over Chinese society. But it must be emphasised, the Chinese cannot gain from any large-scale military confrontation with the Russians. Claims by the Kremlin and its sycophants that the Chinese are preparing an aggressive war merely serve to cloak the aggressive intentions of their authors. It is the Russian bureaucracy which seems increasingly compelled to make threats, which sets about establishing military pacts with a variety of reactionary regimes, which parades its destructive potential – all because of a verbal challenge to its hegemony by the Chinese.


The Overall Perspective

The overall trend throughout the state capitalist world is one of declining growth rates and of lessening resources to meet the challenge of the private capitalist regimes and the demands of the indigenous masses. Within each state capitalist country this means increased concern with a stringent allocation of resources. But this inevitably increases the international conflicts between the different bureaucracies.

The Russian bureaucracy controls an empire that displays increasingly centrifugal tendencies. It finds increasing difficulties in keeping the regimes of Eastern Europe in check. In the next few years it will face similar problems vis-à-vis the component nationalities of the USSR itself.

The failure to grow at the desired rate cannot but have repercussions inside the apparatus itself. For the one factor that above all bound dissidents within the ruling class to Stalin in the 30s and 40s no longer holds. The members of the central political apparatus have no tangible evidence that the policies of their leaders are maximising their interests. This lack of ideological certainty is translated to the rest of society by the intermediate strata (intellectuals, students, etc). During the Khrushchev period there were attempts by the bureaucracy to come to terms with all these difficulties. Certain sorts of reforms were carried through. There were successes. But these did not measure up to the demands of the situation. At the same time they presented new sorts of dangers to the apparatus. When, despite the reforms the economy failed to pick up, Khrushchev was jettisoned, and what might be called a ‘conservative bureaucratic reaction’ followed. The apparatus begins to look back upon the Stalin period with a certain nostalgia.

Internationally, the Khrushchev period was one of ‘polycentrism’, in which the Kremlin seemed willing to allow the tendencies towards national independence within the satellites a degree of leeway. Although a ‘propaganda war’ developed with the Chinese, this did not reach the level of physical threats. Rumania and North Korea were allowed to develop near-complete national independence.

Now, however, the Russian bureaucracy has reverted to crude repression in order to prevent changes it sees as dangerous to itself. That is why it has invaded Czechoslovakia and has threatened war against China. That is also why it has clamped down on the ‘literary opposition’ at home.

The new policy of the Russian apparatus consists in trying to freeze social forces. But this of necessity means preventing changes necessary if accumulation is to take place successfully. Nowhere is this more fully illustrated than in the consequences of the Husak regime for Czechoslovakia. But other East European states face similar, if not yet so grave, difficulties (e.g., Poland) that the bureaucracy dares not come to terms with. At the same time the Russians are unprepared to provide the resources necessary to help solve these (as they did with short-term loans to Hungary after 1956). Despite their large rouble balance in Moscow, the .Czechs are still refused a hard currency loan. The failure of the Kremlin to solve its own economic problems means it can no longer bail out its supporters in Eastern Europe. [39]

Such an approach can only lead to a further growth of discontent among the populations both of Eastern Europe and of Russia itself. This in turn necessitates further repression. One of the main aims of the threats to China is clearly to teach a lesson to dissidents within Eastern Europe and within the USSR.

However, these measures only serve to make more difficult the long-term problems of the bureaucracy. Firstly, they make more difficult reforms necessary if the rate of growth is to rise, and secondly, they necessitate a shift in resources from areas which will raise the level of productivity to military expenditure, etc.

The bureaucracy becomes entrapped in a vicious circle. Any way in which it attempts to solve some of its problems is likely to increase others. For instance, it could gain resources for investment and foodstuffs through a series of massive commercial deals with Western capital (which would also have the effect of solving some of Western capital’s problems, by raising profit rates, etc). But this would increase other problems for the bureaucracy: on the one hand, it would make more difficult the subordination of the whole economic process to the needs of military competition; on the other, it would increase the difficulties for the central apparatus in maintaining ideological control over the component section of the bureaucracy. For this reason, the present dominant wing of the bureaucracy is likely to be as hesitant about such developments as about other sorts of reforms.

If reforms, in collaboration with foreign capital or otherwise, are not carried through, however, the chronic crisis of the Russian and East European economy can only grow worse. Despite their repressive methods the leaders of the central apparatus will increasingly seem to be an impediment to efficient production. Working from hand to mouth, their methods will be unable to impress even the central apparatus itself. Covert dissidence will come to characterise whole layers of the bureaucracy. Given its growing cynicism and scepticism, the strong-arm methods of the apparatus will convince no one. Despite the growing level of repression, the pay-off will decline. The bureaucracy will experience increasing difficulty in maintaining control over its own dissident elements, over intermediate strata like intellectuals and students, and over the rest of society.

Yet it is also increasingly clear that the bureaucracy is unable to carry through reforms on anything like a successful basis without a split of the proportions that characterised Hungary in 1956 and Czechoslovakia in early 1968. Such a split could only be the prelude to an immense crisis throughout the USSR and Eastern Europe, in which the extra-bureaucratic classes would mobilise behind their own demands. Yet if it cannot or will not split, the bureaucracy faces another danger equally horrifying to itself. This is from the working class of the industrial heartland of Russia itself. As it becomes clear that the promises of the Khrushchev era are not going to be fulfilled, so the likelihood grows of a minor incident causing a massive eruption of working-class insurgency, as in Berlin in 1953, Budapest in 1956 or Paris in 1968, but this time on a scale unprecedented in world history.

In either case, the chronic crises of state capitalism will inevitably reach a nodal point at which the whole system is threatened. What happens then will depend upon the ability of the different classes to mobilise around programmes reflecting their own genuine interests. In such a situation, the most dangerous development from the point of view of the working class would be a ‘Polish’ one, in which the ideological confusion of the masses permitted the reforming bureaucracy to retain power.

Given the impossibility of any sort of generalised political agitation in Russia prior to the collapse of the apparatus, it is difficult for socialists in the West to do a great deal to aid directly the development of class conscious elements inside Russia and the satellites. But we can and must give aid to those elements in the Stalinist states who propagate a revolutionary socialist position (for instance, Kuron and Modzelewski in Poland); build a revolutionary movement in the West based upon clear-cut hostility to the state capitalist bureaucracies which cannot be ignored by those inside the Stalinist states (certainly a source of ideological strength for the bureaucracy in the past was the fact that millions of the most militant Western workers were willing to listen to praise of the Stalinist regimes); within this consistently oppose all those who peddle illusions about the ‘progressive’ nature of any section of the state capitalist ruling classes; and finally, oppose all the means by which the Russian bureaucracy attempts to retain control over the situation. Above all this means opposing its repression at home (against intellectuals, workers and national minorities) and its attempts to subjugate other state capitalist countries (the invasion of Czechoslovakia, the threat to China).


1*. The same applies to the Cuban bureaucracy, although in its case, for strategic reasons the Soviet bureaucracy is willing to give aid. But the Cuban bureaucracy resents the price it has to pay for this, for instance, having to concentrate all its efforts on sugar production. Nevertheless, in the struggle between Russia and China, Castro has supported the Russians. He even went so far, at the Tricontinental conference in 1966 as to affirm that ‘the Chinese government has put itself on the same side as American imperialism’. Incidentally, the participants in this conference included such ‘revolutionaries’ as a minister from Pakistan, Nasserites from Egypt and delegates from Boumidien in Algeria. More recently the desperate nature of Cuba’s situation has forced Castro to follow a seemingly more radical policy. But he is still unable to support the real revolutionary forces in the world: witness his support for the Russians in Czechoslovakia and his refusal to speak out against the betrayal by the French CP of the May movement.


1. Cf. Sayers, Between East and West, IS 41.

2. For elaboration of this argument, see T. Cliff, Russia: A Marxist Analysis, Ch.8, and also C. Harman, The Inconsistencies of Ernest Mandel, IS 41.

3. As with monopolies in the West the overall operation of the law of value permitted partial negations of it.

4. The urban minimum wage was fixed at 300 roubles a month (about £9 a month) in 1956. Even this figure gave low-paid workers an average increase of 33 per cent (V. Mayer, Zarabotnaya plata v periode a k Kommunismu, Moscow 1953, p.91, quoted in A. Nove, An Economic History of the USSR, London 1969, p.346).

5. Cf. Cliff, op. cit., p.245, also Nove, ibid., p.343.

6. For example, between 1929 and 1955 the absolute increase in production in the US was similar to that in the USSR, but the labour force rose only 33 per cent in the former compared to 350 per cent in the latter.

7. W. Galenson, Labour Productivity in Soviet and American Industry, New York, 1955.

8. I.e., by raising real wages to the subsistence level.

9. Plenum of the Central Committee of the CPSU December 15-19, 1958 (Russian), Moscow 1958, p.19.

10. Figures from K. Fitzlyon, Soviet Studies, Summer 1969, p.179.

11. Nove, op. cit., p.353.

12. For a lengthy discussion of this tendency in the Polish economy and of the economic unbalance created, see J. Kuron and K. Modzelewski, A Revolutionary Socialist Manifesto (Open Letter to the Party), IS, London n.d., p.27.

13. Cf. Financy SSR, 28/69.

14. From J. Knapp, Lloyds Bank Review, October 1968, p.9.

15. From K. Fitzlyon, op. cit.

16. Figures abstracted from UN Agricultural Statistics 1969.

17. Calculated from UN Economic Bulletin for Europe, vol.2 No.1, p.20.

18. Wadekin in Soviet Studies XX, No.3.

19. The current five-year plan aims at a reduction of more than 10 per cent in the agricultural work force.

20. Between 1959 and 1964 a quarter of those between 17 and 23 left the countryside.

21. Cf. Ladenkov, Voprosy economiki 1967, No.20 (translated in Soviet Review IX, No.3): ‘The rate of increase in equipment on State and collective farms is higher than the rate of growth of cadres operating the equipment.’

22. Fitzlyon, op. cit., p.177.

23. Ibid.

24. Economist, December 27, 1969.

25. L. Kunelskii, translated in Soviet Review IX, No.4.

26. And this applies to some quite skilled personnel, for example, nurses who have completed five years’ training recently received a wage increase, from 60 to 70 roubles per month, ibid.

27. The deposit for one room in a co-operative housing apartment is 1,200 to 1,360 roubles – equal to just under the average annual wage of ‘office and factory workers’.

28. Economy i mate matichiskie methody, No.6, 1966, p.805.

29. Ibid.

30. Voprosyekonomiki, No.4, 1967, pp.31-5.

31. Nove, op. cit., p.354.

32. See Ygael Gluckstein, Stalin’s Satellites in Europe, London 1952.

33. Cf. Gluckstein, ibid.; Sayers, op. cit.

34. Which is why any theory that only calls for a ‘political revolution’ in Eastern Europe today has basically reactionary consequences.

35. For example, their continued occupation of Darein, Port Arthur and the South Manchurian railway until 1954, and their special relationship with Kao Kang who controlled Manchuria in the same period.

36. Figures quoted by T. Cliff, Crisis in China, IS 29.

37. Peking Review, May 8, 1963, p.13-14.

38. Ibid.

39. This above all applies to agriculture, where the placating of the satellites has meant a growing drain on the Russian bureaucracy’s own limited resources. ‘The USSR has in effect “rescued” the rest of Comecon from the effects of this trend (against expansion of primary products). Smileck states that the net Soviet exports to other European members of Comecon rose from $284 million in 1955 to £1,655 million in 1965.’ M. Kaiser, Comecon, London 1967, p.150.

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