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David Miller

The Character of the State in China

Does Trotsky’s Theory of the Permanent Revolution Hold Up?

(Winter 1955)

From Fourth International, Vol.16 No.1, Winter 1955, pp.19-25.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

On the basis of his study of the role of “statism” in the colonial countries, which appeared in the Fall 1954 issue of Fourth International, the author discusses some key problems of the Chinese revolution.

* * *

IN THE fall issue of Fourth International, I presented the view that, for organic economic and political reasons, the revolutions in Asia have given rise to a group of new, independent bourgeois states whose economies are essentially dominated by the state; that this was the only way in which the bourgeois task of primary capital accumulation could now be realized, due to the capital shortage, the need for a planned integrated development, and also because it provides the indispensable means for the most effective control and exploitation of the working class. A historical and statistical effort was made to demonstrate the essentially similar methods, programs and perspectives of these states.

The Chinese State

Despite the numerous admitted basic similarities between the Chinese revolution and regime, and that of other colonial countries in Asia, the claim of organic identity will appear unsupportable to many Marxists. It will be argued that the analysis ignores the supposedly revolutionary significance of the land reforms, the role of consciousness in politics (the history of the Communist Party as a supposedly working class party), the problem of the dynamics, the direction of the economy, and the significance of the political line-up of the regime internationally.

The Land Problem

At the risk of beating down a straw man, we must reject the significance of the land redistribution as a decisive criterion for designating the class character of the state. The spectacular character of land redistribution in China has obscured for many the fundamental class character of this ‘transformation. The political and social characterization of this movement is determined by its relation to the revolution in the city; land reform can be an anti-capitalist act only in conjunction with an effort to destroy urban capitalism. Short of that it remains a bourgeois-democratic act irrespective of its scale, intensity, or revolutionary manifestation. In the case of China, the land reform must be seen as a subordinate aspect of a system of industrial reorganization similar to that being experienced in an entire welter of under-developed areas. This is not to say that the agrarian revolution does not pose problems for us (the permanent revolution, the role of the peasantry) but the class character of resultant society should not be one of them.

This estimate of the land problem becomes even simpler to integrate when we recall that China is not the only country of this type, in this period, to undergo drastic land reform. Burma has experienced a reform that parallels the Chinese in every basic feature, even going them one better by actually nationalizing the land. However, in the present state of industry and agriculture, this is likely to remain a mere juridical difference. [1]

The entire unfortunate question, the fact that Marxists should be at all awed, or even slightly disoriented by the land distribution, derives from two misunderstandings.

Firstly, the mechanical application of Trotsky’s version of the theory of permanent revolution, converting it into the assumption that under no circumstances can the colonial bourgeoisie solve any or all of its democratic demands in this epoch. This vulgarization of his theory is simply inconsistent with the facts (Burma, Guatemala, Bolivia) and should die of this inconsistency alone. We shall return to the question of permanent revolution below.

Secondly, the ahistorical conception that land reform is an indispensable feature of the bourgeois-democratic revolution, without which the revolution cannot be said to have been substantially accomplished. Unfortunately all history cries out against this. What the bourgeois revolution does demand, as a minimum, is the destruction of landlord dominance of the state, and of feudal property relations. Neither of these requirements organically involves land distribution. Japan is a perfect example of the complete destruction of feudal property relations without any significant land distribution. The German and Italian bourgeoisie did not succeed in complete elimination of all feudal property forms until just shortly before World War I. The actual seizure of power by the bourgeoisie, however, often necessitates a political alliance, not always a voluntary one, with the peasantry whose price is land reform. But this form and content of bourgeois revolution, despite its classical character, is actually the exception and not the rule.

The Role of Consciousness

E. Germain, in his desperate effort to demonstrate the revolutionary character of the CP of China, has defined it as an essentially working class party, despite its composition (rural and urban petty-bourgeois), and despite its “opportunist and menshevik conception of struggle on the bloc of four classes, the construction of democratic capitalism, and the equality of labor-capital;” [2] i.e., despite its basically bourgeois ideology as well. His grounds are that in doctrine it is communist, and that it educates its cadres in the spirit of devotion to the USSR; thus the materialist conception of the class character of a party is replaced with one stroke by a wholly idealistic one (and in this case a purely Stalinist criterion).

There is really little that anyone can add, in criticism of this light-minded, anti-Marxist conception, to what Trotsky has already written about it in 1932, in anticipation. (Fourth International, Jan.-Feb., 1950.)

Trotsky’s Conceptions

“The fact that individual Communists are in the leadership of the present armies does not at all transform the social character of the armies, even if their Communist leaders bear a definite proletarian stamp ...”

“It is one thing when the Communist Party, firmly resting on the flower of the urban proletariat, strives, through the workers, to lead the peasant war. It is an altogether different thing when a few thousands or even tens of thousand’s of revolutionists assume the leadership of the peasant war, and are in reality Communists, or take that name without having serious support from the proletariat ...”

In Russia the proletariat was in power, the leadership in the hands of a strong and tempered party, and “the entire commanding staff of the centralized Red Army was in the hands of the workers. Notwithstanding all this, the peasant detachments, incomparably weaker than the Red Army, often came into conflict with it ...”

“... the revolutionary peasantry of China, in the person of its ruling stratum, seems to have appropriated to itself beforehand the political and moral capital which should by the nature of things belong to the Chinese workers. Isn’t it possible that things may turn out so that all this capital will be directed at a certain moment against the workers?”

The peasantry cannot follow an independent course; it must follow either urban class.

“The peasantry does not find the road to the proletariat easily ... The bridge between the peasantry and bourgeoisie is provided by the urban petty bourgeoisie, chiefly by the intellectuals, who commonly come forward under the banner of Socialism and even Communism ... Thus in China, the causes and grounds for conflict between the army, which is peasant in composition and petty-bourgeois in leadership, and the workers, not only are not eliminated but on the contrary all the circumstances are such as to greatly increase the possibility and even the inevitability of such conflicts; and in addition the chances of the proletariat are in advance far less favorable than was the case in Russia.” (My emphasis.)

In the event that the workers are led by Trotskyists, then the struggle for hegemony between peasant and worker, between Communist and Left-Oppositionist, “bears in itself an inner tendency toward transformation into a class struggle.”

Perhaps it would not be amiss here to call attention to the fact that the class composition and character of the dominant parties in the other revolutionary colonial regimes is also petty-bourgeois; i.e., not the direct representatives of the bourgeoisie. And indeed this peculiarity is not peculiar at all since it is almost the norm for the urban petty bourgeoisie to provide the spearhead, organizationally, as well as the most radical ideological face of the revolution. [3] The bourgeoisie itself often enters the revolution, or rather accepts it after other classes have destroyed the old order, or, to curb an irresistible movement (Russia, 1917).

Thus it was in China too. The regime of Chiang, incompetent, bankrupt, dominated by the feudal landlord class (according to Germain), and utterly incapable of dealing with the spreading peasant revolution, is replaced by that movement, led by the urban petty bourgeoisie mobilized in the CP. It was this landlord regime of Chiang – accustomed during 10 years of war to the need and indispensability of planned industrial development – anticipating the proletarian danger, and hoping to secure its own dominance in the future state by minimizing the strength of the Shanghai bourgeoisie, that nationalised industrial property in a last-ditch effort to save itself! Upon the seizure of power, the bourgeoisie gratefully entens the regime and the state, which it hopes will be better able to deal with the revolutionary peasantry and the dangerous, if repressed, proletariat.

The Direction of the Economy

It can be argued that though China and the others have many economic structural similarities, they are essentially different in terms of the direction of movement, and that therefore the coincidence of policy and forms is merely conjunctural.

It is in this role of the dynamics of the situation, that Germain and others seek supplementary support for his up-to-this-point idealistic conception of the CP as a working class party forced to move left. Let us therefore examine Germain’s dynamics.

For him, a state of dual power exists today in China, characterized by the fact that “economic power is still predominantly in the hands of the bourgeoisie.” As a result of international and internal crises, the regime will be forced to move left. This will be manifested economically by the “completion of the expropriation of the urban bourgeoisie.” But Germain has shown us that this “expropriation” is already 80% complete in heavy industry, and 30% in light industry. Furthermore, he himself believes that, as regards light industry and commerce in China, even “a dictatorship of the proletariat would have to be accompanied by a period of NEP, considerably broader and more protracted than in Russia, without the complete suppression of private property in the domain of small urban and village industry and commerce of the artisans, etc.” If this is so, then actually no qualitative change is possible in economic terms (as defined in terms of nationalization), and therefore one would suppose, by his criteria that the “economic power (would be) still predominantly in the hands of the bourgeoisie” even under a dictatorship1 of the proletariat; i.e. a move to the left from dual power is impossible by Germain’s criteria.

The source of this confusion, this internal contradiction on Germain’s part, lies in a long unresolved dilemma, and consists of repeating the same error he committed in his early provocative but disastrous discussion of the buffer zone in Europe. There he offered as one proof of the bourgeois character of these states, the fact that not more than 60% of industry was nationalized. Neither then nor now does the distinction between a bourgeois and a proletarian state rest upon such narrow quantitative distinctions as the exact proportion of statified industry. Once again, the abstraction of nationalized property has thrown him.

Problems of Capital Accumulation

But, false as it may be, Germain is not really interested an the theory of increased expropriation except as it provides him with an economic rationale for his idealistic conception of the CP. For the real qualitative change for Germain lies in a more limited goal, in the final elimination of the classical bourgeois elements from the state apparatus (and not from the economy, which we agree with Germain, is quite impossible), and the necessary turn of the CP toward the proletariat in this process.

And here once again the grossest idealism rears its head. For the main obstacle to the growth of the Chinese economy and the stabilisation of the regime, is neither the remaining private industry nor the pre-revolutionary elements in the bureaucracy, but rather the dangers stemming from the problem of capital accumulation and the inevitably “necessary” repressions of the proletariat and peasantry from whose hides this capital must come under present circumstances. The ideological commitments of the Chinese CP will no more interfere with this course than they did in limiting Stalin’s course toward the Russian proletariat. Once in power, the main enemy of the bureaucracy is always the masses whom it must exploit; with the impotent remnants of the classical bourgeoisie, it can do as it likes, or, at worst, can always come to some understanding with it, for the bourgeoisie recognizes perfectly well that only the CP stands between it and the workers. It is about the ensuing consequences of the efforts at capital accumulation that the next stages in the development of the Chinese revolution will take place, and not about the subordinate problem of classical bourgeois residues! It is of course axiomatic that a workers state in China would organize a major part even of its industrial perspective around the pursuit of a genuinely internationalist policy. But naturally, this is quite alien to the spirit of the present Chinese regime.

In brief therefore, the dynamics of the Chinese economy are toward increasing state dominance in heavy industry and growing role in light industry as well. This process does not involve any qualitative change in the class character of the regime. And this is no different from the tendency in the other countries we have discussed: Formosa, Burma, India, Indonesia. Variations of degree and tempo doubtless exist. But the all-important method and process remain parallel.

The Association of China With the USSR

The intimate alliance of one state with another, granting for the moment its working-class character, would certainly be a significant criterion for the consideration of the nature of the regime, if there were any indication that the act was an expression of proletarian internationalism. Unfortunately, only the grossest misconception of the policy of the Chinese CP could conceive of its alliance with the USSR as subordination to internationalism or even to the Kremlin. The policies of the Chinese CP on the contrary are essentially independent of Russian interests or of those of the world working class, and reflect only the needs and interests of collective Chinese capital. That these interests should, in the immediate conjuncture of events seem to lie in alliance with the USSR is easily determined by the recent history of China – the fact that the US was and remains the threatening colonial master. Just as in Yugoslavia, the needs of China, as interpreted and comprehended by the narrow, national, empiricist bureaucrats of the CP, come first, and, if the US would allow it (no longer likely) a change in policy of the CP would be only too likely. [4]

The Permanent Revolution

The theory of the permanent revolution is rightly regarded one of the cornerstones of modern Marxist theory. Before World War II, this conception had demonstrated its vitality, in all its nuances – in the events of the Russian Revolution and throughout the inter-war period – providing the movement with a series of predictions and analyses repeatedly, brilliantly, confirmed by events.

But it must be equally clear that the colonial revolutions of the past decade have proceeded along a pattern of development quite unforseen by us – that the emergence of a new group of bourgeois states in Asia is inconsistent with our expectations derived from the theory of permanent revolution. We cannot but recognize the existence of a new bourgeois state in India (and elsewhere) despite the irresolution on the land question (fatal as that may prove, it is only one source of organic disequilibrium). To attempt to solve the theoretical problem this poses by the notion that India is not “really independent” would seem to be the most dangerous scholasticism. Yet, so long as the problem of the place of these states in history and in theory has not been -resolved, there will always remain some, who, seeking the simplest resolution, will maintain that nothing has changed; i.e., the former colonies are not independent states but disguised satellites and tributaries. And since a closely related view even finds some reflection in Germain, we must touch upon it briefly.

This conception rests on the “fact” that the bourgeois democratic demands have not been completely realized in these new states. As in Russia, the bourgeoisie is proved incapable of creating a truly independent national State, resolving its historic tasks; and the next point on the agenda therefore remains a proletarian resolution of the democratic demands. In this way, Trotsky’s theory is kept intact.

Unhistorical Conception

Unfortunately, this conception of an absolute minimum of democratic bourgeois demands is completely unhistorical. The nature of the demands, the minimum consistent with, and indispensable to the creation of bourgeois rule, will obviously vary considerably with the manner in which the bourgeoisie comes to power, its history, and the epoch in which it enters upon its tasks. Certainly, concrete bourgeois world history supplies ample evidence of this. It is impermissible to refuse to distinguish between an imperfectly resolved (i.e., non-classical) revolution, and a revolution that is unresolved, between form and essence. The qualitative transformation to a new bourgeois state can be achieved without radical land reform, in spite of secondary territorial incompleteness, and remnants of outmoded social and economic classes, and certainly without (the appurtenances of the parliamentary state.

But if these new states are a fact, is this development as crucial a test of the validity of the theory of the permanent revolution as it appears? Does it strike at the letter or the spirit of the theory? To this end, a closer look at what the theory really says is necessary.

In his address to the general council of the German Workingmen’s Association where the theory of permanent revolution is first propounded, Marx expresses the view that once a revolutionary situation has developed, the proletariat must pursue its own aims under its own independent organization, even when engaged in a common struggle alongside the bourgeoisie. Once the process is under way, the perspective is opened for the proletariat to carry the revolution beyond its bourgeois goals – the revolution in permanence. The key conception and interest is not that the bourgeoisie would or would not fear to enter the revolutionary path, but that once begun, the door was open to the possibility of combined development – that an independently organized and motivated working class need not, should not, and would not stop short of workers’ power.

Starting from this conception, Trotsky refined it to fit the epoch of capitalist decay. Introducing, with Lenin, the notion that the bourgeoisie no longer dared carry through its own revolution, and that the task would have to be executed by the working class, Trotsky added the conception that the proletariat would not stop at this point, but would proceed to the workers state.

Heart of the Theory

The real heart of the theory is that once involved as a class, the workers cannot stop short of full power. The conception that only the workers can carry through the bourgeois revolution is not the key to the theory of permanent revolution, for Lenin’s policy too was based on the impotence of the bourgeoisie, while rejecting the theory of permanent revolution. In the concrete historical circumstances in which Marx’s theory of permanent revolution was restored and reshaped to the needs of the times, it is only natural that what was essentially a historical aspect of the theory (the impotence of the bourgeoisie) should have appeared as one of its major postulates. For the really original element in Trotsky’s conception of the permanent revolution, the aspect that makes it his, is that if the workers participate in the bourgeois revolution as a class (i.e., unlike the major aspects of their participation in the French and English revolutions), then the colonial areas too can be ripe for the direct transition to a workers state. Furthermore, due to the peculiar development of their economies, and the world situation of capital, the backwardness of the economy and the small size of the proletariat will not interfere with this perspective of combined development. (Even Lenin had only envisaged the task of the democratic dictatorship of the proletariat and peasantry to be the creation of a bourgeois state.) But always the unspoken premise (very explicit in Marx) – the presence of a revolutionary party which understands the need for independent class organization, action, and goals.

It is the overwhelming revolutionary pressure, in the absence of this indispensable catalyst, that permitted and forced the bourgeois classes, native and foreign, to accept the developing revolution, to tolerate it before attempting to housebreak it and direct it into channels of new bourgeois states.

Seen from this perspective and conception of the theory of permanent revolution, the fact that for an interlude, the bourgeoisie is able to establish its rule is a matter of distinctly secondary theoretical importance, though of course, of the greatest historical significance. But more important, it permits the unimpeded perspective of revolutionary working-class notion; i.e., the retention of the theory of permanent revolution.

A revolution is not identical with its first phase. The distance between February and October is not always eight mtonths. The French revolution took four years to reach its peak, and the English revolution even longer. On the morning of its assumption of power, the new ruling class must discover that the immediate problems of society, of the revolution, are beyond its capacities, and in its first acts, it lays the basis for the next stase of the revolution, the necessary intervention of the proletariat, in its own name!

There is of course another way out of the difficulty posed by the problem of the new bourgeois states. That is, to argue that the new states are indications of a new force in the political arena, a bureaucracy able to revolutionize society with or without the proletariat.

Pablo and the Permanent Revolution

As if to remove this alternative from the realm of speculation, a resolution reproduced in the Fourth International, July-August 1952, indicates that it is precisely this road that Germain and Pablo propose to follow (thus far, only for China).

Germain’s work is undoubtedly a brilliant tour de force. However, the elegant style cannot conceal the confused, opportunistic character of his politics. We have argued previously that Germain had to develop an idealistic conception of the character of the Chinese CP, and of the future course of development of Chinese economy. We now come to the core of his reasoning on these issues.

In this thesis, Germain attempts to interpret the history of the Chinese revolution, as well as its perspectives, in such a manner as to conform in almost every respect to the classical pattern envisaged in the pure theory of permanent revolution. One slight detail is missing – for the revolutionary role of the proletariat, Germain substitutes the revolutionary role of the CP bureaucracy.

The theory in brief is as follows: The bourgeois-democratic tasks have not been fully realized in China up to this point. The process of full realization will here, classically, involve the transition to a workers state. In this transition, the history and character of the CP leadership indicate that it will be able to consummate the final revolution.

Spacious as they may be, Germain actually sees in the secondary aspects of incompleted bourgeois tasks, the major forces compelling the revolution in permanence! If this issue is really so crucial to Germain, and if his case really rests upon such shaky foundations, it is necessary to take a closer look at it.

Since Germain prides himself on not being a sectarian, a purist in his demands upon revolutionary movements, he must maintain, if he is to be taken seriously, that these areas of incompleteness are of such magnitude that they vitiate, or at least severely cripple the unquestionable partial achievements of the bourgeois revolution up to this date. An examination of his five measures of irresolution of the bourgeois-democratic demands will dispel any such misconception.

Germain’s Five Indices

  1. All foreign capital is not yet expropriated. How absurd, as a vital criterion, this objection becomes, when it is clearly incontestable that the decisive voice in China today (for the first time in 100 years) lies not with foreign capital but native.
  2. Incomplete nationa1 unity (Hong Kong, Formosa, the Russian enclaves and Russian influence in Sinkiang). With the exception of “Russian” Sinkiang, are these really more than the fringes of the national state? How innumerable is the list of just such imperfections, today, in unquestionably bourgeois lands.
  3. The incomplete agrarian reform, by which Germain means the existence and constant recreation of rich peasants. But how this is an indication of incomplete bourgeois land reform, (one of whose laws is precisely the tendency toward capital accumulation on the land, and land concentration) is somewhat obscure.
  4. “In the domain of the state the symbiosis between bourgeois property and the bureaucratic tendencies of the CP apparatus represents a powerful obstacle to a genuine democratic upheaval.” Naturally. But isn’t that an organic phase at the close of every bourgeois revolution – the attempt to consolidate the ruling classes against the masses, who threaten to get out of bounds after the first days of the revolution; i.e., wbo instinctively search for the permanent revolution? Indeed, if anything, this symbiotic process is indicative of the relntive completion of the revolution, and not of its partial character.
  5. The imperialist menace to China through armies in Korea, Viet-Nam, Burma, Formosa, Japan. This is certainly the crudest example of how desperately Germain must search to substantiate his fantasy that none of the tasks of the Chinese (bourgeois) Revolution has yet been definitely resolved.”

Only by the most desperate determination to fit the situation to one’s formula could Germain construe the real content of his five indices as more than secondary qualifications to an essentially completed resolution of the bourgeois tasks. Does there exist a strong national state, free of imperialist domination, able and willing to organize society about the goal of capitalist society, the accumulation of capital? To the degree that this pursuit is possible under bourgeois conditions today, this situation has definitely been achieved, above all, in China.

But, deprived of this unhistoric fantasy of the incomplete bourgeois revolution what basis for revolutionary perspective is left to Germain? Does it pose a serious problem for Pablo? Unfortunately, Pablo is hardly likely to pay much attention. For, as is so often the case, many of his rank-and-file disciples, unable, or too careless, to follow the sophisticated rationalizations of Germain (and, perhaps, also a bit more “flexible,” more rashly prepared to drop all Marxist analysis for impressionistic empiricism) have already been calling China a “workers state” for quite some time. And indeed, why not? There is nothing in Germain’s analysis or method that prevents their doing so. The only distindtion left to Germain between the present regime and a workers state is the problem of democratic workers committees. But this “anachronistic” prerequisite has long since been abandoned by Germain and Pablo in their analyses of other situation’s, so why not here?

New Line Emerges

Fortunately, the history of Pabloite development should make the reason for Germain’s hesitancy, his lag, apparent. As in all transitional statements, even in cases of the greatest personal integrity, it is inevitable that we shall find the emerging new line cloaked in the traditional framework, which it is really trying to destroy. The old and the new, side by side, reveal the all-decisive direction of thinking. Viewed in the context of the entire recent evolution of ideas in Pablo, it is evident that the new element in the analysis, the role of the bureaucracy, provides the real line, land not the lip service to revolutionary perspectives.

If History pays any attention to their theory at all, it will be to note the irony of a situation, in which the theory of permanent revolution was used by Germain to explain the absence (past and future) of the primary role of the proletariat, and to rationalise the revolutionary role of the bireaucracy in the creation of a new “workers state” – how in this moment of transition, for the Pabloite; the revolutionary essence of the theory was destroyed to preserve the mask of orthodoxy.

Problems and Perspectives

A Marxist view of the permanent revolution requires the clearest distinction between the incidental and the essential. Trotsky’s theory must be cleared of the historic specific element in order to preserve its genuine contribution to revolutionary theory. We need the candid recognition of the fact of these state-capitalist bourgeois states, and the theoretical understanding of this development. We must be prepared to endure Germain’s list of one, and twenty erudite reasons why these revolutions are incomplete. Nevertheless, the bourgeois-democratic demands can no longer provide the central focus here of our program or perspectives. Only in this way can we avoid the pitfall of surrender to the bureaucracy as the harbinger of revolution – and preserve a clear working-class perspective.

As was indicated above, one of the chief driving forces in the revolutionary developments in Asia was the deepening economic crisis, manifesting itself in a drastic; decline in the standard of living, and this at a time when the demand had risen for a better way of life, improvement not stagnation. The end of direct imperialist rule therefore meant to the masses an end also to the shackles impeding growth. An independent but stagnant economy would be intolerable.

Under these circumstances, the question is, can the new regimes reverse the trend of decades; can they meet the basic problems of production and consumption?

Rate of Capital Accumulation

Colin Clark, the most noted authority on world income and production statistics, is of the opinion that the rate of capital accumulation in Asia today (1953) is not even up to the pre-war rate, and that the most likely course for these economies is absolute stagnation, and a growing disparity between their development and that of even contemporary western economy. [5] By and large the available figures bear out this thesis.

For India, where information is relatively abundant, planned capital development is not much greater than the pre-war period. When one considers the likelihood that the plan will be under-realized, then a planned increase in investment, a mere 25% above the depressed pre-war years is not a happy omen.

In Clark’s view, instead of the approximately 4% of national income currently devoted to capital accumulation, a rate of 12.5% would be necessary to absorb the annual population increment and maintain even the pre-war rate of growth (UN, Statistics of National Income and Expenditures).

Under existing plans it is conceivable that food consumption could be returned to its depressed pre-war level (the plan’s maximum goal), but little else is to be expected. Without great industrial development, concealed unemployment in agriculture must continue to rise, production per man to fall, and the vital reorganization of the tiny-scale agriculture can not be attempted; i.e., the crisis is unresolved.

With all due historical variants, the situation is essentially similar in the other countries under discussion.

In Burma, despite a redistribution of the investment pattern increasing the share of the government, investment remains the same as 1938 – 12% of national income. However the prolonged civil war has cut that income to two-thirds its 1938 level; apart from rice mills, the income from industry and “mines is only one-third that of 1938. [6]

Indonesia’s greatly depressed state is especially bitter in view of the fact that the 1930s witnessed an enormous rate of industrial development, whose dimensions are best indicated by the fact that employment in modern-type factories tripled in the decade. [7]

From the little information available, it seems that between the unrepressed peasant war, the inflation, and the ‘’strike-happy” working-class, the government is just barely able to hold on, and cannot even restore the pre-war level of output, much less organize capital investment on any significant scale.

The fact that to this day, elections have not been held in Indonesia (an appointed parliament rules) should be a sufficient index of the depth of the current crisis.

Regarding China, insufficient information is available to permit a comparison of economic growth over the different periods of the past 20 years. But despite Pablo’s confidence, there are no indications as yet that the Chinese have or will succeed where the Indians have failed. A meager indication of the prospects can be gleaned when one considers that the Sino-Soviet pact grants China a loan of just $50 million annually, barely half of the US Government loans and grants to India, not to speak of several private projects of considerable magnitude.

Effect of the Class Struggle

Above all of course, it is the class struggle in city and farm which provides the insuperable obstacle to the requisite accumulation. Not a rising but a falling standard of living is required for significant capital growth. At the moment the worker is still able to assert somewhat his demand for improved hours and conditions of work. The victory of the revolution against imperialism is translated by the workers from the first into a victory against capital (synonymous with imperialism), yielding an era of legitimized new expectations and demands. But despite the workers’ resistance, the facts of the situation are becoming manifest. In India, consumer goods output per capita falls while output of producer goods rises. On this score there can be no relaxation.

The political consequences are equally inevitable – proletarian revolution or the imposition of the naked non-parliamentary rule of capital in a last convulsive effort to perform its outdated historic mission. The polarization which proceeds this decision is already far advanced in Indonesia. Hence the markedly rebellious workers who, with some legitimacy, are held responsible by the government and the bourgeoisie for the dearth of capital investment and the failure of production to reach its pre-war level. Hence the pressing demands of the Chinese workers (and their hasty repression) when the agrarian revolution conquered. Here we see the permanent revolution in action, in its incipient stages.

The Problem of Land Distribution

If the class situation in the cities poses organic obstacles to capital development, this is no less the case with the problem of land distribution.

In a situation of concentrated land ownership, where the landed class is not feudal, and does not use its power to obstruct industrial development, the fact of concentrated ownership can be a great support to the process of capital accumulation. Even in China, for example, considerable capital was provided by Chinese landlords. In Kiangsu, 7.5% of the large landholders owned small factories (handicraft), and 3.2% were shareholders in large (modern) plants. (Chen Han-sheng. The Present Agrarian Problem.) Once this mediating, expropriating class is removed, sums that formerly might have gone into capital accumulation are more likely to be diverted to consumption goods (this is particularly true in backward areas), a tendency that is likely to accentuate enormously the difficulties of an economy trying to accumulate and able to produce few consumer goods. Under such circumstances the initial gains of land distribution are often dissipated when the government attempts to meet the situation by directly “relieving” the agriculturalist of his new unspent surplus (taxation, forced sales, etc.) in order to convert it into capital.

In any case, distributed or not, the problem of accelerating primitive accumulation means unceasing unrest in the villages. Nor does distribution by itself countermand the low productivity, which is essentially a function of small-scale operation, backward techniques, and surplus labor.

The fearful economic backwardness, the decay of western capitalism, the irrepressible revolutionary movement, and the absence of the revolutionary party, have combined in our epoch to present us with examples in Asia (and elsewhere) of the theoretically ultimate stage of capitalist development. (There is of course no reason to believe that this theoretical possibility will be realized as a qualitatively changed structure of western capitalist society, short of a tremendous proletarian defeat.) But even this rationalized expression of capital is both theoretically and empirically quite incapable of resolving the problems that called it into being. Nowhere has this spasmodic effort resulted in any stabilization; everywhere, from its very first entry upon the scene of power, it runs headlong into the most implacable class war, and is capable of mere survival only to the degree that the crisis of leadership remains, as the final missing link in the transformation of humanity. For it is only through the utilization and increase, by and under aegis of the working class, of the resources of the entire world that the problem can begin to be met.


1. Nationalization of land, in and of itself, is of course no more progressive (than nationalization of industrial property. It simply paves the way in backward areas of small-scale agriculture for the development of industrial agriculture when that development must take place rapidly and at a forced pace just as is the case in industry. In the US, the reorganization of land tenure for our industrial agriculture simply uses more subtle, slower means. Burma has already allocated funds for the establishment of exploratory collective farms for industrial agriculture.

2. Fourth International, Dec. 1950, p.115.

3. In almost none of these new colonial regimes is political power likely to be turned over to the bourgeoisie directly. One of the important elements supporting this development is the new weight assumed in these states and economies by the petty bourgeoisie (administrators, professionals, the new vastly expanded state bureaucracy). The organization, of society on these lines creates a new role for the petty-bourgeois. His future lies not in classical bourgeois independent economic activity, but rather in his role, his place in the state apparatus. The state is the source of all perspective, of economic growth, “necessary” repression, and above all, jobs.

4. That China was at least partially pushed into the Russian alliance, despite its wish to pursue a policy similar to that of the other Asiatic states, was noted by James P. Cannon in 1953:

“And one bright day, the world was suddenly confronted by a new China, which was really independent, but backward in its industrial development and eager to get foreign loans and credit. The government of Mao Tse-tung offered to guarantee the capitalist system of production, and to guarantee all loans, on that basis.

“The statesmen and leaders of British capitalism, who are older, wiser and more experienced in world affairs wanted to come to terms with the new reality, to recognize the new revolutionary government and continue trading with the new China.

“But the American statesmen and leaders wouldn’t have it that way. They can’t understand how it happened. They feel that somebody gypped them, and they are as indignant as a farmer who has been played for a sucker in a carnival shell game. China, according to their thinking, ‘belongs’ to them, and somehow or other, by some trick or other, they ‘lost’ it.”

5. C. Clark. Manchester Guardian Weekly, Jan. 29, 1953.

6. Economic Bulletin for Asia & Far East, Vol.III No.1-2.

7. Labor Problems in S.E. Asia.

Steve Zeluck   |   ETOL Main Page

Last updated: 2 April 2009