Say the words “state capitalism” and who comes to mind? Martin Thomas or Tony Cliff? Martin (WL 43) advocates his own version of the theory, but in order to engage in the debate on the ground, he should have compared and contrasted his version of the theory with Cliff’s. For this purpose, useful sources are Cliff’s own book and an article entitled “The law of value and the USSR” by Derek Howl (International Socialism 49). Howl’s article is an earnest attempt to explain Cliff’s “method”. The opening sentence reads: “The Socialist Workers Party’s theory of bureaucratic state capitalism has often been misunderstood as a theory to explain the differences between the USSR and Western capitalism.” So where do the differences come in? Howl explains further: “He [Cliff] used the Marxist method to abstract from the apparent differences between East and West in order to explore the underlying similarities.”
Thus Cliff claimed that East and West were similar; he supported this claim by abstracting from the differences! Martin’s version of the theory aligns the USSR with capitalism in genesis, rather than developed capitalism. Undoubtedly this is more plausible. However his “state capitalism” includes countries where “the state nurtured a native private-capitalist class” and others where “the state substituted for and clashed with private capitalists”. This distinction is obliterated by Cliff-like “abstraction”, creating a single category for all countries where the state fostered industrialisation — despite state industry being developed within differing sets of social relations.
The debate between Trotsky, Shachtman and others was an attempt to define the social relations that existed within the USSR, in order to decide the answer to a political problem — whether or not to adopt a position of unconditional defence of the USSR. As it turned out, clarity on this issue was not achieved, and the political problem has now disappeared with the USSR. However, revisiting this debate is potentially of value, if it helps us to understand where the post-war Trotskyists went astray in their appraisal of Stalinism. What is required for this purpose is not a series of generalisations about Turkey, Algeria and India, but an analysis of social relations in the USSR, in the dozen or so years before the second world war. The decisive event in this period was the forced collectivisation of agriculture. In the space of five years (1929-34) collective farms replaced individual farms as the dominant property form. The better off peasants (“kulaks”) were expropriated and excluded from the collectives. Many were killed or died of starvation. Of those that survived, most were transported to labour camps — they were the first mass intake of “recruits” to the convict labour system.
The poorer and middle peasants became the collective farm peasantry. In theory their farms were a collective asset, but in reality they were a collective liability. The state demanded deliveries of grain and other products and paid very low prices in return. Sometimes state demands imposed a net loss on the farms. Many peasants would have preferred to leave the collective farms and eke out a subsistence living on the small private plots that they were allowed to retain. But the state required food, so labour on the collective farm was compulsory for all adult members of the collective. This is in accord with Marx’s discussion of labour rent (Capital Vol 3), where he points out that if the direct producers possess the means to produce their own subsistence, “surplus labour for the nominal owner of the land can only be extorted from them by other than economic pressure”.
Thus, at least in the countryside, a system was set up that resembled Marx’s “Asiatic” mode of production (where the state was the nominal owner of the land) far more closely than it resembled any form of capitalism. Nor did the collectivisation process remotely resemble capitalism in genesis (except for the abundance of blood). Rural capitalism was already developing under the NEP, but this process was halted by collectivisation. The potential capitalists were liquidated, the majority of poorer peasants became tribute payers to the state — not wage workers. In the industrial and commercial sectors, the private traders and capitalists (NEPmen) were also expropriated. However the numbers of industrial workers expanded. If they had remained wage-labour, as they undoubtedly were under the NEP, then the USSR in the 1930’s would have been a hybrid economy, with a state capitalist industrial sector and an “Asiatic” rural sector. Perhaps this is what Martin is trying to say when he informs us that: “History is full of hybrid and exceptional formations which cannot be slotted tidily into one category or another”. [Why then slot the USSR tidily into the category “state capitalism”?] If the USSR was an exceptional and hybrid formation, then “state capitalism” is a poor choice of terminology to describe it, given that “state capitalism” already has an established meaning as a concentrated form of capitalism in the main line of historical development — not a hybrid and exceptional system.
Trotsky wrote (in The Revolution Betrayed): “To define the Soviet regime as transitional, or intermediate, means to abandon such finished social categories as capitalism (and therewith ‘state capitalism’) and also socialism.”
Trotsky’s objection to “bureaucratic collectivism” was in essence the same — he thought it too was a finished social category, prematurely applied to the USSR.
Yet, as a description of the Stalinist USSR, a formula like “transitional, hybrid economy” is bland and unsatisfactory. Formulations like that suggest two economic forms simply added together, without conflict between them, and without the dominance of one form over the other. As Marx put it in his Grundrisse:
“In all forms of society there is one specific kind of production which predominates over the rest, whose relations thus assign rank and influence to the others. It is a general illumination which bathes all the other colours and modifies their particularity. It is a particular ether which determines the specific gravity of every being which has materialised within it.”
Marx identified the “particular ether” of capitalism as follows:
“The capitalist era is therefore characterised by this, that labour-power takes in the eyes of the labourer himself the form of a commodity which is his property; his labour consequently becomes wage-labour”. (Capital, Vol 1).
The Stalinists waged a determined campaign to dispossess the workers of their labour-power. Trade unions, which in the early years of the NEP could bargain with and strike against their “own” state, were converted into “transmission belts” to represent the state against the workers. The very high labour turnover in the early 1930’s was combated, not by offering better working conditions, but by imposing administrative penalties (loss of social insurance) for “flitting”. In December 1932 the internal passport system was enacted, so that movement to another district, without official permission, became illegal. Workers were still paid wages and there was extensive use of piece rates. However Martin’s argument that wage-labour therefore remained dominant is mistaken. Without freedom of movement or the right to leave one job in the hope of finding something better, workers no longer had effective ownership of their labour-power. Whether they were paid wages or handed rations is of secondary importance; the main issue is the real social relation between worker and “employer”. Convict labourers who are paid wages are not thereby magically made free. Martin’s further argument that the Soviet economy remained capitalist, because money was not abolished, is feeble — money predates capitalism by centuries.
The Victory of “Socialism” was proclaimed in 1934, when compulsory labour for the state — the “particular ether” of Stalinism — had become the dominant form of labour. In the years following 1934, state control over workers was intensified. The terror swelled the ranks of the convict labourers to millions. Hundreds, maybe thousands, were political oppositionists, but millions must have been workers who had simply complained about something, or had crossed their supervisor at work. The influence of the gulag on Soviet society was far greater than its role in production — although its productive role was by no means negligible. The fear of arrest was a major “incentive” to work hard and keep quiet. Martin’s argument that workers outside the gulag remained wage-labour, because those on the inside were worse off, is an extreme case of straw clutching. Any reactionary regime, relying on a prison system to terrorise its workforce, will make sure that it is worse to be in prison than out! The culmination of the campaign against wage-labour was a set of draconian measures, decreed by Stalin in 1940. Details may be found in Alec Nove’s An Economic History of the USSR, p264-267. Here is one paragraph:
“No one was to be allowed to leave his or her job without permission. This was only to be granted in special circumstances, some of which were listed (e.g. old age, call-up to the army, move of husband to another town, admission to higher educational establishment, etc.). If anyone disobeyed and left work he would be subject to criminal-law penalties and imprisoned as a ‘flitter’. Sentences of four months were quite common.”
This was not communist voluntary labour! Nor was it capitalist wage-labour. Martin (WL 39) says that “extreme state control modified [!] wage-labour”. The Stalinist aim was the abolition (or extreme modification) of wage-labour, but in the “opposite direction” to socialism. The Stalinists were reactionary utopians, resembling the “feudal socialists” described in the Communist Manifesto.
In the long run the Stalinist system would prove to be incapable of matching the productivity of modern capitalism. The rulers would introduce market mechanisms in an attempt to keep up with the West. Therefore, Martin argues, the system was capitalist, because it changed into capitalism! In 1940, however, this was in the future. Of course tractors, steelworks, power stations, tanks and aeroplanes were not produced for the personal use of the rulers. But, in the Stalin era, the drive for “generalised wealth” intensified the “Asiatic” exploitation of the workers and peasants. In some musings on political economy (Economic Problems of Socialism in the USSR, 1952) Stalin wrote:
“Talk of labour power being a commodity, and of ‘hiring’ of workers sounds rather absurd now, under our system: as though the working class, which possesses means of production, hires itself and sells its labour to itself. It is just as strange to speak now of ‘necessary’ and ‘surplus’ labour: as though, under our conditions, the labour contributed by the workers to society for the extension of production, the promotion of education and public health, the organisation of defence, etc., is not just as necessary to the working class, now in power, as the labour expended to supply the personal needs of the worker and his family.” After the despot had made this pronouncement, who would then dare to advocate a labour market, or an increase in the resources allocated to supplying the personal needs of workers?
After the war, the continued existence of the Stalinist USSR posed a problem for the Trotskyists. Trotsky’s expression “degenerated workers state” had implied that the USSR was acutely unstable, but (since neither a new workers revolution nor the restoration of private property had occurred) his expression was retained as a description of the USSR. Then the Fourth International decided that the structurally similar states in East Europe must be “deformed workers states”. But these states were created by the Red Army, not the workers.
Cliff was justifiably alarmed by the notion that the Red Army could create a workers state. He argued that the overthrow of capitalism could only be achieved by the working class, therefore the East European states must still be capitalist. The structural similarity between East Europe and the USSR showed, not that the East European states were workers states, but that the USSR was also capitalist. Any other conclusion, he claimed, contradicted the concept of socialism as the self-liberation of the working class. This claim was untrue. While the Red Army could not replace the workers and create socialism, it could (and did) impose the USSR’s “Asiatic” system on the occupied countries.
Cliff does not appear to have considered this possibility, which does not contradict the idea that only the working class can take human society forward from capitalism. So Cliff’s conclusion that the USSR was some sort of capitalism was decided at the outset. His theoretical arguments are decorative word spinning, in order that his presupposition (that the USSR was an example of the militarised state capitalism discussed by Bukharin in 1915) might appear to be a conclusion from his “analysis”. However, Cliff’s book was not all pretentious (and preposterous) “theory”; Cliff also asked the question: is labour-power a commodity in the USSR? Today, SWP theoreticians can effortlessly deduce that labour-power in the USSR was a commodity because the USSR was state capitalist. In 1948, Cliff was better than that. He investigated Soviet labour legislation and concluded — No, workers in the USSR do not even have the limited freedom of workers in capitalist countries. This created severe difficulties for the theory of state capitalism, but they were conjured away with more word spinning. Cliff’s supporters still claim that he has given us a unique insight into the nature of the USSR, but they have “taken out insurance” by deciding (without the bother of examining the evidence) that labour-power was always a commodity in the USSR, even in the Stalin era. In the real (as opposed to “state capitalist”) USSR, the first steps towards wage-labour were Khrushchev’s reforms of 1956. In his history (p356), Alec Nove writes: “Workers were now free to leave their jobs, though subject to some limitations on movement owing to the passport system, thus it was still very hard to obtain permission to live in Moscow and some other big cities. None the less, greater unplanned labour mobility was a fact, and this, plus the abolition of most of the forced-labour camps, complicated the process of planning and made wage relativities of ever greater economic significance.” According to the Maoists, this was treason against socialism and the restoration of capitalism! Capitalism was eventually restored, but it could be said in Khrushchev’s “defence” that his reforms were only the beginning — and he had no intention of going all the way. The Soviet empire was still patrolled by armed border guards (keeping people in), and any suggestion of collective wage bargaining was still anathema to the regime.