The three sections we are exploring here basically form one unit. “State Capitalism”, “Is the Bureaucracy a ruling class?” and “The Character of the Soviet Union not yet decided by history” are a theoretical snapshot of the USSR at a particular point in time, and that point in time is their starting point. Trotsky’s dismissal of those who attempt to characterise the USSR as ‘State Capitalist’ is appropriately brief. As he points out in dismissing it, “No one knows what it means”. It is a catch all that describes what happens when a bourgeois state takes control of, or intervenes in, the economy.
He describes something that was later given credence in the works of Tony Cliff, the founder of the SWP, at the end of WWII. But he demonstrates its unviability:
“Theoretically, to be sure, it is possible to conceive a situation in which the bourgeoisie as a whole constitutes itself a stock company which, by means of its state, administers the whole national economy. The economic laws of such a regime would present no mysteries. A single capitalist, as is well known, receives in the form of profit, not that part of the surplus value which is directly created by the workers of his own enterprise, but a share of the combined surplus value created throughout the country proportionate to the amount of his own capital. Under an integral “state capitalism”, this law of the equal rate of profit would be realized, not by devious routes – that is, competition among different capitals – but immediately and directly through state bookkeeping. Such a regime never existed, however, and, because of profound contradictions among the proprietors themselves, never will exist – the more so since, in its quality of universal repository of capitalist property, the state would be too tempting an object for social revolution.”
This is basically Cliff’s thesis on the nature of the USSR, China, and all the degenerated and deformed workers states. It’s what has given Trotskyism a bad name over much of the world, even though Trotsky in effect ridiculed Cliff’s book before it was written. Cliff himself says that such a regime could not come into existence organically under capitalism but could only exist as a product of a proletarian revolution that failed. While Trotsky pointed out that such a regime would be the ultimate self-destructive entity, Cliff describes the USSR as pretty much the worst form of tyranny that ever existed. It’s a caricature of the USSR in any case, as there was no single accounting unit for “profit”, and everyone knows that wide sectors of the economy were subsidised and run effectively at a loss.
So much for a profit-driven economy – the expansion of the productive forces that drove the Soviet economy forward while the capitalist world was in the Great Depression was able to happen precisely because the driving force was social need, not profitability. Even though social need was distorted by what the bureaucracy considered was ‘social need’. Then he goes through the various forms of state intervention in the economy, under a variety of bourgeois reformist regimes, and even under fascism, and shows how they did not touch the basic relations of private property. When you talk about etatism in the French social-democratic sense, or even under the fascism of Mussolini, you are talking about the use of bourgeois state power to safeguard the rule of private property, not to abolish it. That required a completely different movement and political programme.
The question “Is the bureaucracy a ruling class?” heads perhaps the most challenging part of this book theoretically. Trotsky notes that various bourgeois bureaucracies, up to and included the fascist, rule on behalf of the bourgeoisie, a privileged class, that are accustomed to being the masters. Whereas what you have with the bureaucracy of the USSR is a formation that rules on behalf of a ruling class that does not have the habit of ruling and is a long-oppressed class.
“The Soviet bureaucracy has risen above a class which is hardly emerging from destitution and darkness, and has no tradition of dominion or command. Whereas the fascists, when they find themselves in power, are united with the big bourgeoisie by bonds of common interest, friendship, marriage, etc., the Soviet bureaucracy takes on bourgeois customs without having beside it a national bourgeoisie. In this sense we cannot deny that it is something more than a bureaucracy. It is in the full sense of the word the sole privileged and commanding stratum in the Soviet society.”
Furthermore:
“The Soviet bureaucracy has expropriated the proletariat politically in order by methods of its own to defend the social conquests. But the very fact of its appropriation of political power in a country where the principal means of production are in the hands of the state, creates a new and hitherto unknown relation between the bureaucracy and the riches of the nation. The means of production belong to the state. But the state, so to speak, “belongs” to the bureaucracy.”
But he projects, and it’s perhaps not entirely obvious what he means, that:
“If these as yet wholly new relations should solidify, become the norm and be legalized, whether with or without resistance from the workers, they would, in the long run, lead to a complete liquidation of the social conquests of the proletarian revolution.”
But this has not happened:
“The bureaucracy has not yet created social supports for its dominion in the form of special types of property. It is compelled to defend state property as the source of its power and its income. In this aspect of its activity it still remains a weapon of proletarian dictatorship.”
And he goes into the concretes of what that means for the bureaucracy:
“The bureaucracy has neither stocks nor bonds. It is recruited, supplemented and renewed in the manner of an administrative hierarchy, independently of any special property relations of its own. The individual bureaucrat cannot transmit to his heirs his rights in the exploitation of the state apparatus. The bureaucracy enjoys its privileges under the form of an abuse of power It conceals its income; it pretends that as a special social group it does not even exist. Its appropriation of a vast share of the national income has the character of social parasitism. All this makes the position of the commanding Soviet stratum in the highest degree contradictory, equivocal and undignified, notwithstanding the completeness of its power and the smoke screen of flattery that conceals it.”
And thus:
“The attempt to represent the Soviet bureaucracy as a class of “state capitalists” will obviously not withstand criticism.”
And Trotsky drew some conclusions about the future course of the USSR, which in my view, were historically specific. We are not studying this as a holy text, or anything like it. Everything is up for critical evaluation.
Be that as it may, Trotsky writes of the automatism of capitalism, and its ability to continue to prosper under a variety of political regimes:
“Bourgeois society has in the course of its history displaced many political regimes and bureaucratic castes, without changing its social foundations. It has preserved itself against the restoration of feudal and guild relations by the superiority of its productive methods. The state power has been able either to co-operate with capitalist development, or put brakes on it. But in general the productive forces, upon a basis of private property and competition, have been working out their own destiny.”
And it contrasts that with the fate of the planned beginnings of the Soviet economy if the regime were to fall:
“In contrast to this, the property relations which issued from the socialist revolution are indivisibly bound up with the new state as their repository. The predominance of socialist over petty bourgeois tendencies is guaranteed, not by the automatism of the economy – we are still far from that – but by political measures taken by the dictatorship. The character of the economy as a whole thus depends upon the character of the state power.”
And this is the key passage:
“A collapse of the Soviet regime would lead inevitably to the collapse of the planned economy, and thus to the abolition of state property. The bond of compulsion between the trusts and the factories within them would fall away. The more successful enterprises would succeed in coming out on the road of independence. They might convert or they might find some themselves into stock companies, other transitional form of property – one, for example, in which the workers should participate in the profits. The collective farms would disintegrate at the same time, and far more easily. The fall of the present bureaucratic dictatorship, if it were not replaced by a new socialist power, would thus mean a return to capitalist relations with a catastrophic decline of industry and culture.”
And that is the key phrase – the fall of the Stalinist regime to restoration would mean “a catastrophic decline of industry and culture”.
Trotsky expressed deep scepticism, for good reason, about the capacity or even intention of the Stalin regime to preserve the social conquests of the revolution…
“During the last fifteen years, the government has changed its social composition even more deeply than its ideas. Since of all the strata of Soviet society the bureaucracy has best solved its own social problem, and is fully content with the existing situation, it has ceased to offer any subjective guarantee whatever of the socialist direction of its policy. It continues to preserve state property only to the extent that it fears the proletariat. “
And aspects of this came true long after Trotsky’s death. The subjective character of the ‘socialist’ commitment of the bureaucracy atrophied completely in the USSR, and very leading figures in the Communist Party, centred around Gorbachev and Yeltsin, basically junked that socialist commitment even in words. This took place both in the USSR, now mainly in Russia, and in the giant deformed workers’ state of China, which did not exist when Trotsky wrote this work, but which emulated much of what was analysed by Trotsky in the Revolution Betrayed. About the USSR Trotsky wrote:
“The October revolution has been betrayed by the ruling stratum, but not yet overthrown. It has a great power of resistance, coinciding with the established property relations, with the living force of the proletariat, the consciousness of its best elements, the impasse of world capitalism, and the inevitability of world revolution.”
But that confidence of the proletariat in the socialist mission of the USSR had been considerably damaged by 1989-92, as miners, for instance, went on strike to support Yeltsin’s pro-capitalist demands, even though that led to their jobs being massacred.
What is important though, is that both in Russia and in China, what has not happened, despite the horrors of the Yeltsin ‘shock treatment’ of the 1990s, is a “return to capitalist relations with a catastrophic decline of industry and culture”. This is something we have tried to explain and assess the reasons for. It is obvious that the imperialists do not trust the sustainability of the changes in the direction of capitalism that have taken place in Russia and China. It is obvious that some sort of capitalist-restorationist process has happened in Russia and China. Russia is no longer dominated by a Communist Party, and the Communist Party in China is dominated by a capitalist class of billionaires. The General Secretary of the Chinese Communist Party is a dollar billionaire.
But there is still something different about Russia and China. Economic planning was never abolished in China, and the state machine, in which billionaires call the shots, still has large elements of planning. In Russia, there was a terrible neoliberal shock and decline, but then a revival under Putin in which things were not fully rolled back to the situation of the USSR, but a considerable re-statification took place. And we have seen the outbreak of a new Cold War in the last decade-and-a-half, in which the same demonology about Russia and China has taken centre stage. Russia and China are once again seen as the main enemy by Western imperialism. And clearly this still has a class element. They hate those countries because the capitalism that has been restored with is weak, not vis-à-vis the imperialists, but vis-à-vis the massive post-capitalist deformations that mark their economies and state apparatus, which they have proved unable to abolish. This has produced a strange phenomenon, of the bourgeoisie blowing hot and cold in dealing with them, as epitomised by the duality between Biden and Trump.
It appears that Trotsky’s contention that “A collapse of the Soviet regime would lead inevitably to the collapse of the planned economy, and thus to the abolition of state property” has not been borne out. His contention did not work out that “The predominance of socialist over petty bourgeois tendencies is guaranteed, not by the automatism of the economy – we are still far from that – but by political measures taken by the dictatorship.” It does seem that there proved to be a degree of “automatism” of the economy, that falsified some of his most catastrophic predictions of what a counterrevolution would bring. It seems that fact that it took a further half century of the USSR’s surviving, and China among others owing much of their vitality to the USSR, meant the planned element was not as fragile as Trotsky thought. That might slightly modify the scenarios in part 3, of what would happen if a revolutionary party took back power in the USSR in the period Trotsky was talking about, or conversely, what would happen if the Stalinist regime collapsed.
Of course, Trotsky never lived to see these things happen. That does not make his work any the less groundbreaking or useful. But it must be studied critically, not as sterile dogma. Marx and Engels made many errors of perspective, but likewise that does not invalidate their critique of capitalism. The same is true here. There is still a need for the revolutionary proletariat to reconquer power in Russia and China, and smaller examples of this phenomenon like Vietnam, and indeed all the ex-Soviet states and satellites up to and including Ukraine, for that matter. There is still a need for the class-conscious proletariat to gain full political power (which it has never held) in the surviving deformed workers states that still exist, Cuba and North Korea.
There is more ideological confusion created the way things have worked out, as China is ruled by billionaire “Communists”, and Russia, which is still seen by the bourgeoisie as a crypto-communist enemy state, is led by a charismatic centre-right Orthodox Christian. This has created an anomalous situation that needs to be resolved, of a polarisation of these forces against imperialism, and yet these forces not only cannot abolish imperialism, they have no intention of doing so. The ‘multipolar world’ is the ideological expression of a modified form of Stalinism’s programme of ‘peaceful coexistence’ of the workers states with imperialism. It is just as much an illusion, a bourgeois reformist utopia.
We need a new revolutionary Communist International, as these forces cannot remotely begin to deal with the many problems capitalism has bequeathed humanity, not least the damage to the biosphere. But Trotsky’s definition of the USSR, written in 1936, still looks not bad:
“The Soviet Union is a contradictory society halfway between capitalism and socialism, in which: (a) the productive forces are still far from adequate to give the state property a socialist character; (b) the tendency toward primitive accumulation created by want breaks out through innumerable pores of the planned economy; (c) norms of distribution preserving a bourgeois character lie at the basis of a new differentiation of society; (d) the economic growth, while slowly bettering the situation of the toilers, promotes a swift formation of privileged strata; (e) exploiting the social antagonisms, a bureaucracy has converted itself into an uncontrolled caste alien to socialism; (f) the social revolution, betrayed by the ruling party, still exists in property relations and in the consciousness of the toiling masses; (g) a further development of the accumulating contradictions can as well lead to socialism as back to capitalism; (h) on the road to capitalism the counterrevolution would have to break the resistance of the workers; (i) on the road to socialism the workers would have to overthrow the bureaucracy. In the last analysis, the question will be decided by a struggle of living social forces, both on the national and the world arena.”
That cannot really be faulted as a definition, though primitive accumulation in Russia and China was a phase long past by the time of the counterrevolutions of 1989-92, which may even explain much of this.
