23.01.1997

USSR: state capital?

Darren Wade of the Revolutionary Democratic Group takes up the question of the Soviet Union

The CPGB have done the revolutionary left a service in reopening the question of the nature of the Soviet Union. While I want to address this debate generally I would like to begin with a comment on the article by István Mészáros, ‘Control of our own life processes’ (Weekly Worker December 19 1996). The position argued is interesting in that it separates ‘capital’ from ‘capitalism’ and argues that the Soviet Union retained capital. In offering this distinction Mészáros is claiming that the Soviet system was state capital, if not state capitalist. This contrasts to the position outlined in the supplement, which describes the Soviet Union as bureaucratic socialism, implying that this system was already ‘beyond capital’ in a way that Mészáros does not accept (Jack Conrad, ‘Genesis of bureaucratic socialism’ Weekly Worker December 19 1996).

The position outlined by Jack Conrad could be described as close to Trotsky in its acceptance of state property as the defining characteristic of socialism, but this debate also echoes the division between bureaucratic collectivists and state capitalists in the period following Trotsky’s death.

Capital versus capitalism

Mészáros argues that the Soviet system still retained the characteristics he claims define all forms of capital. He gives these as:

the separation and alienation of labour from the objective conditions of the labour process;
the superimposition of objectified and alienated conditions on workers as a separate power;
the personification of capital as a force with a will of its own, in this case as the bureaucracy;
the personification of labour in a contractual and politically regulated dependency relationship.

In distinction to capital, Mészáros characterises capitalism as requiring:

production for exchange
labour power as a commodity
the drive for profit
global integration
the economic extraction of surplus value and its private appropriation

Though crudely compressed, I will now compare this argument to that found in Marx’s Capital.

For Marx capital in its general form is the relationship M-C-M’; value and money become value and money in process, part of an expanding process. It is not the money or commodity form which defines this process; it is the central dynamic of self-expansion that Marx places at the heart of the different varieties of capital, its general form (Capital Vol 1, pp146-155).

Capitalism is defined by Marx in terms of the scale of use of labour: “At first therefore the difference is purely quantitative” (Capital Vol 1, p322). Perhaps more importantly the scale of use leads to qualitative changes in the labour process so that:

“Cooperation ever constitutes the fundamental form of the capitalist mode of production. Nevertheless the elementary form of cooperation continues to subsist as a particular form of capitalist production side by side with the more developed forms of that mode of production” (Capital Vol 1, p335).

It is the social nature of capital in its developed form that makes it capitalism: in particular the cooperative integration of different types of labour power that appear as the work of capital.

Marx later comments that the limits to capitalist production are the characteristics of capital itself: “It is the fact that capital and its self-expansion are the beginning and end, the motive and aim of production; that production is regarded as production for capital ...” (Capital Vol 3, pp278-9). The three principal aspects of capitalist production identified in Volume 3 of Capital are concentration of the means of production, the organisation of labour as social labour and the development of a world market. It appears to me that the attempt by Mészáros to place a divide between capital and capitalism does considerable violence to Marx’s original theory. For Marx capitalist production is inherently social. This is intrinsic to the cooperative use of labour on a large scale.

Capitalists are described as “the trustees of bourgeois society”. Management is described as doing the work of capitalists while boards of directors retain formal property rights. Most famously Marx contemplates the amalgamation of capitals in a particular branch of industry or a whole society: “This limit would not be reached in any particular society until the entire social capital were united either in the hands of one single capitalist or in those of one single corporation” (Capital Vol 1, p627).

The Soviet system concentrated capital spectacularly, the state becoming a single capitalist corporation, and it was ‘managed’ by the bureaucracy, whose genesis is so well described by Jack Conrad. The attempt to suggest that political and economic extraction of surplus labour are different in their fundamental form in the Soviet Union is to ignore the contradictory nature of capitalist production. Inherently social and cooperative production has always included a ‘political’ or managerial element. Robert Owen’s New Lanark experiments in humane management, in early 19th century capitalism, prefigure the latest fads in ‘human resource management’ and ‘stakeholder’ economics. Capitalists always understood that labour power was bought at an average price, but that by selection, training and careful husbandry of the labour ‘resource’ more could be obtained for the average price of this unique commodity. Political or managerial control was in this way always a central component in the extraction of surplus value alongside the mechanism of the market.

In relation to the Russian experience this discussion raises a key question. The market is a part of the process of capital’s transformation. The exchange in the market equalises prices to an average, allowing the realisation of profit by capital, producing commodities using different amounts of labour power for the same output. The replacement of the market by the state removes the function of the market in equalising prices. The state then directly and by administrative means equalises prices in the way that previously took place within individual corporations.

Overall then I would accept with Mészáros that the Soviet Union was dominated by capital, but I find his distinction between this and capitalism breaks sharply from Marx’s own conceptions. At root Mészáros replaces capitalism with a concept relying on the purely economic extraction of surplus value, a process not achieved or aimed for by capitalist production at any stage. This is not some abstract point, as becomes clear in Mészáros’s own words:

“... the state, capital and labour. These are the three fundamental constituents of the system. None of them can be ‘politically overthrown’. The idea of dealing with the situation through a political revolution is a complete illusion and must remain so for the future” (Weekly Worker December 19 1996).

Marx describes capital and capitalism as a social system, a cooperative system in which capital in its own expansion prepares the ground for its own supersession. Mészáros argues that capitalists can be overthrown, but that capital cannot and will reproduce its own personification in another form. In the Soviet Union this happened to be the labour bureaucracy and Communist Party. The dynamic for Mészáros is structural and hence capital cannot be overthrown by political means. Marx, in contrast, clearly envisaged a process of emergence of the new society from the old by political means (See for example the Critique of the Gotha programme). Is Mészáros simply identifying changes that the Russian revolution in particular have brought to our attention? A simple scholastic reading of Marx and Engels would not deal with the changes in capitalism in the past century. My own view is that capital can be overcome politically but that in turn involves us in an assessment of the conditions required for that transformation.

The overthrow of capital and capitalism

The aim of scientific socialism is the transformation of capital by developing its social and cooperative side into its opposite, socialism. It is capital and capitalism that develop the means by which they will be destroyed. This is done in the creation of the proletariat, the class of wage labour organised and disciplined in production into socialised labour.

It is also done through the development of the world market - the much vaunted ‘globalisation’ of the late 20th century is but the most modern incarnation of this process. This process undermines the nation state, the political embodiment of the bourgeois social order. The world market ‘hollows out’ the state, moving its powers away from conscious and political control towards the blind and unfettered processes of economic institutions. Finally capitalism centralises the means of production; many capitals become one so that the whole social edifice of production stands in stark contrast to the power of private capital. Marx contends that capital can be overthrown, that the state can wither away and that labour can be transformed into free association.

Mészáros contends that capital cannot be overthrown - only private capitalists; and that, should capitalists be overthrown a new personification of capital will arise, just as the bureaucracy did in Russia. Equally the state cannot be overthrown - only the capitalist state. For Mészáros ‘the capital/labour antagonism is permanent - irrepressible ...’ Scientific socialism contends that the transcendence of capital lies in the political transformation of the state. The overthrow of capital is at first a political act involving a state, but that that state is of a different kind - a semi-state. Capital, capitalism and the capital/labour antagonism rest on the private appropriation of the essentially social system of production that capitalism develops. The social and conscious control of the socialised system of labour and centralised capital is the first step in capital’s transformation. The nature of the proletarian semi-state is thus a key to the possibility of transition.

The question has been addressed theoretically in both Lenin’s April theses and his State and revolution. It has also been addressed in the practice of the Russian revolution. It is in this regard that Jack Conrad’s article is extremely informative. He describes how the bureaucracy usurped political power within the Russian state after October. He claims this leaves ‘formal’ socialism and a bureaucratically deformed state. In this his formulation is remarkably close to a Trotskyist position. The problem for him is the social basis of this regime: who do the bureaucracy represent? Jack Conrad seems to argue they have a quasi-independent position, balancing between the international capitalist class and Soviet labour. Given Jack’s own account of the usurpation of state power, I find this position incredible.

In this regard Mészáros is to be preferred as he does account for the regime from its economic base. From Marx’s account, the economic transformation of capital is perforce a political act. If the ‘free association’ of producers fails and power is usurped by the bureaucracy then capital remains. The revolution has centralised capital to a new level, but it remains social labour and centralised capital in the private hands of a state administration. In this it is no different from a capitalist corporation run by managers. The John Lewis Partnership is a capitalist enterprise without a private capitalist, as it was handed over to its workforce in the aftermath of the Russian revolution as a bulwark against communism! In the Soviet Union the political nature of the state is not some incidental factor, in the way that similar capitalist systems flourish under different state forms; it is central to the nature of the economic structure. Without the semi-state (a workers’ state leading to its own abolition and the free association of producers) there is no socialism, no transitional form. Capital and capitalism are restored.

Limits to transition

The experience of the Russian revolution explored the limits of national transformation within the system of world imperialism. Marx identified one of the features of capitalism as the development of the world market. The isolation of the Soviet Union within the world market was a key element in the restoration of capitalism. From the civil war to star wars, the impetus of military competition forced accumulation and expanded reproduction onto the Soviet economic system.

Dependence on the world system for technologies and the need to trade brought bourgeois labour practices deep within the system. Taylorism and ‘scientific management’ was an early adaption. The piece rate system was later endemic to production processes throughout the eastern bloc, as was exemplified by Miklos Haraszti in A worker in a workers’ state. Capital was restored in the context of external pressure, especially military competition, but was not solely dependent on it. Despite war communism, wages remained the basis for the economic life of the proletariat. The collectivisation of the peasantry generated a vast pool of ‘free labour’ and played its part in the transformation of the Soviet Union into a wage economy.

In this sense capital was never uprooted in the Soviet Union. Workers took political power but never extended it to social and economic life. The limits to transformation in Russia were set by a largely backward economy suffering the severe effects of world war, and then plunged into civil war and reconstruction. They were also the limits of transformation placed on national economies in what remains a world market. The transition begins in political revolution and the formation of a semi-state, but it can only be completed in the context of an international transformation. Such a change involves the quantitative spreading of revolution in advanced states and culminates in the qualitative shift of the world economy away from the dominance of capital.

Capital cannot be transformed into a free association of producers in a world market still dominated by capital. At most the workers’ semi-state can only begin the transition. Mészáros points correctly to this process, but incorrectly makes the particular a universal by claiming that the capital/labour antagonism is permanent. The development of scientific socialism, from the experience of the Russian revolution, is to specify more closely the requirements for transition, not its impossibility.

Firstly, transition requires an international process in which at some point the quantitative accumulation of workers’ states in key economic areas leads to a qualitative change in the world economy. Secondly, the process of transition cannot begin without the transfer of state power to the working class in the form of a semi-state. Thirdly, the working class must begin quantitative changes in the state-controlled economy dominated by capital before socialism can be built.

The mistake of those who describe the Soviet Union as ‘formal’, ‘degenerated’ or some other type of socialism is to equate the transformation of capital with nationalised or statised control of one fragment of world capitalism.