20.11.1997
Russia in transition
This article is based on a speech given by Hillel Ticktin at Communist University ‘97
Control over the working class can only take place as long as the individual worker is atomised - as long as everyone, in fact, is atomised.
The form of atomisation which existed in the Soviet Union was unique. Of course we have atomisation under capitalism. Marx describes this atomisation in the second chapter of Volume I of Capital, where it was shown to follow from the commodification of labour power. The fetishisation of the commodity leads to the atomisation of the workers.
Today, under capitalism, trade unions and other forms of resistance and community activities exist, but in Russia that was impossible, which is what made it unique. The atomisation of workers - which prevented not just the organisation but even the discussion of resistance - meant that the forms of resistance that did come into existence were extremely limited. It was only in the later years that we did begin to get strikes which went beyond a stay at home - strikes such as the ones which appeared in the main car factories in 1980. There were strikes before, but they were of a different kind.
That unique form of atomisation was only possible under nationalised property. In this context Marx made his famous remark that if you simply have nationalisation but no workers’ control all you can achieve is barracks communism. I think Marx is correct. We are talking here about a society in which a leap has been made, property has been nationalised, but it has not gone the whole way. Consequently the isolated individual has no control precisely because there is nationalised property. Control over the individual is enormous with nationalised property.
We can say that workers under capitalism who have to sell their labour power do not have much choice. But they do have a limited choice. In the Soviet Union you did not even have that limited choice. As later Russian economists also describe, it was a system of semi-forced labour, which distinguished the form of exploitation of labour from that under capitalism. Labour power could not be said to have been sold in the Soviet Union and you cannot say it is being sold even now. In order to sell labour power one would have to be talking of a situation where a worker was free to do so. But right down to 1990 the law concerning parasites continued to exist. A parasite was somebody declared not working - ie, if you were not working you would be convicted of being idle. You did not have a choice of working or not working, a choice which abstractly workers do have under capitalism. Although workers could move from one factory to another, or from one town to another, there were a whole series of barriers.
There is another reason why I say that workers were not selling their labour power. In the factory, they had a degree of control over the labour process. They had no control over their product, but they had a degree of control over how hard they worked. Again that was individualised: it did not happen in a collective form. Workers came into work and worked slowly and rather badly.
What I am describing is the social relationship which existed between the elite and the working class. We have to understand what the old society was in order to understand why it disintegrated, and continues to disintegrate, and why it is not possible for it to simply go to capitalism.
This relationship then was one in which the ordinary worker was not selling their labour power, but had a strong control over the labour process, an individualised control. It is a form of resistance that workers have adopted throughout history, but in the Soviet Union they were doing it in an industrial society.
The Soviet product was peculiar: it was a lower quality product than any product that has been produced in any capitalist society. People have argued with this idea, citing India as an example. But when you produce watches that are an hour fast, you may be producing a watch, but it is of limited use. I am describing the phenomenally low productivity which existed in the Soviet Union. It had to change. It was obvious that as soon as it opened up to the world market it would be wholly uncompetitive. To overcome this would require a complete change in the social relations of production. That is why we have to discuss these relations.
By 1976 the influx of surplus labour upon which the society was based had come to an end. The control over labour, which nationalised property gave, was absolutely crucial to the functioning of the economy: it allocated the direction of labour to one point or another. This could continue as long as there was surplus labour coming into the towns from the countryside or the family.
The way it worked was that if something broke down and there were no spare parts available - production of spares was often bigger than that for originals, but they still had a shortage of spare parts - then they would just use more people to produce whatever it was that was faulty. So having surplus labour was enormously important. The same thing happened in the field of innovation. Whole new factories would be put up to produce something new, rather than introducing the new component into the old factory. Obviously that meant that they had many more factories than the west. But that form of expansion was only possible as long as there were more people coming into the towns.
What this actually means is that by 1976 the expansion of the absolute surplus product had come to an end. So the only way they could grow was not through the absolute surplus product, but through the relative surplus product: in other words through rising productivity. Previously they had been growing absolutely; from 1976 onwards productivity became crucial. That does not mean that there was no extraction of relative surplus product before: of course there was innovation, but innovation in the particular form that I have just described.
The sort of collapse that took place in the economy over this period has never been seen under capitalism up until now. In the Soviet Union the growth rates went down and down. By 1985-86, when Gorbachev came in, the growth rates were distinctively negative. This was disguised somewhat by inflation, whose existence, although modest, was always denied.
The system therefore went into its biggest crisis. It could have gone on for maybe another 10 or 20 years, depending on the power of the working class. What was actually happening was not just that the growth rate was going down, but once they began to lose control over surplus labour they automatically began to lose control over labour itself. The strikes I mentioned were an indication of the working class becoming relatively more powerful.
Abstractly the working class in the Soviet Union was enormously powerful, in the sense that it is and was situated in gigantic plants which were themselves concentrated in particular towns, indeed in particular regions. It is quite unlike the west, where the capitalist class tends to break up large plants. So their size was five times that of plants in West Germany. This was not just a question of scale, but a question of control. If you are not planning, if you do not have the agreement of the population, then you must have direct control, in which case you have a very large plant which is preferably sited not far from Moscow.
What that means of course is that in principle you could have an enormous number of people who might well be opposed to you, but if you have this gigantic plant close to you, you can put in two or three secret police and that would ensure control. Every plant had secret police; every plant had direct control over labour. Smaller plants would have required many more secret police.
This control and atomisation were functional to the system. But what happens when this atomisation begins to break down, as it did during the late 1970s and early 1980s? What happens when the form of organisation I have been talking about begins to break down? Surplus labour was no longer available and the class was becoming more active.
There was no obvious way in which they could react. We have to remember that there was no money in any real sense. The rouble was irrelevant to the functioning of enterprises. Workers would be given roubles, without any guarantee they would be able to buy anything with them. It would be quite possible that there would be no supplies of bread or vegetables, etc. But if you were a member of the elite you could acquire all those things directly. If you were working in a military plant you would receive supplies. The rouble was not functioning as a universal equivalent, or even as a general equivalent. Prices had no meaning: they were arbitrarily fixed by the centre. Nobody ever knew why they were set at a given level. Enterprises bargained with one another directly. It was an inter-enterprise system, more than a system of planning.
Accountants had a very low status because they were largely irrelevant - profits counted for nothing. They were only one of many indicators. Right up to the end what was crucial was product quantity, not totals in monetary terms. In fact an enterprise could make a huge monetary loss, but yet be extremely successful by all the other indicators. ‘Money’ as means of accumulation did not exist. Growth took place, but it is dubious whether you can call that accumulation. It is also clear that under no circumstances could anybody buy the means of production. So the rouble was not money in any Marxist sense and it therefore follows that the law of value did not exist. The profit motive, the extraction of surplus value, did not exist.
In 1985 when Gorbachev had come in the working class was clearly becoming stronger. At the same time, the economy was clearly going downhill. Money could not be used as a means of attraction or control. In other words commodity fetishism could not be used as a means of control. Neither could unemployment. There was full employment, but again that was not an ideological success of the system: rather a failure. The system kept sucking up more and more labour. The point is, they did not have the kind of controls capitalism uses.
The elite could have tried to modify the system. But the system could not go on at all if the working class was threatening to take power, and that was what worried them. So they decided to bring the system to an end at a time which was convenient for them - when they could actually do it, when the opposition from the working class was limited. It was highly successful from their point of view.
They had no clear aim except to maintain themselves. The logical way to go was towards a system that would guarantee them the things they were not getting through the old system: that is, property and inheritance, and therefore control over surplus value. That is what they wanted and have achieved. From the point of view of 70% of the elite, they have managed to make the transition in a very successful way. The elite that is in place today largely comes from the old elite.
However, the transition has happened in a very peculiar form. The way they have done it is to externalise themselves. It appears that something like $20 billion a year leaves the former Soviet Union. Some claim the figure is actually much bigger. When you compare that to IMF loans of $10 billion, you realise that the west is certainly not subsidising the present elite or Russia.
The elite, by externalising itself, is actually subsidising the west. The $20 billion is going to Switzerland, London and New York. They are investing in the country in which they have set up home, although they do also re-invest in Russia. The money that is re-invested usually goes into banking: there are something like 2,500 banks now (of course that is what is given as an example of success - that is about the level of success they have achieved). Many of these banks have investments which ultimately come from Russia via Switzerland, London, etc.
The point of doing it in this roundabout way is that it is safe, having the appearance of external investment. The export of capital from Russia is done through illegal invoicing and a multitude of other forms that the capitalist classes pioneered in many countries throughout the world. The elite therefore is a criminal elite. But not only that: the fact that they are able to do it in this way is an indication of their original nature. You must have heard of some of the different forms of criminality which exist among the elite. It is perfectly true that it is dangerous to be in Moscow now, because you could get shot - caught in the crossfire between gangsters. The government is closely intermeshed with the criminal elite.
The elite therefore is divided into different sections and so is itself atomised. In other words, the process of disintegration continues. Whereas the elite has managed to change itself into a major section of property owners, different components have come into conflict and formed what the west is calling clans, though I would not use the term myself. It expresses the fact that there are different entities like the government, the banks, the media and some industry. The point is that competition is not as you might get in the west: it is actually carried out through force (which gives a whole new meaning to the term ‘cut-throat competition’.
This violent elite has acquired its wealth in criminal ways, expropriating the working class. It externalised itself, but its investment is parasitic. It is parasitic in that it seeks to locate a maximum short-term return, exporting capital from Russia and keeping it in a Swiss bank in order to build up a financial empire. Again this is nothing more than we would expect, given the nature of the old elite.
The problem with investing in industry is that it would mean directly tackling the working class, whereas with finance this conflict is indirect. The consequence is that you have a particular kind of ruling class - this elite, which is clearly ephemeral. It cannot last like this, as parasitic, criminal and externalised. There must be a direct form of extraction of surplus value, and that must come from the working class itself - the source of extraction.
The present situation has only been possible up until now for two reasons: on the one hand the economy has been running down, and on the other the elite has been able to bleed the raw material-extracting sectors. They have obtained their surplus through exporting oil, gas and raw materials in general to the west, which would of course not be able to use Russian industry’s products. One scenario is for a section of the elite to simply maintain the raw material sector, which would allow most of Russia to rot. I have never regarded this as likely myself, though it has been put forward by a section of the elite and some people in the west.
If we turn to the working class and to industry, the consequence of the absence of any real capitalist class can be seen: that is, industry continues to run down. From the point of view of the ruling group there is no reason why it should not run down. They are short-termist and all they wanted to do was to externalise and maintain themselves. In that they have been successful. So the fact that the economy is running down is not an indication that they have not been successful. From the point of view of the west and of capitalism as a whole that would be a disaster. Hence frantic efforts are made to stimulate the economy and reverse the ongoing decline. Nonetheless production now is below 50% and investment is under a quarter of what it was in 1990, and of course the situation is probably even worse than the official statistics.
Clearly no economy can go on like this. It is quite obvious that technically you cannot go on under-investing and not expect the economy eventually to shudder to a halt.
The radical measures taken have come to nothing. They tried to introduce money and the law of value. Prices soared. There was massive inflation and the loss of savings on the part of large sections of the intelligentsia. As a result, if the rouble was not money before, it was even less so after 1992.
In April 1995 they decided to limit the form in which money could be issued, so it could not be regenerated through the central bank. This resulted in the non-payment of wages on a massive scale, and in the continuous growth of debt which could not be repaid. The economy was based on money, but workers were not given wages, no matter how long they worked.
The elite failed therefore to introduce capitalism by using money: whether they could succeed eventually through this method is another question.
If you look at it in terms of the criteria of capitalism - the introduction of money, the establishment of a system whereby the labour power is paid as labour power, where workers alienate their labour power and receive a wage - it has failed: capitalism has not happened. If you look at it in terms of developing private enterprise, that has not happened either. Although enterprises have been privatised, they have been privatised in a very special form in which at least half of the shares went to the workers and management, so in fact most of the enterprises are actually working more or less the way they were working before. Management, not capital, still continues to have control. There are some exceptions, but this is the overall feature.
Some people argue that the system has not changed: it is just much worse - it continues to disintegrate and the economy is declining very rapidly. There has been no shift to capitalism from the point of view of the workers. There is a form of unemployment, but again it is a peculiar form, where unemployed workers are very often attached to the factory and receive benefits from there, because the social security given by the state is tiny. There is an even more degenerate form of what used to exist. From the point of view of the worker the old system was better, and that of course is what the Communist Party of the Russian Federation is arguing - not that I agree with them in any sense.
At the moment we are in a period of declining capitalism, which can be distinguished from its classical form. How does Russia restore capitalism in this situation? We have a capitalism which is dominated by finance capital and which has difficulty and is less and less interested in investing in industry - the only way capitalism can be built in Russia. There is an enormous volume of capital which can find nowhere to go in the world: a certain amount is going to speculative ventures, and a certain amount to Russia. But in general terms capital is not investing there. Had the Soviet Union changed in the 1950s or earlier it might have been very different. Today it is hard to see how Russia can develop capitalism.
There is no obvious way except by wearing down the working class. What they have to do is to overcome the old relations, where workers were ‘controlling’ their own work process in the particular form I described. Underlying that is the egalitarianism which the working class holds to throughout the world. In other words workers are not going to simply accept a situation in which they work for a capitalist who exploits them. It is highly unlikely that the working class would be so worn down, that it will eventually accept capitalism.
Therefore the working class has to be directly attacked - the old relationship must be changed - and this is extremely difficult. It all means continuing disintegration and decline, but that cannot go on for ever. The capitalist class is trying to reach a situation in which abstract labour is established. Ultimately the absence of abstract labour rests on the control the atomisation of the working class exercises over the labour process.
So on the one hand we have the great difficulty for the working class to become a collective - a genuine class: and on the other hand the fact that it is being driven that way nevertheless. It is being forced towards capitalist forms without the actual achievement of capitalism. The enterprises have not been changed: they are still enormous. It is not therefore surprising that miners for example are acting collectively. Nor that there is such a large number of strikes. There is a build-up of working class protest. Workers who had effectively been defeated and prevented from taking any form of collective action for so many years were unable to form themselves as a class. Today that gradual learning process is taking place.
In 1992 the elite were expecting the working class to revolt. Popov, the former mayor of Moscow, actually said he expected an insurrection. But there has been no insurrection up to now.
There has been quite a lot of discussion around the question of why the working class has not acted. One reason of course is, as I have said, that it has been atomised - it does not have the experience of acting collectively. This type of history had been destroyed under Stalin. The workers are now just acquiring and learning their history. Another reason is that there has to be an alternative vision. It is not easy for a worker at the present time to understand what that alternative could be. Yes, they are egalitarian, almost in their bones - they perceive that socialism would actually be better - but they do not see a path to it, especially having lived under Stalinism for so many years.
There are two ways to finding this alternative. One is the growth of an indigenous Marxism coming from the workers and the intelligentsia. But we have to remember that the intelligentsia in the Soviet Union was anti-working class, to put it mildly. That has begun to change with sections orientating to the left. I think we can expect the development of theory from within Russia, but at the moment it is still not there. The second way is of course the development of theory coming from the west. If the working class in Russia could actually see workers in action in the west it would give enormous hope for the possibility of action there too. But at the moment there is still an atmosphere of despair, although I think that has been dented by the limited forms of action that workers have begun to take.
It is true that there has been no great change up until now, but I am extremely hopeful. I do not think it is a question of ideology or trying to convince workers. In the end it is a question of the economy and what the alternatives are. In Russia the alternative of going to capitalism has failed. Even in parts of eastern Europe, where the transition has been relatively successful, it has not happened as quickly as the capitalist class had intended. In an abstract sense it has failed there as well.
Under these conditions it seems to me that the only alternative is for the working class to take control. It is the only chance for Russia to develop a decent standard of living for the population. If they do not do so we will only see continued disintegration. A transition to capitalism through the development of the capital-labour relationship is completely ruled out.