Exchange on State Capitalism:
Is Nationalized Property Proletarian?

We reprint here part of an exchange of correspondence in 1977-1978 between the League for the Revolutionary Party (LRP) and the former Revolutionary Faction of the Red Flag Union (RFURF); it was published in Socialist Voice No. 6 (Spring 1978). The exchange is of particular significance because it is an early presentation of our theory that the Stalinist statified capitalist system was not only a weaker form of capitalism than that of the West but that it would devolve back toward the traditional “private capitalist” forms. This understanding distinguished our tendency from all others on the left, whether they held to theories of deformed workers’ states, bureaucratic collectivism or state capitalism. The theory was remarkably confirmed by the events of 1989-1991 in Eastern Europe and the Soviet Union, and subsequently in China and Vietnam.

To put the exchange in context, the Red Flag Union was a gay liberation organization in California which split politically when it entered upon an investigation of Trotskyism. The majority of the group joined the Spartacist League (SL), while a minority tendency, the Revolutionary Faction, affiliated to the Revolutionary Socialist League (RSL). In introducing this correspondence in 1978 we explained that the LRP had been created out of the expulsion of our tendency from the RSL in 1975-76, and that we were continuing to assess the reasons for the political decay of the RSL. We were taking the opportunity to reply to the RSL’s affiliate in order to expand our analysis of the theory of state capitalism and its role in the world.

In this correspondence the term “Pabloites” refers to those who labeled themselves “orthodox Trotskyists” because they adhered to Michel Pablo’s view that the Stalinist states established after World War II were “deformed workers’ states.” These were allegedly workers’ states because they were modeled on the Soviet Union after the Stalinist counterrevolution; they were “deformed” because they had not been created by working-class revolutions. In our view, because the working class had never held power in these states, they could not be regarded as workers’ states of any kind.

June 10, 2020

LRP to RFU-RF, July 29, 1977

We note in your statement in Red Flag No.2 that you see that cynicism is a basic factor in the Spartacist and RFU-BT defensist position on the so-called workers’ states. In our opinion, you correctly link this view to their abandonment of the proletarian role in social revolutions and in the struggles of the oppressed. That you have seen through and rejected the RFU majority-SL line is a good omen, we feel. There is no question that these elements reflect the outlook of the aristocratic petty-bourgeois layers within the workers’ movement who seek to cynically manipulate our movement in their own class interests.

We are also aware of your collaboration with the RSL, both through the published materials and through the grapevine. We cannot assess at this point the advisability of a tactical bloc against the SL with the RSL, but obviously a deeper relationship is implied by the open political agreements between your two groups. As you are undoubtedly aware, we regard the RSL as a politically rotten and cynical group which, if it is not yet as bad as the SL, is not due to a want of trying.

Cynicism in respect to the proletariat is not a feature of the Pabloites alone but almost totally pervades the whole “far left” here and abroad. In our documents written in the course of the abortive faction fight in the RSL prior to our expulsion, we analyzed this cynicism at some length. In the first issue of Socialist Voice we deepened our understanding of precisely this question.

The cynicism which at present engulfs our movement is a result of the massive defeats inflicted upon the proletariat through the rise of the labor aristocracy due to imperialism (state monopoly capitalism). These include the betrayals of the First World War, the isolation of the Russian Revolution, the string of aborted revolutions which allowed for the emergence of fascism, the smashing of the workers’ uprisings in the wake of the Second World War, etc. These defeats are the historical basis for the ability of the labor bureaucracy to maintain its sway over the American working class (together with their junior partners, the petty-bourgeois leaders of the movements of the oppressed). Identifying the mass of workers with the policies of the aristocratic bureaucracy is a source of cynicism among the petty-bourgeoisified mass of workers as well as a reinforcement of this ideology among the middle-class elements. Such cynicism pervades the RSL as well as the others.

State Capitalism No New System

The SL and RFU-BT polemics on Shachtmanism contain weight not from any contribution of theirs but insofar as they echo Trotsky’s point in relation to the state capitalists and bureaucratic collectivists of his day. He pointed out that giving up on the gains made by the proletariat in the October Revolution would lead to a surrender on defense of bureaucratized workers’ institutions in the West as well, and would in general promote a cynical assessment of the capabilities of the proletariat.

We have attempted to show in Socialist Voice and Socialist Action that nothing so well characterizes the IS-USA, IS-Great Britain (now SWP-GB) tendency – and the RSL which has a leftish version of the same politics – as Trotsky’s prediction. Therefore we would point out that adopting a state capitalist position does not by itself answer the basic questions facing revolutionaries. Precisely what sort of state capitalist view becomes decisively important. How does the IS view, which the RSL tends to accept, that the USSR became the second most powerful nation in the world under the rule of an antiproletarian force jibe with the maintenance of the theory of permanent revolution which rules out such a possibility in the absence of proletarian revolution? To believe that the bourgeois Stalinists were responsible for the development is to junk the Leninist theory of the epoch as well as Trotsky’s strategy for it. Without the strategic theory except in name, politics becomes reduced to maneuverism and the proletariat becomes an object for revolutionaries to manipulate rather than their actual class, which they are part of and lead.

We understand state capitalism to be one aspect of state monopoly capitalism and a prop for its maintenance on an international level. It develops in the “absence” of the proletariat (a formulation common to the RFU majority in Red Flag No.2, the Cliffites and the Spartacists) which is “absent” solely because it has been temporarily defeated by the selfsame Stalinists. It represents the attempt of backward (more precisely semi-backward) nations to catch up with the advanced. Its ability to do so in the USSR was due to the successful proletarian revolution which nationalized and centralized property, established a monopoly over foreign trade, centrally controlled credit and banking, etc., in a way that the bourgeoisie could never have accomplished. These gains were not erased by the Stalinist counterrevolution but seized, utilized and turned against the proletariat. This included the very consciousness of the working class and its identification with the defense of the beleaguered proletarian outpost. This Marxist consciousness rendered into its opposite, bourgeois ideology, was not the least gain of the international working class as a result of October which was used by the counterrevolution against the proletariat.

Only the working class was capable of creating the institutions and momentum which permitted the existence and development of state capitalism when the proletariat had been defeated by counterrevolution. Even in negation, the proletariat is the only truly creative class in this epoch. The proof is indicated by the fact that the “deformed workers’ states” have had a greater drive toward development than the pluralist bourgeois economies as a result of their heritage in the negated Russian Revolution. As a result of the defeat of the workers by the Stalinists, the Chinese, et al., had a model as well as concrete aid for a time after joining in the elimination of the working class as a revolutionary factor. Nevertheless, because these nations did not stem from a genuine workers’ revolution at the outset and were at a different point in history, they have not been able to transcend the limits imposed by imperialism. For all of their efforts, they have fallen into massive debt and reinforced their ties to the strong, though weakening, West.

Unable to catch up and create an independent national position for themselves within the capitalist world market, these nations devolve back into the orbit of state monopoly capitalism and move in the direction of its systemic forms (although a political revolution IS necessary for full devolution).

Our state capitalist (perhaps more accurately described as “state monopoly capitalist”) analysis rejects the idea that state capitalism is a new or higher last stage of capitalism, either on a world wide or a more limited basis. This analysis, in contrast to past state capitalist theories including the RSL’s, does not see this society as an end product of capitalist development in the advanced countries, even though we are fully aware of the tendencies inherent in capitalism which lead in that direction. In the face of a strong proletariat (not smashed) in a modern state, we agree with Trotsky that the chances for state capitalism are minimal since the target of a nationalized productive system is far too tempting. Russia, as a result of its own build-up, has moved into the position wherein it can no longer maintain a viable state capitalism, and it totters on the brink of crisis while attempting to introduce a variety of pluralist and open market forms. For all its development, Russia is profoundly weak and dependent upon state monopoly imperialism. It aggrandizes itself within the compass of maintaining the fabric of Western-dominated imperialism.

From this position we are certainly no defensists. But we do have the closest political affinity to Trotsky’s position that Russia had become a chief agency for counterrevolutionary support to Western imperialism in the world. In fact we hold to this position far more closely than any kind of Pabloite who fetishizes Trotsky’s views, since they now have to discover a “revolutionary” aspect to a Stalinism capable of creating “deformed workers’ states.” As well, our position, in stressing the economic weakness and political incapacities of Russia, does not mechanically equate Russian and Western imperialism and in no sense can be described as “Third Camp.”

For example, it is our understanding that Russia’s role in Africa is not equatable with that of the U.S. The essential role of Russia is to gain some political and diplomatic support in its rivalry with the U.S. in order to protect its own national interests. It is compelled to do so in such a way as to prop up the position of Western imperialism by hamstringing the social movements and fettering them to versions of the same old neocolonialisms (Angola is only one example). This understanding has meant that we hold sharply different positions on Africa from the RSL, which has not been able to explain why it doesn’t emphasize the threat of Russian imperialism in southern Africa. The RSL position also resulted in an absurd third camp line on Zaire, where the Russian danger and the American domination were equated. It also means that the RSL, like the IS, can never deal with the SLers who demand to know where the economic proofs of Russian imperialism are in Africa. (They are there in the limited economic sense, but to a tiny degree compared with the West).

Our views have appeared in far greater depth in our magazine, including our understanding of the difference between our analysis and that of the RSL. This was important for us to work out, since we believe that in one way or another the “Russian Question” is central for any serious political tendency or dispute. We were forced to dig quite deeply in order to explain the enormous cynicism of the RSL revealed so blatantly during our expulsion.

Former RFU-RF to LRP, November 11, 1977

... As you are aware, we have recently affiliated with the R.S.L., as sympathizers, and are therefore in disagreement with your analysis of that organization and believe you have misrepresented its views on a number of points. While there was much in your letters that we do agree with, and while we have found your publications helpful in clarifying certain political points in the course of our study, nevertheless differences remain. We believe the R.S.L. is the only existing organization with a theory and practice capable of building a revolutionary party in this country and internationally. You believe it is “politically rotten and cynical,” moving to the right. The course of the class struggle will, of course, settle the question. We are confident that our decision to join that struggle on the side of the working class and its best organization – the R.S.L. – will be proven correct.

On Russia: We believe that your state capitalist analysis, while excellent in many respects, borders dangerously on the Pabloite view of nationalized property as inherently progressive. “Only the working class was capable of creating the institutions and momentum which permitted the existence and development of state capitalism when the proletariat had been defeated by counterrevolution”, your letter says. And in Socialist Voice No.2, “Nationalization of the means of production could be carried out by the proletarian revolution alone, and Russian state capitalism despite the subsequent defeat of the proletariat stands as a conquest of the workers.”

We agree that in Russia nationalized property and the rest of the economic base upon which state capitalism was built arose from conscious proletarian activity in a workers’ state. (We would not, however, call state capitalism itself a “conquest of the workers,” which implies that workers will, or should, choose to fight for the victory of the capitalist class.)

But how explain the economic transformations in the other Stalinist states? Were the means of production in China nationalized by a proletarian revolution? Your analysis seems to lead to that conclusion, since, you have said, only the workers can carry out that task. If the Chinese regime has a “heritage in the negated Russian Revolution,” what specifically is this, and through what agency does it operate? Material aid and the ideological model of state capitalist Russia are cited in your letter. Is it these which give it what you call “a greater drive toward development than the pluralist bourgeois economies” or is it the nationalized economic base, adopted from victorious state capitalism in Russia, and set up whatever? According to you, the proletariat in negation is still capable of creating the institutions and momentum to develop an economy in a way the bourgeoisie could never do. What is this but the old claim that property forms, regardless of class relations, may assume a proletarian character and surpass capitalism?

You do not see state capitalism as an end product of capitalist development in the advanced countries, and neither do we. Your misstatement of the R.S.L. position on this point does not help your credibility. Similarly, on Africa, if the R.S.L. doesn’t emphasize the threat of Russian imperialism, this is precisely because it is not as imminent a threat as U.S. imperialism to the people of that area. This does not mean the danger of Russian imperialism is nil, only secondary. Nor were these two forces equated in Zaire, as you wrongly charge.

“While revolutionaries should warn of the dangerous games of the Russian imperialists, their main task must be to expose the fact that the Western imperialists are using the invasion (of Zaire) to beef up their puppet regime and military presence in central Africa.” (Torch, p. 13, May 15-June 14, 1977)

If this is an “absurd third camp line,” we would be interested to hear of your own. Do you defend the Katangan mercenaries?

Reply by the LRP

The RSL comrades’ criticism that our analysis “borders dangerously on the Pabloite view of nationalized property as inherently progressive” is a charge put forward without serious proof, based on quotations taken out of context. Any fair reading of our material would show that we have little agreement with the Pabloite view of nationalized property. However, and this is what the comrades find troublesome, we reject the traditional Shachtmanite view of state property as well. The “bordering” they really react to is the closeness of our understanding to the fundamental outlook of Trotsky, despite our obvious disagreements with Trotsky on the question at hand. The errors of Pabloism and those of the bureaucratic collectivists (some now dyed “state capitalists”) stem from similar causes, and their similarities are by no means accidental.

Our articles have always stressed that nationalized property is progressive only as a tool and a facet of the workers’ state which permits the working class to centralize control of the economy and establish conscious planning to an increasing degree. But statified property is not statified in the abstract; in bourgeois hands it is bourgeois state property, property utilized by the executive arm of the capitalist ruling class. In the Western economies the nationalized industries serve to shore up the national economy as a whole and its monopoly profit-making sectors in particular; they are still subject to the limitations and blind economic laws of capitalism, and they are frequently allowed to deteriorate under government control.

In the Stalinist state capitalist countries the laws and limitations still manifest themselves but in altered form. The great advance of the productive forces in the USSR took place in the 1930’s when the Soviet Union was still a workers’ state. Its enormous industrial growth stood in sharp contrast to the bourgeois economies. Since the time when the Soviet workers’ state was overthrown in the great purges of the late thirties, no country has been able to expand its productive forces at a rate more rapid than that of the traditional capitalist countries for any appreciable length of time. None of the post-World War II Stalinist states succeeded in building an economic structure capable of sustaining an independent national economy despite herculean attempts.

This can be understood through the perspective of the theory of permanent revolution. In this epoch of capitalism’s decay, the bourgeoisie is a historically reactionary class incapable of completing even bourgeois revolutions. Bourgeois and petty-bourgeois nationalist forces, whether right or left, in the semi-colonial countries have failed to carry out decisive breaks with imperialism. Only an international federation of workers’ states could achieve the economic abundance upon which sustained independence from imperialism could be based.

Where the fraying fabric of world imperialism is weakest radical alterations have been required to maintain the overall stability of the system. After the Second World War capitalism foundered on the brink of revolution in Italy, France, Eastern Europe and throughout the colonial world. And here Stalinism played its part – neither as a proletarian force nor as a higher form of capitalism, but as the one force within the international state monopoly capitalist system that could defeat the insurgent masses and give world capitalism a new lease on life.

Contrary to Trotsky’s prediction that Russian Stalinism could not survive the war, its rule persisted. Russia emerged from the war a recognized world power, far removed from the weak and transitory degenerated workers’ state that Trotsky had described before the war. It was transformed into a more stable bourgeois class society through the triumph of the bloody counterrevolution, an overwhelming but nonetheless temporary defeat of the proletariat.

Russian capitalism was not restored upon the basis of the earlier, primitive bourgeois forces of Czarist times. Nor was it the imposition of a more-or-less direct Western domination, which Trotsky had imagined would be the likely alternative to the revival of proletarian power. It was a capitalist regime based upon the nationalized and centralized industry, state banking and state-controlled foreign trade which had been created by the Soviet workers’ state, as well as upon the industrial growth of the thirties without which Russia could not have survived the war or expanded its power. And last but not least, the Stalinists inherited a dominating position within the powerful international working classes as a result of the USSR’s heritage in the October revolution, since the masses of the world still looked to it for leadership.

In the wake of the war Russian power expanded into Eastern Europe, crushing the workers’ uprisings and dual power institutions in the revolutionary conditions brought about by the Nazi defeat. In the West it was the power of the Communist Parties within the proletariat which broke the back of the revolutions. In Vietnam, North Africa and other colonial areas again it was Stalinism which paved the way for the re-establishment of Western, chiefly American, imperialism. All these proletarian defeats were made possible by the Stalinists’ power stolen from the working class and rooted in the objective and subjective achievements of the October revolution. That is the irony of history, the fact that history proceeds through negation and contradiction. Despite the defeats, the result of World War II was no new or higher epoch of capitalism. Stalinism’s success only prolonged the epoch of imperialism (state monopoly capitalism, in Lenin’s view) and shifted the class struggle and the operation of the laws of capitalism to a new plane.

Thus the Stalinists moved to full nationalization in Eastern Europe only in 1947-48, after the last efforts at independent proletarian revolutionary activity had been crushed in both East and West. The Stalinists’ historical relation to the working class and the dangerous property forms bequeathed them by that class earned them the fear and enmity of the West. American hostility was increased by the apparent power of the Soviet Union, reflecting its industrial growth in the 1930’s. As soon as Stalinism demonstrated its capacity for imperialist expansion, the United States began to challenge its former ally in the “war to preserve democracy.” Russia tightened her grip upon the satellite countries, eliminating rival forces and integrating their economies into her own. Similarly the Chinese Stalinists could not move in the direction of full-scale nationalization until 1953, after the mass potential of the revolutionary period had died. Full-scale nationalization is a danger to the state capitalist regimes if the proletariat is prepared to challenge for power. Trotsky had pointed out that a fully state capitalist economy was quite possible in theory but was, for one thing, too tempting an object for the proletariat to seize to ever come into existence. Trotsky’s world view was based upon the fact that the proletariat had not been defeated on a world scale and was an immediate contender for power. Only the post-war working class defeats enabled state capitalism to expand; the subsequent revival of working class struggle in the deepening world economic crisis is the key to state capitalism’s accelerating weakness today.

Whereas Russia’s power was founded upon the material basis bequeathed by the shattered workers’ state, the post-war state capitalist regimes, despite their initial spurts of growth, have not been able to overcome their backwardness. They escaped only temporarily from the clutches of Western imperialism, and are now dependent upon the Western powers for trade, capital and modem technology without which no industrial state can accumulate or even maintain itself. The very newest state capitalist regimes (unified Vietnam, Laos, Cambodia) cannot organize their economies at the level that their forbears achieved and are compelled to forego industrialization drives in the interest of bare survival. Cuba has been compelled to abandon any industrial perspective and to try for little beyond an agricultural role in the world market. Thus the new state capitalist regimes resemble the bulk of traditional ex-colonial countries, and there is a growing similarity in form between the “pluralist” statified regimes and the overt Stalinist ones. (Can any “deformed workers’ state” theorist cite fundamental ditierences between the economies of Cambodia and, say, Mozambique, Somalia or Burma – differences that would make the supposed Cambodian “workers’ state” progressive even in Pabloite terms? Can any Pabloite distinguish between the incentives offered for Western investment by “proletarian” Vietnam and by other former colonial countries in Asia and Africa?)

The traditional signs of capitalist anarchy – unemployment, inflation, declining economic growth, vast state debts – have begun to reappear as decisive factors in the state capitalist countries. Reforms in Eastern Europe have reintroduced open internal competition, and the state monopoly of foreign trade has been set aside in several countries. The erosion of nationalized forms stems from the same capitalist crisis that produced the proletarian resurgence starting in the late sixties. The upsurges in France and Italy were matched in Poland, Czechoslovakia, China and other Stalinist states. It is no accident that the Western powers are eager to shore up (and exploit) the state capitalist regimes with loans, nor that the state capitalists look carefully at the greater flexibility of Western economic methods. Statification, however much it appeals to the nationalist ambitions of national bourgeoisies, is too rigid and dangerous a weapon for the bourgeoisie to attempt to wield in the face of a propertyless proletariat on the move.

It was in this context that we wrote that Russian state capitalism “stands as a conquest of the workers.” Nationalization and full centralization of capital are tools of the Bolshevik revolution – and of the proletarian future - that the bourgeoisie stole in order to prolong its rule. In the hands of the bourgeoisie these dangerous tools, designed to free the productive forces from their capitalist fetters, fail of their purpose and tempt an aroused proletariat. Then the state bourgeoisie must try to jettison them. (We have previously expressed these ideas in Socialist Voice No.1, pages 26-27; No.2, pages 26-27; No.4, pages 21-22; and No.5, pages 28-29.)

Yet the RSL comrades go on to characterize our view as one “which implies that workers will, or should, choose to fight for the victory of the capitalist class.” This is simply an impermissable distortion which cannot be derived from an serious reading of any of our substantive articles and letters. Many paragraphs could be cited but one which appears two paragraphs after the cited lines will do (see Socialist Voice No. 1, page 27):

“The basis of Russian state capitalism is the use of the workers’ gains, the expanded and nationalized means of production in particular, against the working class. Vulgar pragmatists cannot grasp what is commonplace under capitalism: capital itself is dead labor created by the proletariat but turned to the suppression and domination of living labor. Nationalization, centralization and concentration are vitally important forms propelled into existence by the workers’ struggle. As capital, both form and content are utilized by the bourgeoisie against the workers. Labor’s creation alienated from the workers under capitalism will be recaptured by the workers’ revolution.”

The proletarian content underlying the forms of nationalization and centralization was not an invention of ours. Marx, Engels and Lenin had the idea before us. It is part of what Engels called “the invading socialist society” within capitalism. For Lenin in particular, the monopolizing and statifying tendencies immanent in the decaying capitalism of this epoch were not neutral forms, adoptable equally well by bourgeoisie or proletariat. The tendencies are anti-capitalist in the sense that they reflect the future proletarian society even though they take place while the bourgeoisie still rules. We quote perhaps his most concise formulation, from the pamphlet “Imperialism, the Highest Stage of Capitalism” (Collected Works, Volume 22, page 205):

“Capitalism in its imperialist stage leads directly to the most comprehensive socialization of production; it, so to speak, drags the capitalists, against their will and consciousness, into some sort of a new social order, a transitional one from complete free com petition to complete socialization.”

Lenin, like Engels, used the term “socialization” within a capitalist context to mean that production becomes social while appropriation remains private; the benefits still accrue to the bourgeoisie but the whole process is becoming public. The means of production are now ready made for the proletariat to seize and harness. The property forms move inexorably toward a new class relationship. This is the revolt of the productive forces against the relations of production. It only remains for the proletariat to make the decisive move, the revolutionary overthrow of the private appropriators of the “socialized” means of production.

Lenin was not discussing the near-totally statified economies of today’s state capitalism but the socializing tendencies under the capitalism of his time which pointed in that direction. Even so he considers the tendency as a transition toward socialism which the bourgeoisie is being dragged into; the bourgeoisie will use the tendency against the proletariat but it is caught up in a dangerous undertow that it is far from comfortable with. This makes our point all the stronger, for what is true of the state monopoly capitalist “socialization” that Lenin witnessed is no less true of post-war state capitalism.

Lenin considered the entire epoch of imperialist decay as transitional, a transition that the bourgeoisie opposes but cannot control. In the same sense, state capitalism of the Russian variety is even more socialized and therefore more dangerous for the bourgeoisie. It is made safe for the bourgeoisie only to the extent that the working class has been set back from its revolutionary challenge. Historically, the existence of the transitional epoch has been prolonged beyond what Lenin foresaw because of the Stalinists’ triumph over the working class, a triumph resting upon the gains of October turned against their creators. It is in this sense that state capitalism outside of the USSR as well is based upon institutions created by the workers; Russia’s power used to smash the international proletarian revolutions permitted the existence and the shortlived economic gains of the other state capitalist nations. Even in negation the power of the working class is the only creative force in this epoch.

The RSL point of view on these questions is notably different and far more generous to the state bourgeoisies. The letter to us refers to China’s “nationalized economic base, adopted from victorious state capitalism in Russia,” as if the Soviet property nationalizations had taken place after the state capitalist counterrevolutions, not before. A more explicit statement occurs in the RSL’s pamphlet, The Rise of State Capitalism, by Ron Taber (p. 19):

“The second reason behind the state-capitalists’ ability to mislead the masses is the economic achievements of state capitalism. State capitalism in Russia (and to a lesser extent in China, Cuba, North Korea and elsewhere) has been capable of making significant strides toward industrialization. Russia was only the fifth most developed country in the world in 1914; today it is second, and is a full·scale industrialized country.”

Only a modicum of pragmatism is required to credit the state capitalists with the industrialization of China, such as it is. But it takes a conscious theory to believe that Russia’s rise to the world’s second industrial power is an “achievement of state capitalism.” The RSL on paper holds to the view that the Stalinist counterrevolution was not completed until the late 1930’s, but Taber’s assertion that Russia’s industrialization took place under state capitalism suggests that the state capitalists seized power well before that. (The same internal contradiction is to be found in the theory of the former Revolutionary Marxist Committee, as we demonstrated in an article in Socialist Voice No.5.)

Thus the RSL avoids the dilemma of recognizing the proletarian heritage in state capitalism by crediting state capitalism itself with significant advances. If state capitalism was able to transform Russia not just from the fifth industrial power but from a vast, underdeveloped semi-imperialized domain to the second strongest nation on earth, that is a fantastic achievement – one that Lenin and Trotsky thought impossible for any bourgeoisie in this epoch. If the radical petty-bourgeoisie can develop the nation state in this manner (and it was not just in Russia but in China and elsewhere, according to Taber, that a similar qualitative transformation took place if only “to a lesser extent”) then capitalism is still capable of sustained revolutionary accomplishments. With this the epoch of bourgeois decay and counterrevolution is tossed out the window, along with the theory of permanent revolution and other quaint ideas.

The RSL’s outlook on state capitalism is not original with this organization. It derives from the political tradition of Shachtmanism, a tendency that the RSL broke away from at its origin in an incomplete fashion. (See our analysis in the article The Struggle for the Revolutionary Party in Socialist Voice No. 1.) Shachtman, a pioneer of the theory of “bureaucratic collectivism” as a description of the USSR and its imitators, argued that nationalized property is not necessarily proletarian: in the past, the state form of property had been adopted by Asiatic Despotism (in Marx’s sense), church-ruled states and a myriad of other societies, while in the present, state property could be employed by both the bourgeoisie and the “bureaucratic collectivists” against the proletariat. That is, Shachtman regarded nationalized property as neutral with respect to class. It was a form with no specific social content that could be a legitimate feature of three different social orders in the modern epoch: capitalism, Stalinism and socialism.

Leaving aside the earlier historical epochs which have nothing to do with the present case, it is clear from Lenin’s analysis of the imperialist epoch that the socialized form of property is an inevitable outgrowth of the laws of development of capitalism, laws generated by the class struggle that themselves turn the progressive aspects of capitalism in its revolutionary epoch into their opposite. Thus the socialization of property is not neutral but is in fact symptomatic of capitalist decay and the transition to socialism.

To summarize the matter briefly, the Pabloite view (that China, Eastern Europe, etc. became “deformed workers’ states” after World War II) stems from the mechanistic belief that the proletarian form of nationalized property necessarily determines a proletarian content. Shachtman’s alternative was to deny that proletarian content existed in the nationalized form. In contrast to both, Marxists must recognize that form reflects content. It can neither determine content nor remain independent of it except for an inherently unstable period in which the contradiction must be resolved. The tendency towards socialization under state monopoly capitalism is an invasion by the socialist future which the bourgeoisie cannot resist. It cannot control the degeneration of its own forms and institutions, and its original weapons for waging the class struggle have become too weak. In the case of Russian-style state capitalism, the socialized forms are remnants of the once-proletarian past, now decaying in the hands of those who stole them from the workers. Taber’s pamphlet (page 4) presents the RSL’s view on the question:

“Thus, the collective forms of monopoly represent an encroachment of forms proper to socialism into the capitalist economy. But these forms are not an attack on capitalism; they come into being in order to shore it up.

“We discussed at the outset the fact that every social system, in its epoch of decay, acts to offset the threat of its overthrow by a new and more progressive social system. The collective forms represented by monopolization are an important aspect of this tendency. In this case, decaying capitalism borrows from the future society in order to shore itself up in the face of the revolutionary threat of the working class. Put differently, capitalism, as it decays, tries to dress itself up in proletarian forms as a means of protecting itself from the working class.”

At first sight Taber’s case seems different from Shachtman’s in that he refers to the collectivized forms of property as “forms proper to socialism” and “proletarian forms” (wording which might surprise the former RFU minority comrades since it “borders dangerously on the Pabloite view of nationalized property”). But he also tells us that “these forms are not an attack on capitalism; they come into being in order to shore it up.”

The RSL view is clearly opposed to the Leninist analysis of the epoch of capitalist decay even though the verbiage is retained. For the RSL, to be sure, the collectivized forms of property indicate that capitalism is in decay and are dangerous to the capitalists. What the RSL does not see is that these forms reflect the content of the socializing drives of the system itself turning capitalism into its opposite. They are not a disguise borrowed from the socialist future as if the bourgeoisie was limited only by its own cleverness in selecting what clothes to wear on the morning of a new epoch. The socialized forms are inevitable symptoms of the system’s own death agony and at the same time the birth pangs of communism. The voluntarism in the RSL’s approach credits the bourgeoisie with the ability to make choices and carry out tasks Marxists have always thought impossible in its epoch of decay.

The RSL’s logic leads it into a different interpretation of state capitalism’s historical role from our own. There are essentially two possible theories of state capitalism. The first holds that it is a new and higher form of capitalism which can maintain exploitative capital accumulation beyond the point where traditional capitalism fails; in fact, that it represents a new stage of development, that is, a new epoch beyond that of imperialism and state monopoly capitalism. The second sees that state capitalism made its temporary advances as the result of conjunctural defeats of the working class but that its stepped-up accumulation can only lead to intensified crises; this theory postulates that while sizeable changes have taken place since the time of Lenin and Trotsky the epoch is still that of imperialist decay and the transition to socialism.

The first theory suggests that state capitalism is still capable of playing an independent role in world politics; the second, that it is fundamentally cast as a prop for the dominant state monopoly capitalists. The first theory is a variant of bureaucratic collectivism, posing a whole new era in which the historical alternatives for our times are of a tri-cornered or “third camp” character (capitalism, socialism, or Stalinism). The fact that it calls the new society state capitalist rather than bureaucratic collectivist merely proves the old adage about the aroma of roses. These are not just theoretical positions; they are linked with a whole approach to mass struggles. That the RSL is coming to accept the first theory is indicated not just by a few unfortunate quotations but also by its analysis of state capitalism’s independence and strength in world events, notably in Africa.

In their letter, the RSL comrades cite a Torch article on Zaire in order to maintain that Western imperialism is the main danger in Africa and that Russian imperialism is a lesser danger. This is a correct but misleading point, since the Russians are described as the lesser danger because of their comparative weakness and not because of their role as a prop for imperialism as a whole. Russia’s struggles with the United States are real but occur within a context wherein the USSR must seek to shore up the stability of the world system under American dominance. Without the Pax Americana the entire imperial fabric would be ripped apart.

Thus the Torch, in a more thorough elaboration of its view, wrote (April 15, 1977) that “the Russians hope that out of the confusion they can take over some big pieces of Africa that used to ‘belong’ to the U.S.” In this situation,

“The way forward for the working masses of southern Africa is to take advantage of the conflict between the imperialists to press their struggle forward. This means accepting arms and material support from the Russians to use against the U.S. and its allies. While the Russians at this moment represent a potential menace to the revolutionary movement, it is the United States which still has its foot squarely on southern Africa’s neck.

“Only a working class leadership can keep the mass movement independent from Russian control while accepting Russian support. The middle-class nationalists who are currently at the head of the guerrilla movements in southern Africa will not and cannot do this. They are willing to sell themselves lock, stock and barrel to the highest bidder. Today, it is the Russians. The Russian imperialists offer the nationalists the means of getting power without developing the full revolutionary energies of the masses.”

But the Russian danger, even the potential Russian danger, is not that Russian imperialist control will be substituted for Western domination. Take the case of Angola, where Russian and Cuban military support was massive. The MPLA’s victory in the national liberation struggle eased the West’s stranglehold on the country but did not wipe out Western imperialism’s interests. Western capitalists retain many profit-producing properties, and the Cuban troops can be trusted to discourage Angolan workers from seizing them. What enables the Russians and their friends to bolster imperialist control is the natural affinity between a state capitalist power and the petty-bourgeois nationalists. The Russian role is to strengthen the left nationalists when the right wing is collapsing, to provide a model not just of state property but of defeating the working class – and it does this today, not just in the potential future. The RSL’s view that “the troops and aid supplied to the MPLA by Cuba and Russia – whatever Russia’s eventual imperialist ambitions – are today aiding the fight to throw off the imperialist yoke” is a dangerous illusion (Torch, January 15, 1976). The RSL also exaggerated the independence and potential power of state capitalism in Ethiopia, where it argued that “the Dergue is a classic example of a state-capitalist ruling class” (Torch, September 15, 1977). This conception overlooks the extreme backwardness of Ethiopia, which makes an advancing or even economically integrated statified capitalism a highly unlikely possibility (much less an accomplished fact). As well, the intensification of the capitalist crisis and the revival of proletarian struggles throughout the world mean that state capitalist solutions are a dangerous game for bourgeois forces of whatever persuasion anywhere: large-scale nationalization of the means of production would once again present too tempting a target. It is no wonder that societies recently set up in Cambodia, Laos and Vietnam remain decentralized even though nationalizations have taken place and are too weak to attempt rapid industrialization. Ethiopia, Angola and Somalia have economies differing from the overtly Stalinized ex-colonial nations, but they converge. They are anything but “classic” state capitalism, which was a phenomenon of the period of relative prosperity and working class setbacks after World War II.

Once more the RSL overestimates the power of Russian state capitalism by implying that it can step into the Americans’ shoes. Even if Russian aid to the Dergue should enable the Ethiopian forces to defeat the national liberation struggles in both Eritrea and the Ogaden (which is not assured), this will only set Ethiopia up for revived domination by the West, mainly the United States – not by the USSR. The most the Russians can hope for is a diplomatic and military dalliance with marginal economic ties.

The same analysis holds in Zaire. There, the RSL equated not the danger of Russian and U.S. imperialism (as we wrongly formulated it in our letter) but the role of Russia and the West. Thus the Torch wrote on May 15, 1977:

“The FNLC is not a genuine national liberation movement. It is nothing more than a band of mercenaries who are long time enemies of the people of Zaire. The fact that they are now in the service of Russia, the weaker imperialist power in Africa, does not alter their thoroughly reactionary character. The workers and peasants must have no illusions in this outfit.

“Russian imperialism probably either supported or ordered the invasion of Shaba. Sensing the weakness of Mobutu’s position in Zaire, the Russians hoped that an invasion would lead to a crisis in Zaire. Either there would be a revolt in Zaire’s officer corps that could end in a coup against Mobutu, or there would be some other split in Mobutu’s regime. Either way, the Russians figured, the fall of Mobutu would open up the area to Russian influence.”

First, let us point out that the Russians’ strength in the semicolonial countries lies with their political ability to line up on the side of mass anti-imperialist struggles. Once they succeed in helping to stabilize a struggle and contain the proletariat, the Russians undermine their own potential even then. But their strength is not their ability to be the “highest bidder,” as the Torch in the same article claims they were, for the Katangan mercenaries. This unproved charge is probably false, since the West can easily outbid the Russians at purely mercenary games.

This brings us to the central point, that the Russians are a full-fledged imperial rival here to the U.S. capable of not only supporting but of “ordering” invasions. The Russians are seen as the up-and-coming imperialist menace even though they are weaker at the moment. This analysis is similar to the Maoists’, who conclude that Russia as the weaker but rising superpower has to be fought even at the cost of backing U.S. imperialism (for example, NATO) and that national liberation struggles aided by Russia cannot be supported (as in Angola). The RSL does not draw such conclusions but also sees Russia as a rising and independent imperialism capable of aiding “classic state capitalist” regimes to power – just as a classic “third camp” analysis would have it. We stand by our comment that the RSL position was an “absurd third camp line.” Compare our own view ofthe Katangan events (Socialist Action, June 1977): “The insurgent force of Katangan troops is led by ‘left-wing’ petty-bourgeois nationalists who once collaborated in the suppression of Lumumba. At this point, when there is no evidence that the rebels represent a genuine national liberation struggle, there is no reason for the working class to support them. Support for the imperialist puppet Mobutu, however, such as that provided in the guise of opposition to Russian imperialism by such Maoist groups as the October League, is out of the question for revolutionaries.”

The RSL used the Katangans’ earlier alliance with Western imperialism as well as their alleged clientship to the USSR as reasons for denying them military support. For us, however, the central factor is the masses and their struggle. We align with the anti-imperialist struggle even under bourgeois leadership against a more immediate danger, giving into no illusions that the nation-state is sustainable or desirable. We openly seek to break the power of the nationalist leaderships who cannot set the masses on an internationalist course, whether or not they play with the Russians.

The upshot of the RSL’s misconception of the Russian role in Africa is that, despite the Torch’s occasional usage of stock Marxist criticisms of nationalism, the nationalist leaderships are let off the hook. The betrayal by the petty-bourgeois nationalists lies not in their predilection for servitude to the Russians as the RSL contends but in the class position in capitalist society and the consequent nationalist ideology which envisions a state capitalist future for the “socialist” ambitions. It is this that determines their preference for guerrilla strategies over mass struggles of the working class, for suppression of the most militant demands and struggles of workers and for aid from the state capitalist countries which share their goals. Time and again nationalist leaderships in Africa and throughout the world have sold the masses down the river because no national solution is possible in this epoch. Yesterday’s leftist nationalists are today’s practical men of power. Revolutionaries have no alternative but to combat the nationalist ideas which have mass influence among the proletariat in order to eliminate the nationalists’ hegemony in the anti-imperialist struggle.

Such a resolute attack is consistently avoided by the RSL. Through its front group, the Solidarity Committee Against Apartheid, the RSL raises the slogan of “Black Workers’ Revolution” in South Africa, making no attempt distinguish their goal from the bourgeois revolution of the left nationalists. After criticisms on this score by the LRP, the RSL now adds from time to time the word “socialist” (which many left nationalists of course accept on their own terms) but still does not counterpose itself to the left-wing nationalists.

This opportunism was compounded by the RSL Central Committee’s strategy for the South African revolution, published in the July 15 Torch. Here it was announced that “the guerrilla struggle is a precondition for the workers’ seizure of power,” a capitulation to the petty-bourgeois strategy despite warnings that the guerrilla struggle must be subordinate to the struggle of the urban workers and under the guidance of the revolutionary workers party. It is a poor substitute to provide such warnings in an article devoted to elaborating the “crucial” strategy of guerrilla warfare. Revolutionaries do not oppose guerrilla tactics when they play a subordinate role to a mass workers’ struggle, but we do combat the petty-bourgeois notion that the guerrilla struggle is primary. It cannot become the centerpiece of our strategy. In no sense is guerrilla warfare a “precondition” for the only real solution, proletarian struggle.

With this in mind the RSL’s charge that our analysis skirts on the edge of Pabloism becomes a bad joke. The Pabloites of the “United Secretariat of the Fourth International” have been notorious for their devotion to guerrilla movements. For them, the logic of their reasoning was quite consistent: if petty-bourgeois nationalists could make the socialist revolution in Cuba, like the petty-bourgeois Stalinists in China and elsewhere, why couldn’t it be done by whatever left-nationalist guerrilla movements spring up? The RSL does not share these illusions in the nature of the socialist revolution, but it does share illusions with the Pabloites on the capacity of state capitalism to make progressive advances in the present-day world. If state capitalism – “classic” state capitalism – is once again capable of building independent nation-states, then the radical state capitalist nationalists have a positive role to play even if they don’t go far enough and their totalitarianism in power is objectionable.

The Pabloites have already given up the conviction that workers’ consciousness in the Marxist sense is really necessary for the socialist revolution. Any force which can nationalize the economy is good enough for those to whom nationalized property is the equivalent of a (“deformed”) workers’ state. Classic Shachtmanism despite its conflict with Pabloism was not so different. Shachtman did not accept the material basis within capitalism for the socialist revolution, the objective tendencies towards socialism inherent in capitalism. Thus the basis for revolution became a purely subjective consciousness, the workers’ arbitrary moral choice of socialism over decaying capitalism and its Stalinist rival. “Consciousness” no longer meant understanding by the workers of an objective drive inherent in capitalism but a choice the workers might make if they were convinced or fooled. The question of who comes to power, socialists or state capitalists, was reduced to who can galvanize or manipulate the masses with greater dexterity. The RSL has not yet stooped as low as the classic Shachtmanites but it has set up a similar logic for itself. This is the source of the hyper-leftist covering for bourgeois-democratic programs which characterizes the work of the RSL today. It is the theoretical basis for various manipulative strategies to use the workers as a battering ram rather than a conscious Marxist vanguard, the classical guerrillaist outlook counterposed to Marxism.

In the 1930’s Trotsky pointed out that a critical distinction between revolutionaries and reformists was the question of the defense of the USSR as a workers’ state. That is no longer the case, and not solely because the Soviet Union is no longer a workers’ state. Revolutionaries of course cannot accept a theory that calls for the “defense” of the counterrevolutionary and imperialist USSR, but it is not sufficient to recognize Russia as capitalist. As the USSR plays an increasing role in propping up imperialism, defense of the USSR becomes more and more a defense of world, and therefore predominantly American-regulated, imperialism. However, the RSL’s notion that Russian imperialism is the weaker, latent but rising alternative camp has led to an overestimation of the progressive potential in state capitalism and left bourgeois nationalism. The line between revolutionists and reformists is now most sharply drawn between proletarian internationalism and bourgeois nationalism in all its forms, including Stalinism and the varieties of centrism. The RSL is digging itself into a position on the nationalist side of the line.