Equally instructive is the Stalinist treatment of state-capitalism and planning. Here a little history is necessary.
It was Marx in Capital (Vol. 1, Kerr edition, p. 688), who stated that the only limit to centralization was all the capital in a single country in the hands of a single corporation.1 If this is not the economic form of state-capitalism, what is it? It was not a chance remark. He did not have it in the first edition. He wrote it into the second edition with some other points and asked all to note that the additions possessed "a scientific value independent of the original". On this no word, not a word from the Stalinists, and not a word from orthodox Trotskyism.
In Anti-Duhring Engels writes the passages so well known that we shall not quote them.2 They are so clear that there were members of the workers' Party who discussed them with the cynicism that Engels was a "Johnsonite". It was either this or saying that "Johnson-Forest" were followers of Engels. They preferred the first. Marx, it is known, approved Engels' draft.
In his criticism of the Erfurt Program, Engels attacked the formulation that there was no plan in capitalism.3 He ends:
"And if we pass from joint companies to trusts which command and monopolize entire branches of industry, then we not only cease to have private production but we cease to have planlessness".4
Karl Kautsky, while denying that capitalism can plan, never thought of denying statification. In 1907 Kautsky wrote in explanation of the Erfurt Program:
"The final result must be the concentration of all the instruments of production in the hands of one person or one stock company, to be used as private property and be disposed of at will; the whole machinery of production will be turned in to a gigantic concern subject to a single master" (The Class Struggle - The Erfurt Program, Kerr, 1910).5
Lenin's treatment of the whole question is a model of Marxism. In Imperialism (1915), he writes only of monopoly capitalism. Then you can trace how stage by stage he reaches state-monopoly capitalism in the preface to State and Revolution (1917).6
In the Spring of 1917, in his first report in Russia on the Political Situation, Lenin described how during the war capitalism had developed even more than before the war. Then:
"As early as in 1891, i.e., twenty-seven years ago ... Engels maintained that capitalism could not be regarded any longer as being planless. This idea has become obsolete; once there are trusts, planlessness disappears. ... monopoly in general has evolved in to state-monopoly". (Collected Works, Revolution of 1917, Book 1, p. 282).7
Then comes a paragraph in which he separates himself from the whole underlying political economy of the Fourth International:
"General conditions show that the war has accelerated the development of capitalism; it advanced from capitalism to imperialism; from monopoly to nationalization. All this made the socialist revolution closer and created the objective conditions for it. Thus the course of the war has brought the socialist revolution nearer to us".8
Although Kautsky, for example, had a different theory from Lenin on state-capitalism, all Marxists (until the Fourth International) agreed on this, that the centralization of capital, however great, did not lessen but increased the crisis of capitalism. It is in the theory of the degenerated workers' state that our whole movement has learned to see in a completely centralized capital, regeneration, progress for capitalism. In the reply to the debate, Lenin quoted from the resolution on which he was speaking:
"monopoly capitalism is changing into state-monopoly capitalism. Social regulation of production and distribution is, under the pressure of circumstances, being introduced in many countries". (p. 316).9
He says again:
"It is noteworthy that twenty-seven years ago Engels pointed out that to characterize capitalism as something distinguished by its planlessness, means to overlook the role played by trusts, and is unsatisfactory... This remark of Engels is particularly appropriate now, when we have state-monopoly capitalism. The introduction of planning into industry keeps the workers enslaved none the less, though it enables the capitalists to gather in their profits in a more planful way. We now witness the metamorphosis of capitalism in to a higher, a regulated form of capitalism".10
And here must be noted a remarkable thing. Obviously that resolution on which Lenin was speaking would be a very important document. The Stalinist archivists say that no copy can be found. Be that as it may, as we have shown in The Invading Socialist Society (p. 5ff.), the whole, yes, the whole strategy of the October Revolution was built on this.11
In State and Revolution, Lenin says that the trusts cannot, of course, plan production completely but however much they do plan, they cannot avoid the contradictions of capitalism.12
Not mere nationalization, even "confiscation," Lenin repeated and repeated, means military penal labor for the workers; you must have workers' control of production under a soviet state. The theoreticians of Stalinism avoid all this like the plague.
Then in 1918 Lenin throws his whole weight against the Left-Communists, basing himself upon this theory:
"To elucidate the question still more, let us first of all take the most concrete example of state capitalism. Everybody knows what this example is. It is Germany. Here we have 'the last word' in modern large-scale capitalist technique and planned organization, subordinated to Junker-bourgeois imperialism. Cross out the word in italics, and in place of the militarist, Junker-bourgeois imperialist state, put a state, but of a different social type, of a different class content - a Soviet, that is, a proletarian state, and you will have the sum total of the conditions necessary for socialism". (Selected Works, pp. 364-5, Vol. VII).13
He says again:
"At present, petty-bourgeois capitalism prevails in Russia, and it is one and the same road that leads from it to large-scale capitalism and to socialism, through one and the same intermediary station called 'national accounting and control of production and distribution.' Those who fail to understand this are committing an unpardonable mistake in economics.' (Ibid., p. 366).
And once again he refers to his previous work on the question of state-capitalism:
"In order to convince the reader that this is not the first time I have given this 'high' appreciation of state capitalism and that I gave it before the Bolsheviks seized power I take the liberty of quoting the following passage from my pamphlet The Threatening Catastrophe and How to Fight It14 written in September, 1917". (Ibid., p. 367).
When he introduced the NEP, Lenin quoted this passage to the extent of three pages.15 Lenin did not know German Fascism or the United States economy during the war, but his whole method shows that in his usual manner, always watching the stages, he would have had not the slightest difficulty with Fascist Germany and Yugoslavia or contemporary Poland.
There is nothing, absolutely nothing in the past of Marxism to prevent a Marxist saying that in its death-agony, capitalism, though in its classic form an economy of private property, can reach a stage where the capitalist class can plan the economy as a whole. This would have been a great triumph for our movement, so well laid were the foundations and the method in the past. But our ancestors could say this because Marx, Engels, Lenin, Bukharin, took it as a corollary that centralization meant the intensification of the crisis for such a capitalism.
But up to 1919 this was not the issue. Bukharin's theory of state-capitalism is not ours, and was criticized even in his own day, but he elaborated it in the ABC of Communism, the book was highly praised by Lenin and was sold in millions of copies and several languages as an official party textbook.16 Why? Because he wrote that even if anarchy of individual capitalism was abrogated by state-capitalism, collapse was still inevitable. Had he written the opposite the denunciations would have started with Lenin.
That was Bolshevism. And that was how Trotsky wrote in the First Manifesto of the Communist International:
"The state control of social life against which capitalist liberalism so strived, is become a reality. There is no turning back either to free competition or to the domination of trusts, syndicates, and other kinds of social anomalies. The question consists solely in this: who shall control state production in the future - the imperialist state or the state of the victorious proletariat?".17
To this 1919 analysis of Trotsky's, "Johnson-Forest" still subscribe wholeheartedly.
It is obvious (and this is only a small selection of the material) that the whole past of our movement made it difficult to escape the theoretical possibility that Russia might be a form of state-capitalism. The Stalinist theoreticians knew all this. There had been restlessness in Russia over it. (No such restlessness stirred the majority of Trotskyists, secure in the belief that the nationalized property rendered all such considerations useless.) But - once Pablo decided on the road he was following, he recognized state-capitalism as the enemy. He warns against it repeatedly, warns Germain that that is where he will end, and undertakes at last to explain it.
Pablo explains that when Engels wrote about state-capitalism he was "like Trotsky... referring to the tendency". This is a positive crime. Trotsky and Engels were here at opposite poles. Trotsky writes: "State-capitalism means the substitution of state-property for private property and for that very reason remains partial in character". Engels writes: "Taking over of the great institutions for production and communication, first by joint-stock companies, later on by trusts, then by the State".*
What did Pablo expect Engels to write: "Taking over of the great institutions of production, each and every single one, by which I mean omitting none, etc., etc".?
Pablo continues: "Engels in that day little suspected the enormous concentration of monopoly capitalism which followed his epoch".18
Engels spoke continually of trusts, trusts, trusts. Lenin and others constantly referred to Engels' analysis of trusts, trusts, trusts. In the quotation already cited, Engels says, "trusts which command and monopolize entire branches of industry". Pablo flips the great achievements of Marxism into the dustbin. What fanaticism is this? "Johnson-Forest" have met it before, in the Schachtmanites. When faced with questions like these, their attitude always was: Tear down the skies; root up the foundations; let everything go to ruin rather than accept this simple fact: No rearrangement of capital on capital's side of the barricades, actual or to the furthest degree of theoretical possibility, can solve the contradictions of capitalism which remain the exclusive task of the revolutionary proletariat.
Who opposes Pablo? All we have seen so far is some Shachtmanesque leaps and jumps by Germain. In The Invading Socialist Society (p. 24) we quoted Lenin and prodded Germain.19 No answer.
Now suddenly, life having destroyed his theory, characteristically Trotskyist, that only the masses could nationalize property in Eastern Europe, and under pressure by Pablo, Germain announces in portentous language and big print:
"We are confronted by transitional cases, cases of combined development, in which the property relations can be overturned without the economy thereby automatically becoming an economy orienting away from capitalism toward socialism, and without permitting us to conclude that what we have is a workers' state" (The Yugoslav Question, the question of the Buffer Zone, and their Implication for Marxist Theory, p. 12).20
"IN THESE TRANSITIONAL SITUATIONS THE LAW OF COMBINED DEVELOPMENT CAN PRESENT CASES IN WHICH THE STATIFICATION OF THE GREATEST PART OF THE MEANS OF PRODUCTION AND EXCHANGE CAN BE THE WORK OF A NON-WORKERS' STATE. IN SUCH SITUATIONS, THIS STATIFICATION THEN CEASES TO BE AN AUTOMATIC CRITERION PROVING THE EXISTENCE of A WORKERS' STATE". (Ibid., p. 14).
This is the theory of exceptionalism so devastated by Trotsky, transferred to the whole world. In passing it gives the same treatment to the economic basis of the Trotskyist theory of state-property that Pablo gives to Engels, throws it on the dust heap. Who accepts this, who does not accept this, we do not know. If this is not chaos, we are willing to use any other word which is suggested to us.
No such confusion is tolerated near the Stalinists. For a brief period, when it seemed they were uncertain of their relation with Western Europe, they themselves called the states in Eastern Europe state-capitalism. Even they recognized that they were either workers' states or state-capitalism, even they. Then when the line turned, they went straight back to Leontiev in 1943.21 'This is what is falsely known as the Varga controversy around Varga's book Changes in the Political Economy of Capitalism Resulting from the Second World War.22 It was not Varga alone. It was practically the whole staff of the Institute of world economics which he headed. Faced with the fact that capitalism had not collapsed, Varga was the mouthpiece of the Institute which could find a reason for the continued existence of capitalism only in the fact that capitalism moved to state-capitalism, which could plan.
Varga was more careful than Pablo because he at least said that this equilibrium would last for a decade and not for centuries. His economic theory was also superior to Pablo's. For at the same time, along with his underconsumptionism, Varga, the mouthpiece, very cautiously re-introduced the theory of the falling rate of profit, holding it so to speak in reserve against his previous underconsumptionism. Despite the caution, these statements by Varga showed that the Stalinists know very well how to analyze state-capitalism and the falling rate of profit.
When the turn came, the reaction was brutal. In the course of the discussion on Varga's book one bold woman, Maria Natavno Smit, attacked Varga from the left:
"The book," she began, "lacks an analysis of the great new change connected with the transition from simple monopoly capitalism to state-monopoly capitalism, as Lenin understood this transition".23 She then proceeded to quote Lenin: "During the war, world capitalism took a step forward not only toward concentration in general, but also toward state-capitalism in even a greater degree than formerly" (Collected Works, Russian ed., XXX, p. 300).24
Smit concluded: "Where Lenin unites the concept of 'state' and of monopoly, Comrade Varga seems to separate them: each exists by itself and meanwhile, in fact, the process of coalescence of the state with monopoly manifests itself quite sharply at the present time in such countries as the U.S.A. and England".
It was an attempt to start where Lenin had left off, and by his method to deal with the vast experiences of thirty years. She was stamped down at once.
"Imperialism is what Lenin elucidates. This is the stage of decay and death of capitalism, beyond which no new phase of capitalism follows. ... I think one should agree with Comrade Varga who does not seek such a phase and does not try to establish a transition to such a phase".**
And this "new phase" would be what? Nothing else but state-capitalism. They know that Lenin's whole method prepared for this and nothing else but this.
Varga in his turn said that Smit "tried to advance a new theoretical idea" and that "the question is one of terminology and not one of substance".25Leninism and with it the theory of state-capitalism was buried once more.
The outline is necessarily summary. It is not the fault of "Johnson-Forest" if we have, in 1950, to spend so much space and time on what should be elementary questions in this discussion. But if we do not do it, who else will? We have said enough to show how profoundly state-capitalism and everything connected with it is embedded in the past and is today in the center of the arena and of the crises in Stalinist political economy. And the Fourth International? A blank, a complete and comprehensive blank! Worse. Every word it writes fortifies Stalinism.
* Engels writes this in a supplement to the chapters from Anti-Duhring, which he reprinted in Socialism, Scientific and Utopian.26 No one so far, not even the Stalinists as far as we know, has ever denied that the original statements in Anti-Duhring theoretically take the question to complete state-ownership.
** The stenographic transcript of the entire discussion was published in English by Public Affairs Press, Washington, D.C..
1 The reference is to Chapter 25, Section 2 of Karl Marx, Capital: Volume 1, 1867.
2 Frederick Engels, Anti-Duhring, 1877. The passage being referred to appears to be the following:
"On the one hand, therefore, the capitalistic mode of production stands convicted of its own incapacity to further direct these productive forces. On the other, these productive forces themselves, with increasing energy, press forward to the removal of the existing contradiction, to the abolition of their quality as capital, to the practical recognition of their character as social productive forces. This rebellion of the productive forces, as they grow more and more powerful, against their quality as capital, this stronger and stronger command that their social character shall be recognised, forces the capitalist class itself to treat them more and more as social productive forces, so far as this is possible under capitalist conditions. The period of industrial high pressure, with its unbounded inflation of credit, not less than the crash itself, by the collapse of great capitalist establishments, tends to bring about that form of the socialisation of great masses of means of production which we meet with in the different kinds of joint-stock companies. Many of these means of production and of communication are, from the outset, so colossal that, like the railways, they exclude all other forms of capitalistic exploitation. At a further stage of evolution this form also becomes insufficient: the official representative of capitalist society - the state - will ultimately have to undertake the direction of production. This necessity for conversion into state property is felt first in the great institutions for intercourse and communication - the post office, the telegraphs, the railways" (Part 3, Chapter 2, 'Theoretical').
3 The Erfurt Program was adopted by the German Social Democratic Party at their 1891 Assembly.
4 Frederick Engels, A Critique of the Draft Social-Democratic Program of 1891, (1891).
5 The quote is from the section '7. The Growth of Large Production. Syndicates and Trusts', in Chapter 3 of Karl Kautsky, The Class Struggle (Erfurt Program), (the MIA dates the publication as 1892, and the English translation as published in 1910.
6 V. I. Lenin, Imperialism: the Highest Stage of Capitalism, (1916). V. I. Lenin, State and Revolution, (1917).
7 V. I. Lenin, 'Speech in Favour of the Resolution on the Current Situation April 29 (May 12)' (the English translation of this speech on the MIA differs from the JFT translation, which was presumably done by Dunayevskaya).
8 Ibid.
9 Ibid.
10 Ibid.
11 CLR James, Raya Dunayevskaya and Grace Lee The Invading Socialist Society, (1947). The reference is to the section 'Lenin and Socialism', in Chapter One.
12 V. I. Lenin, State and Revolution, (1917). The reference appears to be to the section "2. Criticism of the Draft of the Erfurt Programme", of Chapter Four.
13 The quotes if from section IV of "Left-Wing" Childishness", (1918).
14 V. I. Lenin, The Impending Catastrophe and How to Combat It, (1918).
15 The New Economic Policy (NEP) was proposed by Lenin at the Tenth Congress of the Communist Party of Russia, early in 1921. The NEP was adopted as a temporary measure and allowed a limited revival of free trade and foreign concessions alongside the nationalized and state-controlled sectors of the economy.
16 Nikolai Bukharin and Evgenii Preobrazhensky, The ABC of Communism, (1920).
17 Leon Trotsky, 'Manifesto of the Communist International', reproduced in The First Five Years of the Communist International: Volume 1, (1924).
18 The editor has been unable to identify the source of this quote from Pablo.
19 CLR James, Raya Dunayevskaya and Grace Lee The Invading Socialist Society, (1947). A large proportion of Chapter One contains a critique of Mandel. Mandel did not respond directly to the critique. In June 1951 he did publish an article 'The Theory of "State Capitalism"' in The New International, Vol. 12, No. 5. Where he says:
"The theory of state capitalism is defended not only by the Social Democracy, whose theoreticians no one takes seriously, and by insignificant ultra-leftist groups, but also by the representatives of a new and victorious proletarian revolution - by the leaders of the Yugoslav Communist Party, Milovan Djilas and Edward Kardelj.
Presumably he is referring to the Johnson-Forest Tendency (JFT) as an 'insignificant ultra-leftist' group. The article has nothing to say about the state-capitalist theory of the JFT, but instead focuses on Milovan Djilas.
20 Ernest Mandel, The Yugoslav Question, the question of the Buffer Zone, and their Implication for Marxist Theory, International Information Bulletin, January 1950.
21 For more on Leontiev see the previous chapter.
22 Eugen Varga Izmeniya v Ekonomike Kapitalizma v Itoge Vtoroi Mirovoi Voiny (Changes in the Economy of Capitalism as a Result of the Second World War), (1947). Dunayevskaya wrote about the 'Varga controversy' in The Fourth International, Vol.10 No.6, June 1949 and in an article that was circulated amongst the JFT.
23 The editor has been unable to find out anything about Maria Natavno Smit, or the article being quoted from. The author may have been Maria Natanovna Smith-Falkner (1878-1968), an economist, who joined the Bolsheviks in 1918 and was a member of the Academy of Sciences of the USSR from 1939.
24 The editor has been unable to identify the source of the Lenin quote.
25 The editor has been unable to identify the source of the Varga quote.
26 Frederick Engels, Socialism: Utopian and Scientific, (1880).
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