state cpitalism

greeman at greeman at
Tue Aug 1 12:10:56 MDT 1995

				By Richard Greeman

N.B. This is an excerpt of a draft I am working on under the

I welcome comments and criticisms. Please write me at
greeman at

"...	This marginalization (often supplemented by physical
liquidiation) affected not only Serge, but other minority
currents of the 20's, 30's and 40's and continues, to some
extent today. Nonetheless, these militants have left a rich
critical tradition ranging from the Dutch Left (Gorter,
Pannekok), German Council Communists (Korsch, Mattick),
Italian Left (Bordiga) and Russian Workers' Opposition
(Schliapnikov, Kollantai, Sapronov) through the Russian Left
Opposition (Trotsky, Rakovsky, Joffe, Preobrejzinsky), to a
Opposition (Trotsky, Rakovsky, Joffe, Preobrejzinsky), to a )
and post-Trotskyists (Bruno Rizzi, Shachtman, Castoriadis,
C.L.R. James, Dunayevskaya inter alia).

	Serge and the other minority Marxists who witnessed the
transformation of Russia's socialist-led popular revolution
into its opposite, totalitarian state-capitalism, came up
with a variety of class analyses to explain it. Hegel
teaches that the essence of a new world-historical stage is
most strikingly visible in its "birthtime," and so their
analyses turn out to be ever more suggestive a half-century
later in the light of Stalinism's autopsy. Among other
contributions, their early confrontation with Russian state-
capitalism led them to see the generally accepted dogma that
state property equals socialism, common to both majority
Marxists and the bourgeoisie, as a false dichotomy. This
insight pointed their thinking in two directions: toward a
return to Marxism's essence as a philosophy of freedom and
toward a recognition of state-capitalism as a worldwide
phenomenon of which Stalinism was a particularly oppressive

	 As early as 1936, Serge had recognized that the
"Soviet Thermidor" (i.e. counter-revolution) "had been
carried out on the basis of collective property."  He had
described a "new exploitative system" in which the
dictatorship of the proletariat had been replaced by "the
dictatorship of the bureaucracy over the proletariat" and
the "exploitation of labor restored to the profit of the new
privileged group."  Moreover, he anticipated Yeltsin and Co.
by predicting that this "privileged group" would eventually
make an accomodation with the world bourgeoisie and become
its junior partner in extracting surplus value from Russian
labor and exploiting Russia's natural resources. [Serge,

	 Like Trotsky, Serge did not conclude, after the
fashion of the liberals, that Stalinist totalitarianism was
the inevitable product of Leninism (or of revolution
itself). The fact that Stalin needed to exterminate the
quasi-totality of Lenin's Party in order to consolidate his
bureaucratic counter-revolution was, for Serge, proof enough
of that. As to the nature of Stalinist society, Serge
consciously avoided entering the sectarian debate over
terminology, prefering to give concrete descriptions in the
terminology, prefering to give concrete descriptions in the s he published. However, in private he
differed with Trotsky, who, convinced that state property
equalled socialism and fixated by loyalty to the state he
had helped to found (and hoped perhaps to lead again), clung
to the conception of Russia as a "workers' state" (albeit

	Serge recorded his critique of Trotsky in a private,
unpublished manuscript dated 1946. Serge's analysis is a
classic Marxist argument, pointing to new developments in
the material sphere of production and identifiying the new
forms of social and political organization in the
superstructure which arise out of them independantly of the
intentions of their original creators.

Trotsky, despite the wisdom of his analyses, seems not to
have realized that we were all witnessing the formation of a
new system of production, of government, and of exploitation
of man by man, which was and is neither capitalist nor
socialist, although containing elements of capitalism and
socialism; a system which needs to be labeled with a new
term and which, without going deeply into a debate over
terminology, can only be called Totalitarian. The novelty,
vigor and cruelty of this system goes far beyond the most
pessimistic predictions of the most bitter and lucid members
of the Opposition... Karl Korsch observes that Trotsky and
the Oppositions feared above all the restoration of
capitalism in the USSR, the triumph of an authentic
Thermidor, and did not see at all that another form of
counter-revolution, that is of anti-socialism, was
developing from the fact that the technology of large-scale
production in our days is drawn to planned collectivism,
just as in the beginning of the XIXth Century and following
the progress of mechanization, our whole society was drawn
into capitalism.[Serge 1946]

	Serge was not the only member of the historical Russian
Left Opposition to differ with Trotsky. As early as the
1920's other Marxists sought a more far-reaching explanation
for the emergence of what was patently a brutally anti-
workingclass regime. For example, Trotsky's friend and ally
Christian Rakovsky pointed to "a ruling class other than the
proletariat [...] crystallizing before our very eyes. The
motive force of this singular class is the singular form of
private property, state power."  And as early as 1930,
members of the imprisoned or deported Left Opposition were
circulating theses about "state-capitalism" in the Gulag.
Serge himself had debated these "Verkneh-Ouralsk theses"
(also refered to by Anton Ciliga) [Ciliga 1940] with his
deportee comrades in Central Asia, and he dramatized this
underground theoretical discussion in his 1939 novel,
Midnight in the Century.

	Indeed, the image of state-capitalism continued to
haunt Serge's imagination as a novelist. Among his fictional
characters, the Old Bolshevik Philippov of the Central
Planning Commission  insists that the "land of socialism"
has become the land of "State Capitalism" (The Case of
Comrade Tulayev),  while its logic animates Colonel Fontov's
bitter speech  to the effect that "political economy is
bitter speech  to the effect that "political economy is es sans pardon). The military
imagery is shared by young Rodion  who visualizes State
Capitalism as "a sort of enormous tank, covering the whole
horizon, which is going to crush everything" (Midnight in
the Century).

	The "state-capitalist" theory was later elaborated in
the United States by Trotsky's former secretary, Raya
Dunayevskaya as well as by the brilliant West Indian writer,
C.L.R. James, Tony Cliff in England and others. Far from
equating state property with "socialism", these theorists
saw it as a more extreme form of monopoly capitalism, citing
Engels' dictum that with the statification of the productive
forces "The workers remain wage-earners, proletarians" and
"the capitalist relationship is not abolished; it is rather
pushed to an extreme." ("Anti-Duhring").

	Dunayevskaya in particular took pains to ground her
analysis of the Soviet economcy in the Marxian theory of
value, anticipating the approach of Resnick and Wolff by
decades. As early as 1942, she published a statistical
analysis of Stalin's Five Year Plans demonstrating that the
high organic composition of capital and deterioration of
workers' living standards were the indelible marks of
specifically capitalist accumulation. [Dunayevskaya 1942;
1992] A year later, Dunayevskaya revealed that Stalin had
officially revised the teaching of political economy to the
effect that the law of value was now "operative" under
Russian "socialism," thus tacitly admitting that the USSR
was a capitalist society. [Dunayevskaya 1944;1992]

	However, perhaps Dunayevskaya's most significant
contribution was to have seen the necessity to return to the
humanistic roots of Marxism in the face of its monstrous
distortion in Russia. Like Serge during the 1940's,
Dunaysevskaya had struggled with the riddle of why so many
Marxists were fooled by the socialistic appearance of
Russian Communism (state property) while remaining blind to
its capitalistic essence (alienated labor). She was thus led
to produce the first English translation of Marx's 1844
Manuscripts and make Marx's humanism the basis of a new
interpretation of Marx's Capital. [Dunaysevskaya 1958;1988]

	Other theories advanced in the early 1940's under the
impact of the totalitarian nightmare included "the
bureaucratisation of the world" (Bruno Rizzi), "Oriental
despotism" (Carl Wittfogel), "bureaucratic collectivism"
(Max Schactman), "the managerial revolution" (James Burham),
and "bureaucratic capitalism" (Castoriadis. Lefort, et al.).
The latter stressed the convergence between the Eastern
(bureaucratic) and Western (managerial) capitalisms, thus
anticipating their eventual merger at the century's end.

	Although enough ink has been spilled over the competing
merits of the "state-capitalist," "bureaucratic
collectivist," and other interpretations of Russian reality
to delight any Talmudist, they all had the merit of
attempting to account for what Serge had seen emerging as a
new, worldwide form of exploitative social organization --
embracing, to greater or lesser extents, Stalinism, fascism,
Nazism, Japanese feudal-industrialism, Franklin Roosevelt's
New Deal, the welfare state, and anticipating such post-war
phenomena as planned capitalist reconstrucations and
nationalizations, the military-industrial complex, the
modern multinational corporate conglomerate, and the
military-bureaucratic one-party states prevalent in the
post-colonial nations.

	From today's perspective, we can see that all these
forms of what Serge lumped together as "collectivism"
emerged as reactions to the 1929 world crisis of market
capitalism. On the one hand we have the classic Marxist
reaction of "greater concentration of capital into fewer and
fewer hands," on the other, an extension of what Lenin had
observed (and imitated) in the transition from monopoly
capitalism to monopoly state capitalism through governmental
mobilization and regulation of economic resources during

	Two points need to be stressed here in passing: 1)
Despite the appearance of 1990's neo-liberalism with its
deregulations, privatizations and endless prattle about
"free markets," state-capitalism remains the ultimate stage
of world economic development from which there can be no
retreat. 2) None of these forms of top down "collectivsm"
mentioned above had anything to do with socialism, which is
characterized by democracy and workers' control from below.

	However, the fact that this new type of society first
emerged (and attained its most developed and oppressive
form) in Russia on the terrain of what had been a workers'
and peasants' revolution led by socialists made it a
particularly urgent and vexing problem for Marxists in the
1930's 40's and 50's. Some undertook with admirable tenacity
the task of elaborating a single coherent Marxist theory of
this new reality (with the unfortunate result that they
tended to split into tiny competing sects). Others ignored
the obvious by burrying their heads in the sands of orthodox
the obvious by burrying their heads in the sands of orthodox s about "degenerate
workers' states" or "actually existing socialism," thus
further debasing the socialist ideal in the eyes of the
masses. The remainder retreated to fashionable neo-
conservatism by proclaiming "the end of ideology" at the
very moment when a new socialist philosophy was needed to
explain, and supercede, new forms of un-freedom cloaked in
the debased vocabulary of socialism.

	The various trajectories of these Marxist intellectuals
during this dark period reveal two distinct advantages of
the state-capitalist analysis: 1) it kept its proponents
firmly rooted in the specifically Marxist method of analysis
while challenging them to revitalize it; 2) it reminded its
militants of Serge's faith that Stalinist societies, like
private capitalisms, would eventually fall prey to their own
inner contradictions and that the Eastern working classes,
despite totalitarian controls, would continue to rebel, as
indeed they did in Germany (1953), Hungary (1956),
Czechoslovakia (1968), and Poland (1981).

	In contrast, those whose lack of confidence in the
dynamism of the masses led them to hold static theories on
"the Russian question" were compelled to defend the lesser
of two evils during the Cold War. On the one hand Schactman,
convinced that "bureaucratic collectivism" could never be
overthrown from within, ended up supporting U.S. "democracy"
in Vietnam, while on the other Isaac Deutscher, the great
Trotsky biographer, ended as an apologist for Stalin.

	In the 1990's matters appear much more obvious. The
rapid transition of Russian Communism into nomenklatura
capitalism has illuminated the state-capitalist nature of
Stalinist society with the glare of hindsight. The risk
today is to reduce "state-capitalism" to a static economic
category, removing the theory from its historical context
and stripping it of its dialectical movement and
revolutionary trajectory. It is therefore all the more
necessary today for Marxist militants and serious
intellectuals to return to the heritage of Victor Serge and
the defeated revolutionary minorities of his generation (as
well as to later militant/intellectuals like Dunayevskaya) -
- a tradition which provides a living link with the initial
communist impulse of the Russian revolution and the
continuous resistance to its state-capitalist degeneration.

	For those of us working within that tradition, the
tragic history of the rise and fall of Stalinism cannot
simply be written off as a moment in a secular cycle of
"oscillation" from private to state capitalism and back
again. Nor (pace Resnick and Wolff) is it simply a question
of intellectuals demonstrating (to whom?) that communism's
"problems" are somehow "preferable" to capitalism's. For us,
Marxism -- living Marxism -- is only conceivable as a unity
of theory and practice, embedded in history and its process,
embodying and clarifying the collective experience of the
working classes.

	 I have the impression that the theoretician who
influenced him the most in his analysis was the Austro-
Marxist Lucian Laurat [Otto Maschl], today almost completely
  The German Marxist who incidentally also spoke of "state-
capitalism" as early as the '20's.
 Indeed, the neo-liberal state actively intervenes
everywhere to bolster the global profitability of world
capital in the face of the tendency toward the decline in
the rate of profit engendered by competition. Thus, for
example, neo-liberal capitalist governments subsidise arms
production and speculation at public expense while
legislating the forcing down of the cost of labor-power
through union-busting, reducing or eliminating the social
wage, dismantling worker protections, encouraging layoffs,
and flooding internal markets with cheap foreign goods.
These same governments (operating through the IMF, World
Bank, etc.) impose exploitative trade relations ("free
markets") on the undeveloped nations, prevent infrastructure
investement there, and keep the value of socially necessary
labor at a mimimum by arming slave-wage death-squad regimes
as havens for off-shore manufacturing.

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