From Battaglia Comunista #12, December 1956/January 1957 - Translated by the CWO in 2006

The economy of the USSR is today the acid test for revolutionary organisations who would base themselves on the revolutionary tradition of the proletarian movement. Their strategy and tactics towards the working class and in relation to imperialism in general depend on the answer they give to this colossal problem. Now, it’s a long time since we communist internationalists clarified our thinking in this regard, yet the problem remains a very pressing one because it’s not simply for us to solve but for the other groups who, for better or worse, claim to be in the revolutionary tradition.

Amongst the latter there are those who, arguing that black is white, attempt to demonstrate that while the Russian economy is not socialist, neither is it capitalist - assuming that the law of value and of accumulation can only be characterised by the form they take in traditional capitalist regimes - and therefore a Marxist critique cannot put on the same level, for example, the USA and the USSR. It goes without saying that the political result of this kind of critical framework is the strategy and tactical positions of international Stalinism.

State capitalism or an economy in transition towards socialism? Germain, one of the more accomplished epigones of international Trotskyism (see Bandiera Rossa, 15.12.1956) pronounces in favour of the second answer to the problem and supports his weak assertion with the authority of Marx (Critique of the Gotha Programme). Far be it for us to doubt the value of Marx’s note to the Lassallian programme. Above all, we are absolutely in agreement with the letter Marx sent to Bracke with his Critique where he refers to the sell-out of principles in the programme in question but we just want to make clear that Joseph Stalin himself falsely used Marx’s criticism of the Gotha Programme to justify the thesis of ‘socialism in one country’.

We believe that the first elements of Marxism teach that the crucial way to determine a country’s class basis or economic character is to critically, and not sentimentally, evaluate the economic and social structure of the said country and compare it with other countries in the world. Here we are in agreement with the Johnson–Forest current in America. And why not? We are even in agreement here with the current view ... of the Bordigists, but above all we agree with Lenin. We have carefully considered the speech of the incomparable Lenin on the tax in kind. This is really fundamental for helping us understand the class nature of the present-day Russian economy and the social relations which give substance to the life of this country.

In 1918 Lenin classified the forms of production existing in the USSR at the time, thus:

1. a patriarchal peasant economy, that is to a considerable extent a natural economy;
2. small scale production for the market (this includes the majority of the peasants who sell grain);
3. private capitalism;
4. state capitalism;
5. socialism.

We should clarify immediately that by “State capitalism” Lenin was speaking of the 1918 grain monopoly; control over the employers, shopkeepers and traders, bourgeois cooperatives, etc., highlighting that the purpose of it all was to squash speculation.

In 1921, the time of the introduction of NEP (New Economic Policy), War Communism was regarded as having been imposed by the necessity of the civil war and in no way could be considered as a policy corresponding to the economic tasks of the proletariat. Thus, the NEP was considered to be the only way out of the frightening disorganisation provoked by the civil war. For this reason Lenin considered that State capitalism (which could not be substituted for socialism) nevertheless represented an enormous step forward in relation to the anarchy of the small scale peasant and artisan production which was the rule in the economy at the time. Thus Lenin stated that:

Economically State capitalism is incomparably superior to our present economy, and in that there is nothing to fear in so far as the soviet State is secured by the power of the workers and poor peasants.

This passage, where we quote from the speech on the tax in kind, is at the heart of the question.

In any case it is very clear that in 1921 Lenin anticipated the arrival of a State capitalism which would organise industry so that it could produce on a mass scale and he prepared the party for such a task. Such an organisation of production was rightly considered to be the gateway to socialism.

But Lenin, the convinced advocate of an organic State capitalism, did not limit his analysis to economic conditions in the USSR alone. His political work extended to a wider horizon. We must learn, he said, from State capitalism in Germany where the objective conditions for the passage to socialism are mature because without a concentration of large scale industry no socialism is possible. And, he states:

Socialism is inconceivable without large-scale capitalist engineering based on the latest discoveries of modern science. It is inconceivable without planned state organisation which keeps tens of millions of people to the strictest observance of a unified standard in production and distribution. We Marxists have always spoken of this... At the same time socialism is inconceivable unless the proletariat is the ruler of the state. This is also elementary...
A victorious proletarian revolution in Germany would immediately and very easily smash any shell of imperialism and would bring about the victory of world socialism for certain without any difficulty, or with only slight difficulty - if, of course by “difficulty” we mean difficulty on a world-historical scale and not that of petty bourgeois sectarians... but since the revolution in Germany is slow to break out our task is to learn from the State capitalism of the Germans and spare no effort to assimilate the lessons...

And for Lenin the NEP was the beginning of State capitalism. The NEP of 1921 wasn’t just about re-establishing the freedom to trade, “the peasants can sell the excess grain after having paid the tax in kind” and re-establishing, or rather legalising the activity of small industries and artisans, to give a major impulse to bourgeois sorts of cooperation; a stack of concessions to foreign financiers and capitalists were also part of the plan. Those pits, forests, industries, etc., that the socialist state was incapable of organising or hadn’t the means, wherewithal, etc. to get running again, were to be given over as concessions to foreign capitalists - an activity that came under State control and which went under the name of State capitalism.

These measures were imposed out of necessity: to provide manufactured products to the countryside, to get rid of the capitalist speculators, and to establish better links between the city and the countryside, between the proletariat and the poor peasants.

It is obvious that this involved a serious and dangerous turn round, but one which the proletarian power had to confront with the active participation of the proletariat and that it could have had a beneficial outcome for the situation of the working class if only a short time later they hadn’t been excluded from power, if the workers hadn’t been deprived of their control as a class.

In 1924 Trotsky, in his pamphlet Towards Socialism or Towards Capitalism, demonstrated with the figures at hand that state-controlled industry was on the increase compared to private and argued the need for State planning (the Five Year plans would come later). However, he forgot to register one fact, and that is that the proletariat had lost all power, the soviets had been emptied of all class content. The party’s apparatus had suppressed any class initiative so that the State capitalism which should have formed the ante-chamber to socialism began to expand so that in time its breadth and depth surpassed anything that went before it, including the state capitalism in Germany of which Lenin had spoken.

From all that we have said up to now, there can’t possibly be any half measures in the appreciation of the USSR today. The State capitalism that thirty years ago was an oasis has become today the sole economic and political reality of the country and the economic laws which have presided over its rapid development are like those which preside over the development of any other traditional capitalism.

There are those who object, saying that there is no longer a class of private owners in the USSR, that the bulk of the earnings of the various categories of Soviet citizens is not used for capital accumulation and thus cannot be invested in production. Apart from the fact that this is a devious argument and proves absolutely nothing, it should be made clear that the State issues bonds with an annual rate of interest taken from the surplus value created by the workers that can only be purchased by peasants in the USSR, who for the most part earn an income and are therefore liable to have savings. Marxistically speaking, surplus value doesn’t change its name, essence, etc., if it is drawn from a single industry, from a cartel, trust, or from the State, however these describe themselves, and the process of capital accumulation does not change if it occurs in the USSR, Germany or the USA. And a socialist economic structure constructed for socialist ends doesn’t give way to a superstructure which no other socialist country could envy and, above all, it cannot give way to greater social inequality than in any capitalist country.

However, the most important and significant fact remains this: if it is true that the October Revolution seized power from the possessing classes and expropriated them, it is also true that due to its economic backwardness the country did not pass on to the construction of socialism. On the contrary, an enormous small landed proprietorship proceeded to be built, which Lenin in 1921 considered to be the worst enemy of socialism. This enemy was strengthened with the NEP. During the course of the NEP the proletariat lost power and the whole economy, including agriculture, began to be run in a climate of open counterrevolution.

State capitalism in the USSR has surpassed the German model of 1918 but in the USSR, as in Germany, State capitalism can be the ante-chamber of socialism only on condition that the proletariat finds the strength and capacity to violently bring down the power constructed and established on the ruin of its class dictatorship.