¶Leon Trotsky wrote,
The attempt to represent the Soviet
bureaucracy as a class of (The Revolution Betrayed,
State Capitalists will obviously not
withstand criticism. The bureaucracy has neither stocks nor bonds. It is
recruited, supplemented and renewed in the manner of an administrative
hierarchy, independently of any special property relations of its own.
The individual bureaucrat cannot transmit to his heirs his rights in the
exploitation of the State apparatus. The bureaucracy enjoys its
privileges under the form of an abuse of power. It conceals its income;
it pretends that as a special group it does not even exist. Is
appropriation of a vast share of the national income has the character
of social parasitism. All this makes the position of the commanding
Soviet stratum in the highest degree contradictory, equivocal and
undignified, notwithstanding the completeness of its power and the smoke
screen of flattery that conceals it
¶In every sense of the word, Trotsky is proven wrong by the facts.
bureaucracy has stocks and bonds.
¶As the owner of state bonds in the United States, the owners of state bonds in Russia receive profit through the State. In Russia, their profit is in the form of Interest at 5%.
¶This represents profit in payment for the use of capital. This is exploitation of wage labor in the most finished form, through State capital.
¶The bourgeois right of inheriting property is part of
law. The state capitalist has the right to bequeath to heirs his share
of state bonds. Thus, he who owns bonds possesses the right of
exploitation of the workers through the State.
¶In addition, the position of the Russian ruling class inside the
State apparatus from which it receives
salaries of administration
is a veiled form of extracting surplus value from the exploitation of
labor. In industry and on the land the relations in production are
revealed by the relationship of the classes to the State property (means
of production). Through its successful counter-revolution, the Russian
State capitalists have liquidated the workers State power and
established its own power, the power of a State Capitalist class. This
class through its Bonds, i.e. 5% interest for the use of its capital by
its own State, and the
salaries for direct exploitation by its
State through its Statefied Industry and Agriculture, constitute its
relation to production and the basis of its class privileges, such as
superior food, clothing, housing, education, maids, butlers, chauffeurs,
¶State capitalism in Russia shows its face through government bureaus
(i.e., the trade unions, factory managers,
security police, forced labor camps). The trade unions, as one of the
segments of the State, as the trade unions in Western capitalism, are a
labor front of the Russian state for increasing production at a rate (in
concurrence with the laws of motion of the capitalist economy) far
outstripping the level of life of the masses.
¶On the land, as in industry the governing principle is that which is
stated in the Russian constitution,
From each according to his
ability, to each according to his work. An abomination of Lenin’s
analysis of the lowest stage of communism,–
consisting in the
distribution of the articles of consumption according to work
performed” (and not according to need). Lenin, “State and Revolution,
Int’l Publishers, 1932, P. 77. An abomination because there is no
evidence of any tendency to equalize or abolish the wages system in
Russia. On the contrary, the rise of a new capitalist class has revived
the most varied, contrasting wage differentials as great as in Western
capitalism. The peasantry still exists as a class and is permitted
shares in the collective farms. These collectives are like capitalist
corporations in that the petty-bourgeois shareholder in the collective,
receives a return on his shares in proportion to the amount invested.
While the Russian legal code, forbids him to hire labor, his state bonds
pay interest out of the exploitation of the industrial worker in the
city. In addition, this petty bourgeoisie has investments in savings
banks and can hand down their property to heirs. The directors of the
farm collectives stand in the relation of a board of directors (State
Capitalist) to this petty bourgeois.
¶The nationalized property of the October Revolution is liquidated. In its stead is property state owned and administered by a State capitalist class, for which there is no other term than the classic Marxist term, State Capitalism.
¶The key to understanding the process by which the workers lost State power in Russia, and thus their control over the economy was provided by Lenin. For example, on the New Economic Policy he wrote
¶Freedom of exchange means freedom for capitalism – a new form of capitalism – It is state capitalism. But state capitalism in a society in which power belongs to capital and state capitalism in a proletarian state are two different concepts. In a capitalist state, state capitalism is recognized by the state and is controlled by it for the benefit of the bourgeoisie and in opposition to the interests of the proletariat. In the proletarian state, the same thing is done for the benefit of the working class. - Lenin, Selected Works, Vol. IX,The Tactics of the R.C.Pat 3rd Congress of C.I., July 5, 1921, p. 238.
¶In addition, he stated
¶State capitalism in the form that we have it here is not dealt with in any theory, or in any literature, for the simple reason that all the usual concepts connected with this term are associated with the bourgeois state in capitalist society. The concrete form state capitalism took in Russia at that time was setting up ofseventeen companies with a combined capital amounting to many millions – we have formed companies jointly with Russian and foreign capitalists.- Lenin, Selected Works, Vol. IX, P.C. report of C.C. to IIth [sic] RCP Congress, Mar. 27, 1922, p. 339.
The simplest case – of how the Soviet government –
implants state capitalism in concessions –
The cooperatives are
also a form of state capitalism, but less simple. A third form:
The state enlists the capitalist as a merchant and pays him a
definite commission on the sale of state goods and on the purchase of
the produce of the small producer. A fourth form: the state leases to
the capitalist entrepreneur establishments, hunting and fishing
territories, forest sections, land, etc, which belong to the state, the
lease being very similar to a concession agreement (Lenin, Selected
Works, Vol. IX,
The Food Tax, April 21, 1921, pp. 182, 185).
¶It is clear that we have in the above passages a lucid description of the operations of the State in the sphere of capital investment, both, in the present trend to state capitalism in western capitalist states, as well as that of Russia.
¶Only those whose political thinking belong in a museum of ancient antiques can fail to see the destruction of workers’ control over the means of production; the transformation of the trade unions into state instruments for the exploitation of the workers; the substitution by factory managers of rank and file shop delegates; the transformation of the soviets into rubber stamps for the bourgeois measures of the Russian state; the erection of a military officers corp with rank, and medals demanding obeisance from the private, the secret police; piece-work wages on a national scale; the reestablishment of norms in sex and marriage similar to the Catholic church; the forced labor camps; reactionary decrees on art, music, science; signifies that in the relations of production, as well as in the super-structure (culture, morality, religion) the State capitalism of the workers’ state that Lenin spoke of has evolved through a series of internal convulsions into the State capitalism of the bourgeois state.
¶It is obvious that on this fundamental problem of revolutionary Marxism, Trotskyism collapses. We mourn Trotsky, but we do not mourn the death of the fiction that Trotskyism is the continuation of Leninism.
¶That section of Trotskyism which admits that Russia is not a workers’
state and will not defend it, nevertheless has not broken the strings
attaching it to the false line of Trotsky. By insisting on analyzing and
characterizing the present Russian system as bureaucratic collectivism,
it reveals that it considers as as [sic] Trotsky did, and this is the
heart of the question, that State ownership of the means of production
is impossible under capitalism. Therefore, they, along with the
orthodox Trotskyists fall into the trap of advocating state
ownership of communications, transportation, etc. under capitalism, as a
progressive step. This leads them to form a common front with Bourgeois
liberalism, (and when is liberalism not bourgeois?).
¶The characterization of the present trend in world economy as state capitalism, of which Russia is part is an appellation dignified in the best tradition of Marxist thought.
- Marx, Vol. I, of
ABC of Communism.
¶Marx understood that the struggle of capital to enforce its property
rights, at a certain stage, reaches the state level. He wrote,
former times, capital resorted to legislation, whenever necessary, to
enforce its proprietary rights over the free laborer. For instance, down
to 1815, the emigration of mechanics employed in machine making was, in
England, forbidden, under grievous pains and penalties (Karl Marx,
Capital, p. 628).
¶Further, he wrote,
In consequence of the civil war in the United
States and of the accompanying cotton famine, the majority of the cotton
operatives in Lancashire were, as is well known, thrown out of work.
Both from the working-class itself, and from other ranks of society,
there arose a cry for State aid (ibid, p. 629).
¶We come now to a consideration of the aspect concerning Russian
expansion. Imperialism is the highest stage of capitalism. State
capitalism is the highest stage of Imperialism. Lenin’s concept of
Imperialism as written in
Imperialism, the Highest Stage of
Capitalism is applicable to Russia. Russia imports and exports
¶For example, Poland received $450,000,000 in credits from Russia, in a treaty encompassing $1,000,000,000 dollars in reciprocal exchange, in January 1948. Entire economies are monopolized by Russian capital. It aims to be the main capital exporter to its spheres of influence, or it must give way in the competition with rival capital exporters. Russia must offer in its spheres of influence machinery, parts and replacements or be defeated in the deep-going economic conflict with the U.S. for the world capital goods market.
¶Under Lenin and the Bolsheviks, annexations, secret treaties,
indemnities were renounced. They declared,
Let us imagine what would
happen if the workers Soviets of Great Russia were to attempt by force
of arms to coerce the working class of other nations into submission.
The latter would mean the complete collapse of the whole of all
proletarian movements and the Fall of the Revolution.
¶What Lenin and the Bolsheviks imagined has come to pass.
¶The Russian State under Stalin expands by export of capital, military conquests, land grabbing and propaganda pressure. It builds mixed capitalist corporations throughout Europe i.e., with Russian state bank representatives and native boards of directors. Russia employs her military occupation and communist parties to reinforce her state capitalist rule in order to produce the capital goods on which depend her imperial position.
¶The revival of revolutionary communism on an international scale demands an understand of all the essential aspects of the Russian question. The principles flowing from that understanding will eventually unite all revolutionary elements of society on the platform of revolutionary communism.