4. STATE CAPITALISM

Submitted by ICC on December 30, 2004 - 15:01.
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In all periods of decadence, confronted with the exacerbation of the system’s contradictions, the state has to take responsibility for the cohesion of the social organism, for the preservation of the dominant relations of production. It thus tends to strengthen itself to the point of incorporating within its own structures the whole of social life. The bloated growth of the imperial administration and the absolute monarchy were the manifestations of this phenomenon in the decadence of Roman slave society and of feudalism respectively.

In the decadence of capitalism the general tendency towards state capitalism is one of the dominant characteristics of social life. In this period, each national capital, because it cannot expand in an unfettered way and is confronted with acute imperialist rivalries, is forced to organise itself as effectively as possible, so that externally it can compete economically and militarily with its rivals, and internally deal with the increasing aggravation of social contradictions. The only power in society which is capable of fulfilling these tasks is the state. Only the state can:

  • take charge of the national economy in an overall centralised manner and mitigate the internal competition which weakens the economy, in order to strengthen its capacity to maintain a united face against the competition on the world market.

  • develop the military force necessary for the defence of its interests in the face of growing international conflict.

  • finally, owing to an increasingly heavy repressive and bureaucratic apparatus, reinforce the internal cohesion of a society threatened with collapse through the increasing decomposition of its economic foundations; only the state can impose through an all-pervasive violence the preservation of a social structure which is less and less capable of spontaneously regulating human relations and which is more and more questioned the more it becomes an absurdity for the survival of society itself.

On the economic level this tendency towards state capitalism, though never fully realised, is expressed by the state taking over the key points of the productive apparatus. This does not mean the disappearance of the law of value, or competition, or the anarchy of production, which are the fundamental characteristics of the capitalist economy. These characteristics continue to apply on a world scale where the laws of the market still reign and still determine the conditions of production within each national economy however statified it may be. If the laws of value and of competition seem to be ‘violated’, it is only so that they may have a more powerful effect on a global scale. If the anarchy of production seems to subside in the face of state planning, it reappears more brutally on a world scale, particularly during the acute crises of the system which state capitalism is incapable of preventing. Far from representing a ‘rationalisation’ of capitalism, state capitalism is nothing but an expression of its decay.

The statification of capital takes place either in a gradual manner through the fusion of ‘private’ and state capital as is generally the case in the most developed countries, or through sudden leaps in the form of massive and total nationalisations, in general in places where private capital is at its weakest.

In practice, although the tendency towards state capitalism manifests itself in all countries in the world, it is more rapid and more obvious when and where the effects of decadence make themselves felt in the most brutal manner; historically during periods of open crisis or of war, geographically in the weakest economies. But state capitalism is not a specific phenomenon of backward countries. On the contrary, although the degree of formal state control is often higher in the backward capitals, the state’s real control over economic life is generally much more effective in the more developed countries owing to the high level of capital concentration in these nations.

On the political and social level, whether in its most extreme totalitarian forms such as fascism or Stalinism or in forms which hide behind the mask of democracy, the tendency towards state capitalism expresses itself in the increasingly powerful, omnipresent, and systematic control over the whole of social life exerted by the state apparatus, and in particular the executive. On a much greater scale than in the decadence of Rome or feudalism, the state under decadent capitalism has become a monstrous, cold, impersonal machine which has devoured the very substance of civil society.

I'm not ICC. And I'm not

I'm not ICC. And I'm not talking about Leninism, I'm talking about Lenin. You pose the question quite oddly when you say "Given Lenin’s ‘many profound insights’, why is there no super-intellectual ‘magical wand that will get rid of these social relations’?". Lenin was one man, not some kind of divine figure. He was right about some things and wrong about others. You seem to think we should accept Lenin as an omnipotent being who should have been able to solve anything - and the fact that he didn't is evidence only of his maliciousness. Either that, or because he was wrong on some things everything he said and did is useless.

Your point about Lenin and class consciousness is also a typical distortion of his views. The only place this view appears is in What Is To Be Done and it is drawn from Kautsky. Lenin abandoned this position in later years. It was Lenin who constantly warned about the influence of intellectuals in the party and wanted to reduce their role in the party. At one point he recommended a ratio of several hundred workers to every intellectual. It was Lenin who talked about the masses being to the left of the party and the party being to the left of the central committee. Hardly the words of someone who thought the masses were incapable of reaching a revolutionary consciousness without intellectuals!

It was also Lenin who, during the degeneration of the revolution, resisted the idea of militarising labour and who wanted the workers to maintain independent organs to defend themselves against the "workers" state. It was Lenin again, towards the end of his life, that wanted to bring more workers into the central organs of the state to combat the bureacratisation - this was far too little, too late, but again it demonstrates Lenin's belief in the working class as opposed to functionaries and intellectuals.

And how on Earth are you able to deduce from my previous post that I advocate repeating the same mistakes? I opened up my previous post saying that Lenin was wrong about state capitalism. In the light of this, your accusation is just utterly bizarre.

The Profundities of Leninism?

I disagree with you, I think Lenin did understand state capitalism and did see something progressive in it, for Lenin and his class of bourgeois ‘importunate super-clever intellectuals’. Their class interest was to supplant the historical role of the capitalist class in overturning feudalism and thereby swapping the capitalist class for a state capitalist class, the Bolsheviks, with the working class still remaining exploited.

So we are going to have a ‘revolution’ then that ‘doesn’t change a thing’ and in which the ‘fundamental nature’ of the ‘social relations’ ‘does not change’. This is indeed ‘a situation full of contradictions’.

Given Lenin’s ‘many profound insights’, why is there no super-intellectual ‘magical wand that will get rid of these social relations’?

What happened to another of Lenin’s profound ‘understandings’;

‘We have said that there could not have been Social-Democratic consciousness among the workers. It would have to be brought to them from without. The history of all countries shows that the working class, exclusively by its own effort, is able to develop only trade union consciousness,’

And;

‘the theoretical doctrine of Social-Democracy arose altogether independently of the spontaneous growth of the working-class movement; it arose as a natural and inevitable outcome of the development of thought among the revolutionary socialist intelligentsia.’

http://www.marxists.org/archive/lenin/works/1901/witbd/ii.htm

Or is that another profound understanding that turned out to be not so profound after all and just how reliable would what remains of Lenin’s other profound understanding be?

Of course somebody else saw the danger of the patronizing and errant lecturing of our so-called intellectuals or the ‘revolutionary socialist intelligentsia’ of Lenin and his Bolsheviks.

In a typical distortion of Marxism, the case was in fact, according to Engels, the exact opposite of what Lenin and the Bolsheviks made of it. The so called intellectuals needed to learn from the workers.

“I cannot see how you can speak of the ignorance of the masses in Germany after the brilliant evidence of political maturity shown by the workers in their victorious struggle against the Anti-Socialist Law. The patronizing and errant lecturing of our so-called intellectuals seems to me a far greater impediment.

The present influx of literati and students into the party, for example, may be quite damaging if these gentlemen are not properly kept in check.

The biggest obstacle are the small peasants and the importunate super-clever intellectuals who always think they know everything so much the better, the less they understand it.

You speak of an absence of uniform insight. This exists — but on the part of the intellectuals to stem from the aristocracy and the bourgeoisie and who do not suspect how much they still have to learn from the workers... “

http://www.marxists.org/archive/marx/works/1890/letters/90_08_21.htm

Perhaps the Bolsheviks, the victims of ‘vile calumnies’, could have learned from the proletarians of the Kronstadt whom they slaughtered.

There were of course Leninists in Engel’s time, instantly recognisable as such and he spoke of them disparagingly, so;

“Brought up in the school of conspiracy, and held together by the strict discipline which went with it, they started out from the viewpoint that a relatively small number of resolute, well-organized men would be able, at a given favorable moment, not only seize the helm of state, but also by energetic and relentless action, to keep power until they succeeded in drawing the mass of the people into the revolution and ranging them round the small band of leaders. this conception involved, above all, the strictest dictatorship and centralization of all power in the hands of the new revolutionary government.”

http://www.marxists.org/archive/marx/works/1871/civil-war-france/postscript.htm

And in;

http://www.marxists.org/archive/marx/works/1874/06/206.htm

So Lenin, as it turned out in the Russian revolution out, understood nothing but;

‘the necessity to keep the economy functioning - but he demonstrated the beginnings of his own absorption into the state(capitalist) machine’.

And without any profound understanding at all, was ‘swept’ away by circumstances beyond his control and, as a historical Hegelian mule, ushered in the historically inevitable capitalist and state capitalist revolution. And in doing so under the flag of ‘Marxism’, poisoned that political ideology with its profound super-intellectual claptrap.

1885, Engels to Vera Zasulich, In Geneva;

“What I know or believe about the situation in Russia impels me to the opinion that the Russians are approaching their 1789.”

The capitalist and state capitalist revolution as it turned out;

“Well now, if ever Blanquism--the phantasy of overturning an entire society through the action of a small conspiracy--had a certain justification for its existence, that is certainly in Petersburg. Once the spark has been put to the powder, once the forces have been released and national energy has been transformed from potential into kinetic energy (another favourite image of Plekhanov's and a very good one)--the people who laid the spark to the mine will be swept away by the explosion, which will be a thousand times as strong as themselves and which will seek its vent where it can, according as the economic forces and resistances determine.”

“People who boasted that they had made a revolution have always seen the next day that they had no idea what they were doing, that the revolution made did not in the least resemble the one they would have liked to make That is what Hegel calls the irony of history, an irony which few historic personalities escape. “

“Whether this fraction or that fraction gives the signal, whether it happens under this flag or that flag matters little to me.”

“there, when 1789 has once been launched, 1793 will not be long in following.”

Ushered in by the farcical Bolsheviks.

http://www.marxists.org/archive/marx/works/1885/letters/85_04_23.htm

So what do we have now but the ICC, the ‘defender of state capitalism’

http://en.internationalism.org/wr/235_tcliff.htm

I assume you are ICC.

Advocating that we repeat the same profound mistakes, singing the eulogies of the profound Lenin, And conjuring up the spirits of the the Bolshevik past to their service, borrowing from them names, battle slogans, and costumes in order to present this new scene in world history in time-honored disguise and borrowed language.

“Hegel remarks somewhere that all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce. Caussidiere for Danton, Louis Blanc for Robespierre, the Montagne of 1848 to 1851 for the Montagne of 1793 to 1795, the nephew for the uncle. And the same caricature occurs in the circumstances of the second edition of the Eighteenth Brumaire.

Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past. The tradition of all dead generations weighs like a nightmare on the brains of the living.

And just as they seem to be occupied with revolutionizing themselves and things, creating something that did not exist before, precisely in such epochs of revolutionary crisis they anxiously conjure up the spirits of the past to their service, borrowing from them names, battle slogans, and costumes in order to present this new scene in world history in time-honored disguise and borrowed language.”

http://www.marxists.org/archive/marx/works/1852/18th-brumaire/ch01.htm

Lenin had many profound

Lenin had many profound insights but unfortunately a real understanding of state capitalism wasn't one of them. There is nothing progressive in swapping a private boss for a state boss: the working class still remains exploited.

That's not to say capitalism won't exist after the revolution. Indeed, its fundamental components, wage labour, commodity production, the law of value, etc. will remain in place for some time. There's no magical wand that will get rid of these social relations but a prolonged, conscious effort by the proletariat over decades.

In the meantime, an essentially capitalist economy has to be controlled and managed by the proletariat: a situation full of contradictions and dangers.

But state control of these aspects - in so far as the can control them - does not change their fundamental nature. The working class will still remain exploited and simply saying that this takes place in the name of the proletariat doesn't change a thing.

Lenin's nonsense about copying the Kaiser state (!) is a sign of his utter desperation in the face of economic collapse and his growing lack of faith in the Russian proletariat. He understood the necessity to keep the economy functioning - but he demonstrated the beginnings of his own absorption into the state machine by emphasising this point over the other essential element of keeping the revolution alive: proletarian (not state) control of the economy. The Left Communists saw this growing encroachment into proletarian control far more clearly than Lenin.

“Left-Wing” Childishness

So then;

“In all periods of decadence, confronted with the exacerbation of the system’s contradictions, the state has to take responsibility for the cohesion of the social organism, for the preservation of the dominant relations of production. It thus tends to strengthen itself to the point of incorporating within its own structures the whole of social life. The bloated growth of the imperial administration and the absolute monarchy were the manifestations of this phenomenon in the decadence of Roman slave society and of feudalism respectively.”

Quite!

V. I. Lenin, “Left-Wing” Childishness, Written: April 1918

If the words we have quoted provoke a smile, the following discovery made by the “Left Communists” will provoke nothing short of Homeric laughter. According to them, under the “Bolshevik deviation to the right” the Soviet Republic is threatened with “evolution towards state capitalism”. They have really frightened us this time! And with what gusto these “Left Communists” repeat this threatening revelation in their theses and articles. . . .
It has not occurred to them that state capitalism would be a step forward as compared with the present state of affairs in our Soviet Republic. If in approximately six months’ time state capitalism became established in our Republic, this would be a great success

I can imagine with what noble indignation a “Left Communist” will recoil from these words, and what “devastating criticism” he will make to the workers against the “Bolshevik deviation to the right”. What! Transition to state capitalism in the Soviet Socialist Republic would be a step forward?. . . Isn’t this the betrayal of socialism?
Here we come to the root of the economic mistake of the “Left Communists”.

Thirdly, in making a bugbear of “state capitalism”, they betray their failure to understand that the Soviet state differs from the bourgeois state economically.

The shell of our state capitalism (grain monopoly, state controlled entrepreneurs and traders, bourgeois co-operators)

It is not state capitalism that is at war with socialism,

while in deeds they help only the petty bourgeoisie, serve only this section of the population and express only its point of view by fighting—in April 1918!!—against . . . “state capitalism”. They are wide of the mark!

This simple illustration in figures, which I have deliberately simplified to the utmost in order to make it absolutely clear, explains the present correlation of state capitalism and socialism

State capitalism would be a gigantic step forward

In the first place, economically, state capitalism is immeasurably superior to our present economic system

our task is to study the state capitalism of the Germans, to spare no effort in copying it and not shrink from adopting dictatorial methods to hasten the copying of it. Our task is to hasten this copying even more than Peter hastened the copying of Western culture by barbarian Russia, and we must not hesitate to use barbarous methods i

and it is one and the same road that leads from it to both large-scale state capitalism and to socialism,

the economic situation now existing here without traversing the ground which is common to state capitalism and to socialism

that the attempt to frighten others as well as themselves with “evolution towards state capitalism” (Kommunist No. 1, p. 8, col. 1) is utter theoretical nonsense.

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 Impending Catastrophe and How to Combat It , written in September 1917.

“. . . Try to substitute for the Junker-capitalist state, for the landowner-capitalist state, a revolutionary-democratic state, i.e., a state which in a revolutionary way abolishes all privileges and does not fear to introduce the fullest democracy in a revolutionary way. You will find that, given a really revolutionary-democratic state, state-monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism!

“. . . For socialism is merely the next step forward from state-capitalist monopoly.
“. . . State-monopoly capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no intermediate rungs ” (pages 27 and 28)

the less ought we to fear “state capitalism"?

From whatever side we approach the question, only one conclusion can be drawn: the argument of the “Left Communists” about the “state capitalism” which is alleged to be threatening us is an utter mistake in economics and is evident proof that they are complete slaves of petty-bourgeois ideology.

On the other hand, we must use the method of compromise, or of buying off the cultured capitalists who agree to “state capitalism”, who are capable of putting it into practice and who are useful to the proletariat as intelligent and experienced organisers of the largest types of enterprises, which actually supply products to tens of millions of people.

but are behind the most backward West-European country as regards organising a good state capitalism,

The workers are not petty bourgeois. They are not afraid of large-scale “state capitalism”, they prize it as their proletarian weapon which their Soviet power
like Chief Leather Committee and Central Textile Committee take their place by the side of the capitalists, learn from them, establish trusts, establish “state capitalism”, which under Soviet power represents the threshold of socialism, the condition of its firm victory.

http://www.marxists.org/archive/lenin/works/1918/may/09.htm

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