From: dr.bedggood-AT-auckland.ac.nz
Date: Sat, 29 Mar 1997 00:23:47 +0000
Subject: M-G: LOV and state capitalism




Walter Daum questions my statement that Trotsky "explained that there 
was no value-relation that resembled that of capitalism".  Walter says 
that Trotsky "seems to say the opposite" and quotes a passage from 
"The Revolution Betrayed" . p54  "The state assumes directly...a dual 
character...bourgeois, insofar as the distribution of life's goods is 
carried out with a capitalistic measure of value and all the 
consequences ensuring therefrom".

Its true this may "seem" to imply that the LOV existed in the SU.  
That would make the claim that the SU was or became capitalist easier 
to argue. However, things arent always what they seem. The quote in 
itself is incomplete.When speaking of the "dual state" we 
need to point out both aspects. The full quote reads:
"The state assumes directly and from the very beginning a dual 
character: socialistic, insofar as it defends social property in the
 means of production; bourgeois, insofar as the distribution of life's
 goods is carried out with a capitalistic measure of value and all the
 consequences ensuring therefrom.".  

The significance of this quote is that it occurs in a part of the 
book where Trotsky is referring to the fact that after a socialist 
revolution the state cannot immediately wither away and has 
"from the very beginning" to stimulate production to overcome 
material scarcity. 

Trotsky says that: "A socialist state even in America, on 
the basis of the most advanced capitalism, could not immediately 
provide everyone with as much as [s]he needs, and would therefore be
compelled to spur everyone to produce as much as possible". In doing 
this the state has to resort to "the method of labor payment worked 
out by capitalism."  Here he follows both Marx and Lenin. 

Marx in the Critique of the Gotha Programme said of socialism that 
it would be necessary to enforce a bourgeois norm of distribution 
"from each according to the ability, to each according to the work". 
This would impose an inequality in distribution that meant
 the survival of " bourgeois inequality".  This means that 
"bourgeois law" also is inevitable under socialism.  

Lenin amplifies this to mean: "Bourgeois law in relation 
to the distribution of the objects of consumption assumes, of course, 
inevitably a BOURGEOIS STATE, for law is nothing without an apparatus 
capable of compelling observance of its norms. It follows that under 
Communism not only will bourgeois law survive for a certain time, but 
also even a bourgeois state without the bourgeoisie!" (53)

Trotsky then paraphrases: "Insofar as the state which assumes the 
task of socialist transformation is compelled to defend inequality - 
that is, the material privileges of a minority - by methods of 
compulsion, insofar does it also remain a "bourgeois" state, even 
without a bourgeoisie". (54).

The significance of the quote  about the dual state that follows 
becomes clearer.  Bourgeois norms of distribution will be present 
>from the very beginning in a workers state. They will employ some 
measure of "value" taken over from capitalism and require a bourgeois 
law and state power to implement.  However, these norms of 
distribution which employ some measure of "value" do not operate on 
the basis of the LOV since they are not based on bourgeois social 
relations of production. The "value" is not determined by commodity 
exchange based on socially necessary labour-time.  "Value" is based 
on labour time but actually assigned by "bourgeois" administrators. 
What is exchanged are not commodities in the capitalist sense, 
but use-values with administrated prices attached. Use-values  are 
not sold in order to to realise surplus-value. People can buy more or 
less use-values depending on the level of their incomes. However, 
the workers state would cease to be a"dual" state if,  and when, 
such   bourgeois norms of distribution spread to overthrow the 
"socialistic" social property, and replace it with bourgeois 
social relations of production. 

The reason for this would be obvious. The restoration of  private 
property would require the return of the LOV as the dominant 
allocator of social labour. Use-values would sell only if they were 
exchange-values.
 
In the Chapter on "Social Relations in the SU" in the same book 
written in 1936, Trotsky argues against the SU as state capitalist. 
The survival of state property, reproduced by the state, as the basis 
of bureaucratic power and privileges, has not been eroded by the 
bourgeois norms of distribution even though income inequalities have 
greatly increased as the workers state degenerated under the 
bureaucratic caste.  The dual nature of the state can only be resolved 
in one of two ways.  "Either the bourgeois norm [of distribution] must 
in one form or another spread to the means of production, or the norms 
of distribution must be brought into correspondence with the socialist 
property system" (244)

The onus is on Walter Daum and other advocates of state capitalism to 
show when these bourgeois norms of distribution spread to overthrow 
state property and restore bourgeois social relations of production. 
1929? 1939? 1989? 

The question of the bureaucracy becoming a class does not depend upon
its power or its privileges in consumption, but whether or not it can free 
itself from reproducing state property by converting state property into 
its own private property. 

I would argue that this did not happen until after 1989 and took a decisive 
turn with Yeltsins counter-coup in 1991 which put the fast-track bureaucrats 
into power and facilitated the breakup of the SU, the smashing of the plan and 
the re-introduction of the LOV along with privatised property. 

Dave.



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