Date: Mon, 7 Jul 1997 22:22:48 -0400 (EDT)
From: Andrew Wayne Austin <aaustin-AT-utkux.utcc.utk.edu>
Subject: M-I: State capitalism: Responses to Lew, Hugh, and Lou (sorry Louis, couldn't help myself)


Comrades,

On Mon, 7 Jul 1997, Lew wrote:

> It all depends on the evidence you're looking for. The theory of state
> capitalism predicts the presence of class and class struggle. Do we find
> these things? We certainly do.

If all the state cap theory looks for is the presence of class and class
struggle to claim the existence of capitalism, then state cap theory can
find capitalism in slavery and feudalism. The presence of classes and
class conflict and struggle is present in a myriad of possible social
formations, most of which are noncapitalist. Marx argued that class
struggle was the engine of history, and clearly the history he documents
and explains was not eternally capitalist. Indeed, Marx criticized those
who focus on a few elements that social forms have in common and
generalize from these that the social form in which they lived is eternal.
Lew makes this error--of eternalizing forms--constantly.

> Your approach starts off with the assumption that such things don't
> exist and so, unsurprisingly, you have nothing to say on the matter. 

This is a false claim. I specifically wrote that the Soviet Union, had two
social classes (peasant and proletariat) and a ruling stratum. I have
never made the claim that classes and class struggle did not exist in the
Soviet Union or any other actually existing socialist social formation.

> This highlights the difference between the two methods: the former is
> critical and subversive, the latter uncritical apologetics. There is no
> "probing beneath the surface". 

Seeing the presence of social class and class conflict and arguing from
this that the social formation in which these are observed is capitalist
is "critical" and "subversive"? I think Proyect nailed you on this in his
criticisms of your position. 
 
> I think it was Lloyd George who said that there were lies, damned lies
> and statistics. 

Yes, and there is also a cliche that says that "it is easy to lie with
statistics." I submit to you that it is even easier to lie without
statistics. I have drawn my definition of capitalism for Marx, I have
reviewed the competing theories, and I have presented empirical data in
support of my position. All you have argued is that the presence of social
class and class struggle warrants making a claim of capitalism. Have you
argued more than this?

> But even this "evidence for socialism" is fundamentally
> flawed. When researching income inequality did the researcher include
> the priviliged income not included in the pay packet - exclusive access
> to dashas, the "bonuses", the special shops which on only the ruling
> class were allowed to use (even in the West the ruling class would have
> trouble getting away with that).

Nor did Cereseto use such data drawn from capitalist nations. Had she used
data that included the full measures of wealth and privileges accruing
to capitalist bosses her conclusion would have been even more dramatic, I
believe.

> I think not. Like you, she begins with an explicit assumption of what it
> is she's trying to find. 

One question is whether Cereseto's assumptions and expectations caused her
to find what she was looking for. The same question may be asked of Marx
and Lenin, as well. But the more important question is not whether
Cereseto achieved some mythical or ideal standard of objectivity, but
whether her data, drawn from sources that have no interest in making
socialism look good (the UN and the World Bank), supports the hypotheses
she set forth. Looking over the wealth of data she supplies, her method
of analysis, her theoretical perspective, which was explicitly Marxist,
and her conclusions, I am confident she demonstrated her case. 

If you believe she reached her conclusions in error, Lew, then it is up to
you to poke holes in her research and analysis (or go into your denial
mode). Repeating pithy slogans about statistics and lies, and noting what
every freshman student of philosophy of science understands about the
folly of scientific objectivity, does not stand for anything remotely
approximating a critique of Cereseto's work.

> Then there are intangibles such as democracy, freedom and the right to
> organise genuine trade unions which defend the interests of workers.

Of course, these are all important things. But they are not intangibles,
are they? I don't believe that democracy, freedom, and organizing are
things incapable of being grasped mentally. They must be defined (or
operationalized) and assessed, sure. But I think our comrades on this
channel have a fair idea of what is democratic and what is not (the
confusion of some over what constitutes civil and political society
notwithstanding). If freedom was an intangible then on what basis can you
make any judgments about relative political and economic freedom when
comparing social formations (a task which admittedly you skirt by calling
everything capitalism)? So it is impossible for you to bring these
intangibles, mere phantoms, into the debate.

I would also remind you that, assuming as I do that these things *are*
definable and measurable, that measures of democracy, freedom, and labor
organizing are present in capitalist societies, as well. So assessing
these matters involves a many respects a qualitative mode of analysis,
something that Cereseto did not attempt in her very quantitative
research and analysis.

On Mon, 7 Jul 1997, Lew wrote:

> "The wealth of those societies in which the capitalist mode of
> production prevails presents itself as 'an immense accumulation of
> commodities'" (*Capital*, Vol 1, first sentence).

All societies must accumulate. The question is what is accumulated and
how. Accumulated labor products become commodities within a specific mode
of production, with a corresponding mode of distribution and exchange,
whose character is specifically capitalist. This capitalist character
involves the production of commodities for exchange. Exchange is not to be
generalized here as the general production and exchange of labor products
(for this has been going on since the dawn of human social interaction),
but to be understood in specific exchange relations where value (not use
value only) is produced. This involves capitalist social relations of
private property, the profit motive, etc. (and, again, this mode of
production and exchange must be the primary mode of production in order
for a social formation to qualify as a capitalist one). 

Marx's theory of the commodity is one of the primary conceptual tools
employed in Marxian analysis to understand the character of a society
built upon these relations and processes, the relations and processes that
in turn give labor products the character of commodities. For example,
labor power is a commodity under capitalism because it has a price (wage) 
and is exchanged in markets. Another example: in financial markets capital
itself becomes a commodity for it is sold in markets, i.e., it has a
price. This was why I quoted extensively from Hilferding the other day. 
The upshot to this is whether the Soviet Union was underpinned with a
system of production (and distribution and exchange) based on these
relations and giving labor products the character of commodities. Of
course, accumulated labor products in a socialist mode of production are
not commodities and do not operate in this way for there is no capitalist
mode of production in operation to give labor products the character of
commodities.

Lew, as is his habit, has universalized the commodity form and
transgressed the mode of production in which the commodity must exist to
remain what it is (its historically and structurally specific
character)--just as Lew, in the previous post (and countless times before)
has generalized historically specific class structure and process and
supposed them to exist with this character in other noncapitalist social
formations. Lew commits this mistake over and over again. This is perhaps
the central tenet of Marxian analysis, and Lew doesn't recognize it, even
after it has been pointed out to him--even after he supplies the key quote
himself! 

> One is via the Leninist route. According to this interpretation,
> socialism is a transitional society between capitalism and full
> communism. The difference between capitalism and socialism in this
> definition is largely political, with the latter seeing changes such as
> nationalisation and central planning. The social relations of production
> are left virtually untouched, as are the basic economic categories of
> capitalism (capital accumulation, commodity production, surplus value,
> etc). 

This is a strawman of Lenin's position and it denies historical reality. 
In fact, social relations under socialism in the Soviet Union were
fundamentally transformed--the capitalist class was expropriated and
capitalist social relations were effectively abolished. Petty commodity
production in the countryside was destroyed. Etc. The assertion that the
social relations of production were left virtually untouched is an
absurdity. 

> The result can only be some form of state capitalism.

Completely unwarranted categorical imperative.

> Within this conception of "socialism" there is a wide variety of 
> possible qualitative differences, ranging from the almost fascist North
> Korean model to the genuinely populist example in Cuba.

Please define fascist--or, more specifically, "almost fascist."
 
> Another approach is that of Marx himself, where socialism and communism
> are used interchangeably to refer to the same post-capitalist system of
> society. 

I already proved this to be a false assertion with a massive accumulation
of quotations from Marx and Engels themselves.

> The working class generally must emancipate themselves; they
> gain political power within capitalism and consciously create socialism.

And what were they doing in Cuba? In Russia? Marx and Engels in the
*Communist Manifesto* write that "the proletariat must first of all
acquire political supremacy." After this, "the proletariat will use its
political supremacy to wrest, by degrees, all capital from the
bourgeoisie, to centralize all instruments of production in the hands of
the state, i.e., of the proletariat organized as the ruling class; and to
increase the total of productive forces as rapidly as possible." Lew sees
centralizing all instruments of production in the hands of the state and
the increasing of the productive forces as "state capitalism." But, I have
combed this document, and other of Marx and Engels writings, and I can
find no such designation. What I find is that Marx and Engels argue that
the revolution and the post-revolutionary steps described above constitute
the transition to communism.

> The establishment of common ownership is also the transcendence of the
> wage labour and capital social relations and the economic categories
> that go with them. Production takes place directly for need, and the
> state has either withered away (Engels) or has been abolished (Marx).

This is false. Marx argued that in the long transition from capitalism to
communism, through socialism and its corresponding political structure,
distribution of the social product would be based on productivity. The
slogan that sums up this transition phase can be stated clearly as "from
each according to his ability, to each according to his work." This is
because in a society in transition, replacing the dominance of the
previous mode of production with the new mode of production, the old mode
of production still lingers into the transition. Just as feudal relations
persisted (and persist) into social formations where capitalism is the
dominant mode of production, so too will capitalist relations persist into
socialism. Marx and Engels, in *The Communist Manifesto* wrote that "when,
in the course of development, class distinctions have disappeared, and all
production has been concentrated in the hands of a vast association of the
whole nation, the public power will lose its political character." In
other words, the state may be abolished *after* the disappearance of class
distinctions and with production concentrated in the hands of the entire
nation (note this nationalistic language, for I will use these and other
passages to refute Lew's claim that socialism in one country is contrary
to Marxism). It is only after the communists sweep away the old conditions
of production, and then class antagonisms, and then classes altogether,
and the need for the proletariat to be a ruling class, may we move beyond
socialism onto communism. 

So we have two refutations of Lew's position. First, Marx's own analysis
would lead anybody applying it to understand that modes of production can
and do co-exist in any given social formation. Second, Marx (and Engels) 
was quite clear on the specific matter of the transition to communism.
Lew's continual skirting of this point is about as obvious an example of
denial as you will ever see. 

> But socialism in one island is impossible. 

Not according to Marx and Engels. Both Marx and Engels argued that
socialism must be achieved within the national context. It is only after
the revolution is successful and secured in national contexts that the
conquest for world socialism could be launched. Considering the number of
countries that successfully carried out socialist revolutions, many of
which still survive today, and given the degree of Soviet leadership in
these transformations, during and after Stalin, your argument carries no
logical or empirical weight.

I hear this claim a lot. It is a myth, originally created, I suspect, as a
criticism of Stalin (of course that's what it was) that has become reified
over time and rarely (never?) questioned. Marx and Engels understood that
"workingmen have no country." And they understood that "national
differences and antagonisms between peoples are vanishing from day to day,
owning to the development of the bourgeois, to freedom of commerce, to the
world marker, to uniformity in the mode of production and in the
conditions of life corresponding thereto." (This latter assertion is
globalization theorizing, a point I have stressed before in Marx, and that
would make for a very fascinating discussion, since globalization in the
manner predicted in the *Manifesto* has, more or less, come to pass.) But
they still understood that in the context of the interstate system, with
its juridical-political unit the nation-state, the first step towards
making world socialism is to make socialism at the national level. "Since
the proletariat must first of all acquire political supremacy, must rise
to be the leading class of the nation, must constitute itself *the*
nation, it is, so far, itself national, thought not in the bourgeois sense
of the word." Of course not in the bourgeois sense of the word, since the
nation is now constituted by a primarily socialist mode of production.
Socialist countries would have to unite (which they did) into a interstate
socialist system. Remember, it is a key part of transformation to
communism for the proletariat under socialism to concentrate the means of
production in the hands of a state. States are bounded by nations (were at
the time, and still are, despite the rise of a transnational political
apparatus and the reality of a global economy with a single division of
labor). Socialism in the interstate system can only initially exist
politically within the juridical-political boundaries of the nation-state. 
Marx and Engels even write that the measures used to move towards
communism "will of course be different in different countries." They then
list a ten-point program that, according to Lew's taxonomy, looks
strikingly state capitalist. After listing this program they write about
all production being concentrated "in the hands of a vast association of
the whole *nation*" (emphasis mine). So why does Lew uncritically repeat
this unfounded conventional piety? Well, because it serve his singular
purpose, what did you think?

				* * *
 
Hugh,

On Mon, 7 Jul 1997, you wrote:

> Andrew, although less of a state cap than a lot of the others,
> illustrates perfectly the petty-bourgeois sentimentalism of much of the
> regime criticism levelled at Nazism and Stalinism.

I am not "less of a state capitalist." I am no state capitalist at all. I
believe the Soviet Union was a state socialist social formation and was
part of an emerging socialist world system. The Soviet Union, along with
the rest of the socialist world, was in a state of arrested development
because of imperialist encirclement, bureaucracy, and, at first in the
Soviet Union and in most of the other countries, an insufficient level of
productive development.

> Both are extreme forms of anti-democratic, anti-revolutionary regimes,
> and both regimes were labelled fascist by Trotsky (eg in The Revolution
> Betrayed).

I do not have *The Revolution Betrayed* here. Does Trotsky claim that the
Soviet Union is fascist in there? *In Defense of Marxism*, Trotsky argues
against this interpretation, as well as against the interpretation of
bureaucratic collectivism and state capitalism. Can you supply a quote for
me in which Trotsky assesses the Soviet Union as fascist?

> But the historical roots of the crises these Bonapartist regimes
> expressed cannot be understood or interacted with in a healthy way if
> the question of the mode of production is ignored or fudged. 

Of course not, which is why I employ a mode of production perspective. It
was why I presented Cereseto's research; because she employs a mode of
production analysis.
 
> As soon as regime aspects of a state are given precedence over the
> social and economic bases of the state, the mode of production is set
> aside and the class aspect is lost.

Absolutely.

> We have seen this in Andrew's outburst in defence of the "democratic"
> imperialists in the Second World War. We see positive defences of
> imperialism when Justin Schwarz and other market socialists or
> sympathizers get lyrical about bourgeois justice and go on about mob
> rule in the same way as Andrew recently. 

I have never defended imperialism. If you are referring to my looking
favorably on the destruction of global fascism, then you might want to be
clear about that, because supporting the effort to stop the rise of global
fascism is not synonymous with defending imperialism (no matter how hard
you work reality into binary oppositions). And I have never attached the
label "democratic" to imperialist countries (maybe sarcastically with
quotes around it). I have specifically borrowed the term "polyarchy" to
define what some people otherwise called "parliamentary democracy," to be
more clear about what type of polity actually existed in the core
capitalist countries during this period. And I have referred to other
capitalist nations, those subordinated to the world economy, as generally
authoritarian.

As for "bourgeois justice," I am prepared to defend positive elements of
the present "justice" system. But for the record, I regard the "justice" 
system specifically and the system of "justice" in general in capitalist
societies as generally unjust and as systems of injustice. Furthermore, I
have not defended (let alone waxed lyrical over) "bourgeois justice." I
have been defending the basic political freedom of free speech (along with
some other political freedoms). These freedoms are not bourgeois freedoms. 
And as for the comment about mob rule. I do not go on about mob rule. I
used the term very specifically, only in referring to the violent behavior
of antifascists street punks. 

> All these criticisms share the conviction that the October Revolution
> and the resulting state -- the Soviet Union -- did not represent a
> historical break with the capitalist system (or perhaps at most a break
> of a few years, to the start of the NEP, say, or to Lenin's death, or to
> Trotsky's exile). 

Of course the October Revolution represents a historical break with the
capitalist system. This was why Trotsky, for example, despite his
criticism of Stalinism, argued that the Soviet Union and its satellites,
must be defended from fascist aggression. 
 
> The State Cap school, those who question the existence of conquests of the
> working class in the form of state property expropriated from individual
> capitalists, will try and fight for some kind of immediate workers'
> control, regardless of the ownership question. Those who follow an orthodox
> Bolshevik-Leninist policy, based on the work of Marx, Lenin and Trotsky,
> will put the question of ownership in focus, with slogans like "Defend
> nationalized property" or if the Thatcherites have gone all the way
> "Renationalize the railways (or the phone company, or whatever)". Workers'
> control in isolation is a utopian slogan on a par with equal wages. In
> conjunction with the demand for nationalization, eg "Renationalize the
> railways under workers' control" it makes sense as a demand for workers'
> democratic control of property removed from the capitalists and brought
> into the political sphere where conscious planning for social needs is
> feasible.

This is a fine point.

> If the demand for nationalization is not central, the criminal illusion is
> being sown that such things as workers' control etc are attainable within
> the capitalist system. All the old Anarchist dangers of putschism,
> voluntarism etc return.

Another fine point.
 
> The obvious reason for a Marxist is the growing
> collectivization, centralization and planning of production, and the
> disappearance of the individually responsible capitalist entrepreneur (Marx
> referred to the joint-stock company as the abolition of capitalism within
> its own framework, in Capital III) all in an increasingly tense
> contradiction with the persisting framework of relations of production
> based on individual ownership and its rights.

I always find this an interesting point. Marx does but does not argue
specifically that the joint-stock company constitutes "an abolition of
capitalism within its own framework." Oh yeah, you can make him say this
is you pull the phase out of context. But he did not leave it at that as
Hugh does and move on. Rather what he wrote was that this represents "the
abolition of capital as private property within the confines of the
capitalist mode of production itself." Marx is using the term "capital"
here obviously in the sense of productive means. This is based on Marx's
argument that the means of production are inherently (as in actually)
based on a social mode of production. The joint-stock company becomes
"capital of directly associated individuals." This is, he argues, is in
contrast to private capital. Capitalism is not abolished, however. Rather
the functioning capitalist is progressively reduced to a manager, and the
owner of capital in a "mere money capitalist." Remember, their income is
profits, not wages. Then later he does say that this constitutes "the
abolition of the capitalist mode of production within the capitalist mode
of production itself, and hence a self-abolishing contradiction, which
presents itself *prima facie* as a mere point of transition of a new form
of production." Hugh leaves out this second part where Marx stresses that
the appearance of a transition to a new form of production is only "on
first sight" (i.e., *prima facie*). Rather it is "private production
unchecked by private ownership." Contrary to the diffusion of ownership
that one might suppose in such a hypothetical transformation to socialism,
which is what Hugh means to suggest here, this adaptation of capitalism
actually concentrates capitalism to an even greater degree, as "little
fishes are gobbled up by the sharks, and sheep by the stock-exchange
wolves." On the other hand, "the cooperative factories run by workers
themselves are, within the old form, the first examples of the emergence
of a new form, even though they naturally reproduce in all cases, in
their present organization, all the defects of the existing system, and
must reproduce them," a point Hugh touches upon above, which I still see
as a fine point, although I do not have the sort of co-optive take that
Hugh appears to have on the matter, seeing any degree of freedom obtained
as freedom gained. 

In any event, this is not so much a criticism but a caution: one has to be
cautious here. Weber and, especially Schumpeter, argued that these forms
of capitalist concentration and organization were moving the capitalist
social formation towards socialism. In fact, for Schumpeter, corporatism
(not the political form mapped over industrial capitalism, but the
economic form extrapolated from the joint-stock company) was synonymous
with socialism. Marx regarded is as possibly the seeds of another, more
totalitarian phase of capitalist development.

> If you ditch the perspective of transition, you end up with a fatalist view
> of the omnipotence of imperialism (and enter into an alliance with the
> Louis P's and Doug H's by the same token) and are once again thrown back on
> socialism as a question of attitude and strength of will, and find yourself
> at the mercy of subjective moralizing instead of seeking the scientifically
> optimal point of intervention in the class struggle, where your subjective
> forces will have the greatest impact.

I agree that we mustn't lose sight of transition, but I am not sure that
Louis Proyect ditches the perspective of transition to communism. I don't
believe that anybody who reads Marx, and Proyect's posts demonstrate that
he does actually read Marx, can deny that Marx believed that the journey
to socialism, and then onto communism, advances through transitions, these
transitions not reducible to clear stages of development, but rather
represent a constant struggle on behalf of the working and peasant classes
(depending on the level of development and social relations at the time of
the revolution) and the party to make socialism. Certainly I understand
the importance of transition, which is why I agree with those who have
held the Soviet Union and the system to which it belongs as socialist,
although imperfect, of course, because it was a transition (and highly
variable--there are many paths to communism).

				* * *

Finally, in response to Louis Proyect's response to Lew,

Your post was very tight Marxist writing, I dare say Marxian. I
particularly want to stress your excellent points about Trotsky finding
his ideas of combined and uneven development and permanent revolution
(despite what Stalin says on the matter) in Marx's writings. Marx was
opposed to inevitability theories; they lacked human agency. The material
conditions were ripe in major industrial nations, but the class struggle
failed to realize the potential. And although the material conditions were
not optimal in Russia and elsewhere, class struggle resulted in a heroic
attempt to usher in a new social era, and the results, while far from
perfect, were quite admirable.

Louis is also square with Marx when he argues for multiple modes of
production in any given social formation and characteristics specific to
historical systems. I have been trying my damnest to get these points
across. 

Now to Lew and Neil and others. Where do you think Louis and I are getting
these ideas? They are in Capital, the Grundrisse, the Manifesto, etc. 
Maybe you won't find these ideas in Cliff and Rizzi and Burnham, I dare
say not, or certainly not in any depth, which is why their conclusions are
wrong, and why you perhaps ought to consider returning to, or in Lew's
case learning, Marxian analysis.

In Solidarity,
Andrew Austin







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