Date: Wed, 17 Jul 96 12:18:19 PDT
From: LCMRCI <global-AT-london.uk.pi.net>
Subject: When is a workers' state no longer a workers' state?



When is a workers' state no longer a workers' state?
Why state capitalism rules in eastern Europe?

The LRCI's Moribund Marxism.

It is now a commonplace to say that the collapse of the Stalinist states was 

the acid test for self-professed Trotskyists. Few came out with their faded 
red flag flying.
For serious Trotskyists who claimed to defend state property, despite the 
repressive Stalinist regimes, the collapses put them to the test. First, how 

to defend state property when the majority of workers didn't want to defend 
it?  Second, how to decide when capitalism had been restored? In almost all 
cases, these groups failed the tests because their degenerate Trotskyist 
method could not deal with the collapse as a dialectical process. The 
terrible twins of post-war Pabloism, Stalinophiles and Stalinophobes, both 
lost the plot. 

The closet stalinophiles hung onto the belief that a section of the 
bureaucracy, including the Red army, was defending state property as late as 

August 1991.  When these bureaucratic "defenders" were defeated, and 
restorationists came to power, the workers states were declared to be dead. 
Meanwhile the more-or-less closet Stalinophobes had illusions in the ability 

of workers to make use of bourgeois democracy to stage  political 
revolution. In this view, it is not sufficient for restorationists to take 
state power, they have to use it to restore capitalism. What's more, for the 

LRCI, capitalism is not restored until the "dominance" of the law of value 
is once more established. 

The LRCI continues to argue this line in its recent Trotskyist 
International, .  Despite  the existence of bourgeois "regimes" in power,  
which "intend" to use their power to restore capitalism, these regimes have 
not yet succeeded (outside Germany) because of barriers to the complete 
return of the rule of the law of value.  These barriers are economic, such 
as the failure to force state enterprises into bankruptcy,  and political, 
such as the problem of rising social resistance to further market `reforms'. 

 


LRCI's moribund workers state.
To capture this contradictory reality, the LRCI has developed the concept of 

a moribund workers' state (MWS). They define it as: "degenerated workers 
states that have restorationist governments in power which are actively 
demolishing the foundations of the planned economy" (TI, No. ? p40).  
Crucial to this definition is the contradiction between the bourgeois state 
apparatus ("restorationist governments") and workers property relations 
("planned economy"). The LRCI claims that this contradiction exists in 
concrete reality and must therefore be appropriated in thought, in order to 
address that reality politically.  Our argument is that this contradiction 
does not exist in reality, but is imported into the concrete reality as a 
false abstraction based on an incorrect understanding and application of 
Marx's method.

The LRCI misapplies Marx's method  by confusing levels of abstraction. It 
falls foul of the logical fallacy of "misplaced concreteness". Something 
that exists in abstract thought, is held to exist in reality. In the place 
of an analysis of existing societies in all of their complex concreteness, 
the LRCI substitutes two sets of ahistorical abstractions from Capital 
concerning the law of value, and from Trotsky on the class character of the 
state.

False abstractions.
The first concerns the level of abstraction of Capital where Marx explains 
the simple, basic categories of capitalism by holding constant the world of 
concrete appearances. The LRCI says that capitalism cannot be restored in 
the ex-Stalinists states until it meets the criteria laid down in Capital:  
namely, that the law of value must ensure that wage-labour and capital 
exchange at their value. Only when this occurs can it be said that the law 
of value is dominant over the planned economy.  So long as the state 
(bourgeois in form) prevents inefficient state enterprises (workers social 
relations) from collapsing by baling them out with "soft loans", then the 
law of value is not yet "dominant."  As we will argue, this method of false 
abstraction reifies simple categories that are then misappropriated in 
thought at the level of complex categories as a false basis for 
revolutionary practice.

Secondly, given this abstract schema, the state while bourgeois in form, 
still retains a workers content. That is, if the law of value is not 
dominant, then planned property relations must be dominant. Here the LRCI 
appeals to Trotsky's analysis of the state. [TI, No ?  p. 40] It quotes 
Trotsky to prove that the seizure of power by restorationists is not 
decisive. What is decisive are the dominant relations of production. But 
Trotsky is grossly distorted to arrive at the LRCI's conception of the 
state. The fact that Trotsky clearly stated that workers property was state 
property is ignored. Workers property is split away from the state which is 
essential to its existence. 

According to the LRCI: "Trotsky's use of the term degenerated workers state 
becomes absolutely clear. In this broad sense he is using it to refer to the 

totality of social relations and political institutions prevailing within 
its borders - base and superstructure, to use terms anathema to all 
fashionable idealising trends in Marxism". (TI.No ? p.40) Yes, in a "broad", 

or even "general" sense. The LRCI uses "general" concept of the state which 
is a concept that applies to all class society. (ibid, p.38).  Here the 
"base" are social relations, and "superstructure", the state. 

Yet to abstract base and superstructure from the concrete totality in order 
to split state from social relations is to import abstract schemas. Because 
abstract schemas cannot substitute for dialectics, the LTT are correct to 
accuse the LRCI of "addiction to formal logic categories"..."which do not 
allow for contradictions in the real world" ( ibid. P. 40) 
 


Marx's method.
Both of the abstractions imposed on the ex-Stalinist states by the LRCI are 
false abstractions. Trotsky already grasped clearly the problem of a 
degenerate workers state in which capitalism is restored. This was because 
he understood and applied Marx's method correctly. The question of 
restoration of capitalism in the workers states was not posed at the level 
of abstraction of Capital, but at the level of complex reality. It was posed 

at the level of "many determinations" which result in the contradictory 
reality of the workers state embedded in the global capitalist system. This 
meant that the operation of the law of value as expressed in Volume Three of 

Capital, was greatly complicated by a series of increasingly complex, 
concrete mediations involving the state, international relations, the world 
market and capitalist crisis. Marx outlines in Grundrisse (p.100-108, and p. 

227) the importance of level of abstraction in reconstituting the concrete 
in thought. 

Marx's method as outlined in the Grundrisse means that  we reconstitute the 
concrete in thought as complex, concrete categories that bring together the 
many-determinations as a totality. In reality, at the most concrete level, 
the world market, already the moments of production, distribution, exchange 
and consumption are mediated by the state, and international relations. In 
the analysis of the crisis of Stalinism and the collapse of the degenerate 
workers states, workers property is understood as embedded in the state, and 

subject to the many determining influences of the capitalist world market. 
Each degenerate workers state becomes integrated into the totality of world 
capitalism where the process of restoration of capitalist social relations 
internally is mediated by the state, through its key role in reintroducing 
the law of value via legislative acts. 

Here we deliberately refer to "complex concrete reality" to contrast Marx's 
method of abstraction which is used to understand the "concrete complexity" 
of the mediations of the state in an historic overturn such as the collapse 
of the Stalinist states. We contrast it to the LRCI's normative method of 
proceeding directly from a real abstraction "the law of value" and its 
operation via "free labour" to the complex concrete reality.   

Trotsky on state capitalism.
Given this method, Trotsky understood that workers property is state 
property.  He and Lenin applied that method in the concrete instance of the 
"healthy" workers state in the USSR, and to its "deformations" which Trotsky 

later developed into his conception of the degenerated workers state. 
Extending this method, Trotsky clearly expected that the transition back to 
capitalism had to be via state capitalism.

Its content would be expressed as state capitalism. But the bourgeois state 
would proceed the restoration of capitalism: "The inevitable collapse of 
Stalinist Bonapartism would immediately call into question the character of 
the USSR as a workers' state. A socialist economy cannot be constructed 
without a socialist power. The fate of the USSR as a socialist state depends 

upon that political regime that will arise to replace Stalinist 
Bonapartism". (Writings, 34-35, p182)

Because the property relations are "indivisibly bound up with the state" 
this would require first the "replacement of a workers' government by a 
bourgeois or petty-bourgeois government [which] would lead inevitably to the 

liquidation of the planned economy and, subsequently, the restoration of 
private property. In contradistinction to capitalism, socialism is built not 

automatically but consciously. Progress towards socialism is inseparable 
>from that state power that is desirous of socialism or that is constrained 
to desire it. (ibid, p179.)

In case this may appear to support the LRCI position, it does not. "...the 
property relations which issued from the socialist revolution are 
indivisibly bound up with the new state as their repository. The 
predominance of socialist over petty bourgeois tendencies is guaranteed, not 

by the automatism of the economy - we are still far from that - but by 
political measures taken by the dictatorship. The character of the economy 
as a whole thus depends upon the character of the state power...The collapse 

of the soviet regime would lead inevitably to the collapse of the planned 
economy, and thus the abolition of state property." (The Revolution 
Betrayed, p250)

In running the film of revolution backwards as a counter-revolution Trotsky 
argued clearly that in the seizure of power by restorationists, it is not 
their intentions to restore capitalism, but their political measures, in 
overturning the property relations that are decisive. Obviously the theorist 

of "uneven and combined" development  also anticipated the concrete 
complexity of the transition process. 

Trotsky on when a workers state is not a workers state.
If we take Trotsky seriously then, we have  the guidelines we need to 
explain the transition back to capitalism. Of course this means that we 
first have to get the class character of the state right.  If, like the 
LRCI, we separate form and function and have a bourgeois state in form, 
reproducing workers property in content, than all is confusion. We have a 
separation of form and content during a counter-revolution! How can this be? 

During revolutions and counter-revolutions the use of the state to overthrow 

the old and establish the new social relations  is the "defining moment". 

The state has to be overthrown, and smashed, before a revolutionary class 
can use the state to introduce new social relations. There is only one 
possible way of theorising the restoration of capitalism in the ex-stalinist 

states, and that is of determining when the seizure of state power takes 
place, and then when the class character of this state is decided in 
practice. In the case of each country, located in  the capitalist world 
economy, it is the state which takes responsibility for restoring 
capitalism, but under conditions not of its own determining. 

The point of seizure of power is given by analysis of events. The intentions 

of those in power is given by their programmes. The point at which the class 

character of the state is determined must by that point where the 
quantitative actions taken to overturn workers property and restore 
capitalist social relations, changes into quality. The only attempt to 
theorise this point on the basis of Marxist method to date is that of Brian 
Green, which takes as the decisive turning point, the establishment of a 
convertible currency.


Convertible currency - the states "defining moment"?
The LRCI has objected to Green's argument since 1991. (TI No ? p.43). Its 
objections then, and now, demonstrate a failure to understand Marx's method. 

They ask: how can convertible currency be sufficient to restore the 
dominance of the law of value? After all, isn't money a commodity which 
operates at the level of exchange, and not production? And since when has 
money, taken by itself, represented capital? But money is not being taken " 
by itself" here. A convertible currency has the effect of decisively 
integrating a "national" economy into the capitalist world economy by 
representing "value" as it is produced internationally, and acting as a 
measure of value in a state in transition back to capitalist production.  

As soon as this happens, world capitalism has the national economy in its 
firm grip. It revalues all products as commodities, as if they had been 
produced capitalistically.  State enterprises, even when kept afloat by 
"soft loans", are now state capitalist enterprises. How else can "soft 
loans" be defined except by the criteria loans at market interest rates and 
hence the law of value? Plant and machinery becomes revalued as constant 
capital.  Wage funds becomes revalued as the price of labour-power. But the 
law of value is mediated by the state within the context of world capitalism 

in crisis. The "price" of constant and variable capital are set not by their 

actual values, but by real-world fluctuations around that value. Under the 
state capitalism we are discussing, the prices exceed values because of 
social and political constraints on economic "reforms". 

The mistake the LRCI makes is to see money and exchange in isolation of 
production and distribution as expressed at the level of complex concrete 
reality. Hence they fail to recognise the concrete "truth" that, in the case 

of a specific country, all the many determinations of an "uneven and 
combined" transition back to capitalism, combine to make "world money" the 
decisive moment in the circuit of capital by which state capitalism is 
reintroduced. 

As we argued above, Marx explained that at the level of the world market as 
a totality, the moment of exchange can be determining, although itself 
determined ultimately by production. This is because, at this level, 
exchange presupposes the existence of the international circuit of capital 
in all of its moments, but mediated by many other factors such as the state 
and international relations. Once Marx's method is understood, the LRCI's 
objections to convertible currency as the qualitative turning point in the 
actual concrete process of restoration, collapse.

Actually existing state capitalism.
Like capitalist countries in which state intervention requires a partial 
suppression of the operation of the law of value, so too the restored state 
capitalist countries. State enterprises operate capitalistically even though 

the law of value is distorted.  The distortion or partial suppression of the 

law of value is not evidence of is non-existence.  "Soft loans" are 
therefore not a survival of workers property. They result from the 
capitalist state allowing the price of labour or commodities to be 
subsidised below their value because class struggle requires a gradual 
phasing-in of reforms. 

The LRCI's further objection that "soft loans" allow a rapid expansion of 
the money supply and inflation, and hence against money as a measure of 
value is woefully ignorant.[ibid p.43] It is precisely because money is 
acting a measure of value, that an increase in its supply causes it to 
inflate prices that represent values. [Grundrisse, p.789-791 on money as 
measure of value.  p 808-9 on inflation].  

Brian Green also emphasises this point. How can the economic restructuring 
that followed the "big bangs" which saw shortages give way to surpluses and 
rapid price inflation, be evidence of residual planning?  Inflation is no 
more evidence that state enterprises remain non-capitalist, than it is 
evidence that state enterprises in Western capitalist economies are also 
non-capitalist.  They are capitalist, but they are inefficient by the 
abstract criteria of Capital, and by the free-market ideology of the 
Economist magazine.


Bad method, rotten politics.
The real test of the absurdity of the LRCI position is that it logically 
excludes the reality of state capitalism from the transition process.  It 
therefore cannot direct its programme at class struggle under state 
capitalism. Its claims to programmatic correctness are baseless. If the 
state is bourgeois, how can political revolution be on the agenda?  If the 
social relations are still workers property what demands do workers put on 
the state? Do we call for the smashing of the state to defend workers 
property? Do we call on the state to defend workers property?  The sheer 
confusion that results from the LRCI's position disqualifies it from 
revolutionary leadership. Its method and theory are centrist and so is its 
practice.

Dave Brown.
Communist Workers Group of New Zealand.






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