I think Q, who is a member of this group, is a member of the CWI and dismisses degenerated worker's state.
I do as the "degenerated workers state" is not a satisfying explanatory model. After all, when does something become so "degenerated" that it qualitatively becomes something else? The term could possibly be justified in the course of the 1920's, but in the 1930's - with the securing of the counterrevolutionary situation - it becomes increasingly problematic.
As for China: I don't know of any Trotskyist trend that is of the view that there ever was a genuine workers revolution. So, basically for all post-war "really existing socialist" regimes many Trotskyists use the neologism (that started after the war, as an attempt to stay within the conceptual framework Trotsky laid out) "deformed workers state".
Both conceptions base themselves on the definition that there was: a. some sort of planning, despite it being bureaucratically performed and b. that there was no private property and, thus, in the absence of it being capitalist it had to be something better and a basis for a workers state.
This definition is problematic on many levels. First of all, there was little genuine planning in these countries, in the sense of rationally planning for human need. In fact, most "plans" were amended on a monthly basis, to reach new targets. I would therefore prefer the term "target economy", as this expresses the bureaucratic nature the best. This is what bureaucracies do: Set arbitrary targets and zigzag when things do not succeed.
Second, the definition of a workers state as having nationalised everything might (and often did) lead in the far left in capitalist countries to a weakening of the political fight for working class hegemony via the "battle for democracy". Instead, the demands became to nationalise the top such and such "under workers control". This despite the fact that workers "control" within the capitalist context always leads to class collaborationist schemes that are dominated by the trade union bureaucracy, in the service of capital. This, in turn, often led to far left groups and organisations submitting themselves to trade union bureaucrats and many other kinds of problems one could encapsulate simply as opportunism.
Furthermore, it might also lead to a position of Lassalleanism, or state-socialism, that Marx already attacked in his famous Critique on the Gotha program (I'll spare you the quotes, but it is obvious and easy to look up).
So, what then of the USSR? Personally I think Hillel Ticktin provides the best explanatory model that is available as he in essence tries to put the USSR under a new analysis of political economy. One which can be summed up by the USSR being a "non-mode of production", a "non-society" where no one believed in this form of "socialism" and which merely continued to exist for so long by the fact it had such an all-pervasive bureaucratic apparatus that controlled every single aspect of human lives.
Ticktin then from this takes a conclusion few other Trotskyists would dare take with him: The fall of the Soviet Union was historically a good thing, despite the huge fall in living standards and the near-complete breakdown of society after its collapse, as it taught people to think for themselves again which was completely impossible under the Stalinist regime. A political revolution, something many Trotskyists uphold as necessary for this period, was utterly impossible.
This in turn leaves a new light on our current situation (something which Ticktin does not conclude by the way): If the USSR was in essence a counter-revolutionary project since, say, the 1930's onwards and since the "official communist" movement was so closely allied with Stalinism and, later, with its close brother Maoism, then that does explain the current dire state of the working class movement in the West and other parts of the globe.
In a nutshell: Since the 1930's the working class was led by "communists" that were not communists at all - but apologists for a counterrevolutionary system (that is nothing to say about their own intentions I need to stress, many of these militants were quite sincere of course) and on the other by social-democrats that were no longer social-democrats but instead fully incorporated into capitalism - then it stands for reason that when the USSR collapsed and, with it, the workers movement based on that historical context, that the workers movement had a "bubble" of development collapse that existed for about 70 years. To try and recover from such a crash indeed does take quite some time and it should not surprise anyone really that only know, 20+ years after the collapse of the USSR, we see new traces of workers organizing themselves as a class.
The far left however still needs to recover in many aspects. The current sect littered landscape is really an inheritance of this collapse. One could state that we're currently back in the situation of before 1860-80, before the era of mass organisations of the working class as a class. And this is then exactly defining our current strategy: What we need is a strategy of unity, of radical democracy, of building our class in opposition to the state as opposed to submitting to it, a strategy that fights against any and all traces of bureaucratic control that have prevented such developments for such a long time. For this we need, first of all, a paradigm shift on the left itself. Thus, the fight for radical democracy - the right to disagree - starts within the left.
Sorry for the long rant
