So, most people on this forum say that the USSR under Stalin, China during the Mao years, and Cuba are not socialist countries at all, but state capitalism. They say that industry is not in the hands of the workers but controlled from the top to bottom. What are some facts that we can use to counter these claims? Any good webpages that explain this topic more deeply?
First I think we should distinguish between two theories which some propenents of "state capitalism" analysis often treat as one: Lenin's theory of State Monopoly Capitalism and the theory of state capitalism pioneered by Ultra-Leftists and Menshevik exiles, developed by heterodox Trots, and later adopted by most anarchists and some Marxist-Leninists. To be overly brief and simplistic, Lenin's theory of monopoly capitalism (sometimes called state monopoly capitalism) asserts correctly that the dynamics of capital accumulation tend towards monopoly. What that means is that capitalism may begin with a relatively large number of relatively small enterprises, but by the time you reach the age of imperialism and proletarian revolution, capitalist economies are dominated by a few monopolies and oligopolies. These companies (today we tend to call them multinational corporations) wield immense political power, and use the state to increase their ability to extract surplus value. We've seen this very well recently from the American wars in Asia to the bank bailouts, the bourgeois state has more and more become merely an obedient instrument of monopoly capitalists. Now, those who try and sell the state capitalist analysis of socialist countries take this a step further. They essentially assert that the socialists states are/were merely the biggest monopoly capitalists in history. They assert that instead of being dictatorships of the proletariat where economic production did not result in the extraction of surplus value, the socialist states were really held in private hands (the hands of the Communist Party or some of its members) and that these bosses extracted surplus value from the workers. To see the absurdity of this theory, one only needs to examine what happened when the first socialist country on earth was dragged kicking and screaming back to capitalism by bourgeois imperialism and its own internal traitors. A few illustrations should do. We should start on the factory floor, or more specifically in the accounting department. When Jeffrey Sachs and his cronies (many now high officials in the American regime) went to the former USSR they encountered an interesting dilemma. They would go to factory accountants and say "This factory needs to make a profit." The accountants would say "We do make a profit." Sachs et al. would reply, "No you don't, I'm looking at your balence sheet right here, you're breaking even." The accountants would direct Sachs et al. to examine the accounts more closely. What did they find? They found that indeed the factories made "profits." These "profits" were automatically spent on things like union sponsored dances, concerts, and other evening entertainments, luxury resorts which factory workers would visit on vacations, etc. In a word, the fruit of the factory's production was redistributed as benefits to the workers. Most of these benefits were administered by the unions, so the workers could democratically decide what to spend the money on (i.e. where the factory resort would be). In order to restore capitalism, Sachs et al. needed to teach factory accountants to pass these profits onto the new capitalist class instead of spending it on the workers. However, state capitalist proponents could say, "fine, workers got some benefits which could otherwise have been extracted as surplus value, but each factory sent money to the central government, surely that was surplus value?" The answer is no. This was nothing more than taxation. What was the money sent to the central government spent on. Unfortunately, a lot was spent on weapons necessary to defend socialism during the cold war started by NATO and its allies. However, it was also spent on medical care, housing, etc. I.e. more social benefits for the workers. After the restoration of capitalism, the mortality rate in the former Soviet Union went up by 12.8% according to the Lancet. Only one of many reasons why it is aburd to argue that the money collected by the socialist state was extracted as surplus value instead of being distributed to the proletariat. We've looked at this problem at the micro-level (factories) and the meso-level (state bureaucracies), now to the macro-level (the economy as a whole): Another problem Sachs and his friends encountered was that there was not enough money concentrated in private hands to buy state enterprises from the government. That is to say, capital accumulation in Russia and the other ex-soviet republics in the 1990s was primitive accumulation not general accumulation. All the high officials who had supposedly been running a "state capitalist" regime should have had the capital (accumulated through the extraction of surplus value from the workers) on hand to buy assets off the state. They did not. Where did the money go? It was not concentrated in the hands of a small elite, it was broadly distributed among the workers. The Soviet Union and all other socialist countries had/have many problems. These problems are often exacerbated when revisionists reach high party and state office. One thing is certain, although they have problems, the existence of a capitalist regime is not one of them.
Thank you Joe for the reply. That was very thorough and easy to understand. Are there any resources online that you know of that proves our point?
Honestly, the best resources for proving the point are the writings of capitalists who describe the problems with the transition from socialism to capitalism in Russia. Most of the stuff I mentioned above comes straight from Yegor Gaidar's Days of Defeat and Victory. Gaidar was Yeltsin's chief economic adviser and acting prime minister at one point. Two Marxist (non-Leninist) scholars, Nancy Holmstrom and Richard Smith, wrote a pretty good piece in the February 2000 edition of Monthly Review arguing the specifically Marxist point (which you won't find directly in the accounts of Russian capitalists) that accumulation after the fall was primitive and not general. It was called something like "The Necessity of Gangster Capitalism," I'm not in my office today, so I don't have the article in front of me, you might be able to find it online, or you might need to get it from a library. They also make a case that China has already reverted to capitalism in the same article, which I don't quite argee with, but its worth reading anyway. I've yet to see a full Marxist-Leninist critque of state capitalism, although some must exists, but there was a critique from an orthodox Trot perspective which makes some of the same points, although argues quite oddly that the USSR was niether capitalist nor socialist. It's a book called State Capitalism: A Marxist Critique by Barry Shepard and Ernest Mandel. Hopefully someone else in this group will have seen and M-L critique of the theory which they can refer us to.
[FONT=Verdana]One thing that I would add is the sources of surplus value. Surplus value from my understanding comes from the reserve army of the unemployed, as wages go down as the supply of unemployed goes up. Their fore 100% employment = 0% surplus value. I once found a link on wiki that said that the Soviet Union under Stalin had 100% employment, which is a goal of communism. [/FONT]
[FONT=Verdana]One thing that I would add is the sources of surplus value. Surplus value from my understanding comes from the reserve army of the unemployed, as wages go down as the supply of unemployed goes up. Their fore 100% employment = 0% surplus value. I once found a link on wiki that said that the Soviet Union under Stalin had 100% employment, which is a goal of communism. [/FONT] surplus value = production profit
surplus value = production profit [FONT=Verdana]Yes, but production profit comes from unemployment. You work one hour and make a item that sells for $40, you are paid a wage of $10 an hour. The production profit would be $30, right? Now ask yourself why you would accept $10 an hour. The answer is that unemployment is high enough, that you loss part of you bargaining power, which results in a lower wage. You can see this now, with some of the wages. As unemployment goes up, people will work for less, so that they will not be replaced by the people on the unemployment line. [/FONT]
Surplus value, what capitalists call "added value", is the diffrence between what they paid to make a commodity and what they sell it for. If you only paid $1.08 to make a Nike sneaker but sell it for $101.08, that's a surplus value of $100. To pose a countrer arguement, I do think Russia was state capitalist. They still had capital, they still had wages, they still had a market system. They had all they trademarks of capitalism. Including one-man management in the factories. They were also imperialist. They would send money to a small group of rebels friendly to the USSR, and support their regime. In exchange they would have economic hegemony in that nation. These were usually not workers revolutions, although sometimes they were like in China and Afghanistan. In some cases they would even physically move their factories and bring them back to the fatherland. They had commodities, becasuse they still had trade with other nations. Commodities are products of labor that are made specifically to sell. They had that. They would produce raw materials that they would trade to other countries for profit. In fact after Stalin a large part of their economy became foreign trade. Some say, "Oh it's not capitalism because there was no competition" Well they did have competition. Not nationally, but internationally. They were in competition with America, and other free trade capitalist countries. You don't have competition within GE or Phizer, but between diffrent firms you do. Russia was state capitalism. They weren't free trade capitalist because the state owned all the industry. They weren't socialist, because socialism means economic equality, which they didn't have either. What they had was state capitalism. What my question is, why is this not progressive? You have a planned economy, and you have industry under control of the state, and the state is a potentially democratic institution. They didn't have democracy in the USSR, but that doesn't mean that state capitalism is always undemocratic. Look at Venezuela. They are taking the state capitalist road. They are nationalizing the parts of industry that do not conform with trade laws. By nationalizing these parts of industry, they are putting them under democratic control. how is that not progressive? Furthermore, how can you go from capitalism to socialism w/o state capitalism? Socialism is not a doctrine you implement, it is a specific productive relationship, just like capitalism. If you don't have socialism, and you don't have free market capitalism, you have state capitalism.
Socialism Betrayed: Behind the Collapse of the Soviet Union I would recommend tracking now that book. its currently out of print but they will be making new copies soon I understand.
[FONT=Verdana] Surplus value, what capitalists call "added value", is the diffrence between what they paid to make a commodity and what they sell it for. If you only paid $1.08 to make a Nike sneaker but sell it for $101.08, that's a surplus value of $100. [/FONT] [FONT=Verdana]That $1.08 comes all from human labor, in one form or another. So that $1.08 is a in one shape or form the wages of the people who made it. The machine they used had to be built by someone, the material had to be made by someone, and the shoe itself was made by someone. The only way to sell an item for more than it cost you to make is to keep wages low. The main way, and in some cases the only way to keep wages low, is to have unemployment in one form or another. [/FONT] [FONT=Verdana]Look at Venezuela. They are taking the state capitalist road. They are nationalizing the parts of industry that do not conform with trade laws. By nationalizing these parts of industry, they are putting them under democratic control. how is that not progressive?[/FONT] [FONT=Verdana]In fact it very progressive, and is a show how things should be done. But one of the main problem I found with communism, is that we use under defined words, like “State capitalism” and “revisionism” where they can be used for anyone or any place. [/FONT]
It is difficult to pin down an exact definition that everyone will be happy with. But i think that state capitalism is a society where the capitalist mode of production is combined with state power. Where the state acts like a big corporation, with 100% public shareholders. The state would not work toward profit but at this point in society, where the revolution was like a week ago, you are still going to have the capitalist mode of production. You can't drop the wage system (call it labor notes if you want, it's a wage system), and you will still be trying to get "capital", surplus wealth you can put toward development. The money that is raised this way will not belong to a few people at the top, but be part of the public trust, from which everyone is paid roughly the same. True this is not how state capitalism always operates, but it can be made to operate this way, as long as we are sure to democratize it, and create a process by which everyone is obligated to take part in it's operation. It'll be like jury duty. Everyone has to do it. You can have system in place where any public official couldn't hold office one of every three years, or two of every six years, or something like that that obligates him to work for a living every few years.
It is difficult to pin down an exact definition that everyone will be happy with. I'm not asking for a definition that erveryone will be happy with, just one, that can't be used for everyone and everything. Definitions should define somthing, but that not the case when it is so general that you can label anyone a [FONT=Verdana]"State capitalist".[/FONT]
