4. State Capitalism

In all periods of decadence, confronted with the exacerbation of the system’s contradictions, the state has to take responsibility for the cohesion of the social organism, for the preservation of the dominant relations of production. It thus tends to strengthen itself to the point of incorporating within its own structures the whole of social life. The bloated growth of the imperial administration and the absolute monarchy were the manifestations of this phenomenon in the decadence of Roman slave society and of feudalism respectively.

In the decadence of capitalism the general tendency towards state capitalism is one of the dominant characteristics of social life. In this period, each national capital, because it cannot expand in an unfettered way and is confronted with acute imperialist rivalries, is forced to organise itself as effectively as possible, so that externally it can compete economically and militarily with its rivals, and internally deal with the increasing aggravation of social contradictions. The only power in society which is capable of fulfilling these tasks is the state. Only the state can:

• take charge of the national economy in an overall centralised manner and mitigate the internal competition which weakens the economy, in order to strengthen its capacity to maintain a united face against the competition on the world market.
• develop the military force necessary for the defence of its interests in the face of growing international conflict.
• finally, owing to an increasingly heavy repressive and bureaucratic apparatus, reinforce the internal cohesion of a society threatened with collapse through the increasing decomposition of its economic foundations; only the state can impose through an all-pervasive violence the preservation of a social structure which is less and less capable of spontaneously regulating human relations and which is more and more questioned the more it becomes an absurdity for the survival of society itself.

On the economic level this tendency towards state capitalism, though never fully realised, is expressed by the state taking over the key points of the productive apparatus. This does not mean the disappearance of the law of value, or competition, or the anarchy of production, which are the fundamental characteristics of the capitalist economy. These characteristics continue to apply on a world scale where the laws of the market still reign and still determine the conditions of production within each national economy however statified it may be. If the laws of value and of competition seem to be ‘violated’, it is only so that they may have a more powerful effect on a global scale. If the anarchy of production seems to subside in the face of state planning, it reappears more brutally on a world scale, particularly during the acute crises of the system which state capitalism is incapable of preventing. Far from representing a ‘rationalisation’ of capitalism, state capitalism is nothing but an expression of its decay.

The statification of capital takes place either in a gradual manner through the fusion of ‘private’ and state capital as is generally the case in the most developed countries, or through sudden leaps in the form of massive and total nationalisations, in general in places where private capital is at its weakest.

In practice, although the tendency towards state capitalism manifests itself in all countries in the world, it is more rapid and more obvious when and where the effects of decadence make themselves felt in the most brutal manner; historically during periods of open crisis or of war, geographically in the weakest economies. But state capitalism is not a specific phenomenon of backward countries. On the contrary, although the degree of formal state control is often higher in the backward capitals, the state’s real control over economic life is generally much more effective in the more developed countries owing to the high level of capital concentration in these nations.

On the political and social level, whether in its most extreme totalitarian forms such as fascism or Stalinism or in forms which hide behind the mask of democracy, the tendency towards state capitalism expresses itself in the increasingly powerful, omnipresent, and systematic control over the whole of social life exerted by the state apparatus, and in particular the executive. On a much greater scale than in the decadence of Rome or feudalism, the state under decadent capitalism has become a monstrous, cold, impersonal machine which has devoured the very substance of civil society.

Hi. I'm a supporter of the ICC and I'm trying to understand State Capitalism and specifically, the ICC's understanding of the State and what it means for something to be a part of the state. I recently wrote up something for a discussion with them which contained many of my main questions about the issue:

What does the ICC mean by saying that the unions & workers’ reform parties are “part of the state”? I agree that they can't conduct class struggle, but I really want to be crystal clear about the issue of their actually being organs of the bourgeois state. I know the ICC doesn't mean that left parties are always in power or that in all periods the ruling class utilize the unions in the same way or collaborate openly. Is it because they don’t challenge the state’s framework? Because they participate in state initiatives (wars, arbitration boards, national economy plans)? Or is it rather that the structure, material basis, and mode of existence and operation of these organs necessarily compels them to ACT as instruments of the state, even if they are unconscious of this? Are they always unconscious of this or are they EVER unconscious of this? Does every bourgeois ruler know what an ally they have in these organs and consciously use them? How much does Machiavellianism play into this?


Part of this is the idea that all of civil society is absorbed into the state under State Capitalism. I think that the ICC even says that except in revolutionary periods there can't be workers' unitary organizations, because in this period any organization without a revolutionary program will inevitably be recuperated by the state--this seems to be why the ICC also says that trying to create revolutionary unions is folly. Believe me, I have a huge reading list about all this that I'm going to print out soon, but I really do want to understand these points (State Capitalism, the Unions, and the Left Wing of Capital). I know these points are all closely related to the issue of decadence, which I'm also interested in understanding better. If anyone's interested in discussing, debating, etc. (either in forums or through messaging), let me know. Thanks.

On one aspect of this (because it's a big question): it's necessary to see a division of labour within the left and the unions. The big left parties (Labour, Communist parties, etc) are more obviously parties of state as they have had direct responsibility for managing the capitalist state for many decades. The more extreme leftist groups, like the Trotskyists, can more readily be understood as critical appendages of the big left parties and only rarely take on directly managing the state (although we do see this in certain circumstances). Similarly with the trade unions: at their apex, they are clearly integrated into national state policies and planning, but they cannot function without the more radical structures at the base. But they do have to be seen as an whole apparatus which is inexorably tied up with the capitalist state.
Don't know if this answers your question but it's a belated start.

Thanks, Alf, that makes sense. I'm still congealing some of my thoughts about my reading about the left of capital, but one thing that I'm thinking about is the connection between the impossibility of real lasting reforms and the absorption by the state of groups which have as their goal nothing but the reform of capitalism in favor of workers (including the unions).

The ICC says that the real definitive reason that the unions become part of the state (and inevitably must) is that they are unitary organizations for improvements of workers' conditions within capitalism, and that except in a revolutionary period there cannot be a unitary organization that doesn't become sucked into the state's dance (enforcing austerity while claiming that it would have been much worse had they not "fought" for the slightly-less-bad version of austerity that finally gets imposed). This is the real thing I'd like to understand, because it seems to be, for the ICC, the fundamental reason for the state-ization process.

I know that the COBAS in Italy have become just another union, and I'm sure there are countless other examples of strike-committee or rank-and-file style organizations becoming neutralized, but I don't think I totally understand how an organization that was simply fighting the wrong fight (reforming an unreformable capitalism) would necessarily become integrated into the state. Where is the line between a misguided campaign for reform and an organ of the state that directs working class struggle into such dead-ends? Is it when an organization refuses to challenge the state--refuses to make its struggle political, that it becomes a tool of the state for diverting struggles away from confronting the state? Is there a line?

We've recently seen the unions in the US all guarantee the state their help in cutting "cadillac health plans" as part of the much-awaited "health care reform" of the new administration, there was also a recent article in the New York Times about how the unions have recognized that "the company isn't the enemy, the enemy is foreign competition" http://www.nytimes.com/2010/01/06/bu...WRxsHFz7k+u4gQ
I'm wondering if this press has anything to do with the need for the bourgeoisie to mobilize unions again (in the US in the 80's they were used more as the pretend scapegoat which made them look more radical or "working class" but it seems like they're perhaps needed as part of a closer collaboration with the open crisis).

Thanks for the comments.

Zimmerwald is right: a key element here is that an organ that was once fuelled by the struggle then sets itself up as the 'representative' of the workers when that struggle dies away. It is then compelled to take on trade union type functions even if it originally criticised the established unions. If it wants to 'speak for the workers' it then has to play by the rules which are laid down by the state. A case in point is the IWW: no longer even a hybrid form of unitary organisation as it was in its early days, the IWW has essentially avoided being integrated into capitalism because it has shrunk to a political group that has not entirely forgotten its internationalist heritage. But when it actually, in some cases, begins to act as a union, the pressures are on it to play the game dictated by the state - hence the scandal of certain IWW branches signing no strike clauses (I can't recall the exact locality or sector but there was some discussion about this on libcom)

I may be guilty of both threadomancy and threadjacking at the same time, but I'd like to let comrades know that I've started a 'State Capitalist Theorists' group. My intention is all those who have some variant of theory of the USSR as state capitalist can discuss this together, from Left Communists to Anarchists to Trotskyists, without having to constantly put up with defenders of 'actually existing socialism' screaming at us that we're all petty-bourgeois deviationists who objectively support capital; because frankly, I'm getting a bit bored of that.

good idea. Any replies yet?

joined your new group and did a post, hope it is of use.