war and the state

Michael Pugliese debsian at pacbell.net
Fri Aug 30 09:23:07 PDT 2002


State Capitalism' in the Soviet Union, " by M.C. Howard and J.E. King. http://www.comlaw.utas.edu.au/economics/HER/ART07HowardKing.pdf or if you don't have the free adobe acrobat reader, http://216.239.33.100/search? q=cache:caTt2RR5pw4C:www.comlaw.utas.edu.au/economics/HER/ART07HowardKing.pdf+State+Capitalism+or+Tota litarian+State+Economy

http://csf.colorado.edu/pen-l/2001II/msg03371.html Page 1

`State Capitalism' in the Soviet Union

M.C. Howard and J.E. King*

Introduction

The aim of this paper is to explore the reactions to the Bolshevik Revolution of one

group of critics from the left: those who saw it as ushering in a new form of

capitalism. The controversy over state capitalism had both theoretical and practical

significance. At the analytical level it presented an important test of Marx's

conception of historical materialism, which had been formulated in a largely

successful attempt to explain the transition from feudalism to capitalism in Western

Europe but had encountered difficulties when applied to other epochs and other

continents. In political terms, the class character of the Soviet Union was a crucial

question for those who wished to understand its internal dynamics, the nature of its

contradictions and the potential that it offered for revolutionary change. It remained

central, even after 1991, to any serious Marxian analysis of post-Mao China,

though this is not a topic that we develop at any length here.

Our treatment is broadly chronological. We begin by outlining the origins

of the state capitalism hypothesis before the October Revolution, and then describe

the use of the term by socialist critics of the Bolsheviks between 1917 and 1929.

Next we discuss the revival of interest in the idea during the 1930s experience of

Stalinism, show how Frankfurt School theorists extended it to denote contemporary

developments in Western capitalism, and consider the further evolution of the

notion of state capitalism that occurred after 1945. Finally we summarise the

arguments, for and against the hypothesis, that emerged from these debates, and

conclude by briefly considering the principal deficiencies of the state capitalist

hypothesis.

`State Capitalism' Before 1917

The conservative claim that socialism would inevitably degenerate into tyranny is

probably as old as the socialist ideal itself. What is often overlooked is that the

accusation came from the Left, no less than from the Right. The anti-democratic

views of Owen and Saint-Simon were frequently criticised by their socialist

contemporaries, while William Thompson charged Thomas Hodgskin

with

promoting the interests not of the masses but rather of an intellectual elite. Karl

Marx aroused similar suspicions. Long before 1917, some of the left (that is,

socialists and anarchists) were already claiming that there might be serious

problems with the Marxian project. Based on his experiences in the First

International, Mikhail Bakunin concluded that any regime led by Marx or his

followers was likely to be oppressive and dictatorial:

You can see quite well that behind all the democratic and socialistic

phrases and promises in Marx's program for the State lies all that

constitutes the true despotic and brutal nature of all states, regardless of

their form of government. Moreover, in the final reckoning, the

People's State of Marx and the aristocratic-monarchic state of Bismarck

are completely identical in terms of their primary domestic and foreign

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`State Capitalism' in the Soviet Union 111 _______________________________________________________________________________

objectives. In foreign affairs there is the same deployment of military

force, that is to say, conquest. And in home affairs the same employment

of armed force, the last argument of all threatened political leaders

against the masses who, tired of always believing, hoping, submitting,

and obeying, rise in revolt. (Bakunin 1872 [1973], pp. 319-20)

Bakunin's own political practice may have been elitist, manipulative and

authoritarian, but he deserves credit, perhaps, for having been the first to

foreshadow the Bolshevik dictatorship. According to Alvin Gouldner his insights

went much deeper, leading him to formulate an original and incisive critique of

Marxism as `the ideology, not of the working class, but of a new class of scientific

intelligentsia...who would corrupt socialism, make themselves a new elite, and

impose their rule on the majority' (Gouldner 1982, pp. 860-1). The basis of their

domination would be knowledge or `cultural capital' (ibid., p. 867) 1 , together with

their monopoly of political power. Thirty years later the Polish anarchist Jan

Waclav Machajski reasserted Bakunin's position, arguing that the intelligentsia's

rise to power as a new ruling class might be facilitated by a Marxist dictatorship.

His analysis was taken seriously enough in Stalin's Russia for a campaign to be

mounted, in 1938, against `Makhaevism' (Avrich 1965). At about the same time as

Machajski, in 1904, Leon Trotsky expressed similar fears, this time in the context

of Lenin's assertion that the party should become a hierarchy of professional

revolutionaries. In what is with hindsight a chilling article, attacking Lenin's

Jacobin tendencies that led him towards `Substitutism', Trotsky predicted the

replacement of the revolutionary working class as the source of political authority

first by the party, then by its leadership, and finally by a single party dictator

(Deutscher 1954, pp. 88-97).

Control of the state was central to all these arguments, but none of these

writers speculated on the potential emergence of a new, statist form of capitalism.

The concept of `state capitalism' was not, however, entirely absent from the

socialist literature before 1917, though it was generally used to describe `the

takeover of industries by a state controlled by or for private capitalists' (Buick and

Crump 1986, p. 118). Marx himself had predicted an ever-increasing role for the

state as capitalism continued to evolve (Marx 1867 [1961], chapter XV, section 9),

and in Anti-Dühring Engels had written that

The modern state, whatever its form, is an essentially capitalist

machine, the state of the capitalists, the ideal aggregate capitalist. The

more productive forces it takes over into its possession, the more it

becomes a real aggregate capitalist, the more citizens it exploits. The

workers remain wage-workers, proletarians. The capitalist relationship

is not abolished, rather it is pushed to the limit. (Engels 1878 [1976], p.

360)

Later Marxists acknowledged the part played by the state in developing capitalism

in both Russia and Germany, with Lenin (for example) describing a `Prussian path'

by which the Tsarist regime hoped to save itself by incorporating some aspects of

the bourgeois system and thereby reconstructing the ancien regime from above

(Howard and King 1989, chapter 11). This process was seen to have deepened in

the early stages of the First World War, leading some Marxists to argue that the

extension of state involvement in the capitalist economy was not only irreversible

but also entailed a profound systemic change. Nikolai Bukharin, for example,

identified a new stage in the development of capitalism, in which all sectors of

national production and all important social institutions had come under state

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112 History of Economics Review _______________________________________________________________________________

management; he termed this new stage `state capitalism' (Bukharin 1915 [1972], p.

158). Rudolf Hilferding's interpretation of the German war economy was very

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1989, chapter 14) and as we shall see later was always deeply critical of the

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