State capitalism, Leninism, and the transition to socialism (part 3):

The question of
"state capitalism under workers' rule"

By Joseph Green
(CV #14, August 10, 1997)

"State capitalism under workers' rule" is widely said to be the Marxist-Leninist view of the path from capitalism to socialism. Yet it is doubtful that this term was Lenin's definition of a transitional economy, rather than being an attempt to describe certain of its features, with Lenin pointing out that he was not using the term state capitalism "in the literal sense". However, whether it was Lenin's definition or not, I think the term actually retards grasping various aspects of the Marxist-Leninist theory on the transition to socialism that are important today as part of completing the anti-revisionist critique of doctrines that have passed as "Marxist" for decades.

Part 2 of this series of articles, "The Anarchy of Production Beneath the Veneer of Soviet Revisionist Planning", analyzed several of the most basic features of Soviet economic performance, noted by observers of varying political points of view. (1) Based on this, it established that the revisionist state sector does not establish the social control of production because of, among other things, the multitude of private revisionist interests that exist under the facade of uniform state ownership. The development and growth of these private or small-group ownership interests right within the state sector is one of the main things distinguishing revisionist economy from a transitional economy. In moving towards socialism, the point is to bring all production under social control. For Marxist socialism, nationalization is only a step to this aim, and not the definition of this process. Thus, the growth of a type of state sector that does not establish social control is fundamentally different from the Marxist path to the classless society.

Thus the fact of extensive nationalization does not in itself show that a regime is socialist. In the case of the revisionist regimes, it only helps establish their state capitalist character. As well, outright capitalist regimes may carry out a certain amount of nationalization, and this does not create a socialist but a state capitalist sector of the economy. A workers' regime on the path towards socialism will also undertake nationalization, which in this case functions as a step towards the social control of production. The nationalized industry will be run by workers' institutions and representatives, but moreover, it will be more and more run by the masses of workers (and not only by replacing the former top executives of nationalized industry with revolutionary representatives), and a separate managerial class will fade away. This is part of the transitional process, by which the working class, after seizing power in a socialist revolution, transforms the economy in the direction of socialism. The raises the question: Does the existence of a nationalized state sector in this transitional economy, but this time under workers' control both in the sense that the ruling party is truly a party of the working class and in that the masses take over more and more of the administration of the state sector, mean that the transitional system can be characterized overall as state capitalism, but a "state capitalism under the workers' rule" or "state capitalism under the dictatorship of the proletariat"?

There has been a good deal of discussion on this issue, a few of the positions being as follows:

* Some sources simplify it to that the path attempted by Lenin was simply "state capitalism" as a transition to socialism. The academic historian E. H. Carr basically characterized Lenin's theory that way, and so did Maurice Dobb, a historian sympathetic to the Soviet revisionists. (2)

* The first part of the article "State-capitalism, Leninism and the transition to socialism", which appeared in CV on June 1 of last year, discussed Jim's report "Lenin's views on state capitalism--review". Jim sought to discredit Leninism, and he concentrated "on the celebrated question of 'state capitalism' under workers' rule". In the body of the report he claimed that Lenin laid the basis for revisionism. To do so, he tried to prove that Lenin equated state capitalism with the transitional economy or even with socialism itself. He went on to imply that Stalinist state capitalism was simply a consolidated form of the state capitalist road allegedly set forward by Lenin. (3)

* The Chicago Workers' Voice group talks of "arriving at socialism through a form of state capitalism under the hegemony, however, of the proletariat, and guided by a Marxist-socialist party which represented the interests of the proletariat and the other working masses. "(4) It seems however to see this as mainly a political difference from ordinary state capitalism, and to have little idea of how the underlying economic structure of such a system would differ from ordinary state capitalism, and instead judges by the rhetoric of the government, by whether it has contradictions with U.S. imperialism, or whether it has some leftist social policies. Thus, to judge the nature of the Castro regime, the CWV group does not examine how the state-sector and the economy as a whole are run, but is instead influenced by the fact that many leftists like this regime, that it incessantly drapes itself in socialist talk, and that U. S. imperialism is confronting this regime. As a result, the CWV group vacillates on the nature of the Castro regime in Cuba, saying on one hand that it has a "state-capitalist economy" and is not a "model" of socialism, but on the other hand holding that the Castroist regime should be defended in the name of anti-imperialism and refusing to call on the Cuban proletariat to build its own class movement independent of the Castroist bourgeoisie. (5) Taken to its logical conclusion, the CWV's stand might mean that they recognize, say, "state-capitalism under anti-imperialist rule" as something that isn't quite the model road to socialism, but isn't quite capitalism either. In any case, a number of apologists for this or that nationalist regime in effect hold to such a conception of third world state-capitalism.

* A thoughtful CVO comrade I have talked to believes that "state capitalism under workers' rule" might describe the economy at a certain point in the transition to socialism, although it would not describe the whole course of the transition to socialism.

* In 1992 I wrote the following, which identifies the transitional economy with state capitalism right up until the achievement of socialism (the lower stage of communism):

"A classless society means the people as a whole run the entire economy. The only way to get there from a capitalist society is through a revolution after which the working people as a whole take over the economy. I don't know how this is possible except through a period of state ownership, as Engels describes. And so long as the economy isn't yet socialist, this is presumably state capitalism, albeit a state capitalism that is in transition towards socialism. " (6)

I think this states the case in favor of the term "state capitalism" albeit under workers' control or in transition towards socialism with a certain consistency and force. However, right after writing this, I became convinced that the last sentence was a mistake, although I have had to wait five years to have the occasion to write an article on this subject retracting this view. (7)

Different types of state capitalism

As these varying viewpoints show, the term "state capitalism under workers' rule" relates to a number of different issues. So in discussing it, one has to take account of the fact that Lenin and others use the term "state capitalism" to refer to several different things:

(A) There is the state-capitalism that can be found in most present-day capitalist economies. This exists both in the developed, industrial economies and in "developing" countries, including many with avowedly capitalist regimes. They regulate private capitalism to a certain extent, as well as having a "public sector", which can be quite substantial, of state-owned companies. Indeed, especially after adding on the military, the health, education, pension and social welfare systems, subsidies to private companies, etc., overall state intervention in "free-market" countries can sometimes be quite extensive.

(B) There is revisionist state-capitalism. This actually is a variant of the first type of state-capitalism, since it also takes place under the dictatorship of the bourgeoisie, albeit a new bourgeoisie that has usually supplanted in whole or in part the previous ruling class. It differs from Western state capitalism in generally having a much more bureaucratic state and far greater restrictions on open market mechanisms. The revisionist model, besides being applied in fake "communist" countries, had at one time an even wider influence among third world regimes.

(C) There is state capitalism run by a revolutionary-democratic government of the toilers. In the midst of any revolution where the struggle is severe, the regime may infringe on the marketplace and introduce state regulation. In the case of a revolution where the toilers themselves seize power, they will undoubtedly use state regulation of the economy to sweep away the old ruling classes,  accomplish a number of reforms, ameliorate economic distress, etc. This may take place both through state regulation of private capitalism and through state enterprises. It does not in itself go beyond the bounds of capitalism. Unless the revolution moves forward to a socialist stage, the revolutionary regime will eventually either be succeeded by, or degenerate into, an ordinary bourgeois regime.

(D) There is private capitalism regulated by a proletarian government. Even after a socialist revolution, it is unlikely that the proletariat can take control of all production at once. For one thing, the bulk of the small producers in countryside and city have to be gradually moved towards large-scale production. Thus there will be, for a time, capitalist and petty-bourgeois enterprises and trade regulated by the government, with various enterprises amalgamated into large enterprises. In Lenin's terminology, capitalism regulated by the state is "state-capitalism". And so this will constitute a state-capitalist sector of the economy. However, it would be only one sector of the economy.

(E) As well, even in the state sector of an economy in transition towards socialism, certain capitalist methods persist. Money is still used, and the business accounting methods used by state enterprises inevitably affects, and profoundly so, the relations of the proletarian state with the workers. It takes time for the masses to organize themselves to really run all aspects of the state and the economy and replace all the old capitalist methods. And it takes time to build up the base of material abundance necessary for socialism. The transition period is when all these processes are taking place, a period marked by presence of bourgeois carryovers as well as the development of new ways of doing things. The bourgeois methods used in the state sector can themselves be referred to as state-capitalist methods.

State economy

How does this apply to the overall characterization of what the economy looks like when a country is genuinely on the way to socialism? The following conclusions are my views, and not necessarily those of any other member of the CVO.

In my opinion, the use of the term "state-capitalism", or even "state-capitalism under workers' rule", as an overall characterization of the transitional economy is not right. Such a term reduces the economic base of the transitional period to capitalism and negates some of the most profound changes going on within the economy. If the economy is actually moving towards socialism, if the proletariat is controlling and transforming the state sector, then despite the existence of bourgeois carryovers and money, the nature of the economy should not be reduced solely to capitalism. Yet "state-capitalism" literally means a form of capitalism; this is why Lenin, when he is talking most generally about the character of the whole economy, says that he is not referring to it as state-capitalism "in the literal sense". By way of contrast, "state-capitalism under a democratic dictatorship of the workers and peasants" really is a form of capitalism, albeit the form of most use to the toilers. But the transitional economy is supposed to represent something that is breaking through the bounds of capitalism, although it will not become a stable and completely distinct system until socialism itself is achieved.

* The term "state capitalism under workers' rule" suggests that socialism divides into an economy on one hand, and a separate type of government on the other. It can suggest that disparate elements can simply be melded together, or even that the difference between revisionist state capitalism and a transitional economy is only the political policies of the government. One can't simply merge a proletarian head (government) onto a capitalist body (economy). The relation between the two is much more intimate than that. In the long run, if there isn't substantial motion towards socialism, if there isn't some transformation of the economic base, a proletarian government can't survive on top of a capitalist economy.

The article "The anarchy of production beneath the veneer of Soviet revisionist planning" (CV, March 1, 1997) showed that the nationalized sector in a revisionist country isn't simply an obedient machine following the policies set by the ministries, but is heavily influenced by the various "private interests" of the new bourgeoisie. In an ordinary bourgeois country, the state sector has a thousand links with the market bourgeoisie, and in a revisionist country it has a thousand links with both the overall class interests, and the "private interests", of the new bourgeoisie. In a country actually moving towards socialism, the state sector has to be developing more and more links with the masses--which means not just that individual workers join the administration, but organizational links as well. Any term for the economy that weakens the conception of this connection is flawed for the current needs of the revolutionary workers' movement, in which comparisons between different systems of state direction of the economy are very important.

* If economies with an extensive or dominant state sector are called, say, "state economies" or "state-dominant economies"(8), then one can compare different "state" economies. One can ask if a country with a "state economy" has a state capitalist economy or a transitional one, and if it is transitional, one can discuss which features are similar to, and which distinct from, state-capitalism. Try to express such questions under the old terminology! You end up with such formulations as "How far does state-capitalism under workers' rule resemble state-capitalism?" The question looks so absurd that one is forced to try to reformulate it: "How far does state-capitalism under workers' rule resemble state capitalism in the literal sense"? For example, Lenin said such things as

"our state capitalism differs from state capitalism in the literal sense" or that our state capitalism "does not agree with the usual conception of state capitalism"(9) or that "state capitalism in the form we have here is not dealt with in any theory, or in any books". (10)

So one is forced to distinguish between state capitalism in two senses, the full, Western sense and the sense under workers' rule. Thoughtful communists with Marxist convictions may be able to handle such a distinction, but it plays havoc with how the issue is discussed by anyone else. One would normally think that if the system isn't state-capitalism "in the literal sense", this means that it really isn't state capitalism, but is something different which has certain similarities with it. A terminology which allowed this to be expressed more directly and easily, which helped people see the point at issue rather than confuse it, would be preferable.

* One of the key features of the 20th century is the existence of the fake communist or revisionist regimes. Marxism will only survive as a living doctrine if it throws off all the reformist and revisionist distortions that have been attached to it for so many decades and becomes anti-revisionist Marxism, which bases itself on the distinction between Marxism and revisionism, between the revisionist economy and the transitional economy, etc. This is true not just for theoretical work, but also in order to rally the millions of workers who have been shackled by revisionism and who are sick to their stomach at the sight of revisionist crimes and the sound of revisionist platitudes. Marxism must show that it is the sharpest tool for tearing asunder all the apologies about and illusions in the revisionist regimes. Revisionist bureaucratic state capitalism, and the transitional economy have something in common--the large role of the state, even larger than in Western monopoly capitalism. But they nevertheless are quite different, and the terminology must highlight and not slur over this difference.

At present, the strongest socialist attack against the overall nature of the revisionist economies is characterizing them as state capitalism. However, the term "state capitalism under workers' rule" suggests that a socialist regime is also some sort of state capitalism, even though one explains that this is not so "in the literal sense". Some people might conclude that the difference between revisionism and socialism is between "state capitalism under an oppressive government" and "state capitalism under workers' rule". This suggests that they have the same economic base, with the executives simply having different policies. While whether the government is really a workers' government is an important part of the distinction between revisionism and revolutionary socialism, it is fundamentally wrong to see the economic base of revisionist society as the same as that of a transitional economy, as our research on Cuba and the Soviet Union has shown. Others may take the issue to be that revisionism is simply the transitional form towards socialism, since the transitional economy is "state-capitalism"; this widespread viewpoint amounts to apology for revisionism. Or people might think that one is simply saying that a regime one likes is good state-capitalism, and a regime one doesn't like is bad state-capitalism. (Indeed, this is in essence how the CWV group distinguishes among state-capitalisms.) When the opposition to these viewpoints has to be summed up by saying that the transitional economy is not state-capitalism "in the literal sense", then the terminology has definitely gotten in the way of political clarity.

* Of course, if the transitional economy really is another variety of state capitalism, then it should be so labeled. For example, the sector of the transitional economy which is private capitalism under state regulation really is a state-capitalist sector in the literal sense. But if the economy is mainly this type of state capitalism, then the revolution has not yet gone beyond revolutionary-democratic transformations and, it seems to me, is not yet a transitional economy. A socialist revolution has to accomplish all sorts of democratic tasks in passing, and thus might in some cases have to pass relatively briefly through such a period. But until the revolution gets beyond it, it hasn't fundamentally challenged capitalism and set out onto the transition towards socialism.

However, I don't think that the persistence of certain capitalist features in the transitional economy prove that the overall transitional economy is state capitalism. So long as money and other financial accounting is necessary, so long as actual socialism (the first stage of communism) has not been achieved, there are in fact capitalist carryovers of all sorts in the economy and its state sector. But if it's really a transitional economy and is being increasing run by the workers, then it is not really state capitalism, but a form of "state economy" which has certain features in common with state capitalism. However, if this hasn't occurred, if the transformation of the state sector doesn't begin very soon in the revolution, and if the capitalist carryovers remain so extensive that the economy can overall be characterized as state-capitalism, then it is hard to see how one can talk of a transitional economy or, after awhile, of an ongoing socialist revolution at all.

* It should be clear that I am not saying that the transitional economy can be defined simply as "state economy". "State economy" embraces a range of different economies, including both state-capitalism (in the full, literal sense) and the transitional economy. By having such a term, one can discuss the similarities and differences of the different types of state economy. But this is not a new name for the transitional economy; such an economy is just that, a transitional economy, a name that will do just fine. Saying that it is "state capitalism under workers' rule" may seem satisfying, but actually only identifies certain features of it -- at the price of blurring the distinction between the transitional economy and other state economies. Suppose one tried to imitate the term "state capitalism under workers' rule" by saying that the transitional economy is a form of "state economy under workers' rule". Such a statement would at least have the advantage of being literally true, but it too would not be an adequate definition. For one thing, it would not include any indication of those particular features (other than the proletarian rule over the state power) in which such a state economy differs from state-capitalism, no indication that it is not any type of economy that can be combined with workers' rule, nor any direct reference to capitalist carryovers.

It might seem that the term "state capitalism under workers' rule" has the advantage of encouraging vigilance against the strong capitalist carryovers that still exist in the transitional economy. It is necessary to recognize both the need for a number of carryovers and the struggle to keep them in check and eventually eliminate them. But in practice, the term "state capitalism under workers' rule" always was most effective in showing the need to utilize certain capitalist carryovers; I'm not sure it ever had much power in encouraging vigilance against these carryovers, even though Lenin stressed the need for vigilance. By now, this term seems to have been perverted by long use by the revisionists into a wet blanket on vigilance. If asked why their economies look capitalist, they, or their friends, can reply that the transitional economy is, of course, state-capitalism under workers rule. Moreover, when one has to describe "state-capitalism under workers' control" as state-capitalism of a type that is either not literally state-capitalism or that is not the same as that known in the past, this itself tends to blunt any power that the analogy to state-capitalism might otherwise have had.

Lenin's formulations

Lenin used such formulas as "state capitalism" and "state capitalism under workers' rule" in a somewhat different fashion than how these terms are understood today. Today state capitalism brings to mind countries with a predominant state sector, and the discussion of state capitalism is mainly focused on the state sector. After all, the analysis of revisionist countries is never far from one's mind nowadays, and even the state sector of market capitalist countries grew tremendously during the 20th century. But Lenin did not deal with these issues: the flourishing of revisionist economy took place after his death; and he mainly used the term "state capitalism" not about the directly state-owned sector, but to refer to the regulation of private capitalism by the state. For example, when he talked about learning from German state-capitalism, he was talking about the way German industries were amalgamated into monopoly associations, still under private ownership, that had close relations with the government. When he talked about the state capitalism in the Bolshevik regime, he was mainly referring to the amalgamation and regulation of private trade, petty-bourgeois production, and capitalist enterprises.

It's not that Lenin didn't also talk about the use of certain bourgeois methods in the state sector. He stressed both the impossibility of eliminating all bourgeois methods at once, and the fact that these methods did in fact mean a compromise with capitalism. For example, he bluntly pointed this out with respect to high pay and privileges for bourgeois experts. And during the New Economic Policy (NEP) he wrote some dramatic things about the effects of adopting business-accounting in the state sector and the need for the working class to defend itself against the "bureaucratic distortions" that this would bring. (11) But he didn't describe the state sector as state-capitalist, and continued to contrast it to capitalist and state-capitalist enterprise. (12)

But, it may be asked, what actually characterizes a transitional economy: state-regulated capitalism or the state sector? I don't think Lenin looked at the question this way. He held instead that

"Theoretically, there can be no doubt that between capitalism and communism there is a definite transition period which must combine the features and properties of both these forms of social economy. "(13) In one of the major works in which he raised the issue of state capitalism under workers' rule, he wrote that "No one, I think, in studying the question of the economic system of Russia, has denied its transitional character. .  .  . But what does the word 'transition' mean? Does it not mean, as applied to an economy, that the present system contains elements, particles, fragments of both capitalism and socialism? Everyone will admit that it does. "(14)

I think that the combination of different elements, the fact that the system was not fully here or there, is how Lenin regarded the characterization of the system. In this work, he went on to list the various different economic formations still in Russia, such as patriarchal petty production, petty-bourgeois (or commodity) petty production, private capitalism, state capitalism, and socialism. (15) To then say that he really means that this mixed system is overall state-capitalism seems to go against the clear sense of the passage. As to what the nature of such an economic system is, he remarked once that it had

"left the rails of capitalism, but has not yet got on to the new rails" . (16)

It's not that Lenin was at all hesitant about raising the issue of state capitalism. He did so repeatedly and emphatically in the early period of the Bolshevik Revolution prior to the Civil War, and then once again later in the period of the New Economic Policy. But look at the content of his talk about state-capitalism. For example, from the Bolshevik Revolution of 1917 through early 1918, Lenin wasn't for an immediate nationalization of the entire urban economy, but advocated a gradual approach. There would be workers' control, but the capitalists would still own many enterprises. Why not simply nationalize all industry at once? Was it because the capitalists were too powerful and could block this? Not at all.

Lenin discussed the issue as follows. He pointed out that the "Left Communists" were denouncing his gradual policy and demanding extensive nationalization which they took to be "a most determined policy of socialization". As we have seen earlier in this article, the social control of production is the key question of reaching socialism. How did Lenin respond to this? He distinguished between actual socialization and what could be achieved at the moment by nationalization. He wrote:

".  .  . The misfortune of our 'Lefts' is that they have missed the very essence of the 'present situation', the transition from confiscation (the carrying out of which requires above all determination in a politician) to socialization (the carrying out of which requires a different quality in the revolutionary).

"Yesterday, the main task of the moment was, as determinedly as possible, to nationalize, confiscate, beat down and crush the bourgeoisie, and put down sabotage. Today, only a blind man could fail to see that we have nationalized, confiscated, beaten down and put down more than we have had time to count. The difference between socialization and simple confiscation is that confiscation can be carried out by 'determination' alone, without the ability to calculate and distribute property, whereas socialization cannot be brought about without this ability. " (17)

Lenin concentrated on the need to develop the organization of the masses, their ability to establish national accounting and control, their ability to actually run the enterprises, etc. As he stressed:

"In every socialist revolution, however--and consequently in the socialist revolution in Russia which we began on October 25, 1917--the principal task of the proletariat and of the poor peasants which it leads, is the positive or constructive work of setting up an extremely intricate and delicate system of new organizational relationships extending to the planned production and distribution of the goods required for the existence of tens of millions of people. Such a revolution can be successfully carried out only if the majority of the population, and primarily the majority of the working people, engage in independent creative work as makers of history. "(18)

Lenin discussed the petty-bourgeois predominance in Russia, which was mainly a small-peasant country, and how to overcome the anarchy and disorganization brought by petty production. He believed that state-regulation of capitalism (involving not just workers' control over industrial enterprises, but also consumer and producer cooperatives and other means of developing mass accounting and control of production and distribution) could be a means for bringing the masses into the job of directing the economy. If the more class-conscious workers weren't to be swamped by the mass of Russian petty production, it would be necessary for their efforts to be amplified by that of the largest mass of working people. In this sense, it was preferable to proceed gradually, if possible, rather than immediately seek to nationalize everything.

In practice, this plan was cut short by the capitalists challenging the very existence of a socialist regime and beginning the Civil War. The result was that widespread nationalization was carried out rapidly; the workers had to learn as best they could in the resulting situation; and the Bolsheviks set up an extensive state sector as best they could. However, after the Civil War, Lenin again returned to the issue of finding ways to overcome petty-bourgeois disorganization in the situation where simply relying on government decrees would be unavailing.

Thus Lenin's "state-capitalist" plans were based on the idea of the necessity to involve the masses in the constructive work of running the economy. It was based on the idea that communist decrees alone could not bring socialism, and that nationalization could not bring a real socialization of production if there wasn't yet mass national accounting and control, labor discipline, etc. It was part of his effort to stress the need for transitional measures including co-operatives, state regulation of trade, etc. And yet the phrase "state-capitalism under workers' rule" probably would bring to most people's minds the idea that the transitional socialist economy can be created simply by nationalizing everything possible and creating a large state sector. It is of course possible that a correct phrase can be widely misinterpreted and distorted, as many Marxist principles have been by the revisionists. But in this case, I think the phrase is theoretically mistaken as a description of the overall transitional economy, as well as a source of misunderstanding in practice.

There is another aspect of the matter besides Lenin's theoretical conception. The New Economic Policy of the 1920's in the Soviet Union was the furthest extent of the state-capitalist methods that Lenin conceived of. How did this function in practice? Did the Soviet economy remain a transitional economy and verify Lenin's conception, or did it become a state-capitalist economy in the full sense of the word, and why? I think that by the end of NEP, the Soviet Union had already decayed quite far into a state-capitalist country. Moreover, even while Lenin was alive, there are still a number of questions about NEP. One issue is that the Bolshevik government may have already irretrievably lost sufficient mass support to be a revolutionary government near the beginning of NEP, which would have doomed any economic policy. Lenin never dealt with the issue of the degeneration of the regime and loss of its character as a revolutionary representative of the masses. The regime might be overthrown, but he assumed that if it could hold power, that it could maintain its status as the voice of the masses. Whether the regime had become permanently detached from the masses while Lenin lived, or only after his death, in any case he didn't theorize on the issue of what communists should do in this case. I don't deal with the practical assessment of NEP here; however I believe that the sounder theoretical framework about state-capitalism sketched in this article should be helpful for such a study.

While I think that it's doubtful that Lenin regarded the term "state capitalism under workers' control" as an overall description of the transitional economy, my objection to the term isn't based on that. For that matter, I came to the conclusion the term was a mistake at a time when I thought Lenin did use the term as an overall characterization. But it is up to us present-day anti-revisionist activists to assess the experience of the Bolshevik Revolution and evaluate the pluses and minuses in the ways the Bolsheviks discussed the transition period. I think the term "state capitalism under workers' rule" gets in the way of examining some of the key issues Lenin raised about the transitional economy, some of which I outlined in part one of the article "State capitalism, Leninism, and the transition to socialism", and that it holds people back from dealing with some of the additional problems concerning state-capitalism that affect us today. The basis of Lenin's talk about "state capitalism" was a fierce struggle on behalf of the need for transitional measures which involve the masses in actually running the economy, and not just attempting to establish communist economic norms by decree. Many of the particular measures tried in the revolution failed, and Lenin modified his plans a number of times to deal with the rapid changes of a revolutionary period. But there is a theoretical legacy that the Bolshevik revolution left us, and I think that criticism of the formula of "state capitalism under workers' rule" will help preserve the revolutionary core of that legacy, facilitate the critique of the revisionist regimes, and encourage better theorizing on the transition period.


(1) See Communist Voice, vol. 3, #1, March 1, 1997. (Return to text)

(2) E.H. Carr, The Bolshevik Revolution, 1917-1923, vol. II, pp. 88-93, 137-138, 362; Maurice Dobb, Soviet Economic Development Since 1917, pp. 145-6. (Text)

(3) See Communist Voice, June, 1, 1996, vol. 2, #3 for both Jim's report (pp. 43-57) and my comment on it (pp. 26-42). Some of the particular references to Jim's claim that Lenin equated state capitalism and socialism include p. 35 col. 2 - p. 36 col. 1; p. 38, col. 2; p. 39 col. 2 - p. 40, col. 1. (Text)

(4) From Baba to Tovarishch: The Bolshevik Revolution and Soviet Women's Struggle for Liberation, Overview, p. xix. This book was prepared by the CWV group. (Text)

(5) A number of articles in Communist Voice trace the CWV's stand on Castroism, from "On the CWV agitation on Cuba: Should we build an anti-revisionist trend among the masses?" in vol. 1, #1, April 15, 1995 to "How some former anti-revisionists reconcile with Cuban revisionism: Apologizing for the Castro regime or supporting the Cuban workers?" in vol. #3, #2, May 8, 1997, which also contains Sarah's (CWV) review of the movie Che. (Text)

(6) "Some Notes on Theory (2)", The Workers' Advocate Supplement, July 25, 1992, vol. 8, #6, p. 13, col. 2. (Text)

(7) My first concern about the term centered on the artificial difficulties that it created for the serious study of the economic bases of socialism and revisionism that I was involved in. I bent the ear of a few comrades about this, and I wrote in Sept. 1994 to the CWV's Sarah on this issue when reviewing a draft of the "overview" from the CWV's book From Baba to Tovarishch prior to its publication. The CWV decided to stick with terms like "state capitalism under the hegemony of the proletariat" (see for instance p. xix of the final "Overview" as published). (Text)

(8) I am using such awkward terms as "state economy" or "state-dominant economy" for lack of anything better. (Text)

(9) "Report to the Fourth Congress of the CI, Nov. 13, 1922", Collected Works, vol. 33, pp. 427-8. (Text)

(10) "Political Report of the CC of the RCP(B), March 27, 1922, vol. 33, p. 278. (Text)

(11) For example, "The Role and Functions of the Trade Unions Under the New Economic Policy", Jan. 12, 1922, Collected Works, vol. 33, p. 184-196. (Text)

(12) Naturally, there is no hard and fast dividing line between bourgeois methods in the state sector and state regulation of private capitalism, since for the state to regulate private capitalism rather than replace private capitalism can be described as a bourgeois method. But for our purposes today, if possibly not Lenin's, it is important to distinguish between the organization of the state sector in itself, and its connection with private capitalism, that is, to distinguish between state-capitalism in the forms (D) and (E) above. In the main, Lenin is emphasizing (D) when he talks about state-capitalism. (Text)

(13) "Economics and Politics in the Era of the Dictatorship of the Proletariat", Collected Works, vol. 30, p. 107, Oct. 30, 1919. (Text)

(14) "'Left-wing' childishness and the Petty-Bourgeois Mentality", Collected Works, vol. 27, p. 335, May 5, 1918, emphasis as in the original. What these different particles of different systems are will deserve a closer look at another time. Various capitalist fragments are easy to see. But the socialist fragments, the increasing role of the working class in running the entire economy, takes more effort to judge. It isn't as easy as simply tracing the growth of the state sector or the expansion of free services. Socialism doesn't come into existence in fragments, but the fragments create the conditions for it. (Text)

(15) Ibid. , pp. 335-6. It is the state sector that Lenin identifies as "socialism" (which is only true in a certain sense, similar to the way in which one calls a country which has of yet only embarked on the transition to socialism a "socialist" country). The main point here is that Lenin lists the state sector separate from the state-capitalist sector, which is state regulation of private capitalism. (Text)

(16) "Political Report of the CC to the 11th Congress of the RCP(B)", Collected Works, Vol. 33, p. 278, March 1922. (Text)

(17) "'Left-Wing' Childishness .  .  . " pp. 333-4, emphasis as in the original. (Text)

(18) "The Immediate Tasks of the Soviet Government", Collected Works, vol. 27, p. 241, March-April 1918. (Text) <>

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