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Communist Voice

Successor to the Workers' Advocate

Volume 2, Number 3

June 1, 1996


In this issue


Zapatista politics in crisis


Fourth EZLN declaration from the Lacandona Jungle


Postal workers under attack

Resist management’s efforts to ruin letter carriers


Impotent strategies against postal privatization


South Korea

South Korea, imperialism, and “free-market” mythology


The transition to socialism

State capitalism, Leninism, and the transition to socialism


Lenin’s views on state capitalism — review



On the 4th Declaration of the Lacandona Jungle:

Zapatista politics in crisis

by Mark, Detroit

For some time, Communist Voice has been trying to keep our readers informed about the policy and ideology of the Zapatista (EZLN) leadership in Mexico. We, like many other progressive activists, have been excited about the Chiapas uprising led by the Zapatistas, and supported peasant demands for land, aid and an end to government repression. But we have also called attention to the weaknesses of the Zapatista leadership's views. We believe that glossing over the problems that come up only hurts the development of the revolutionary movement of the masses.

On January 1 of this year, the Zapatista leadership issued their "Fourth Declaration of the Lacandona Jungle". Like the previous three statements, this one is an attempt to map out the general position of the EZLN. While the latest Declaration has some notable changes from previous positions, these changes continue to demonstrate the underlying weaknesses that characterize Zapatismo. For some time, articles in Communist Voice have pointed out that ever since the uprising in Chiapas was contained by government troops, the Zapatista leaders' views have led them to an impasse. The EZLN negotiates with the government on behalf of the indigenous peasants. But the government encirclement means the Zapatistas have little leverage to press for major demands. So the EZLN leaders have been groping for what their activity should be now that the armed struggle has been blocked. The Fourth Declaration confirms this. It aims to sum up the results of a Zapatista "consultation" with the Mexican populace where the EZLN itself proposed that the nature of its activity had to change. What is striking about the Fourth Declaration is that the Zapatistas themselves not only admit they must follow another course, but that they have little idea what that course should be. Thus, their Declaration limits itself to calling for a "dialogue" with others to find a "plan [that] is yet to be made."

The "new stage"

In the Fourth Declaration, the Zapatista leaders say their struggle is entering a "new stage". Previously, the Zapatistas claimed that what distinguished them from other groups opposed to the ruling PRI was that the EZLN relied on the armed struggle while others comprised the political movement of the peaceful, civic opposition. Now the Zapatistas say in the Fourth Declaration that they "will enter a new stage" in which "the EZLN won't disappear but its more important effort will go for the political fight." Namely, they want to form a political front.

It was no fault of the Zapatistas that overwhelming government repression and other conditions forced them to curtail their armed revolt. But if the Zapatistas are no longer distinguished by their armed struggle, what is it that distinguishes them from other political groups? If we look at the history of the EZLN we will see they have emphasized that they don't consider their goals to be different than the other political groups, just their method of the armed struggle.1 And in fact, the EZLN's elevation of democratization of the political system to a panacea that will automatically solve all the socio-economic ills of the masses, and not merely an opening for the class struggle, is a perspective the EZLN shares with the reformist political trends in Mexico.

Evidently, the Zapatistas plan to distinguish themselves by being the ones that can overcome the differences between all the groups that comprise "civil society." The Fourth Declaration mentions three proposals for the political fight. It talks about organizing "civil society" into "committees of dialogue" which will form the basis of a new national political front in which the Zapatistas will eventually directly participate. The EZLN also calls for "places of encounter between civil society and Zapatism" called "Aguascalientes" after the 1914 convention organized in the Mexican revolution of early this century. And these attempts to organize Mexican "civil society" are to lay the groundwork for extending this work to an "intercontinental conference against neo-liberalism [conservative, "free-market" politics -- ed.]." The new front is not supposed to be "partisan" in any way but just represent all Mexicans who see "the system of the party of the State is the principle obstacle to the transition to democracy in Mexico", that is, oppose the ruling PRI's grip on the political process. And if these groups just "dialogue" with each other, they can allegedly reach a consensus on a plan that will be good for everyone.

Is "civil society" above the class struggle?

"Civil society" as presented by the Zapatistas in their Fourth Declaration is simply various activists and ordinary citizens doing battle with the powerful forces who hate democracy and are ruining Mexico. Moreover, since the activists and citizens are supposed to be non-partisan, then allegedly they won't be subject to the corruption of political office and will do what's best for everyone. But this description fails to mention important features of the groups in "civil society." In reality the groups are influenced by, give support to, or are otherwise tied to various political parties or groups. Simply calling a group part of "civil society" does not change the fact that these groups have particular demands, agendas, and views. And even if these groups are not parties, their stand cannot reflect what is in the interest of Mexico in general because Mexico is fundamentally divided into classes. There are rich Mexicans and poor, big landlords and starving peasants, workers and the factory owners and financiers. Thus, the stands of the groups in "civil society" ultimately reflect particular class interests. And efforts to reach a consensus of "civil society" amount to trying to reconcile the differences between the exploited and the exploiter.

The Zapatistas have long had faith that the interests of the oppressed would be served by an all-class harmony of "civil society." This became especially noticeable after they could no longer advance their military struggle. For years, the Zapatistas patiently organized among the indigenous peasant population of Chiapas. And they may continue to be integrated there or among the downtrodden Indian peasants elsewhere. But after the government contained the uprising in Chiapas, the Zapatista leaders' illusions in reconciling class conflict left them flailing. The EZLN felt that the problems of the poor peasants in Chiapas could not be solved without extending the struggle beyond Chiapas, but it had no conception of how to advance the struggle of the oppressed in Mexico as a whole. It wasn't oriented to building up a revolutionary class movement against the Mexican bourgeoisie. It didn't see that the cause of the oppressed could not advance unless class organization was built among the workers and poor peasants, however humble the first efforts would be and however protracted the process. Instead, for the last two years they have been bogged down in one scheme after another to forge a coalition with the reformist forces of "civil society".

The Zapatistas' first big attempt to try to unite the downtrodden with the other forces of "civil society" was their formation of the National Democratic Convention which is spoken of in their "Second Declaration of the Lacandona Jungle" in June, 1994. Here the Convention is described as a place where "civil society" would supposedly "organize itself to lead the forces of peace toward Democracy, Freedom and Justice."2 But this Convention inadvertently demonstrated that the idea that "civil society" could achieve unity above particular class interests was a myth. Likewise it showed how false was the idea that "civil society" was somehow above partisan politics. The peaceful path declared by the Convention essentially amounted to lining up behind the 1994 election campaign of the PRD, a rotten bourgeois reformist party that developed as a split from the ruling PRI in the late 1980s by one of the former leading lights of the PRI, Cuauhtemoc Cardenas.

The great hopes the Zapatistas had in the elections were dashed, however. Rather than the PRD increasing their power, it was the right-wing PAN party which grew in strength in the 1994 elections. Frustrated by the election results, the Zapatista leadership declared in its "Third Declaration from the Lacandona Jungle" in January 1995 that it was time to fight "by all methods" and declared a "national liberation movement." But the heart of this "national liberation movement" was still the old "civil society" grouped in the National Democratic Convention. And who was to lead "civil society" to do this fighting by all methods? The Zapatistas called on none other than the top reformist leader, PRD founder C. Cardenas, to lead this movement in alliance with the National Democratic Convention.

The Fourth Declaration marks a bit of a shift while retaining the general framework of all-class unity. It criticizes the right-wing PAN whereas previously the EZLN was mainly quiet about them, and even wanted them to attend the National Democratic Convention. In contrast to the Third Declaration, it does not praise the reformist bourgeois, C. Cardenas, as the great savior. But neither does it expose Cardenas or the PRD, thus leaving the door open to a continued alliance with them. It appears that the PRD may not be welcome in the EZLN's newest political front, called the Zapatista Front of National Liberation, which gives the impression it might want to exclude parties that run in elections. [As it turns out, the PRD is very welcome in the Zapatista Front, which reinforces the overall point being made by Mark in this paragraph.--CV 2a] But that doesn't mean the new Front itself couldn't lend a hand to the bourgeois reformists in the elections.

But regardless of the particular maneuvers with the PRD and Cardenas, not telling the truth about the pro-capitalist policy of the bourgeois reformists, and their attempts to keep the struggle of the masses in check, damages the mass movement. Indeed, in so far as "civil society" participates in politics (and this is quite a lot), it is mainly PRD and Cardenista politics. Remaining silent on the bourgeois reformists means letting their rotten influence hold sway. The Zapatistas do not offer any analysis of what role any of the other groups in "civil society" are playing either. Indeed, in the past they have prided themselves on downplaying the importance of analyzing other trends. The EZLN prefers to soothe the masses with fairy tales about how everyone in "civil society" is on their side, no matter what their ideology, program or methods. They consider it a virtue to hover above the fight of political parties. The Zapatistas have, so far, avoided a merger with the reformists, while also courting the radical left and attempting to reconcile them with the reformists. Perhaps this is why the EZLN feels especially qualified to bring all of "civil society" together!

A typical example of "civil society" politics

The EZLN attitude to other groups of "civil society" can be seen in their praise in the Fourth Declaration for the liberal Civic Alliance. The Civic Alliance is a typical representative of "civil society" politics. The Civic Alliance has its political roots in the 1991 campaign of Salvador Nava for governor of San Luis Potosi. Nava had been a devotee of the old PRI politics of Lazaro Cardenas, who carried out a bourgeois reformist program in the 1930s. Nava's campaign established a model for the broad coalition of "civic society." Not only did Nava run as the PRD candidate, but as the candidates of the right-wing PAN and even the fascist PMD! Reportedly Nava had the support of local industrialists and some indigenous communities, too. 3 Nava led a protest movement against the election fraud engineered on behalf of the PRI candidate in this election and this forced new elections to be held.

Nava also founded the Citizens Movement for Democracy (MCD) on a platform of democratic reform to break the PRI stranglehold over the political system. Nava died before the next elections but his widow forged an anti-PRI coalition including the MCD, PAN, PRD and others.In the new election, one of the Nava movement's own leaders ran as a PAN candidate against Nava's widow, who received support from the PRD. The PRI candidate won.

The MCD was the backbone for forming the Civic Alliance in 1994 to be a national anti-fraud watchdog over the 1994 elections. Their reformist views were considered tame enough to gain support of U.S. imperialism's National Endowment for Democracy (NED), notorious for financing political trends that fight against revolutionary change in Latin America and elsewhere. The NED helped finance both the MCD and the Civic Alliance in their monitoring activities of the 1994 national elections in Mexico.

But the Zapatista leadership has nothing but praise for this reformist milieu. The Zapatistas don't mention that the MCD and the Civic Alliance forces ally with an array of capitalist political parties. And what of the Zapatistas' calls for an "international dialogue" of "civic society"? The Civic Alliance and some other similar groups meet with U.S. State Department officials and beg for funds. This is part of the international activities of "civil society", too. Indeed, the EZLN's overall concept of "civil society" politics sounds like it comes right from Nava's reformist MCD. The MCD's founding platform declares for "reconciliation, dialogue and civil struggle to bring about the transition government in Mexico dedicated ... to rebuilding the civil structure of the country." This is echoed by the Zapatista's Fourth Declaration call that all "civil society" should reach agreement on a plan for "the transition to democracy as the project of reconstruction of the country."

As well, the Fourth Declaration continues the relentless Mexican nationalism of the EZLN. Its portrayal of the struggle in Mexico as one for "independence" and "national liberation" reinforces the idea of unity of all classes of "civil society" by ignoring that the struggle between classes is at the center of the fight against oppression today in Mexico.

Confusion on the role of democratization

The Zapatista views that all classes can be reconciled are also reflected in their stand on democratization of the Mexican political system. The oppressed masses have an interest in seeing the downfall of the political strangulation of society by the PRI. It would create some opening for organizing the class struggle and make the struggle between classes stand out in sharper relief in Mexico. But the Zapatistas have created a panacea out of democratization. They promoted a democratic electoral system as meaning that the political parties would be obligated to serve the interests of the oppressed masses since they would have to get their votes. Thus they ignored that under bourgeois democracy, the wealthy also rule over the masses. And they made it clear they weren't interested in seeing a new class come to power, implying that the oppression of the masses would disappear without a revolution against Mexican capitalism. 4

The Fourth Declaration refers back to the previous Zapatista programs which includes the above-mentioned democratic reforms. But it also gives seemingly contradictory positions. From earlier enthusiasm for PRD election campaigns, the Zapatistas argue that elections are no good, that holding any elected office just means power and privilege, etc. And they argue that while breaking the political monopoly of the PRI is "the principal obstacle to the transition to democracy", they say that "democracy doesn't mean the alternation of power" by different political parties.

But if the Zapatistas think breaking the PRI political monopoly is the key issue, why do they wail about other parties coming to power? Evidently, the EZLN cannot come to grips with the fact that weakening of the PRI monopoly did not lead to the bourgeois reformists of the PRD gaining strength as they had been banking on. Instead, it was the right-wing PAN that gained. The elections were far from clean, but the loss of strength of the PRD and rise of the PAN were not a matter of election fraud. But since the Zapatistas don't like PAN's free-market capitalist views, they refuse to acknowledge PAN's "alternation of power" as having anything to do with breaking the PRI monopoly. So all the talk against elections actually betrays their exaggerated expectations in democratization. For the Zapatistas, democratic reforms of the political system mean the "good guys" win, and the will of the masses is realized in government. They can't understand why parties they don't like can win even in a democratic system, why the rich capitalists really have all the advantages under bourgeois democracy, not only PRI-style dictatorships. The EZLN imagines democratic reform in the idealized version of school books that hide the class essence of democracy under capitalism beneath talk about "government of the people, for the people, and by the people."

In passing, it should be noted that the EZLN statements casting aspersions on participating in elections in general are wrong for another reason. There are many situations where participating in elections, or participating in legislative bodies can be useful to the revolutionary forces. It may help propagate revolutionary politics, help expose the maneuvers of the bourgeois politicians, etc. Of course, to serve such a revolutionary end, the electoral work must serve the development of the class struggle, not create illusions that democratic elections will solve the evils of capitalism.

A revolutionary alternative to Zapatismo

The Fourth Declaration marks the recognition by the Zapatistas themselves that they are no longer able to carry out the type of struggle that gave them their reputation. What faces them, however, isn't just the retreat from the military struggle, a retreat forced on them by circumstances. Rather it is that their search for a new path has brought their weaknesses to the fore. The problem is the conceptions they are pushing are harmful to the mass movement and push it away from the path of class struggle and revolution against Mexican capitalism.

The crisis of Zapatista politics shows that a different sort of trend is needed for the struggle in Mexico to advance. Such a trend must repudiate the fashionable ideas of class reconciliation and begin the arduous task of the reorganization of the Mexican proletariat on the basis of its own class politics, distinct from, and in opposition to, the bourgeoisie. Not only would such a trend have to overcome the influence of the PRI unions and various reformist and opportunist trends in the workers movement. Such a trend would also work to win the poor peasants away from the illusions in "civil society" and the reformist bourgeoisie spread by the Zapatista leadership and strive to rally the poor peasants to ally with the revolutionary workers. The revolutionary activists should use the energy and political atmosphere generated by the Chiapas uprising to begin the task of proletarian reorganization.


1 For instance, the "Second Declaration of the Lacandona Jungle", in addressing itself to the array of political parties and non-governmental organizations who oppose the PRI political monopoly, explains that the EZLN believes all these groups share the same goals, only the Zapatistas are those who wear the masks of the armed guerrillas. It states: The flag is now in the hands of those who have faces and names [i.e., not the EZLN who wear masks to hide the personal identity -- ed.], of good and honest people who walk paths that are not ours but whose end is the same one that we walked longingly toward."[emphasis added --ed.] See Communist Voice, vol.1, #2, June 1, 1995, p.24.

2 "Second Declaration of the Lacandona Jungle", June 10, 1994, reprinted in Communist Voice, vol.1, #2, June 1, 1995, p.29.

2a In the next CV, vol. 2, #4, in the midst of discussing another subject, Mark pointed out (pp. 30-31): The CWV group as a whole downplays the fight against opportunism. An amazing example of this comes from the Anita's page three article "News from Mexico" in CWVTJ #10. In a brief report on some activities of the Zapatistas, she casually mentions that the recently formed Zapatista Front for National Liberation, which is defined by the Zapatista leaders as their main work in this period, has been turned over to the bourgeois reformist forces like the PRD. Anita's comment on this central undertaking of the Zapatistas is that "it is not clear at this time how successful this organizing is" because of this "one problem." If Anita "is not clear" how successful the Zapatista's new front is when it has been turned over to the likes of the PRD (the Mexican rough equivalent of the Democrats here), this is because nothing can make her criticize the Zapatista policy. To say there is only "one problem" with a front under the PRD's thumb is like a doctor saying there was only one problem with the last operation -- the patient died!

3 La Botz, Democracy in Mexico: peasant rebellion and political reform, pp.132-134, South End Press, 1995.

4 The EZLN holds that "revolution will not end in a new class, faction of a class or group in power but rather in a free and democratic 'space' of political struggle." See "Second Declaration of the Lacandona Jungle" reprinted in Communist Voice, vol.1, #2, June 1, 1995, p. 29.

Another key Zapatista statement:

Fourth Declaration from the Lacandona Jungle

The Zapatistas have marked each new stage in their tactics with a major call from the Lacandona Jungle. The first three were the declaration of war of Jan. 1, 1994; the call for a national democratic convention and a transitional government of June 10, 1994, and the call to form a national liberation movement of Jan. 1, 1995: they can be found in Communist Voice, vol. 1, #2, June 1, 1995. The rough text of the Fourth Declaration given below is based on a translation by CVO comrade Phil in Seattle from the Spanish original in El Machete Internacional, #9, Jan 26, 1996. Elsewhere in this issue of Communist Voice Mark comments on the Fourth Declaration in his article “Zapatista politics in crisis"

* * * *

Today we say- Here we are! We are the rebellious nobility, the forgotten spirit of the Fatherland!

January 1, 1996.

All those people, all those that work the earth, who we call on to gather to our side and give life to this lonely struggle, so that we can carry it on with your help.

We will continue fighting without resting so that the land will be ours, as property of the people, as it was left to us by our grandfathers, against the fingers of stone that oppress us, which have snatched many from us, to pass into the shadows; we will raise up high together, with our hands in the air and with the strength of our heart, so beautiful that it must be seen in order to be believed, that which is called the standard of the nobility and liberty of the workers of the earth; we will continue fighting and we will conquer those that have recently risen to the upper class, those who help those that have taken land from another, those who have made great sums of money from the work of people like us, and those scoundrels on the large country estates, such is our duty of honor, if we want to be called men who have lived a good life, and are truly good sons of the people.

Now then, in this way more than ever, it is necessary for all to stand united, with all their hearts and with all their zeal, in that great work of the marvelous unification, faithful to those that began the fight, to keep those beginnings in our pure heart and not to lose the faith which goes with the good life.

We ask whoever takes this manifesto in his hand to pass it on to all the men of those towns.

Reform, Liberty, Justice, and Law ”

The General in Chief of the Liberation Army of the South,

Emiliano Zapata.

(Zapatista manifesto in Nahuatl).

To the people of Mexico:

To the peoples and the governments of the world:



The flower of this speech won’t die. The darkened face which you see today may die, but this speech that comes from the depths of history and the earth can never be uprooted by the arrogance of power

We were born of the night. We have lived in it. We will die in it. But the light of the morning will come for the many who today cry in the night, who are denied the day, who have been given death, who are forbidden to have a life. For all of them, the light will come. For all of them, everything will come. For us come pain and anguish, comes a joyful rebellion, comes the future denied, comes the nobility of the insurrection. For us comes nothing.

Our struggle is to make ourselves heard, and the evil government shouts us down arrogantly and responds with bullets to whatever they hear

Our fight is against hunger, and the evil government responds with lead and paper for the stomachs of our children. Our fight is for decent shelter, and the evil government destroys our houses and our history

Our fight is for knowledge, and the evil government responds with ignorance and scorn.

Our fight is for land, and the evil government offers cemeteries.

Our fight is for just and worthy work, and the evil government buys and sells bodies and shame. Our fight is for life, and the evil government offers death as a future.

Our fight is for respect for our right to govern and be governed by ourselves, and the evil government imposes on the many the laws of the few.

Our fight is for liberty of thought and action, and the evil government puts us in jails and tombs. Our fight is for justice, and the evil government is filled with criminals and murderers.

Our fight is for our history, and the evil government proposes forgetfulness.

Our fight is for the Fatherland, and the evil government sleeps while under the flag and the language of foreigners.

Our fight is for peace, and the evil government announces war and destruction.

Shelter, land, work, bread, health, education, independence, democracy, liberty, justice, and peace. These were our banners in the dawn of 1994. These were our demands during the long night of 500 years.

These are, today, our demands.

Our blood and our words lit a tiny fire in the mountains and aimed it for the houses of power and of money Brothers and sisters of other races and other languages, of other colors, with the same spirit, protected our fire while they fanned their respective fires.

The powerful ones wanted to blow it out, but our fire had sparked other fires. The rich dreamt of turning off the original fire. But it was useless, there are already many fires and all are first.

The arrogant ones wanted to suppress a rebelliousness which they ignorantly located in the dawn of 1994. But that rebelliousness, which today has a brown face and honest language, was not born yesterday Before this it spoke with other languages and in other lands. In many mountains and many histories has walked this rebelliousness against injustice. It has already spoken the Ndhuatl, Paipai, Kiliwa, Cucapa, Cochimi, Kumiai, Yuma, Seri, Chontal, Chinanteco, Pame, Chichimeca, Otomi, Mazahua, Matlazinca, Ocuilteco, Zapoteco, Solteco, Chatino, Papabuco, Mixteco, Cuicateco, Triqui, Amuzgo, Mazateco, Chocho, Izcateco, Huave, Tlapaneco, Totonaca, Tepehua, Popoluca, Mixe, Zoque, Huasteco. Lacanddn, Maya, Choi, Tzeltal, Tzotzil, Tojolabal, Marne, Teco, Ixil, Aguacateco, Motocintleco, Chicomucelteco. Kanjobal, Jacalteco, Quiche, Cakchiquel, Ketchi, Pima, Tepehuan, Tarahumara, Mayo, Yaqui, Cahita, Opata, Cora, Huichol, Pur6pecha, and Kikapu languages. It spoke and still speaks Castillian. This rebelliousness is not a result of language, it is a result of dignity and of human nature.

By work they kill us, by life they kill us. There is no place for us in the world of power By fighting us they will kill us, but in that way we will bring about a world where we all belong and all of us will live without this death in our speech. They want us to quit the land so that there will no longer be ground for us to walk on. They want us to leave behind our history so that in forgetfulness our speech will die. As Indigenous Americans, they don’t want us. They want us dead.

For the powerful our silence was their desire. By being silenced, we died; without speech, we didn’t exist. We fought in order to speak against the forgetfulness, against the death, for memory and for life. We fought for fear we would die the death of forgetfulness.

Speaking with this spirit of the Indigenous Americans, the Fatherland follows us with nobility and with memory.



On January 1, 1995, after breaking the military encirclement with which the evil government sought to bury us in forgetfulness and make us surrender, we called to the different political forces and citizens to build a broad front of opposition to unite those with the desire for democracy against the system of the party of the State: the Movement for National Liberation. Although in the beginning this effort to unite the opposition found not a few problems, it continued ahead in the thoughts of men and women who are not satisfied to see their Fatherland delivered up to the decisions of the power and money of foreigners. The broad front of opposition, after following a route full of difficulties, misunderstandings and retreats, led to an explicit statement of the first plans and agreements for combined action. The long process of maturation of this organizing effort will be fully accomplished during the current year. We, the Zapatistas, greet the birth of the Movement for National Liberation and desire that between those who form a part of it there always exists the desire for unity and the respect for our differences.

After the dialogue with the Supreme Government was initiated, the commitment of the EZLN to the search for a political solution to the war begun in 1994 was betrayed. Feigning the desire for dialogue, the evil government opted in a cowardly way for the military solution, and with clumsy and stupid arguments, let loose a massive police and military persecution that had the murder of the leadership of the EZLN as its supreme objective. The forces of armed rebellion of the EZLN resisted with serenity the assault by tens of thousands of troops, with foreign advice and all the modern machinery of death that they possess, as they sought to strangle the noble cry that had come from the mountains of the Mexican Southeast. An orderly retreat permitted the forces of the Zapatistas to conserve their military ability, their ethical authority, the political forces and historical justification that are their principal weapon against the crimes of the government. The big mobilizations of the civil, national and international society stopped the treacherous offensive and obligated to the government to insist on the way of dialogue and negotiation. Tens of innocent civilians were taken prisoner by the evil government and they still remain in jails as hostages of the terrorists that govern us. The federal forces didn’t have more of a military victory than the destruction of a library, a studio for culture, a dance floor, and the looting of the few belongings of the indigenous people of the Lacandon Jungle. The intention of murder was covered up by a governmental lie as a masquerade called the “recovery of the national sovereignty ”

Forgetting that Article 39 of the Constitution which it swore to comply with on December 1, 1994, the Supreme Government reduced the Federal Mexican Army to the category of an army of occupation, assigned to it the task of safeguarding the organized criminal acts of the government, and wanted it to confront their Mexican brothers.

Meanwhile, the true loss of the national sovereignty was stated explicitly in the public and secret pacts of the economic cabinet with the owners of money and with foreign governments. Today, while tens of thousand of federal soldiers attack and harass a people armed with stick rifles and noble words, the high officials of the government finish selling the wealth of the great Mexican nation and they complete the destruction of what little had remained standing.

Hardly had the dialogue, which was obligated by the civil, national and international society, been initiated, the government delegation took the opportunity to clearly show their true intentions in the negotiation of peace. The neo-conquistadors of the indigenous peoples that head the negotiating team of the government are distinguished by an overbearing, arrogant, and racist attitude and were humiliated that they had led the different meetings at the Dialogue of San Andreas from failure to failure. Betting on the fatigue and weakening of the Zapatistas, the governmental delegation put all their efforts into creating a rupture of the dialogue, confident that there would be pretexts so that they could resort to force and get what it was impossible to get through reason.

Seeing that the government was avoiding a serious focus on the national conflict that was represented by the war, the EZLN took the initiative of peace that would separate the dialogue from the negotiations. Calling civil society to a national and international dialogue in search of a new peace, the EZLN summoned the Consultation for Peace and Democracy in order to listen to national and international thought on their demands and their future. With the enthusiastic participation of the members of the National Democratic Convention, the disinterested delivery of thousand of citizens without organization but with democratic desires, the mobilization of the committees of international solidarity and the groups of youth, and the irreproachable aid of the brothers and sisters of National Civic Alliance, during the months of August and September of 1995 there was carried out an exercise in citizenship that has no precedent in world history- a civil society carrying on a peaceful dialogue with an armed and secret group. More than one million three hundred thousand dialogues were carried out in order to accomplish this encounter of democratic wills. As a result of this consultation, the genuineness of the demands of the Zapatistas was ratified, and a new impulse was given to the broad front of opposition which had been stalemated, and the desire was clearly expressed that the Zapatistas should participate in the civil and political life of the country The great participation of the civil international society attracted attention on the necessity of constructing the spaces of encounter between the wills of democratic change that exist in the different countries. The EZLN took the results of this national and international dialogue seriously and began the political work and organizing to act in accordance with these directives.

Three new initiatives were launched by the Zapatistas as a response to the success of the Consultation for the Peace and the Democracy. An initiative for the international sphere was to call for an intercontinental conference against neo-liberalism. Two initiatives are of national character -- the formation of civil committees of dialogue as a base of discussion of the principal national problems and as the germ of a new nonpartisan political force; and the construction of new “Aguascalientes” as places of encounter between civil society and Zapatismo.1

Three months afterwards, to make these three initiatives more definite for the convocation of an inter-continental conference for humanity and against neo-liberalism, more than 200 civil committees of dialogue have been formed throughout the Mexican Republic and, on this very day, there is being inaugurated five new “Aguascalientes”- one in the community of La Garrucha, another in Oventic, one more in Morelia, another in La Realidad, and the last and first in the hearts of all the honest men and women that there are in the world.

In the midst of threats and poverty, the indigenous Zapatista communities and civil society succeeded in setting up these centers of civil and peaceful resistance that will be places of preservation of Mexican and worldwide culture.

The New National Dialogue had its first test on the occasion of item 1 of the Dialogue of San Andres. While the government was discovering its ignorance with respect to the original inhabitants of these lands, the advisers and members of the EZLN began to carry on a dialogue so rich and new that it surpassed the narrowness of the items of San Andreas immediately and located itself in its true place: the nation. The indigenous Mexicans, who we have always been obliged to listen to, to obey, to accept, and to resign ourselves to, took the word and spoke the wisdom that comes from their life. The image of the ignorant Indigenous American, pusillanimous and ridiculous, the image that those in power decree for national consumption, shattered, and indigenous pride and dignity returned to history in order to take the place that corresponds to them: that of complete and exact citizens. Independently of anything that results from the first negotiation of agreements in San Andreas, the dialogue began by the different ethnic groups and their representatives will follow ahead now in the National Indigenous Forum, and it will have their rhythm and the scope that the indigenous themselves agree on and decide. In the national political stage, the rediscovery of the criminality of the Salinas clan1 again shook the system of the party of the State. The apologists of the Salinas counter-reforms suffered amnesia, and they now are the most enthusiastic persecutors of him in whose shadow they were enriched. The Party of National Action [PAN], the more faithful allies of Carlos Salinas de Gortari, began to show their real possibilities of replacing the Revolutionary Institutional Party at the summit of political power and to teach their repressive, intolerant, and reactionary vocations. Those who laid their hopes in the ascent of neo-PANism forget that the replacement of a dictatorship doesn’t mean democracy, and they applaud the new inquisition that, with a democratic mask, will ratify with blows and moralizing the latest death rattles of a country that has astonished the world and today is a reference for police chronicles and scandals. The constants in the exercise of government were the repression and the impunity; the massacres of indigenous in Guerrero, Oaxaca and Huasteca ratifies the governmental politics towards the indigenous; the authoritarianism in the UNAM [the Autonomous National University of Mexico] towards the movement of the CCH demonstrates the route of corruption that runs from the university to politics; the detention of the leaders of El Barzon is the model, more than treachery, of the method of dialogue; the bestialities of the Espinosa management rehearse the fascism loitering in Mexico City; the reforms in the Law of Social Safety reiterate the democratization of poverty, and the support to the privatized bank assures the vocation of unity between power and money; the political crimes are unresolved because they originate from those who say they are pursuing the criminals; the economic crisis makes more insulting the corruption in the governmental spheres. Government and crime, today, are synonyms and equivalent.

While the true opposition toiled to find the center of a moribund nation, broad layers of the population reinforced their skepticism towards the political parties and searched for, without finding it yet, an option for a new political task, a political organization of a new type.

Like a star, the heroic and worthy resistance of the indigenous Zapatista communities illuminated the year of 1995 and wrote a beautiful lesson in the Mexican history In Tepoztlan, in the workers of SUTAUR-100, in El Barzon, to mention some places and movements, the popular resistance found worthy representatives.

In summary, the year of 1995 was characterized by the definition of two completely different and contradictory plans for the nation.

On one hand the plan for a powerful country, a plan that implies the total destruction of the Mexican nation; the negation of their history; the delivery of their sovereignty; the betrayal and the crime as supreme values; hypocrisy and deceit as a method of government; destabilization and insecurity as a national program, and repression and intolerance as a plan of development. This plan finds in PRI its criminal face, and in PAN, its democratic masquerade. On the other hand, the plan of transition to democracy, not as a transition contracted with power that feigns a change so that everything remains the same, but the transition to democracy as the project of reconstruction of the country; the defense of the national sovereignty; justice and hope as aspirations; truth and the binding mandate as a guide of the headquarters; the stability and security that give us democracy and liberty; dialogue, tolerance and inclusion as a new form of making politics.

This plan is yet to be made, and it will correspond, not to a force of political hegemony or to the eccentricity of an individual, but to a broad movement of opposition that picks up the feelings of the nation. We are in the midst of a great war that has shaken Mexico at the end of the twentieth century The war between those who seek the perpetuation of a social, cultural and political regime that is equal to the crime of betraying the homeland, and those that fight for democratic, free and just change. The war with the Zapatistas is only a part of that great war that is the fight between the memory that aspires to the future and the forgetfulness with foreign vocation.

A new pluralist society, tolerant, inclusive, democratic, just, and free is only possible, today, in a new fatherland. It will not be built on power Power today is only the agency for selling out of the ruins of a country destroyed by the true subversives and destabilizers; the rulers.

The plans of the independent opposition lack something that, today, has become very decisive; we are opposed to the policies of a country that implies our destruction, but we lack a plan for a new nation, a proposal of reconstruction.

A part, but not everything, and not the vanguard, has been and is the EZLN as a force for the transition to the democracy In spite of persecutions and threats, through the deceits and the lies, the EZLN, legitimate and consistent, continues on in the fight for democracy, liberty and justice for all Mexicans.

Today, the fight for democracy, liberty and justice in Mexico is a fight for national liberation.

Today, with the spirit of Emiliano Zapata and having listened to the voice of all our brothers, we call on the people of Mexico to participate in a new stage of the fight for national liberation and the construction of a new fatherland in this way

In the Fourth Declaration from the Lacandon Jungle, we call on all honest men and women to participate in the new political national force that is born today the Zapatista Front of National Liberation, a civil and peaceful, independent democratic organization, Mexican and national, that fights for democracy, liberty, and justice in Mexico. The Zapatista Front of National Liberation is born today, and we invite the participation of the workers of the Republic, the workers of the field and of the city, the indigenous, the colonists, the teachers and students, the Mexican women, the youth of all country, the artists and honest intellectuals, the religiously devout, and all Mexican citizens who do not want power but democracy, liberty, and justice for us and our children.

We invite the national civil society, those without a party, social and civic movements, and all Mexicans to construct a new political force. A new political force with its base in the EZLN.

A new political force that forms a part of a broad movement of opposition, the Movement for National Liberation, as a place for political civic action where other political forces of the independent opposition join together, a space of encounter of wills and a coordinator of united actions.

A political force whose components neither hold nor aspire to hold offices of popular election or governmental positions at whatever level. A political force that doesn’t aspire to the taking of power. A force that is not a political party.

A political force that could organize the demands and proposals of the citizens so that those who would lead it, lead obediently A political force that could organize the solution of the common problems yet without the intervention of the political parties and of the government. We don’t need to ask permission to be free. The function of government is a prerogative of society and it is their right to exercise that function. A political force that fights against the concentration of wealth in a few hands and against the centralization of power A political force whose components don’t have any privilege other than the satisfaction of fulfilling their duty.

A political force with local, state and regional organization that grows from the base, from their social sustenance. A political force born from the civil committees of dialogue.

A political force that is called a “Front” because it tries to incorporate organizing efforts that are not partisan, and has many levels of participation and many forms of struggle.

A political force that is called “Zapatista” because it was born with the hope and indigenous spirit that, together with the EZLN, arose from the Mexican mountains.

A political force that is called “Of National Liberation” because their fight is for the liberty of all Mexicans and throughout the entire country

A political force with a program of struggle of 13 points, those of the “First Declaration of the Lacandon Jungle”, enriched through two years of insurgency A political force that fights against the system of the party of the State. A political force that fights for democracy in everything and not just in elections. A political force that fights for a new constituency and a new Constitution. A political force that fights so that there will be justice, liberty and democracy everywhere. A political force that does not fight to take political power but for the democracy of those who command it, who command its obedience.

We called to all the men and women in Mexico, to the indigenous and to the non-indigenous, to all the races that form the nation; to those who agree to fight for shelter, land, work, bread, health, education, information, culture, independence, democracy, justice, liberty, and peace; to those who understand that the system of the party of the State is the principal obstacle to the transition to democracy in Mexico; to those who know that democracy doesn’t mean the alternation of power but government of the people, for the people, and by the people; to those who agree that there should be a new Magna Carta that incorporates the principal demands of the Mexican people and guarantees them through compliance with Article 39 regarding results of plebiscites and referendums; to those who don’t aspire or lay claim to public office or positions of popular election; to those who have the heart, the will, and the thought on the left side of the bosom; to those who want to cease being spectators and are willing to have neither payment nor privilege of any kind other than participation in the national reconstruction; to those who want to construct something new and good; to form the Zapatista Front of National Liberation.

Let those citizens without party, those social and political organizations, those civil committees of dialogue, movements and groups, all those that don’t aspire to the taking of power and that adhere to this “Fourth Declaration of the Lacandon Jungle”, commit to participating in dialogue to decide on the organic structure, the plan of action and the declaration of founding of the Zapatista Front of National Liberation.

With the organized unity of the civil Zapatistas and the combatant Zapatistas in the Zapatista Front of National Liberation, the struggle begun on January 1, 1994 will enter a new stage. The EZLN won’t disappear, but its more important effort will go for the political fight. In due time and conditions, the EZLN will participate directly in the formation of the Zapatista Front of National Liberation.

Today, January 1, 1996, the Zapatista Army of National Liberation signs this “Fourth Declaration of the Lacandon Jungle.” We invite the people of Mexico to adhere to it.



Many words are current in the world. Many worlds are made. Many worlds make us. There are words and worlds that are lies and injustices. There are words and worlds that are truth and true. We make true worlds. We are made by true words.

In the world of the powerful there is only room for the big people and their servants. In the world that we want all will belong.

The world that we want is one where there will be room for many worlds. The fatherland that we will build is one where there will be room for all the peoples and their languages, so that all may follow that road, so that all may laugh, so that all may see the dawn.

We spoke of inclusive unity when we were silent. Humbly and crying, we spoke the words that seek the unity that we embrace in history and in order to reject the forgetfulness that confronts us and destroys us.

Our word, our song, and our cry, is so that they no longer die any more deaths. So that they live, we struggle; so that they live, we sing.

Long live these words! Long live “Enough, already!” Long live the night that gives way to the morning! Long live our noble walk together with all who cry In order to destroy the clock of death of the powerful we fought. We fought for a new time of life.

The flower of the word doesn’t die, although our road may be followed in silence.

From silence, a sound had emerged. It grew into an uproar from being silenced. The word becomes a soldier in order that we don’t die from forgetfulness. In order to live the word was extinguished, sown as always in the belly of the world. Being born and living we died. We will always live. They will only return to forgetfulness who surrender their history. Here we are. We didn’t surrender. Zapata lives and, in spite of everything, the struggle continues.

From the mountains of the Mexican Southeast.

The Indigenous Clandestine Revolutionary Committee -- General Command of the Zapatista Army of National Liberation.

Mexico, January of 1996.


1 During the Mexican revolution, Aguascalientes was the site of the Convention at which the original Zapatistas and Villa’s forces came together. — CV

2 Carlos Salinas de Gortari was president of Mexico from 1988 to 1994 and is now involved in a series of scandals. — CV []

[End of article group]

Postal workers under attack

Resist management’s efforts to ruin letter carriers!

The following article is reprinted from issue #10 (May 20, 1996) of Detroit Workers’ Voice, produced by the Detroit Marxist-Leninist Study Group. This leaflet also contained an ad for Communist Voice.

In the Detroit area and across the nation letter carriers are under attack. A new automation system called Delivery Point Sequence (DPS) is being used to destroy working conditions. The DPS system uses machines to sort part of the mail into walk-sequence order which was previously done by the letter carriers before carrying their mail. Management claims that the time saved by automated sorting means carriers should have many of their routes eliminated and combined into super-long routes. But when management tested the actual work time needed by carriers to complete their routes under the new system, their predicted time savings proved to be a myth. The USPS (U.S. Postal Service) bosses didn’t care, however They are shoving heavier workloads on the carriers anyway and firing, harassing and threatening letter carriers who refuse to be driven like dogs.

Letter carriers do not want to take this assault lying down. Everywhere there is a discussion of what can be done, and in a few stations informational picketing has begun. Postal workers face the task of -organizing themselves for a serious struggle aimed at collective mass action and overcoming the limitations placed on that struggle by the leadership of the postal unions.

Improving profits, not service to ordinary customers

Of course, the USPS claims that their new system is simply a way to provide better service. But with extra-long routes, exhausted carriers, and a still highly inaccurate automatic sorting system, the quality of service to ordinary citizens will decline. For example, under this system, the automatically sorted mail arrives at local stations much later, resulting in later delivery times. Carriers’ work-days have been moved up an hour or two later in the day as a result, and mail not arriving until supper time or after is commonplace. As well, management tries to achieve their ridiculous work-hour reduction targets by having carriers leave mail in the office that they previously would have had time to deliver

Driving the letter carriers harder has nothing to do with better service, but everything to do with management greed. The postal service, like private capitalist corporations, is always looking for new ways to squeeze profits from their workers. Last year, the post office had profits of over a billion dollars. And they achieved about that same amount in the first three months of this year. The post office is raking in the money But they won’t be satisfied until they completely wreck the conditions of the workers. After all, managers earn bonuses for driving the workers down. Meanwhile, Postmaster General Marvin Runyon’s idea of improved service is to demand an additional retirement bonus for himself of $1.5 million.

How DPS automation ruins the letter carriers

DPS automation does save some office time. But management has a wildly inflated idea of how much time. Meanwhile there are enough errors in the automated sorting that management has to let carriers leaf through the trays of automated mail to remove the missorted letters. But management doesn’t allow adequate time for this. Nor do they allow adequate time for numerous other tasks needed to prepare a route. Instead they lash out at carriers who can’t make their absurd new office time standards.

The reason management doesn’t want to give proper office time is that they want to extend the length of the routes of the carriers. DPS automation aims to eventually add as much as 1-2 hours to each route. The longer routes are sure to lead to wearing out carriers. Routes were already plenty long, as carriers had to work long hours in the worst sort of weather Now carriers will be lucky to survive each day of scorching summers and bitter winters. But management is too busy adding up the extra profits and fat management bonuses to care what happens to their employees.

There are other health hazards under the new DPS system. For instance, carriers are required to handle two separate bundles of mail in their left hand, which makes “fingering” the mail while walking more difficult and wears out a carrier’s fingers and hands. Fumbling through this extra bundle also makes it difficult for the carrier to watch where they are going. But management makes no allowance for the extra time needed to carry mail in the field under their allegedly “time-saving” new work methods. Instead there are reports that carriers at some stations who stop fingering mail, so as to see where they are walking, are being given disciplinary measures. Nor will management allow carriers to case DPS mail along with non-DPS mail which would eliminate the problem of carrying two bundles of mail in one hand.

Management’s reign of terror

When letter carriers do not finish their ever-greater workload in time to please management, they are subjected to harassment. This is not just coming from some mean local supervisors, but is being organized by top postal officials. For example, the post office has planned a program to send spies on all the routes, and even is testing tracking devices on postal vehicles in some parts of the country. The USPS is creating its own little police-state to intimidate carriers. Verbal disagreements of any kind between supervisors and letter carriers are liable to result in disciplinary measures. Reports of carriers being fired or disciplined in connection with the DPS program are constant. Management systematically violates any rule or regulation if they think it will frighten workers into compliance with the new work standards.

Management makes a joke out of route reviews

Every so often, a letter carrier’s route is subject to a week of extensive time tests to see if it has changed enough to have additions or subtractions. This is supposed to set the standard time allowed for the route. In the Detroit area, many stations are having their routes retested after DPS automation has gone into effect. Often the results of these tests show that the time savings predicted for DPS just aren’t there. In fact, because management imposed harder work methods for the field, routes sometimes take longer than before. So time and again, management has just ignored what the data in the route reviews shows. Instead they just try to pile up the work for each carrier For example, when route reviews data contradicts management’s goal of making a route longer, management often adds on to the route anyway, “building up” the route to where it takes over the standard eight-hour workday to complete. Then they hope to bully carriers on these routes into finishing them without going into overtime.

Pivoting” carriers to death

Another result of ignoring the actual time it takes to complete routes under the DPS system is a huge increase in “pivoting.” Pivoting means carriers are given extra work on another route in addition to their normal routes and are expected to do this extra work without going into overtime. Pivoting was supposed to be used in cases where a carrier had an extraordinarily light workload that day Now, management pretends that DPS mail has made it possible for carriers to pivot every day Management no longer cares how heavy a carrier’s workload is on their own routes, but requires pivoting even as mail becomes backlogged on the carrier’s own route. Previously it was common to pivot for one-half an hour, but top local management has ordered a standard one-hour pivot. In other words, carriers are being required to do one more extra hour’s work a day “free of charge. ”

Carriers must organize to fight back

Everywhere carriers are angry at the ruining of their working conditions and management harassment. Often this takes the form of individual acts of resistance. This sort of resistance shows an admirable spirit to fight, but is most difficult to maintain as it allows management to gang up on one individual at a time. An effective struggle requires that carriers find forms of collective struggle. Militant workers need to form networks among their coworkers. Such networks can write and distribute leaflets, organize picket or other protests at postal facilities, job actions such as work-to-rule slowdowns, and other types of mass activity.

Don’t rely on the leaders of the NALC [National Association of Letter Carriers] union to organize this struggle, however National NALC president Vince Sombrotto sold carriers down the river when he agreed to a 1992 Memorandum of Understanding with the postal bosses that allowed management to implement their rotten DPS work methods. And since then, the NALC at both the national and local levels has offered only the most meek opposition.

Time and again, the NALC bureaucrats tell the workers to have faith in anything but their own mass struggle. They preached faith in “labor-management cooperation” including such diversions as Employee Involvement (EI). But cooperation with management always wound up meaning doing what management considered acceptable. Not only did management have the power to negate anything that workers wanted in the EI teams, but they have now dropped all pretenses of caring what the employees think and have unilaterally ended the EI process. “Labor-management cooperation” also sanctioned the DPS system. The union heads told the workers that rather than fight against management’s DPS plans, it would be great for the workers if the union helped management install the DPS program. When it came to winning a good contract, the union leaders relied on the contract arbitration process and the contracts get worse and worse. They promoted electing allegedly “pro-worker” Democrats, and Clinton and congressional Democrats adopt much of the Republican platform and do nothing to stop the USPS from crushing its employees. In short, the bureaucrats have faith in the capitalist establishment.

If postal workers want to get somewhere, they are going to have to reject the class collaborationist path of the union officials. Instead of faith in the “good will” of management and the wealthy establishment, workers should place their faith in themselves, in organizing themselves for struggle, and in the power of mass resistance. And this means postal workers are going to have to get organized independendy of the union bureaucrats.

This does not mean that carriers should stop filing grievances against management wrong doing. But it must be kept in mind that the grievance procedure is stacked in favor of management and cannot replace the need for mass action. As well, the more collective action is developed, the more pressure management (and the union bureaucrats) will feel to reach a settlement favorable to the workers.

It’s high time that postal workers put their collective foot down. Letter carriers should not allow DPS automation to ruin them. Organize for struggle! Organize for your livelihood!

Down with management’s harassment!

Down with “pivoting”!

No to longer routes!

No to DPS work methods!

DPS mail should be cased!

Impotent strategies against postal privatization

by Tim, Detroit

Some Detroit metro area postal union leaders called a meeting March 31 to discuss the threat of privatization of the postal service. A new federal privatization bill, HR 210, has gone through hearings in the House of Representatives. It provides for selling off the postal service piecemeal to private industry This, of course, would be a sumptuous banquet for the capitalists and a disaster for postal workers, who would face union-busting, firings, layoffs, speed-up and wage-cuts.

The meeting was attended by about 250 postal workers, mostly from the 480 region but including a significant number of mail handlers from Detroit.

What strategies did the union leaders call upon the workers to take up?

A representative of the Canadian postal workers’ union described how her union leaders were lobbying the Members of Parliament. Their plan is to show the government that management had cost the service losses of revenue by violating the contract and provoking the workers to strike. These losses are being used to justify privatization, so presumably if management would just act right, there would be no strikes, no losses and no need for privatization. She forgot that the MP’s themselves are capitalists or lawyer-flunkeys of capitalists who don’t mind solving the postal budget problems by squeezing the workers whether this requires violating the contract or not. This is IMPOTENT STRATEGY # 1 CONVINCE THE BOSSES THAT IT WILL BE MORE PROFITABLE NOT TO PRIVATIZE.

Next came a National Association of Letter Carriers official. He called for phone calls and letters to Congressmen. He saw this as a pressure tactic. This is IMPOTENT STRATEGY # 2: PRESSURE, NOT CONVINCE, THE POLITICIANS, BUT DO SO IN THE MEEKEST, MOST HARMLESS MANNER POSSIBLE.

Then the president of the Michigan Postal Workers Union spoke. He waxed eloquent about “our friends in Congress” but did not name any He said profits should not mean everything. This was IMPOTENT STRATEGY # 3: A PIOUS WISH THAT THE WHOLE CAPITALIST SYSTEM, WHOSE ONLY MOTIVE FOR ANY PRODUCTION AT ALL IS PROFIT, WOULD JUST STOP BEING THAT WAY WITHOUT THE WORKERS HAVING TO LIFT A FINGER TO FIGHT IT.

Then a mail handler official spoke. He made the only suggestion of the day that would have any teeth, if it could be implemented: he called for organizing the private mailers. This could provide the present postal workers some protection in the event of privatization. But relying on the present postal leadership to do this is IMPOTENT STRATEGY # 4.

Then came Paul Felton, a 480-area APWU leader who organized the meeting. He said that pressure on Congress was not enough; what was needed was a broad movement like in the 60’s or the 30’s. But Felton is the author of an article which pleads the impossibility of a successful postal strike. This was IMPOTENT STRATEGY tt 5: CALLING FOR A RERUN OF THE 60’S OR THE 30’S WITHOUT BEING WILLING TO ORGANIZE THE MILITANT MASS ACTION WHICH GAVE THOSE DECADES THEIR IMPACT

After a few more speakers, who made comments irrelevant to the privatization of the postal service, Scribner of the Detroit AFL-CIO central labor council gave the last speech. He had the most militant-sounding voice of the day; he sounded really angry, which is how such hacks make workers think that they are fighting for our interests while they sell us down the river Scribner harkened back to the Reagan years of cutbacks and concessions and called on the workers present to vote out the Republicans and vote in the Democrats. He did not explain how it was that Reagan got his tax cuts for the rich and cutbacks for the workers and poor through the Democratic-controlled Congress. Why, that Congress was just filled with “friends of Labor”! That was IMPOTENT STRATEGY #6: ELECT “FRIENDS" TO CONGRESS WHO WILL TURN OUT TO ENEMIES WHEN THEY GET THERE. THEN SHOUT WITH ANGER AND DO IT AGAIN AND AGAIN AND AGAIN

These strategies are all impotent because they do not mobilize the rank-and-file workers to go into motion en masse against the bosses. Convincing profit-hungry capitalists is absurd. Electing an eternal series of sellouts is futile. We workers need our own movement, not tied to either capitalist political party Pressuring the capitalist politicians not to privatize requires scaring them with a mass force that means business. Our greatest strength lies in our numbers, but to arouse large numbers we must start from the smaller-scale struggles that are going on now. Militant workers should organize job actions such as slowdowns, issue leaflets, call informational pickets and prepare for strikes, etc. And in building such a movement, the undermining efforts and impotent strategies of the union misleaders must be fought at every step.[]

[End of article group]

South Korea, imperialism, and “free-market” mythology

by Mark, Detroit


A. Japanese colonialism

* Japanese colonialism devastates the Korean peasantry

* The growth and bleeding of the Korean working class

B. U.S. military occupation and domination

* U.S. military suppression of popular government

* The South Korean bourgeoisie takes over on U.S. life-support

* The U.S. gives special treatment to South Korea

C. Later developments between South Korea, the U.S. and Japan



A. Myths in the service of capitalism

B. State intervention plays huge role

* State sectors of the economy

* State planning and regulation

* Protectionism and being export-oriented

C. Factors in South Korean development

* Peculiarities of the Japanese and U.S. domination

* State terror

* The South Korean “miracle” means extreme exploitation

D. What explains the recent “free-market” policies?

* Motives of South Korean capital

* Pressure from the big imperialist powers

* The balance sheet

* On the meaning of the trend towards “market” policy


A. The growth of monopoly capitalism

B. Growth of the working class

C. The central role of the struggle between the proletariat and bourgeoisie

Imperialism, a world system of exploitation and oppression based on monopoly capitalism, continues to ravage the working masses. But the world looks a good deal different than at the time that the imperialist system was so excellently analyzed by Lenin in the early part of the 20th century. The forms of domination by gigantic business concerns has changed, the old colonial system has been shattered, a series of national liberation and other revolutionary-democratic struggles occurred in Asia, Africa and Latin America, and capitalism has grown dramatically in the former colonial possessions and dependent countries. All this has not ended the domination of world economics and politics by the imperialist powers. But it has meant important changes in the developing countries and the nature of the struggle there. Marxist-Leninist theory on imperialism is not merely a description of conditions that existed early this century, but a framework for looking at historical developments since then. Thus, one of the tasks of anti-revisionist communism today is to get a more complete picture of these developments, how they impacted on how the world imperialist system operates today, and what the new conditions mean for the struggle of the oppressed classes.

To this end, a series of articles has been undertaken by members and supporters of the Communist Voice Organization.1 This article will briefly look at South Korea. South Korea is today known as the largest of the “Asian tigers,” a country that was previously economically backward but now is a capitalist powerhouse. From the bourgeois viewpoint, this shows that South Korea should be touted as an example of how wonderful capitalism is, how being closely connected to imperialism insures miracles of development. The bourgeoisie makes up fairy tales about the alleged “free market” policies that gave rise to this miracle and tries to convince the world’s toilers that the good life awaits those who follow the “Asian tiger” model.

No one can deny that South Korea has become an economic force in its own right. But the truth is that the country’s economic miracle has been built through the torture of the workers and poor peasants and that imperialism’s legacy includes a half-century of brutal Japanese colonial rule, the horrors of the U.S. war of aggression and subsequent military occupation, and the backing of military dictatorships. Even today, while South Korean workers have a higher standard of living than before, their wages and living conditions remain well below workers in the big imperialist powers who themselves are struggling to get by Military dictatorship has been replaced by democratic reforms, but harsh repression continues against the masses while the revelations continue of government leaders stuffing their pockets with bribes from the South Korean monopoly corporations. Meanwhile, it must be remembered that South Korea is an example of the “best” that capitalist- imperialist development has done while most of the developing countries languish in far more difficult economic straits and the gap between the rich and the poor countries of the world grows.

This article will attempt a brief comment on the following issues:

1) What is the historic role of imperialism in Korea and the present-day relations of imperialism and South Korea.2

2) “Free-market” myths and some factors behind South Korea’s economic growth.

3) What has been the significance of the growth of South Korean capitalism for the class struggle there?

I. Imperialism’s historic role in Korea

A. Japanese colonialism

The period of Japanese colonialism in Korea helped accelerate the development of capitalism in a most brutal fashion. For centuries, the feudal Yi dynasty had ruled Korea. Near the end of the 19th century, Japanese military threats wrung commercial concessions from the Yi dynasty Other powers, among them the U.S., Britain, and Russia, also extracted concessions. The invasion of foreign goods hastened the ruin of the peasant village economy and the colonial invaders imposed heavy taxation and financial obligations as well. This led to a major peasant uprising, the Tonghak rebellion of 1894, which fought for land, against the burdens on the peasantry, and against the foreign colonial powers. The peasant army defeated the army of the Yi dynasty, but the Japanese came in and crushed the revolt. Japanese domination was challenged by Czarist Russia. But the Japanese victory in the Russo-Japanese War in 1905 left Japan unchallenged in Korea. Japan and the Western imperialist powers reached an agreement on dividing up the region, with Japan getting Korea, Britain claiming China and the U.S. getting the Philippines and Hawaii. Japan cemented its control over Korea by annexing it in 1910, setting up its direct colonial rule there that lasted until the end of World War II.

Japanese colonialism devastates the Korean peasantry

During the Japanese rule, the working masses were reduced to semi-slave status and suffered ferocious repression. The Japanese colonialists seized huge amounts of the best land, and some estimate that maybe as much as half of all land was expropriated by the Japanese authorities who then turned it over to Japanese capitalists and farmers. The old Korean landed aristocracy, though subject to expropriations itself, in the main was allowed to continue its own plunder of the peasantry But the small farms of the village commune were expropriated by the Japanese colonial rulers. This, and the spread of commercial relations into the villages, hastened the demise of small self- sufficient farming and the peasant farmers were largely forced into tenant status on Japanese farms. They paid enormous rents, typically 50%, and sometimes as high as 90% of their production. By one estimate, the number of landless peasants rose from 42% to 70% of the peasant population during the colonial period.3

Moreover, rice and other grains on which the population subsisted were exported in huge quantities to Japan. The rice consumption of the Korean masses dropped accordingly The Japanese occupiers did bring some modern technique to agriculture, extending the irrigation system for instance. And this led to a significant increase in total rice output. But this was done through ravaging the peasantry to the extent that virtually the entire tenant and part-time tenant Korean peasantry was living on the verge of starvation.

The growth and bleeding of the Korean working class

The large pool of landless peasants created a vast pool of cheap labor for the industrial capitalist enterprises. Though Korea remained a predominantly agricultural society under Japanese rule, there was a major increase in the industrial proletariat. One reflection of this shift was that the weight of agricultural output in the economy fell from 86% to 59% while mining and manufacturing more than tripled to over 26%.4 The number of mining and manufacturing workers increased about seven times, to around one million, from 1931-1944.5

The Korean workers were driven like dogs. So harsh was their exploitation that at the end of the 1930’s, real wages were only two-thirds of what they had been in1910 and a common working day was 16 hours! Such conditions gave rise to a militant trade union movement, general strikes, and the spread of communism and other left-wing views and organizing. Thus was born a tradition of militant workers’ actions that continues to this day in South Korea. But more on this later.

World War II accelerated the atrocities against the Korean workers and poor peasants. Millions were press-ganged into industry for the Japanese war machine. The Japanese rulers “exported’’ Korean labor to Japan and elsewhere in their empire to slave away in war production. One estimate is that some 30% of the Japanese workforce at the end of the war were imported Korean workers.6 Women workers were an extraordinarily high percentage of the workers who were exploited by Japanese imperialism. And possibly as many as 200,000 poor women were forced into prostitution for Japanese soldiers.7

Japanese imperialism brings development — and limits it

Through cruel exploitation, Japan established a level of industrial development in Korea that was extraordinarily high compared to most other colonies. This was not done out of kindness of course, but to further the aims of the Japanese empire. And even as Japanese capital in Korea inevitably fostered a certain growth of Korean business interests, Japan imposed legal restrictions on Korean commodity production and completely dominated the economy.

One of the initial goals of the Japanese colonization was to help the Japanese capitalists at home keep wages down by using Korea as a source of cheap food products for the Japanese workers. But in the 1920’s Japan also wanted to establish a secure source of certain raw materials and manufacture so that it would not be so reliant on imports from outside its sphere of influence, the so-called Yen Bloc. To this end, Japan undertook industrial development in some nearby colonies including Korea and Formosa (Taiwan). Mineral extraction became important in Korea, but Korea also served the Japanese as a producer of such things as chemical fertilizers and steel. War production further heated up the development of Korean industry During the war years, the weight of manufactured goods in colonial Korean export zoomed from 17% to 42%.8

While carrying out this industrial development, Japanese imperialism also placed many restrictions on native Korean producers. For example, there was the Corporation Law which banned competition with Japanese industrial exports to Korea and led to the dissolving of some Korean businesses. The law had to be abolished, however, as it eventually interfered with Japanese firms operating in Korea. Small handicraft manufacture was either physically smashed (weaving looms for example) or ruined through punitive taxation so that Japanese light manufacturing could take over such fields as textiles, lumber, and processed food. There was compulsory sale of certain raw materials to Japanese concerns. Japanese colonialism spread capitalist relations in agriculture. But capitalism via the wide-scale expropriation of Korean peasant farms in general meant retarding Korean agriculture and class differentiation within it.

Japanese companies had unchallenged domination in Korea. The Korean bourgeoisie was much weaker and undeveloped before colonization, and it remained completely subordinate during colonial rule. In terms of the number of businesses, the Korean bourgeoisie was not negligible (about 40% of the total in the late 1930’s). But these were almost exclusively tiny enterprises. Meanwhile, a relative handful of the top Japanese companies in Korea accounted for 80% of factory output at that time.9 And Japanese capital took control of the finance and the monetary system.

Nevertheless, under Japanese colonialism, there was an overall growth of factory production by Korean firms. Although Japanese nationals held almost all the skilled and technical jobs, eventually a small strata of Koreans got into technical positions and began to fill middle management roles. In agriculture, there was some development of Korean capitalist farmers.

The economic and political domination of Japan was reinforced by cultural genocide. Teaching Korean was banned, Korean history rewritten to suit the Japanese masters, and Japanese imperialist culture imposed. This was in line with long- range plans to have Korea “Japanese-ized” in preparation for giving it an “independent’’ status within the Japanese empire.

B. U.S. Military Occupation and Domination

U.S. military suppression of popular government

The Korean masses fought major battles to free themselves from the onerous oppression of Japanese colonial rule. This was finally accomplished when Japan was defeated in WWII. Right after the Japanese surrender, the Korean revolutionary movement began to establish popular government across the country. Local committees were mobilized to disarm the Japanese and their Korean collaborators, take over administrative duties, seize transport and communications and organize land reform and factory production. The nascent new governmental power, although largely organized by the radical left, was a coalition with moderate bourgeois nationalists. On this basis, a national congress was held to declare the Korean People’s Republic. The central government’s proclaimed program was radical-democratic in nature. It’s stated goals included nationalizing the property of the Japanese colonialists and their Korean lackeys and heavy industry, institution of the 8-hour day, granting political rights, establishing a compulsory education system, etc.

U.S. imperialism found this situation intolerable and moved in to militarily crush the new revolutionary government after only several weeks of existence. The U.S. Army Military Government (AMG) seized back the factories and farms taken over by the people’s committees and set up a reactionary government of former Japanese collaborators. This began the process of transforming what the big powers had promised would be a temporary division of Korea into a north, where the Soviet Union administered the Japanese surrender, and a south where the U.S. did the same, into two separate states. The U.S. intervention was widely opposed in the north and south. In an effort to give the U.S.-installed regime in the south some credibility, the AMG brought in Syngman Rhee to lead it. Rhee had been a leader of the conciliatory upper-class Korean opposition to Japanese colonialism, forming a Korean government in exile while the radical masses fought the hard battles against the colonial oppressors. Rhee’s unity with collaborator groups in the new government quickly discredited him, however. Massive protests broke out including a general strike and attacks on the Japanese-trained police forces. The Korean masses did not want to exchange Japanese conquest for U.S. dictate: they raised demands for the restoration of the people’s committees and various social demands.

It should be noted that there was also anger with the Soviet Union’s policy of agreement with the U.S. to place Korea under a 5-year big power trusteeship rather than grant independence immediately. Indeed, the Soviet Union pursued a cynical imperialist policy toward the revolutionary movement in Korea, giving it certain aid, but urging it to seek reconciliation with the U.S. in the south and resign itself to a divided nation. Through this policy, the Soviet Union hoped to placate U.S. interests and avoid a conflict which might jeopardize its own influence in the north.

The South Korean bourgeoisie takes over on U.S. life-support

The revolts against the AMG failed, however, and the tyrannical rule of the South Korean bourgeoisie began. (In the north, meanwhile, the revolutionary motion eventually ended and a repressive state-capitalist regime developed under a phony “communist” label.) Having forcibly imposed its will on the south of Korea, the U.S. launched its war of aggression from 1950-1953 to prevent Korean unification and defend its domination of South Korea. The rotten Rhee regime and U.S. domination was preserved at the cost of destroying much of the country and another wholesale slaughter of the masses. And for a number of years after that, the South Korean capitalist order lived a precarious existence on U.S. military and economic life- support.

The extent of dependence on U.S. aid throughout the 1950s and early 60s can be seen in many ways. At the end of the 1950s, imports to Korea were 10 times greater than exports, and it was U.S. grant aid that financed a whopping 83% of these imports.10 When the Park regime came to power in 1961. the U.S. was still financing half of the national budget and three-fourths of the military budget of South Korea.11 U.S. financial aid also helped the developing “chaebol” monopolies in Korea accumulate capital. The chaebol used U.S. aid to buy imported goods which they resold to the domestic market at inflated prices. As well, the Korean capitalists enriched themselves on contracts from the U.S. military.

The economic and military dependence on the U.S. went hand-in-hand with extensive U.S. political influence. As was previously mentioned, the U.S. military occupation had a big role in organizing the first South Korean regimes. The U.S. helped organize the gigantic political police apparatus, the KCIA, which numbered some 370,000 by 1964. The KCIA in turn was involved in setting up the Democratic Republican Party of dictator Park. There was good old direct bribery of Korean political parties by imperialist monopolies for particular favors. Gulf Oil, Douglas Aircraft and others were involved in such activity In the 1971 elections, the known payments by U.S. firms to the DRP coffers totaled $8.5 million.12 Japanese imperialism followed suit, with six firms secretly paying a whopping $66 million to Park’s party to grease the skids for South Korea to normalize relations with Japan in the mid-60s.13

By the early 60’s, however, the U.S. budget subsidies and other financial gifts were drastically scaled back. More and more, the domestic capitalists had gained the strength to sustain their own system. During periods of sharp crisis, however, the U.S. (and Japan) helped shore up the system.

The U.S. gives special treatment to South Korea

In general, U.S. policy toward South Korea provided unusually favorable circumstances for the South Korean capitalists to develop. Here are some further examples.

Because divided Korea was a flashpoint of the U.S.-Soviet rivalry for imperialist domination, it was given an exceptionally high amount of aid and other advantages. According to one source, economic “net assistance per head” was much higher in South Korea than other Asian countries. For example, in 1963-64 this aid was twice that to Taiwan and over seven times the aid to the Philippines.14 Moreover, the U.S. military aid from 1946-79 exceeded that to any other Asian country except South Viet Nam. Another author concludes that U.S. economic aid to South Korea from 1946-78 almost equaled its aid to the entire continent of Africa and was about 41 % of the aid to all of Latin America.15 In its early stages of development, Korea was the third highest aid-receiving country in the world, after South Viet Nam and Israel.16 Hefty loans from the U.S. and Japan were an important factor in bankrolling South Korean industrialization. And when the debt crises that have crippled many a developing country arose, South Korea was given relief by its imperialist backers in various ways.

For several decades, South Korean capital greatly benefited from having an open U.S. market. In the 1980s it was even allowed to run up big trade surpluses there. Having such a sizable and accessible export market was vital for South Korean capitalism’s policy of running trade deficits with Japan in order to import Japanese technology and components necessary for developing its industrial base. In the mid-80’s this enabled South Korea to run an overall trade surplus for the first time.

It also appears that U.S. imperialism generally allowed the South Korean ruling class to follow its own economic development policy even though it often contradicted certain U.S. imperialist interests. True, at various times the U.S. (and Japan) did bring heavy pressure for certain economic policies to be followed. For instance, the U.S. demanded that Syngman Rhee resign in part because it felt Rhee’s handling of the economy would make it difficult for the U.S. to cut back costly aid programs keeping the economy afloat. But South Korea’s heavy protectionism and tight regulation of foreign investment, its plans for development of heavy industry, and its reliance on- strong state intervention in the economy were irritations to imperialism and contradicted particular development schemes of imperialist agencies like the World Bank.

C. Later developments between South Korea, the U.S. and Japan

With a series of historical advantages over most other developing countries, the South Korean capitalists grew enormously in strength. This greatly altered the relative weight of foreign imperialism to domestic capitalism inside the country Under pre-war colonialism, Japan thoroughly dominated the domestic economy. In the early post-World War II era, U.S. aid and war contracts were largely responsible for keeping the weak domestic bourgeoisie alive. Today, however, a highly developed South Korean bourgeoisie dominates the country’s production. Throughout the 1980’s, the value-added of all foreign affiliates operating in South Korea was less than 2% of its Gross Domestic Product.17

Indeed, the South Korean government has historically greatly restricted the ability of the multinational corporations to operate there, although in the last few years this has been eased somewhat. Foreign direct investment in South Korea has been tiny compared to countries like Mexico and Brazil and is small even compared to some other “Asian tigers”. Moreover, big foreign companies were commonly required to enter into joint ventures with South Korean capitalists with the understanding that gradually South Korean control of them would be achieved. Through such means. South Korea eventually took over various sectors initially dominated by foreign firms, for example, the buying out of Gulf and Union oil interests.

There is no need to weep for the multinationals that come to South Korea, however. Cheap labor, low taxes and police measures against unions have made business lucrative for them despite having to put up with the restrictions imposed upon them by the South Korean government. One example is the Masan “free trade” zone. Its sweatshop conditions have attracted a lot of labor-intensive industries which survive on low wages and long hours. 70% of direct foreign investment in South Korea is from Japan and the U.S.18 Up to the early 80’s at least, Japanese direct investment was much greater than the U.S.

There is a new situation as regards trade, too. South Korea is no longer as reliant on the U.S. market. In fact, with the opening of the China market in the last several years. South Korea’s exports to Asian countries besides Japan has outstripped its exports to the U.S. and imports from other Asian countries has outpaced Japanese imports. At the same time, the U.S. and Japan more and more face South Korea as a serious international competitor. This has led to something of a trade war, with the U.S. raising barriers to South Korean imports, demanding more open South Korean markets, pressuring South Korea to raise the value of its currency to make its exports more expensive, etc. Japan is also pressuring for access to South Korea’s home market. Both Japanese and U.S. imperialism are also making it harder for South Korea to get more advanced technology from them.

There is no doubt that the top imperialist countries still bring pressure to bear on South Korea. But where conflicts arise on trade, South Korea is not easily pushed around. On world political matters, the South Korean bourgeoisie has historically lined up with U.S. imperialism, and issues like North Korea continue to bind them. But the common positions cannot just be attributed to U.S. pressure, but reflect the independent interests of the South Korean bourgeoisie as well.

II. “Free-market” myths about South Korean development

A. Myths in the service of capitalism

In recent years, South Korea and the other “Asian tigers" have been touted by the bourgeoisie as proof that salvation lies in “free-market" capitalism. Supposedly all a country need do to achieve prosperity is avoid state intervention in its economy, orient its production toward export markets, and eliminate protectionist barriers to the free flow of capital and commodities. For instance, there is the Organization for Economic Co-operation and Development (OECD), a world capitalist policy center that promotes “free trade” as a panacea. According to their OECD Economic Survey, 1993-94 on South Korea, the role of state intervention is reduced to “negative influences of interventionist policies” which didn’t kill South Korea only because “the international markets has generally been the criterion by which policies have been evaluated in Korea.” (p. 156) In other words, because South Korea had a lot of trade in the world market, it inevitably succeeded despite state industrial policies.

There’s only one small problem with this theory, though. It is contradicted by the entire history of the last century! This has been a century where there has been an explosion of capitalist development and production throughout the world. Every sort of combination of “free-market" and state-interventionist policy has been tried. Yet, the ability of a less developed country to rise to the economic level of the big imperialist powers happens with about the same frequency as the appearance of Halley’s comet. The economic, military, and political dominance of the handful of imperialist powers has made entry into this exclusive club a great rarity this century. Meanwhile, studies show that enormous gaps between the rich and poor countries remain and are, in general, widening. It is not that capitalism has been prevented from developing, but that its growth is inseparable from uneven development.

But even if it were possible that there was some magic capitalist formula that would elevate the poor countries to the level of the rich ones, than South Korea is certainly not an example of a neo-conservative cure. South Korea capitalism has been nurtured at every step with heavy state intervention. A shift to somewhat less state control in the last few years cannot negate the role played by the previous several decades. Indeed, even a dissident, self-described “controversial” 1995 report undertaken at the behest of the OECD concedes the importance of the state’s role in South Korean development. This somewhat more honest bourgeois report adds that “such a role by the state is conceptually inadmissible in the standard neoclassical economics." (See The Economic Transformation of South Korea: Lessons for the Transition Economies, by Chung H. Lee, p.5) Moreover, all the talk about free trade and open markets covers up that these policies aim at the further domination of the market by giant monopolies.

Various state-interventionist policies followed in South Korea play a role in facilitating domestic capitalist growth there. But these policies cannot serve as a general model either. For one thing, the policy a capitalist government follows is determined by the particular interests of the most powerful groups of exploiters, not by what someone believes would be the best policy for capitalism in general. For instance, how capitalism was developed in South Korea was at one time determined by the interests of the Japanese monopolies, not general Korean capitalist interests, and later is heavily influenced by the U.S. occupation, and still later, by the powerful South Korean chaebol. What might or might not better assist the overall development of capitalism is often rejected because it contradicts some more narrow or immediate interests of some powerful section of exploiters. Nor can there be a general model because whatever the value of certain policies, were it not for a series of particularly favorable historical circumstances, it is likely that South Korean development would have been set back by severe problems no matter what policy it pursued. Contrary to the theories spouted by neo-conservatism, the root causes of South Korea’s relative economic success cannot be found in it being “export-oriented” or integrated into the international market. Not only is this a one-sided description of actual policies, but it does not explain why one succeeds or fails in the market. To answer that, one has to look at the particular historical conditions that enabled South Korea to get a bit of an advantage over other developing countries.

The neo-conservative lies about “free-market” policies have several purposes. They express the desire of the big imperialist powers to penetrate the protectionist measures in other countries. They help justify the dismantling of state services and social programs. And they are meant to discredit the idea of socialism in the minds of the masses. Supposedly the former Soviet Union and the “socialist” regimes of Eastern Europe collapsed because that is the inevitable result of state control of the economy. This is wrong twice over. First, these societies were not socialist but state-capitalist. Secondly, the collapse of state-capitalism merely shows that state-capitalism remains capitalism. Indeed, if it were just a matter of state or collective capitalist forms being the problem, then it’s hard to explain why “market” reforms are compounding the economic disaster in the Soviet Union, etc.

Now let’s take a closer look at some of the neo-conservative myths and compare them to the reality of South Korea.

B. State intervention plays huge role

State sectors of the economy

Far from being an example of “free-trade” policy. South Korea development is marked by very heavy state intervention. First, there is the issue of state-owned sectors of the economy or sectors with heavy state equity and control. Finance is one of the most important areas here. The developing South Korean bourgeoisie needed sources of capital to develop, but its very weakness limited its private resources. So the state resources were vital here. The state domination of the financial sector meant that it could direct aid towards particular industries deemed essential for creating a modern industrial base. South Korean heavy industry depended heavily on government financing. For instance, the auto industry was government-financed. State restrictions on private borrowing from foreign sources cemented the state control. It appears that the government restrictions on private sources of finance aimed at helping South Korean industrialists avoid higher interest rates that would arise in private financial markets.

State ownership developed in such areas as heavy industry, raw materials, infrastructure and energy resources. These state sectors in turn served the needs of manufacturing in general. One of the best known examples of this is the giant Pohang Iron and Steel Company, whose creation, incidentally was opposed at the time by the World Bank. State industry has been partially privatized, but even in the 90’s, it remains an important factor.

State planning and regulation

Heavy state control over the process of industrialization was a hallmark of the Park military dictatorship of 1961-1979. Park set up strong state economic planning bodies. And the decisions of these bodies were to be taken seriously Early on. Park even arrested some rich businessmen to “encourage” them to invest in manufacturing facilities with the assistance of government financial aid. Park, a general who received his training in the colonial Japanese military, also staffed government agencies with military officers. A system of licensing was instituted that gave the state further control of what and how much was produced. There were extensive price controls, too.

Protectionism and being export-oriented

One of the key features of Park’s economic policy was extreme protectionism. As was alluded to earlier. South Korea had one of the most restrictive investment codes in the world. Those multinationals that were allowed were mainly restricted to exporting their goods. The result, as one author put it, was “the local bourgeoisie enjoyed a full monopoly of the domestic economy ”19 Even today, the South Korean market is highly protected.

Conventional neo-conservative wisdom preaches about export-oriented economies. But what is meant is not just that a country be involved in export, but that the home capitalists should just not build up industries where they will not immediately be able to compete with world standards. Allegedly these fields should be left to the dominant economic power of the moment. South Korea’s highly protectionist policy has little in common with this formula. If it had, the country would still be exporting iron ore and silk rather than electronic goods, ships and cars. Rather, the South Korean rulers were very concerned about becoming too reliant on foreign firms whose whims could disrupt their own industrialization plans. They also strove to limit imports to conserve limited foreign exchange for what they considered the most vital imports, such as advanced technology.

It should also be noted that had matters been left exclusively to the whims of private capitalists, the growth of this sector would have been hindered. Many export industries were not the most immediately profitable or were unprofitable at various times. It required a combination of state subsidies and arm- twisting to convince many capitalists that they should produce for the world market.

C. Factors in South Korean development

Whatever the benefits of extensive state intervention, the main factors for the relative success of South Korean capitalist growth lie in various fortunate historical circumstances. In fact, even the state development policies no doubt were embraced in large part because the South Korean bourgeoisie was trained in Japanese imperialism’s system of strong state intervention.

Peculiarities of the Japanese and U.S. domination

Among the fortunate historical circumstances for capitalist development in South Korea were certain peculiarities of the country’s relationship with Japanese and U.S. imperialism. South Korea had a leg up on most other former colonies in the level of industrial development bequeathed to it by its colonial master, Japan. As pointed out earlier, this was not due to Japan’s concern for Korea, but the needs of Japanese capital and in particular, the Japanese war machine. A management- technical stratum was also trained during the Japanese reign. And the South Korean bourgeoisie, at least since Park, an admirer of colonial Japan, borrowed heavily from the Japanese development strategy

Because of South Korea’s role as a “showcase” of U.S.- backed capitalist development in its rivalry against North Korea and its patron, the state-capitalist Soviet Union, it enjoyed special advantages. While U.S. imperialism could simply plunder other countries and let them bear the consequences, the U.S. could not afford to let South Korea collapse. So time and again, the U.S. came to the rescue. At first, U.S. aid kept the system from collapsing. Later on, when South Korea would get into debt crises, the U.S. provided relief. And this relief did not come at the onerous terms that usually accompany such debt relief. As mentioned earlier, access to the U.S. market was very important to keep the country from drowning in trade deficits. Also the economic spin-off from hosting a sizable U.S. war machine was the lifeblood for a section of South Korean capitalists. For instance, Hyundai built itself up on non-competitive contracts from the U.S. military and the South Korean government.

Japanese imperialism was aligned with the Western imperialist alliance against the Soviet Union and wanted to contain its sphere of influence. So it had an interest in propping up South Korea with key debt bailouts, too. Moreover, Japanese profits exploiting South Korean labor were so high, that such aid was a small price to pay to preserve stability there.

State terror

Another factor behind the “economic miracle” in South Korea was police-state terror. Of course, all capitalist states have used repression against the working masses. But the South Korean state was among the most systematic and brutal, forcing the masses to endure incredible exploitation and hardships. This undoubtedly helped increase the competitive advantage of South Korean manufacture. Like other factors, being a world-class tyranny wouldn’t by itself produce economic growth. But having an edge in keeping wages a bit lower or squeezing more production out of its workforce can give one set of capitalists an edge in the competition for the world market.

The Rhee regime was born amidst the bloody repression of a general strike and in subsequent years murdered or jailed vast numbers of government opponents. Some estimates claim as many as 100,000 were slaughtered by the regime. After a mass upsurge chased Rhee from power, the notorious military dictatorship of Park Chung-hee took over. All trade unions and political parties were dissolved, along with the National Assembly. The massive KCIA was built up to crush any organizing among the masses. New powerless unions under the thumb of the government were created. They were banned from political activity, strikes, and even collective bargaining. The impulse toward struggle and organization among the workers was irresistible, however, and police thugs smashed strikes and independent unions. In-fighting among the South Korean rulers led to the assassination of Park by the head of the KCIA, but another military dictator, Chun Doo Hwan came to power. Chun was the butcher of the massive Kwangju uprising of workers and students in 1980. Chun sent in tens of thousands of troops, slaughtering 2,000 in the battle. This was followed by more bans on the press, and restrictions on worker organizing. In the 1980s, there was some leeway granted for union organizing as part of a democratization process. But government troops continue to brutally attack workers’ strikes and militant mass protests to this very day while trade unions that are independent from the officially-sanctioned unions are subject to repression. A history of terror against the working masses is another ‘‘secret’’ to the success of South Korean capitalism.

The South Korean “miracle” means extreme exploitation

Behind the South Korean ‘‘miracle’’ lies the merciless exploitation of the masses. One factor contributing to this extreme exploitation was the gigantic surplus population available for the initial years of industrial development. In part, this was a legacy of Japanese colonialism. The big expansion of the number of landless peasants created a surplus of wage-laborers available for exploitation in the factories and capitalist farms. During Japanese colonialism, there was massive emigration from Korea of the surplus population, both due to economic ruination and to being exiled to work in Japanese factories in Japan and its other colonies. Following liberation millions of poor Koreans returned from overseas.

The ruin of the peasantry not only created a pool of cheap labor for industrial development. Other methods of bleeding the peasants also financed the rising capitalist industry One involved the way the land reform was carried out in South Korea. The revolutionary movement at the end of WWII had carried out a land reform by expropriating the landlords. The U.S. military government undid this, but couldn’t avoid land reform altogether. Land reform under U.S. auspices and the Rhee regime gave some land to former tenants. But it was done in such a way that the peasants ended up financing the transition of a sizable section of the landlords into industrial capitalists. The land the government took from the landlords had to be paid for by the peasants. These payments helped enable the government to offer formerly Japanese factories to the landlords at dirt cheap prices. And the government offered low-interest loans to boot, loans that in many cases were never paid back. The capital thus attained was a boon to such budding chaebol as Samsung, Lucky and Hyundai.

In the mid-1960s another wave of agricultural ruin swelled the surplus labor population, once again exerting downward pressure on wages. According to one estimate, in 1968 alone. 10% of the total farm population (1.5 million people) left the farms.20 The government helped precipitate this crisis by paying the peasantry ridiculously low prices and limiting credit. (South Korean peasants sold grain to the state at government set prices in return for credit and fertilizer from the government, which had a virtual monopoly in these areas.) Actually, low government prices for farm production was apparently nothing new. According to one report the government prices were lower than production costs in the 1950s and below market prices in the 1960s. Indeed, the agricultural collapse was so deep that rice imports on generous terms from the U.S. accounted for a quarter of the rice available at the beginning of the 1970s. The aim of these low agricultural prices was to keep the price of wage-labor down. So if South Korea capitalism grew because of export industries, export industries succeeded in part because millions of peasants were bled dry.

The burgeoning working class in South Korea suffered brutal working conditions, near starvation wages and police-state repression. In the late 1970s, for instance, the average salary for males was well below the cost of the minimum requirements of a family according to the government’s own figures. Keep in mind, that the situation was even worse for female workers who have comprised a high percentage of the factory proletariat. Teen-age women workers were predominant in the Masan free trade zone and made 20% less than the average wage. Real wages were rising, (although official statistics probably exaggerate the rise), but remained pitifully low Even by the late 1970s, the typical young manufacturing worker in South Korea earned but 17% of their Japanese counterpart.21 Meanwhile, there has been a complete lack of concern for the safety and health of the South Korean workers. In the late 1980s, South Korea had the dubious distinction of having the highest rate of industrial accidents in the world. And South Korean workers have had one of the longest average workweeks in the world, over 54 hours/week in the early 1980s.

Unemployment figures by the 1970s look fairly low, but they are very deceptive. The Korean government figures (at least in the 1960s and 70s) count someone as employed if they work one hour a week! And even at the end of the 1980s, only slightly more than half the workforce were full-time employees.22 The huge numbers of those employed only occasionally or otherwise eking out an existence in the cities populate the huge sprawling shantytowns of Seoul and other areas. It’s no wonder that the poverty disease tuberculosis is over 10 times higher than the combined average rate of the U.S. and the main European powers.23 Contributing to the misery is the lack of social programs. Unemployment benefits have been non-existent at least up until 1993 when some legislation was proposed. Minimum wage legislation of recent years is set at such a low rate that it would only raise the wages of 1 % of the workforce.24

D. What explains the recent “free-market” policies?

While it is clear that South Korean economic development makes a shambles of neo-conservative dogma, it's true that in recent years there has been movement to more privatization of the state sector and some more open trade policies. The impetus for this has come from both the South Korean capitalists and from the U.S., Japan and the other imperialist powers. The analysis below does not attempt to give a complete picture of the reasons behind each and every policy shift, but to get some feel for the general motivations behind the tendency toward liberalization.

Motives of South Korean capital

The heavy role of the state in the South Korean economy was never to serve “society” in general, but assist the growth of private profit-making. Over the decades, this resulted in the growth of powerful “chaebol” monopoly capitalists that dominate the South Korean economy. But the very size and power of the chaebol has caused them to chafe against various government regulations. One issue is that the growth of huge monopolies and capitalist businesses in general stretched the state financial institutions. The chaebol want to have access to other financial resources. This has led to the growth of a non-government financial sector and a desire for more access to world financial markets. The desire of South Korean capital to invest in overseas financial markets has also led to relaxing restrictions on capital export. Another motive for less state control is the tendency of the chaebol in recent years to invest an increasing amount of their funds in land speculation and financial speculation on the stock market rather than investing in their own industries. On these matters, the chaebol routinely ignore government economic planning bodies who are concerned that a slackening of investment in plants and technology will cause the South Korean manufacturers to fall behind their world competitors. As well, among the well-to-do in South Korea, there is a desire for cheaper overseas luxury goods, which requires relaxing protectionism of the domestic market.

Pressure from the big imperialist powers

Pressure for a more open South Korean market has come from U.S. imperialism. The U.S. used to tolerate South Korean penetration of the U.S. market because it wanted South Korea as a showcase of Western imperialism. However, the international imperialist agencies (which speak for the strongest capitalist powers) have long lectured against protectionist policies and desired access to South Korean markets. Now South Korea is able to stand on its own feet economically and U.S. manufacturers have been facing stiffer international competition. So the U.S. has been using the leverage it has because of the South Korean need for the U.S. market to pry open South Korea’s markets. In 1988, for instance, the U.S. used the threat of invoking stiff barriers to South Korean goods to win assurances from the South Korean government to liberalize trade and to raise the value of its currency, the “won”, to make its exports more costly A cat-and-mouse game ensued however, with South Korea trying to get around its pledges. For instance, the “won” was soon devalued twice. The U.S. has managed to pry agricultural markets open, with South Korea becoming one of the largest per capita importers of U.S. agriculture in the world in the 1980s.

Similarly, Japan has been pushing for inroads into South Korean markets. Japan considers South Korea a serious competitor for the Asian market. Japan wants to dominate certain sectors of the South Korean economy not only for the profits to be realized there. It also hopes it can prevent South Korean manufacturers from becoming competitors in foreign markets in products such as “high-end” electronics and automobiles, confining South Korea to cheaper and less-advanced products in these fields. Japan’s leverage includes South Korea’s reliance on Japanese technology and components. Japanese pressure seems to have gotten some results. In 1993, for instance, bans on 258 Japanese import items were somewhat eased, including autos and electronics. On the other hand, the South Korean government is not surrendering the advanced technology fields to the Japanese, but is pumping research and development into these areas.

In addition, it is now easier for foreigners to invest in the South Korean stock market. This opening is partly due to South Korea’s efforts to improve its current account trade deficits of recent years.

The balance sheet

Overall, there has been some trade liberalization and privatization of industry and finance. But state intervention continues to play a big role in the economy. And protectionism is hardly a thing of the past. South Korea continues to maintain high protectionism in areas where it worries about international competition.25 Some state enterprises have been privatized, but the state also continues to have heavy equity in these enterprises and other methods of influencing them.

On the meaning of the trend towards “market” policy

An examination of the shifts in South Korean economic policy shows how deceptive the label of “free competition” has become. Behind this phrase lies the striving for domination of the big foreign monopolies and the growing power of South Korean monopoly capital. Far from marking the end of the domination of imperialist monopolies, “free-trade” policies serve it. And South Korea proves that if one is to have any pretensions of joining the handful of countries that dominate the world market, then one must develop their own powerful monopolies. Far from world capitalist economic growth requiring an end to domination by the most powerful countries and monopolies, it is inseparable from such domination. To the extent that South Korea enters the realm of the most powerful, it will be because its monopoly power can make some inroads against the monopolies of the U.S., Japan or Europe.

State intervention and protectionism remain weapons of capitalist development and are alternately taken up with “free market” policies as the situation demands. They are a weapon to help one’s own capitalist class compete in the world market. This is clear in the case of South Korea. Protectionism played a big role in the historical development of U.S. and Japanese industry, and protectionist policy is still a big issue whenever the powerful imperialist states feel threatened by competition.

That state capitalism in South Korea gave rise to powerful private monopolies that demand freedom from certain state regulations does not show that “laissez faire” policy is superior to state intervention, but only shows that in a capitalist society state industrial policy serves the needs of private capitalist interests. The state, having made its monopoly enterprises viable, is partially turning them over to private monopoly To the extent that private monopoly no longer needs certain government aid, it is no longer willing to obey certain regulations that accompanied the aid. More freedom from the state for state-nurtured and state-protected big business. That is the real meaning of “free-market” policy.

III. Capitalist development and the class struggle

A. The growth of monopoly capitalism

However ruthless the process of South Korean capitalist development, the country has become one of the stronger economies in the world. Its real per capita GDP has grown enormously. In 1963-73 alone, it doubled. In the early 1990s, South Korea had climbed to ninth place in overall economic size among OECD countries, which includes most of the largest economic powers including the G-7 countries. Still, with a per capita income of about 29% of the U.S., a major gap continues to separate it from the richest capitalist countries. Its per capita income is about on par with Greece or Portugal. It was also the 13th largest exporter in the world in 1992.

The weak bourgeoisie of the colonial period has become a bourgeoisie headed by powerful monopolies. From 1974 to 1981 the combined sales of the top 10 chaebol (monopoly capitalist groups) as a percent of GNP rose from 15% to 56% There has been great concentration in land ownership, too. The top 5% of landowners own two-thirds of the total land area.27 Along with monopolization, the character of South Korean production has changed. Agriculture has declined from over 35% of GDP in 1961 to under 8% in 1992.28 Manufacturing’s weight doubled from 1961 to 1987 And the type of manufacture has changed over the years. Into the 1960s, manufacture was largely light labor-intensive manufacture. By the late 1970s, the emphasis shifted to such things as chemicals, steel and electronic equipment. Heavy industry has had a much greater weight in manufacture and whole new world-class industries in steel, auto and shipbuilding arose. Heavy industry now accounts for two-thirds of the value of manufacturing.

South Korean exports were a negligible amount of GDP in the early 60s but had grown to 35% in the late 80s and declined to 26% by 1992. The type of export has changed dramatically In the early 60s, agriculture and raw materials were dominant, but by 1991, electronic products were the top export, heavy manufacturing dominated, and agriculture was reduced to a minor role. South Korea is not only exporting products. Its companies are setting up shop around the world. Since the late 1970s, South Korean companies have established 1,200 foreign affiliates. Unfortunately, I currently lack information on what these companies are and their economic weight.

As South Korean capital has grown, so has its ever greater need for outside markets and raw materials. Like other Asian countries, it is jousting for sources of oil. This is one reason that its powerful armed forces are undergoing a revamping. Most of the country’s oil imports come through the South China sea, and there is speculation about large undersea oil resources in this area, too. In the last several years. South Korea has been on a military spending binge so it can deal not only with North Korea but have capabilities as a regional naval and air power.

B. Growth of the working class

Capitalist development has also led to a huge growth of the working class. When Japanese colonial rule began in 1910, an estimated 84% of Korean families engaged in agriculture. Three decades ago, agriculture consumed half the labor force. By 1992, only 16% of the employed population was engaged in agriculture (including farming, livestock, fishing and forestry), and this sector is destined to continue to decline. Of the small household farms, a third are only part-time ventures, and over half of farm family income is from non-agricultural activities. As well, there is a trend to relying more on imports of basic foods and pressure to convert farm land to urban use.

Meanwhile, the number of people employed in manufacturing increased eight times from 1963-1990, rising to over 25% of all employment. Growth of manufacturing employment continued through the 1980s, increasing about 63%. Of the 84% of the population not engaged in agriculture, about a third are in manufacturing. Another 15% are engaged in construction and transport. Other large blocks of employment are “distribution (commerce — ed.) and hotels” which comprised almost 27% of non-farm employment in 1990 and “government and other services” which total almost 18%. But the weight of both these sectors has declined a good deal as a percentage of non-farm employment in the 1963-90 period, from 59% to 44% The fastest growing sector has been “finance, insurance, real estate” which has more than doubled its weight in non-farm employment in the same time frame, up to a bit over 6% by 1990. South Korea’s employment sectors are nearly identical to the average of all OECD countries, with the exception of having somewhat higher agricultural employment, 16% compared to the 9.4% OECD average.

It should be noted that all the above employment figures do not break down those employed by occupation. Thus, they don’t directly reveal the numbers of workers. But clearly, in such an economy the urban working class is a huge force, and along with the urban poor comprises the vast majority of the exploited. Undoubtedly, a good deal of the peasantry works as part or full-time wage-laborers, too. But unfortunately, the research for this article did not include a study of the class differentiation among the peasantry

The South Korean working class is heavily concentrated in sizable factories and plants. In 1990 enterprises with over 300 workers made up a mere 1.7% of enterprises in manufacturing, but accounted for over 38% of employment. 6.4% of enterprises were over 100 employees and accounted for 56% of all manufacturing employment. In contrast, the 65% of enterprises employing under four people accounted for only about 9% of manufacturing employment in 1986.29

C. The central role of the struggle between the proletariat and bourgeoisie

The growth of capitalism and the changes in class relations means that progress for the masses revolves around the class struggle between the proletariat and the bourgeoisie. The Korean masses have a noble history of resistance to oppression, but the struggle today is quite different than in the past. The peasant uprisings at the end of the 19th century took place at a time when a feudal dynasty ruled, when capitalism was little developed and even slavery was common. It was also a time when imperialism was sending in its armies to force concessions from the Yi dynasty The uprising sought land, and an end to slavery and relief for peasant farmers from dynastic oppression and foreign domination. The economic content of this struggle would have been to help clear the grounds for domestic capitalist development. But it was crushed under the iron heel of the Japanese empire and so capitalism developed in a different and particularly savage way. In the 35 years of Japanese colonial rule, capitalism developed to the point of establishing a significant industrial base and the working class movement began to develop. The masses fought to rid the country of the Japanese oppressors. But the worker and peasant masses also fought for their own class demands. The robbery of peasant land by the Japanese brought the question of agrarian reform to the forefront. The workers fought to establish their own class organizations and fight semi-slave exploitation. The Korean bourgeoisie was subject to national oppression, too. But their interests as exploiters led, in the main, to either outright collaboration with the Japanese imperialists or to forming a meek, reformist opposition.

At the end of World War II, the masses sought to carry out their demands in a revolutionary way, while the Korean bourgeoisie (in the South) hitched its fate to the counterinsurgency occupation army of U.S. imperialism. In the South, the U.S. occupation army suppressed the revolutionary motion there and turned the reigns of government over to the South Korean bourgeoisie. Political independence was established, but the new power was not the revolutionary government fought for by the masses, but the bloody rule of the exploiters under the tutelage of U.S. imperialism. The U.S. war of aggression in the early 1950s further set back the revolutionary masses and cemented the division of Korea. The bourgeoisie in the South perfected its police-state apparatus and began to flourish. Meanwhile, over the decades, the vast bulk of the peasantry was ruined by capitalism and a large, impoverished and highly concentrated proletariat was created. The conditions for the modern class struggle were created.

In the 1970s and 80s, workers, students and small farmers waged many battles against the South Korean military dictatorship. The mass revolts helped crumble the military dictatorship in the 1980s, and certain democratic rights were granted. Powerful worker actions were key in this process such as those of the Sabuk miners and Pusan steel workers who took up arms against the Chun Doo Hwan dictatorship to win their demands and union rights. The workers seized any new openings with a vengeance, and their struggle went way beyond the limited rights granted by the ruling class. For example, after the government ended its right to be the final arbiter of all labor-management relations in the late 80s, 2,600 strikes broke out in two months. This was more strikes than had occurred in the previous 25 years!30 The peak of the strike wave was 1987 (3,749 strikes) and declined to 1,616 by 1989, which still represented a big number by South Korean standards. Most of these strikes were illegal. And new unions formed in the midst of the strike wave were often banned. Such were the limits of the democratic reforms as the 1990s began.

Major battles by the workers have continued in the early 1990s, such as the 1990 Hyundai strike in Ulsan where the government sent in thousands of troops to subdue the workers. Stung by the gains won by the workers’ movement the government in 1992 responded with measures that would penalize large firms that granted wage increases deemed too high and that provided financial assistance as an incentive to firms keeping wages in check. In 1995, the government’s attitude to militant workers’ actions remained much the same. In May 1995, Hyundai auto workers in Seoul went on strike outside of official trade union channels when a leader of an alternative union was fired. The strike quickly spread to other Hyundai plants and the government moved in to forcibly break the strike.

The various other mass movements in South Korea must also be developed as part of the struggle against South Korean capitalism. For instance, the struggle against the continued U.S. military presence or other outrages of foreign imperialism must also have an edge against the independent interests of South Korean capitalism. Indeed, today South Korea capital has now reached the point where it is exploiting cheaper labor in sweatshops from China to Central America, and seeking ever-wider overseas markets for its goods and for financial investments. While military dictatorship has been replaced by a parliamentary system, protests against continued heavy repression against the masses remains. The struggle for democratic rights must be oriented against the capitalist class as a whole, not trail behind the reform policy of the liberal capitalists. The idea of a united Korea remains popular among the progressive activists. And the South Korean bourgeoisie itself is developing its ties to the North amidst periodic saber-rattling from both sides. If South Korea and the state-capitalist North unite, this will raise the question of a united struggle of the workers against capitalism.

A revolutionary transformation of South Korean society today can only take place through the overthrow of the bourgeoisie and the establishment of socialism. South Korean capitalism has prepared the grounds. The dominant role of large-scale industry has concentrated production in the hands of a few And the state-capitalist policy has further centralized control of production. This creates good conditions for the expropriation of the means of production by the proletariat and placing the economy in the hands of society as a whole. Capitalism has also created the social force whose aspirations are served by such a revolution and who have the potential strength to accomplish it. This is the proletariat, huge in numbers and organized and concentrated by large-scale production.

To accomplish its aims the workers must have their own revolutionary class organization. The establishment of an anti-revisionist communist party and extending its influence among all the mass movements is the first step necessary to begin turning the dreams of escaping oppression into reality []


1 Previous research articles appearing in Communist Voice on developments in the imperialist system include:

"In support of the Papua New Guinea people’s struggle against environmental ruin”, Vol. l, #2, June, 1, 1995;

"The IMF and imperialist superprofits”, Vol. l, #3, August 1,1995;

"The IMF, World Bank and U.S. imperialism: an overview”, Vol. l, #4, Sept. 15, 1995;

"Papua New Guinea and imperialism”, Vol.2, #2, March 15, 19%;

There is also a research article by Mark that appeared in the Chicago Workers’ Voice Theoretical Journal, Issue #3, June 1, 1994 entitled “Cartels and the striving for domination by monopolies” The CWVTJ has subsequently abandoned the task of building an anti-revisionist communist trend. A worthwhile polemical exchange between former members of the now defunct Marxist-Leninist Party on imperialism was also carried in the CWVTJ. For more information on this, write our journal, Communist Voice.

2 This article will not deal with North Korea. Following the liberation of Korea from Japanese colonialism in WWII, Korea was divided by an imperialist deal between the Allied Powers, with the Soviet Union’s forces administering the north and U.S. forces doing the same in the south. Supposedly the country was to eventually be united, but despite popular sentiment, the U.S. forces prevented a popular government from uniting the country. The Soviet Union connived in this against the will of the masses. The U.S. war of aggression of 1950-53 cemented the division. Thus, North Korea developed separately. The North Korean regime developed into a repressive state-capitalist order led by a phony “communist” party that abandoned Marxist-Leninist principles.

3 Lim, Hyun-Chin, Dependent development in Korea: 1963-1979, p.43, Seoul University Press, 1985.

4 Lim, p.40.

5 Hart-Landsberg, Martin, The rush to development: Economic change and political struggle in South Korea, p. 107, Monthly Review Press, 1993.

6 Ibid., p. 107

7 Ibid., p. 115.

8 Lim, p.42.

9 Hamilton, Clive, Capitalist industrialization in Korea, p. 15.

10 Ibid., p.35.

11 Ibid., p.28.

12 Hart-Landsberg, p. 169.

13 Ibid., p. 167

14 Lim, p.63.

15 Landsberg, pp. 145-147

16 Song, Byung-Nak, The rise of the Korean economy, p.5 Oxford University Press, 1994.

17 OECD Economic Surveys, 1993-1994: Korea,, p.37

18 Ibid.

19 Lim, p. 103.

20 Hamilton, p.38.

21 Lim, p. 124.

22 Hart-Landsberg, p. 181.

23 OECD, p. 148.

24 Ibid., p. 86.

25 Ibid., p. 18.

26 Ibid., pp. 17, 40-41 (for all statistics in this paragraph).

27 Ibid., p.28.

28 Ibid., p.25.

29 Song, pp. 111-113 (for all statistics in this paragraph).

30 OECD, p.82.

The Transition to socialism

State capitalism, Leninism, and the transition to socialism

--Part one--

by Joseph Green, Detroit

Marxist socialism

Other theories of transition to socialism

* No transition period

* Immediate elimination of the state

* The state sector in a "mixed economy" as socialist

* A dominant state sector seen as socialist in itself

* Wait for the whole world

* Small-scale production and group ownership rather than social control of the entire economy

* Maintaining the marketplace forever

Lenin's views on the transition to socialism

* A protracted transition

* Importance of organization

* Accounting and control

* Utilizing forms from large-scale capitalism

* A realistic appraisal of the transition

* Capitalism doesn't just come from the former bourgeoisie

* A bourgeois economy is incompatible with a proletarian state

* Distortions of the proletarian state

Jim's report evades an assessment of the path to socialism

Where the report comes from

Was Lenin inconsistent?

* Is the nationalization of the banks and large corporations equivalent to socialism?

* Are consumer co-ops equivalent to socialism?

* Did Lenin recognize any dangers of state capitalism?

* Is state capitalism equal to socialism?

Jim's marketplace socialism

* Is it a retreat to go back to private capitalism?

* Is it possible to lead the small producers onto the path of amalgamation?

* Do agricultural co-ops have anything to do with the transition to socialism?

* Is nationwide accounting and control realistic?

* Should the state take over industry?

* What other means of transition is there?

On the term "state capitalism"

Is Marxism-Leninism the source of Stalinism?

* Jim's proof: Stalin says so

* Did Lenin think concessions were the only form of state capitalism?

* On Co-operation

* High salaries etc.

* Bureaucratic tutelage

* No such thing as revisionism?

What does the economy of a country in transition to socialism look like? Does state ownership by itself suffice to lay the economic basis of socialism? How can socialism be distinguished from the revisionist economies ruled by sluggish bureaucracies in the state-capitalist countries (for example, Cuba, North Korea, China, Vietnam and formerly the Soviet Union and Eastern Europe)?

These are some of the questions raised by the experience of early days of the Bolshevik revolution, and by the fight against the various revisionist regimes that have sought to pass themselves off as socialist or communist. A discussion of the nature of state-capitalism and its relation to socialism will help throw some light on these issues. In part one of this article, I begin by criticizing a report by Jim (San Francisco Bay Area) on Lenin's views on the use of state capitalism by a socialist government. (Jim's report is reprinted elsewhere in this issue of Communist Voice.1)

To understand what is at stake in the debates over state capitalism, let's review briefly some of the different conceptions of socialism.

Marxist socialism

Communist society as envisioned by Marx and Engels is neither mere state ownership nor ownership of each workplace by its workers alone. Nor is it ownership by individual communities or collectives. It is the management of production by all of society collectively, and it requires the elimination of the division of humanity into toiling classes that do the work and exploiting classes that do the ruling. Marx and Engels studied how money and private property and the present capitalist society arose; they showed how the private and small-scale character of production inevitably gave rise to money and exploitation. They showed that it was large-scale production, that has grown up under capitalism, that also provides the basis for overcoming capitalism. It creates both the necessity and the possibility for society as a whole to take over the direction of production, and to eliminate the division of humanity into classes. A classless society would have neither money, nor any form of private or small-group ownership of the means of production. There would not be a fair system of wages, but the elimination of the system of wage-labor: people would not work for wages, but they would receive their needs as a matter of course. People would work because transforming the world (creating things, taking care of people, protecting the environment, etc. ) would be one of the central desires of a fulfilled life. There would not be government (a state apparatus) in a classless society, as the state is a means whereby one section of the population suppresses the rest. Instead there would simply be an administrative apparatus operated by the whole population.

But Marx and Engels didn't believe that such a society could come into being all at once. It's not just that it would require a revolution to overthrow the ruling minority that presently owns the means of production. Even after a revolution, such a society could not simply be proclaimed; it could not simply be the result of a revolutionary decree. It required a lengthy process of transition from capitalist society to communism. This is the dictatorship of the proletariat, during which the working population would transform itself as well as transforming the economy. Moreover, this transformation would lead through two phases of communism. In the lower phase of communism (often called socialism), production is already run by society as a whole. But people earn the means of life through their labor, although they are now paid equally with respect to the amount of their labor. The differences between the various types of labor have not yet been overcome; work has not yet changed from a job to one of the most important parts of a satisfying life; etc. This society is not the Marxist goal, but only one of the stages along the road to the higher stage of communism, the classless society.

In the Communist Manifesto, Marx and Engels briefly sketched out this transition. They described a series of measures which the revolutionary proletariat, organized as the ruling class, would take. Many of these measures involved increasing the control of the state over the means of production. It is only at the culmination of this process, "when . . . class distinctions have disappeared, and all production has been concentrated in the hands of a vast association of the whole nation" that "the public power will lose its political character"2 -- i. e. government (the state) will dissolve into a merely administrative apparatus.

In his famous polemic Anti-Dühring, Engels went back over the same ground, and pointed out that after the proletariat seizes power, it "transforms the means of production in the first instance into state property. " (emphasis in the original. ) He distinguished this from ordinary state ownership by a capitalist government (so-called "state socialism"). And he held that this led eventually to the withering away of the state power itself, leaving behind only "the administration of things and the direction of the processes of production."3 In Engels' later article The Peasant Question in France and Germany, he discussed the steps that a socialist government might take in the countryside. He studied in particular the question of the relationship of the state to collectives, and he held that the lower form of co-operatives were not yet socialist and were simply a stage on the road to a higher form of collective. He set forward certain general principles and showed the modifications that would be needed in some particular countries and regions.

Also notable are Marx's comments in The Civil War in France on the Paris Commune of 1871, in which the proletariat briefly held power. He pointed out that the revolutionary proletarian state is not the same type as the bourgeois state. He did not, however, say much in this book about the economic tasks of this state, because he was summing up the experience of the Commune, which lasted only 71 days before it was crushed by military force and didn't get far on the economic front.

Thus Marx and Engels provided a description of the communist goal, along with stress on the need for a revolutionary transition period between capitalism and communism. They showed that, as a step towards society as a whole running production, the proletarian revolution would have the state take over the economy, and that even this might be preceded by a series of preliminary measures. They provided what was, in essence, the first discussion of the utilization, by the revolutionary proletariat, of both state regulation of capitalism and state ownership as steps in the elimination of capitalism. They did not call this "state capitalism under workers' rule" [as it was often called later], but they briefly sketched some of the content of this process. Moreover, they distinguished it from "state socialism". 4 [Note, however, that this series of articles vehemently opposes the view that the transitional economy can be described overall as "state capitalism under workers' rule". Under the subhead "On the term 'state-capitalism'" it shows how very different things are often all jumbled together as state-capitalism, and points to the need for a better terminology. In part three of this article, "On the question of 'state capitalism under workers' rule'" it argues that it is doubtful that Lenin himself equated the transitional period simply with state-capitalism, and that in any case the experience of the 20th century shows that such an identification is mistaken theoretically and misleading in practice.]

Other theories of transition to socialism

The Bolshevik revolution would represent the first big attempt to apply these theories to a proletarian revolution. Lenin's views were the best presentation of the issue by the Bolsheviks. But before reviewing Lenin's views, let's note that there are other, non-Marxist theories of overcoming capitalism. The list below of some different views, although cursory, may help indicate the issues at stake. This will help provide a context for judging what the experience of the Bolshevik revolution on one hand, and of the various revisionist regimes of this century on the other, show about the transition to socialism.

--No transition period

Some people denounce the idea of a transition period. Instead, they hold that when enough people understand the plan for a future society, they will bring it into existence all at once. They may, for example, demand that money, commodity production, wage-labor, and the state are all abolished immediately. Refusal to recognize a transition may seem very revolutionary. But it is not only impractical, but can have reactionary consequences. For example, its advocates may hold that a socialist regime need not recognize the right to national self-determination, since nations and national differences should simply be abolished. In practice, national differences cannot be abolished this way, but national freedoms can be.

--Immediate elimination of the state

Anarchists see the source of evil in authority in general and the state in particular. They don't recognize that the state itself arises on the basis of existing class differences and the lack of social direction of the process of production. Hence they believe that they can simply abolish the state and this will eliminate oppression and eliminate classes. They denounce the revolutionary dictatorship of the proletariat as just another name for the oppressor state.

--The state sector in a "mixed economy" as socialist

Reformist socialism sees the state sector in a capitalist country as "socialism". This type of "socialism", typical of the Second International, is widespread, and is an ideology of the modern capitalist state, which has a state sector and state regulation alongside a big private sector. It holds that various capitalist states in Western Europe actually already are -- or have been, so long as the social-democratic party is in power -- socialist. But the state sector in reality is not "socialist" but is simply run on behalf of the entire bourgeoisie.

--A dominant state sector seen as socialist in itself

Stalinism and, in general, revisionism in power present a system with a big state sector as socialism, especially if the old bourgeoisie has--at least in part--been replaced by a new bourgeoisie with its power based in the state sector. Faced with opposition to the exploitation and lack of rights which the workers face in their regimes, the revisionists cite state ownership as supposedly sufficient proof that there is no exploiting class. Most of the revisionist regimes have collapsed, but the remaining ones have adopted more and more market reforms. More and more, the last remnant of revisionist "socialism" is simply an authoritarian rule against the masses by a corrupt party based on state bureaucrats and managers of enterprises.

--Wait for the whole world

Another view holds that there can be no socialism until the whole world is socialist. Some say this in order to throw up their hands and do nothing. But among those who advocate revolutionary activity, this view allows its advocates to fudge on the question of the transitional steps to socialism, with the result of vacillating between at times deprecating the necessary steps of a transition as allegedly opportunism and at other times being unable to see what is wrong with the economic base of revisionist state-capitalist society (their only objection being that the revisionists aren't more democratic about it). Generally, the advocates of this view suggest that the issue isn't to judge the conditions in each country or region, but to see whether the world as a whole is ripe for socialism. This orients them away from the sober assessments needed of each particular country or region.

--Small-scale production and group ownership rather than social control of the entire economy

Some people denounce large-scale production as the cause of the problems of modern capitalism. They look to going back to small-scale production. They may idealize the individual entrepreneur. But most dream of autonomous collectives and direct democracy. The advocates of such views may regard the social direction of all production as even worse than the present system, and in any case if society were organized according to their plan it would be unable to carry out such direction of production as a whole. Despite the intentions of the supporters of these plans, the various independent units would eventually relate to each other through the marketplace.

--Maintaining the marketplace forever

Some left-wing trends have become open advocates of marketplace ideas, thus helping import the neo-conservative atmosphere of the time into the movement. Some of them simply want a better "mixed" economy, with the government correcting the excesses of the market. Others -- such as the individualist wing of anarchism -- dream of a society without a government but with the marketplace, and form a sort of left-wing of the Libertarian Party.

Lenin's views on the transition to socialism

The views of various left-wing political trends often combine several of the above-mentioned viewpoints. Lenin by way of contrast developed his view of the path to socialism through continuing the ideas of Marxism. His views differ from those of the "left communists" and anarchists in a number of ways, among which is that he sharply stressed the need for a revolutionary transition period prior to the classless society. His stand differs from the revisionist and Trotskyist view that state ownership is in itself socialist, and he instead looked more closely at the nature of the state and of the economic principles guiding state industry. His stand differs from the marketplace ideologists (and the anarchists) in that he pointed to the role of large-scale production and the need for society as a whole to take over the direction of production.

A study of Lenin's views on the transition period, with especial reference to the issue of state capitalism, shows that he emphasized a number of themes. I won't deal here -- except perhaps in passing--with many important questions, such as the party, the trade unions, and many important political issues, but will focus on the economic questions most directly related to the "state capitalism" issue and to those raised by Jim in his report. A few of Lenin's points are as follows:

--A protracted transition

Lenin -- in the preparation for the October revolution -- emphasized that there could be no question of directly turning Russia into a socialist country, but instead there had to be a series of steps to socialism, a lengthy transition period. He didn't just agitate for socialism in Russia on the grounds that the world in general was ripe for socialism, nor did he hold that socialism could simply be decreed, but advocated definite measures which he held would begin the transition towards socialism. Articles like "The Impending Catastrophe and How to Combat It" and "Can the Bolsheviks Retain State Power" argued on the basis of definite transitional measures.

After the revolution, Lenin continued to advocate such measures, both for industry and agriculture. When various measures could not be implemented or did not have the desired effect, Lenin sought out alternative ways of preparing the ground for socialist measures. He held

". . . that it was not without reason that the teachers of socialism spoke of a whole period of transition from capitalism to socialism and emphasized the 'prolonged birthpangs' of the new society. And this new society is again an abstraction which can come into being only by passing through a series of varied, imperfect concrete attempts to create this or that socialist state".5

--Importance of organization

Why couldn't socialism just be introduced by decree? If socialism was just a matter of expropriating the bourgeoisie, it could be done rapidly. But Lenin stressed that "The important thing will not be even the confiscation of the capitalists' property, but countrywide, all embracing workers' control over the capitalists and their possible supporters. Confiscation alone leads nowhere, as it does not contain the element of organization, of accounting for proper distribution."6 Lenin emphasized developing the organization necessary for the proletariat to actually run production and dispense with the capitalists, and this led through various stages. Again and again he came back to the need for the workers to learn how to handle nationwide accounting and supervision of production.

Lenin pointed out that "in Russia we have a petty-bourgeois mass which sympathizes with the abolition of the big bourgeoisie in all countries, but does not sympathize with accounting, socialization and control -- herein lies the danger for the revolution, here you have the unity of social forces which ruined the great French revolution and could not fail to do so, and which, if the Russian proletariat proves weak, can alone ruin the Russian revolution."7 It is this petty-bourgeois stand which, by the way, is reflected in anarchism, which denounces the big bourgeoisie but is skeptical of organization or denounces it as Stalinism, state socialism, or what not.

--Accounting and control

In dealing with the organization needed to actually run the economy, Lenin laid stress on the apparently prosaic tasks of accounting and control. In his conception, this was a key step towards the masses collectively organizing and running industry and agriculture. He laid stress on verifying and reverifying the work that was done, and not being satisfied with high-sounding declarations and decrees. Replacing the capitalists requires that the masses show in practice that they can provide their own accounting and control, their own management of large-scale production, their own labor discipline.

--Utilizing forms from large-scale capitalism

Lenin held that the socialist proletariat could make use of and transform some of the large-scale organization that had arisen under capitalism, including the co-operatives, banking apparatus, monopolies, etc. Some of these could be transformed into an apparatus run by the workers. Others he regarded as compromises with capitalism which could be used for awhile. Thus, in cases where the workers could not immediately take over the direction of production, he held that a sort of state-capitalism under workers' control -- that is, capitalists running enterprises under the control and regulation of the proletarian state and workers' organizations -- could be used as one part of the transitional economy. The enterprises would not yet be directly owned and managed by the proletariat and its state, but the proletariat would gain experience, force the amalgamation of industry and other changes, and prepare conditions for state ownership. This would lead to it taking over the industry altogether. Lenin also referred to certain practices used in the state-owned industry in the Soviet Union as state-capitalist.

--A realistic appraisal of the transition

Lenin didn't sugarcoat the transitional measures, as is shown by his designation of some of them as state-capitalism or as having features in common with state-capitalism. For example, he didn't pretend that nationalization of the land alone brings socialism nor that the first steps towards cooperation in the countryside was socialism. Instead he supported transitional measures because they facilitate having millions of millions of toilers participate in building the economy and moving towards socialism.

--Capitalism doesn't just come from the former bourgeoisie

Lenin stressed that overthrowing the old bourgeoisie didn't suffice to root out capitalist relations. Lenin stressed that the "small production engenders capitalism and the bourgeoisie continuously, daily, hourly, spontaneously, and on a mass scale."8 He held that production via individual co-ops, if the co-ops owned their own means of production, also gives rise to a bourgeoisie. And he pointed to the possibility of bourgeois relations developing inside state industry. Thus he held that extra-high salaries to specialists implies capitalist relations, saying that "State capitalism is not money but social relations. If we pay 2,000 . . . , that is state capitalism."9 Similarly he pointed to the contradictions created between the management and the mass of workers by the state industry temporarily going on to the profit-making or commercial basis. For all these reasons, capitalism doesn't just spring from the individuals who formed the ruling class prior to the revolution, but "a new bourgeoisie"10 can arise after the expropriation of the old bourgeoisie.

--A bourgeois economy is incompatible with a proletarian state

Lenin also held that there could only be a proletarian state if there was definite progress towards socialism. He did not agree that one could simply graft a proletarian state onto a bourgeois economy and wait until the world went socialist. He held, for example, that "The proletarian state may, without changing its own nature, permit ... the development of capitalism only with certain bounds, and only on the condition that the state regulates [it]."11 Nor was his view that the proletarian state could simply tolerate regulated capitalism forever. He held that the proletariat should, in accordance with its strength and organization, gradually eliminate the various compromises with capitalism and the utilization of state capitalist methods.

--Distortions of the proletarian state

Moreover, Lenin held that the use of state capitalist methods not only had to be kept within certain bounds, but that it affects the nature of the proletarian state. He stressed that it inevitably resulted in "bureaucratic distortions of the state apparatus." When state industry in Russia went onto the so-called "commercial basis" and each industrial department had to make a profit, he pointed to "the inevitable rise of narrow departmental interests and excessive departmental zeal", giving rise to conflicts with the mass of workers.12 He connected this to the fact that "class struggle is inevitable" in "the period of transition from capitalism to socialism".13 He discussed the ramifications of this for the trade unions, which had to defend the working class against the distortions of the proletarian state and its management of industry. Indeed, he polemicized strongly against Trotsky on this issue, opposing his policy of "bureaucratic harassment of the trade unions"14 and his failure to deal with the fact that workers must not only build up a proletarian state but defend themselves against its mistakes and errors as well.

These are some of the themes that stand out in Lenin's discussion of the relationship of the transition to socialism to state capitalism.

Jim's report evades an assessment of the path to socialism

You might expect that Jim's report of 1991, entitled "Lenin's views on state capitalism under workers' rule -- review", would assess these views and their significance for the general theory of the transition to socialism. And his report does contain a large number of interesting extracts from Lenin's writing, characterized into four chronological periods. Each period was followed by relatively brief remarks by Jim. The report was accompanied by an even larger collection of extracts from Lenin's writings. But oddly enough this report never really expresses a view on general significance of "state capitalism under workers' rule". It snipes at various statements of Lenin's, but it avoids a direct statement on the general theoretical issues involved. Much of the report is devoted to Jim's complaints about how Lenin expressed his ideas. Jim says Lenin didn't repeat his ideas enough, or didn't express them "forcefully and directly" enough.

Indeed, contradictions abound in Jim's report. For example, it begins by praising Lenin for opposing the spinelessness of "the social-traitors [who] were renouncing the tasks of revolution and socialism with the excuse that the economic conditions were not yet ripe for the overthrow of capital. " [43/1] But within a few pages Jim starts developing his theme that the conditions weren't ripe in Russia, because of the peasant majority. [46/2] And by the end of the report, Jim suggests that they probably weren't ripe in "much of the rest of Europe" either. [56/1] So apparently Jim thinks that the spineless social-traitors were right after all.

Now, did Jim really think that those who thought the conditions weren't ripe for revolution were "spineless social-traitors", or was he just characterizing Lenin's views of them?15 Were the "social-traitors" correct to renounce revolution, or does Jim think that the revolution should have gone ahead even if there weren't any conditions for it? Or does he think the revolution should not have been for socialism, but for something else? And if so, what? He doesn't say.

Similarly, Jim's report is full of statements about Lenin's genius, about how he "broke new theoretical ground" about the transition to socialism, and stood "head and shoulders" above the "post-Lenin leadership". [56/2, 57/1] But the report also suggests that Lenin led a system of "bureaucratic tutelage", and that Lenin's ideas paved the way for Stalin's later despotism and "consolidated state capitalism". Well, there's a glowing endorsement for this "new theoretical ground"! According to Jim, Lenin ploughed the fields of despotism, but he did it so very, very well.

These contradictions aren't the result of a bad writing style. Jim generally spoke and wrote in a clear, confident, and forceful manner. If his report is full of equivocal ways of saying things, this is due to the fact that Jim -- a member of the Central Committee (CC) of the late Marxist-Leninist Party -- and a number of his co-thinkers became demoralized about revolution, socialism, and Marxism by 1990-91, but they didn't want to be known as people who would abandon ship. So they beat their breasts about their loyalty to revolution and opposition to "social-traitors" until the day they gathered sufficient strength, at which time they advocated that all anti-revisionist communist work should stop. But why should the work stop? Because they were demoralized with it? Not at all, they said, it was just that there were no objective conditions for it, because the workers weren't militant enough, because the theory was shaky, anything at all, but not that they didn't want to do it. And they sought to silence any debate on this.

Few people can carry out intense revolutionary work for all their lives. Most people, if they retain their communist convictions, become sympathizers and supporters rather than all-out organizers. There's nothing wrong with that. But Jim and company wanted to be known as the firmest of the firm, while jumping ship. So instead of advocating their views openly, they engaged in the peekaboo style which is apparent in the report.

Where the report comes from

Jim's report was part of the examination by the late Marxist-Leninist Party of the early years of the Bolshevik Revolution and the related theoretical issues. Jim discussed his work with other Central Committee members at CC meetings. The CC noted the report's failure to sum up the general significance of the issues it was supposed to be dealing with. The CC minutes of November 1991 state that the CC discussed Jim's report "and, beyond that, further views on what the actual answer to the question of transition to socialism is and on the significance of state capitalism under workers' rule or transition to socialism in Russia and elsewhere. The report may go through some modifications/additions including adding views on the significance of state capitalism under workers' rule for the transition to socialism."16 And the CC meeting of March 1992 returned to this point and stated that Jim's report "mainly has left for its completion a look back at Marx and Engels on state capitalism and seeing what is different or developed further in Lenin on state capitalism, and also the polishing of the collection of Lenin statements on state capitalism. "17

It wasn't until November 1993, two years later, that the MLP dissolved. Yet Jim never added to the report, despite the overriding importance the MLP gave to theoretical work on these questions. This is because in fact Jim already had reached a conclusion on the significance of Lenin's views on state capitalism -- and, more generally, on the Marxist idea of the transition to socialism. If he had stated his conclusions directly, it would have given rise to a debate, which he wanted to avoid. But if one pieces together Jim's comments throughout the report,, a general picture emerges. Jim held that Lenin's views were "unrealistic" and inconsistent. He holds that Lenin paved the way for Stalin and Stalinism, and abandons the view that the Stalinists were revisionists. He finds the path of the state takeover of the economy as dangerous, while instead looking favorably on reliance on the free-market. He doesn't explain how the marketplace will lead to socialism.

As we examine further Jim's report, we shall see that Jim's evidence that Lenin's views were "unrealistic" is simply that the revolution ultimately failed, and his evidence that Leninism is the source of Stalinism is that Stalin says so.

Was Lenin inconsistent?

Jim's main charge is that Lenin is inconsistent. Over and over, Jim's report presents Lenin as vacillating back and forth, swinging like a pendulum from one extreme to the other. A year after his report, at the Fourth Congress of the MLP in November 1992, referring to this supposed inconsistency, Jim would say that Leninism was fine but it was "inconsistent". But an "inconsistent" theorist is one who talks out of both sides of his mouth, and an inconsistent theory is a worthless one. So it is not surprising that in another year -- in the debate leading to the dissolution of the MLP in November 1993 -- Jim was denouncing Leninism altogether. 18

In his report, Jim basically demands that Lenin should have had gone into the October revolution with a precise definition of what the transition to socialism would look like. Lenin should have had a precise formula about what constituted state-capitalist elements of the economy, about what apparatus should be built, about the role each aspect of the economy would play, etc. There should have been no deviation from these definitions. And these formulas should have been repeated word for word in each article, without the slightest change in metaphors or imagery.

This is a profoundly utopian and anti-revolutionary demand. No new social system can be pictured in detail prior to its existence, and no large human endeavor is ever carried out exactly according to its original blueprint. Jim was engaging in vulgar mockery of the process of change.

Lenin had a different view of the revolutionary struggle. He held that one has to analyze the basic lines of the class struggle, and then constantly study and take account of the experience of the struggle. Above I have quoted Lenin pointing out socialism can only come into being "by passing through a series of varied, imperfect concrete attempts to create this or that socialist state". And in describing the revolutionary struggle, he wrote that communist must "Investigate, study, seek, divine, grasp that which is peculiarly national, specifically national in the concrete manner in which each country approaches the fulfillment of the single international task . . ." 19 Can it be believed that this ceases upon the achievement of proletarian political power, and the new society is then constructed according to a perfect blueprint?

So yes, the Bolshevik revolution went through a number of changes and zigzags and sharp turns in its early years, and Lenin studied attentively its experience and repeatedly adjusted his ideas about the transition to socialism. But having said this, it is remarkable how consistent -- throughout these many twists and turns -- was Lenin's adherence to the Marxist theoretical framework about these problems. Again and again, it will turn out that Jim's attempts to prove that Lenin vacillated about this framework are bogus. Jim's analysis often turns on quibbling over the words "socialism" and "socialist society," and conveniently forgetting that sometimes they are used to mean the full classless society, sometimes only the first phase of communism, and most often they are used to refer to transitional forms that are on the path towards the new society.

--Is the nationalization of the banks and large corporations equivalent to socialism?

Jim's first example of Lenin's vacillation is as follows:

". . . there is the question of how Lenin viewed the nationalization of the banks, syndicates, etc. . . . It seems that there is a shift in Lenin's views between April and September [1917--JG. ], a shift corresponding to the class shift within the soviets, from seeing the soviets as a 'revolutionary democratic government of the workers and peasants' to seeing them as some type of socialist power. " [44/2]

Jim argues that Lenin originally "stresses that this [nationalization] is not a socialist measure in itself, but only a step to socialism", but by September Lenin allegedly regarded such nationalizations as "a more immediate or direct step toward socialism. " [45/1]

But wait a minute! According to Jim, Lenin regarded nationalization as a step to socialism in April -- and still regarded it as a step to socialism in September. What a big shift in views! (To be precise, Lenin regarded nationalization as a step towards socialism only provided nationalization was carried out by at least a revolutionary-democratic state, and more so if carried out by a proletarian state.)

But Jim gives this example repeatedly, each time growing more emphatic. A bit later in his report, Jim states that:

"In April, he [Lenin] is relatively forceful that there is nothing socialist in the nationalization of the banks and syndicates. By September, a single nationalized state bank becomes 'nine-tenths of the socialist apparatus,' and 'the skeleton of socialist society. '" [46/2]

But it is not Lenin, but Jim who is inconsistent here. First he simplifies Lenin's statements in April -- that nationalization is not socialism, but a step towards socialism -- and converts them into the view that there is "nothing socialist" at all about nationalization. Apparently, for Jim there is "nothing socialist" about the transition towards socialism. And then Jim simplifies Lenin's later repetition of the idea that nationalization is a step to socialism and converts it into meaning that nationalization is just about all there is to socialism.

So in the same report Jim sometimes says Lenin's inconsistency was just over how far nationalization went towards socialism, but elsewhere Jim says the inconsistency is over whether nationalization is socialism. Jim isn't even consistent about Lenin's supposed inconsistency.

Of course Lenin's views about how quickly the transition to socialism would take place changed repeatedly. They varied continuously as the experience of the Russian revolutions of 1917 deepened. How rapidly would the proletariat be able to establish workers' control over industry? What would the resistance of the bourgeoisie amount to? Did Lenin put too much stress on what could be accomplished with revolutionary decrees in what he wrote in the weeks just prior to the October Revolution, when his attention and that of other comrades was focused on what a revolutionary government should proclaim to the whole country? Or is it more significant that Lenin's articles, even in September 1917 in preparation for the revolution, emphasized that a start should be made with workers' control (not ownership) of industry, and did not promise the immediate "introduction" of socialism? But through it all, the theoretical framework, of whether nationalization in itself constituted socialism, did not vary. And yet that is what Jim had charged.

Jim appears to put particular emphasis on Lenin's words in April against "'introducing' socialism" and claims it shows that Lenin thought, in Jim's words, that "the direct transition" was "out of the question". [44/1] Presumably this means that Jim thought that these words showed that Lenin had a clearer idea in April about the need for a protracted transition to socialism. In this regard, Jim's report cites Lenin saying in April that the proletariat could not "set itself the aim of 'introducing' socialism in a country of small peasants so long as the overwhelming majority of the population has not come to realize the need for a socialist revolution. " But Lenin kept on insisting on the same idea -- that Russia had to go through a protracted transition to socialism. Here he is, in Dec. 1917, after the October revolution, saying that "We have always known, said and emphasized that socialism cannot be 'introduced', that it takes shape in the course of the most intense, the most acute class struggle . . . we have always said that a long period of 'birth-pangs' lies between capitalism and socialism . . . "20 And here he is at the 3rd All-Russia Congress of Soviets of Workers', Soldiers' and Peasants' Deputies, in January 1918, saying that "we cannot leap straight into socialism. "21

Jim also apparently charges Lenin with being inconsistent because Lenin thought the significance of nationalization varied depending, among other things, on the government doing the nationalizing. This is presumably the basis of Jim's remark that Lenin's "shift" in views depended on the changes in the nature of the Soviets. As we have seen, Jim is wrong about the nature of Lenin's "shift" -- under no circumstances did Lenin equate nationalization with socialism. Nevertheless, Lenin did believe that the significance of nationalization could differ. In this, he was simply following the elementary Marxist principle that economic content of nationalization is utterly dependent on, among other things, who is doing the nationalizing.

Jim continues to even wilder criticisms of Lenin's views on the nationalization of the banks and syndicates. He ends up accusing these views of being an ideological preparation for Stalinist society. I will deal with this criticism later on, in the sections of this article dealing with Jim's attitude to the marketplace and his equation of Leninism with Stalinism. For now, let's note that Jim never discusses the significance of the nationalization of the banks and syndicates directly. Are these steps to socialism or not? Does society have to take over all of production, and how can this be done without nationalizing the banks and syndicates? Does nationalizing the banks play a role in developing nationwide control and accounting, or does a socialist government do this in some other way? Jim accuses Lenin of vagueness, while himself avoiding a clear answer.

--Are consumer co-ops equivalent to socialism?

Jim also argues that Lenin swung wildly back and forth on co-operatives and even thought consumer co-ops were the main thing in socialism. He writes of

"an over-optimism in relation to the consumer co-ops. Lenin's 1918 views on the cooperatives seems to be consistent with the exaggerations in such places as his 1923 article 'On Cooperation.' In 1923, the extension of the cooperatives becomes 'all that is necessary to build a complete socialist society. '" [49/2]

Jim likes this point so much he makes it at least three times. The last time, near the conclusion of the article, Jim sums up that, with respect to co-ops, Lenin put forward plenty of "contradictory viewpoints. " And he goes on to state:

"That is the only way to read the January, 1923 article 'On Co-operation. ' This article reflects an extreme in Lenin's views over a five or six year period, albeit at the outer limit of the pendulum swing. The views equating cooperatives with socialism were in line with similar opinions expressed in 1918. " [56/2]

If Lenin believed that socialism could be built simply out of consumer co-operatives, then he had indeed departed from Marxist socialism, which emphasizes that socialism involves the organization of production. But this assertion from Jim is simply ludicrous.

Take "On Co-operation". I have commented on this article in a previous issue of Communist Voice.22 It is clear that, Jim to the contrary, this article was concerned, not just with consumer co-ops, but especially with producer co-ops. Lenin referred to co-operatives where "the land on which they are situated and the means of production belong to the state, i. e. , the working class. " (vol. 33, p. 473) This can only be referring to a type of agricultural producers' co-op (collective farming); land and means of production mean little for consumer co-ops.

Similarly, what about Lenin's "1918 views on the co-operatives" which supposedly said that socialism could be built out of consumer co-ops alone? It turns out that the very statement by Lenin cited by Jim refers to producers' as well as consumers' co-operatives. Moreover, it was dealing with the need for accounting and control, and how to achieve it. Lenin was discussing the transition to socialism, not the full achievement of it. In this respect, he suggests that "The socialist state can arise only as a network of producers' and consumers' communes, which conscientiously keep account of their production and consumption, economize on labor, and steadily rise the productivity of labor, thus making it possible to reduce the working day to seven, six and even fewer hours. "23

Jim however ignores this and points only to a sentence later on in the paragraph: "Capitalism has left us a legacy of mass organizations which can facilitate our transition to the mass accounting and control of the distribution of goods, namely, the consumers' cooperative societies." See, Lenin talked only about consumer co-ops!!! But Lenin's idea is clear. There should be a network of producers' and consumers' co-ops, of which capitalism has left us a legacy of consumer co-ops. The consumer co-ops can only do some of the things which are needed -- it will help the transition to the mass accounting and control of distribution, while socialism also requires mass accounting and control of production, raising the productivity of labor, etc.

Moreover, Lenin doesn't refer to the co-ops and communes as equaling socialism. Indeed, in "On Co-operation", Lenin explicitly denied this. He referred to a series of political and economic conditions, including the building of these co-operatives, and then says "Is this not all that is necessary to build a complete socialist society? It is still not the building of socialist society, but it is all that is necessary and sufficient for it. " Jim is aware that Lenin said this, but it doesn't matter to him. He waves it aside, saying: "Expressions such as 'still not the building of socialist society, but it is all that is necessary and sufficient for it' were similar to other vague generalities that make it difficult to penetrate any precise economic analysis."

But Lenin's idea isn't that difficult to figure out. He believed that a series of conditions, including the voluntary organization of all peasants into a type of collective farm whose land and means of production belonged to all of society, would provide a stable basis for the transition to socialism, free of the crises in grain procurement and other economic disasters that had threatened the socialist revolution right from the start. One could ask how could this be achieved in Russia at that time. (See my comments on "On Co-operation", referred to in footnote 22, where I point to a number of factors that would have to be considered. ) But Jim's equation of Lenin's article with a new definition of socialism is mindlessness.

--Did Lenin recognize any dangers in state capitalism?

Jim also claims that Lenin was inconsistent on whether there are any dangers in a workers' state utilizing state capitalism. Jim writes, with respect to early 1918, that

"It was during this period that Lenin sets up the framework that the enemy is petty production against state capitalism (or sometimes state capitalism and socialism). However, it seems that there was something one-sided here. It is one thing to recognize the need for a certain compromise with state capitalism; and Lenin several times said that it must be admitted bluntly that it was a compromise. It is quite another to not squarely pose that such a compromise involves very real dangers; and Lenin tended towards the opposite extreme, rejecting any talk of state capitalist enemies or dangers. There is almost a boastful attitude that there is nothing to fear because the workers are in power: '. . . there is nothing terrible in it (state capitalism) for Soviet power, for the Soviet state is a state in which the power of the workers and the poor is assured. ' (vol. 27, p. 339)" [49/2]

Well, let's see. If we restrict ourselves to 1918, as Jim asks, we find that:

* Jim's own report admits that Lenin talked of various of these dangers. For example, Jim states that Lenin "admitted bluntly" that state capitalist methods were a compromise.

* Jim cites Lenin saying things such as that paying high salaries to specialists "implies the cessation -- in a certain field and to a certain degree -- of the offensive against capital".24 That's a pretty strong statement to make, considering that one is in the midst of a revolution against capital.

* Lenin also stated that "The corrupting influence of high salaries [i. e. salaries to a few that are very much higher than that of the typical worker] -- both upon the Soviet authorities . . . and upon the mass of the workers -- is indisputable."25 Thus Lenin refers both to the danger of undermining the socialist stance of the Soviet authorities as well as damaging the morale of the mass of workers.

Yet Jim insists that Lenin didn't "squarely pose" in 1918 that there were dangers! If anything, Lenin goes into this issue much more deeply than Jim. In fact, Jim -- who poses as sterner than Lenin against extra-high salaries and privileges for specialists and experts -- is altogether silent about the danger of these salaries and privileges when it comes to private capitalism. We shall see that Jim forgets all about the dangers of salary differentials and privileges when it comes to considering marketplace capitalism, as if these differentials only existed in state-regulated capitalism and weren't an inherent part of market capitalism.

Waving aside the content of what Lenin said, Jim instead denounces Lenin's view that there is "nothing terrible" for the Soviet state in state-regulated capitalism. Jim calls this boastful. But does state-regulated capitalism involve a greater danger than the private capitalism it is replacing? Does he disagree with Lenin's view that the Soviet state can make use of state-regulated capitalism in the course of preparing the proletariat to take over the economy altogether? Or does Jim think that the Soviet proletariat was in the position to simply take over and run industry without trying to make use of the expertise of the capitalists and the specialists for awhile? Lenin's statements about state-regulated capitalism and about certain compromises in the state sector with capitalism (such as extra-high salaries for specialists) raises the question of whether such methods are typical of one stage of the transition to socialism, or were simply an especially terrible feature of Russia in 1918. It seems to me that such compromises are typical. But Jim doesn't speak to this. He just insists that one must repeat over and over that the revolution is using dangerous methods. Apparently he is demanding that, whether advancing or retreating, the socialist activists should only speak of revolution in tones of dread apprehension.

Now let's focus a bit more closely on Lenin's views, not on Soviet use of state-capitalism in general (which includes state regulation of the private sector), but just on state-capitalist methods in the state sector. So far I have just referred to Lenin's views in 1918 on this question. According to Jim, it was "in the spring of 1918 that Lenin gave some of his more insightful views about state capitalism within the state sector. The main focus was on the question of high pay and privileges for the managers and experts. " [49/1] But Lenin focused on high pay and privileges in 1918 because this was the main way state capitalism was manifested in the state sector at that time. It wasn't until the New Economic Policy of 1921 that the state industry went on to the commercial basis. At that time, Lenin said a lot more about state capitalism in the state sector:

* He pointed to the rise of contradictions between the mass of workers and the management of state industry, and he stressed that the class struggle continues in the period of transition to socialism.26

* He held that the trade unions had to defend the workers in state industry against the bureaucratic distortions of the state, and discussed the implications of this for the trade unions.27

* He stressed, in his polemic against Trotsky's commandism with respect to the trade unions, that the workers' state had bureaucratic distortions and the trade unions had to be one of the tools the workers used against such distortions. 28

* Moreover, as Jim himself says in his report, Lenin tended to call the state enterprises run on a commercial basis not socialist enterprises, but "nationalized or state or even socialized enterprises". [55/1]

Yet Jim insists that Lenin's remarks in 1918 were his main discussion of state capitalism in the state sector. He says that Lenin only gave "some clues of the profundity of the issue" and that these clues only leave "a taste that leaves one hungry to go beyond the issue of high salaries . . ." [50/1] But Jim must not have been that hungry after all, because when his report reached Lenin's striking views about the state sector during NEP, Jim just waved them aside as "not directly pos(ing) the weaknesses in the state". Not directly posing the weaknesses??? Lenin just talked about the bureaucratic distortions of the state apparatus, called for the trade unions to fight the weaknesses in the state, laid stress on the continuation of the class struggle during the transition to socialism, fought Trotsky's commandism, etc. But according to Jim, this just "touches on this issue [weaknesses in the state sector]". Incredible!

Well, what would be a more direct discussion of weaknesses in the state? What new point has Jim come up with? The only thing Jim can think of, is the question of high salaries. This is the only example he gives, and it is an issue which Lenin had discussed in great detail. But Jim himself blows hot and cold on this. When Jim discussed Lenin's writings of 1918 about high salaries, Jim claimed that Lenin was only dealing with a peripheral issue. But when Jim discusses the NEP period, the issue of high salaries apparently becomes the key issue for him. He claims that Lenin no longer talked about the issue of high salaries during NEP. Jim apparently doesn't understand the connection of extra-high salaries to the class struggle that Lenin laid stress on.

But as a matter of fact, Jim's view that Lenin stopped talking directly about the issue of high salaries is not correct. Lenin brings up the point again in, for example, his "Report on the NEP at the Seventh Moscow Gubernia Conference of the RCP", Oct. 29, 1921.29 Of course, gradually eliminating extra-high salaries would have been part of a renewed advance against capital. Yet Jim also criticizes Lenin for talking about the perspective of such an advance. He complains that Lenin seems to

"present the end of the 'retreat' as the imminent task, to be accomplished as soon as the forces of organization and control had the strength to go back on the offensive against the free market, etc. " [56/1]

Thus Jim wants it both ways: he chides Lenin both for putting forward the perspective of limiting and ending the compromises with capital (i. e. ending the "retreat"), and for supposedly having given up the perspective that high salaries, etc. were a compromise. There doesn't seem to be any consistency here except that Jim simply wants to say the opposite of whatever Lenin says. Or does Jim think that capitalism and "the free market" can grow and grow, but without high salaries? It does correspond to modern neo-conservative ideas to complain only about high salaries in the state sector and to forget about them in the private sector: in this sense, it is consistent to complain about the perspective of an offensive against capital -- if one has in mind private capital -- while simultaneously complaining about high salaries in the state sector.

--Is state capitalism equal to socialism?

But what Jim is really trying to say is that Lenin equates state capitalism with socialism. He states that:

"Lenin called on the workers to organize the economy 'along state capitalist lines'. But what does that mean? Either it is just a phrase, or it means something quite distinct from socialism. Granted, this is a process of transition where there is no brick wall between the old and the new. Nonetheless, Lenin is clearly striving to guide the economy along the rails of state capitalism. One would think this would require a clear perspective of switching tracks towards a socialist organization down the way. But that perspective wasn't there (or if it was there it was only a flicker and not a guiding light). " [49/2-50/1]

This is simply Jim turning things on their head. Lenin quite clearly stressed that Russia does not have socialism but is searching for the path of transition to socialism; Lenin indicated that various measures were a compromise with socialist principles and a "step backwards" and were state capitalism; he writes of the different economic systems coexisting in Russia; and then Jim says that Lenin hadn't clarified that this is really "something quite distinct from" the classless society.

Jim claims that Lenin gave no indication of how to proceed towards socialism, but it's Jim who gives no indication. What is the alternative "track" towards socialist organization that Jim is talking about? How does he conceive the transition? As we shall see later, the only alternative Jim suggests is the direct rule of the marketplace, which he opposes to the step-by-step extension of social control of the economy.

Lenin, on the other hand, discussed the conditions he felt were necessary to allow an advance towards socialism. Take the question of extra-high salaries to the specialists and the bourgeoisie. He called this an "evil legacy of capitalism" and says the Soviet Republic can be liberated from this "only by organizing ourselves . . . If the class-conscious advanced workers and poor peasants manage with the aid of the Soviet institutions to organize, become disciplined, pull themselves together, create powerful labor discipline in the course of one year, then in a year's time we shall throw off this 'tribute'. "30 He talked of extending the network of producers' and consumers' communes; the development of a non-financial type of competition among communes; the necessity to develop mass participation in administration; the need for nationwide accounting and control; etc. Some measures worked and some measures didn't; some estimates were right and some were wrong. But the whole emphasis was on what is needed to provide a "conscious mass advance" and on the contrast between the old way of doing things, which has to be compromised with for the time being, and the new way. Lenin's writings provide one with a host of questions to ask and standards to use in judging what worked and what didn't and why. Jim would replace this with the idea that there is an alternative track to socialism, which however he does not care to reveal to us.

Jim's marketplace socialism

But enough of Jim's double-talk about Lenin's views. Now let's look at some of Jim's points that indicate his own view on socialism and how to get there or whether it will ever be possible to achieve socialism.

--Is it a retreat to go back to private capitalism?

Jim is skeptical of almost every transitional step towards socialism, as seen when he accuses Lenin of not telling the masses that these steps were fraught with untold dangers. But Jim is noticeably enthusiastic about one particular step. He is excited about the moves to free trade in grain during the New Economic Policy.

In the NEP, first the Soviet state tried to replace the state grain monopoly (in which all surplus grain went to the state) with a system of what was called "commodity exchange" which was apparently a somewhat state-regulated way in which the peasants could exchange the surplus grain with state industry. Then there was a further retreat, and Lenin said that what resulted was just ordinary "buying and selling", just the usual capitalist marketplace. Lenin stressed that these were "retreats". But Jim, instead of following his usual pattern and saying that Lenin's term "retreat" is vague, and "leaves one hungry" for a deeper discussion of the dangers, this time accuses Lenin of seeing dangers that aren't there. Jim denies that the free marketplace in grain, and that the increased role of the marketplace in the countryside in general, is a retreat at all.

Thus Jim asks "Was it or wasn't it a retreat in fact?" And he reasons

"Was going over from state rationing of extreme scarcity to a certain freedom of trade a 'retreat' or an advance from the economic point of view of socialism?" [56/1]

If Jim wanted to be consistent in this reasoning, then he should also have questioned whether extra-high salaries for bourgeois specialists were a retreat. He should have asked, in the exact same way: "Was going over from industrial disorganization to a certain compromise with capitalist methods (such as extra-high salaries and privileges for the bourgeois specialists) a 'retreat' or an advance from the economic point of view of socialism?"

Lenin's answer to both these questions was that he "admitted bluntly", as Jim puts it, that these transitional measures are compromises with socialist principle, and to point out the conditions needed to overcome these compromises or "retreats". [49/2] Jim's point of view is to denounce up and down anything associated with the state sector, but to question whether unleashing the force of the marketplace is a retreat.

So Jim finds that the state sector in NEP period is suspect, but the marketplace is just fine. He finds that the co-ops are pretty suspect, but "freedom of trade" is not. When it is a question of going over from private capitalism to state-regulated capitalism, Jim gloomily wonders if this means having illusions in state capitalism really being socialism. But when it is a question of the free market, Jim says the problem is that Lenin only had a "partial recognition" of the need for it, and his views "were not consistent or systematic. "

Jim even tries to prove that Lenin had come to see the need of the free marketplace as allegedly the best way to achieve socialism. He cites and runs with one sentence of Lenin's: "Theoretically speaking, state monopoly is not necessarily the best system from the standpoint of the interests of socialism."31 Lenin said this in a paragraph discussing the replacement of the "surplus appropriation system" for grain, in which there was "confiscation of all surpluses", with a tax in kind. This line of thought would lead Lenin, in "On Co-operation", to renew the emphasis on gradually organizing the entire peasantry into agricultural producer co-ops as key to bringing them towards socialism. But Jim seems to take Lenin's statement to mean that state interference should be replaced by private capitalism. Jim proceeds to advocate that state regulation and control of capitalism ("state-capitalism") is supposedly a "hot house" product. The implication is that the free market is the appropriate basis for the transition to socialism.

Moreover, in quoting Lenin's article, "The Role and Functions of the Trade Unions Under the NEP," January 1922, Jim presents it as if NEP simply meant an unrestricted free market. He leaves out Lenin's view that "The proletarian state may, without changing its own nature, permit freedom to trade and the development of capitalism only within certain bounds, and only on the condition that the state regulates (supervises, controls, determines the forms and methods of, etc.) private trade and private capitalism. "32 [53/2-54/1]

Overall, Jim argues that state regulation of capitalism was impossible in Russian conditions -- it would simply be a "'hot house' state capitalism". So long as the proletariat sought to limit and restrict and control capitalism, Jim argues, "there were but two possibilities: either a social explosion, or bureaucratic tutelage. " [56/1] This leads to the view that, to avoid this dilemma, there was only one way out: the development of private capitalism.

--Is it possible to lead the small producers onto the path of amalgamation?

Jim argues that the socialist revolution could not regulate private capitalism without bureaucratic tutelage, because monopolies, trusts, conglomerates, banks were really a superficial feature of Russian economy. (Indeed, he suggests that this was also the case in "much of the rest of Europe". ) He argues that "large, modern production" in Russia was devastated, while the regulation of small-scale production in order to direct it towards modern production "was an emergency measure imposed from above, a government decree managed by tens of thousands of bureaucrats, on top of millions of small to tiny producers. "[56/1] His conclusion is that there was no alternative but just freeing the marketplace from "bureaucratic tutelage", and he accuses Lenin of inconsistency because Lenin wished to hedge the marketplace with restrictions and controls and eventually to overcome it.

Jim seems to assume that all the small producers must be wiped out by monopolies and trusts before the material conditions exist for a socialist revolution. But Marxist theory, while pointing out that modern socialism springs from the development of large-scale production under capitalism, never assumed that monopoly and large corporations would wipe out all middle and small capital and all petty-bourgeois production. Instead it held that large-scale production was the leading factor in the economy, and that the proletariat could step by step amalgamate and transform small-scale production. Jim doesn't even regard this as a possibility. Such amalgamation and transformation is simply bureaucracy in Jim's eyes.

--Do agricultural co-ops have anything to do with the transition to socialism?

This is what apparently lies behind Jim's grudge against co-ops in general and agricultural producers' co-ops, or collective farms, in particular. He doesn't want to consider ways in which the proletariat can actively transform the countryside in the direction of large-scale production. Marxist theory had proposed that this was possible. It paid attention to collective farms as a way in which the proletariat, coming to power in a country with a large peasant population, could help move the peasants towards socialism. For example, in his article "The Peasant Question in France and Germany", Engels wrote in 1894 that, after taking power, the proletariat's task with respect to the small peasants "consists, in the first place, in effecting a transition of his private enterprise and private possession to co-operative ones, not forcibly but by dint of example and the proffer of social assistance for this purpose. " (Selected Works, Vol. II, pp. 458, 470. ) He goes on to talk about different types of co-operatives and other relevant issues.

Jim however refuses to consider what role the co-ops can play in transforming small production. He waves aside the issue. He instead repeats over and over that the co-ops are not socialism, are not the classless society, in order to avoid dealing with the issue at hand--whether co-ops can play a role in the transition to socialism.

Thus, as we have seen, he falsely accuses Lenin of talking only of consumer co-ops. With this dodge, he avoids dealing with Lenin's views concerning collective farms, or agricultural producers' co-ops, and he avoids dealing with the role of producers' co-ops altogether.

--Is nationwide accounting and control realistic?

Jim refers briefly to the early 1918 period of the revolution and argues that "it is clear that Lenin's general plan for establishing 'accounting and control' was unrealistic. " [49/2] But if the workers can't in fact control the economy, this means that the only alternative is the free market. And this is precisely what Jim insinuates.

This is the key issue. How can the workers' take over the economy? Lenin suggested that it was necessary to start with establishing "accounting and control". If this was impossible, then what's left of the socialist revolution?

Jim implies that the idea of "accounting and control" failed already in the early 1918 period. But what is his evidence? He has none.

Instead Jim fraudulently presents the failure of an attempt to develop a system of state-regulated exchange called "commodity exchange" in 1921 as the failure of accounting and control in early 1918. The steps towards accounting and control in early 1918 were quite different from the "commodity exchange" plan of 1921; and the conditions were quite different in early 1918 and 1921. Yet, talking about early 1918, Jim writes that "in place of the free market and a money economy, Lenin hoped for what he later described as 'commodity exchange' of industrial and agricultural goods through the grain monopoly and state control of trade. " [49/2] Lenin never described the "commodity exchange" plan as referring to anything but 1921, and in one of the main articles describing the failure of the "commodity exchange" plan, Lenin explicitly talked about the plans of early 1918 as something quite different.

How different? Well, Jim -- with his talk about the "commodity exchange" plan supposedly being in effect in early 1918 -- claims that the Bolsheviks sought to replace "the free market and a money economy" back then. This just isn't true. Instead -- prior to the Civil War and "War Communism" -- there was an attempt to gradually transform the economy, with an enlarging state sector competing with the private sector. This assumed the continued existence of a market (although a regulated one), and of money. In an article in late 1921, Lenin described the situation in early 1918 as "We assumed that the two systems -- state production and distribution and private commodity production and distribution -- would compete with each other, . . . " And he pointed out that the proletariat "made an attempt to pass, as gradually as possible, breaking up as little of the old as possible, to the new social relations while adapting itself, as much as possible, to the conditions then prevailing. "33

Why does Jim drag in the "commodity exchange" system of 1921 when discussing the situation in early 1918? It's because the "commodity exchange" system failed. Since Jim has no evidence for a general failure of "accounting and control" in early 1918, he instead cites the failure of the "commodity exchange" system that was to be used in the countryside in 1921.

But why was Jim so concerned to prove that "accounting and control" failed precisely in early 1918? Well, he presents this period as almost idyllic, being "before the civil war and the devastation of the working class". [49/1-2] So, he implies, if "accounting and control" failed in this period, then it would show that the revolution wasn't overwhelmed by hardships, civil war, drought and blockade, but just failed of itself. Actually, the early 1918 period was a short period which faced dealing with the damage World War I inflicted on the economy and which saw dramatic political events (making and breaking of alliances among the parties of the toilers; German invasion and the controversial Brest-Litovsk treaty; the beginning of Allied invasion; and massive debate among the proletariat on how to take control of industry), but I will comment more on this and on the material conditions in general in the continuation of this article in later issues of Communist Voice.

--Should the state take over industry?

Jim repeatedly suggests that the problem with the socialist revolution was dealing with small-scale and individual production in the countryside. But he also seems to be skeptical of state control over industry. This appears in his view that the general plan for accounting and control was "unrealistic", since accounting and control was the path leading to the takeover of industry and not simply a matter of relations with the countryside. And Jim complains repeatedly about Lenin's remarks about taking over industry. Whenever he deals with Lenin's views on taking over industry, he accuses Lenin of believing that nationalization of industry, or even nationalization of the banks alone, constitutes socialism. He never is willing to discuss that the takeover of industry is a key part of the transition to socialism.

In one place, Jim raises the general issue of state regulation of the economy. He refers to "State and Revolution", "The Impending Catastrophe and How to Combat It" and "Can the Bolsheviks Retain State Power?" and points out that Lenin wrote "in general, sweeping terms about the proletarian soviets taking hold of" the economy. [45/1] One might think that Jim would support this perspective, but Jim only cites such statements of Lenin's to object to them. He identifies this perspective as Lenin allegedly identifying socialism with state capitalism. To do so, he simplifies Lenin's discussion of the proletarian takeover of the economy as simply the Soviets "taking hold of the economic mechanism of state capitalism". Thus Jim identifies the whole process of the proletariat taking over the economy with state capitalism. Having thus drastically simplified Lenin's views, he feels safe in accusing Lenin of identifying one of the transitional methods -- the use of state-regulated capitalism -- with the classless socialist society itself.

So let's see. Lenin devoted a whole pamphlet, "State and Revolution", to denouncing the opportunist worship of state, and to reiterating the Marxist views on the state withering away in the classless society. And what does Jim conclude -- that Lenin identified the classless society with state capitalism, the state regulation of capitalism! Lenin discussed the Marxist views on state ownership and on how the proletariat takes over the entire economy, and Jim concludes that Lenin believed that mere regulation of capitalism amounts to socialism. Lenin carefully refrained from saying anywhere that the necessary nationalizations mean that socialism has arrived. And Jim concludes that Lenin is not describing transitional measures, but the future classless society. This is not simply an exercise in tearing words out of context by Jim. It displays an allergy to the concept that the proletariat must have the state take over the entire economy as a step towards a future society without capitalists or a state.

--What other means of transition are there?

So Jim is skeptical of co-ops, nationwide accounting and control, state control of the economy, etc. What other type of transition to socialism does he envision? He accuses Lenin of not having "a clear perspective of switching tracks towards a socialist organization down the way. " [50/1, emphasis added] But Jim never mentions what this other track is. Is it a jump directly to the classless society? But he is surely not proposing that for Russia, where he thought the material conditions for socialism doesn't exist. Or is it the free market?

On the term "state capitalism"

By now it should be clear that a good deal of Jim's argumentation centers on confusing different uses of the term "state capitalism". This term refers to at least five different things.

(A) There is ordinary state capitalism. This is the economy that has developed in most advanced industrialized states of the capitalist world, in which the state plays a big role -- not just in owning a number of corporations, but through marketing boards, commissions, and a variety of regulations. The state -- no matter how many elections are organized -- remains a dictatorship of the capitalist class; its bureaucracy is connected to the capitalists by a thousand strings; and state ownership is simply ownership on behalf of the capitalist class or its most powerful sections. During wars, the role of the state generally expands tremendously in capitalist countries, and part of this expansion usually remains after the war. Lenin stated repeatedly that, in a capitalist state, "'war-time socialism' is in fact war-time state-monopoly capitalism, or, to put it more simply and clearly, war-time penal servitude for the workers and war-time protection for capitalist profits."34

(B) There is revisionist state capitalism. This state capitalism is actually a special variety of the first type, since it is the dictatorship of a bourgeois class. It is the economic system that generally prevails in the countries ruled by revisionist parties, such as China, Vietnam, Cuba, and previously the late Soviet Union and Eastern Europe. It differs from Western state capitalism in generally having a much more bureaucratic state, and in the status of the revisionist bourgeoisie being based directly on position in the ruling party and bureaucracy. There may also be other capitalists (especially smaller ones) and petty-bourgeois strata of a more traditional type. The analysis of this type of state capitalism is specially important to us today, as it is the base for the revisionist regimes which must be exposed as fake communism and real capitalism. But it wasn't discussed by Lenin since it hadn't developed yet.

(C) There is capitalism regulated by a revolutionary-democratic government of the toilers. In this case, the masses have seized power and are utilizing state power to achieve their revolutionary aims. State ownership and state regulation do not make such governments socialist. But Lenin felt that this type of state capitalism, i.e. the extension of the economic role of the revolutionary-democratic state, was a step towards socialism. Unless the revolution becomes a socialist one, however, such a revolutionary-democratic regime will eventually be succeeded by, or degenerate into, an ordinary capitalist rule.

(D) There is capitalism regulated by a proletarian government. After a socialist revolution, it is unlikely that the revolutionary proletarian government will be able to take over all the economy at once. It will increasingly seek to develop workers' control and regulation over the rest of the economy. The capitalist and petty-bourgeois enterprises and trade regulated by the government constitute a "state-capitalist" part of the economy.

(E) As well, there are bourgeois methods in the state sector run by a proletarian government. The socialist revolution strives to smash up and replace the old state machine by an administration by the workers and the masses. But certain compromises with the old bourgeois methods will generally be necessary for a time -- such as specially high salaries and privileges for specialists. And putting state industry on a profit basis is a compromise that is so deep that it immediately affects the relations of the state and the ruling party with the masses of workers.

But Jim simply jumbles things all together when he discusses Lenin's views. He ignores all distinctions and simply characterizes Lenin's idea as "the transition to socialism through state capitalism"35 or that Lenin is "clearly striving to guide the economy along the rails of state capitalism".36 [49/1, 50/1] Jim thus implicitly advocates that any economy that has some features of state capitalism (in the sense of D and E above) can be characterized overall as state capitalism, as if it were an ordinary capitalist economy (in the sense of A above). He thus makes it out that Lenin believed that the transitional economy is nothing but state capitalism. Moreover, since Jim oversimplifies even more by presenting Lenin's view of the transitional economy as supposedly his view of socialism, Jim presents Lenin as identifying socialism with state capitalism.

But this amounts in part to tearing words out of context and to ignoring the different uses of the term "state-capitalist". In 1918 Lenin expressed the essence of what he had in mind by saying that ". . . Russia cannot advance from the economic situation now existing here without traversing the ground which is common to state capitalism and to socialism (national accounting and control). . ."37 The point was not to build ordinary state capitalism in Russia, but to "develop national accounting and control", which was a key to developing the proletariat's ability to run the economy. Lenin described the various sectors of the economy in Russia, and believed that organizing the private capitalist and petty-bourgeois sectors into the state capitalist sector would be a step forward. The measure of success would be the development of the proletariat's ability to direct the economy; the development of a revolutionary state ownership; etc.

Jim's picture of the transitional economy is substantially different. There is state capitalism, which he seems to identify with ordinary state capitalism because he tends to describe it as "bureaucratic tutelage". There are things he sneers at, such as the co-ops. There is small peasant enterprise. But is there, in his view, anything socialist (that is, transitional towards socialism) in the economy at that time? He tends to present it as just ordinary state capitalism or the marketplace, with an unknown alternative track to socialism that was never taken.

Jim's way of measuring the economy seems to be that the various types of state capitalism differ only quantitatively, only in their degree of consolidation. He says that the later Stalinist regime in the Soviet Union was "consolidated state capitalism", which is correct. But his implication is that revisionist economy differs from a transitional economy simply in how consolidated a state-capitalism it is. And that is simply not true. After all, what does it mean to make the degree of consolidation the only issue? If the state controls more of the economy, that would be a more consolidated system of state control, wouldn't it? But the higher degree of state ownership might reflect that the economy is closer to socialism. The type of economy -- and the type of state capitalism involved -- depends on whether there is a proletarian, a revolutionary-democratic, or a capitalist state; on whether the control is used to create "war-time penal servitude" for the workers (as Lenin characterized ordinary state capitalism in World War I) or to help benefit the workers and peasants; on whether a new bourgeoisie is consolidating or the country is moving closer to socialism; etc. And these questions can't simply be reduced to how consolidated the system is, but involve definite economic and social facts about the nature of the system, such as: Are the workers and their party doing the regulating and controlling? Is the ruling party actually a party of the working masses? Is the regulation designed to increase the profits of the rich, or are the rich being compelled to help the proletariat organize?

The framework of Jim's report, however, is not organized around these questions. It is organized on the idea of a scale on which one measures the degree of state-capitalism. Jim in essence presents that one can rank Lenin on this scale by seeing how many times he repeats various formulations, or whether he is supposedly too enthusiastic about nationwide control and accounting ("state-capitalism").

In my opinion, a better terminology on the issue of state capitalism and the transition period would be useful, partly to avoid the confusion-mongering which Jim revels in and mainly because the issue of revisionist state-capitalism is so important to us. I will discuss this in part two of my article. For now, I wish to go on to one of the main implications from Jim's theory that the various types of state-capitalism differ only in degree.

Is Marxism-Leninism the source of Stalinism?

Jim's report hints repeatedly that Lenin's views were the source of Stalinism. He presents Lenin's views as justifying the building of state-capitalism, while the "post-Lenin leadership" consolidated this state-capitalism.

In line with this, Jim doesn't attribute a class difference to the Bolshevik regime when it was really a revolutionary proletarian force and the state-capitalist system under the later Stalinist and revisionist leadership. It's simply a matter of degree. And thus he doesn't deal with the main drift of Lenin's ideas and how well it reflected the needs of the class struggle, but instead assesses how many times Lenin repeated various ideas, the exact degree of vehemence, etc. (He gets this wrong, but this is what he focuses on. )

--Jim's proof: Stalin says so

To show that Stalin really was following Lenin, Jim makes the astonishing revelation that Stalin said so. Of course, Stalin also claimed to be following Marx, to be loyal to socialism and communism, to be leading the class struggle, and to be organizing the working class. Should all these things be set aside too? Well, within a couple of years Jim and his co-thinkers would be suggesting they had unanswered questions about all of these things.

To prove his point, Jim cites one particular example in the collection of writings by Stalin entitled On the Opposition. Stalin must quote Lenin dozens and dozens of times in these articles, but Jim's argument is that he is has found one case in which "It cannot be said that Lenin was just misquoted here. " [47/1] If this is the only one, then surely it shows that Stalin had a hard time adapting Leninism to his purposes.

Well, let's examine this case. Jim cites an argument in 1925 between Stalin and Sokolnikov. All Jim knows about this argument is Stalin's side of it in one of his speeches at the 14th Congress of the CPSU(B), and he cites page 244 of "On the Opposition".38 Jim admits he doesn't really know what the argument was about; after quoting a few words from Sokolnikov which Stalin used, Jim says "Who knows the context in which Sokolnikov raised this. " [47/1] But Jim tries to draw a conclusion anyway. He doesn't think that one needs to know the substance of what is being argued about.

It seems that part of the debate is over the nature of the State Bank of 1925 and, more generally, how to regard the state sector of the Soviet economy under NEP in late 1925. If one assumed that the Soviet economy and politics hadn't changed much since Lenin died in January 1924, one might refer to Lenin's comments about the relationship of NEP to the state sector. As we pointed out earlier in this article, Lenin had a lot to say about this. In the early 20's, what he said included:

* that there were "bureaucratic distortions in the state apparatus", a point which he maintained vehemently against Trotsky;

* that NEP meant "the inevitable rise of narrow departmental interests and excessive departmental zeal", giving rise to conflicts between industrial management and the state apparatus on one side and the mass of workers on the other;

* that the trade unions must defend the workers against these distortions and this excessive departmental zeal;

* that the class struggle is inevitable under NEP and until the disappearance of classes; etc.

Stalin refers to none of these views of Lenin, any of which struck hard against his viewpoint.

What does Stalin do? Jim relates that Stalin quoted a remark of Lenin's from prior to the October Revolution in 1917 "about the state bank being 'nine-tenths of the socialist apparatus' and the 'skeleton of the socialist society. '" To make this more dramatic, Jim leaves out the context and Lenin's qualifying words, in which Lenin said that "That will be nationwide book-keeping, nation-wide accounting of the production and distribution of goods, that will be, so to speak, something in the nature of the skeleton of socialist society. '" (underlining added) Lenin was arguing that the revolutionary proletariat can transform the banking apparatus as part of constructing its transitional apparatus of national accounting and control. In practice, the state bank didn't play anywhere near as much of a role as Lenin had thought at the time of this article. That's why Lenin's articles after the October revolution didn't present the bank in the same way. But the general point being made by Lenin in this article was suggestions how to begin building the apparatus of nationwide accounting and control.

But Stalin and Sokolnikov are apparently arguing over how revolutionary the Soviet state apparatus still was in 1925. Lenin's remark of 1917 had simply stated that a revolutionary proletarian state can make use of the banking apparatus. It said nothing about the existence of the state bank proving that the state was still revolutionary and socialist. And it said nothing about the particular features of the State Bank under NEP. Lenin always consistently emphasized that the nature of state institutions depended on, among other things, who controlled the state. State regulation, in his view, could help impose "war-time penal servitude" upon the workers, if carried out by the bourgeoisie; it could help prepare for the workers running the entire economy, if carried out by a revolutionary socialist government; it could have "bureaucratic distortions", even though it took place during the process of transition towards socialism. It is circular reasoning to deduce, from the fact that a revolutionary proletarian state could make use of a State Bank, that the state apparatus is revolutionary and proletarian because there is a State Bank. That is essentially what Stalin does. And Jim endorses this reasoning, and tells us that it can't be said that Lenin is being distorted.

This is the type of logical somersaults that Jim has to turn in order to show that Leninism supposed gave rise to Stalinism. But this example does show us one thing. We now know why Jim concentrates so much attention on Lenin's remark on the State Bank. It's because Stalin did. And instead of thinking the issue through for himself, Jim just accepted Stalin's views on this issue.

--Did Lenin think concessions were the only form of state capitalism?

Similarly, Jim wants to prove that Lenin repeatedly suggested that concessions (leases and deals with private capitalists, local or foreign) were the only form of compromise with capitalism being made use of by the Soviet government. Why? Because Stalin, in the speech we have just been discussing, presents "concessions and leases" as the main forms of "state capitalism". Stalin presents his view of this as Lenin's conception, and Jim naturally takes Stalin's word for what Leninism is. Jim's problem is that Lenin repeatedly presented the issue of "state capitalism" in a much broader light, as indeed can be seen even in various statements from Lenin cited in Jim's own report.

So Jim does his usual trick -- he pulls a rabbit out of his hat. He waves aside the main drift of Lenin's writings, and the themes which Lenin polemicizes on over and over again. Jim is the David Copperfield of political analysts, and he can make Lenin's overall analysis disappear, while triumphantly displaying that cute rabbit. Concretely, Jim rushes to pull another passage of Lenin's out of context.

Thus Jim cites the article "On Co-operation" and claims that it "defin(es) state capitalism as essentially concessions, plus the cooperative societies". [55/1] (However, Jim can't decide whether it presented the co-ops as state-capitalism or socialism, and he argues both ways on this.) But this article, which is a rough sketch, focuses on the issue of agricultural collectives in the countryside, as its title might suggest. It doesn't focus on state industry, nor the government apparatus, nor the tasks of the trade unions in defending the workers against capitalism. So naturally, this article is the place where Jim thinks one should try to find Lenin's discussion of what's up with state industry and the state sector.39

--On Co-operation

Indeed, Jim lays great stress on "On Co-operation". He says that "articles such as 'On Co-operation' . . . are one-sided along the same lines which eventually became the state capitalist orthodoxy. " Let's see. "On Co-operation" fervently advocated voluntary collectivization, and suggested that it would be a protracted process. The Stalinist, revisionist regime implemented forced and hurried collectivization. "On Co-operation" says that the proper type of co-ops provides the basis for building socialism, but isn't itself socialism. The revisionist regime said that state industry plus co-ops is socialism, and it eventually was debating where it was the full, communist, classless society. So what does Jim conclude? The "post-Lenin leadership" was simply following Lenin's plan.

No doubt, Stalin cited "On Co-operation" in various debates, as he cited many other articles of Lenin, works of Marx, the ideas of socialism and the class struggle, etc. But that doesn't mean he was a Leninist any more than it means that the revisionist regime was "socialist" and based on the "working class".

--High salaries etc.

Similarly, why does Jim do somersaults to prove that Lenin supposedly vacillated on whether there was a danger or compromise involved in ultra-high salaries for specialists under socialism? It's because the Stalinist regime became notorious for its huge salary differentials. And Jim wants to prove that they were simply following Lenin, perhaps going a bit further than he would have, but basically on the same road. Thus Jim has to stretch and tear at Lenin's writing.

It is precisely examples like this that are the evidence for Jim's conclusion, at the end of his report, that Lenin's "framework" had

"a number of big loopholes in it. The post-Lenin leadership made good use of these weaknesses . . . in favor of their self-satisfied optimism that lead to pawning off a consolidated state capitalism as the victory of socialism. " [57/2]

--Bureaucratic tutelage

Another way in which Jim implies that Stalinism simply follows from Leninism and from the socialist revolution is in his discussion of "bureaucratic tutelage". The Bolshevik revolution -- so long as it was a live socialist revolution -- was inseparable from the mass initiative and activity of the proletariat and large numbers of allied toilers. It faced protracted hardship, exhaustion and devastation that finally sapped the strength of the militant proletariat, and also, along with the many zigzags of the revolution, divided the proletariat, poor peasants and communist activists among themselves. This provided the basis for the Bolshevik revolution eventually degenerating into a state capitalist despotism. A fundamental dividing line between revolutionary socialism and revisionism is whether the regime really does represent the will of the proletariat, or whether it is ruling over the masses.

Lenin's plans were based on the revolutionary action of the masses. Even his plans for the utilization of state capitalism were designed to provide conditions for increasing the knowledge and ability to act of the proletariat. For example, discussing state regulation of capitalism under NEP, Lenin pointed out that: "The success of such regulation will depend not only on the state authorities but also, and to a larger extent, on the degree of maturity of the proletariat and of the masses of the working people generally. "40 And in his sketch "On Co-operation", he was concerned to find a path towards socialism that would enlist the activity of all the toilers, so that "every small peasant could take part in it."41

The tragedy of the Bolshevik revolution was that this mass mobilization declined, faltered, and was defeated. But Jim ignores the existence of this mobilization in early years of the revolution. He insists that the need to deal with the small-peasant economy meant that there was a system of "bureaucratic tutelage" right from the start -- in his view, only reliance on the marketplace could avoid this. This basically comes down to the view that the transitional state is just as bureaucratic and oppressive as an ordinary capitalist state or as a revisionist state. It amounts to the view that all the talk of mass activity is simply a pleasant-sounding lie. With this view, it's not surprising that Jim abandoned socialist activity. But the view that the revolution was simply bureaucratic tutelage from the start goes against the facts of history.

--No such thing as revisionism?

Thus again and again, Jim suggested the practices of the "post-Lenin leadership" sprung from Lenin's views. This is why he never refers to revisionism. He has given up the view that the state-capitalist regimes were trampling on the ideas of Marx or Lenin. The word revisionist or anything like it never occurs in his report, even though he devotes a good deal of attention to comparing Lenin's views to those of the revisionist leaders. For Jim, they were only the "post-Lenin leadership" [57/1,2] or "state-capitalist buffs" [47/1]. There is Lenin, who he praises as smarter and more insightful, and the "post-Lenin leadership", who were not as smart and just fell right through those "loopholes" that Lenin left in his theorizing. But there is no longer a contrast between revolutionary Marxism and revisionism, between a revolutionary movement that stands at the head of the masses and a revisionist bourgeoisie who are oppressing the masses. Instead Jim implies repeatedly that the "post-Lenin leadership" was not abandoning Marx and Lenin's views, but simply following Marxism-Leninism to its conclusion. It is simply a difference in shading, that's all -- that's the viewpoint of the report.


1 Page references to Jim's report will be given in the form [x/y], meaning page x, column y of this issue of Communist Voice.

2 See the Communist Manifesto at the end of Section II "Proletarians and Communists".

3 Herr Eugen Dühring's Revolution in Science, Part III. Socialism. Ch. II. Theoretical, pp. 306,7.

4 See Engels' denunciation of "state socialism" using the example of colonial Java in his letter to Bebel of Jan. 18, 1884.

5 Collected Works, vol. 27, p. 341, "'Left-wing' childishness and the petty-bourgeois mentality", IV.

6 Collected Works, vol. 26, pp. 107-8, "Can the Bolsheviks Retain State Power".

7 Collected Works, vol. 27, p. 295, "Session of the All-Russia C. E. C. , April 29, 1918: 1. Report on the immediate tasks of the Soviet government".

8 "Left-Wing" Communism, An Infantile Disorder, ch. II.

9 Collected Works, vol. 27, p. 311, "Session of the All-Russia C. E. C. , April 29, 1918: 2. Reply to the debate on the report on the immediate tasks".

10 Collected Works, vol. 29, p. 189, "Speech closing the debate on the party program", March 19, 1919 at the Eighth Congress of the R. C. P. (B. )".

11 Collected Works, vol. 33, p. 185, "The role and functions of the trade unions under the New Economic Policy, Sec. 2. State capitalism in the proletarian state and the trade unions".

12 Ibid. . pp. 185,6,"Sec. 3. The state enterprises that are being put on a profit basis and the trade unions".

13 (Ibid. , "Sec. 4. The essential difference between the class struggle of the proletariat . . ").

14 Collected Works, vol. 32, p. 42, "The Trade Unions, the Present Situation and Trotsky's Mistakes".

15 Within two years, Jim would start hinting that the organizations led by the ideas of those his report called "spineless social-traitors" were really "Marxist movements", just as much as the Bolsheviks were.

16 CC minutes of the 11th plenum since the 3rd Congress, November 1991, Point 1, "Theoretical Work", available in the archives of the State Historical Society of Wisconsin.

17 Minutes of the 12th Plenum, Point 1, "Theoretical Work".

18 Also see the Open Letter of June 27, 1994 in which he and his fellow-thinkers denounced the fact that a number of former MLP activists had continued active work in defense of Marxism-Leninism.

19 "Left-Wing" Communism, An Infantile Disorder, Ch. X, p. 96.

20 Collected Works, vol. 26, p. 401, "Fear of the Collapse of the Old and the Fight for the New".

21 Collected Works, vol. 26, p. 461, "Report on the Activities of the Council of People's Commissars".

22 See Communist Voice, Vol. 1, #3, pp. 59-61 where I discussed some of the issues raised by Lenin's views on the collectives and some of the issues that "On Cooperation" didn't go into. I was commenting on the views of Barb (Chicago Workers' Voice). In contrast to Barb, who identified this article with Lenin's complete teachings on the peasantry, I pointed out that it was only a brief sketch. Barb avoids major issues by saying that "On Co-operation" answered everything one needs to know about what the Bolsheviks should have done, while Jim seems to have been reading "On Co-operation" upside down.

23 Collected Works, vol. 27, p. 255, "The Immediate Tasks of the Soviet Government".

24 Collected Works, vol. 27, p. 249, "The Immediate Tasks of the Soviet Government".

25 Ibid. , p. 250.

26 Collected Works, vol. 33, pp. 185-6, "The Role and Functions of the Trade Unions Under the New Economic Policy".

27 Ibid. , pp. 185-8,193.

28 See for example Collected Works, vol. 32, pp. 24-25 in particular, "The Trade Unions, The Present Situation and Trotsky's Mistakes"; also "The Party Crisis", vol. 32, p. 48.

29 Collected Works, vol. 33, p. 88.

30 Collected Works, vol. 27, p. 251, "The Immediate Tasks of the Soviet Government".

31 Collected Works, vol. 32, p. 226, Tenth Congress of the R. C. P. (B. )".

32 Collected Works, vol. 33, p. 185.

33 Collected Works, vol. 33, pp. 88, 91, "Report on the New Economic Policy", Oct. 29, 1921, at Seventh Moscow Gubernia Conference of the Russian Communist Party".

34 Collected Works, vol. 25, p. 377, The section "Can we go forward if we fear to advance towards socialism" in "The Impending Catastrophe and How to Combat It", vol. 25, p. 357.

35 See the first sentence of "Some Observations (2)".

36 See the fifth paragraph of "Some Observations (2)".

37 Collected Works, vol. 27, p. 341, "Left-Wing" Childishness and the Petty-Bourgeois Mentality, sec. IV, emphasis as in the original.

38 Stalin, "Reply to the discussion on the Political Report of the CC", Dec. 23, 1925, section 6. "Concerning NEP".

39 "On Co-operation" was written hastily by Lenin in his final illness, and it contains a number of loose formulations, is repetitive, etc. One can either read it to deal with its main theme, or to make sensational discoveries about Lenin's new views. The paragraph that supposedly presents state capitalism as just concessions also states that: "the practical purpose of our New Economic Policy was to lease our concessions". (Vol. 33, p. 472) Taken literally, this identifies the key aspect of NEP as "concessions". And since Lenin also pointed out in "On Co-operation", correctly, that concessions hadn't developed very far, it would lead to the conclusion that NEP was a minor issue. This would not only contradict everything known about NEP, but also contradict what Lenin said about NEP elsewhere in "On Co-operation". Also see footnote 22 for a reference to where I discuss some of the issues raised by reading "On Co-operation" in context.

40 Collected Works, Vol. 33, p. 185, "The Role and Functions of the Trade Unions under the New Economic Policy".

41 Collected Works, vol. 33, p. 468. []

Lenin’s views on state capitalism — review

by Jim, San Francisco Bay Area

The following report was based on work by the San Francisco Bay Area Branch of the late Marxist-Leninist Party. It was finished by Jim, a member of the Central Committee of the MLP, in late 1991. I have checked the extracts from the works of Lenin, correcting page numbers, article names, and minor mistakes — hopefully no new ones have been added. In some cases where passages of interest have been omitted from the Lenin quotations, I have added them in footnotes. My criticism of this report appears in the article “State capitalism, Leninism, and the transition to socialism” elsewhere in this issue of Communist Voice.— Joseph Green

Lenin’s writings on the celebrated question of “state capitalism” under workers’ rule break down into four main periods. There is a guiding thread throughout; and there is also noticeable changes and differences in shade. The format of this report is a review of a selection of the typical passages from a given period followed by some observations. The observations are not well elaborated or complete; they are there to provide food for thought. The four periods break down as follows:

1) During the months preceding October, 1917.

2) In the early months of 1918, before the outbreak of Civil War.

3) During War Communism (1919 through early 1920).

4) The transition from War Communism to NEP (1920- 23).

1) During the months preceding October, 1917.

Lenin began his discussion of state-capitalism as a transition step towards socialism during the pre-October period of 1917 It was one of the economic pillars of his “April Thesis” ideas. There were a number of pieces to Lenin’s arguments.

There was the underlying general polemic with the leaders of the Second International. In country after country, the social-traitors were renouncing the tasks of revolution and socialism with the excuse that the economic conditions were not yet ripe for the overthrow of capital. Lenin attacked their spinelessness by pointing out that, in reality, the war had brought the contradictions of capitalism to the bursting point and that this was expressed in the growth of state capitalism as a result of the war crisis.

(From “The Impending Catastrophe and How to Combat It”- Sept. 1917:)

For socialism is merely the next step forward from state-capitalist monopoly. Or in other words, socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly.

There is no middle course here. The objective process of development is such that it is impossible to advance from monopolies (and the war has magnified their number, role and importance tenfold) without advancing towards socialism.

The dialectics of history is such that the war, by extraordinarily expediting the transformation of monopoly capitalism into state monopoly capitalism, has thereby extraordinarily advanced mankind towards socialism.

Imperialist war is the eve of socialist revolution. And this not only because the horrors of the war give rise to the proletarian revolt — no revolt can bring about socialism unless the economic conditions for socialism are ripe — but because state-monopoly capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no intermediate rungs." (vol. 25, p. 358. 358-9)

In Lenin’s view, this process was also in force in Russia. He repeatedly pointed to the creation of the sugar syndicate, the banks and other state-capitalist forms as a favorable condition for the exploited classes overthrowing the exploiters and taking control over the economy

(From “Letters on Tactics” — April 1917:)

They [the Soviets—Jim] will more effectively, more practically and more correctly decide what steps can be taken towards socialism and how these steps should be taken. Control over a bank, the merging of all banks into one, is not yet socialism, but it is a step towards socialism. Today such steps are being taken in Germany by the Junkers and the bourgeoisie against the people. Tomorrow the Soviet will be able to take these steps more effectively for the benefit of the people if the whole state power is in its hands." (vol. 24, pp. 53-4)

(From “The Impending Catastrophe and How to Combat It” — Sept. 1917:)

That capitalism in Russia has also become monopoly capitalism is sufficiently attested by the examples of the Produgol, the Prodamet, the Sugar Syndicate, etc. This Sugar Syndicate is an object lesson in the way monopoly capitalism develops into state-monopoly capitalism.

And what is the state? It is an organization of the ruling class—in Germany, for instance, of the Junkers and capitalists. And therefore what the German Plekhanovs (. .) call 'wartime socialism’ is in fact war-time state-monopoly capitalism. 1

Now try to substitute for the Junker capitalist state, for the landowner-capitalist state, a revolutionary-democratic state, i.e., a state which in a revolutionary way abolishes all privileges and does not fear to introduce the fullest democracy in a revolutionary way. You will find that, given a really revolutionary-democratic state, state-monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism!” (vol. 25, p. 357-8)

At the same time, Lenin stressed the particularity of Russian conditions, especially the preponderance of a peasantry engaged in small-scale agriculture. He made repeated warnings to the effect that this situation made the direct transition to socialism out of the question and that the new power would have to make a series of steps to prepare for such a transition.

(From “The Tasks of the Proletariat in Our Revolution” — April 1917:)

The Commune, i.e., the Soviets, does not ‘introduce’, does not intend to ‘introduce’, and must not introduce any reforms which have not absolutely matured both in economic reality and in the minds of the overwhelming majority of the people.” (vol. 24, p. 69)

15. Under no circumstances can the party of the proletariat set itself the aim of ‘introducing’ socialism in a country of small peasants so long as the overwhelming majority of the population has not come to realize the need for a socialist revolution.” (vol. 24, p. 73)

(From “A Basic Question” — April 1917:)

". . . The question arises2 -- if the petty proprietors constitute the majority of the population and if the objective conditions for socialism are lacking, then how can the majority of the population declare in favor of socialism? Who can say anything or who says anything about establishing socialism against the will of the majority?” (vol. 24, p. 193)

(From “The Seventh All Russia Conference of the R.S.D.L.P.(B.)” - April-May 1917:)

.. The Soviets must take power not for the purpose of building an ordinary bourgeois republic, nor for the purpose of making a direct transition to socialism. This cannot be. What, then, is the purpose? The Soviets must take power in order to make the first concrete steps towards this transition, steps that can and should be made.

We cannot be for ‘introducing’ socialism — this would be the height of absurdity We must preach socialism. The majority of the population in Russia are peasants, small farmers who can have no idea of socialism. But what objections can they have to a bank being set up in each village to enable them to improve their farming?

Quite another thing is the Sugar Syndicate. This is a clear fact. Here our proposal must be direct and practical; these already fully developed syndicates must be taken over by the state. If the Soviets intend to assume power, it is only for such ends. ” (vol. 24, pp. 241,2)

(From “The Impending Catastrophe and How to Combat It” - Sept. 1917:)

It is impossible in twentieth-century Russia, which has won a republic and democracy in a revolutionary way, to go forward without advancing towards socialism, without taking steps towards it (steps conditioned and determined by the level of technology and culture: large-scale machine production cannot be ‘introduced’3 in peasant agriculture nor abolished in the sugar industry).

But to fear to advance means retreating.” (vol. 25, pp. 358-9)

Then there is the question of how Lenin viewed the nationalization of the banks, syndicates, etc. What was the economic content of this reform in terms of the steps towards transition to socialism or the transition itself? It seems that there is a shift in Lenin’s views between April and September, a shift corresponding to the class shift within the soviets, from seeing the soviets as a “revolutionary democratic government of the workers and peasants” to seeing them as some type of socialist power (There is also the question of what was meant by nationalization: regulation? control? state ownership? some combination of all three? However, this doesn’t appear to play a role in the shift between April and September, or to be central to Lenin’s argument.)

In April, Lenin, when arguing for the nationalization of the banks and syndicates, stresses that this is not a socialist measure in itself, but only a step towards socialism.

(From “The Tasks of the Proletariat In Our Revolution” — April 1917)

Such measures as the nationalization of the land, of all the banks and capitalist syndicates, or, at least, the immediate establishment of the control of the Soviets of Workers’ Deputies, etc., over them —measures which do not in any way constitute the ’introduction’ of socialism — must be absolutely insisted on. Without such measures, which are only steps towards socialism, and which are perfectly feasible economically, it will be impossible to heal the wounds caused by the war and avert the impending collapse; ” (vol. 24, p. 74)

(From “A Basic Question” — April 1917:)

Is it economically possible to immediately effect such a merger of all the banks? Without a doubt, it is quite possible.

Would this be a socialist measure? No, it would not yet be socialism.

Would the taking over of the [sugar] syndicate by the democratic-bourgeois, peasant, state be a socialist measure?

No, that would not yet be socialism.

The question is: Would such measures as the merging of the banks and turning over the Sugar Manufacturers’ Syndicate to a democratic peasant government enhance or diminish the role, importance, and influence of the proletarians and semi-proletarians among the general mass of the population?

After these measures will have been put into effect, further progress towards socialism in Russia would become fully possible, . . . (vol. 24, p. 195)

However, by September 1917, the ideas of what “revolutionary democracy” meant had shifted and nationalization, etc., seems to become a more immediate or direct step towards socialism. In works such as “State and Revolution” and “Impending Catastrophe” and “Can the Bolsheviks Retain State Power?”, Lenin wrote in more general, sweeping terms about the proletarian soviets taking hold of the economic mechanism of state capitalism for the socialist transformation of the economy.

(From “State and Revolution” — August-Sept. 1917:)

". . . At present the postal service is a business organized on the lines of a state-capitalist monopoly. Imperialism is gradually transforming all trusts into organizations of a similar type, in which, standing over the “common" people, who are overworked and starved, one has the same bourgeois bureaucracy But the mechanism of social management is here already to hand. Once we have overthrown the capitalists, crushed the resistance of these exploiters with the iron hand of the armed workers, and smashed the bureaucratic machine of the modern state, we shall have a splendidly-equipped mechanism.

To organize the whole economy on the lines of the postal service so that the technicians, foremen and accountants, as well as all officials, shall receive salaries no higher than “a workman’s wage,” all under the control and leadership of the armed proletariat — this is our immediate aim. This is the state and this is the economic foundation we need.” (vol. 25, pp. 431-2)

(From “The Impending Catastrophe and How to Combat It” - Sept. 1917:)

For if a huge capitalist undertaking becomes a monopoly, it means that it serves the whole nation. If it has become a state monopoly, it means that the state (i.e., the armed organization of the population, the workers and peasants above all, provided there is revolutionary democracy) directs the whole undertaking. In whose interest?

Either in the interest of the landowners and capitalists, in which case we have not a revolutionary-democratic, but a reactionary bureaucratic state, an imperialist republic.

Or in the interest of revolutionary democracy — and then it is a step towards socialism.

For socialism is merely the next step forward from state-capitalist monopoly Or in other words, socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly." (vol. 25, pp. 358)

(From “Can the Bolsheviks Retain State Power?” — end Sept.-Oct. 1, 1917:)

The chief difficulty facing the proletarian revolution is the establishment on a country-wide scale of the most precise and most conscientious accounting and control, of workers’ control of the production and distribution of goods.

This brings us to another aspect of the question of the state apparatus. In addition to the chiefly ’oppressive’ apparatus — the standing army, the police and the bureaucracy — the modern state possesses an apparatus which has extremely close connections with the banks and syndicates, an apparatus which performs an enormous amount of accounting and registration work, if it may be expressed this way This apparatus must not, and should not, be smashed.

It must be wrested from the control of the capitalists; the capitalists and the wires they pull must be cut off, lopped off, chopped away from this apparatus; it must be subordinated to the proletarian Soviets; it must be expanded, made more comprehensive, and nation-wide.

Capitalism has created an accounting apparatus in the shape of the banks, syndicates, postal service, consumers’ societies, and office employees’ unions. Without big banks socialism would be impossible.

The big banks are the ’state apparatus’ which we need to bring about socialism, and which we take ready-made from capitalism; our task here is merely to lop off what capitalistically mutilates this excellent apparatus, to make it even bigger, even more democratic, even more comprehensive. Quantity will be transformed into quality A single State Bank, the biggest of the big, with branches in every rural district, in every factory, will constitute as much as nine- tenths of the socialist apparatus. This will be country-wide book-keeping, country-wide accounting . . .4 something in the nature of the skeleton of socialist society

We can ‘lay hold of and ‘set in motion’ this ‘state apparatus’ (which is not fully a state apparatus under capitalism, but which will be so with us, under socialism) at one stroke, by a single decree, because the actual work of bookkeeping, control, registering, accounting and counting is performed by employees, the majority of whom themselves lead a proletarian or semi- proletarian existence.

By a single decree of the proletarian government these employees can and must be transferred to the status of state employees.

As for higher officials, of whom there are very few, but who gravitate towards the capitalists, they will have to be dealt with in the same way as the capitalists, i.e., ‘severely’.

We can do this, for it is merely a question of breaking the resistance of an insignificant minority of the population, literally a handful of people, over each of whom the employees’ unions, the trade unions, the consumers’ societies and the Soviets will institute such super vision.” (vol. 26, pp. 104-5, 5-7)

Some Observations (1):

Lenin’s general polemic against the Second International on the nature of monopoly capitalism being capitalism ripe for expropriation, etc., seems indisputable in that he is speaking especially against the opportunists in Germany and other advanced countries. The general line of argument that the growth of state capitalism in Russia is to the advantage of a truly revolutionary government also seems valid. But there are certain particularities that are problematic.

Lenin points out that the war crisis had accelerated the process of state capitalism — what the opportunists called “war socialism” But the other side of this might be: Could this accelerated process be sustained without the war crisis? Especially in backward Russia? Hindsight provides a clue that there may have been too much optimism here. Much of the apparatus created by the tsarist/capitalist regime during the war could, in fact, not be wielded by the soviets as Lenin had hoped because it evaporated with the end of war conditions (e.g. the partial state grain monopoly and the grain procurement and distribution system). Or, take the example of compulsory labor and work books, created by the warring imperialist governments, and which Lenin had hoped to wield against the bourgeoisie (see “Can the Bolsheviks Retain State Power?”, vol. 26, p. 109). Without war conditions, such things became impossible. Part of the issue was the general collapse that threw the entire economy backwards. But another thing to look into is what could have been expected in peace time, especially in small peasant Russia.

Another question is the apparent lack of consistency in Lenin’s views about the economic content of nationalization. In April he is relatively forceful that there is nothing socialist in the nationalization of the banks and syndicates. By September, a single nationalized state bank becomes “nine-tenths of the socialist apparatus,” and “the skeleton of socialist society ” It doesn’t seem that this shift can entirely be explained by the political shift in the soviets. This shift away from the petty- bourgeois elements and towards the proletariat and semi- proletariat can explain that the Bolsheviks were now hoping for a soviet power with a different class content.

However, it seems that the nature of the political power is only part of the question. The other part is the economic preponderance of petty production (small farming, etc.). This economic reality seems to be Lenin’s chief argument in April, along the lines: How can one talk of introducing socialism surrounded by an ocean of tiny farms? But in September the stress changes. Lenin does not give an explanation of this change, yet by September-October the whole discussion of “introducing socialism” in a peasant country seems to get lopped off.

One possibility is that this change has to do with the emergency war measures discussed above. Millions of peasants were organized into regiments; state trusts were in place to supply the war effort, including rationing and procurement systems; there was military conscription and labor armies; etc. But what happens when the peasants go back to their farms and the ordinary system of buying and selling reasserts itself? It seems that Lenin and the Bolsheviks misread this from this period until the forced rectification of the NEP This misreading may have led to a number of the exaggerations and tangents in Bolshevik policy in the early years.

In any case, I think the inconsistencies and vagueness in Lenin’s views about the theory of state capitalism and socialism (at least in Russian conditions) begins in this pre-October period. Lenin’s views were penetrating, powerful and extremely advanced (and still are). But in historic hindsight it seems that some of these views, at least in shading, don’t jibe with each other. Moreover, I don’t believe this was missed by those who followed Lenin.

For example, in the mid-1920’s, a number of leaders of the left opposition were raising questions about state capitalism (Preobrazhensky, Krupskaya, Zinoviev, Sokolnikov, etc.). At the 14th Congress of the CPSU (Dec. 1925) Sokolnikov raised the issue that the trading system, state bank, and monetary system were being “conducted as state capitalist enterprises" and were “permeated with the principles of capitalist economy ” (See Stalin, On the Opposition, p 244.) Who knows the context in which Sokolnikov raised this? But one would think it would be quite logical to pose this issue given the prevailing NEP conditions of free trade, etc. One would also think that this would be seen as in line with Lenin’s own discussion of the significance of state ownership in a peasant country from the April, 1917 period. But it didn’t turn out that way. Stalin’s reply was the quote from “Can the Bolsheviks Retain State Power?” about the state bank being “nine-tenths of the socialist apparatus” and the “skeleton of the socialist society ” Stalin concludes “Compare these words of Lenin's with Sokolnikov’s speech and you will understand what Sokolnikov is slipping into. I shall not be surprised if he declares the People’s commissariat of Finance to be state capitalism. ” (Ibid., p. 245) It cannot be said that Lenin was just misquoted here. It seems that Lenin’s articles from this time were a tad one-sided or slightly exaggerated, and Stalin and the state capitalist buffs took this and ran with it.

2) Before the Civil War — April-May 1918

In the spring of 1918, Lenin turned his attention to economic problems, once again returning to the question of state capitalism and the transition to socialism. At this time Lenin was principally arguing with the so-called “Left Communists” and others who had become swept up in the fervor of the day and could not see that socialism could not be built on fervor alone; it is necessary to first lay the technical and organizational foundations. In Lenin’s view, these foundations were to be laid through the path of state capitalism.

The writings from this period clear up one ambiguity from the pre-October writings. Before soviet power, Lenin stressed the prospect of seizing the apparatus of state capitalism (the syndicates, the banks, etc.) as a step towards transition — while it is left unclear or unsaid exactly to what extent this state capitalism exists in Russia. However, after taking power it must have become apparent how weak and isolated much of this system in Russia was. In this period Lenin’s emphasis is on the lack of state capitalism and on the need to extend it, to organize it.

(From “Report on the Immediate Tasks of the Soviet Government” — April 29, 1918:)

Reality tells us that state capitalism would be a step forward. If in a small space of time we could achieve state capitalism in Russia, that would be a victory.

I said that state capitalism would be our salvation; if we had it in Russia, the transition to full socialism would be easy, would be within our grasp, because state capitalism is something centralized, calculated, controlled and socialized, and that is exactly what we lack;. ” (vol. 27, pp. 293,4)

Only the development of state capitalism, only the painstaking establishment of accounting and control, only the strictest organization and labor discipline, will lead us to socialism. Without this there is no socialism.” (vol. 27, p. 297)

The situation is best among those workers who are carrying out this state capitalism, among the tanners and in the textile and sugar industries, because they have a sober, proletarian knowledge of their industry and they want to preserve it and make it more powerful — because in that lies the greatest socialism. They say -- I can’t cope with this task just yet; I shall put in capitalists, giving them one-third of the posts, and I shall learn from them.” (vol. 27, p. 297)

(From “‘Left-Wing’ Childishness and the Petty-Bourgeois Mentality” — May 1918:)

It has not occurred to them that state capitalism would be a step forward as compared with the present state of affairs in our Soviet Republic. If in approximately six months’ time state capitalism became established in our Republic, this would be a great success and a sure guarantee that within a year socialism will have gained a permanently firm hold and will have become invincible in our country ” (vol. 27, pp. 334-5)

(It should be noted that this quote with a six-month and one year timetable is not typical of his writings in this period. More typical is words like “protracted” and “painstaking.” For example, in his “Report on the Immediate Tasks,” Lenin wrote: “The road of organization is a long road and the tasks of socialist construction demand stubborn, long-continued work Even the more developed generation of the immediate future will hardly achieve the complete transition to socialism. ” [vol. 27, p. 301])

When the working class has learned how to defend the state system against the anarchy of small ownership, when it has learned to organize large-scale production on a national scale, along state capitalist lines, it will hold all the trump cards, and the consolidation of socialism will be assured.

In the first place, economically, state capitalism is immeasurably superior to our present economic system.

To make things even clearer, let us first of all take the most concrete example of state capitalism. ... It is Germany. Here we have the ‘last word’ in modern large-scale capitalist engineering and planned organization, subordinated to Junker-bourgeois imperialism. Cross out the words in italics, and in place of the militarist Junker, bourgeois, imperialist state put also a state, but of a different social type, of a different class content — a Soviet state, and you will have the sum total of the conditions necessary for socialism.” (vol. 29, p. 339)

It was also in “‘Left-Wing’ Childishness” that Lenin spelled out his analysis of the different elements of the transitional economy

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?

Let us enumerate these elements:

1) patriarchal, i.e., to a considerable extent natural, peasant farming;

2) small commodity production (this includes the majority of those peasants who sell their grain);

3) private capitalism;

4) state capitalism;

5) socialism.

Russia is so vast and so varied that all these different types of socio-economic structures are intermingled.” (vol. 27, pp. 335-6)

For Lenin, the perspective for advance was by way of the organized and centralized element of state capitalism overcoming the anarchy and disintegration of small production (farmers who marketed grain, the small traders, etc.).

(From “Report on the Immediate Tasks of the Soviet Government” — April 1918:)

How is it that they [the Left Communists] cannot see that it is the petty proprietor, small capital, that is our enemy? They ought not to forget that in the transition from capitalism to socialism our chief enemy is the petty bourgeoisie, its habits and customs, its economic position. The petty bourgeoisie fears state capitalism above all, . . . ” (vol. 27, p. 294)

(From “‘Left-Wing’ Childishness and the Petty-Bourgeois Mentality” — May 1918:)

The question arises: what elements predominate? Clearly, in a small-peasant country, the petty-bourgeois element predominates. The shell of our state capitalism (grain monopoly, state-controlled entrepreneurs and traders, bourgeois co-operators) is pierced now in one place, now in another by profiteers,

It is in this field that the main struggle is being waged. It is not state capitalism that is at war with socialism, but the petty bourgeoisie plus private capitalism fighting together against both state capitalism and socialism. The petty bourgeoisie oppose every kind of state interference, accounting and control, whether it be state capitalist or state socialist.” (vol. 27, p. 336)

The principal objective in this struggle was to be “accounting and control”; the key weapons to accomplish this were to be the state grain and trade monopolies and the consumer cooperative societies (“the shell of our state capitalism”).5 One of the striking things at this time was how much emphasis Lenin placed on the bourgeois-dominated cooperative societies.

(From “The Significance of the Struggle for Country-Wide Accounting and Control” — April 1918:)

The socialist state can arise only as a network of producers’ and consumers’ communes, which conscientiously keep account of their production and consumption6, Nothing will be achieved unless the strictest, countrywide, comprehensive accounting and control of grain and the production of grain (and later of all other essential goods) are set going. Capitalism left us a legacy of mass organizations which can facilitate our transition to the mass accounting and control of the distribution of goods, namely, the consumers’ cooperative societies.” (vol. 27, p. 255)

(Lenin goes on to describe the “agreement with the bourgeois co-operative societies which still adhere to the bourgeois point of view.”7 Under this agreement the co-ops were allowed to keep running as essentially cooperative capitalist businesses, charging entrance fees, and keeping bourgeois elements on the board of directors.)

The Soviets can (and should) now gauge their successes in the field of socialist construction, among other things in how many communities (communes or villages, or blocks of houses, etc.) cooperative societies have been organized, . . .”8 (vol. 27, p. 256)

It was also in the spring of 1918 that Lenin gave some of his more insightful views about state capitalism within the state sector The main focus was on the question of high pay and privileges for the managers and experts.

(From “The Immediate Tasks of the Soviet Government" — April 1918:)

Now we have to resort to the old bourgeois method and to agree to pay a very high price for the ‘services’ of the top bourgeois experts.

Clearly, this measure is a compromise, a departure from the principles of the Paris Commune and of every proletarian power,

Moreover, it is clear that this measure not only implies the cessation—in a certain field and to a certain degree — of the offensive against capital (for capital is not a sum of money, but a definite social relation); " (vol. 27, pp. 248-9)

(From “Reply to the Debate on the Report on the Immediate Tasks" - April 1918:)

" . . . State capitalism is not money but social relations. If we pay 2,000 [to the engineers — Jim] in accordance with the railway decree, that is state capitalism.” (vol. 27, p. 311)

(From “‘Left-Wing’ Childishness and the Petty-Bourgeois Mentality” — May 1918:)

On the one hand we must ruthlessly suppress the uncultured capitalists who refuse to have anything to do with ‘state capitalism’

On the other hand, we must use the method of compromise, or of buying off the cultured capitalists who agree to ‘state capitalism,’ who are capable of putting it into practice and who are useful to the proletariat as organizers of the largest types of enterprises, ” (vol. 27, pp. 345-6)

Some Observations (2):

In general, Lenin’s writings during the early 1918 period seem to be some of his best and clearest presentations in regard to the transition to socialism through state capitalism. The most amazing thing is to read them in the context of the times. This was before the civil war and the devastation of the working class. The armed workers are in the streets making all types of red and socialist proclamations. Many of the Bolsheviks are caught up in this mood of making socialism with rifles, so to speak. Indeed, this was the point at which many revolutions fall on their face as they attempt to leap to a new social order for which the economic, technical and other conditions have not been laid. But Lenin attempted to keep things bound to earth, pointing out that socialism was as yet only the determination of the new regime, not economic reality, and that the transition would have to go through painful stages, including state capitalism. Compared to the guiding ideas of any mass revolution before (and probably since, too) Lenin’s views were genius. Yet, they were not without weaknesses.

In hindsight, it is clear that Lenin’s general plan for establishing “accounting and control” was unrealistic. In place of the free market and a money economy, Lenin hoped for what he later described as “commodity exchange” of industrial and agricultural goods through the grain monopoly and state control of trade. This did not pan out. This type of control of the small producer and trader would have proved to be untenable much sooner if not for the interruption of the civil war

This is not a minor question in a vast country of tiny farmers, and this wrong estimate seems to be compounded by an over-optimism in relation to the consumer co-ops. Lenin’s 1918 views on the cooperatives seems to be consistent with the exaggerations in such places as his 1923 article “On Co-operation.” In 1923, the extension of the co-operatives becomes “all that is necessary to build a complete socialist society ” In 1918, there is the distinction that they had not yet been forced to abandon the grain monopoly and state control of trade. However, the theme is the same, the new “socialist state” will arise out of the co-ops combined with the grain monopoly But what about the tens of millions of small producers? They were still there underneath the co-ops and the monopoly, and there was nothing socialist about it. It seems that this socialism equals cooperation (or co-operation plus grain monopoly) doesn’t jibe with much of the rest of Lenin’s writings, including his writings on the nature of the co-ops. Nonetheless, an examination of his writings of the spring of 1918 shows that his 1923 article “On Co-operation” was not an aberration due to ill health. Rather it was one stream of thought in Lenin’s writings from the first months after the October revolution.

It was during this period that Lenin sets up the framework that the enemy is petty production against state capitalism (or sometimes state capitalism and socialism). However, it seems that there was something one-sided here. It is one thing to recognize the need for a certain compromise with state capitalism; and Lenin several times said that it must be admitted bluntly that it was a compromise. It is quite another to not squarely pose that such a compromise involves very real dangers; and Lenin tended towards the opposite extreme, rejecting any talk of state capitalist enemies or dangers. There is almost a boastful attitude that there is nothing to fear because the workers are in power- “ there is nothing terrible in it [state capitalism—Jim] for Soviet power, for the Soviet state is a state in which the power of the workers and the poor is assured. ” (vol. 27, p. 339)

Lenin called on the workers to organize the economy “along state capitalist lines. ” But what does that mean? Either it is just a phrase, or it means something quite distinct from socialism. Granted, this is a process of transition where there is no brick wall between the old and the new. Nonetheless, Lenin is clearly striving to guide the economy along the rails of state capitalism. One would think this would require a clear perspective of switching tracks towards a socialist organization down the way But that perspective wasn’t there (or if it was there it was only a flicker and not a guiding light).

Or, to put it another way, Lenin calls on the soviet workers to copy German state capitalism, but with a soviet state in place of the Junker-bourgeois imperialist state. This Lenin says is the “sum total of the conditions necessary for socialism” (vol. 27, p. 339) However, from there the question is left hanging of what transformations are needed to go beyond state capitalism to socialism (and not just its necessary conditions).

In a few places, Lenin gives some clues of the profundity of the issue. For instance, there is his warning that capital “is not a sum of money, but a social relation” and “state capitalism is not money but social relations.” This is provocative; it leaves one thinking that Lenin was no dreamer and understood what he was up against. But it is only a taste that leaves one hungry to go beyond the issue of high salaries to a more comprehensive understanding of the transformation of state capitalism into socialism.

3) During War Communism, 1919

The outbreak of the war accelerated everything. While pieces of the economic program from the preceding peaceful period remain, the thinking is put in a different framework. In general, one might conclude from Lenin’s writings that the economy had ten or twenty years of rapid transformation between the spring of 1918 and the spring of 1919. The whole discussion of state capitalism as a transition to socialism recedes. In fact, even the phrase “transition to socialism” is mainly replaced by “transition to communism” or “full communism,” and this seems to reflect the mood of the time.

In the spring of 1918, Lenin was calling on the workers to “organize production along state capitalist lines.” By February of 1919, in the discussions of the Party Program, this transitional step isn’t there. For example, Lenin proposes paving the way to abolish money as “speedily as possible” with no mention of the need for money and capital to function for a period of time. (vol. 29, pp. 115-69) Everything is couched in the name of transition from capitalism to communism. For example, high pay for managers is no longer mentioned with state capitalism, but as something necessary during the transition to “full communism.”

(From “Draft Program of the R.C.P.(B.)” — February 1919:)

Although our ultimate aim is to achieve full communism and equal remuneration for all kinds of work, we cannot introduce this equality straight-away, we must retain the present higher remuneration for specialists in order to give them an incentive to work ., bonuses would be impermissible under a full communist system but in the period of transition from capitalism to communism bonuses are indispensable. ” (vol. 29, pp. 113-4)

During war communism, the compromise with state capitalism drops out in favor of a direct struggle of socialism (or communism) against the remnants of capitalism, which is identified almost exclusively as small production. And the center of this struggle is the enforcement of the grain monopoly and the procurement of grain.

(From “Economics and Politics in the Era of the Dictatorship of the Proletariat” • October 1919:)

The economic system of Russia in the era of the dictatorship of the proletariat represents the struggle of labor, united on communist principles on the scale of a vast state and making its first steps — the struggle against petty commodity production and against capitalism that still persists . . . .10

In Russia, labor is united communistically insofar as, first, private ownership of the means of production has been abolished, and, secondly, the proletarian state power is organizing large- scale production on state-owned land in state-owned enterprises on a national scale, is distributing labor-power among the various branches of production and the various enterprises, and is distributing among the working people large quantities of articles of consumption belonging to the state. (vol. 30, pp. 108-9)

During the first three months of the next campaign (1919-20) procurements [of grain] will presumably total about 45,000 poods, for the same period (August - October) in 1918.

These figures speak clearly of a slow but steady improvement in the state of affairs from the point of view of the victory of communism over capitalism” (vol. 30, p. 110)

(From “A Great Beginning" — July 1919:)

Clearly, in order to abolish classes completely, it is not enough to overthrow the exploiters, the landowners and capitalists, not enough to abolish their rights of ownership; it is necessary also to abolish all private ownership of the means of production, it is necessary to abolish the distinction between town and country, as well as the distinction between manual workers and brain workers. This requires a very long period of time. In order to achieve this an enormous step forward must be taken in developing the productive forces; it is necessary to overcome the resistance of the numerous survivals of small-scale production; it is necessary to overcome the enormous force of habit and conservatism which are connected to these survivals.” (vol. 29, p. 421)

It was during this period that Lenin discussed at some length the distinction between socialism and communism. This was mainly in connection to the subotniks.

(From “Report on Subotniks Delivered to a Moscow City Conference of the R.C.P.(B.)” — December 20, 1919:)

If we were to ask ourselves what the present economic system of Soviet Russia is, we should have to say that it consists in laying the foundations of socialism in large-scale industry, in reorganizing the old capitalist economy with the capitalists putting up a stubborn resistance There is, however, not yet anything communist in our economic system. The ‘communist’ begins when subotniks (i.e., unpaid labor with no quota set by any authority or any state) make their appearance; If there is anything communist at all in the prevailing system in Russia, it is only the subotniks, and everything else is nothing but the struggle against capitalism for the consolidation of socialism out of which, after the full victory of socialism, there should grow that communism that we see at subotniks, not with the aid of a book, but in living reality ” (vol. 30, pp. 286-7)

Some Observations (3):

Lenin’s economic writings during the months of war communism were clearly a break with what went before and after It could be said that they were an aberration or just a mistake. However, there were underlying ideas that had a certain continuity. This included a wrong assessment of the grain monopoly.

From the spring of 1917, it seems that Lenin had an over- estimation of the role of the state grain monopoly in the sense of its durability and in the sense of the role it could play in transforming the petty economy Whether he described it as state capitalist, socialist or “communistically organized,” Lenin banked heavily on this monopoly in his economic plans. In fact, the grain monopoly could only exist thanks to the war crisis, and it was not capable of effecting any durable change among the petty producers and traders. When the war crisis demanded sending armed detachments to seize and distribute grain, it was looked at as a major advance.

Of course, in the fever of the war, everything took on red, communist colors. The spirit of heroism and desperate sacrifice among the masses (including voluntary unpaid labor), combined with the breakdown of bourgeois relations under the blows of the crisis, was seen as the beginning of a new order, when in reality the foundations for this new order hadn’t been laid. This leads to a series of missteps, such as the attempts to create labor armies (which, by the way, Lenin had been enthusiastic for even prior to the war).

But it seems that the most serious misstep had to do with the attitude towards the peasantry, and especially the grain monopoly. In 1918, Lenin may have exaggerated its potential role, but he clearly identified the grain monopoly as state capitalist. But when this grain monopoly became linked to armed worker detachments aided by poor peasant committees, there is a change in the social and economic color, and it becomes the battle line of communism against capitalism.

This was during the heroic days of the civil war. A mistaken economic analysis does not make this epoch any less heroic. But there is a point of concern here in terms of precedent. It is the first time one sees economic reality (primitive agriculture combined with extreme emergency and state capitalist forms) being taken for something socialist or communist. After the civil war, Lenin touches on this issue as one of the mistakes of the “war communism” period, but it is only in hints.

4) The transition from War Communism to NEP (1921-23)

The switch from “war communism” ideas to NEP ideas was abrupt in Lenin’s writings; but not quite as abrupt as it might first appear In fact his thinking went through a transition as the retreat deepened, and this unraveling process gives more insight into Lenin’s views about the state capitalism/socialism question.

When discussing the plans for the NEP, while advocating a dramatic change in policy, there was still much in it that smacks of the “war communist” ideas of what comprises socialism. There were references to the 1918 discussion of state capitalism and of the state capitalist sector (small enterprises and concessions). At the same time there was discussion of a socialist state sector and of socialist exchange between the town and countryside, which were shaded differently from the pre-civil war writings.

(From “Report on the Tax in Kind Delivered at a Meeting of Secretaries and Responsible Representatives of R.C.P.(B.) Cells of Moscow and Moscow Gubernia” — April 9, 1921:)

the socialist attitude of workers at state factories, who collect fuel, raw materials and food, or try to arrange a proper distribution of manufactured goods among the peasants and to deliver them with their own transport facilities.

That is socialism. But alongside is small enterprise, which very often exists independently of it.

Why can it do so? Because large scale industry is not back on its feet, and socialist factories are getting perhaps only one-tenth of what they should be getting. In consequence, small enterprise remains independent of the socialist factories. The incredible havoc, the shortage of fuel, raw materials and transport facilities allow small enterprise to exist separately from socialism. I ask you: What is state capitalism in these circumstances? It is the amalgamation of small- scale production.

What are concessions from the standpoint of economic relations? They are state capitalism. The socialist state gives the capitalist its means of production such as factories, mines and materials. The capitalist operates as a contractor leasing socialist means of production, making a profit on his capital and delivering a part of his output to the socialist state.” (vol. 32, pp. 296-7)

A key feature of early NEP was the replacement of the state grain monopoly with an attempt to establish what they called “commodity exchange.” When Lenin and co. spoke of “exchange” or “free exchange” this was still not the free market with buying and selling, but attempts at regulated direct exchange of agricultural goods for industrial ones.

(From “Tenth Congress of the R.C.P.(B.)” — March 1921:)

Why must we replace surplus appropriation by a tax? Surplus appropriation implied confiscation of all surpluses and establishment of a compulsory state monopoly Theoretically speaking, state monopoly is not necessarily the best system from the standpoint of the interests of socialism. A system of taxation and free exchange can be employed as a transitional measure in a peasant country possessing an industry—if this industry is running—and if there is a certain quantity of goods available.” (vol. 32, p. 226)

(From “Tenth All-Russia Conference of R.C.P.(B) — Draft Resolution on Questions of the NEP” — May, 1921:)

2. Commodity exchange is brought to the fore as the principal level of the New Economic Policy. It is impossible to establish a correct relationship between the proletariat and the peasantry without regular commodity exchange or the exchange of products between industry and agriculture.

3. Considering co-operatives to be the main apparatus for commodity exchange ” (vol. 32, p. 433)

Towards the end of 1921, Lenin’s criticism of the mistakes of the “war communism” period become deeper and sharper. In the process, his formulations on socialism and state capitalism also become sharper (or at least closer to the formulations of early 1918).

(From “New Times and Old Mistakes in a New Guise” — August 1921:)

We need a bloc, or alliance, between the proletarian state and state capitalism against the petty-bourgeois element.” (vol. 33, p.28)

(From “Fourth Anniversary of the October Revolution” — October 1921:)

We expected to be able to organize the state production and state distribution of products on communist lines in a small-peasant country directly as ordered by the proletarian state. Experience has proved that we were wrong. It appears that a number of transitional stages were necessary — state capitalism and socialism—in order to prepare—to prepare by many years of effort — for the transition to communism we must first set to work in this small-peasant country to build solid gangways to socialism by way of state capitalism.” (vol. 33, p. 58)

The proletarian state must become a cautious, assiduous and shrewd “businessman,” a punctilious wholesale merchant — otherwise it will never succeed in putting this small-peasant country economically on its feet. A wholesale merchant seems to be an economic type as remote from communism as heaven from earth. But that is one of the contradictions which, in actual life, lead from a small-peasant economy via state capitalism to socialism.” (vol. 33, p. 59)

However, the NEP ideas were not simply a revival of the 1918 ideas. By the fall of 1921, there was a recognition that the direct struggle for state control, state capitalism, state monopoly, etc., was untenable, and that the free market and the money economy was too powerful to hold down by direct means. This reassessment corresponded to the breakdown of the plans for “commodity exchange” in face of buying and selling. This required, according to Lenin, a retreat from state capitalism to state regulation of trade.

(From “Seventh Moscow Gubernia Conference of the Russian Communist Party” — October 29-31, 1921:)

We regarded the organizational, economic work, which we put in the forefront at that time [April 1918—Jim], from a single angle. We assumed that by introducing state production and state distribution we had established an economic system of production and distribution that differed from the previous one. We assumed that the two systems — state production and distribution and private commodity production and distribution—would compete with each other, and meanwhile we would build up state production and distribution, and step by step win them away from the hostile system. We said this in March and April 1918; but we did not ask ourselves in what relation our economy would stand to the market, to trade.”11 (vol. 33, p. 88)

"In the spring [1921—Jim] we said that we would not be afraid to revert to state capitalism, and that our task was to organize commodity exchange. What plan of development did it imply? It implied a more or less socialist exchange throughout the country of the products of industry for the products of agriculture, and by means of that commodity exchange the restoration of large-scale industry as the sole basis of socialist organization. But what happened? . . . this system of commodity exchange has broken down; it has broken down in the sense that it has assumed the form of buying and selling. We must admit that we have not retreated enough, that we must make a further retreat, a further retreat from state capitalism to the creation of state-regulated buying and selling, to the money system. Nothing came of commodity exchange; the private market proved too strong for us; and instead of the exchange of commodities we got ordinary buying and selling, trade.” (vol. 33, pp. 96-7)

"... after the retreat from socialist construction to state capitalism, which we were obliged to make in the spring of 1921, we see that the regulation of trade and the money system are on the order of the day ” (vol. 33, p. 100)

We can no longer speak of commodity exchange today because we have lost it as a sphere of struggle. We must acquire the knowledge needed for the state to regulate commercial relations The co-operative trade is something difficult but not impossible To date we have already put a small number of enterprises on a commercial footing; at these enterprises wages are paid according to the prices on the open market, and they have gone over to gold in their settlements. ” (vol. 33, p. 106)

(From “The Importance of Gold Now and After the Complete Victory of Socialism” — November 1921:)

We retreated to state capitalism, but we did not retreat too far. We are now retreating to state regulation of trade, but we shall not retreat too far ” (vol. 33, p. 116)

At the beginning of 1922, the discussion of state capitalism takes another turn with the placing of the state enterprises on a profit or commercial footing. The essence of this change may have meant a return to what they were trying to accomplish in 1918, when they had first launched the slogan “organize production along state capitalist lines." But now this state sector is surrounded by a free capitalist market. The picture of NEP capitalism becomes clearer. Lenin’s most remarkable article on this theme was “The Role and Functions of the Trade Unions Under the NEP,” January 1922. It is remarkable because of the blunt and unvarnished assessment of the economy, and because of its insight into what this reality means for the class struggle and the workers’ role.

(From “The Role and Functions of the Trade Unions Under the New Economic Policy — Decision of the C.C., R.C.P.(B.)” — January 12, 1922:)

1. The New Economic Policy and the Trade Unions

The New Economic Policy introduces a number of important changes in the position of the proletariat and, consequently, in that of the trade unions. The great bulk of the means of production in industry and the transport system remain in the hands of the proletarian state. This, together with the nationalization of the land, shows that the New Economic Policy does not change the nature of the workers’ state,. . .

In particular, a free market and capitalism, both subject to state control, are now being permitted and are developing; on the other hand, the socialized state enterprises are being put on commercial lines, which will give rise to the impression among the masses that there is an antagonism of interest between the management of the different enterprises and the workers employed in them.” (vol. 33, pp. 184-5)

2. State Capitalism in the Proletarian State and the Trade Unions

". . . But even if this regulation is completely successful, the antagonism of class interests between labor and capital will certainly remain. Consequently, one of the main tasks that will henceforth confront the trade unions is to protect in every way the class interests of the proletariat in its struggle against capital. This task should be openly put in the forefront, and the machinery of the trade unions must be reorganized, changed or reorganized accordingly (conflict commissions, strike funds, mutual aid funds, etc., should be formed, or rather, built up).” (vol. 33, p. 185)

3. The State Enterprises That Are Being Put on a Profit Basis and the Trade Unions

The transfer of state enterprises to the so- called profit basis is inevitably and inseparably connected with the New Economic Policy; in the near future this is bound to become the predominant, if not the sole, form of state enterprise. In actual fact, this means that with the free market now permitted and developing the state enterprises will to a large extent be put on a commercial basis. In view of the urgent need to increase the productivity of labor and make every state enterprise pay its way and show a profit, and in view of the inevitable rise of narrow departmental interests and excessive departmental zeal, this circumstance is bound to create a certain conflict of interests in matters concerning labor conditions between the masses of workers and the directors and managers of the state enterprises, or the government departments in charge of them. Therefore, as regards the socialized enterprises, it is undoubtedly the duty of the trade unions to protect the interests of the working people, to facilitate as far as possible the improvement of their standard of living, and constantly to correct the blunders and excesses of business organizations resulting from bureaucratic distortions of the state apparatus.” (vol. 33, pp. 185-6)

4. The Essential Difference Between the Class Struggle of the Proletariat in a State Which Recognizes Private Ownership of the Land, Factories, etc., and Where Political Power Is in the Hands of the Capitalist Class, and the Economic Struggle of the Proletariat in a State Which Does Not Recognize Private Ownership of the Land and the Majority of the Large Enterprises and Where Political Power Is in the Hands of the Proletariat

As long as classes exist, the class struggle is inevitable. In the period of transition from capitalism to socialism the existence of classes is inevitable; Hence the Communist Party, the Soviet government and the trade unions must frankly admit the existence of an economic struggle and its inevitability until the electrification of industry and agriculture is completed — at least in the main — and until small production and the supremacy of the market are thereby cut off at the roots.” (vol. 33, p. 186)

(From “Interview with Arthur Ransome, Manchester Guardian Correspondent”— November 5, 1922:)

The real nature of the New Economic Policy is this — firstly, the proletarian state has given small producers freedom to trade; and secondly, in respect of the means of production in large-scale industry, the proletarian state is applying a number of the principles of what in capitalist economics is called 'state capitalism' ” (vol. 33, p. 407)

(From “Eleventh Congress of the R.C.P.(B)— Political Report of the C.C. of the R.C.P (B.)” — March 27, 1922:)

We are now forming mixed companies which, like our state trade and our New Economic Policy as a whole, mean that we Communists are resorting to commercial, capitalist methods.” (vol. 33, p. 272)

It was also at the Eleventh Congress that Lenin discussed at some length the question of “state capitalism under communism.” The central theme is the distinction between state capitalism under bourgeois rule and state capitalism under proletarian rule.

" . . .Not a single book has been written about state capitalism under communism. It did not occur even to Marx to write a word on this subject; and he died without leaving a single precise statement or definite instruction on it.

The state capitalism discussed in all books on economics is that which exists under the capitalist system, But ours is a proletarian state. . . . That is why very many people are misled by the term state capitalism. Our society is one which has left the rails of capitalism, but has not yet got on to new rails. The state in this society is not ruled by the bourgeoisie, but by the proletariat. We refuse to understand that when we say ‘state’ we mean ourselves, the proletariat, the vanguard of the working class.

State capitalism is capitalism which we shall be able to restrain, and the limits of which we shall be able to fix. This state capitalism is connected with the state, and the state is the workers, the advanced section of the workers, the vanguard.

We are the state.” (vol. 33, p. 278)

One of the striking features of Lenin’s writings in late 1921 and in 1922 was that the concept of a “socialist sector” or “socialist enterprises” is dropped. During this period he refers to nationalized or state or even socialized enterprises, but not socialist. The emphasis seems to be on the reality that they are surrounded by the free market and that they themselves are being put on commercial lines, and therefore a special type of state capitalism has been created. After the 11th Congress in April, 1922, Lenin devoted most of his attention to problems of state organization. Then in January, 1923, near the end of his political life, Lenin dictated the article “On Co-operation.” This article reverts to the more limited concepts of state capitalism (as in the earliest NEP writings), defining state capitalism as essentially concessions, plus the cooperative societies. Yet the co-ops he also tends to equate with socialism (echoing similar formulations from 1918).

(From “On Co-operation” — January 4 & 6, 1923:)

" . . .Indeed, the power of the state over all large-scale means of production, political power in the hands of the proletariat, the alliance of this proletariat with the many millions of small and very small peasants, the assured leadership of the peasantry, etc.—is this not all that is necessary to build a complete socialist society out of co-operatives, out of co-operatives alone, which we formerly ridiculed as huckstering and which from a certain aspect we have the right to treat as such now, under NEP? Is this not all that is necessary to build a complete socialist society? It is still not the building of socialist society, but it is all that is necessary and sufficient for it.” (vol. 33, p. 468)

And given social ownership of the means of production, given the class victory of the proletariat over the bourgeoisie, the system of civilized co-operators is the system of socialism.” (vol. 33, p.470)

" . . . In the prevailing circumstances, concessions in our country would unquestionably have been a pure type of state capitalism. That is how I argued about state capitalism.

But there is another aspect of the matter for which we may need state capitalism, or at least a comparison with it. It is the question of co-operatives.

In the capitalist state, co-operative are no doubt collective capitalist institutions. Nor is there any doubt that under our present economic conditions, when we combine private capitalist enterprises with enterprises of a consistently socialist type (the means of production, the land on which the enterprises are situated, and the enterprises as a whole belonging to the state), the question arises about a third type of enterprise, which were not formerly regarded as an independent type differing fundamentally from the others. Under our present system, co-operative enterprises differ from private capitalist enterprises because they are collective enterprises, but do not differ from socialist enterprises if the land on which they are situated and the means of production belong to the state, i.e., the working class.

If we exclude concessions, which, incidentally, have not developed on any considerable scale, co-operation under our conditions nearly always coincides fully with socialism.

Now we are entitled to say that for us the mere growth of cooperation (with the ‘slight’ exception [concessions—Jim] mentioned above) is identical with the growth of socialism, (vol. 33, pp. 473, 4)

Some Observations (4):

The adoption of the NEP poses a series of issues around the question of “retreat.” Was the retreat inevitable? Was it dictated by the mistakes or excesses of “war communism”? Was it or wasn’t it a retreat in fact? The discussion of these issues goes well beyond the intent of this report. However, there are a few things of note relating to Lenin’s views on state capitalism.

Lenin’s public pronouncements repeated the expression “retreat” in regards to the lapse of the state grain monopoly (and then to state control via “commodity exchange”). It is either a retreat from communism, or from socialism (and in a few places a retreat from state capitalism). And that is the mood about it, not unlike the retreat from Poland.

But the question arises, was this actually a retreat in terms of economic progress? At the 10th Congress in March 1921, there is a very striking sentence in the midst of Lenin’s explanation of the abandonment of the compulsory state grain monopoly and going over to free exchange. He points out: “Theoretically speaking, state monopoly is not necessarily the best system from the standpoint of the interests of socialism.” There was no elaboration, and there were only hints of this idea in other writings. However, it probably should not be dismissed lightly. When Lenin prefaced a proposition with “theoretically speaking” there was usually some theoretical line of thought behind it. It seems that this possibility that “state monopoly is not necessarily the best system” raises a number of questions about such things as the grain monopoly, the trade monopoly and a number of other key points to the plan to reach socialism through state capitalism in the conditions of Russia in that epoch. Was going over from state rationing of extreme scarcity to a certain freedom of trade a “retreat” or an advance from the economic point of view of socialism? Or similarly, was going over from a primitive system of local barter to buying and selling a “retreat” or an advance?

One of the principal issues seems to be that it is necessary to examine how state capitalism evolved and took hold in Russia. In the earlier writings of Marx and Engels, as well as in Lenin’s own Imperialism, the Highest Stage of Capitalism, state capitalism is presented as the natural end product of the concentration of large-scale industry and commerce. It has its foundation in the huge economies of the giant trusts, conglomerates, corporations, banks, etc. Clearly, the state capitalism of First World War Russia (and probably much of the rest of Europe for that matter) was something of a different animal. True, there was a section of the economy dominated by large, modern production, a section that was nearly destroyed by the imperialist war and the civil war But the rest of the state capitalism was an emergency measure imposed from above, a government decree managed by tens of thousands of bureaucrats, on top of millions of small to tiny producers. What could be the fate of such a “hot-house” state capitalism that lacked a firm economic foundation? There were but two possibilities: either a social explosion, or bureaucratic tutelage.

This attempt to create a “hot-house” state capitalism began quite early, at least from the time of the appeal to “copy German state capitalism” in early 1918. The “hot-house” got much hotter with war communism until the first signs of social explosion. It then became apparent to most that there was insufficient soil to root the plans for state capitalism, let alone socialism and beyond.

It seems that with NEP Lenin had gained at least a partial recognition of the poor results to be expected of any attempts to force the issue on a population of small producers. But his views on this were not consistent or systematic. He frequently posed the necessity of a protracted process to bring about electrification, collectivization and large-scale agriculture as the way out. But no less frequently did he present the end of the “retreat" as the imminent task, to be accomplished as soon as the forces of organization and control had the strength to go back on the offensive against the free market, etc. This ambiguity was part of the tension from the outset of NEP, a tension that was never resolved. Thus, NEP succeeded in putting the lid on the immediate social explosion, giving the apparatus of the party and the bureaucracy room to regroup and then renew the offensive against small capital, etc. In general, the conditions of NEP Russia (even “high NEP") remained within the same backward framework as say 1918. Yet. the whole discussion of when and how to “renew the offensive" failed to work through the ambiguities about state monopoly, etc. Success was to be measured by the avoidance of social explosion, while failure loomed in the form of bureaucratic state tutelage.

Another major question from this period is exactly what was the nature of the role played by the soviet state in the economy? In particular, what did the predominance of bureaucracy and old functionaries mean? Lenin goes back again and again to the theme that state capitalism in the Soviet Republic was unlike any other state capitalism because the state was “ours,” it was the proletariat or the vanguard of the proletariat. Hence the formula: “state capitalism under communism.” At the same time, Lenin paid a great deal of attention to the fact that this state had a “bureaucratic twist,” that it was “utterly useless”, and weighted down with hold-overs from the bureaucratic capitalist state machine of the past. It seems that these two propositions had to intersect somewhere. What does it mean when the state is only partly “ours,” when a bourgeois class force also had a grip on it?

In places Lenin touches on this issue. For example, in “The Role and functions of the Trade Unions Under the NEP” (January 1922): “Therefore, as regards the socialized enterprises constantly to correct the blunders and excesses of business organizations resulting from bureaucratic distortions of the state apparatus.” (vol. 33, p. 186) But this article, which in many ways is profound and insightful, did not directly pose the question of the weaknesses in the state in regards to state capitalism under communism idea. In fact, in the later writings observations such as “high salaries mean state capitalism” that were being made in 1918, drop out of the discussion.

The question of the nature of the state power goes beyond this report. But it seems that it was a major failing to not more directly and forcefully make the link between the weaknesses in the proletarian power and the prospects of state capitalism under workers* rule as a means of transition. This is all the more striking given that Lenin wrote a dozen articles declaring that “the proletarian state must become a shrewd businessman, merchant” or some version of the same. But instead of clear warnings, a definite perspective, there was ambiguity and plenty of contradictory viewpoints.

That is the only way to read the January 1923 article “On Co-operation.” This article reflects one extreme in Lenin’s views over a five or six year period, albeit at the outer limit of the pendulum swing. The views equating cooperatives with socialism were in line with similar opinions expressed in 1918 (see above). The limiting of the concept of state capitalism to simply concessions was similar to the discussion in early 1921. Expressions such as “still not the building of socialist society, but it is all that is necessary and sufficient for it” were similar to other vague generalities that make it difficult to penetrate any precise economic analysis.

For the first time in the history of communism, the Bolsheviks grappled with the nuts and bolts, the practical questions of transition from a capitalist to a socialist economy. No doubt, Lenin was the clearest of them and broke new theoretical ground with ideas about state capitalism under workers’ rule as a transit point to socialism, and related questions of transition. Before 1917 Russia, these ideas had not been broached, and Lenin’s most insightful writings (e.g. “The Role and Tasks of the Trade Unions Under the NEP”) stand head and shoulders above the discussion of the tasks of transition generally found in the works of the post-Lenin leadership.

However, there are also articles such as “On Co-operation” which are one-sided along the same lines which eventually became the state capitalist orthodoxy. Maybe the famous expression about eagles sometimes flying as low as chickens applies here. In any case, for whatever reason (press of work? health? disposition? other? which is not explored in this report), Lenin did not completely live up to the framework which he indicated. Thus, the framework is left only in broad outlines with a number of big loopholes in it. The post-Lenin leadership made good use of these weaknesses to snuff out what was critical, radical, and Marxist in Lenin in favor of their self- satisfied optimism that led to pawning off a consolidated state capitalism as the victory of socialism.


1 The omitted words are: “or, to put it more simply and clearly, war-time penal servitude for the workers and war-time protection for capitalist profits.” — JG.

2 This is from a paragraph in which Lenin is characterizing the contradictions in an article from Plekhanov, who castigated “people who call on the Russian working masses to seize political power, an act which would make sense only if the objective conditions necessary for a social revolution prevailed. These conditions do not exist yet. ” Lenin says this is “a muddle, not a thought” The hill title of Lenin’s article is “A basic question/A line of argument used by socialists who have gone over to the bourgeoisie.” — JG.

3 The report left out the quotation marks around the word “introduced” — JG.

4 The omitted words are “of the production and distribution of goods, this will be, so to speak”.—JG.

5 The “shell of our state capitalism” also included “state-controlled entrepreneurs and traders”; and it was “socialism” as well as “state capitalism” that were at war against “the petty bourgeoisie plus private capitalism” because both included the element of accounting and control.—JG.

6 The omitted words are “economize on labor, and steadily raise the productivity of labor, thus making it possible to reduce the working day to seven, six and even fewer hours. ” — JG.

7 Lenin talks of the agreement with “the bourgeois cooperative societies” and “the workers' co-operative societies which still adhere to the bourgeois point of view ” (Emphasis added) — JG.

8 Lenin describes the compromise which was made as follows: “We should have done this without the assistance of the bourgeois co-operative societies, without making any concession to the purely bourgeois principle which prompts the workers’ societies to remain workers’ societies side by side with bourgeois societies, instead of subordinating these bourgeois cooperative societies entirely to themselves, merging the two together and taking the entire management of the society and the supervision of the consumption of the rich in their own hands” (p. 256). — JG.

9 This refers to Lenin’s “Draft Program of the R.C.P.(B.)”, which states at one point “U is impossible to abolish money at one stroke in the first period of transition from capitalism to communism. The R.C.P will strive as speedily as possible to introduce the most radical measures to pave the way for the abolition of money, first and foremost to replace it by savings- bank books, cheques, short-terms notes entitling the holders to receive goods from the public stores, and so forth, to make it compulsory for money to be deposited in the banks, etc. Practical experience will show which of them are the most expedient.” (vol. 29, pp. 115-6). — JG.

10 The omitted words are “and against that which is newly arising on the basis of petty commodity production.”—JG.

11 One may get a wrong idea of what Lenin is saying unless one reads a little further. Lenin goes on to point out: “ in the spring of 1918 we did not argue that we were going back to state capitalism, but that our position would be alleviated and the solution of our socialist problems facilitated if state capitalism became the predominant economic system in Russia.

I shall give you an example One of the first decrees at the end of 1917 was that which established a state monopoly of advertising. It assumed that there would be a more gradual transition to the new social press, but the establishment of a certain amount of state capitalism that would direct it into the channels of state capitalism. The decree assumed that privately owned newspapers would continue to exist as a general rule, that an economic policy requiring private advertisements would continue, and that private property would remain There was something analogous to this in the decrees on banking.” Lenin then describes that the capitalists, instead of paying a tax on advertisements, “retaliated to this decree of the state power by completely repudiating that state power The capitalist class had adopted the tactics of forcing us into a desperate and relentless struggle, and that compelled us to destroy the old relations to a far larger extent than we had at first intended. ” Thus such decrees as the one on advertising came to naught.

Lenin says “we cannot but regard our decree as naive and, to a certain extent, mistaken. Nevertheless, it did contain something that was right, in that the state power — the proletariat-made an attempt to pass, as gradually as possible, breaking up as little of the old as possible, to the new social relations while adapting itself as much as possible, one may say, to the conditions then prevailing.” But, Lenin said, the bourgeoisie wouldn’t submit without first testing the proletariat’s strength through the Civil War. (Vol. 33, pp. 89-91)—JG.

12 The following words, expressing the limits of the free markets, were omitted: “The proletarian state may, without changing its own nature, permit freedom to trade and the development of capitalism only with certain bounds, and only on the condition that the state regulates (supervises, controls, determines the forms and methods of, etc.) private trade and private capitalism.” — JG. []

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