CWO Introduction

The latest in our series of translations from the journal Kommunist of 1918 goes under the unpromisingly dry title of “Some Fundamental Concepts of Modern Economics”. This though belies its importance and interest.

As we have noted previously, the contributors to Kommunist came together largely over two issues. They viewed the signing of the Treaty of Brest-Litovsk in March 1918 as an error which would set back the world revolution, and they feared that Russia was heading towards a new form of capitalism, state capitalism. The latter issue was raised in articles we translated earlier by Ossinsky⁽¹⁾ but this one by Bukharin is more substantial, and has the merit of linking the changes in the operation of the capitalist state in the economy to the rise of imperialism based on Bukharin’s own considerable research into the question.

Bukharin changed his position on many issues over his career at the centre of the Russian Revolution and the Soviet state. Even before the German Revolution broke out in November 1918 he (along with another “left communist” Radek)⁽²⁾ abandoned his opposition to the Treaty of Brest-Litovsk. He subsequently also abandoned the Kommunist idea that socialism could only be built from below and was beginning to endorse Party rule as a substitute for class rule by 1920. And, after the Kronstadt Rebellion of March 1921 (where he rejected the official line of it being “a White plot”, instead seeing it as a revolt of “our erring proletarian brothers”), he would go on to write that the contemporary adoption of the New Economic Policy (NEP) represented “the collapse of all our illusions”.

From this time on he became the leading defender of NEP as a “path to socialism” and even supported Stalin’s “socialism in one country”. In his role as leader of the Comintern from 1926-9 he abandoned his former opposition to support for national liberation struggles and thought the anti-colonial struggle of local bourgeois factions would aid the world proletarian revolution (a disastrous policy which contributed to the Shanghai Massacre of Chinese communist workers in April 1927). However, his insistence on maintaining NEP as the gradual build up of Russian capitalism (passing as “socialism”) meant that he opposed all “super-industrialisers” like his former friend and collaborator Preobrazhensky who supported the Left Opposition in the years immediately after Lenin’s death. In alliance with Stalin, Bukharin voted for his expulsion from the party along with Trotsky and many of his former comrades amongst the Left Communists of 1918.

It was with this attachment to continuing the NEP that he also became the leader of the Right Opposition against Stalin’s plans for collectivisation. As a result, he was ousted from the Politburo in 1929, and put on trial in 1937. Found guilty, he was executed in 1938. Bukharin was thus no revolutionary hero. He too succumbed to the reality of the counter-revolution and unsuccessfully attempted to ride it. This though does not nullify his theoretical contribution in the period before 1920. Despite all his political contortions, the consequences of which we can see all too clearly today, the one thing Bukharin always stuck with was his analysis of imperialism and state capitalism which he reiterated even as late as 1927.

Although Lenin criticised him as “scholastic” in his so-called Testament (presumably over such issues as Brest-Litovsk) he also considered him “a most valuable and major theorist of the Party” in the same document. He could hardly have done otherwise given that he had not only come round to Bukharin’s view on the state (as evidenced in The State and Revolution)⁽³⁾ but had also borrowed extensively from Bukharin’s Imperialism and World Economy (1915) for his own work on Imperialism – The Highest Stage of Capitalism written a year later.

The issue they fundamentally disagreed on was the significance of state capitalism and the article which follows is a direct polemic against Lenin’s conception that it was “a step forward” for the Russian Revolution.

Bukharin’s views on the nature of state capitalism were the product of serious work. His 1915 book Imperialism and World Economy ⁽⁴⁾ laid the groundwork. In it he begins by noting that the tendencies Marx had identified in Capital had now produced new contradictions.

The process of the formation of capitalist monopolies is, logically and historically, a continuation of the process of concentration and centralisation of capital … free competition inside of the class of capitalists is being more and more limited by restrictions and by the formation of giant economies monopolising the entire “national” market.

op cit, p. 65

Monopoly producers were so dominant that they became more and more intertwined with the political power – the state.

… the bourgeoisie as a whole is more tolerant regarding monopolistic interference of the state power. The basic reason for this change is the ever growing closeness between state power and the leading spheres of finance capital … a maximum of centralisation and a maximum of state power are required by the fierce competitive struggle on the world market … The bourgeoisie loses nothing from shifting production from one of its hands into another, since present-day state power is nothing but an entrepreneurs’ company of tremendous power, headed even by the same persons that occupy the leading positions in the banking and syndicate offices.

op.cit. p. 155

Thus

With the growth of the importance of state power, its inner structure also changes. The state becomes more than ever before an “executive committee of the ruling classes.” … The state apparatus not only embodies the interests of the ruling classes in general, but also their collectively expressed will.

op.cit p.127-8

With fewer small capitalists to fall by the wayside this heavy concentration of capital transfers competition from the level of individual firms to that between national “champions” backed by their respective states. This was what Bukharin now identified as the era of world economy, that is the springboard for imperialism. And this capitalist imperialism eventually leads to world war:

Capitalism has attempted to overcome its own anarchy by pressing it into the iron ring of state organisation. But having eliminated competition within the state, it let loose all the devils of a world scuffle.

op.cit. p.169

Writing in the middle of the First World War he could also see that in this new epoch it was no one off event.

A series of wars is unavoidable … Once the present war is over new problems will have to be solved by the sword.

op. cit. p.139

The coherence of Bukharin’s view with the essential mainspring of Marxism, and the way it links all the observable phenomena of his time, is thus one of its greatest strengths. The second strength lies in his refusal to accept that state control is “socialism” in any form. In the First World War the fact that the whole of social and economic life was subject to the domination of the militarised state meant that amongst the capitalists there were many who claimed that this was “state socialism”. One such, Max Krahman, quoted by Bukharin in his 1915 work tells us that

The present powerful effect of all the measures in support of the state and in defence of the country … because of military considerations brings us … considerably nearer to State Socialism … This is not internationally diluted but nationally consolidated socialism.

op.cit. p.156-7

It is thus no accident that the great fans of imperialism, Mussolini and Hitler, should also advertise themselves as “national socialists”, something Bukharin himself noted as early as 1927. Mussolini, the one time leader of the Left of the Socialist Party, editor of the Party paper Avanti!, became a fervent supporter of Italian imperialism as soon as the war began. Fascism was the logical outcome of his marriage of imperialism and state direction of capital. Workers’ loyalty was to be to the nation, not the class. Imperialist war was the answer to class struggle. And if you look at the actual political composition of the great German Social Democratic Party you see that it was riddled with racist supporters of imperialism, especially in its trade unions led by the likes of Legien and David. Little wonder that some disgruntled socialists after the “shame of Versailles” should form groups like the National Socialist German Workers' Party of Anton Drexler. This was the vehicle which Hitler took over to promote the same “national socialism” as Mussolini. The key common feature for Bukharin was “the trustification of state power” reflecting “a peculiar form of state capitalism, where the state power controls and develops capitalism”.⁽⁵⁾

Bukharin stresses, again and again, both in the article below, and in his other writings, like The ABC of Communism, that the term “socialism” was continually misused and abused. The key factor was which class controlled the state and society. “Nationalisation of the economy” cannot be socialism if it is still the capitalists who control both. And it still resonates today. From 2008 on the leading capitalist states have continued to absorb the debt acquired by the banking system’s failed speculations. They were considered too big to fail and thus too central to the survival of the system to be subject to some “creative destruction”. At the time it was commented that this was “socialism for the rich”. And today, faced with a global pandemic, every sector of the economy from airlines and builders to restaurants and pubs demand the right to a state bailout. Enough for the Daily Telegraph to announce “we are all socialists now”.⁽⁶⁾ The right wing ideologues of course take their conception of “socialism” from the left wing of capitalism as proposed by the likes of Bernie Sanders, Jeremy Corbyn and Alexandria Ocasio-Cortez.⁽⁷⁾ What they call “socialism” is merely the nationalisation of the means of production. It does not do away with the essential component of capitalism – the exploitation of wage labour – and it leaves the class organisation of society intact. Bukharin takes issue with this idea here using examples from his own time to argue that nationalisation is not socialism if the state is still dominated by the interests of finance capital. State capitalism is thus “the highest power of the bourgeoisie”.

There is however a glaring weakness in Bukharin’s view. After 1921 he does not apply his analysis to the USSR. There are two reasons for this. The first is that, having expelled the capitalists, he believed that the working class, “the proletarian dictatorship”, ruled the USSR through the Communist Party of the Soviet Union, a view he seems to have arrived at by 1920 if the evidence of his book Economics of the Transformation Period is anything to go by. Abandoning his earlier views about the fact that socialism can only be built through working class initiative itself, he writes at length on the need for the compulsion of labour in the Soviet state. He justifies it thus:

In the capitalist regime, compulsion was defended in the name of “the interests of the totality”, while in reality it was in the interest of capitalist groups. Under proletarian dictatorship, compulsion is for the first time really the tool of the majority in the interests of the majority”. [Lenin wrote in the margin “True!”]

op. cit. p.158

But this is the nub of the matter. Bukharin does not question the fact that the Party apparatus and the state now rules over the working class not through it. A new ruling class was in process of formation which, after 1928, would go in for the oxymoronic “socialist primitive accumulation” which his friend Preobrazhensky was calling for.

He could also have argued (had the question ever been put to him!) that in Russia the Soviet Government had reneged on Tsarism’s debts to international capital. So what was going on in NEP Russia in the 1920s was thus unrelated to the process he described where the concentration and centralisation of capital tended to monopoly and this in turn brought out the need for state intervention. He did not grasp that in order to contest the power of finance capital the USSR would have to develop a new form of state capitalism.

There was one element in his theory though that was to be of relevance in regard to the USSR. As we have already noted, for Bukharin, imperialism and state capitalism were linked to militarism and the inevitability of more wars. As he says in the article which follows, “Imperialism, militarism, state capitalism – this holy trinity of capitalist barbarism must be blown apart by the proletariat”. In the USSR exactly the opposite was about to happen. The issue was complex but in the wake of the Shanghai massacre the Left Opposition revived accusing the Bukharin-Stalin duopoly of betraying the revolution both at home and abroad. Stalin now exaggerated threats from abroad (the British Government had cut off diplomatic relations after alleged USSR interference in the General Strike and the Soviet Ambassador to Poland was assassinated by a White Russian émigré) to declare “a war scare”. At the same time he raised the price of industrial goods whilst lowering that of agricultural goods so that the peasantry brought in less grain (a major source of export revenue at the time). This set the scene for both collectivisation and the Five Year Plans (to start the “primitive socialist accumulation” which basically was what Left Oppositionist economists like Preobrazhenzky had been calling for from the earliest days of NEP).

Stalin was now a “super-industrialiser”, and a far more brutal one at that, but to justify it he invoked the military danger to the USSR from the hostile capitalist states surrounding it. In 1931 his speech to industrial managers justified this brutality thus:

One feature of the history of old Russia was the continual beatings she suffered because of her backwardness. She was beaten by the Mongol khans. She was beaten by the Turkish beys. She was beaten by the Swedish feudal lords. She was beaten by the Polish and Lithuanian gentry. She was beaten by the British and French capitalists. She was beaten by the Japanese barons. All beat her because of her backwardness, military backwardness, cultural backwardness, political backwardness, industrial backwardness, agricultural backwardness ... We are fifty or a hundred years behind the advanced countries. We must make good this distance in ten years. Either we do it, or we shall be crushed.⁽⁸⁾

What in fact Stalin was launching was a new form of state capitalism which would be predicated on raising a surplus from the peasantry to invest in the massive exploitation of a class which still thought it was building a new socialist world, but which was creating surplus value for a state which had never really left the imperialist concert of nations (as the secret treaties made with Germany in the 1920s attest). This forced industrialisation of a command economy was the product of a state with huge national resources which had managed to expel those financial capitalists who had dominated Russia’s industry until 1918. A revolution which had withered in its isolation in a single state would thus have to find its own way forward. In doing so, sheltered behind the walls of a non-convertible currency the USSR could become a model for a different form of state capitalism. Tragically it flew under the false flag of “really existing socialism” to its Stalinist supporters and “communism” to its Western opponents. Revolutionaries are still living with the consequences of those mutually reinforcing lies today.

The Stalinist command economy was a model which appealed to the leading elite in many ex-colonial states in Africa, Latin America and Asia. This was especially true after victory in the Second World War had conferred on the USSR the status of a “super-power”. If the USSR had been able to achieve its own “take off” without the assistance of international finance capital they thought they could do the same. However none of them had the size or the natural resources of the USSR. In the Cold War of the next 45 years the USSR also could not match the capital investment that came from the West (mainly the USA). Its best exports were armaments (to foment the wars of “national liberation”). Even here the amount of the USSR’s budget devoted to arms expenditure not only meant economic austerity for its workers but basically brought the system to its knees by 1982. The belated attempt at reform in the 1980s led to its implosion in 1990. Before then though states that had begun by looking to the USSR model were already gradually opening up to Western capital, including Vietnam and, after Mao’s death, China.

Ironically China today provides yet another model of a type of state capitalism. It has abandoned its non-convertible currency for a semi-convertible currency. It opened up to Western finance capital (which could find few really profitable opportunities in the USA, Japan or Europe after 1971) at first via Special Economic Zones which gradually got extended to more of the territory. This combination of Western finance capital exploiting cheap itinerant labour under the direction of an authoritarian one party state is now baptised as “socialism with Chinese characteristics” but there is little doubt that it is yet another “socialism” flying under a false flag or in short, state capitalism.

Even in the West state capitalism has passed through many stages. These have gone from nationalisations in the post-war period and the first attempts to meet the crisis with deficit-financing, to the later restructuring of industry and deregulation of finance. The latter led Western capital to seek higher profits by investing in low wage economies creating the financialisation of the world economy which led to the speculative bubble that burst in 2007-8. Since that time, capitalism everywhere has been on life support and even in this current Covid-19 crisis the capitalists look to the state to finance them. “State capitalism” may be infinitely variable and more complex than Bukharin’s original analysis allowed but he did identify the general historical tendency of the capitalist system in the epoch of its decline.

And it is an irreversible tendency despite the attempts of so-called neo-liberals to reverse it in the 1980s and after. Today the capitalist system would have collapsed if it were not for the daily interventions of the state. However, state capitalism cannot solve capitalism’s recurring crisis of profitability. All it has done over the last 40 years is impoverish the working class whilst keeping the system afloat on a sea of debt and fictitious capital.

With no economic solution in sight who can deny that today’s current capitalist competition is between nation-states rather than individual firms (just look at the fight over Huawei and 5G). In a system which has such an over-accumulation of capital that it needs some massive act of destruction in order to kick start its economy once again imperialist rivalries are rising. We are once again approaching a situation where “new problems will have to be solved by the sword” which will have disastrous consequences for humanity. Despite the passing of time, and the increasing complexity of the world capitalist system, Bukharin’s notion that state capitalism is not a step forward for humanity is one that still resonates today.

Jock and Tinkotka

Notes to the introduction

(1) leftcom.org

(2) Radek also had a chequered, and not always distinguished career, eventually supporting “National Bolshevism” in Germany in 1923. A later supporter of Trotsky he capitulated to Stalin in 1929. He collaborated with Bukharin again on the writing of the 1936 Soviet Constitution. None of this saved him from the Show Trials which condemned him to ten years hard labour in 1937. In 1939 he was allegedly killed in the gulag by another prisoner. There are a number of articles by him in Kommunist and four are already on our site but the most telling of them is this one: leftcom.org

(3) For Bukharin and the The State and Revolution see: leftcom.org

(4) A version of which was also reviewed in Kommunist. See: leftcom.org

(5) Quoted in S.A Cohen, Bukharin and the Bolshevik Revolution, p. 255

(6) For an expansion of this theme see: leftcom.org

(7) See: leftcom.org

(8) J. V. Stalin, Problems of Leninism, (Moscow, Foreign Languages Publishing House, 1953) pp. 457-8.

Some Fundamental Concepts of Modern Economics

In recent times Russian and European economic life has developed many new and complex forms that require a “work of analysis and synthesis” as well as proper classification in the first place. Naturally, here “practice” precedes “theory” and theoretical work can only be carried out after the accumulation of sufficient material. It is also understandable that the preliminary approaches suffer inevitably from serious errors. “Confusion of concepts” is the inevitable sin of human thought when it seeks new paths. Therefore these errors are expressed logically with a bias and a deviation which are owed to a specific social position. In this case, a “tendency” is formed which can be qualified according to its social content. Lenin’s recent speeches, on the one hand, and the series of declarations, articles etc., all very symptomatic, emerge from the workers’ milieu; on the other hand, they show the need for a critical analysis of some fundamental concepts of modern economics.

I

In the current discussions between the Right and the Left of our Party, the question of state capitalism has been put forward. On this subject, Comrade Lenin proposed a series of formulations: “to learn socialism from the organisers of the trusts” (first slogan); “state capitalism [under sovier power] would be a step forward” (second thesis); “state capitalism under Kerensky’s democracy would have been a step towards socialism” – is Comrade Lenin’s third thesis, which he put forward in opposition to the author of this article at one of the most recent meetings of the VtsIK.⁽⁹⁾

We now cite two excerpts from the journal Vestnik Metallista.⁽¹⁰⁾ Here is what Comrade Ya. Boyarkov⁽¹¹⁾ writes in his article “The Problems of the Demobilisation of Industry”:

The young workers’ unions, which do not have much experience of class struggle and are not used to organisational economic activity, must take all responsibility for the State regulation of the economy. Given their astonishing lack of intellectual and industrial forces, without cooperating with the entrepreneurs, the Russian proletariat is alone in imposing a system of control over economic forces, a control characteristic of developed capitalism (my emphasis – NB) in Western Europe.

And further:

It is not socialism or the exclusively bourgeois order that we must set up in Russia. Against the backwards Russian bourgeoisie, we must set up a system of developed capitalism (my emphasis – NB), with State control over production.

Then the author declares that he is under “no illusion that socialism illuminates the East.” Let us compare Comrade Lenin’s declarations with the articles of Vestnik Metallista. Let us also remember Comrade Lenin’s words on the ideology of the metalworkers’ union, which is an example of proletarian ideology. We thus understand that this correlation is not accidental. Obviously, it is in the process of forming a “tendency” which is actually present in the working masses.

Let us now analyse the logical aspect of the above mentioned theses. We see that Comrade Lenin’s “state capitalism” is the same as the “developed capitalism” of Vestnik. Therefore we must first analyse this concept.

What is state capitalism? From the perspective of the techniques of production, it means production controlled by the State, the liquidation of the anarchy of the free market in this domain, and “strict control” exercised by authorities. Production and distribution are organised. Not only are the general conditions of the production process knowingly made part of the general plan of organisation, but so too are the technical details thereof.

From a social and economic perspective, this characteristic is not sufficient, because we must moreover analyse the relations between persons in the production process. State capitalism (“developed capitalism”) is one of the forms of capitalism, a certain form of the power of capital. Therefore, there is no change in the principles of the “economic structure”. The principal relations of production of the capitalist system are those that exist between the capitalist who owns the means of production and the worker who sells his labour power to the capitalist. Under finance capitalism, these relations are maintained, but unlike under industrial capitalism, the individual property of each capitalist is replaced by the collective capitalist ownership of the means of production. State capitalism is the outcome of finance capitalism. Therefore, the principal relations (the domination of capital over the working class) remain entirely intact. But unlike finance capitalism, these multiple bourgeois organisations that concentrate production in their hands (private trusts, cartels, unions of “employers”, etc.) give way to a single organisation of the bourgeoisie – the bourgeois, financial, capitalist and imperialist State.

If we are to characterise state capitalist society from the perspective of the relations of social forces, state capitalism is the highest power of the bourgeoisie. Here the domination of capital becomes extremely and monstrously powerful, it tears down all of its enemies, in the first place the proletariat which is enslaved by the plunderous State.

Finally, if we analyse the question from the perspective of relations between countries, state capitalism means the aggravation of capitalist competition, the economic preparation for future destructive wars (“the militarisation of the economy”), significant development of protectionism and the heightened danger of war.

Let us now analyse state capitalism in relation to socialism. The social patriots of all varieties have declared that state capitalism is a type of socialism. Once the famous German revisionist Edmund Fischer⁽¹²⁾ believed he had found numerous types of socialism following the example of the Prussian or Bavarian kingdoms, which were introducing monopolies: the planning by the State of the monopoly of electricity – here we have electric socialism! The force of water being monopolised – here we had water socialism, etc. In view of the declaration of war and the militarisation of industry, the social patriots declared that it was necessary to support the existing government solely because the bourgeois State was in the process of degenerating into a classless “state socialism”.

After all that, we can understand that this characteristic of state capitalism is a bloody joke for the working class. For state capitalism means the immense strengthening of the domination of capital and the military class as well as the merciless exploitation of the working class. It is not socialism but a slave economy. And in order to build socialism, we must first and foremost destroy the monstrous apparatus of violence and oppression.

This is why the extreme Left of the Zimmerwald International⁽¹³⁾ proposed the slogan considered essential to the era: “Down with state capitalism!” (Gegen den Staatskapitalismus!). This is why this wing refused to support all the measures that were competing to strengthen state capitalism (like the customs Union of Austria-Hungary and Germany).

In this case, the progressive character – from a technical perspective – of this form does not and cannot serve as a tactical criticism. Without a shadow of a doubt, state capitalism is a step forward in terms of the centralisation and concentration of capital. These are the contradictions of capitalist development. This “step forward” simultaneously means a rise in militarism, in the danger of war, in the oppression of the working class, and in the growing threat of socialist revolution; thus, in short, the aggravation of the risk of colossal and barbaric elimination of the productive forces of society. This is why the current epoch imposes on the working class the task, not of supporting state capitalism, but of destroying it. Imperialism, militarism, state capitalism – this holy trinity of capitalist barbarism must blown apart by the proletariat.

And our Party understands this well. Let us recall the debate between the journal Novaya Zhizn ⁽¹⁴⁾ and our press. While Novaya Zhizn, represented by the Bazarovs⁽¹⁵⁾, the Azilovs⁽¹⁶⁾, etc., were in favour of state control, we proposed the slogan of workers’ control from below. And it was not because we were opposed to a central plan and a general organisation from the bottom up. From our point of view, since the imperialist bourgeoisie possesses power, state control means the rise of state capitalism, inevitably accompanied by the enslavement of the working class. At the time, we did not at all share Lenin’s current idea that “state capitalism under Kerensky’s democracy would have been a step towards socialism”. We understood that finance capital, which had “utilised” the leaders of the petty bourgeoisie very well, would have found itself another prop at a time when it was losing all support.

But that which was so clear then has now become obscure for a number of people. When Comrade Boyarkov writes, “It is neither socialism nor the exclusively bourgeois order that we (that is, we the working class) must build in Russia”. And when he admits that this order must be “a developed capitalism”, in this truly classic phrase is concentrated such an abyss of confusion, contradictions and the most unbridled opportunism that reveal themselves here and there in the fragments of the speeches and declarations of many of our comrades.

In fact, “developed capitalism” is represented as some kind of in-between society of transition from capitalism to socialism. And Comrade Boyarkov, a naïve soul, says that capitalism, especially developed capitalism, is not an exclusively bourgeois society. We permit ourselves to reassure Comrade Boyarkov here that state capitalism is bourgeois society par excellence and in its purest form, for in this type of capitalism the power of capitalist organisations is pushed to a limit never seen before. And it is this society that Vestnik Metallista proposes that the workers “build in Russia”! What can we say? What a great task for socialist workers! Until now the Marxists always scornfully turned their backs on the Populists who invited them to “draw the conclusion from it”, that is, to open shops “peddling capitalism”⁽¹⁷⁾ themselves. The Marxists thought that their task was not the “dissemination of capitalism”, but the organisation of the gravediggers of capitalism. Now, it turns out that this old point of view is obsolete; we have arrived at a caricature of Populism; the fact that we are not “disseminating” it now but “building” it is of little consolation to us.

II

The reader must not think that the comrade metalworkers and Comrade Lenin are preparing themselves without further ado for the actual construction of the same relations built by the Lloyd Georges, the Helfferichs⁽¹⁸⁾, the Rathenaus⁽¹⁹⁾ and other oligarchs in Europe and America. This would be truly catastrophic, if after the bloody war against the imperialist bourgeoisie and its agents, the triumphant proletariat built for itself a state capitalist society in Russia… In fact, having read the formulations proposed by Comrade Lenin and the “qualified workers” of Vestnik Metallista, one could easily note that comrades are using words without properly understanding their meaning. Thus Comrade Lenin speaks of “state capitalism under the conditions of the dictatorship of the proletariat” and the author of Vestnik speaks naïvely of the construction of capitalism “without entrepreneurs” (!!). The two are equivalent. State capitalism under the dictatorship of the proletariat is an absurdity, a nonsense. For state capitalism presupposes the dictatorship of finance capital, which means the submission of production to the dictatorial state. “Non-capitalist capitalism” – it is the greatest confusion imaginable.

From this we see that the comrades confuse state capitalism with control over production by the proletarian (or proletarian and peasant) socialist State. State control can have two forms that contradict each other in their social meaning and significance: socialism and state capitalism, and their different meanings depend entirely on the class in power.

But there is no smoke without fire. And in reality, this is not just a confusion of words or terms. Unfortunately this discussion does not only concern ideas. The domination of every class and its power must be analysed not just as a static phenomenon, but in its dynamics, its development or its regression. It is from this perspective that we must analyse the current situation.

Class power consists fundamentally of two elements: its political power and its economic influence, and in the end, the decisive factor is its degree of influence over production. From this perspective, it can be understood that a workers’ and peasants’ dictatorship that did not lead to the expropriation of expropriators and the abolition of the power of capital in enterprise could not be but a passing phenomenon. Inevitably, it would give way to a bourgeois political regime and its historical meaning would be limited to the destruction of the vestiges of feudalism. It is thus that we posed the question, in the era of the previous Revolution of 1905-1907, when bourgeois democracy and not socialism was the order of the day. We considered the “dictatorship of the proletariat and peasantry” as a radical step in the history, sweeping away the last remnants of feudalism and objectively clearing the way for a rapid development of capitalist relations.

It is this question that remains to be answered today. There can be a certain mismatch between the political and economic regimes when the pressure of the “economy” contributes to “political” transformation. Concretely: suppose that the soviet power (the dictatorship of the proletariat supported by the poor peasants), which organises state control in words, bequeaths in practice its management to “trust organisers”. What happens? The real power of capital grows and closes in on the economy. And either the political shell transforms little by little until it becomes despicable, or it “explodes” at some point, because in the long run, “the power of management” of capital over the economy is incompatible with that of the proletariat over the political sphere.

A similar situation is in the process of being formed here. If the tendency towards gradual conciliation with capital prevails (fortunately this is not yet the case) in the economy, it would be the creation of a strong power led by the capitalists that would sooner or later overthrow a political superstructure that would be absolutely intolerable for it. Thus a complete state capitalism would be established and the political dictatorship of capital would hatch from the egg of the economic power of the leadership of “trust organisers”. This real internal danger is precisely what we spoke about in our Theses.⁽²⁰⁾ This danger to soviet power is revealed in the political line of Gukovsky, in the negotiations with Meshchersky (which in the end fortunately were fruitless), etc., and in the articles of Vestnik Metallista. This signifies an orientation towards foreign capital that wishes to establish state capitalism. Unfortunately, the comrades have forgotten that as state capitalism grows, the soul of the dictatorship of the proletariat leaves it.

III

Lack of clarity when we pose the essential question of state capitalism leads to a series of obscurities and errors in almost all questions relating to state control over production. Let us note here those concerning obligation to work and work discipline. According to the analysis above, these concepts can have two completely different and indeed opposite meanings.

Obligatory work service expresses solidarity with the socialist dictatorship. It could equally be the total enslavement of the working class by state capitalism. Work discipline represents fraternal discipline under the socialist dictatorship. However, it is the murder of the soul and misery under state capitalism. As long as the tendency towards state capitalism persists, the first meanings of these concepts will always be transformed into the second ones, which would inevitably detach the working class from the Party that leads the masses to state capitalism.

In discussions with the Left Communists, Comrade Lenin claims in particular that the former do not understand the critical character of the current phase of the revolution which confronts the proletariat with the necessity of everyday work. But we are completely agreed on the need for such work and in particular the consequences thereof. Our real disagreements are totally different, they concern the line dividing state capitalism and the socialist commune State. It would not be difficult to show that the current conception of abandoning collective decision making, based on misgivings in the strength of workers’ organisations, fundamentally contradicts the great slogan once formulated by Comrade Lenin: “every cook can learn to administer the state”.⁽²¹⁾ Nor would it be difficult to show that the “trust organisers” (not the technical staff, but the capitalists as such) have nothing to do with the old slogans which raised the level of activity of the proletariat. But all of this is outside the scope of this article.

Let us return to our analysis of the “fundamental concepts of modern economics”. It seems that that word so typical of our era – “nationalisation” – is in fact responsible for the confusion of ideas.

Nationalisation means statification. But there are two kinds of statification, since the social essence of the State depends on the class on which it rests. “Nationalisation” is a formal concept from a certain perspective, because it says nothing at all about the social content of statification. When American capital takes the railways back into the hands of the plundering State, this is nationalisation. When the Prussian State monopolises the production of electrical energy, this is nationalisation. But the transfer of the sugar industry into the hands of the workers’ and peasants’ State (from the hands of the entrepreneurs), this is also nationalisation. Clearly, in the first two cases, there is no “expropriation of the expropriators”; they simply transfer the exploitation machine from one hand to the other: from the hands of their trusts to those of their State. In the third case, the expropriation is obvious.

Clearly, under the socialist dictatorship, complete nationalisation means socialisation and the transfer of a branch of production into the hands of socialist power.

The word “socialisation” is distorted by certain SRs who use it with a specific nuance (equal plots of land, work quotas, etc.). This does not at all prevent us from so calling nationalisation under the regime of the dictatorship of the proletariat.

The distinction must be made between socialisation and occupation of isolated enterprises by the workers of those enterprises. During the revolutionary ascent, such an occupation transforms inevitably into socialisation; if the revolution decays, either the phenomenon ceases (because the workers “are not capable of doing it”), or (improbably) other workers form “artels”⁽²²⁾ which are doomed to become (like most productive associations) a capitalist enterprise.

Socialisation of production is the antithesis of state capitalism. It is the step in the transition from socialism to communism where the dictatorship of the proletariat withers away and when classes dissolve into stateless communist society, which has become unified and harmonious. Our slogan, like that of the Communist Party, is not state capitalism. It is “towards the socialisation of production – towards socialism!”

N. Bukharin

Notes to the article

(9) Session of the VTsIK [All-Russian Executive Committee of the Soviets] held on 29 April 1918. cf Lenin, Collected Works Volume 27, pp. 279-313 [see “Reply to the Debate on the Report on the Immediate Tasks”, pp. 306-313] marxists.org

(10) Vestnik Metallista, Issue 2, January 1918 - The Metalworkers’ Messenger, organ of the Central Committee of the All-Russian Union of Metalworkers (editor’s note).

(11) Ya. Boyarkov was the pseudonym of Abraham Z. Goltsman (1894-1933): leader of the metalworkers and a supporter of the Meshchersky project developing state capitalism [for details see: leftcom.org Footnote 11]. President of the metalworkers’ union following Shlyapanikov being sent on a mission to Norway, he would be one of the rare syndicalist leaders to support Trotsky in a debate on the unions in 1920. In opposition for a while since he signed the “Declaration of the 46” in 1923, he was later responsible for civil aviation from 1932. He met his death in an aeroplane accident.

(12) Georg Edmund Fischer (1864-1925): German wood sculptor, journalist and Social Democrat, he was one of the founding members of the SPD in Frankfurt am Main in 1890. From 1892 to 1893, he was the editor of the journal Volksstimme, and from 1893 to 1898 the editor of Dresden’s Sächsischen Arbeiterzeitung. Regular contributor to the Sozialistischen Monatshefte from 1914 to 1922, he would have been a delegate at all congresses of the SPD between 1895 and 1916.

(13) It was in the Swiss village of Zimmerwald that the 38 European internationalist militants met from 5 to 8 September 1915 to mark their opposition to the war and their rejection of the Sacred Union. Faced with a right wing satisfied with reaffirming its pacifist principles, the Zimmerwald Left called for the formation of a new international and a break from Social Democracy, whose bankruptcy was evident. leftcom.org

(14) Novaya Zhizn, “New Life”, central organ of the Menshevik Internationalists published in Petrograd by Maxim Gorky. Opposed to the Bolsheviks seizing power, the journal was suppressed in July 1918.

(15) Vladimir Alexandrovich Bazarov (1874-1939): Russian economist and philosopher, he organised with Bogdanov, to whom he remained close, a circle of workers in his native city of Tula. Between 1907 and 1909 he translated Capital into Russian and joined the Mensheviks around 1911. Internationalist during the First World War, principal contributor to the journal Novaya Zhizn, very critical of the politics of Lenin, he would nevertheless later work on Gosplan at the time of the NEP and at the Marx-Engels Institute with Riazanov. Arrested in summer 1930, he was interrogated during the “Menshevik Trial” of 1931 and condemned to 18 months of exile.

(16) Boris Vasilievich Avilov (1874–1938): lawyer, member of the Bolshevik Party in 1904, remained so until April 1917 before joining the Menshevik Internationalists, where he was appointed to the Central Committee in August. He abandoned the politics of the party in 1918 and later worked at the Central Bureau of Statistics as well as at Gosplan.

(17) Reference to the old discussion between the Marxists and the Populists. The Marxists claimed that capitalism was a progressive phase for Russia (socialism being impossible to build without this phase); the Populists consequently invited them to compete in the construction of capitalism.

(18) Karl Theodor Helfferich (1872–1924): German economist, politician and banker, he was State Secretary of State of the Treasury from 1915 to 1916 and Secretary of State of the Interior from May 1916 to October 1917. In 1918 he was appointed German Ambassador to Russia, after the assassination of Count von Mirbach. He was also in charge of collecting funds and funnelling money from the Deutsche Bank to the extreme Right, notably the Anti-Bolshevik League in opposition to the November Revolution and the Spartacist League.

(19) Walther Rathenau (1867–1922): German industrialist and politician, he was the son of the founder of AEG and became a faithful political supporter of the imperialist policy of the Second Reich. He nevertheless grew accustomed to the Weimar Republic, in which he became one of the major figures of the Right. Denounced equally by the extreme Right and the extreme Left, he was the one who negotiated the Treaty of Rapallo with the Russians, which earned him a particularly virulent attack in the Reichstag by Helfferich on 23 June 1922. The next day he was assassinated by the Organisation Consul, which had come out of the Freikorps following the failure of the Kapp Putsch.

(20) cf. pp68

(21) This idea can be found in the second part of the pamphlet “Can the Bolsheviks retain State power?”, which came out in October 1917 in the journal Prosveshcheniye no. 1-2: “We are not utopians. We know that an unskilled labourer or a cook cannot immediately get on with the job of state administration. In this we agree with the Cadets, with Breshkovskaya, and with Tsereteli. We differ, however, from these citizens in that we demand an immediate break with the prejudiced view that only the rich, or officials chosen from rich families, are capable of administering the state, of performing the ordinary, everyday work of administration. We demand that training in the work of state administration be conducted by class-conscious workers and soldiers and that this training be begun at once, i.e., that a beginning be made at once in training all the working people, all the poor, for this work.” See: marxists.org

(22) Or “brotherhood of artisans”, The artel was traditional form of labour organisation under Tsarism in Russia. Bukharin here is referring to all cooperatives and small associations of workers where property was collectively owned.