A Reply To Mike McNair Part I

This is the first part of a reply to Mike Mcnair on the question of the Class nature of the USSR and other Stalinist states. The original discussion began in comments to my previous blog A Critique of the AWL on Socialist Action

Given the nature of the debate, and for ease of viewing and further comments I have moved the debate to a separate blog, and my intention will be to break down Mike's argument into a number of distinct sections, and to respond to them in individual posts. That way further debate should be facilitated.

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“But in very brief, I am *not* a "new class" theorist: my view is that the USSR (etc.) is a form of Bonapartism (high autonomy of the state) transitional between feudalism and capitalism, and that to the extent any class is in the ascendant it is an old class, the petty proprietors.”

I agree that the USSR was a Bonapartist regime. I find your argument that it was the petty proprietors – in which you include the intelligentsia (owners of intellectual property – a term I think in itself is problematic) – who were in the ascendant hard to reconcile with Marxist theory, or empirical evidence, and in conflict with your argument later that the bureaucracy rested upon at least a section of the urban working class. Every bureaucracy is a bureaucracy attached to some class – a state bureaucracy attached to the ruling social class – and in its composition can best be described as petit-bourgeois (though recognising the wide range this term covers) determined by its relationship to the means of production – occupying a necessarily intermediate and mediating role – its lifestyle, and world outlook. Even were we to accept the idea that petty proprietors as a class – and thereby with the same class characteristics as the bureaucracy – were in the ascendant (and I am far from accepting that was the case) it is a far cry from that to identify the state bureaucracy and its interests with those of the petty producers. Indeed as I say later you do not you identify the bureaucracy – correctly – as remaining based on, and ideological tied to the urban working class (not just in the Stalinist states, but globally) so whether the petty property owners were becoming ascendant or not seems moot. It is of no more significance than Marx’s correct observation that within capitalism the social function of the capitalist class would become redundant, and consequently a new middle class of manager’s, technicians etc. would rise, and become numerous, possibly even more numerous than the proletariat proper. Indeed, perhaps even less so. Within the context of an existing capitalism that middle class remains a reservoir of bourgeois public opinion that can only be drawn towards the opposite pole of the proletariat by the increasing effective social weight of the latter. In a Workers State the latter is already the dominating social force. To the extent the social roots of the old exploiting classes have been thoroughly uprooted, the middle class like other intermediary classes is necessarily drawn behind the proletariat. In the context of the USSR the weakness of the Proletariat, and the continued existence of capitalist encirclement – together with the condition of those petty producers – meant that the pull of bourgeois ideas continued to hold sway within large sections of them, hence the largely bourgeois content of much of the samizdat papers circulated by the intelligentsia and other sections of the middle classes – and although this could exert some influence on the ideas circulated within the realm of the State and Party elites it could in no way change the nature of those petty producers as an intermediary class, could in no way change the fact that the working class remained the ruling social class, or that the State remained the State of that ruling social class.

I find the idea that this regime was transitional between feudalism and capitalism novel, but I have to say somewhat bizarre. We have seen lots of regimes that were transitional between feudalism and capitalism, and none of them looked like the USSR. That in itself is not proof that your argument is wrong, but it does mean that a stronger burden of proof is required for your argument to explain why this instance was different from all the others which did share some fairly common features, though of course were not identical in their historical development. I suppose the closest example would be that of Bismark’s Germany, which developed through a sort of state capitalism, but then it is difficult if that is your model to see how your argument is different from the State Capitalist argument put forward by Martin Thomas, which borrows from Dunayetskaya. What we would have would be indeed a new class theory which is nothing more than a more centralised, and rigorous form of Bismarkian State Capitalism, with Stalin in the role of Bismarkian Bonaparte.

I find that argument untenable. Bismark’s State Capitalism did not proceed via a complete, or even near complete statisation of production. It does not do so for very good reasons of the mechanics of capitalist production to do with the maximisation of the rate of profit, and the allocation of Capital to the most profitable activities. Capital as capital must accumulate, and to do so it must maximise Surplus Value. It can only do though if Capital moves to those areas where Surplus Value is highest i.e. it achieves this through the average rate of profit. But, this in itself requires – short of a socialist society – the fundamental role of market prices. But market prices in themselves require the existence of competition between producers. A thoroughly statised economy usually means the absence of such competition, and therefore of effective market prices. The fundamental mechanism for ensuring the allocation of Capital to ensure the maximisation of Surplus Value is removed. I say usually, because it is, of course conceptually possible to consider a fully statised economy where the State acts as a central accounting office, and where Capital is taken in and redistributed according to market mechanisms resulting in competition between enterprises, and market prices. That could be one version of what Marx and Engels described when they spoke of a transitional economy in which Co-operatives continued to compete against each other under the direct control and management of their workers, and through a market mechanism, but in which the actual title deeds to the enterprises were vested with the Workers State. That is not what existed in Bismark’s Germany or in the USSR, or even in Tito’s Yugoslavia.

The closest we have to that kind of State Capitalism is, as I have said in the past, actually what exists in the developed Capitalist economies where although the top few thousand families often continue to have some relation to a particular branch of economy, their wealth is so large that in reality it is spread across the whole of the economy both in the form of share ownership of a wide range of companies – often with interlocking share ownership of companies – and the ownership of State debt. The problem of the average rate of profit is resolved almost instantaneously – whereas for Marx it was a dynamic process requiring years – not by the movement of market prices, and reallocation of physical Capital, but by the revaluation of share prices and corresponding changes in the price earnings ratio, and dividend yield. This small number of super capitalists act as a state capitalist class, and the Stock Exchange acts as the allocator of Capital so as to maximise Surplus Value for this state capitalist class as outlined above. Again this was not what we saw in the USSR or elsewhere.

The obvious question to ask is if these were regimes that were transitional between feudalism and capitalism then why did we not see the kind of automatic processes that led to the domination of Capital that we saw in every other society transitional between feudalism and capitalism? Why did we not see a differentiation of the peasantry into a proletariat, and bourgeoisie? One of the reasons that feudalism broke down was the role of money economy. The feudal lords replaced payment of rent in kind with payment in money, for the simple reason that as trade increases, and as their wants increase their demands rise beyond those which can be met simply by peasant production, and barter of those goods for the things they do want is inefficient and cumbersome compared with the use of money. To obtain money the peasant himself has to engage with the market, has to divert a portion of his production to the market, and thereby to inevitably the merchant. Now we saw that under NEP, we see it in China now and in Vietnam and other Stalinist states, but that process was brought swiftly to a halt by Stalin in 1928, precisely because of the logic of where it leads. Incidentally, I think the Chinese Stalinists will do the same thing in some form too, but I’ll come to that later. But, if you are right if this regime was a transitional society between feudalism and capitalism why stop that process? Of course, Bukharin and the Right didn’t want to stop it, but the fact is that Stalin did stop that process, and stopped it not because this regime was transitional between feudalism and capitalism – in which case the function of the State would be to facilitate that movement – but was transitional between a backward capitalism, and socialism.

Go to Part II