This distinction took on importance again, thirty years later, when subjectivists were again confused by the ephemeral, superficial characteristics of Stalin's regime, and so again confused this with the class nature of the USSR, and its state, which could only be determined on a scientific, materialist analysis of the dominant form of property, and the social relations developed on it. That was why, just as Lenin was able to look beyond the ephemeral, superficial appearance of the Tsarist regime, to see that Russia was already a capitalist state, Trotsky was able to look beyond the ephemeral, superficial appearance of the Stalinist regime to identify that the USSR was a workers' state. The important point, here, being that a workers' state is not the same thing as a socialist state, just as a workers' cooperative is not a socialist form of property.
It was the petty-bourgeois subjectivists of the Third Camp who could not see beyond the superficial appearances of the political regime to recognise the underlying material reality that the USSR was a workers' state, a state in which the proletariat exercised the social dictatorship on the basis of socialised property. Indeed, the analysis and approach of the petty-bourgeois Third Campists is the same as that of the Narodniks, and necessarily so, because they both belong to the same subjectivist school of moral socialists. The Narodniks had their own “natural path” of how Russian development should proceed, and bemoaned the fact that it was diverging from that path, blaming the fact that reality diverged from their preconceived ideal schemas on the role of foreign capital, or implantation by “the authorities”. The Third Camp of the petty-bourgeois moralists, as Trotsky called them, had their own subjectivist, preconceived ideal schemas of what a workers' state should look like, and what its “natural path” of development should be, and so when the USSR's actual development did not accord with this ideal, they could only conclude that the USSR must then not be a workers' state at all, and could only find the reason for this divergence from their ideal “natural path” in the role of ephemeral, superficial and subjective factors, such as the role of the Stalinist political regime. As with the moral socialism of the Narodniks, the Third Campists started from the superficial and their revulsion of it, and then sought justification of their political agenda by constructing a theory of why the USSR was not a workers' state. By contrast, the scientific, materialist approach, adopted by Trotsky, was to honestly analyse the productive and property relations, in the USSR, and the wider material conditions in which they were developing, and thereby to understand the specific nature of he USSR, out of which the political regime itself arose.
On that basis, as Trotsky said, in the USSR the old exploiting classes – the landlords and bourgeoisie had been liquidated – the forms of property upon which these social classes arose – landed property and capital – had been uprooted, and so there was no economic and social basis for these classes to exist. Even under NEP, the mostly small-scale, capitalist property that was allowed to return was subordinated to large-scale state owned property. Indeed, as Marx and Engels had described, state owned property is just one form of socialised property. As Marx sets out in Capital III, Chapter 27, its not just socialised capital in the form of workers' cooperatives that constitutes the transitional form of property. That applies also to joint stock companies. In capitalist states, the bourgeoisie has ensured that it enacts company laws that enable shareholders to exercise control over property – productive-capital – they do not own. But, even a progressive social-democratic government would overturn such laws, though it would face a huge political struggle in doing so, amounting to a political revolution. Germany's Co-determination Laws do it in part, the same was proposed by the Bullock Report commissioned by the Wilson government, and the EU's Draft 5th Company Law Directive proposed something similar for the whole EU. In practice, these are a charade aimed at giving the appearance of workers control and industrial democracy, whilst retaining control in the hands of representatives of the bourgeoisie.
A Workers' Government certainly could overturn such laws, ensuring that control over socialised capital resided where it belongs – in the hands of the associated producers. So, its quite clear that, on the basis of Marx's analysis of socialised capital, as a transitional form of property, between capitalism and socialism, a form in which capital continues to exist, but no longer as private property, and in which it is owned and controlled by the associated producers, this capital itself is in the process of dissolution, and in transition to becoming simply socialised means of production.
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