State capitalism or bureaucratic collectivism? The debate on the ‘Russian Question’ in the Workers’ Party

Published below is a rare account of a debate on the ‘Russian Question’ between by Raya Dunayevskaya and Max Shachtman, two theorists of the old Workers Party in the USA. It remains vitally important to bring to light efforts by Marxists to come to grips with the fate of the Russian Revolution and the Stalinist societies in the USSR and Eastern Europe whose legacy still constitutes a major block to socialist revolution. The continued existence of dictatorships calling themselves ‘communist’ which oppress millions in China, North Korea and Cuba makes it not a purely historical question. There is also an additional relevance of the discussions on the ‘Russian question’, that is that we should see it as integral to our efforts to conceptualize and project a socialist alternative to today’s age of global capitalism. It is a necessity to so that we may prevent future revolutions transforming into their opposite – another totalitarian state-capitalist society.


Dunayevskaya was described by Adrienne Rich as “one of the longest continuously active women revolutionaries of the twentieth century”. Born in Ukraine, her pro-Bolshevik sympathies began when the Red Army liberated her village from pogromists during the Civil War. Emigrating during the 1921 famine she joined the Communist Party in Chicago in her early teens and forged a close relationship with the struggle of African-Americans, working with the Chicago based Negro Champion paper of the American Negro Labor Congress. In 1928 she was thrown out of the Young Workers League by the Stalinists for requesting they hear Trotsky’s response to his expulsion. Dunayevskaya sought out and joined the young Trotskyist movement in New York, working as secretary to James P Cannon, and taking part in the intense struggles of the 1930’s in cities across America. In 1937 she moved to Mexico to work directly with Trotsky serving as his Russian language secretary. Her closeness to Trotsky, who she considered the greatest living revolutionary, did not prevent her questioning his political and theoretical positions in the light of the Moscow Trials and the Spanish Civil War. As she later wrote: “Out of the Spanish Civil War there emerged a new kind of revolutionary who posed questions, not against Stalinism, but against Trotskyism, indeed against all established Marxists”.


The catalyst for Dunayevskaya’s break with Trotsky was the Hitler-Stalin Pact of 1939, which gave the green light for World War Two. Trotsky still defended the USSR as a “workers state, though degenerate” and this stubborn insistence, she asserted, was rooted in his fetishising of statified property: “nationalized property = workers state”. Dunayevskaya wrote that she “felt the need to prove my conviction, that what had occurred was a total transformation into opposite, that Russia had turned from a workers state into a state capitalist society. It took three years before I finished my study of the three Five Year Plans from original sources, set in the context of a new world stage of capitalism”. Dunayevskaya followed the Workers Party led by Max Shachtman out of the SWP (USA), which retained its orthodoxy. In 1941, in the Workers Party bulletin, she published The Union of Soviet Socialist Republics Is a Capitalist Society. At the same time CLR James published a separate article, arguing for the same definition. James (party name J.R.Johnson) and Dunayevskaya (Freddie Forest) formed the State-Capitalist tendency more commonly known under the Johnson-Forest tendency label.


The ideas of the majority of the Workers Party leadership led by Shachtman who elaborated a theory of bureaucratic collectivism have been republished most notably in the collection The Fate of the Russian Revolution. Whilst later writings of Dunayevskaya and CLR James have been published in the UK, their earlier works the especially on the Russian Question are less well known. This is partly due to the role in this country of a later state-capitalist grouping founded by Tony Cliff, now the SWP. They built a myth that Cliff was the author of the “original theory of state-capitalism” within the Trotskyist movement. Something perpetuated by his apostle Callinicos. The relationship of Cliff to then actually existing State-Capitalist tendency is instructive; we can see from the very inception of his tendency it bore all the hallmarks of a sect. Dunayevskaya recalled that by 1943 her theory was known in Europe, Cliff “not only knew of this but refused categorically to acknowledge that anyone internationally could have done original work in Marxist Theory ahead of him”. In 1947 Cliff was coming to the conclusion that Russia was a state-capitalist society:

“Nevertheless, he refused to vote for my resolution at the Fourth International Conference or to take any stand, until he had “his study” completed. That occurred the next year. And, again, despite references to many sources that would prove his “erudition”, he made not a single reference to my study; much less acknowledge that a study before his had been done on this question. We nearly came to blows when I arrived in London in 1947 and found that his analysis was so fully economist that we really did have little that we agreed on. For example, the theory of State-Capitalism in our tendency was never separated from the new forms of Workers Revolts, in which of necessity the spontaneity of the Masses played a crucial role. His administrative mentality merely treated spontaneity of the Workers as if it were an “Anarchist Aberration”. The same divergence of views separated us on the question of Palestine as even that early; he refused to see anything revolutionary in the action of the Jewish masses to rid themselves of British Imperialism.”


Thus so important to Cliff was the theory of state-capitalism that he essentially refused to wage a struggle within the Fourth International. Within his own organization when support for the theory of state-capitalism as developed inside the Workers Party was raised, he expelled the adherent. Dunayevskaya subsequently wrote that: “It is the human problem that is the problem of our age. Without the Humanism of Marxism, the theory of state-capitalism could degenerate into one more variety of economism”, and that is certainly is true of Cliff’s sect.


Dunayevskaya considered that “from the start of the state-capitalist debate in 1941, my immediate point of departure was not the crimes of Stalin, but the role of labour in a workers state”. Yet in addressing this question she was hampered early on, whilst The New International was prepared to publish An Analysis of the Russian Economy in 1942, she was prevented from publishing its preface Labour and Society which was based on her study of Marx’s yet un-translated manuscripts of 1844 on ‘Alienated Labour’. Part two of the study was submitted to New International in August 1943 and also denied publication, also in the internal bulletin. In fact no writings by Dunayevskaya on state-capitalism appeared in the New International until December 1946. This is a sad reflection on what was an otherwise excellent publication, the fact that other writings on state-capitalism by Ukrainian Marxists were published in Labor Action and New International is rather damming of the conduct of the elements of the leadership.


Unlike other theorists of state-capitalism and bureaucratic collectivism, Dunayevskaya believed that the law of value ruled in Russia, a law operational in bourgeois society alone. A further unique feature of Dunayevskaya’s theory is her view of the issue as more than a “Russian Question”. Contrary critics such as Callinicos’s criticism, she did not ignore the impact of the world market as. As she later wrote:

“Because the law of value dominates not only the home front of class exploitation, but also in the world market where big capital of the most teehnologica11y advanced land rules, the theory of state-capitalism was not confined to the “Russian Question,” as was the case when the nomenclature was used by others. Quite the contrary. The new in the theory of state-capitalism, its dialectics, its conclusions, demonstrated, first, that the State Plan, the State Party, the monolithic State, differed in no fundamental degree from the capitalism Marx analyzed- in Capital, where he showed that it was not the anarchy in the market but the ‘despotic plan of capital’ which labor confronted daily in the factory. Equally fundamental was the second point my study made, that the 1930’s made it possible to prove, in the concrete, what Marx could only state in theory about the ultimate development of the concentration and centralization of capital “in the hands of a single capitalist or a single capitalist corporation”.


The question of revolutionary potential of the working class itself became a key feature of the divergence. The state-capitalist tendency argued that majority tendency was “governed by the theory of ‘historical retrogression’, this was elaborated by the IKD in Germany.

“The authors of that theory said that the degeneration of bourgeois society meant also the degeneration of the proletariat. Our conception was the exact opposite. We said that the degradation of bourgeois society was due to the maturity and power of the proletariat”.


The debate below between Shachtman and Dunayevskaya came shortly before the State Capitalist tendency broke from the Workers Party to rejoin the SWP-(USA). This retrogressive step was actually not the opinion of Duneyavskaya herself, unity with the SWP (USA) was however agreed by the Workers Party in February 1947, minority followed it through in dismay at what they saw as the disruptive manoeuvres of the majority. It is this authors opinion they were all wrong, the minority would have been better placed within the Workers Party to resist the turn to the right and Shachtmans abandonment of building an organized a ‘third camp’ socialist alternative.

Sean Matgamna in his own volume Fate of the Russian Revolution completely removes the State Capitalist Tendency from his selection of writings of the Workers Party, this misnamed Lost Texts of Critical Marxism is noticeable for the absence of those critical of Matgamna’s favoured positions. (Not to mention the complete absence of any of the Soviet or East European Marxists) In one of his accounts Matgamna knowingly lies that the tendency “remained in the SWP/USA virtually silent”. To give one of many examples, they presented and fought at the 1948 SWP Convention for their Resolution on the Negro Question; by 1948 the tendency was as well known for its position on the independent self-activity of Black Americans. There was also an intense struggle with the SWP leadership over the miners’ general strike of 1949-50. Dunayevkaya was also engaged very public fight with Novack expressed in her essay The Revolt of the Workers and the Plan of the Intellectuals a defence of State-Capitalism and World Revolution. Dunayevskaya continued to project the theory of state-capitalism, in 1947 she attended the conference of the RCP (UK), and in France at the Second Congress of the Fourth International where she debated Ernest Mandel.



In 1950 the tendency broke with the SWP, to form the Correspondence group. They further split and in 1954 Dunayevskaya moved to Detroit with a number of supporters and founded the News and Letters Committees, an organisation of Marxist-Humanists that exists to this day, centred in Chicago. It is in this later period that her most widely respected contributions to Marxist Theory were made, notably here three books Marxism and Freedom, from 1776 until Today (1958), Philosophy and Revolution: from Hegel to Sartre and from Marx to Mao (1973), Rosa Luxemburg, Women’s Liberation, and Marx’s Philosophy of Revolution (1982).


Dunayevskaya developed the theory of state-capitalism in response to a world situation very different from our “post-communist” era. In revisiting this debate we should see the necessity of an absolute critique of capitalism in all its forms of appearance. For over half a century state-capitalism paraded as its opposite – socialism, and has shown clearly the aspiration for power, so desired by many a ‘radical’, and the creation of a free classless society are not a priori the same thing. In developing a renewed socialist alternative to our present decadent capitalism, we can learn from these debates in the 1940’s in our fight for workers liberty and human emancipation in the 21st century.

The Russian Question:


A debate between Raya Dunayevskaya and Max Shachtman

May 25, 1947


Dear Comrades:

The NY [New York] local of the WP [Workers Party], yesterday held the first of the announced series of discussions on the various positions of the party. The topic was the Russian Question with Shachtman for the Majority and Forest [Dunayevskaya] for the Minority. Each had 1 hr 15 mins for the presentation and 15 mins for summary. At the meeting there was time only for questions from the floor. At the next meeting on June 7, the floor will be open for discussion to be followed by a final summation by each speaker. Rather than edititorialize about the meeting I’ll report the substance of the reports, the questions asked and summaries. Shachtman spoke first:

Max Shachtman


The Russian Question is the most important question for the revolutionary movement since the Russian Revolution. It dominates the political life of the world bourgeoisie and the world labour movement a well as that of the Fourth itself. The answer given to this question will determine the fate of the revolutionary movement and the character of the epoch.


The studies and analyses of the Russian Question are the greatest contributions made by the Trotskyist movement and above all by Trotsky himself. We shall confine today’s discussion to the class character of the Stalinist state today.


The state is a political institution consisting fundamentally of prisons and military bodies of men separated from the people as a whole. Its function is to keep in subjection the class from which the ruling class derives its power and wealth. The ownership of the means of production determines the ruling class. Thus, the slave owners ruled the slave states, the landowners in feudal society, and the capitalist owners rule in capitalist society. But where there is no ownership as such what are the class characteristics of the ruling class? The working class, with Russian Revolution, took over the ownership of all the means of production and turned it over to the state they established. We have thus a new criterion for determining the ruling class. The class character, therefore, of a workers’ state is not determined by who owns the means of production since the state owns them and the state is not a class. Therefore the class character is determined by the class character of the state. This is a political not an ownership criterion. The class character is not determined by the ownership of the property but by the ownership of the state. The political power of the bourgeoisie is assured by its economic power, which is assured by its ownership of the means of production. The economic power of the working class, on the other hand is assured by its political power. We therefore called the Bolshevik state a workers’ state. The Bolsheviks were on their guard against the restoration of capitalism from two possible directions:

– from the armed imposition from abroad

– from the re-emergence of the petty capitalist elements still in Russia, the Kulaks and Nepmen.

For years now the Russian working class has had no control at all of the state and no political power. Given our premises it is therefore sufficient for us to conclude that Russia is not a workers’ state. Without political power the state can’t be a workers’ state. It is political power, which safeguards the workers control of the state. But if the working class is not the ruling class who is?


A degenerate workers’ state.

Trotsky saw a way out by developing the theory of a degenerate workers’ state. A Bonapartist workers’ state. He said the working class has no political power but neither have the capitalists because nowhere has private property been restored. Rather the Kulaks and Nepmen have been completely destroyed. There are still some elements of them but these are completely unimportant. Nationalized property, he said still remains in existence as established by the Revolution, it is therefore a degenerate workers’ state. Trotsky said the workers no longer have political power but they retain economic power. From our basic criteria that the economic power of the working class rests on its political power we say that Trotsky was completely wrong. Trotsky correctly looked for the restoration of capitalism in the restoration of private property, where Lenin also looked for it. But the state property developed at the same pace as the loss of political power by the proletariat. This dilemma the workers statists don’t begin to resolve.


State capitalism

For many years another explanation has been offered: Russia is not a workers’ state because the proletariat lacks political power. Neither is it a classical capitalist state. However it is a particular type of capitalists state. In Russia, the theory says, we have state capitalism. This theory had its greatest dissemination from the European, especially the Russian, Mensheviks. I don’t state its origin to discredit the theory. But even before the Russian Revolution the Mensheviks had a rigid conception of Marxism. They therefore denied in advance the possibility of Socialist Revolution in Russia. They insisted therefore that only a bourgeois revolution was possible for Russia. The insistence that post-Bolshevik Russia is a capitalist state flows logically from the wooden conception of the pre-Bolshevik Mensheviks. Thus for Otto Bauer, R Abramovitch, for Dan, for Kautsky, Russia was state capitalist. All support their thesis by quoting from Engels. His quotation, always misunderstood and improperly applied, has been used by all of these as the peg for their theories.


The peculiarity of the state capitalist theory is two-fold:

the term is used by all these theoreticians to characterize the most antagonistic phenomena. What they cannot explain, they call state capitalism;

no two people will agree or can agree on a definition of what is state capitalism.

The formula state capitalism tells us nothing because it covers too much. It tells us nothing, which specifically distinguishes what is in Russia. According to it we would also have to call England, Germany, Japan, Poland, etc. state capitalist. All specific differentiation is thus lost. The liberal radicals say that state capitalism exists where the state is the only capitalist. This is ridiculous. Capitalism can never exist without a capitalist class. The state is not a class. It has been said that the capitalist is only an agent, but without that agent there is not, nor can there be capitalism. If you say this then I add that where there is only one capitalist in whose hand are concentrated all the means of production, then it is no longer capitalism. If, therefore, you say the state is the capitalist, you deal in contradictory terms. Moreover, this has never been the Marxist conception of state capitalism.


Lenin said the state capitalism the Bolsheviks “are establishing is unique”. Bukharin wrote much about it but where he wrote that capitalists in one country can abolish competition, Lenin appended “Can not”. Bukharin’s example of state monopoly capitalism was the United States of World War I. But here private property existed and competition existed. In no country of capitalism has it ever been seen in any stage of development at all, where the state takes over private property and capitalism remains.


I don’t claim to be a great theoretician but I console myself by watching those who do claim it. Still I have learned something: Everything I learned about capitalism from the theorists of our movement all said that for capitalism to exist there must be these basic features:

predominance of commodity production i.e., production for the market, production which operates by the blind dictates of the market;

private ownership of the means of production and exchange;

existence of free wage labour. What does Marx means by free wage labour? He gives the term a dual meaning: 1. Labour must be free of ownership the means of production and 2. it must be free politically – no serf is a wageworker.

Not one of these three basic requirements exists in Russia today. All writers and teachers of Marxism agree on these criteria of capitalism. Read Marx, Engels, Kautsky, Bogdanov, Lenin, Trotsky, Sverdlov, all the standard texts, all agree. There is no reason to revise that. But state capitalists say they won’t argue about it. Instead they say that in Russia the law of value operates in full force.


Since it operates in Russia and also under capitalism, Russia therefore is state capitalist. But this is not true as the state capitalists state it. The law of value says Marx, is a natural law. It is neither established nor wiped out by capitalism. Scientists distinguish the forms in which it operates. It operated one way under Lenin, one way under Stalin, and it operates one way under Truman or Hirohito. Under capitalism the law of value operates under private exchange. This distinguishes it specifically. Marx and Lenin themselves say so. Let me refer to a few of the other laws operating under capitalism. Under capitalism regardless of the relation between constant and variable capital we have the achievement of an average rate of profit. How is this established in Russia if Russia is capitalist? The rate of profit is of vital significance in capitalist production. Without it there would be utter anarchy. For a given total national capital there is earned a given national surplus (national profit). How is this distributed among the various capitalists? By what law? By a political decision? No. By a basic economic law, which says, I get from the national profit the percentage of which my capital is of the total national capital. Steel therefore gets more than coal. Under capitalism production is only for profit. If I don’t get a profit I quit producing. How is this manifested in Russia? Do the Russian capitalists divide it according to percentage of total capital? If not, then by what law?


Many of the state capitalist theoreticians are anti-under consumptionists. They say there are disproportions. What determines these disproportions in Russia? In capitalism this is determined by blind distribution of the national capital in private property. Who composes the capitalist class of Russia? The state is not a class. Which is the class in Russia? How does one become a capitalist in Russia? Here you can buy in. How do you enter and leave it in Russia? How is the class perpetuated? By what economic means? By inheritance? How else? Is there not nevertheless an inherent trend towards the concentration of capital? Isn’t there such a concentration in Russia? It is counteracted by other tendencies moving in the opposite direction, but this isn’t important. We can’t deny the theoretical possibility. But if you achieve such concentration in one hand, then capitalism comes to an end.


The last refuge is that it is a unique capitalism in Russia because it follows a proletarian revolution. It has no natural history. All other capitalisms and capitalist classes came out of pre-capitalist conditions. This one came out of decayed bureaucracy. In that case it must be acknowledged that such capitalism has never existed before nor will it again unless there is the perspective of other proletarian revolutions, which will decay. Lastly, if Russia is a fascist state capitalism, there should be some reflection of that in the social world outside of Russia. Somehow the international working class feels that Russia is anti-capitalist. Certainly the international bourgeoisie knows that it is anti-capitalist.


Bureaucratic collectivist state

Now to summarize our position: What then exists in Russia? We call it a bureaucratic collectivist state – anti-proletarian and anti-socialist, but also anti-capitalist. The ruling class is a bureaucracy. The possibility of such a bureaucracy was foreseen by Marx. I’ve already published without challenge that the leader next to Trotsky of the Russian opposition said in 1931 that in Russia there is a unique ruling class. Bukharin said that in degeneration a peculiar ruling class could emerge. Trotsky allowed for its possibility and concluded therefore that if it occurred Marxism would have proved to be a utopia. I don’t agree with his conclusions but nevertheless he allowed for the theoretical possibility. Our theory arose from our analysis of the developments in Russia. It is impossible for the working class to maintain power indefinitely in one country and it is impossible to create socialism in one country. We thought that the capitalists would be restored but the Russian bourgeoisie proved to be too weak to retake power. Capitalism can come to Russia primarily from the outside. But world capitalism didn’t and couldn’t do it because it was too weak and too torn by its own internal contradictions. In the midst of this mutual impotence, to maintain the revolution or to re-establish bourgeoisie rule, the unique ruling class brilliantly foreseen by Bukharin came to pass by smashing both the working class and the remnants of the bourgeoisie in Russia. The bureaucracy came to power and expanded production – not socialist production or capitalist production, as the international capitalists know it. The working class does not exist in its capitalist form or in its workers’ state form. Even less does the old bourgeoisie exist.


Trotsky said that in fascism on the one hand and in Stalinism on the other we already have the beginnings of barbarism. The future of barbarism cannot be seen a priori. We don’t pretend the longevity for the bureaucracy that Marx could foretell for capitalism. That task remains to be done. Bureaucratic collectivism has demonstrated the incapacity of the working class to re-establish society on communist beginnings if confined to one country. The working class internationally is inexhaustible, but in one country it is exhaustible. The future of Stalinism can be seen only in struggle. Our task is the effort to lead the struggle against Stalinism. I hope to develop in future discussion the crisis in the Fourth as remaining left wing of Stalinism or the left wing of the working class.

The substance of Forest’s submission follows


We have been treated to a curious lecture by comrade Shachtman. You might have thought that we have not had six years of struggle. He disregarded the development of the war on the development of Eastern Europe. Also he disregarded his own position. We don’t expect another Capital, but in six years we expect more than he said in 1941. He spent ten minutes on workers statism, fifty minutes in state capitalism, and only fifteen minutes on bureaucratic collectivism. But in his fifteen minutes had time enough to say he disagreed with Trotsky, or only partially agreed with him on the question of the reappraisal of the epoch. It is just like saying the lady is only a little bit pregnant.


In 1946, we summed up our differences. We said Trotsky left us a dual heritage: the concept of world revolution and the concept of workers statism. We said we must retain the one and change the other. The Majority and the IKD did the completely opposite: on the basis of the degeneration of the October Revolution they revised the concept of world revolution. It is therefore necessary to see how Trotsky developed the theory of permanent revolution. He said the most advanced state will give the characteristics of the world revolution and the development of the production relations. But in the concrete state, by combined and uneven development, we cannot ignore the less advanced. What is involved is not setting the date for the revolution but placing it in perspective of world revolution. What is involved is the perspectives of world revolution. Therefore in revising Trotsky’s workers statism you must use is own method: world revolution on the basis of the objective development of the economic forces and on the basis of working class intervention. The inevitability of socialism is based only on the collapse of capitalism. Every generation of Marxists has had to work this out concretely.


Marx drew his conclusions of how the law of value operates in advanced capitalist countries. The “how” for Marx was not to remain in the market and its “equality” but to go into production. The conflict between one group who produce more than his value and the group who usurps the value. This inequality is the heritage of Marx. How was he able concretely to foresee what we are seeing now? By analyzing the conclusions of the law of motion of capitalism. We have to see how he analyzed the limits of capitalist society. Since World War II, incidentally Max, Hilferding said that the Mensheviks were wrong before. That there is no state capitalism in Russia because there is no private property.


Marx set himself the task of determining whether the law of value with it concomitant, the law of the concentration of capital, would change the law of the declining rate of profit and the aggregate of constant to variable. Marx said “No”. You can’t avoid this contradiction. Marx made this analysis in Volume I and set it up as his premise, so to speak, in Volume II. Engels carried the analysis forward in Anti-Duhring and the Critique of Erfurht and said that after a certain stage you cannot any longer have “planlessness.” Lenin put it in State and Revolution; Bukharin in the ABC of Marxism; Trotsky in the first manifesto of the Bolsheviks. This was no abstraction because the Bolsheviks face the problem of making the Russian workers’ state into a world workers’ state. Trotsky, who later denied capitalism in Russia still allowed for its theoretical possibility. He said state capitalism would be no mystery to us; the only difference would be that instead of the rate of profit being decided by competition it would be decided by the state. The average rate of profit is not decisive to Marx. The law which capitalists cannot escape is the law of the declining rate of profit because labour is the only source of surplus value. In 1929 we moved to a stage past 1929, and with the rise of fascism there was further indication that statification is the new phenomena of capitalism. What has occurred?


With World War II and the role of Russia in the war, new questions arose. In 1946 we said: “The experience of Stalinist Russia since 1936 has exploded the idea that planning by any class other than the proletariat can reverse the laws of motion of capitalist production. Planning becomes merely the stratified instead of the spontaneous submission to these laws…Stalinist Russia, driven by internal contradictions of value production, i.e. capitalist production, has defeated Germany only to embark on the same imperialist program, regrouping in peace the economic and political methods of German imperialism, direct annexation, looting men and materials, formation of chains of companies in which the conquering imperialism holds the largest share”. (Bulletin of the Workers Party, Vol.1, #2, April 27, 1946)


We went further. We tried to analyze politically, philosophically, statistically what occurred. We don’t accept Shachtman’s ridiculous hierarchy of politics versus economics.


When we come to analysis of our age we say the phenomenon today is statification. Russia is the central question today in the sense of being the first in life of what was foreseen theoretically. We saw that statification had no effect on the capitalist laws. It is not private property but how much of surplus value extracted goes back into production. What is involved is how the law of value operates in the new decadent society.


Marx wrote:

“Those who look upon the self-development of value as a mere abstraction, forget that the movement of industrial capital is the realization of this abstraction. Value here passes through various forms in which it maintains itself and at the same time increases its value. As we are here concerned in the form of this movement, we shall not take into consideration the revolutions, which capital-value, may undergo during its rotation. But it is clear that capitalist production can only exist and endure, in spite of the revolutions of capital-value, so long as this value creates more value, that is to say, so long as it goes through its cycles as a self-developing value or so long as the revolutions in value can be overcome and balanced in some way, The movements of capital appear as the action of some individual industrial capitalist who performs the function of a buyer of labour-power, a seller of commodities, and an owner of productive capital, and who brings about the process of rotation by his activity. If social capital-value experiences a revolution in value, it may happen, that the capital of the individual capitalist succumbs and fails, because it cannot adapt itself to the conditions of the conversion of values. To the extent that such revolutions in value become acute and frequent, the automatic nature of self-developing value makes itself felt with the force of elementary powers against the foresight and calculations of the individual capitalist, the course of normal production becomes subject to abnormal speculation, and the existence of individual capitals is endangered. These periodical revolutions in value, therefore, prove that which they are alleged to refute, namely, the independent nature of value in the form of capital and its increasing independence in the course of its development.” (Capital, Vol.II, p.120)


It is this law of value which operates in Russia and which makes itself felt in spite of the bureaucracy. It shows that state capitalism, which is the highest form of capitalist development, is also the disintegration of capitalism. Not only is obsolescent material destroyed, but also inefficient managers are purged. Capitalism in its modern state form destroys capitalists because there is no stability for the modern capitalist of such a state.


In 1947 it is no longer only the beginning. It is the beginning of the end. This is what we must analyze, not the law of private property. Marx said it was possible to have “private” capitalism without private capitalist property, that’s, why he could speak of communal capitalism and of capitalist communism.


We know that in the workers’ state the law of value operates in the sense of the existence of the world market, but it does not operate to the extent that the working class intervenes in production and it withers away to the extent that the workers intervention causes the state to wither away. The difference between domination and operation.


In 1943, the Stalinists revised Marxism by stating that the law of value operates but it is not capitalism since, in effect they said, since production is organized in a soviet state.


It is a sorry sight when a leader of a Marxist movement like Comrade Shachtman at this stage of decadent capitalism, does everything to obscure what Marx worked so hard to reveal in the progression of successive historic orders – the general motion of societies. This general law Shachtman transforms into an iron succession. He proceeds to throw this straw man down not by revealing how Russia has deviated and escaped from the “iron pattern” but in fact that the “regime of Mahomet Ali” does not fit into it. Instead of showing how Russia differs. Marx wrote of the economists:

“The vulgar economist thinks he has made a great discovery when, as against the disclosure of the inner connection, he proudly proclaims that in appearance things look different. In fact he is boasting that he holds fast to the appearance and takes it for the last word.”


The bureaucratic collectivists make much of the fact that the bureaucratic collectivists cannot be called capitalists because the capitalists don’t choose introduce “bureaucratic collectivism.” They substitute the will of the capitalist for the law of capitalism. It is like Kautsky’s argument, which said that imperialism is not a stage of capitalism but is a policy preferred by bad capitalists.


It is still necessary to see what laws are operative not what laws are claimed not to operate. Shachtman says the future will be decided by struggle. This is evasion. Does the struggle flow from the regime and the economy or is it a fervent wish? Is bureaucratic collectivism replacing capitalism in Yugoslavia, in Czechoslovakia, in Poland? What kind of an analysis is it which fails to deal with this? In Chicago, Ferguson said that the law of motion in Russia is suspended. That economic laws don’t operate there today because politics prevents them from operating. That there is no anarchy of production in Russia. Does Shachtman say this too? Shachtman makes a big thing of slave labour. He speaks of the two-fold freedom of free labour finding it to be 1) freedom from ownership of the means of production and 2) freedom to sell its labour power on the market, i.e. political freedom. But this is not what Marx meant by the two-fold freedom. What Marx said was:

“Free labourers in the double sense that neither they themselves form part and parcel of the means of production, as in the case of slaves, bondsmen, etc., nor do the means of production belong to them, as in the case of peasant-proprietors; they are, therefore, free from, unencumbered by, any means of production of their own”. (Capital, vol. I, p.785)


This is the Russian worker, the Nazi worker, and the American worker today in this stage of capitalist decadence. The degradation of the worker results not from the decadence of the Kremlin, but from the decadence of capitalism.


Has Stalinist Russia avoided the anarchy of production, crises, unemployment, has it solved capitalist contradictions? If it could solve those contradictions it would rule the economy not be ruled by it.


I say therefore, that in revising Trotsky’s workers statism, we revise it in the context of world revolution. You revise the context of world revolution in the light of Russian degeneration. In Russia do you call for a proletarian revolution or a slave revolt. Slave revolts could organize no new society. Proletarian revolution establishes a new society.


In the dispute between Lenin and Bukharin, Bukharin said throw out everything which preceded the revolution. Lenin said the whole must be seen as a process, Lenin wrote: “This is the general perspective of world history. Whatever the subsequent vicissitudes of the struggle may be, however many partial zigzags it may be necessary to overcome…in order not to get lost in these twists, in order not to get lost in the periods of retreat, retirement, temporary defeat, or when history or the enemy throws us back…” And I add: It is all the more necessary now to say not if the revolution fails then what, but to base ourselves on the unconscious strivings of the working class to reorganize society on communist beginnings.

The following were the questions asked during the questions period:


Vaughan to Forest: Marx speaks about crises and explains it thus: a particular capitalist reinvents and sets new relations between constant and variable and the crises occur. How do you explain that this should occur where there is a single capitalist without competition? Why should he reinvent to alter the relation between constant and variable? Why can’t he plan properly? How do you explain crises on your basis?


Bob L to Shachtman: You state two prime requisites for capitalism: 1) commodity production for the blind market; 2) disproportionality of production. Such disproportionality should not exist in Russia according to you; therefore crises should not exist in Russia? If there are no crises then there is an advanced society. Is this true of Russia?


Jimmy to Shachtman: Has the theory of bureaucratic collectivism a position on 1) Which of the basic contradictions of capitalism has Russia solved? 2) Are the will and intelligence of the Russian bureaucrats still subject to the blind economic laws as are the will and intelligence of the capitalist class? And flowing from these. 3) Will you relate historically, the bureaucracy to capitalism?


I. Berg to Forest: Do you consider the Nazi bureaucracy as part of the capitalist class? If you do as Jimmy claimed in 1941, how can we speak of Bonapartism in Germany? How speak of capitalists expropriating capitalists?


Lund to Forest: In the Struggle for the New Course, Shachtman related the bureaucratic struggle first against the right wing and then against the left wing. On the basis of state capitalism how do you characterize the 1920 struggle?


Ricky to Forest: If the blind economic laws can in part be consciously controlled in a workers’ state, why isn’t it possible for state capitalism to plan the proportion between constant capital and variable capital in the same way as the working class can?


Ruth to Shachtman: Forest in her studies of the Russian economy showed that in Russia the same relationship exists between the production of the means of production (Dept I) and the production of the means of consumption (Dept II) as exists in capitalist society. From what economic laws does this drive in Russia if not from the capitalist law of accumulation?

Shachtman asked Forest whether there is no disproportionality in Russia. To what does Shachtman attribute this disproportionality in Russia?

If the law of value operates in Russia, to what extent does it do so? What is produced in Russia? Use value? How is this so?


Hank Newman to Forest: In relation to labour being free in a double sense: free of the tools and free of the land, i.e. to go where it wishes, is this true in Russia?


Maggie Bell to Forest: Jimmy said that bureaucratic collectivism arises from Trotsky’s theory of the workers’ state and he is opposed to both. How then does he justify making a bloc with them against us?


Norman to Shachtman: Shachtman poses as a criterion of capitalism the private ownership of the means of production and exchange. Did this exist in non-capitalist society?


Herman Fenwick to Shachtman: Did free labour exist in Nazi Germany?


Herman Fenwick to Forest: were the 1936 purges, purges of inefficient managers? It seems to me that her position on purges is a justification of the Stalinist purges.


Howe to Forest: Forest says bureaucratic collectivism denies the inevitability of socialism. She says that evaluating phenomena and then drawing conclusions is pragmatism, which she opposes. On what basis does she determine inevitability?


G.Blackwell to Forest: By what concrete mechanism does the law of value lead to the declining rate of profit. How does this occur in Russia?


Nelson to Forest: Didn’t the same phenomena of Russia today exist in Lenin’s Russia?


Corbin to Forest: Is international competition, i.e. military competition between nations necessary to calling Russia a state capitalism. If Russia conquered the world would it still be capitalism?


Corbin to Shachtman: In the United States there is competition between individual capitalists, but in Russia international competition affects its internal economy. In spite of no competition within Russia, why doesn’t world competition acts as a substitute for the Russian economy?


Yoni to Shachtman: Marx used the mode of production as a determinant of the character of the state. What is the mode of production in Russia?


Berg to Forest: From 1923 to 1936 what were the laws of motion of the degenerate workers’ state? What contradictions existed in the degenerated workers’ state of that period? What was the relationship then between the bureaucracy in Russia and the capitalist class in Russia and throughout the capitalist world?

Shachtman for ten minutes:


I asked certain basic question. What the characteristics of capitalism as Marxists have always defined them? Do they apply to Russia? I still want answers. The three basic characteristics of capitalism as I stated them and I quoted many Marxist theoreticians in support. I want a good reason why this has to be abandoned to accommodate the theorists of state capitalism in Russia. Is there a tendency to a single state capitalism? Yes. But Marx and the Marxists have made it clear that when that occurred it would no longer be capitalism. Marx:

“The rate of profit is the compelling power of capitalist production, and only such things are produced as yield a profit. Hence the fright of the English economists over the decline of the rate of profit. That the bare possibility of such a thing should worry Ricardo, shows his profound understanding of the conditions of capitalist production. The reproach moved against him, that he has an eye only to the development of the productive forces regardless of ‘human beings,’ regardless of the sacrifices in human beings and capital values incurred, strikes precisely his strong point. The development of the productive forces of social labour is the historical task and privilege of capital. It is precisely in this way that it unconsciously creates the material requirements of a higher mode of production. What worries Ricardo is the fact that the rate of profit, the stimulating principle of capitalist production, the fundamental premise and driving force of accumulation, should be endangered by the development of production itself. And the quantitive proportion means everything here. There is indeed something deeper than this hidden at this point, which he vaguely feels. It is here demonstrated in a purely economic way, that is from a bourgeois point of view within the confines of capitalist understanding from the standpoint of capitalist production itself, that it has a barrier, that it is relative, that it is not an absolute, but is only an historical mode of production corresponding to a definite and limited epoch in the development of the material conditions of production.” (Capital, vol. III.pp.304-5)

In Russia you have that single capitalist – the state. What is the compelling law? Marx said it’s profit for the capitalists. Is this so in Russia? Explain this satisfactorily and I’ll agree with you. I’m well known as a vacillator.


Now on the question of value: Here is a letter Lenin calls the outstanding letter for an understanding of Marxism. Letter to Kugelmann, July 11, 1868:

“The nonsense about the necessity of proving the concept of value arises from complete ignorance both of the subject dealt with and of the method of science. Every child knows that a country which ceased to work, I will not say for a year but for a few weeks, would die. Every child knows too that the mass of products corresponding to the different needs require different and quantitatively determined masses of the total labour of society. That this necessity of distributing social labour in definite proportions cannot be done away with by the particular form of social production, but can only change the form it assumes, is self evident. No natural laws can be done away with. What can change, in changing historical circumstances, is the form in which those laws operate in a state of society where the interconnection of social labour is manifested in the private exchange of the individual products of labour, is precisely the exchange value of these products.


The science consists precisely in working out how the law of value operates. So that if one wanted at the very beginning to ‘explain’ all the phenomena which apparently contradicted that law, one would have to give the science before the science. It is precisely Ricardo’s mistake that in his first chapter on value he takes as given all possible categories which have still to be developed in order to prove their conformity with the law of value


On the other hand as you correctly assumed, the history of the theory certainly shows that the concept of the value relation has always been the same, whether more or less clear, hedged with illusions or scientifically precise. Since the thought process, itself grows out of the conditions, is itself a natural process, thinking that really comprehends must always be the same, and can only vary gradually according to maturity of development, including that of the organ by which the thinking is done. Everything else is drivel”


Substantially the same fundamental connection with private property was made in the last thing Marx wrote – a letter to the bourgeois German economist.


When these Marxist fathers spoke of statification of production they meant what is in the United States during the war, and Nazi Germany, etc. They state organizes and controls but private property remains.


In the Sixth World Congress, Bukharin goes into great detail against an Iranian comrade about the question of statification as Bukharin and Lenin spoke of it – the wedding of monopoly with the state machine – and he says it’s theoretically possible that all capitalisms be concentrated in one, but you will then have an exploiting society which will not be capitalism. That will be the end and negation of capitalism. There will be crises but no capitalist crises.


I am opposed to the inexorable historical progression of society. Does that exclude mongrel developments? Mongrel developments, which are more or less outside of the historical epochs. For example see the Oriental despotisms which existed during feudalism and the rise of capitalism.


We cannot and do not attempt to foretell the historical evolution of bureaucratic collectivism. We don’t believe it has one. It has not shown that it can overcome vital capitalism. If it does so, we shall give an even more exhaustive analysis than we have done.


Doesn’t everybody know that wherever Nazi Germany advanced, private property trusts were given to German cartels? But the Russians don’t do this. Can’t we speak of this as a historical aberration without giving up our revolutionary perspective?


Forest for thirty minutes:


In quoting from Volume III, Shachtman starts from the very first with the rate of profit. But he missed what Marx said that the rate of profit is the capitalist form of stating the declining rate of profit arising from the law of value. The same if true when he quotes Marx’s letter.


The dominant force is the law of value. Don’t confuse this with the phenomenal form it takes. Marx insisted on this. Marx keeps referring to private property, but that is the simple agitational way of stating it at one point of development. But Marx always insisted that you can’t consider the form apart from the essence of the production relations. In his letter to Annenkov, Dec. 28, 1846 Marx writing of Proudhon, says:

“Finally the last category in M.Proudhon’s system is constituted by property. In the real world, on the other hand, the division of labour and all M.Proudhon’s other categories are social relations forming as a whole what is to-day known as property: outside these relations bourgeois property is nothing but a metaphysical or juristic illusion. The property of a different epoch, feudal property develops in a series of entirely different social relations. M.Proudhon, by establishing property as an independent relation, commits more than a mistake in method: he clearly shows he has not grasped the bond which holds together all forms of bourgeois production, that he has not understood the historical and transitory character of the forms of production in a particular epoch. M.Proudhon who does not regard our social institutions as an historical development, can only produce dogmatic criticism of them”


Who composes the capitalist class in Russia? I have showed in great detail that it is the 2% “classless intelligentsia” united in capitalism’s disintegrating form.

Now to answer the questions. Those that are not answered today will be answered in our next session. All the underconsumptionists from Rosa Luxemburg to Keynes to Shachtman insist that all you need is a plan. Marx said that the proportion of planning, eight constant to one variable, is technical planning. But Marx said as this continues if the worker could live on air you could not overcome the contradiction of this proportion. One the other hand you have the socialization of labour which drives the working class onto the scene as capitalism’s gravedigger. The chaos arises not from a plan or its lack but from the contradiction between constant and variable capital. Instead of discussing this you give schoolboy definitions of private property. It is impossible to plan against the world market. That is why the workers’ state was transitional and couldn’t remain. That is why we are against the theory of socialism in one country. (Answer to Vaughan)


If there were concentration in the hands, world wide, of a single capitalist, I don’t think it would then be capitalism.

If you are preoccupied with private individual capitalists, I tell you we always speak of agents of capitalism not of capitalists because they express the movement of the law.

You cannot separate politics and economics as you insist in your questions on Bonapartism.

Shachtman speaks of mongrel formations but goes onto make it the basis of a world analysis.

What concrete mechanism brings about the declining rate of profit? Marx says it is the law of value.

Shachtman insists that state capitalism has never been seen and that real statification is only the combination of private property with state power behind it. In Eastern Europe I say it is more than two-thirds stratified. What kind of state is that? Here is something threatening world capitalism yet you say it is a mongrel form which has such enormous social importance.

I say my philosophy, economics and politics flow from the objective collapse of capitalism and the emergence of the working class as its disciplined grave diggers. If you want to play with a new society, Trotsky said realize the ramifications.


Shachtman for twenty minutes:


I insist on my schoolboy definitions of capitalism. I don’t ignore the production relations but I insist that they exist on the three basic requirements. Demonstrate that these exist in Russia.

“Is it a freak?” says Forest. Yes and no. But the answer cannot be demonstrated theoretically, only practically in struggle. If it overcomes capitalism it is not a freak. That remains to be seen. We have seen that it overcame it in Russia and that it challenges capitalism in the world. Whether it can overcome it cannot yet be said. One thing it proved is the incapacity of the working class to withstand bureaucratic collectivism.

The idea that if there is not capitalism then there must be socialism is a myth in the Marxist movement. But the scientists in the movement said when the question was raised that if the workers do not take power another development is possible. Bukharin said so. For one hundred years, while the proletariat was on the rise, the problem facing us did not arise. But we have twenty years of Stalinism. The problem exists and must be answered. Capitalism must inevitably collapse but it is not absolutely guaranteed that socialism will replace it. In order for this to occur, among other things, we must have a strong party.

We are mocked for speaking of a bastard society. But a bastard society implies at least one parent. You have the Immaculate Conception theory. Who were the parents of the Russian capitalist class? Out of what social roots did they come? We know where the capitalists in the United States or Siam or England come from. Where did they come from in Russia? You have created a new class – the state capitalist class. Did they arise from the Kulak or the Nepman? From what? How will this class perpetuate itself? Will it die with the last existing members of the bureaucracy in Russia? Every class perpetuates itself by natural laws. How, by what economic or natural law does it pass on its power in Russia?

Speaking of the division of profit, Marx says: “In a capitalist society, this surplus-value, or this surplus-product (leaving aside accidental fluctuations in its distribution and considering only the regulating law of these fluctuations) is divided among the capitalists as a dividend in proportion to the percentage of the total social capital held by each. In this shape the surplus-value appears as the average profit, which in its turn is separated into profits of enterprise and interest, and which in this way may fall into the hands of different types of capitalists. This appropriation and distribution of the surplus-value, or surplus-product, by the capital however, has its barrier in the private ownership of land. Just as the active capitalist pumps surplus labour, and with it surplus-value and surplus…

4 thoughts on “State capitalism or bureaucratic collectivism? The debate on the ‘Russian Question’ in the Workers’ Party

  1. I strongly disagree that the Group Cliff founded in 1950 was always a sect. In my opinion its development showed real promise at some points to develop into a real thinking revolutionary organisation. Sadly Cliff threw it away when he expelled those elements of the group which had wanted to continue with the rank and file tactic placed firmly at the centre of the groups work. Certainly there were faults even as far back as the late 1960s but the expulsion of the ISO and the Left Faction soon after marked the turning point. In its heyday IS was, whatever else it was, the best of the left sects.

    In addition to the above I do not accept all of Dunayevskajas remarks concerning the origin of Cliffs conception of state capitalism. It seems to be the case, for example, that Cliff was moving towards a state capitalist position long before he left Palestine. Moreover there were many theories of state capitalism prior to Dunayevskaja producing heres as has been amply demonstrated by Paul Flewers in his recent book.

    In passing I note that Cliff came to britain in September 1946 which leaves me baffled as to which meeting of the FI Dunayevskaja would have met him. Was it the April 46 Pre-Conference perhaps? He was certainly not a delegate from the RCP to any later meetings to the best of my knowledge.


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