The following article is from Proletarian Revolution No. 65 (Fall 2002).

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Theories of Stalinism’s Collapse

The downfall of the Soviet Union and the Eastern European Stalinist regimes just over a decade ago transformed the world scene. It brought a dramatic end to the Cold War period and inspired voluminous gloating about the “end of history” and the triumph of capitalism in a “New World Order.” It legitimized the neo-liberal free-market outlook, which was thereupon imposed on the ex-Stalinist states; this proved to be an economic disaster not only there but in most of the world as well.

The collapse also disoriented almost all the international far left, organizations and activists who consider themselves working-class revolutionaries. Many leftists were wedded to theories and beliefs that regarded the Soviet Union as socialist or as a workers’ state; thus in their eyes its downfall represented a major defeat for Marxism as well. Others who recognized the Stalinist regimes as counterrevolutionary also became demoralized, because for several years afterwards the working-class audience for socialist ideas shrank significantly under the impact of the Stalinist collapse.

But now that the deepening economic turmoil in the U.S. and other imperialist states is calling capitalism’s triumph into question, openness to socialist ideas is reviving in the working class. That means that a renewed understanding of Stalinism is of vital importance. For it is impossible to understand the world today without understanding the role Stalinism played, both as a deformed form of capitalist exploitation and as a crucial prop for the stability of capitalism on a world scale. Stalinism left us a legacy of two evils: the resuscitation of capitalism from its death agony in the 1930’s, and the destruction of working-class consciousness of the proletarian alternative to capitalism.

Today contradictions reminiscent of those that brought Stalinism down are undermining the stability of capitalism as a whole. Moreover, the false solutions raised by the far left to the crisis of Stalinism are again being put forward as the working-class answer to the mounting crisis of imperialism. For all these reasons, we revisit the debates over the class character and the downfall of the pseudo-socialist societies created under Stalinist rule.

Statified Capitalism

Proletarian Revolution has since 1976 fought for the unique analysis of Stalinism of the League for the Revolutionary Party (and later the Communist Organization for the Fourth International): that the USSR and the other pseudo-socialist states were transient forms of statified capitalism. Now others, including revolutionaries in the former USSR, have come to the same conclusion.

The Soviet workers’ state was created in 1917 by the Bolshevik revolution. Its goal of socialism, a classless society offering abundance for all, depended on the spread of proletarian revolutions to the most advanced countries. But the Soviet Union barely survived the imperialist and Czarist armies that assaulted it in the four-year civil war that followed. The combined devastation of World War I and the civil war left the country even more backward than before; the proletariat, above all its revolutionary cadre, was decimated. Moreover, the defeat of the workers’ revolutionary uprisings elsewhere in Europe isolated the Soviet state. The weakened Soviet state could not get rid of the trappings of capitalism, like exchange of commodities according to value and the wage system. As a consequence, during the 1920’s the conservative bureaucracy led by Joseph Stalin consolidated its power at the head of the state and ruling Communist Party.

The degeneration accelerated in the 1930’s. During the Great Purges in the latter half of the decade, the Stalinists wiped out the surviving revolutionary elements in the party and destroyed the officer corps of the Red Army. The essential core of the state power -- its military, police and judicial arms -- were purged and re-purged until all vestiges of Bolshevism were erased. Thus the state apparatus was smashed and reconstituted into a tool of the top bureaucracy -- a new capitalist class, a regent class ruling in place of the destroyed bourgeoisie. That signified the completion of the counterrevolution: the workers’ state was destroyed. Even though statified industry remained, once the Stalinist bureaucracy had set itself up as a ruling class, like capitalists anywhere it extracted surplus value from the workers through the mechanism of wage labor. The bastardized system that resulted we called “statified capitalism.”

Internationally, the post-World War II USSR nominally supported national liberation struggles against Western imperialism, working above all to prevent these movements from going beyond capitalist bounds. In Europe, it guaranteed the spheres of interest of the U.S. and other Western powers by restraining workers’ struggles. Its role was key in squelching workers’ revolutionary movements after the war. Thus, despite the Cold War rivalry between the USSR and the West, Stalinism upheld the world imperialist order headed by the U.S., while it carved out regional imperialist interests for itself.

This analysis is fully explained in our book, The Life and Death of Stalinism. In this article we will review the question in the light of the collapse of the Stalinist system and the events of the post-Stalinist world, and take up some of the other theories falsely presented as Marxist.

The Collapse of Theory

The “Russian question” has been debated within the working class ever since 1917, but especially since the Stalinists took control in the USSR. Stalin, by then the de facto dictator, asserted in the 1930’s that Soviet society was socialist, the first stage of the classless society, communism. This flew in the face of the materially based teachings of both Karl Marx, the founder of the communist movement, and Vladimir Lenin, the leader of the Russian workers’ revolution, that socialism required the elimination of scarcity; the Soviet workers’ state could achieve socialism only through the spread of the proletarian revolution to the most advanced industrial countries.

Leon Trotsky, the leading communist oppositionist to Stalinism’s betrayal of the revolution, challenged Stalin’s dogma with the analysis that a political counterrevolution had occurred: the workers’ state had not been eliminated but was moving not toward socialism but back toward capitalism. The USSR under Stalin’s bureaucracy had become a “degenerated workers’ state”: it had removed the working class as a whole from the actual exercise of state power, undermined its revolutionary achievements and was on the road to restoring capitalist rule. Trotsky labeled the continuing counterrevolution a “preventive civil war” against the proletariat but did not draw our conclusion that the social counterrevolution had been completed; that is, that the class nature of the state changed from proletarian (albeit degenerated) to capitalist.

Contrary to Trotsky’s prediction, rooted in his mistaken belief that the degenerated workers’ state persisted, World War II led not to the end of Stalinism but rather its expansion, into Eastern Europe by Soviet conquest and into China and other Asian countries through revolutions by Stalinist parties not based in the working class. Independent workers’ uprisings in several countries were crushed. The Stalinists first ruled through popular-front coalitions with traditional bourgeois parties. Only when the working class had been contained and decapitated did the Stalinists consolidate their regimes of statified capitalism.

The Trotskyist movement, the Fourth International (FI), was in disarray after World War II. (Trotsky himself had been killed on Stalin’s orders on the eve of the war.) It adapted to the middle-class milieu that grew rapidly in the imperialist countries during the post-war boom. The triumphs of Stalinism infected it with the cynicism toward proletarian revolution common among the petty-bourgeois intelligentsia. Whereas Trotsky had considered the Stalinist and social-democratic reformists to be counterrevolutionary enemies of working-class socialism, the FI adapted to these milieus in Western Europe; they were seen as progressives whose vision just didn’t go all the way to socialist revolution. From there it was but a short step to the notion that the Stalinists in Eastern Europe and elsewhere could carry out the socialist revolution if they were “prodded” by the mass struggle.

On the new regimes in Eastern Europe, the FI had first said, accurately, that they were state capitalist. But this set up a contradiction in that the USSR, with much the same economic structure, was still supposed to be a workers’ state. Then, several years after the fact, the “orthodox” majority led by Michel Pablo resolved the contradiction by deciding that they had become workers’ states, “deformed” rather than degenerated since the working class had never conquered power. How states created by crushing the working class could be workers’ states of any kind was never seriously explained. Nor could all the Pabloite orthodoxists agree on just when the new workers’ states in Europe were created: when the Soviet Army “liberated” them from their previous Nazi conquerors in 1944-45, or when the Communist Parties consolidated sole power some years later. (Chapter 7 of our book has a detailed discussion of these issues; see also Stalinist Expansion, the Fourth International and the Working Class in PR 64.)

Several minority groupings among the Trotskyists objected to these brain-twisting denials of Marxism. James Cannon, the leader of the American SWP, wrote:

I don’t think you can change the class character of the state by manipulations at the top. It can only be done by a revolution which is followed by a fundamental change in property relations.... If you once begin to play with the idea that the class nature of the state can be changed by manipulations in top circles, you open the door to all kinds of revisions of basic theory. (SWP Internal Bulletin, October 1949.)

Ernest Mandel, the chief Trotskyist theorist in Europe, had likewise correctly insisted:

We will continue, until we have sufficient proof to the contrary, to consider as absurd the theories of a ... degenerated workers’ state being installed in a country where there has not previously been a proletarian revolution. (Fourth International, 1947.)

Shortly afterward Cannon and Mandel both went along with these revisions and absurdities and swallowed the deformed workers’ state travesty.

Other dissidents tried to resolve the contradiction in other ways. Some developed theories that the USSR and its imitators were state capitalist, describing the exploitation of the Soviet workers and other Stalinist crimes. C.L.R. James and Raya Dunayevskaya came closest to a fully Marxist understanding by beginning to analyze how capitalism’s law of value operated in the USSR. Tony Cliff labeled the system state capitalist but insisted that it lacked wage labor and the law of value. Max Shachtman and others agreed that Stalinism did not follow capitalist laws and therefore was a new non-capitalist exploitative society called bureaucratic collectivism.

Other faults aside, none of these currents dealt adequately with the historical dimension of the “regime change” in the USSR: how and when had the Soviet workers’ state been done away with? Trotsky’s analysis of the “degenerated workers’ state” was the necessary starting point. Yet James-Dunayevskaya, Cliff and Shachtman all rejected the very concept of a degenerated workers’ state -- that a workers’ state could be reversed in its course and be hurled backward toward capitalism. They all said or implied that the Stalinists had ended the workers’ state the moment they consolidated power in the 1920’s or early 1930’s.

A key to this question that they did not grasp is that capitalist forms are inherent within a workers’ state. Marx and Lenin stressed that a workers’ state is not yet socialism but transitional to it; it is a “bourgeois state without the bourgeoisie.” Thus the early USSR started off as a battleground between capitalism’s blindly operating, anarchic laws of motion (summed up as the law of value) and conscious proletarian direction.

The three formulas that held sway among self-styled Trotskyists -- deformed workers’ state, bureaucratic collectivism, and Cliff’s state capitalism -- were in fact variants of a common theory. They all denied the centrality of the law of value under Stalinism because they regarded value to be determined by exchange on the market, not by the exploitation of workers in production. All three held that the only economic regulator was the allegedly conscious planning by the ruling bureaucracies.

Versions of these theories continue to the present day. None could explain how the Stalinist system worked or account for its demise. They could neither predict nor account for (in some cases, not even admit) the weakening of the Stalinist system that led to its collapse; indeed, they all saw it as stronger and more dynamic than Western capitalism, for better or for worse. That left them floundering and ultimately capitulatory when it came to intervening in the class struggles that erupted.

The Theory of Collapse

Stalinism survived as a world power for almost a half-century after World War II. Yet up until the very end, almost all observers, right and left, thought the Soviet system would remain essentially intact for decades. Bourgeois spokesmen in the West had previously exaggerated the economic strength of the USSR for several reasons: to justify the enormous imperialist military build-up, and to suppress the class struggle at home in the face of a powerful external opponent. After the fall, they proclaimed the virtues of “democracy” and the “free market” and promised that these fictions would bring the region out of its doldrums. This was hardly a disinterested opinion, since Western imperialists shared in the looting of the former Russian empire that accelerated when Boris Yeltsin came to power in late 1991.

Left analysts did little better. The “orthodox Trotskyists,” led by Mandel of the United Secretariat tendency (USec), regarded the Stalinist states as progressive with respect to capitalism. They hailed the initially high growth rates in Russia and Eastern Europe after the war without recognizing that these were temporary, as in much of the traditional capitalist world. Thus they were caught by surprise when the system’s internal rot set the stage for its collapse. After the fall, despite their common theory, they could not agree on whether or when the ex-Stalinist states had become capitalist. The “theory” turned out to be no basis for analysis but simply a name for societies that once had seemed free of capitalism’s crises.

The main state capitalist current, Tony Cliff’s International Socialist Tendency (IST), saw statified economy as the more dynamic culmination of capitalism’s centralizing tendencies and therefore interpreted Stalinism as capitalism's future development, which had already superseded imperialism as the system's highest stage. Thus they could not foresee the rulers' drive to privatization. The IST theorists changed their view only when the crisis of the system became apparent, but they did not account for their 180-degree turn.

The bureaucratic collectivists likewise thought of Stalinism as the wave of the future; they saw the world locked in a titanic struggle between two counterposed systems, with Stalinism the more dynamic. The dominant wing led by Max Shachtman originally thought Stalinism to be progressive with respect to capitalism because of its collectivized property; finally they decided that since capitalism stood for democracy (ignoring above all the reality of the colonial and ex-colonial countries) and therefore chose to side with Western imperialism.

Our theory, in contrast, allowed us to predict the lines of Stalinism’s crisis. When this magazine was first published in 1976, we argued that important working-class gains survived the counterrevolution -- the full nationalization of industry, the right to a job, housing, health care, etc. These retentions hampered full-scale capitalist exploitation, and therefore the Stalinist rulers would be driven to adopt Western-style capitalist methods: market competition, mass unemployment, rapid inflation and other open attacks on working-class conditions. That is, the mounting economic stagnation of the Stalinist societies would force them to devolve in the direction of traditional capitalism.

Crisis East and West

Chapter 5 of our book has a further explanation of the “permanent crisis” that post-war Stalinism found itself in. Traditional capitalism goes through cycles of booms and busts, triggered by overproduction crises that periodically occur because independent capitalists are collectively driven to accumulate means of production beyond what the economic system can tolerate. In the depression phase of the cycle, the most backward and weakest capitals are wiped out and workers' living standards are forced downward, thereby allowing profitability to revive and the expansion phase to begin.

The Stalinist system of statified capitalism, however, prevented the elimination of obsolete industries, so crises could not be resolved. Production would continue with inefficient methods but at steadily declining rates. In the USSR, for example, party leader Mikhail Gorbachev’s top economic adviser, Abel Aganbegyan, admitted in the mid-1980’s that Soviet per capita growth rates had been at zero for years. The Stalinist ruling classes saw their economies falling ever further behind the Western imperialist powers and facing increasingly antagonistic working classes. Hence their urgent turn to creeping privatization and pseudo-democratic reforms.

One theme of our book is that the economic breakdown of Stalinism results from tendencies similar to those operative in the West. The imperial capitalists are wary of a re-run of the Great Depression of the 1930’s; such an upheaval would exacerbate the existing imperialist rivalries and undermine working-class acquiescence to capitalist rule. Since World War II they have resorted to various forms of state intervention into the economy to dampen their system’s crises and forestall depression. These measures led to the build-up of an enormous bubble of fictitious capital, which now is beginning to deflate and contribute to the crisis it was meant to prevent. (See our pamphlet The Specter of Economic Collapse.)

The opening up of Eastern European and ex-Soviet economies to public scrutiny revealed that, even more than previously believed, the Stalinists had lived parasitically off their own capital as well as human and natural resources. Fixed capital was exhausted without replacement; environmental degradation was horrendous; industrial workers had significantly shorter life expectancies in the East. In the West, the bubble of fictitious capital partly derives from failing to replace fixed capital, thereby counting used-up capital as surplus value. Though not as pervasive yet in the Western countries as in the East, and not as devastating as in the superexploited “third world,” this tendency is typical of capitalism everywhere in its epoch of decay.

Our theory points to the collapse of Stalinism as the harbinger of economic upheavals in the capitalist world as a whole. Much of the far left in contrast saw Stalinism’s fall as a world-historical defeat for the proletariat which could give Western imperialism a new lease on life. No doubt Western financiers leeched plenty of surplus-value from the workers and resources of the East. But after a ten-year binge the contradictions of the system are now looming even more powerfully.

The Role of the Proletariat

The economic crisis and growing inequality underlay the events that opened up in 1989. Working-class resistance, notably the massive Polish workers’ upheaval of 1980-81, had undermined the self-confidence of the Stalinist ruling classes and destroyed their hold over society -- showing once again the centrality of the proletariat for social progress in the present epoch, a fundamental teaching of Marxism. The Interfactory Strike Committees created by the Polish workers in August 1980 were echoes of the Russian soviets of 1905 and 1917 (the basis of the workers’ seizure of state power in 1917), the Hungarian workers’ councils of 1956, and many similar bodies erected whenever workers’ have risen in revolutionary struggle against their capitalist overlords. (The momentous events in Poland were described and analyzed in depth in Nos. 10-16 of Socialist Voice, the predecessor of this magazine.)

Throughout the Stalinist realm, the workers’ struggles were triggered by the ruling-class compulsion to intensify exploitation, which itself stems from the underlying laws of motion of the capitalist system discovered by Marx. As our book explains, these laws applied to the statified capitalist states of the East as well as to the “normal” capitalist societies of the West.

The flight from state ownership, in the West as well as the East, reflects the fact that statified property inherently embodies elements of working-class gains; it hinders the all-out exploitation that the capitalists need. The wave of privatization schemes in East Europe, China and the ex-USSR were aimed at strengthening capitalist rule internationally as well as nationally.

The working classes had dealt the hated Stalinists decisive blows, but even though past upsurges had taken on unmistakably working-class forms (strikes, factory occupations, etc.), in the events that opened up in 1989 the protesting workers were led by middle-class elements, in some cases dissenting Stalinist officials. As we wrote in early 1990:

These mass revolutions are historic achievements, yet they are only partial victories. Governments have fallen, but the underlying social relations of exploitation remain....

Although the working classes have been the real muscle behind the uprooting of Stalinism even when other social forces took the lead, the danger is that they will be trapped into following the middle-class reformers....

East Europe is only at the beginning of the revolutionary process. In the coming months we will see governments rise and fall, unable to stave off economic collapse and deal with continual mass upheaval. However, if the economic power of the bureaucracy and its new reformist and Western bourgeois allies is not broken, the workers of East Europe will see their revolutions turned against them, and they will become victims of even deeper exploitation than before. (“Revolution Sweeps East Europe,” PR 36.)

The key factor missing was a revolutionary leadership -- a proletarian party -- that could have clearly exposed the class nature and political roles of the Stalinists and the reformist oppositions and outlined a program to show the workers the way to a genuine workers’ state. Without such a party, the struggles against Stalinism were usurped by forces drawn from the Stalinists themselves and from bourgeois elements that their decaying system had nourished.

To preserve their class rule in the face of devastating economic crises and working-class unrest, sections of the ruling class engineered a counter-revolt, yielding a share of state and economic power to the growing “private” bourgeois wing. In several countries of Eastern Europe, the rulers hijacked popular movements to preserve their class rule. In others, including the USSR, the transformations were pre-emptive. In all cases the Stalinist system of statified capitalism gave way to a hybrid system that allowed the ruling class to wipe out most of the remnants of the working-class gains which it had previously been compelled to preserve under the false name of socialism.

As a result, in Russia and the other states of the former USSR, the workers suffered a catastrophe: manufacturing jobs disappeared, wages went unpaid, health care was destroyed and mortality rates have risen rapidly. In Eastern Europe, the conditions of the workers have also worsened, if not as drastically (war-ridden ex-Yugoslavia excepted). But the terrible decline in workers’ living standards had begun well before the fall of the Communist Party regimes. There were severe shortages of consumer goods, diseases from environmental poisoning and alcoholism were rampant, infant mortality was rising and life expectancy declining. The regime changes of 1989-91 did not initiate these horrors; they added more.

Political Revolutions

The fact that the Stalinist societies turned openly capitalist without the state being smashed confirms our analysis that the class nature of the state did not change -- Stalinism was capitalist to begin with. (See New Ruling Class from Old.) Thus the transformations of 1989-91 that consolidated the new regimes were political revolutions: the underlying system of exploitation remained capitalist, but dominant power within the ruling class shifted to an overlapping wing of the same class. The new regimes turned the momentum of the mass struggle against the masses themselves and destroyed what remained of the gains that the workers had held on to for decades, even in woefully deformed conditions.

In this light they completed certain steps that the Stalinist social counterrevolution had been unable to carry out when it smashed the Soviet workers’ state in the 1930’s. In contrast to the dismantling of the state apparatus at that time, in the political overturns of 1989-91 the state apparatus and personnel remained much the same. The Soviet Union’s vast army, five million troops stationed from Berlin to Vladivostok, did not move to preserve either the Soviet empire in 1989 or the Soviet Union itself in 1991. That is because it remained the arm of the ruling class that was striving to bourgeoisify its methods of rule. In Poland, the defense minister reappointed by the coalition regime between the retreating Stalinists and the wing of the Solidarity movement led by Lech Walesa was General Florian Siwicki. He was eager for his forces to adapt as the “form of state” changed:

"Now it depends on each of us, all Poles, whether we will be equal to the challenges of the future.” These included “the formation of a democratic, parliamentary and civil form of state. In backing the changes taking place in the state, we are also changing the shape of the army.” (New York Times, Aug. 29, 1989.)

The “democratic, parliamentary and civil” state is code talk for private property. The military apparatus could so easily adapt because the old regime, like the new, defended capitalist exploitation. Whether this occurs primarily through state or private property is of secondary importance. In either case the state belongs to the exploiters and exists to repress the workers.

China too has been undergoing a major transformation from statified capitalism to a combination of private and state capital. The Tienanmen movement in 1989 went far beyond its obvious student aspect to reach deeply into the working class. Its crushing by military force enabled the regime to carry through “reforms” that could not have been imposed previously. The Communist Party bureaucracy kept its hold on the state and engineered the growth of a substantial non-state economy along with slashing attacks on the jobs, income and rights of workers in state-run industries.

The Key: Revolutionary Leadership

The “revolutions” in the name of freedom devastated the working classes and drove them into a period of comparative passivity. For the East European workers had shown their power in many uprisings against Stalinism -- from East Berlin in 1953 to Gdansk in 1980 -- and had raised hopes among working-class fighters everywhere that they would find the way to overthrow the Stalinist system and replace it with genuine workers’ states. That no revolutionary workers’ parties were built is largely due to the historical fact that the Stalinists, in the massive purges that helped put the Soviet workers’ state to death in the 1930’s, had wiped out the remaining leadership that still stood for the goals of the October revolution of 1917. Similarly, in East Europe in the 1940’s, the Stalinists who rode the Soviet army to power eliminated those genuine revolutionaries who had survived the Nazi conquest.

A significant share of the blame for the failure of a proletarian revolutionary alternative to emerge also lies with those organizations which claimed to stand for Trotskyism. Their capitulations in theory and practice meant that no serious force was articulating and fighting for the program of working-class revolution on the world scene. In the 1960’s and ’70’s, many of them looked to student movements, peasant-based guerrillas and/or social-democratic and Stalinist forces for revolutionary advances. They dropped these notions because of their dismal failure, but their underlying class attitudes and the theories that reflect them remain the same to this day. Some of the pseudo-Trotskyist groups had affiliates in the ex-USSR and East Europe and were able to play a small but disastrous role. Cynical about the capacity of the working class to take power in its own name, they muddled along with theories that saw either the old Stalinist or the new “democratic” regimes as progressive.

Thus workers in the USSR and Eastern Europe saw no revolutionary alternative leadership to Stalinism or traditional capitalism. Consequently, their revolts led them into the hands of the new bourgeois post-Stalinist leaders before they could generate a new revolutionary world view and vanguard leadership. Authentic Marxists do not glorify the immediate consciousness of the working class. The communist program may not be popular at a given moment, but it is not an artificial ideology: it arises out of the objective needs of the proletariat. As class struggles deepen, the most advanced workers become conscious of their program and tasks and organize themselves into the kernel of a revolutionary proletarian party; they thereby give leadership to the rest of their class and other oppressed layers of the population. Creation of a proletarian party is the only “stage” that is a genuine prerequisite for socialist revolution.

The reason for debating the class character of the Soviet Union is not to score theoretical points but to re-establish the centrality for socialism of the conscious, revolutionary proletariat -- a class that consciously struggles to create a new society. Leftists who look to other classes, to saviors from on high, are not just rejecting the central teaching of Marxism. They are preparing to mislead workers into following the neo-Stalinists and social democrats whose job is to set them up for increased oppression and exploitation.

The Yeltsin Coup

Marxists who believe that the USSR and allied states were non-capitalist before 1989 but are capitalist now have to ask the question for each country: when did the counterrevolution occur? We have already mentioned that the orthodox Trotskyists in the 1940’s had considerable trouble with the “date question” of that time: when did the countries of East Europe, China, etc. become workers’ states? The reverse problem after 1989 was equally troublesome.

In the USSR, Yeltsin’s counter-coup was the key event in the Communist Party’s ouster from power. In that conflict between wings of the bureaucratic capitalist ruling class, the Stalinist “hard-liners” led by Vice-President Gennady Yanaev attempted to seize sole power and end Gorbachev’s delicate balance of power between them and the more rapid privatizers. The coup posed an acute danger to the working class, since its leaders announced an immediate ban on strikes and a retraction of the limited democratic gains yielded by Gorbachev in the “glasnost” (openness) campaign of the previous half-decade. So revolutionary workers would have opposed the coup and would have tactically lined up in a military bloc with Yeltsin to defeat the immediate threat to workers’ interests.

As a matter of principle revolutionaries could give no political support to either wing of the capitalist ruling class. But we could tactically and momentarily defend one side in a civil war or armed conflict if we judged the other side to be the more acute threat to the working class. That was the Bolsheviks’ method in defending the reactionary Kerensky against the reactionary Kornilov in 1917, and likewise Trotsky’s in defending the bourgeois Spanish Republic against the fascists in 1936. Our position was to give “military support” to the Yeltsin side. That is, we were for workers pointing their guns against Yanaev at that moment, while warning that the working class would have to take on Yeltsin soon after. Indeed, after the coup was defeated Yeltsin and Gorbachev signed a pact which, among other things, tried to ban strikes. And Yeltsin, like Yanaev, expressed the opinion that Pinochet in Chile was his model.

When the hard-liners’ revolt fizzled out, Gorbachev’s balancing act collapsed and Yeltsin emerged on top. His triumph ushered in a period of undisguised capitalist looting that enriched a handful and impoverished millions. Even though the Yanaev team was also dedicated to “free-market” reforms, its expected course was slower. Thus any deformed workers-statist should have defended the Yanaev side, despite its immediate threat to crush the workers -- as a matter of principle, not just tactics. Yet few did. Most backed Yeltsin on dubious democratic grounds, proving one more time that their workers’ state theory is empty phrase-mongering.

Cliff and the International Socialists

For practically all theorists of Stalinism, their failure to anticipate its downfall has not prevented them from claiming that the collapse confirmed their views. We will take up a number of different Marxist theories and currents in order to challenge their claims.

In 1990, Tony Cliff’s sidekick Chris Harman described the fall of Stalinism as follows:

The transition from state capitalism to multinational capitalism is neither a step forward nor a step backward but a step sidewards. The change involves only a shift from one form of exploitation to another form for the working class as a whole, even though some individual groups of workers ... find themselves better placed to improve their conditions and others ... find their conditions worsened. (International Socialism No. 46, 1990.)

In 1998 Cliff published an article called “The Test of Time” to assert that his theory of state capitalism had been vindicated. In it he repeated the “step sidewards” analysis. It is remotely conceivable that in 1990 observers could have overlooked the threat to all workers’ rights and living standards that were entailed in the privatization and looting of state property. But not by the end of the decade. Cliff & Co. never accepted that any working-class gains had survived under Stalinism and thus looked on complacently as they went down the drain.

The Stalinist changeover proved the IST’s theory wrong in all essential particulars. Cliff explained the Stalinist economy as in effect a single capitalist firm without the law of value or competition operating internally. (We said in our book that Cliff’s theory was in fact not a theory of capitalism but was rather bureaucratic collectivism in disguise.) Hence for Cliff, cyclical crises of overproduction were ruled out. Cliff cited the early Soviet theorist Nikolai Bukharin, who reasoned that the driving economic force under state capitalism is the consumption needs of the ruling class; since these needs are physically limited, economic growth under such a system would stagnate.

Cliff argued, however, that the Soviet economy had avoided the “Bukharin ‘solution’” because it had an additional driving force, its need for arms production. This was “a means to acquire new capital and new possibilities of accumulation.” (State Capitalism in Russia, 1988 edition, pp.243-4.) Cliff saw arms spending as a huge economic boost rather than a temporary shot in the arm; in reality it is an enormous drain on any economy, especially a stagnating one. Not only consumption goods but also capital goods lagged behind the rates in the West. The Soviet Union’s strenuous but doomed attempts to keep up in the arms race with the U.S. was the final straw forcing the system’s collapse. (A critique of the various versions of the IST’s “permanent arms economy” theory is in Chapter 7 of our book.) Cliff’s failure to see Stalinism’s internal laws and contradictions, leading to relative weakness and economic anarchy, followed from the notion that it represented a higher stage of capitalism, that conscious planning was actually the driving force. He wrote in his main theoretical work, originally published in 1955:

From a state-owned and planned economy there can be no retracing of steps to an anarchic, private-ownership economy.... The replacement of large-scale state industry with private industry would be a technical-economic regression. (State Capitalism in Russia, p.273.)

In more recent years, the Cliffite theorists were forced to recognize the fact of Stalinism’s crisis. But they did not grasp that the system was in mortal trouble. (See Their Predictions and Ours.) The fundamental error in the IST theory was that they did not see that Stalinism was a bastard form of capitalism deformed by its inability to destroy major revolutionary gains of the working class. They saw it as only an extreme form of capitalism and were blind to the system’s fundamental weakness as well as to the reality that the workers had some vestiges of 1917 to defend.

The Deformed Workers-Statists

The major deformed workers’ state theorists also saw Stalinism as stable, in their case arguing that the “workers’ states” did not face the “restoration” of capitalism. By maintaining that capitalism was not a danger, Mandel and his co-thinkers could afford to blend in with liberal reformers of Stalinism -- and thereby mislead the advanced workers who heeded them.

For the entire period between World War II and the fall of Stalinism, Mandel and Cliff had engaged in a running debate over the nature of Stalinism as the leading theorists in the broad milieu that defined itself as adhering or sympathetic to Trotskyism. That both of their analyses proved disastrously wrong reflects in the final analysis the middle-class outlook of the milieu. As if to prove this, both of their tendencies tailed middle-class saviors in the struggle against Stalinism in the days of its collapse. The leading example was Poland, where Mandel’s USec and Cliff’s IST both supported the government of Stalinists and former Solidarity advisers when it was administering post-Stalinist austerity capitalism in 1990. (See “The Left and East Europe,” PR 36.)

Some orthodox Trotskyists make the argument that the immense setbacks to the workers in the post-Stalinist countries prove that these states have changed their class character. But this claim runs directly counter to the Marxist theory of the state. If the Stalinist states had been workers’ states, however deformed, overthrowing them had to mean smashing the state apparatus. (See And a Peaceful Counterrevolution Was Had by All.) How do the same armed forces now defend capitalist property, when they defended “proletarian” property just before? And why must a major defeat of the working class require a social, not just a political, defeat? The Nazi rise to power in Germany in 1933 was violently destructive of workers’ institutions, but it was a political counterrevolution within the compass of capitalist rule.

Moreover, if the Stalinist states were workers’ states, why did the rulers, who according to the deformed workers’ state theory had their own inherent caste interest in defending state property, choose instead to privatize state property? Why did the disputes among the Stalinist rulers occur over the speed of destatification and not over the aim itself?

Deformed workers’ state believers have always been torn between two opposing currents. On one side, tendencies like Workers World in the U.S. and the Spartacists defended the Stalinists against the workers in the name of defending the “workers’ states.” On the other side, Mandel & Co. took the middle-class reformist “dissidents” who had misled the workers' organization Solidarity as the genuine leaders of the working class. The most telling condemnation of the entire “orthodox” milieu is that in the half-century of their “deformed workers’ states,” not one of them wrote a serious theoretical analysis, much less a book, explaining the laws of motion of such a society and justifying a designation that has such obvious contradictions. The theory was no guide to action because there was no theory.

The Spartacist Tendency

The Spartacists had a particularly hard time deciding when the Soviet “workers’ state” had been lost. They announced retroactively in late 1992 that counterrevolution had won some time before, exactly when remained unclear. (See “Spartacists Terminate Russian `Workers’ State’ Not with a Bang but a Whimper," PR 43.) A “theory” that allows its proponents to overlook the downfall of a “workers’ state” -- the land of the Bolshevik revolution, no less -- when the decisive events occur in plain view of all the world, is useless for the working class.

The Spartacists supported hard-line Stalinists against the workers when they defended the Berlin Wall (which was used to imprison East German workers, who were shot if they attempted to cross it) and applauded the Polish Stalinists’ crackdown on the ten million workers in 1982. They should have had no trouble supporting the Yanaev coup against Gorbachev in 1991. But this time they took no sides. They went through theoretical contortions to avoid doing so, for one reason because that would have meant admitting that their arch-rivals, the International Bolshevik Tendency (IBT), who did support Yanaev, had been “right” when they were wrong. For all their trumpeting of their supposed Bolshevik allegiance to program, the Spartacists are often motivated by petty organizational needs.

The IBT’s approach, however logical from a pro-Stalinist standpoint, is no more consistent. The reasoning that led the IBT to defend Yanaev against Yeltsin should also have led them to defend Ceausescu in Romania in December 1989 -- against not only the Stalinist reformers who took over power but also against the popular uprising that Ceausescu savagely repressed. After all, it was the reformers who destroyed the “workers’ state” by weakening the Stalinist state machine, and it was Ceausescu who for all his crimes -- including an unswerving devotion to paying off Romania’s debts to the imperialists at the cost of feeding the population -- who was bent on preserving state property in order to defend his own power and loot. But in defending his own property he was defending nationalized property, and therefore in the eyes of the IBT and SL, the “workers’ state.” Opportunistically, because it would have meant defending a particularly odious Stalinist butcher, neither the Spartacists nor the IBT took the position consistent with their pro-Stalinist principles.

More recently the Spartacists tried once again to come up with a theoretical explanation for the demise of the Stalinist “workers’ states.” “Six decades of bureaucratic misrule ... had produced a deep political cynicism among the working masses of the Soviet Union,” they wrote, thereby blaming the working class while prettifying the counterrevolutionary regime as “misrule.” (Workers Vanguard, Aug. 6, 1999.) To cover their own history of admiring Stalinist “planning,” they lied that they had long understood Soviet economic retardation with respect to the West:

In 1960, Khrushchev challenged the capitalist West. “We will bury you,” proclaiming that the USSR would not only achieve global dominance over Western capitalism but also “full communism” in 20 years. He was here expressing the false consciousness of the Kremlin oligarchy.

But in fact the Spartacists themselves had loudly proclaimed Stalinism’s economic superiority. Like Mandel and so many other workers-state co-thinkers, they had argued the palpable nonsense that the Soviet economy was free of systemic crises and that it “insures the rapid and steady growth of productive forces” -- even that the social structure of Russia under Lenin was “far more conducive to capitalist restoration” than under Brezhnev. (Quotes from the Spartacists’ 1977 pamphlet, Why the USSR is Not Capitalist, pp.59, 90.) Another brilliant prediction!

They specifically boasted that the USSR had an 18 percent annual growth rate in 1974-5, at a time when the capitalist world was mired in depression. (p.58.) That miraculous figure was a complete lie; not even the Kremlin claimed such an achievement. We challenged the specific figure and the whole picture of Soviet economic superiority, citing the USSR’s declining growth rates, in Socialist Voice No. 4; they never replied or corrected the falsehood. Now they dismiss claims like their own as Stalinist “false consciousness.” For once they are right.

Workers Power (LRCI)

The Workers Power group in Britain, backbone of the League for a Revolutionary Communist International (LRCI), is one of the few workers-state tendencies that tries to justify its politics on the basis of theory; we have therefore analyzed and dissected their views several times. (On Stalinism, see issues 20, 21, 48 and 49 of our magazine.) But for all their attempts at theory, what distinguishes LRCI above all else is its predilection for changing its position on question after question.

When the USSR was breaking up, LRCI at first opposed independence for the non-Russian Soviet republics lest that weaken the Soviet “workers’ state”; thus it supported Gorbachev’s assault on Azerbaijan in early 1990. But when Moscow cracked down on Lithuania in 1991, LRCI flip-flopped and came out for self-determination, even though the Russian “bureaucratic conservative counterrevolution” was helping to prevent the changes that were decisive for restoring capitalism! A few years later, LRCI changed its mind several times over self-determination for Bosnia during the Yugoslav wars. (See PR 43.)

On the class nature of the post-Stalinist states, LRCI recently made its greatest flip-flop and probably retired for all time the world cup for centrist vacillation. When the openly bourgeois regimes had taken power, LRCI refused to accept the states as capitalist; they insisted that only political revolutions within the workers’ states had occurred. They labeled the result “moribund workers’ states.” Here is how they explained what it would take to convince them that the societies were capitalist:

We have outlined the key structural changes that will be necessary for capitalism to be finally imposed on these advanced transitional countries, or moribund workers’ states. How -- post festum -- might we recognize when this has been effectively carried through?

Through the deceptive prism of bourgeois economic indicators certain features should be observable, for example, when national production bounces back out of the depths of its present slump in Eastern Europe to the extent that a clean cycle of recovery is obvious; when this growth is non-inflationary and accomplishes a reduction in budget deficits. (Trotskyist International No. 9, 1992.)

We commented in response:

WP and LRCI have taken their theory of the law of value to absurdity.... Capitalism triumphs when the economy makes a decisive leap forward out of its slump under the “workers’ state” -- that is, for LRCI, capitalism solves the economic crisis that the proletarian state cannot handle! If taken seriously, this ought to mean that capitalism is progressive. (PR 48, 1995.)

We were even more right about the absurdity of this theory than we knew, because right after this passage we wrote: “Whatever was intended, for LRCI `defense of the workers’ states’ clearly means defense of backwardness.” But we overlooked at the time that for LRCI “moribund workers’ states” were states that working-class revolutionaries were not obliged to defend in times of war. So not only were these “workers’ states” that the working class never created and in which the workers did not have state power; there did not even exist remnants of socialist elements worth defending. LRCI called them workers’ states only to avoid recognizing them as capitalist. Our observation that deformed workers’ state theories really amount to third-system theories was corroborated once again.

Two years ago LRCI turned its line completely around. They rejected the term “moribund workers’ state” and replaced it by “restorationist bourgeois state.” Moreover, they characterized their previous theory as “radically false and misleading,” “undialectical,” “confused” and “absurd.” (Capitalist Restoration and the State, November 2000.)

LRCI’s new theory means “that formerly Stalinist countries, in which the economy is still not operating on fully capitalist lines, are not necessarily workers’ states of any type. The key determinant is not the prevailing property relations, but the class and economic system that the state power promotes and defends.” In the USSR, for example, the change took place in 1991 when Yeltsin established his government. Not only did LRCI not foresee the end of a “workers’ state” or take note of it when it happened; they did not notice its loss for nearly a decade. (The you-win-some-you-lose-some attitude towards what should mean the working class’s highest achievement is typical of academic game-playing, not Marxist politics.) LRCI has a section in Ukraine, whose working-class members, if any there be, must have been disappointed to learn in 2000 that they were no longer part of the nominal ruling class, however moribund.

LRCI also had to retroactively re-think their assignment of the dates at which the East European states after World War II became “workers’ states.’” Their previous line had defined the turning point to be when the economies were totally statified (that is, in 1950-51). Now they say it was when “the governments and states began to move decisively against capital and capitalism and to create bureaucratically planned economies on the Stalin model, i.e. in 1948-49.”

This hardly solves the key problems, which we pointed to in PRs 20 and 21. In neither 1948-49 nor 1950-51 did the state machinery change -- there were no revolutions. The only relevant state-power change occurred earlier, when the Soviet Army conquered East Europe in 1944-45. But then the regimes installed were clearly capitalist popular fronts led by the Stalinists with openly bourgeois parties present. According to either Workers Power’s new or old theory, these capitalist regimes would have been turning their own states from bourgeois to proletarian. That is, capitalist states would have carried out the socialist revolution. That burlesque of theory occurs because for all its recent self-criticism, LRCI has not dealt with the real contradiction in every version of their theory: “workers’ states” without the working class.

Bureaucratic Collectivists

The theory of bureaucratic collectivism should have collapsed with Shachtman’s open adaptation to imperialism; it survived in a leftish form in the U.S. among the Independent Socialists of the late 1960’s through to the Solidarity group today. But it had no grasp whatever of the motion of the Stalinist system it pretended to describe. (See Robert Brenner quoted in Their Predictions and Ours.)

In Britain, the Workers’ Liberty tendency led by Sean Matgamna has revived bureaucratic collectivism. In 1998 Matgamna edited a volume of writings by Shachtman and other bureaucratic collectivists, prefacing it with a 150-page introduction of his own. Matgamna’s aim is to show that Trotsky misunderstood the Russian question while Shachtman & Co. were basically right.

Nevertheless, Matgamna can find nothing from his theoretical predecessors to account for Stalinism’s collapse. Indeed, he is forced to conclude:

They got the overall perspective of Stalinism wrong. From our vantage point it is plain that Trotsky, and then Shachtman until 1946 or ’47, were right to regard the Stalinist phenomenon as an aberration in the broad sweep of history. It is understandable that the spread of Stalinism after 1944 to a further sixth of the Earth should have led Shachtman to misunderstand. Nonetheless it is plain now that the Stalinist systems emerged as parallels to capitalism, not as its successor. They were historical blind alleys. (The Fate of the Russian Revolution: Lost Texts of Critical Marxism, Vol.1, pp.155-6.)

Matgamna agrees most fundamentally with Shachtman not in his specific analysis of Russia but in his favoring of the West in the Cold War:

In the post-war World where the USSR was the second great global power, recognition that the USA and Western Europe -- advanced capitalism -- was the more progressive of the contending camps, the one which gave richer possibilities, greater freedom, more for socialists to build on, was, I believe, a necessary part of the restoration of the Marxist balance to socialist politics. (p.145.)

Western capitalism, however, is imperialism. And in the world as a whole, the possibilities it gave to the masses of the ex-colonial world were hardly rich or free. Fifteen years ago, this magazine observed that Matgamna (evidently without knowing it) was not only turning his then-theory of deformed workers’ states towards bureaucratic collectivism; he was also adopting an extreme cynicism toward the revolutionary capacity of the working class and adapting heavily to pro-imperialist reformism. For example, he took a neutral position on Britain’s imperialist war against Argentina over the Malvinas Islands in 1982. (See “Where Are the Matgamnaites Going?” in PR 28 [as well as Malvinas War Tests Leftists from Socialist Voice No. 17.) In his book Matgamna deplores Shachtman’s most open capitulations to imperialism: support for the U.S.’s assaults on Cuba and its war on Vietnam. But his own adaptation points in the same direction.

Another American bureaucratic collectivist current writes in New Politics magazine, whose co-editor, Julius Jacobson, has attempted to account for the fall of Stalinism. He too had to face the standard dilemma: if the USSR was not capitalist before 1991, then how did the old ruling class turn into the new? Jacobson took his theory to its logical conclusion:

In the Russian Republic -- as in most nations of the dismembered USSR -- there is the anomaly, tragic and farcical, of leading elements of the former Communist ruling class, driven by personal and social instincts of survival, mauling each other as they scramble and strain to self-metamorphose into the executive committee and financial elite of an artificially created and militantly anti-Communist bourgeoisie. A unique kind of one-dimensional “class struggle” in which a ruling class is fiercely fighting to overthrow itself. (New Politics, Winter 1995.)

The absurdity of a ruling class overthrowing itself is dictated by the need to see one class replacing another while both consist substantially of the same people. The conception that this is a “class struggle” (even if in mock quotation marks) downplays the real class struggle going on between bosses and workers. But overlooking such minor facts is inevitable for any theory that does not base its class analysis on the relations of exploitation between rulers and producers.

The “Russian question” was never just a debate over the proper description of the Stalinist system. It is at the heart of how working-class revolutionaries understand the role of their own class in creating a new society that can put an end to the misery so many millions endure under capitalism. The Russian workers’ revolution of 1917 was the outstanding achievement in our class’s 150-year history. The downfall of Stalinism was a warped after-effect of that achievement, since the central reason for the collapse was the statified capitalist ruling class’s desperate need to dismantle the workers’ remaining gains.

Trotsky often said of the Soviet Union that those who could not defend the past gains of the working class could not possibly help achieve new ones. The same is true of those who cannot understand them.

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