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The debate about the nature of the former Soviet Union: Who was right?

Moscow 2008.

[For more discussion on the nature of the Soviet Union click HERE. See also the related discussion on Stalinism HERE.]

By Chris Slee

July 30, 2012 – Links International Journal of Socialist Renewal -- The nature of the former Soviet Union was an issue which divided the left for many decades. Now that the Soviet Union no longer exists, differing analyses of its class nature should no longer be a reason for maintaining separate socialist organisations.

Nevertheless, this historical debate has relevance to current politics, since the theories developed to explain the nature of the Soviet Union were subsequently applied to other countries, including Cuba. In particular, the theory of state capitalism, of which British Socialist Workers Party leader Tony Cliff was a leading exponent, is applied to Cuba by many groups today, including Solidarity and Socialist Alternative in Australia.

Cuba is not the same as the former Soviet Union, despite the apparent similarity of political forms (both are/were “one-party states”). Cuba is not ruled by a privileged bureaucratic layer. That is why it did not collapse (as some predicted) when the Soviet Union was dismantled. Instead, Cuba has made further gains in areas such as health and education.

Hence even if Solidarity and Socialist Alternative members continue to believe that the Soviet Union was state capitalist, they don’t have to apply the same analysis to Cuba. But in practice they continue to do so.

The following article takes the form of a review of books by Leon Trotsky, Tony Cliff and Stalinist sympathiser Albert Szymanski, who represent three different currents of thought among socialist analysts ofthe former Soviet Union. It is a version of an article first published in The Activist (the internal discussion bulletin of the Democratic Socialist Party) in 2003.

* * *

The Revolution Betrayed
By Leon Trotsky
Pathfinder Press 1972

State Capitalism in Russia
By Tony Cliff
Bookmarks 1988

Is the Red Flag Flying?
By Albert Szymanski
Zed Press 1979

The Soviet Union, created following the 1917 Russian Revolution, was formally dissolved in 1991. It had played a crucial role in world affairs. But what kind of state was it? The three authors reviewed here agree that it began as a workers’ state. But they disagree on how to analyse its subsequent evolution.

Leon Trotsky, writing in 1936, argued that the Soviet Union had undergone a process of bureaucratic degeneration during the 1920s. A privileged bureaucratic layer had seized political power.

However, Trotsky did not believe that the socialist revolution had been totally reversed. He regarded the Soviet Union as "a contradictory society, half way between capitalism and socialism" (The Revolution Betrayed, p. 255), which could go either way. If the bureaucracy was not overthrown, it would eventually restore capitalism. This would result in a "catastrophic decline of industry and culture" (p. 251). But another outcome was also possible -- a political revolution leading to the restoration of proletarian democracy.

Tony Cliff, who wrote the first edition of his book State Capitalism in Russia in 1948, argued that the Soviet Union had already become capitalist by the end of the 1920s. The fact that industry was still state owned was irrelevant. In Cliff's view, what existed was "state capitalism".

Albert Szymanski, writing in 1978, argued that the Soviet Union had remained a socialist state since its inception. In his view, the state was necessarily harsh in its early decades due to the threat of invasion, but became progressively more democratic as the Soviet Union became stronger.

Trotsky's analysis

Trotsky argued that after a revolution, society cannot go straight from capitalism to communism. It must pass through a transition period. During this period, the state has "a dual character: socialistic, insofar as it defends social property in the means of production; bourgeois, insofar as the distribution of life's goods is carried out with a capitalistic measure of value..." (The Revolution Betrayed, p. 54)

Hence a degree of social inequality is inevitable in the transitional society; but a workers’ state should aim to limit the extent of inequality and reduce it over time. However, this is not a smooth process: “Economic contradictions produce social antagonisms, which in turn develop their own logic". (p 48) This situation tends to result in the emergence of a bureaucracy -- a layer of privileged government and party officials.

Trotsky believed that: "The basis of bureaucratic rule is the poverty of society in objects of consumption, with the resulting struggle of each against all" (p. 112). Bureaucratisation is always a danger in a transitional society, but "the poorer the society ... the more crude would be the forms assumed by bureaucratism, and the more dangerous would it become for socialist development" (p. 55). Hence the poverty and backwardness of Russia created fertile ground for the bureaucratic degeneration of the Soviet state.

The isolation of the Soviet Union in a capitalist world increased the pressure towards bureaucratisation. But in turn, the bureaucracy sabotaged revolutionary opportunities in other countries, prolonging the isolation of the Soviet Union.

The Soviet bureaucracy, which was "nationally limited and conservative, ignorant and irresponsible" (p. 191), dictated policies to communist parties around the world, and purged these parties of any independent-minded leaders. The Communist International became "a completely submissive apparatus in the service of Soviet foreign policy, ready at any time for any zigzag whatever" (pp. 186-7). This led to defeats for communist parties in several countries, notably China and Germany.

Trotsky did not think that capitalism had been restored in the Soviet Union in the 1930s, because the bureaucrats had not converted the means of production into their own private property. He argued that, "The nationalisation of the land, the means of industrial production, transport and exchange, together with the [state] monopoly of foreign trade, constitute the basis of the Soviet social structure. Through these relations, established by the proletarian revolution, the nature of the Soviet Union as a proletarian state is for us basically defined" (p. 248).

Trotsky believed that the bureaucrats would eventually seek to convert state assets into their own private property. "One may argue that the big bureaucrat cares little what are the prevailing forms of property, provided only they guarantee him the necessary income. This argument ignores not only the instability of the bureaucrat's own rights, but also the question of his descendants... Privileges have only half their worth, if they cannot be transmitted to one's children. But the right of testament is inseparable from the right of property" (p. 254).

However, they were held back by fear of the reaction of the workers. In Trotsky's opinion the bureaucracy "continues to preserve state property only to the extent that it fears the proletariat" (p. 251).

He added that: "As a conscious political force the bureaucracy has betrayed the revolution. But a victorious revolution is fortunately not only a program and a banner, not only political institutions, but also a system of social relations. To betray it is not enough. You have to overthrow it. The October revolution has been betrayed by the ruling stratum, but not yet overthrown" (pp. 251-2). He argued that the revolution “still exists in property relations and in the consciousness of the toiling masses” (p 255).

Trotsky believed that the bureaucratic regime was unstable. Either the workers would overthrow the bureaucracy and restore soviet democracy, or capitalism would be restored.

Summing up, Trotsky said:

The Soviet Union is a contradictory society halfway between capitalism and socialism, in which: (a) the productive forces are still far from adequate to give the state property a socialist character; (b) the tendency toward primitive accumulation created by want breaks out through innumerable pores of the planned economy; (c) norms of distribution preserving a bourgeois character lie at the basis of a new differentiation of society; (d) the economic growth, while slowly bettering the situation of the toilers, promotes a swift formation of privileged strata; (e) exploiting the social antagonisms, a bureaucracy has converted itself into an uncontrolled caste alien to socialism; (f) the social revolution, betrayed by the ruling party, still exists in property relations and in the consciousness of the toiling masses; (g) a further development of the accumulating contradictions can as well lead to socialism as back to capitalism; (h) on the road to capitalism the counterrevolution would have to break the resistance of the workers; (i) on the road to socialism the workers would have to overthrow the bureaucracy. In the last analysis, the question will be decided by a struggle of living social forces, both on the national and the world arena (p. 255).

Tony Cliff's analysis

Tony Cliff agreed with Trotsky that the Soviet Union had undergone a process of bureaucratic degeneration during the 1920s. However, he believed that the resulting bureaucratic regime was in no sense a workers’ state. Cliff pointed to the lack of workers’ control over production; the lack of any right for workers to organise in defence of their own interests; the growth of inequality; and the lack of democracy in the soviets and the Communist Party, and concluded that what existed was state capitalism.

Cliff saw state capitalism as the inevitable outcome of any attempt at rapid industrialisation following a revolution that remained isolated in a backward country surrounded by a hostile capitalist world. He argued that the goal of rapid industrialisation required rapid accumulation of capital, which could only be carried out through putting heavy pressure on the working conditions and living standards for the masses. "Under such conditions, the bureaucracy, transformed into a personification of capital ... must get rid of all remnants of workers’ contro l... must atomise the working class, must force all social-political life into a totalitarian mould" (State Capitalism in Russia, p. 165).

The bureaucracy, having freed itself from all control by the working class, uses its position of power for its own benefit. "Thus, industrialization ... in a backward country under conditions of siege transforms the bureaucracy from a layer which is under the direct and indirect pressure and control of the proletariat, into a ruling class ..." (pp. 165-166).

Cliff claimed, "What is specific to capitalism is accumulation for accumulation's sake, with the object of standing up to competition" (p. 180). He concluded that: "the Russian bureaucracy, ‘owning’ as it does the state and controlling the process of accumulation, is the personification of capital in its purest form" (p. 181).

In Cliff’s view, the decisive turning point in the creation of "state capitalism" in the Soviet Union was the start of the first Five-Year Plan in 1929. He claimed that this plan “signifies the transformation of the bureaucracy into a ruling class” (p. 164) because: “It was now, for the first time, that the bureaucracy sought to create a proletariat and to accumulate capital rapidly" (p. 165).

An implication of Cliff's theory is that an isolated workers state cannot survive for very long. If it does not industrialise, it will fall further and further behind the capitalist countries, both economically and militarily, and risks being invaded. But if it does try to industrialise, it will become "state capitalist" for the reasons explained above. Hence, Cliff asks rhetorically: "Can a workers’ revolution in a backward country, isolated by triumphant international capitalism, be anything but ‘a point in the process’ of the development of capitalism, even if the capitalist class is abolished?" (p. 164).

This outcome can only be avoided if a “series of new revolutions ... break out immediately or after a certain interval” (p. 158). The length of the “interval” is not specified, but the implication is that it is fairly short.

Cliff denied that the bureaucracy was interested in the restoration of private ownership of the means of production. He claimed that private capitalism could not be restored without military occupation by “external forces” (p. 326) because “internal forces are not able to restore individual capitalism in Russia" (p. 324). This assertion was not backed by a clear argument, but Cliff seems to have assumed that the bureaucracy, being the “owner” of state property, would always oppose any attempt to restore private property.

Szymanski's analysis

Szymanski argues that "the Soviet Union is a socialist society, albeit a somewhat distorted one", because "no exploiting class controls the means of production nor dominates the state and party" (Is the Red Flag Flying?, p. 199).

As evidence of its socialist character, Szymanski cited a range of statistics, mainly derived from Western academic studies of the Soviet Union, showing that the Soviet Union in the 1970s was much more egalitarian than Western countries and was continuing to become more economically and socially equal. For example, in 1956 the highest paid 10% of employees in the Soviet Union received 8.1 times the income of the lowest paid 10%. By 1975, this ratio had fallen to only 4.1, whereas in the United States, the similar ratio was 12 times (p. 64).

Szymanski added that factors such as free health care and education, and subsidised housing and child care, also had an equalising effect. Another indication of the "relative egalitarianism" of the Soviet Union was the fact that it was normal for government and enterprise officials to live in the same apartment buildings as production workers (p. 68).

He did however admit that there were some exclusive neighbourhoods where leading officials of the Communist Party lived. He also admitted that managers had privileged access to fringe benefits such as cars and summer houses. But he argued that overall the Soviet Union was much more egalitarian than Western countries.

Szymanski also argued that the Soviet Union had a high level of political participation. While Soviet elections were often criticised in the West as a farce, because there was only one candidate for each position, Szymanski argued that the electoral process “must be taken seriously as one means of exerting influence on the decision making process" (p. 81). He claimed that "the very real decision making process occurs before the final casting of ballots. Candidates are nominated at meetings of workers and members of mass organisations after sounding out their opinions and evaluation of the candidates by local election committees and Communist Party members. Anyone at a meeting has the right to propose or oppose a candidate" (p. 81).

Szymanski did however admit that "I could find no hard evidence on the extent to which the nomination process was authentically democratic" (p. 82).

Whereas the Soviet Union was criticised in the West for repressing freedom of speech, Szymanski claimed that there was “very widespread involvement both among the professional intelligentsia and the working class in the formulation and discussion of public issues, as well as in criticisms of state and Party performance" (p. 87). He pointed out that "the Soviet press is full of public debates on a very wide range of issues: literary policy, economic and legal reform, military strategy, the relation between the Party and the military, city planning, crime, pollution, farm problems, the role of the press, art, women's role in the economy, access to higher education, incompetent economic management, bungling bureaucrats" (p. 83).

However, he admitted that certain topics were "taboo" (p. 84) -- for example, the press did not publish criticism of the Communist Party as an institution or its top leaders.

Szymanski claimed that the regime was popular, pointing out that "even harsh domestic critics of the system bemoan the fact of the unpopularity of their own ideas among working people" (p. 88). He claimed that the CP was becoming "increasingly proletarian and democratic" (p. 95), citing statistics on the party's social composition and information about debates within it.

Szymanski acknowledged that these positive trends would not necessarily continue in a linear way. "It is possible that at some point the power elite and the professional intelligentsia will attempt to reverse the egalitarian trend" (p. 96). However, workers would strongly oppose any such attempt. He claimed that a "transition to capitalism ... seems an increasingly remote possibility" (p. 221).

Szymanski claimed that in the 1930s and 1940s, a harsh regime was necessary to ensure the Soviet Union's survival in the face of the danger of foreign invasion. "Material incentives" involving a high level of economic inequality were also necessary. But once industrialisation was carried out and the external pressure eased, society was able to become more egalitarian and democratic.

Szymanski claimed that despite some "abuses of power", and even at times "collective paranoia", "the USSR was in fact a socialist society in the 1930s and 1940s" (p. 209). He argued that the transition from a harsh regime in the 1930s and 1940s to a more democratic one after the 1950s was "a product of the logic of Soviet society and the international situation" (p. 210).

Who was right?

The statistics quoted by Szymanski, showing a relatively low and declining level of inequality in the Soviet Union in the 1970s, are interesting. But the picture he painted was too rosy. Szymanski downplayed the power and privileges of the bureaucracy under the Soviet system. While their official incomes were relatively low by Western standards, the bureaucrats had privileged access to scarce consumer goods. Corruption was also a significant factor in making society more unequal than it appeared on the surface.

Nevertheless, Szymanski’s view that the Soviet Union was more egalitarian than the West (or became so in the years after Stalin’s death) seems correct. During the Gorbachev period some intellectuals complained about the supposedly excessive egalitarianism of Soviet society.

The fact that Szymanski's view was over-optimistic was proven by the restoration of capitalism in the Soviet Union in the 1990s, and the lack of strong resistance to it. Not only did the Communist Party of the Soviet Union, which Szymanski claimed was "increasingly proletarian and democratic", fail to lead any such resistance; high ranking party officials played a key role in bringing about capitalist restoration. Boris Yeltsin, for example, had been a senior party leader for many years before becoming a "democrat" and carrying out large-scale privatisation.

While Szymanski was too "positive" about the Soviet Union, Cliff was too "negative"; he ignored any information showing that the Soviet Union was in any way better than the West for workers. In the 1988 edition of his book, he continued to quote statistics from the 1930s and 1940s, not acknowledging any improvements such as the apparent decline in inequality during subsequent decades. (An appendix by Chris Harman does acknowledge some improvements in workers’ living standards, but does not take account of the information cited by Szymanski apparently showing that social inequality in the Soviet Union was relatively low and falling.)

Despite their limitations, the statistics quoted by Szymanski tend to support Trotsky's view that the Soviet state still had a “socialistic" aspect, despite its bureaucratic degeneration.

Cliff failed to anticipate the drive of the bureaucracy to restore private ownership of the means of production -- in fact he denied that this could occur. Trotsky's view that the bureaucracy would try to restore private ownership of the means of production was proven correct, even if the transitional regime lasted much longer than he anticipated.

While Trotsky's theory enabled him to anticipate subsequent developments more correctly than Cliff or Szymanski, it is still necessary to consider some of Cliff's criticisms of Trotsky's analysis.

Who controlled the Soviet state?

Cliff said that the Soviet Union could not be a workers’ state because the workers did not control it: "If the state is the repository of the means of production and the workers do not control it, they do not own the means of production, i.e. they are not the ruling class" (State Capitalism in Russia, pp. 311-312).

But how do we judge who "controls" a state?

Liberal political theory says that in a parliamentary democracy the voters control the state by electing members of parliament to supervise it on their behalf. If the MPs don't do what the voters want, they can be replaced at the next election. If most voters are workers, in theory the working class should be able to control the state by electing a majority of pro-worker MPs. But in reality voting every three or four years does not give citizens control over the state.

Government ministers and senior civil servants make the key decisions on matters of government policy. Often they go against the wishes of the majority of voters. (For example, in Australia the privatisation of public utilities and other government enterprises was carried out by both Labor and Liberal governments, despite public opinion surveys showing most people opposed this.)

Does this mean that the state officials are a law unto themselves, not controlled by any outside force? Is the state controlled by its own bureaucracy? This is not the whole truth either. The state in capitalist society is ultimately controlled by those who own the means of production -- the capitalist class.

The capitalists can influence state policy by many channels. They give election campaign funding to parties that carry out pro-capitalist policies. They offer seats on company boards to retired politicians and civil servants as a reward for implementing pro-capitalist policies. They threaten to withdraw their investments from countries where the government fails to carry out their wishes. Hence, while officials of the state bureaucracy make many of the key decisions, they do so in the interests of the capitalist class. Thus the capitalists control the state, even if indirectly.

What about the former Soviet Union? Who controlled the state there? The bureaucrats certainly made the key decisions. But in whose interests were these decisions made?

Cliff gave a simple answer: The bureaucrats made decisions in their own interests. Trotsky gave a more complex answer: insofar as the bureaucrats acted to maintain and increase social inequality, they were defending their own interests. But insofar as they acted to defend state property against attempts to restore private ownership of the means of production, they were defending the interests of the working class. He added that the bureaucrats defended state property only to the extent that they feared the working class.

Perhaps the best evidence in favour of Trotsky's view comes from looking at the consequences when the bureaucracy stopped defending nationalised property. When the Yeltsin regime began implementing a program of large-scale privatisation, poverty in the former Soviet Union increased markedly due to unemployment, inflation, cuts to social services and widespread non-payment of wages. The health and education systems deteriorated. Life expectancy declined dramatically.

The deterioration in conditions for workers after privatisation contrasts with the gains which they had previously made under a nationalised economy (free health and education, full employment, etc.)

Additional support for Trotsky's analysis comes from the statistics on income distribution quoted by Szymanski, showing a trend towards greater equality between the 1950s and 1970s. In part this was a result of concessions granted by the bureaucracy to the working class as a response to workers' struggles. There were large-scale outbreaks of working-class rebellion in several Eastern European countries in the 1950s and 1960s, as well as localised outbreaks in the Soviet Union itself. The net effect of these concessions was to make the Soviet Union a more egalitarian society.

The concessions were quite substantial, despite the very limited extent of working-class rebellion inside the Soviet Union itself. It seems that pressure from the working class was able to have more impact than we might have expected. Why was this?

In a capitalist economy, the logic of the market tends to generate ever-increasing inequality. Progressive taxation and the welfare state can counteract this only to a limited extent.

In a state-owned economy, the government can (if it chooses) take conscious decisions that tend to reduce the level of inequality. It may take such decisions, not because it wants to, but because it fears a possible rebellion if it does not. In such an economy workers' discontent is focused on the state, which cannot use "market forces" as an excuse to evade responsibility for workers' pay and conditions. In the absence of a powerful domestic capitalist class owning the means of production and able to influence state policy in an anti-worker direction, the state may be responsive to such pressure.

Hence the working class was able to exercise a certain degree of "control" over the state, despite the lack of real proletarian democracy.

Cliff ridiculed Trotsky's view that the bureaucracy was held back from privatisation by fear of working-class reaction: "The Russian proletariat was not strong enough to keep its control over the means of production, and was ousted by the bureaucracy, but it is strong enough to prevent the promulgation of this relation in law! The proletariat was not strong enough to check a most antagonistic distribution of the product, to prevent the bureaucracy from brutally depressing its standard of living and denying it the most elementary rights, to prevent the sentence of millions of its members to slave labor in Siberia; but it is strong enough to defend the form of property!" (State Capitalism in Russia, p. 325).

However, the idea that the bureaucracy was held back from privatising the means of production by fear of working-class response is not quite as ridiculous as Cliff suggests. At the time when Trotsky was writing The Revolution Betrayed, capitalism was in the middle of the Great Depression. If the state enterprises in the Soviet Union had been privatised at that time, the result would have been mass sackings. It was not unreasonable for the bureaucrats to fear that this would spark a workers revolt -- particularly given that many workers, as former participants in the October revolution, had practical experience of overthrowing an oppressive regime.

Maintaining and expanding state-owned industry meant providing workers with relatively secure jobs and maintaining the political loyalty of a section of the working class (mainly the more privileged layers). Thus the maintenance of state ownership of the means of production can be seen as a concession to the working class.

State ownership and the nature of the state

Cliff says that, “In Trotsky’s works we find two different and quite contradictory definitions of a workers’ state. According to one, the criterion of a workers’ state is whether the proletariat has direct or indirect control, no matter how restricted, over the state power: that is, whether the proletariat can get rid of the bureaucracy by reform alone, without the need for revolution… Trotsky’s second definition has a fundamentally different criterion. No matter how independent the state machine be from the masses, and even if the only way of getting rid of the bureaucracy be by revolution, so long as the means of production are statified the state remains a workers’ state with the proletariat the ruling class” (State Capitalism In Russia, pp. 310-11).

In fact, Trotsky saw the survival of state ownership in the Soviet Union as reflecting a form of “indirect control” (to use Cliff’s phrase, though with a somewhat different meaning) by the working class over the bureaucracy. Trotsky believed that the bureaucracy “continues to preserve state property only to the extent that it fears the proletariat” (The Revolution Betrayed, p. 251).

Trotsky saw state ownership in the Soviet Union as the product of workers revolution, and its survival as an indicator that the revolution was not totally dead: “the social revolution, betrayed by the ruling party, still exists in property relations and in the consciousness of the toiling masses” (The Revolution Betrayed, p. 255).

Trotsky made a sharp distinction between the partial measures of state ownership introduced by capitalist governments and “the expropriation of the class of capitalists” (The Revolution Betrayed, p. 247). In his view the latter could only be achieved “by the proletariat with the methods of social revolution” (p. 248).

Trotsky occasionally used the term “state capitalism” to describe state ownership of certain industries under capitalist governments. But he thought there were limits to how far capitalist governments could go in the direction of state ownership: “State capitalism means the substitution of state property for private property, and for that reason remains partial in character” (The Revolution Betrayed, p. 246).

Capitalist governments have often established state-owned enterprises. Less often have they nationalised existing privately owned enterprises (normally with compensation to the previous owners).

This may be done for a number of reasons.

  • A government may want direct control over an industry that is crucial to the needs of the state. For example, it may want to own a weapons factory to ensure that it has an adequate supply of weapons for its military needs, and that the products of the factory are not sold to its enemies.
  • Private companies may fail to invest in areas crucial to the economy as a whole, because the investment may be risky or may not pay off quickly enough. (e.g. railways in 19th century Australia). Similarly the service provided by private companies in a key area may be so poor that it hinders economic development (e.g. electricity supply in Victoria in the 1920s – see Kenneth Davidson, The Age, February 10, 2000). Public ownership of such industries may benefit the capitalists who use these services.
  • At times working-class pressure has been a factor in influencing bourgeois governments to carry out nationalisations. This was particularly the case in Western Europe after the World War II, when the bourgeoisie feared a communist revolution, and was prepared to make significant concessions to the working class, including most importantly introducing the welfare state, but also the nationalisation of certain industries.
  • Bourgeois nationalist regimes in Third World countries may take over foreign-owned enterprises to ensure that the profits remain in the country rather than flowing overseas. After nationalisation the profits go initially to the state, which in turn uses part of the money to give profitable contracts to local capitalists. Thus nationalisation of foreign-owned enterprises can strengthen the indigenous capitalist class.

In these cases nationalisation is carried out by capitalist governments in the interest of the capitalist class. But once the capitalists feel that public ownership of an enterprise is no longer necessary or beneficial to them, they will push for privatisation. They much prefer to own profit-making industries themselves rather than allow the government to own them, even if that government acts in the interests of the capitalist class.

Some non-working class regimes have carried out extensive nationalisation. For example, in Egypt in the 1950s and 1960s most large-scale industrial and commercial enterprises were nationalised by the Nasser regime, which came to power through a military coup. (This did not mean that the majority of the economy was nationalised, because most people continued to be peasant farmers, small traders or artisans. The petty bourgeoisie survived, as did small and medium-sized capitalists.)

How, if at all, did the situation in Nasser’s Egypt differ from the Soviet Union under the New Economic Policy in the 1920s, where large-scale industry was state-owned but most people were peasants?

One key difference was that in the Soviet Union, unlike in Egypt, millions of workers and peasants had been through the experience of making a socialist revolution. Furthermore, the country was still ruled by the party which had led the revolution. Despite the growth of bureaucracy and careerism, most Communist Party members were still committed to the socialist goal.

Explaining why Nasser’s Egypt was not a workers’ state, US socialist Joseph Hansen wrote:

A workers’ state is based not only on nationalizations but, among other things, on the revolutionary consciousness of the masses… The great school for the masses in achieving this level is a popular revolution – a profound collective experience in mobilizing against the ruling class and its system (“The Workers and Farmers Government”, by Joseph Hansen, in Education for Socialists bulletin, US Socialist Workers Party, 1974, p. 8)

Such a revolution had occurred in the Soviet Union, but not in Egypt.

In the Soviet Union, state ownership of industry had the potential to be a step on the road towards socialism. But this could only occur if the Communist Party leadership did not degenerate or make catastrophic mistakes, and if victorious revolutions occurred in other countries, breaking the isolation of the Soviet Union.

Stalinist totalitarianism and post-Stalin reform

In reality neither of these conditions applied. There were a series of defeats for the working class in other countries, while the bureaucratisation of the Soviet Union deepened and political repression intensified, culminating in the purge trials of the late 1930s.

Stalin’s policy of forced collectivisation of agriculture in the Soviet Union was disastrous. Because of the hasty, poorly planned and non-voluntary way it was done, it had a devastating impact on agricultural production, causing millions of deaths from starvation. Millions of people, the majority of them peasants, were sent to labour camps.

On the other hand, state ownership of the factories and mines enabled the rapid growth of Soviet industry during the 1930s, when the capitalist world was suffering from the Great Depression. Conditions for Soviet workers were grim, but at least they had jobs.

After the disaster of forced collectivisation, bureaucratic ultra-leftism gave way to bureaucratic conservatism. The bureaucrats wanted to avoid further dramatic changes. Hence they did not want to risk provoking a new wave of turmoil by privatising state-owned assets (causing mass sackings and potentially a working-class revolt).

Thus nationalised industry survived and expanded. After Stalin’s death, repression was eased and economic concessions were made to the working class. In this new context, state ownership of industry provided the basis for improvements in workers’ living standards and a tendency towards greater social equality.

During the Stalin era it was understandable that some socialists could see nothing positive in the Soviet Union for workers. The theory of state capitalism was an attempt to explain the oppressive nature of the Stalinist regime.

Cliff and Chris Harman acknowledged significant improvements in the post-Stalin era. Explaining the post-Stalin reforms, Harman said that Khrushchev “had pushed through reforms because, without them, there was the danger of revolution” (State Capitalism in Russia, p. 280). This recognition that fear of revolution could influence government policy contrasts with Cliff’s earlier dismissal of Trotsky’s view that the bureaucracy was held back from privatising state-owned industry by fear of the response of the working class.

Capitalist restoration

The privatisation of industry under Yeltsin led to growing social inequality, insecurity and poverty, which tends to support Trotsky’s view that state ownership had been a gain for the working class. Why then did the working class not resist privatisation more strongly?

First, the legacy of Stalinist repression meant the absence of a strong socialist party with a clear Marxist understanding of the situation. Many workers had a general sentiment in favour of democratic socialism, but this was not organised.

Second, the international political situation was unfavourable to the working class. US President Ronald Reagan, British Prime Minister Margaret Thatcher and other Western leaders had defeated key working-class struggles (e.g. the British miners’ strike) and successfully carried through the neoliberal offensive in the advanced capitalist countries, while also carrying out an offensive against revolutions in the Third World (e.g. Nicaragua, southern Africa), and stepping up the arms race which put pressure on the Soviet economy.

Third, the international economic environment was different from that in the 1930s. In the 1980s and 1990s, despite the end of the post-war boom, the advanced capitalist countries still appeared relatively prosperous. Soviet workers were increasingly aware of Western living standards, without being aware that these were based on the exploitation of the Third World. Hence, when privatisation was first introduced the workers (while not necessarily convinced of the supposed benefits) did not expect it to be a major disaster.

This international context created favourable conditions for the neoliberal offensive within the Soviet Union itself. Imperialist governments and institutions intervened very consciously to promote neoliberal ideology. For example, Margaret Thatcher went on Soviet television to argue the virtues of the "free market". The intelligentsia was won over to neoliberalism. The working class remained passive and depoliticised -- a legacy of Stalinist repression, reinforced by the global situation of working class defeat and retreat.

This context made possible the restoration of private ownership of the means of production with relatively little conscious political opposition. There were many fierce struggles around immediate economic issues such as unpaid wages, but no broadly based political challenge to the general direction of government policy.


Trotsky's view of the former Soviet Union as a transitional society ruled by a bureaucratic regime seems to explain the evolution and eventual dissolution of the Soviet Union better than either Cliff's theory of state capitalism or Szymanski's view that it was a socialist society ruled by an "increasingly proletarian and democratic" Communist Party.

Does it matter who was right, now that the Soviet Union is gone?

It is necessary to correctly understand the past in order to orient ourselves for the future. It is important to understand the problem of bureaucratic degeneration in order to prevent its recurrence. But it is also important not to assume prematurely that capitalism has been restored in a country that has made a revolution.

A crucial current example is Cuba. Cliff extended his theory of state capitalism to apply to other post-revolutionary societies, including Cuba. But this analysis is even more clearly wrong in the case of Cuba than the Soviet Union, since Cuba is not ruled by a privileged bureaucracy. "State capitalist" theory undermines the urgent task of building solidarity with the revolutionary Cuban government.

More generally, Cliff's argument that an isolated workers’ state in a backward country cannot survive for long is defeatist. It is true that there are strong pressures towards bureaucratic degeneration and capitalist restoration under such circumstances, but a revolutionary leadership that understands these pressures can do much to combat them.

[Chris Slee is an activist with the Socialist Alliance, in Melbourne, Australia.]

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