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Charles Bettelheim and the socialist road

 

 

By Doug Enaa Greene

 

Dedicated to my grandmother.

 

To the cry of the middle class reformers, “make this or that the property of the government,” we reply, “yes, in proportion as the workers are ready to make the government their property.” James Connolly.[1]

 

July 7, 2016 — Links International Journal of Socialist Renewal — What is socialism? What should be one of the easiest questions for socialists and communists to answer is actually a fiercely contested terrain with many different and conflicting answers. Is it enough for the state to nationalize industries and develop the productive forces through economic planning? Does that mean the USSR in 1967 was socialist with its singular focus of economic growth through developing heavy industry? Or was the German Democratic Republic socialist with its feared secret police, the Stasi? Is anything the government does socialist, as the Tea Party claims? Does that mean Sweden and other Scandinavian countries are socialist with their impressive welfare programs, despite having hereditary monarchies, anti-immigrant racism and exploitative relationships with the Third World? Does socialism allow any room for the market? And if so, how much? If a market is compatible with socialism, then is present-day China socialist since it is led by a Communist party, despite opening the country up to sweatshops and unleashing rampant inequality? Is Bernie Sanders and his campaign a socialist opening in US politics, even though he supports the Democratic Party and approves of imperialist wars and Apartheid Israel? Maybe socialism is not the destination, but instead a road? Although not all theses questions can be definitively answered here, the French Marxist Charles Bettelheim made valiant efforts, based on his own theoretical and practical work with the 20th century's attempts at socialism, to answer what it meant for a society to take the socialist road and how we should understand socialism.

 

I. Biography

 

Charles Bettelheim was born on November 20, 1913 in Paris into a banker's family, but he spent his early life in Switzerland and Egypt before moving back to Paris in 1922. In 1933, radicalized by the impact of the Great Depression and Hitler's rise to power, Bettelheim joined the Communist Party. Despite his political commitments, Bettelheim studied widely, learning philosophy, sociology, law and psychology, and Russian. In 1936, he traveled to the Soviet Union for five months and was there when the first major show trials occurred. Bettelheim was shaken by these events, but maintained his Marxist convictions. Following the Second World War, Bettelheim choose economics as his profession, and due to his knowledge of the USSR and economic planning he served in the Ministry of Labor, before, in 1948 becoming Director of Studies of the École Pratique des Hautes Études (EPHE) and a professor at the Institut d'Etutde du Developpement Economique et Social in 1968. By the 1950s and 60s, Bettelheim was working abroad as an economic adviser to many newly-independent countries in the Third World, such as Egypt, India, Algeria and Cuba. In the mid-1960s, Bettelheim supported Maoism, visited China several times and served as President of the Franco-Chinese Friendship Association until his resignation in 1976. He authored a number of books such as Soviet Planning (1945), The German Economy under Nazism, an Aspect of the Decadence of Capitalism (1946), Independent India (1962), Transition to a Socialist Economy (1968), Economic Calculation and Forms of Property (1971), Cultural Revolution and Industrial Organization in China (1973), multiple volumes of Class Struggles in the USSR (1974, 1977, and 1982) and China Since Mao (1978). Despite his international reputation, Bettelheim fell into obscurity after the mid-1980s, publishing little and died on July 20, 2006.

 

II. The ‘Great Debate’

 

Throughout the majority of his career, Bettelheim defended Soviet orthodoxy in regards to developing the productive forces, the role of markets and socialism, as seen by his contribution to the “Great Debate” in Cuba. By the mid-1960s, Cuba's young revolution had successfully defended themselves against US imperialist efforts to overthrow them. Yet Cuba struggled over different methods to construct socialism — whether to adopt the prevailing modus operandi of the Soviet bloc or break their dependency on sugar (the island's main crop and export) by industrializing through reliance on moral incentives.

 

A new road for Cuba had to be found. Although the revolutionary government's initial efforts at nationalization and redistribution had slowed economic growth, according to Helen Yaffe,

 

by 1962-63 national output and worker productivity began to decline as the shocks of profound structural change set in: new institutions, new social relations of production, new trade relations, the exodus of professionals and the imposition of the US blockade. This was also the result of the rash implementation of policies whose consequences had not been fully analyzed.[2]

 

Dependence on sugar kept Cuba in a vice and halted ambitious plans of industrialization. Cuba's problems were further compounded by the US blockade that limited their ability to import raw materials. In the face of these difficulties, many economists and government officials were committed to the seemingly tried and tested Soviet model of development by integrating Cuba into the Eastern Bloc through trade agreements and relying on their experts and technicians to create a viable infrastructure. Others offered a different path.

 

The resulting controversy led to the “Great Debate” between different roads to socialism — Auto Financing System or AFS (aka Economic Calculus) or the Budgetary Finance System (BFS). Advocates of AFS (which was the existing Soviet orthodoxy) said that enterprises in the Cuban economy should be legally independent, trade their products with each other through a market (thereby products were commodities), that success for enterprises is determined by their profitability and material incentives would promote efficiency and innovation. Despite the relative independence of the enterprises, they would still rely upon banks for various forms of credit.

 

Opposed to the AFS, advocates for the BFS believed in less autonomy for enterprises, but argued for each firm to be controlled by a central plan. The enterprises would be considered part of a larger unit — the planned sector of the economy. Products would only acquire the status of a commodity when they were sold on the market. Furthermore, profitability would play no role in measuring the success of an enterprise. The central bank would serve to establish rigorous control over the enterprises by centrally allocating the necessary funds. Lastly, the main form of motivation, or incentives, was expected to come via moral and social conscience, not from material gain.

 

The ensuing “Great Debate” became one of the most important debates on the transition to socialism since the 1920s, discussing wide-ranging issues such as the role of consciousness, material and moral incentives, money, bureaucracy, planning and the law of value.[3]

 

Che Guevara (supported by the Belgian Trotskyist economist Ernest Mandel) was one of the foremost proponents of the BFS and “opposed the use of capitalist mechanisms to determine production and consumption.”[4] Che did not deny the existence of the law of value in socialism, but argued that it was unsuitable as a guide for social justice and it had no role to play in the public sector. Enterprises in the planned sector operated as a single whole that did not produce commodities, and while they were subject to strict accounting, this was not the same as being subjected to the law of value. Rather, Che said that rejecting the law of value as a regulator for the economy meant that production needed to be regulated instead by a central plan. Che said that economic development and the pursuit of social justice required curtailing the law of value. Socialization the means of production opens the road to central planning and overcoming the anarchy of the market. Che believed that the success of the Cuban Revolution proved that deterministic views of economic laws were false and that the revolutionary vanguard “is capable of consciously anticipating the steps to be taken in order to force the pace of events, but forcing it within what is objectively possible.”[5] Ultimately, Che said the development of socialism would create new human beings guided by a new consciousness:

 

For the advocates of financial self-management, the use of direct material incentives throughout the various stages of building communism does not contradict the “development” of consciousness. But for us it does. It is for this reason that we struggle against the predominance of material incentives — because they retard the development of socialist morality.[6]

 

Che and Mandel were opposed by Bettelheim, then working in Cuba as an economic adviser, who defended the AFS. Considering the dramatic changes in Bettelheim's ideas on the transition to socialism a few years later, it is worth discussing the line he championed during the “Great Debate.” Bettelheim, using Stalin to buttress his position, argued that it was an “economic law that the relations of production must necessarily conform with the character of the productive forces.”[7] Effective economic organization needed to conform to the economic structure of society. Since Cuba was underdeveloped, the necessity of the AFS and the survival of the law of value was in conformity with the current development of the productive forces. Bettelheim said that the law of value was an objective law during the transition to socialism and it remained operative in the planned sector of the economy due to the low level of development of the productive forces. Since an underdeveloped economy was not in the position of knowing social wants and planning for them, this meant commodity prices within “the socialist sector itself, the role of the law of value and of a price system that cannot reflect only the social cost of the different products but has also to express the ratio between the supply of and demand for these products...”[8] For Bettelheim, enterprises needed autonomy and the economy needed to rely on the law of value until the productive forces are developed.

 

Bettelheim summed up his position and his disagreement with Che years later:

 

Cuba's level of development meant that the various units of production needed a sufficient measure of autonomy, that they be integrated into the market so that they could buy and sell their products at the prices reflecting the costs of production. I also found that the low level of productive forces required the principle: to each according to his work. The more one worked, the higher the pay. This was the core of our divergence, because Che found differences acceptable only when they arose from what each contributed to the best of his ability.[9]

 

Mandel objected to Bettelheim's position, characterizing it as too abstract, since “categories emerge from reality, but reality cannot be reduced to categories.”[10] Rather, the problems of the socialist transition in Cuba cannot be reduced to abstract concepts because reality was a much richer and complex process. Secondly, Bettelheim argued that there could not be complete collective ownership of the means of production without total collective ownership, but Mandel said that “'complete control of the means of production down to the last nail is a somewhat mechanical and technocratic approach and in no way the end goal of socialism.”[11] To say otherwise was to close the socialist road for every underdeveloped country. Thirdly, Bettelheim reduced “social ownership of the means of production...[to] simply a legal phenomenon.”[12] Rather, changes in ownership do matter and open the way to planning. Social ownership did not equal the total control that Bettelheim implied.

 

Fourthly, the survival of mercantile categories, such as money and wages, was due to the low level of the productive forces, which “is still inadequate to ensure the distribution of consumer goods according to need.”[13] Since the productive forces were so underdeveloped, Mandel cautioned against a premature reliance on moral incentives and abolishing private ownership before consumer needs could be fulfilled by the planned sector would be lead to involuntary labor. For Mandel, the key question during the transition was not over “abolishing” the law of value, which he admitted was impossible, rather the principal contradiction was “between the non-capitalist mode of production and the bourgeois standards of distribution.”[14] Mandel warned that reliance on the law of value in the socialist sector would lead to the anarchy of overproduction and “preserve the imbalance of the economic structure handed down from capitalism”, dooming Cuba to permanent underdevelopment.[15] Mandel foresaw a long-term struggle between the “principle of conscious planning and the blind operation of the law of value.”[16]

 

By 1965, the “Great Debate” came to an end. Publicly, Che Guevara appeared to have won. In 1968, Cuba launched a radical offensive: nationalizing most non-agricultural businesses still in private hands, eliminating the market as a medium of exchange, but at the same time, relying on sugar and agriculture as the main sector of growth. The shift to agriculture occurred just as the percentage of agricultural workers declined, leading the government to reliance upon moral incentives as a short-term solution to the labor shortage.[17] However, the whole-scale nationalizations disrupted the economy and moral incentives could not compensate for low productivity and mismanagement. Lastly, the Cubans launched a major effort to harvest 10 million tons of sugar in 1970 (double the 1968 harvest), diverting significant numbers of resources for the goal and leading to further difficulties in the economy. The gamble failed. Soon after, Cuba adopted the Soviet economic model.[18] It appeared that Che's road had reached a dead end and that Bettelheim was proven right.

 

III. Productive forces

 

The “Great Debate” in Cuba occurred concurrently with larger discussions within the Eastern Bloc over political “liberalization” and economic “reforms.” The economic reforms proposed entailed introducing capitalist methods and material incentives to overcome problems of low productivity, bureaucracy and slowing rates of growth. Yugoslavia had already gone the farthest down the road of market socialism, but Poland, Hungary and the USSR were also open to adopting market measures. In the USSR, the economist Y. G. Liberman was a leading advocate of reducing centralized planning, enterprise autonomy and utilizing profitability and material incentives.[19] Many of Liberman's proposals were adopted by the USSR in 1965, but the results of the reforms were inconsistent and did not lead to efficient central planning, leading many of them to be rolled back by the 1970s.[20]

 

Bettelheim's position during the “Great Debate” was very close to the reigning Soviet orthodoxy in stressing a greater role for market and enterprise efficiency. He also shared with the USSR a belief in the primacy of developing the productive forces, since owing to the underdeveloped nature of the Soviet economy (and most other Eastern Bloc countries), in order for them to build socialism, they needed to focus on developing the forces of production, especially heavy industry. According to Soviet orthodoxy, the task of building up the forces of production was the "driving force of history" that would transform the relations of production and inevitably lead to the creation of socialism. In this conception, as Bettelheim stated later in a self-criticism of his views in the preface to his multi-volume Class Struggles in the USSR, the class struggle was seen as a secondary factor which “intervenes essentially in order to smash production relations that hinder the development of the productive forces, thus engendering new production relations which conform to the needs of the development of the productive forces.”[21]

 

According to Bettelheim, the theory of the primacy of the productive forces, was a form of “economism” that characterized the whole of the Bolshevik Party (with the important exception of Lenin) which “ascribes the major role in the building of socialism not to the initiative of the working people but to the accumulation of new means of production and technical knowledge.”[22] While Lenin combated economism before 1917, following the success revolution and vast social changes in the Bolshevik Party, economism returned due to the “growth among party members of a stratum of administrators and of business, planning, and financial officials favored the development of economism in new forms.”[23] In light of the backward condition prevailing in the USSR, these elements favored the quickest development of the productive forces (which they identified with building socialism), especially in heavy industry, even at the cost of the alliance with the peasantry. In short, the primacy of productive forces meant that as Soviet industry grew, exploitative social relations developed as well, leading to “increased wage differentials, development of a bonus system, growing privileges accorded to technicians, strengthening of the personal authority of the manager of an enterprise, etc.”[24] Bettelheim believes that economism was not just defended by Stalin, but by all opposition trends within the Communist Party, whether led by Trotsky, Bukharin or Preobrazhensky, whom he says only challenged “particular concrete measures or groups of measures, of a political or administrative character, decided on the basis of a general orientation which they did not challenge fundamentally.”[25]

 

The primacy of the productive forces which had led to the growth of repression and inequality in the USSR during the Stalin era was not abandoned by the later Soviet leadership. In fact, the 20th Congress of the Soviet Communist Party, which condemned Stalin's crimes, was the rejection of Marxism as a tool of analysis by the party. The many problems of the USSR during the Stalin era “were presented as being "perversions" due to the actions of a certain ‘personality,’ namely, Stalin” and “The contradictory reality of Soviet history and Soviet society was not subject to the least analysis. The aspects of reality which needed to be condemned and transformed were not explained in relation to the inner contradictions of the Soviet Union.”[26] The new line of “reforms” and “democratization” was not a revitalization of socialism, but, to the contrary, the consolidation of “the class relations which concentrated economic and political power in the hands of a minority, so that the contradictions engendered by these class relations, far from diminishing, were actually deepened.”[27] The consequences of the new line were pro-market reforms and liberalization, which despite some short-term successes, brought greater inequality and discontent amongst workers in both Russia and the Eastern Bloc.

 

Bettelheim himself moved away from his previous conceptions of the socialist transition and defense of the USSR following the Warsaw Pact invasion of Czechoslovakia in 1968 and the Chinese Cultural Revolution of 1966. According to Bettelheim, “the chief shortcoming of my writings of 1962-1967 lies in the fact that what is there treated as something dictated by objective requirements is essentially related to the level of development of productive forces.”[28] Now Bettelheim

 

began to turn away from [his] previous problematic, in which the disappearance of commodity and money relations and the progress of socialist planning tended to be seen as dependent above all on the development of the productive forces (this development being conceived, moreover, in somewhat unilinear fashion), and not, first and foremost, on the revolutionization of social relations.[29]

 

The great lesson of the Chinese Cultural Revolution was that it rejected the premise of developing the productive forces and recognized that the class struggle continued under the dictatorship of the proletariat. For Bettelheim, only a continuing revolutionizing of the productive relations would increase the control of the masses in society, and bring about the disappearance of capitalist economic relations and the ideological and political relations which reproduce them, in order to continue on the socialist road:

 

The Great Proletarian Cultural Revolution represents a turning point of the greatest political importance; it "discovered" (in the sense in which Marx used the expression in connection with the Paris Commune) an essential form of the class struggle for the construction of socialism ... In the combination productive forces/productive relations, the latter play the dominant role by imposing the conditions under which the productive forces are reproduced. Conversely, the development of the productive forces never directly determines the transformation of the production relations; this transformation is always the focus of intervention by the contending classes — that is, of class struggle.[30]

 

IV. The socialist road

 

Bettelheim's Class Struggles in the USSR explained the history of the restoration of bourgeois power in Russia by drawing upon the experience of the Cultural Revolution. However, Bettelheim's historical work built on his earlier theoretical work, primarily Economic Calculation and Forms of Property. It is to the arguments of that work which we now turn. According to Bettelheim, the most fundamental element of socialism was not defining it in economic terms, but politically — i.e. as the dictatorship of the proletariat. In a debate with US Marxist Paul Sweezy, he said:

 

...the contradiction 'plan'-'market' designates an essential contradiction in socialism viewed as a transitional or passing form; this contradiction is the surface effect caused by a deeper contradiction, by the basic contradiction in the transitional form which is obviously situated at the level of productive relationships and productive forces ... What characterizes socialism as opposed to capitalism is not ... the existence or non-existence of market relationships, money and prices, but the existence of the domination of the proletariat, of the dictatorship of the proletariat. It is through the exercise of this dictatorship in all areas - economic, political, ideological - that market relations can be progressively eliminated by means of concrete measures adapted to concrete situations and conjunctures.[31]

 

According to Bettelheim, once the working class came to power, they needed to overcome the domination of bourgeois culture, politics, ideology and the law of value. However, there was an ever-present danger that the bourgeoisie would develop anew under socialism from amongst those whose position in the system of social reproduction reflected a bourgeois position (including members of the Communist Party, state officials, managers, planning administrators) and retake state power. To prevent a capitalist restoration, it was necessary for the working class to possess actual control of the state. If the working class did not control the state, then state ownership is just a legal fiction that disguised the ownership of a new state bourgeoisie. When the state bourgeoisie was in charge of the state, they would use the appearance of planning to dominate workers since “the intervention of the plan does not allow commodity relations to disappear; the plan is then only superimposed on these relations.”[32]

 

True socialist planning, Bettelheim said, can only exist under certain conditions:

 

It is only under certain social, political, and ideological conditions that a plan is an instrument of the domination by the producers over the conditions and the results of their activity. For it to play this role, the plan must be elaborated and set in operation on the basis of the initiative of the masses, so that it concentrates and coordinates the experiences and projects of the masses...[33]

 

For planning to be actually under the control of the working class, “planned prices” must express “not the requirements of the law of value but those of the social direction of the economy... [which] means that, in the transition to socialism, politics must be in command of economics and, therefore, that the distribution of social labor is not dominated by the requirements of the reproduction of capitalist relations of production...”[34] This means that the question of prices is a political decision, not an economic one. Planned prices must serve the requirements of constructing socialism which “implies the increasing control of immediate producers over production and also, therefore, the development of production in terms of present and future needs of producers” not perpetuating the law of value.[35] The law of value manifests itself “spontaneously,” while taking the socialist road cannot be left to spontaneity since it requires political intervention and leadership. “This presupposes that the workers occupy a dominant political and economic position, at least through the intermediary of a vanguard, ensuring the direction of the state apparatus and control over the units of production.”[36]

 

If the state is truly in the hands of the workers, then state ownership of property is a legal expression of social ownership, and, therefore planning reflects the interests of the working class. By contrast, if the state was not controlled by workers, then state property belongs to bureaucrats and administrators who use the planning to reinforce their power on the economic, political and ideological levels, ultimately leading back to capitalism. As Bettelheim says:

 

The "obscuring effects" brought about by inadequate forms of intervention can also lead to opposite consequences of those outlined above, particularly under the influence of economism. In this case, because of the inefficacy of the intervention of the political level, this intervention tends to be renounced: This can then mean the disappearance of state property, because this only exists economically through the real and effective intervention of the political level within the processes of production and reproduction. Without this intervention, state property constitutes a simple juridical superstructure to which the real relations of production correspond less and less.

 

It is precisely the existence of the value-form, particularly in the process of production and, through this, the existence of capitalist relations of production, especially the wage-relation, that make possible the "retreat" of the political level's intervention and the resurgence of a market economy. The dominance of commodity relations then necessarily leads to the dominance of capitalist relations of production.[37]

 

Bettelheim argued that for transitional economies, it was not possible to just eliminate commodity relations. Rather, they existed alongside new socialist relations in an uneasy tension:

 

Commodity relations cannot be "abolished," and a plan cannot be substituted for them; they are eliminated through adequate political action in which the plan is only an instrument, and certainly not the main one.[38]

 

Capitalist relations survive under transitional economies because the core of capitalist economies are enterprises that possess a dual separation:

 

The capitalist character of the "enterprise" (which, primarily in industry, is the concrete "unit of production" on which, as a general rule, state property exerts its effects in transitional social formations) is due to the fact that its structure assumes the form of a double separation: the separation of workers from their means of production (which has, as its counterpart, the possession of these means by the enterprises, that is, in fact, by their managers), and the separation of the enterprises from each other. This double separation forms the central characteristic of the capitalist mode of production, and it serves as a support for the totality of contradictions of this mode of production, to the extent that this mode opposes the "private" character of property or possession to the social character of the productive forces. State capitalism and nationalizations only provide the formal means for partially "overcoming" these contradictions, that is, in fact, the means by which their effects can be displaced.[39]

 

When enterprises have this double separation, they produce and reproduce capitalist social relations, which distort the plan. If these relations are not overcome, they could facilitate the creation of a new state bourgeoisie who would restore capitalism. For Bettelheim, if socialism was defined mainly by the political domination of the working class, then

 

control by the producers over their conditions of existence requires the development of entirely new social relations, and that to the extent that these new relations are not developed, the old relations which permit exploitation and class domination continue to reproduce themselves.[40]

 

Therefore, a transitional economy will see a continuous struggle between the law of value and the law of the social direction of the economy, and commodity production will not disappear until the working class supplants them with new social relations. This means that class struggle continues under socialism and will not end until

 

the conditions under which the law of value functions have disappeared, the transitional period is complete; the law of social direction of the economy is then dominant on its own, while the duality, property/possession, has disappeared, and a process of social appropriation under the direction of the immediate producers asserts itself.[41]

 

In Cuba, Bettelheim argued that socialism required the development of the productive forces while changes in the relations of production would inevitably follow. Now in light of the experience of the Cultural Revolution, Bettelheim argued that the key link was not developing the productive forces, but revolutionizing the relations of production, and that the socialist road did not only go forward, but went backwards:

 

Historical experience shows that because of the weight of the dominant ideological relationships resulting from centuries of oppression and exploitation and reproducing themselves on the basis of a social division of labor which cannot be revolutionized overnight, the political forms which are intended to enable the direct producers to organize themselves as a ruling class tend, if a systematic struggle is not waged against this tendency, spontaneously to transform themselves in the direct of an 'autonomization' of the organs of power, i.e. of a new separation between the masses and the state apparatus, and consequently, of a reconstitution of political relations of oppression and of economic relations of exploitation. During the entire period of transition, therefore, there is a struggle between two roads: the socialist road and the capitalist road.[42]

 

For Bettelheim, taking the socialist road entailed connecting the masses with the communist goal, making them the true masters over society, identifying and defeating those forces who would reverse the revolution, and lastly, creating a new culture and ideas which take root. Taking the socialist road meant that there was no “inevitable” guarantee of reaching the communist goal, but one could just as easily go back. The road is marked with ebbs and flows, advances and retreats, revolution and counterrevolution.

 

Bettelheim saw socialism as more than just developing industry and the productive forces, but entailed a struggle to replace production for profit by production for social use, a struggle to revolutionize all institutions and social relations in society, to forge new values and attitudes and establish all-round control of society by the working people, so they can master and transform all aspects of society, and to narrow and ultimately abolish all class distinctions. In short, socialism is a struggle to uproot the old and build a new communist world.

 

The refined understand of socialism and taking the socialist road that Bettelheim develops based on his reflections on the experience of the USSR, China, and Cuba consists of the following three components. Firstly, socialism is the class rule of the proletariat (and its allied classes) over the bourgeoisie and other (old and new) exploiting classes. After the revolution, when the proletariat has state power, they cannot wipe out the law of value at a stroke, but they can end its dominance in society. An essential task of the revolutionary state is to begin making "despotic inroads" on the rights of private property — to end the ability of capital to reproduce itself. The working class cannot accept the logic of capital while making a revolution or they lose. If capital refuses to submit, then they must be broken swiftly and without mercy. While the dictatorship of the proletariat means vastly expanded democracy for the working class, it also a dictatorship exercised over the overthrown capitalist class in all spheres — political, ideological, cultural and economic. Secondly, socialism is a mode of production where social ownership replaces that of private ownership. Some mechanism must regulate the allocation of the means of production and surplus value. Assuming the proletariat is in power, then that device is the plan and the conscious allocation of resources and organization of social labor to transform society. If the proletariat is not directing and changing society, or if commodity production is not being restricted, then another mechanism — the law of value — will be in command. Lastly, socialism is a period of transition of class struggles and social changes that leads towards the goal of eliminating classes and class distinctions. While socialism contains the seeds of communism, it also bears the marks of capitalism that also reproduce themselves. Therefore, the victory of communism is not inevitable since socialist society nurtures the roots for both capitalist restoration and the continued advance to communism.[43]

 

V. Criticism[44]

 

Many Marxists challenged Bettelheim's Maoist writings on capitalist restoration and history of the USSR on a number of methodological and factual grounds, which by in large are quite valid. For one, Bettelheim's anti-economism could easily become a justification for voluntarism and idealism in the building of socialism since he saw the ultimate criteria for determining the capitalist or socialist character of a society as whether or not it followed the correct political line (Lenin or Mao). The British Marxist Ralph Miliband objected to Bettelheim's anti-economism, saying that the term was turned into a “catch-all explanation for phenomena which require deeper probing than the denunciation of it allows.”[45] In his eagerness to repudiate anti-economism, Bettelheim's “under-estimation of the weight of economic factors” can easily lead to voluntarism. Bettelheim at times does ignore the material conditions existing in the USSR (in fact he looks at the USSR as a self-contained entity, ignoring the international class struggle and revolutions abroad) and suggests that socialism can be built by political will, regardless of unfavorable conditions. Paul Sweezy echoes Miliband, saying that Bettelheim uses the “correct ideological line” as the barometer for judging capitalist restoration:

 

Bettelheim offers no criterion for judging whether or not the proletariat is in power other than the policies pursued by the government and the party. Is it not essential for the theory to have explanatory value that there should be an independent method of establishing the identity of the class in power Or .. what are the modalities and stages in the growth of the new state bourgeoisie? Perhaps most important of all, under what conditions can one expect a victory of the proletariat, and under what conditions a victory of the new state bourgeoisie?[46]

 

For the Trotskyist Alexander Callinicos, Bettelheim's fundamental error was viewing “working-class power as a matter, not of the proletariat directly exercising power, but of the ideas inculcated into the masses by those who control the state machine.”[47] This results in denying the necessity for class dictatorship by the working class and submitting the party to democratic control, something that comes out in two long passages from Bettelheim:

 

The establishment of the dictatorship of the proletariat means that the proletariat sets itself up as the ruling class, and this cannot be done through organs of the soviet type, which are mass organizations, or through state organs exclusively derived from these. The constitution of the proletariat as ruling class is necessarily effected through an apparatus that is specifically proletarian in ideology and aims, and in the role of leadership and unification that it plays in relation to the masses: in other words, through a proletarian party that plays this leading role, politically and ideologically, and plays it, too, in relation to the machinery of state issuing from the mass organizations.[48]

 

And:

 

The definition of the proletarian revolutionary line can therefore not be left to a mere "majority vote," whether in a popular (or workers') assembly, in a party congress, or in a meeting of the party's Central Committee. Experience shows that, faced with a profoundly new situation, it is usually only a minority that finds the correct path, even in an experienced proletarian party. This being so, to suppose that a majority vote can settle difficulties and decide the correct line would be quite illusory. Generally speaking, what is correct does not immediately appear as such: this clarification comes about only after struggle, free discussion, experience, and the test of time.[49]

 

This means that the working class character of the party and state have little to do with the working class, but is determined by its ideology and political line, which is ultimately a form of voluntarism. In Bettelheim's Marxism, the existing social relations are detached from material reality, becoming almost a supernatural force that can be transformed with the correct line.[50]

 

Yet for all of Bettelheim's focus on politics and ideology, the great debates within the Bolshevik Party are mentioned very sparsely in his account. Rather, he indulges in a “great man theory of history” by viewing Lenin as always right. Bettelheim largely ignores other Bolshevik leaders, viewing them all as infected by economism, thereby downplaying their specific lines and programs.[51] Yet Bettelheim goes further and transforms Lenin into a precursor of Mao.

 

Furthermore, Bettelheim's concept of a state bourgeoisie is criticized by Miliband as taking “for granted what has to be demonstrated, or at least argued — in this case the actual existence of a ‘state bourgeoisie’, a concept which conjures up a very definite class formation whose exact nature demands specification. But it demands in vain.”[52] Bettelheim appears to believe that the state bourgeoisie can be traced back to the earliest days of the Russian Revolution, ignoring the breaks between the eras of Stalin and Lenin, the Civil War, NEP and the Five Year Plans.[53] In fact, by the time Bettelheim completed the final volume of Class Struggles in the USSR, he declared that the Russian Revolution had not been a socialist revolution, but a capitalist one.[54]

 

The theoretical and factual premises of Bettelheim's Economic Calculation and Forms of Property were also the subject of extensive criticism by the Marxist economist Hillel Ticktin. Ticktin states that Bettelheim takes Soviet statistics and economic data at face value as opposed to seriously interrogating them. Secondly, Bettelheim “produces generalizations or isolated postulates ... on the nature of Eastern Europe as a whole, ignoring that fundamental differences exist.”[55] This leads him to generalize the entire Eastern Bloc, something which is not supported by empirical evidence for different countries. Ticktin also takes factual issue with Bettelheim's claim that in the USSR, enterprises are independent, that the law of value continues to operate and that labor power is a commodity. Based on the evidence, Ticktin says enterprises in the USSR were controlled by a central plan and not able to determine their own prices, wages or even what to produce. In spite of the Liberman reforms, “profit remains relatively unimportant as an indicator in the enterprise performance.”[56] In the USSR, there was no economic competition and prices were not set by the law of value. This leads Ticktin to conclude that Soviet enterprises “are in fact [not] independent units. Price, quantity, wages and salaries are all determined outside the firm or enterprise, unlike capitalism.”[57] Lastly, there was no labor market in the USSR and workers could not be fired at will. While the goal of the Liberman reforms was “to discipline the worker in this manner — through the market,” but as we have seen the reforms were only partly implemented — they did not change the overall Soviet planning structure, nor did they create a labor market.

 

VI. Conclusion

 

Socialism is not simply nationalization, nor is it about developing the productive forces of society. Socialism is a transitional system that can lead either back to capitalism or forward to a truly emancipated communist society that uproots all forms of exploitation and oppression. Although he fell into obscurity at the end of the Maoist era in China, Bettelheim attempted to show theoretically, drawing on the lessons of 20th century socialist experiments, what taking the socialist road meant in practice. Despite the many justified criticisms leveled at Bettelheim's theories and conclusions, his work is still worth engaging in order to help us answer the burning question of “what is socialism?”

 

Notes

 

[1] James Connolly, “State Monopoly versus Socialism,” Marxists Internet Archive. https://www.marxists.org/archive/connolly/1901/evangel/stmonsoc.htm

 

[2] Helen Yaffe, Che Guevara: The Economics of Revolution (New York: Palgrave Macmillan, 2009), 46.

 

[3] "The law of value is the law of spontaneous equilibrium of commodity-capitalist society. In a society without commanding centers of planned regulation, thanks to the operation of this law, direct or indirect, everything is achieved which is needed cor the comparative normal functioning of a whole productive system of the commodity-capitalist type: the distribution of the productive forces - that is, people and means if production - among the different branches of the economy; the distribution of the product of society's annual production between workers and capitalists; the distribution of surplus value between different branches or countries, and its distribution among other exploiting classes; technical progress; the victory of advanced economic forms over backward ones and the subordination of the latter to the former." Evgeny Preobrazhensky, The New Economics (New York: Oxford University Press, 1965), 147-8.

 

[4] Helen Yaffe, “Ernesto 'Che' Guevara: a rebel against Soviet Political Economy,” Marxists Internet Archive. https://www.marxists.org/subject/economy/authors/yaffeh/che-critic.htm

 

[5] Ernesto Che Guevara, “The Meaning of Socialist Planning,” in Man and Socialism in Cuba: The Great Debate, ed. Bertram Silverman (New York: Atheneum, 1971), 102.

 

[6] Ernesto Che Guevara, “On the Budgetary Finance System,” in Man and Socialism in Cuba: The Great Debate, ed. Bertram Silverman (New York: Atheneum, 1971), 134-5. For more on Che's position, see Michael Lowy, The Marxism of Che Guevara: Philosophy, Economics, Revolutionary Warfare (New York: Rowman & Littlefield Publishers, Inc., 2007), 27-65; Olivier Besancenot and Michael Lowy, Che Guevara: His Revolutionary Legacy (New York: Monthly Review Press, 2009), 65-77.

 

[7] Joseph Stalin, “Economic Problems of the USSR,” Marxists Internet Archive. https://www.marxists.org/reference/archive/stalin/works/1951/economic-problems/ch02.htm

 

[8] Charles Bettelheim, “Forms and methods of socialist planning and the level of development of the productive forces,” in The Transition to Socialist Economy (Sussex: The Harvester Press Limited, 1975), 136.

 

[9] Quoted in Jan Willem Stutje, Ernest Mandel: A Rebel's Dream Deferred (New York: Verso, 2009), 151.

 

[10] Ernest Mandel, “Mercantile Categories in the Period of Transition,” in Man and Socialism in Cuba: The Great Debate, ed. Bertram Silverman (New York: Atheneum, 1971), 61.

 

[11] Ibid. 64.

 

[12] Ibid. 62.

 

[13] Ibid. 71.

 

[14] Ibid. 92.

 

[15] Ibid. 82.

 

[16] Ibid.

 

[17] See Bertram Silverman, “The Great Debate in Retrospect: Economic Rationality and the Ethics of Revolution,” in Man and Socialism in Cuba: The Great Debate, ed. Bertram Silverman (New York: Atheneum, 1971),16-21.

 

[18] See Richard Gott, Cuba: A New History (New Haven: Yale University Press, 2004), 240-3; Piero Gleijeses, Conflicting Missions: Havana, Washington, and Africa, 1959-1976 (Chapel Hill: University of North Carolina Press, 2002), 222-3; Silverman 1971, 22-6.

 

[19] Daniel Boorstein, The Economic Transformation of Cuba (New York: Monthly Review Press, 1968), 267-9, 275-6.

 

[20] For the results of the Liberman reforms, see Alec Nove, An Economic History of the USSR (New York: Penguin Books, 1982), 374-6.

 

[21] Charles Bettelheim, Class Struggles in the USSR, First Period: 1917-1923 (New York: Monthly Review Press, 1976), 23.

 

[22] Ibid. 34

 

[23] Ibid. 37.

 

[24] Ibid. 27.

 

[25] Ibid. 38

 

[26] Ibid. 11. See also Isaac Deutscher, “Khrushchev on Stalin,” Marxists Internet Archive. https://www.marxists.org/archive/deutscher/1956/khrushchev_on_stalin.htm

 

[27] Bettelheim 1976, 11.

 

[28] Ibid. 15.

 

[29] Ibid. 16.

 

[30] Charles Bettelheim, Cultural Revolution and Industrial Organization in China: Changes in Management and the Division of Labor (New York: Monthly Review Press, 1974), 10 and 91-2.

 

[31] Paul Sweezy and Charles Bettelheim, On the Transition to Socialism (New York: Monthly Review Press, 1971), 18-9.

 

[32] Charles Bettelheim, Economic Calculation and Forms of Property: An Essay on the Transition Between Capitalism and Socialism (New York: Monthly Review Press, 1975), 84.

 

[33] Sweezy and Bettelheim 1971, 41.

 

[34] Bettelheim 1975, 150.

 

[35] Ibid.

 

[36] Ibid. 101.

 

[37] Ibid. 138-9.

 

[38] Ibid. 85.

 

[39] Ibid. 77.

 

[40] Sweezy and Bettelheim 1971, 42.

 

[41] Bettelheim 1975, 143.

 

[42] Sweezy and Bettelheim 1971, 60.

 

[43] For more on the Maoist conception of socialism see my essay The Final Aim is Nothing: The Politics of Revisionism and anti-revisionism” (forthcoming); Raymond Lotta, ed., Maoist Economics and the Revolutionary Road to Communism: The Shanghai Textbook (New York: Banner Press, 1993); Mao Zedong, A Critique of Soviet Economics (New York: Monthly Review Press, 1977); Chang Chun-chiao (Zhang Chunqiao), “On Exercising All-Round Dictatorship Over the Bourgeoisie,” Marxists Internet Archive. https://www.marxists.org/reference/archive/zhang/1975/x01/x01.htm

 

[44] This section draws heavily on Marcel van der Linden, Western Marxism and the Soviet Union: A Survey of Critical Theories and Debates Since 1917 (Boston: Brill, 2007), 186-192.

 

[45] Ralph Miliband, “Bettelheim and the Soviet Experience,” in Ralph Miliband: Class War Conservatism and Other Essays (New York: Verso, 2015), 191.

 

[46] Sweezy and Bettelheim 1971, 49; Corrigan, Ramsey and Sayer, all Marxists fairly close to Bettelheim politically, say that he reverts to “a radical idealism wherein the Line of the ruling party becomes effectively the sole criterion of the nature of a transitional form.” See Socialist Construction and Marxist Theory: Bolshevism and Its Critique (New York: Monthly Review Press, 178), 150.

 

[47] Alexander Callinicos, “Maoism, Stalinism and the Soviet Union,” Marxists Internet Archive. https://www.marxists.org/history/etol/writers/callinicos/1979/xx/bettelheim.html

 

[48] Charles Bettelheim, Class Struggles in the USSR, First Period: 1917-1923 (New York: Monthly Review Press, 1976), 109.

 

[49] Ibid. 414.

 

[50] Nigel Harris considers Bettelheim's position that the social relations play the dominant role to be idealist: “Bettleheim is compelled to turn everything on its head – the will to change social relations is more powerful than the material reality of which the social relations are the product; consciousness determines social being. Materialism is scrapped (not, of course explicitly) in exchange for a new doctrine of utopian socialism – great minds with access to the great idea (the correct line) is all that is needed.” Nigel Harris, “Mao and Marx: On Bettleheim’s The Class Struggle in the USSR,” Marxists Internet Archive. https://www.marxists.org/history/etol/writers/harris/1976/06/marx-mao.htm

 

[51] Kunal Chattopadhyay, The Marxism of Leon Trotsky Chapter One (electronic book in my possession) and Miliband 2015, 197-201. Miliband and Trotskyist critics of Bettelheim (correctly in my opinion) point out that he does not distinguish between the different policies of Lenin, Bukharin, Trotsky, Stalin, Preobrazhensky, etc, instead painting all of them (save Lenin) as “economistic.” For criticism of Bettelheim's reading on Preobrazhensky see Donald Filtzer, “Preobrazhensky and the problem of the Soviet transition,” Critique: Journal of Socialist Theory 9:1 (1978): 63-84. Ironically, considering his criticism of Deng Xiaoping and market reforms in China, Bettelheim implicitly defends the line of the market socialist Nikolai Bukharin, stating: “[Bukharin] had the merit that it stressed (referring, moreover, to the decisions of principle previously taken by the Party) the necessity of not attacking the standard of living of the masses ; of respecting certain objective relations between consumption and accumulation, between industry and agriculture, and between heavy and light industry; and of not setting targets which failed to correspond to the material and human resources available, and which, instead of enabling the economy to operate with reserves, actually multiplied shortages ... As Bukharin saw it, the future of the revolution depended on a firm and trusting alliance with the peasantry, and it was essential for the Party to seek to strengthen this alliance through organizational and cultural work that took account of the peasants' interests. He warned against the idea of a "third revolution" which would impose collective forms of production from above. He maintained that industrialization and accumulation must be carried out in a way that respected conditions of exchange which were acceptable to the peasants, through efforts aimed at economy and efficiency.” Charles Bettelheim, Class Struggles in the USSR, The Second Period: 1923-30 (New York: Monthly Review Press, 1978), 411 and 420.

 

[52] Miliband 2015, 194.

 

[53] Orthodox Maoists have also criticized Bettelheim's defense of the NEP, Bukharin's line and for denying leaps, ruptures ebbs and flow under socialism: “This line is nothing but gradualism and lifeless reformism. Bettelheim wants everything to develop in an orderly way. But things don't. There are leaps, contradictions sharpen and come to a head. Lenin's line on the NEP recognized this, and that is why he did refer to it as a retreat to a temporary state of siege. In fact one might say that the wave-length development of things virtually guarantees that the class struggle under socialism will always develop in a pattern of alternating states of siege and revolutionary frontal assaults, qualitative leaps forward, on the fortresses of capitalism. Indeed, he fears the qualitative leaps, the moments of revolutionary upsurge, 'coercive' as they so generally are.” C.R., "China, the Dictatorship of the Proletariat and Professor Bettelheim (or How Not to Criticize Revisionism),” The Communist 5 (May 1979): 229. https://www.marxists.org/history/erol/periodicals/communist-rcpusa/index.htm

 

[54] Although the third volume of Class Struggles in the USSR never appeared in the US or Britain, in 1985 article Bettelheim ended up condemning all 20th century attempts at socialism: “None of the twentieth century's 'socialist' revolutions is socialist in the sense that Marx used the term... The 'twentieth century revolutions' did not bring to power 'the proletariat organized as the ruling class' but rather installed 'tightly organized revolutionary parties drawn from elements of various sections of society.' Upon seizing power, these centralized parties invariably stamped out all democratic rights, prohibiting all forms of economic and social organization not controlled by them, and imposed a formal centralization of all important economic decisions. The beneficiaries of the new system were a dominant class which controlled the state apparatus and which collectively appropriated the labor of the mass of direct producers... None of the 'twentieth century revolutions' has abolished the wage relations.” Charles Bettelheim, “The Specificity of Soviet Capitalism,” Monthly Review 37:4 (September1985): 43-4.

 

[55] Hillel Ticktin, “The Contradictions of Soviet Society & Professor Bettelheim,” Critique: Journal of Socialist Theory 6:1 (1976): 22.

 

[56] Ibid. 24.

 

[57] Ibid. 43. Mandel says something similar: “Bettelheim confuses the power to dispose of the means of production with “full appropriation of all produced goods”. The former concerns investment activities, i.e. the distribution of the economic resources available to society. The latter concerns the forms and degrees of direct acquisition and distribution of goods, which is admittedly connected with the former, but is in no way identical with it. In the USSR and the other Eastern bloc countries, the overwhelming majority of the major investment decisions are taken centrally and not at enterprise level.” Ernest Mandel, “Ten Theses on the Social and Economic Laws Governing the Society Transitional Between Capitalism and Socialism,” Marxists Internet Archive. https://www.marxists.org/archive/mandel/1973/xx/10theses.htm

 

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