Source: One Big Union Monthly, Nov. 1937, pp. 32-4;
Transcribed: by Thomas Schmidt;
Proofed: and corrected by Jonas Holmgren

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To those readers who are already acquainted with Trotsky’s ideas and the publications of his movement, his present book will be a disappointment as it contains little new material. In this review we shall therefore limit ourselves to those portions of the volume which indicate that even in the mind of the party-intellectual changes do take place. But, it must be said, even such changes as Trotsky sees are only matters of emphasis – an effort to adapt his “theoretical line” to the new situation which has obviously contradicted previous postulates of his theory.

Any serious student of Soviet Russia must admit that Trotsky’s factual material gives an accurate picture of the real situation in Russia. It may also be said that, on the whole, he has paid due regard to the high-lights in the history and present policy of the Third International even though he still tends to account for the counter-revolutionary role of that institution and its sponsor, the Soviet state, by referring to the stupidity and viciousness of Stalin and his associates. The subjective “errors” and “crimes” of these leaders seem to play, according to Trotsky, a more significant part in the general development than the objective factor of economic-social necessity.

Hazy History

The farther Trotsky searches back into the past of Bolshevism and Russia, the more meager are the fruits of his investigation. It is regrettable that the period during which Lenin and Trotsky held sway is dealt with in such a cursory manner as not to admit of a critical evaluation. It should be evident that to explain Stalin’s triumph it is necessary to refer back to pre-Stalinist conditions in Russia and it is precisely these important years that preceded Stalin’s rise which meet with no criticism at the pen of Trotsky. Stalinism can be explained only by way of Bolshevism. If Leninism was the revolutionary stage of Bolshevism, Stalinism is its phase of consolidation. The two are inseparable and a criticism of one is of small value without an analysis of the other.

Trotsky writes: “Socialism has demonstrated its right to victory, not on the pages of Das Kapital, but in an industrial arena comprising a sixth part of the earth’s surface-not in the language of dialectics, but in the language of steel, cement and electricity.” (p. 8). This sentence, accepted at its face value, vitiates all criticism of Stalinism for certainly, this “right” of “Socialism” has been better demonstrated in the period of Stalin than before. Only with Stalin has this “right” been demonstrated at all “in the industrial arena.” Lenin himself did not think it possible to do more than vindicate the “right” of state capitalism after the Bolshevik seizure of power. Can it be that when Trotsky innocently states that the “term ‘state capitalism’ has the advantage that nobody knows exactly what it means,” he is expressing a hope that his readers are unacquainted with Lenin’s position on this question which dominated the ideas of the Bolsheviks prior to Stalin’s ascendancy?

Lenin, at the eleventh party congress, stated clearly his line: “State capitalism is that form of capitalism which we shall be in a position to restrict to establish its limits; this capitalism is bound up with the state – that is, the workers, the most advanced part of the workers, the vanguard is ourselves. And it is we on whom the nature of this state capitalism will depend.” But it was necessary to camouflage the state capitalist character of Russian economy before the Russian masses. As Bukharin expressed it at a government conference toward the end of 1926: “If we confess that the enterprises taken over by the State are state-capitalist enterprises, if we say this openly, how can we conduct a campaign for a greater output? In factories which are not purely socialistic, the workers will not increase the productivity of their labor.” This plainly reveals that the Bolsheviks did not think it convenient to tell the workers that Russia is a state capitalist system. Of course the international bourgeoisie understood that they could deal quite as well – if not better – with the One Big Corporation which was Soviet capitalism as they had done formerly with the multitude of individual capitalists.

Frequently Lenin identified state capitalism and socialism... In Towards the Seizure of Power, he writes: “Socialism is nothing but state capitalist monopoly made to benefit the whole people; by this token it ceases to be capitalist monopoly.” In spite of the unmistakable meaning of Lenin’s words Trotsky nevertheless writes that his analysis of the concept of state capitalism “is sufficient to show how absurd the attempts are to identify capitalist state-ism with the soviet system.” (p. 248)

Russian State Capitalism

Trotsky denies the state capitalist character of Russian economy by reducing the term state capitalism to a meaningless phrase. That is, he sees in the concept no more than was seen in it prior to the Russian revolution, or than is seen in it today with reference to the state capitalist tendencies of the fascist countries.

Since it is clear that Russia today is dominated by an economy different from what is implied by the term state capitalism in fascist or general bourgeois society, Trotsky is enabled to win his argument by posing the question to suit his convenience. But a full-fledged state capitalist system is surely something other than state capitalist tendencies, or state enterprises, or even state control in an otherwise bourgeois society. State capitalism as a social system presupposes the expropriation of the individual capitalists, that is, a revolution in property relations.

While the capitalist mode of production grew up historically on the basis of individual ownership of the means of production, the Russian revolution has shown that under certain conditions the capitalist mode of production can continue to exist even though the individual proprietors are eliminated and replaced by a collective exploiting apparatus where factories are not owned by capitalist “X” or “Y” but are “controlled” (i. e. owned) by the State (i. e. the controlling classes).

The Russian revolution changed property relations, replacing individual proprietors by the Bolsheviks and their allies, substituting new “revolutionary” phrases for the old pep slogans, erecting the hammer and sickle over the Kremlin where the Czarist Eagle once stood, but the Bolshevik seizure of power did not change the capitalist mode of production. That is to say, under the Bolsheviks, there remains, as formerly, the system of wage labor and the appropriation by the exploiting class of surplus value which is profit. And, what is done with such profit is exactly what was done with it under the system of individual capitalists, allowing, of course, for the special character of state capitalism.

Such surplus value is distributed according to the needs of the total capital in the interests of further capital accumulation and to safeguard the state capitalist apparatus by increasing its power and prestige.

Only a change in the mode of production can bring about socialism; otherwise, as far as the workers are concerned, they will have only exchanged one set of exploiters for another. Under the conditions of state capitalism the process of accumulation, the development of the productive forces by wage labor is bound up, as in the case of “regular” capitalism, with an increased appropriation of surplus value, with further exploitation, and hence with the development of new classes, of new vested interests in order to continue this process since the working class cannot exploit itself.

This capitalist necessity serves to explain Russian development; no other “line,” no other “policy” could have essentially changed this development. By failing to recognize the state capitalist character of Russia, by regarding its present economy as a transitional step to socialism, Trotsky merely indicates his readiness to precipitate a new state capitalist revolution which must lead to a new Stalinism – another betrayal of the Revolution.

Advocates A New Machine

Trotsky describes the contradictions of the Russian economic situation as follows: “To the extent that, in contrast to a decaying capitalism, it develops the productive forces, it is preparing the economic basis of socialism. To the extent that, for the benefit of an upper stratum, it carries to more and more extreme expression bourgeois norms of distribution, it is preparing a capitalist restoration. This contrast between forms of property and norms of distribution cannot grow indefinitely. Either the bourgeois norms in one form or another spread to the means of production, or the norms of distribution must be brought into correspondence with the socialist property system.” (p. 244)

The solution, according to Trotsky, lies in the replacement of the present parasitical bureaucracy by a non-parasitical apparatus. Nothing else in his opinion needs to be changed as the Soviet economic system is fully qualified to proceed toward socialism in combination with the world-revolutionary trend. This new bureaucracy, essential in Trotsky’s transitional stage, will, according to Trotsky, introduce a greater equality of income. But Trotsky must remember that the present bureaucracy started out with the same idea, originally limiting salaries to Communists, etc. It was the circumstances enveloping the economy which not only enabled but obliged the present bureaucracy to adopt a program of ever increasing economic inequality in its favor. This was in harmony with the need of a faster accumulation to secure the system as a whole. There is no guarantee that a hypothetical Trotskyist bureaucracy would be any different in this respect from Stalin’s machine.

Under the prevailing mode of production Russia cannot develop the productive forces higher than the old familiar brand of capitalism in the western world was able to do. Because it cannot do so its system of distribution can never exceed the norms of capitalist distribution. Such a contradiction between forms of property and norms of distribution as Trotsky envisions does not exist. The Russian method of distribution is in perfect harmony with its state capitalist method of production.

It is only necessary to reflect on the paramount role which Trotsky played in the first thundering years of Bolshevik Russia to understand why he cannot admit that the Bolshevik revolution was only able to change the form of capitalism but was not able to do away with the capitalist form of exploitation. It is the shadow of that period that lies in the way of his understanding.