Part IV: Towards a theory of the deformation of value

So our saga on the nature of the USSR draws to a close. While some readers have awaited avidly for each exciting installment, others from the beginning thought we gave disproportionate space to this rather tired old topic.[98] Another dissatisfied group may be the partizans of particular theories which were not given the recognition they feel they deserved.[99] This was unavoidable considering the sheer number of theories one could have dealt with. The list of political tendencies which have considered that the USSR was a variety of capitalism includes ‘anarchism, council communism, “impossibilism”, many types of Leninism (including Bordigism, Maoism and a number arising out of Trotskyism), libertarian socialism, Marxist-Humanism, Menshevism, the Situationist International and social democracy.[100] Some might also question why, of our previous parts, only one dealt with (state-)capitalist theories outside Trotskyism. Yet what is striking in looking at these alternatives is that none dealt adequately with the ‘orthodox Marxist’ criticisms coming from Trotskyism. If Trotskyism itself has been politically bankrupt in its relation to both Stalinism and social democracy — and this is not unrelated to its refusal to accept the USSR was capitalist — at a certain theoretical level it still posed a challenge. We restate the issues at stake in the first few pages below. While fragmented ideological conceptions satisfy the needs of the bourgeoisie, the proletariat must acquire theory: the practical truth necessary for its universal task of self-abolition which at the same time abolishes class society. Clearing some of the bullshit and clarifying issues around one of the central obstacles to human emancipation that the 20^th century has thrown up, namely the complicity of the Left with capital, may help the next century have done with the capitalist mode of production once and for all.

Introduction

The problem of determining the nature of the USSR was that it exhibited two contradictory aspects. On the one hand, the USSR appeared to have characteristics that were strikingly similar to those of the actually existing capitalist societies of the West. Thus, for example, the vast majority of the population of the USSR was dependent for their livelihoods on wage-labor. Rapid industrialization and the forced collectivization of agriculture under Stalin had led to the break up of traditional communities and the emergence of a mass industrialized society made up of atomized individuals and families. While the overriding aim of the economic system was the maximation of economic growth.

On the other hand, the USSR diverged markedly from the laissez-faire capitalism that had been analyzed by Marx. The economy of the USSR was not made up of competing privately owned enterprises regulated through the ‘invisible hand’ of the market. On the contrary, all the principal means of production were state owned and the economy was consciously regulated through centralized planning. As a consequence, there were neither the sharp differentiation between the economic nor the political nor was there a distinct civil society that existed between family and state. Finally the economic growth was not driven by the profit motive but directly by the need to expand the mass of use-values to meet the needs of both the state and the population as a whole.

As a consequence, any theory that the USSR was essentially a capitalist form of society must be able to explain this contradictory appearance of the USSR. Firstly, it must show how the dominant social relations that arose in the peculiar historical circumstance of the USSR were essentially capitalist social relations: and to this extent the theory must be grounded in a value-analysis of the Soviet Union. Secondly it must show how these social relations manifested themselves, not only in those features of the USSR that were clearly capitalist, but also in those features of the Soviet Union that appear as distinctly at variance with capitalism.

The capitalist essence of the USSR

As we saw in Part III, there were a number of theories that emerged out of the Communist Left following the Russian Revolution that came to argue that the USSR was essentially a form of capitalism. Most of these early theories, however, had focused on the question of the class nature of the Russian Revolution and had failed to go far in developing a value-analysis of the Soviet System.[101] However, following Mattick’s attempt to analyze the USSR of value-forms there have been a number of attempts to show that, despite appearances to the contrary, the dominant social relations of the USSR were essentially capitalist in nature.

Of course, any theory that the USSR was in some sense capitalist must reject the vulgar interpretation of orthodox Marxism which simply sees capitalism as a profit driven system based on private property and the ‘anarchy of the market’. The essence of capitalism is the dominance of the social relations of capital. But what is capital? From Marx it can be argued that capital was essentially the self-expansion of alienated labor: the creative and productive powers of human activity that becomes an alien force that subsumes human will and needs to its own autonomous expansion.

Yet the alienation of labor presupposes wage-labor which itself presupposes the separation of the direct producers from both the means of production and the means of subsistence. Of course, in the ‘classical form’ of capitalism private property is the institutional means through which the direct producers are separated from both the means of production and the means of subsistence. The class of capitalists owns both the means of production and the means of subsistence in the form of the private property of each individual capitalist. In confronting the private property of each individual capitalist the worker finds himself excluded from access to the means through he can either directly or indirectly satisfy his needs. As a consequence he is obliged to sell his labor-power to one capitalist so that he can then buy his means of subsistence from another. Yet in selling their labor-power to capitalists the working class produce their future means of subsistence and their future means of production as the private property of the capitalist class. In doing so they end up reproducing the relation of capital and wage-labor.

Yet this social relation is not fundamentally altered with the institution of the state ownership of both the means of production and the means of subsistence. Of course the Stalinist apologists would claim that the state ownership of means of production meant the ownership of by the entire population. But this was quite clearly a legal formality. The Soviet working class no more owned and controlled their factories than British workers owned British Steel, British Coal or British Leyland in the days of the nationalized industries. State ownership, whether in Russia or elsewhere, was merely a specific institutional form through which the working class was excluded from both the means of production and the means of subsistence and therefore obliged to sell their labor-power.

In selling their labor-power to the various state enterprises the Russian workers did not work to produce for their own needs but worked in exchange for wages. Thus in a very real sense they alienated their labor and hence produced capital. Instead of selling their labor-power to capital in the form of a private capitalist enterprise, the Russian working class simply sold their labor-power to capital in the form of the state owned enterprise.

Whereas in the ‘classical form’ of capitalism the capitalist class is constituted through the private ownership of the means of production, in the USSR the capitalist class was constituted through the state and as such collectively owned and controlled the means of production. Nevertheless, by making the Russian working class work longer than that necessary to produce the equivalent of their labor-power the Russian State enterprises were able to extract surplus-value just as the counterparts in the West would do. Furthermore, while a part of this surplus-value would be used to pay for the privileges of the ‘state bourgeoisie’, as in the West, the largest part would be reinvested in the expansion of the economy and thus ensuring the self-expansion of state-capital.

Hence by penetrating behind the forms of property we can see that the real social relations within the USSR were essentially those of capital. The USSR can therefore be seen as having been capitalist — although in the specific form of state capitalism. However politically useful and intuitive correct this classification of the USSR may be, the problem is that by itself this approach is unable to explain the apparently non-capitalist aspects of the USSR. As anyone acquainted with Hegel might say ‘the essence must appear!’. Capital may be the self-expansion of alienated labor but it is labor in the form of value. How can we speak of value, or indeed surplus-value, when there is no production of commodities, since without markets there was no real production for exchange?

These criticisms of state capitalist theories of the USSR have emerged out of the Trotskyist tradition. It is to this tradition that we must now turn to explore the limits of the state capitalist theories of the USSR.

The Trotskyist approach

The more sophisticated Trotskyist theorists have criticized the method of state capitalist theories of the USSR. They argue it is wrong to seek to identify an abstract and ahistorical essence of capitalism and seek to identify its existence to a concrete historical social formation such as the USSR. For them the apparent contradiction between the non-capitalist and capitalist aspects of the USSR was a real contradiction that can only be understood by grasping the Soviet Union as a transitional social formation.

As we saw in Part I, for Trotskyists, the Russian Revolution marked a decisive break with capitalism. As a consequence, following 1917, Russia had entered a transitional period between capitalism and socialism. As such the USSR was neither capitalist nor socialist but had aspects of the two which arose from the struggle between the law of value and of planning.

As a result Trotskyist never denied the existence of capitalist aspects of the USSR. Indeed they accepted the persistence of capitalist forms such as money, profits, interest and wages. But these were decaying forms — ‘empty husks’ — that disguised the emerging socialist relations in a period of transition. This becomes clear, they argue if we examine these ‘capitalist forms’ more closely.

Firstly, it may appear that in the USSR that production took the form of production for exchange and hence products took the form of commodities. After all, different state enterprises traded with each other and sold products to the working class. But for the most part such exchange of products was determined by the central plan not by competitive exchange on the market. As a consequence, while the state enterprises formally sold their outputs and purchased their inputs such ‘exchanges’ were in content merely transfers that were made in accordance with the central plan. Hence production was not for exchange but for the plan and thus products did not really assume the form of commodities.

Secondly, since there was no real commodity exchange, but simply a planed transfer of products, there could be no real money in USSR. While money certainly existed and was used in transactions it did not by any means have the full functions that money has under capitalism. Money principally functioned as a unit of account. Unlike money under capitalism, which as the universal equivalent, was both necessary and sufficient to buy anything, in the USSR money may have been necessary to buy certain things but was often very far from being sufficient. As the long queues and shortages testified what was needed in USSR to obtain things was not just money but also time or influence.

Thirdly, there were the forms of profits and interest. Under capitalism profit serves as the driving force that propels the expansion of the economic system, while interest ensures the efficient allocation of capital to the most profitable sectors and industries. In the USSR the forms of profit and interest existed but they were for the most part accounting devises. Production was no more production for profit than it was production for exchange. Indeed the expansion of the economic system was driven by the central plan that set specific targets for the production of use-values not values.[102]

Finally and perhaps most importantly we come to the form of wages. To the extent that Trotskyist theorists reject the Stalinist notion that the Russian working class were co-owners of the state enterprises, they are obliged to accept that the direct producers were separated from both their means of subsistence and the means of production. However, in the absence of general commodity production it is argued that the Russian worker was unable to sell her labor-power as a commodity. Firstly, because the worker was not ‘free’ to sell her labor power to who ever she chose and secondly because the money wage could not be freely transformed into commodities. As a consequence, although the workers in the USSR were nominally paid wages, in reality such wages were little more than pensions or rations that bore scant relation to the labor performed. The position of the worker was more like that of a serf or slave tied to a specific means of production that a ‘free’ wage worker.

We shall return to consider this question of ‘empty capitalist forms’ later. What is important at present is to see how the Trotskyist approach is able to ground the contradictory appearance of the USSR as both capitalist and non-capitalist in terms of the transition from capitalism to socialism. To this extent the Trotskyist approach has the advantage over most state capitalist theories that are unable to adequately account for the non-capitalist aspects of the USSR. This failure to grasp the non-capitalist aspects of the USSR has been exposed in the light of the decay and final collapse of the USSR.

Capitalist crisis and the collapse of the USSR

One of the most striking features of the capitalist mode of production is its crisis ridden mode of development. Capitalism has brought about an unprecedented development of the productive forces, yet such development has been repeatedly punctuated by crises of overproduction.

The sheer waste that such crises could involve had become clearly apparent in the great depression of the 1930s. On the one side millions of workers in the industrialized countries had been plunged into poverty by mass unemployment while on the other side stood idle factories that had previous served as a means to feed and clothe these workers. In contrast, at that time Stalinist Russia was undergoing a process of rapid apparently crisis free industrialization that was to transform the USSR from a predominantly agrarian economy into a major industrial and military power.[103]

In the 1930s and the decades that followed, even bourgeois observers had come to accept the view that the Stalinist system of centralized planning had overcome the problem of economic crisis and was at least in economic terms an advance over free market capitalism. The only question that remained for such observers was whether the cost in bourgeois freedom that the Stalinist system seemed to imply was worth the economic gains of a rationally planned economy.

While it became increasingly difficult for Trotskyists to defend the notion that the USSR was a degenerated workers state on the grounds that the working class was in any sense in power, the USSR could still be defended as being progressive in that it was able to develop the forces of production faster than capitalism. To the extent that the rapid development of the forces of production was creating the material conditions for socialism then the USSR could still be seen as being in the long term interests of the working class.

Many of the state capitalist theorists shared this common view that the USSR was an advance over the free market capitalism of the West. While they may have disagreed with the Trotskyist notion that the Russian Revolution had led to a break with capitalism they still accepted that by leading to the eventual introduction of a predominantly state capitalist economy it had marked an advance not only over pre-Revolutionary Russia but also over Western capitalism.

This view seemed to be confirmed by the post Second World War development in Western capitalism. The emergence of Keynesian demand management, widespread nationalization of key industries, indicative planning[104] and the introduction of the welfare state all seemed to indicate an evolution towards the form of state capitalism. For many bourgeois as well as Marxist theorists of the 1950s and 1960s there was developing a convergence between the West and the East as the state increasingly came to regulate the economy. For Socialism or Barbarism there was emerging what they termed a ‘bureaucratic capitalism’ that had overcome the problems of economic crisis.

As we noted in Part III, Mattick as one of the leading state capitalist theorist of the German left, rejected the claims that Keynesianism had resolved the contradictions of capitalism. Yet nevertheless he took the claims that the USSR had itself resolved the problems of economic crisis through rational planning at face value.

However, as we saw in Part II, by the 1970s it had become increasingly clear that the USSR had entered a period of chronic economic stagnation. By the time of the collapse of the USSR in 1990 only the most hard line Stalinist could deny that the USSR had been a bureaucratic nightmare that involved enormous economic waste and inefficiency.

State capitalist theories have so far proved unable to explain the peculiar nature of the fundamental contradictions of the USSR that led to its chronic stagnation and eventual downfall.[105] If the USSR was simply a form of capitalism then the crisis theories of capitalism should be in some way applicable to the crisis in the USSR. But attempts to explain the economic problems of the USSR simply in terms of the falling rate and profit, overproduction and crisis etc. have failed to explain the specific features of the economic problems that beset the USSR. The USSR did not experience acute crisis of overproduction but rather problems of systematic waste and chronic economic stagnation, none of which can be explained by the standard theories of capitalist crisis.

As a consequence of this limitation of state capitalist theories, perhaps rather ironically, the most persuasive explanation of the downfall of the USSR has not arisen from those traditions that had most consistently opposed the Soviet Union, and which had given rise to the theories that Soviet Union was a form of State Capitalism, but from the Trotskyist tradition that had given the USSR its critical support. As we saw in Part II, it has been Ticktin that has given the most plausible explanation and description of the decline and fall of the USSR. Although in developing his theory of the USSR Ticktin was obliged to ditch the notion that the USSR remained a degenerate workers state, he held on to the crucial Trotskyist notion that the Soviet Union was in a transitional stage between capitalism and socialism. For Ticktin, Russia’s transition to socialism was part of the global transition from capitalism to socialism. With the failure of the world revolution following the First World War Russia was left in isolation and was unable to complete the transition to socialism. As a consequence, the USSR became stuck in a half-way position between capitalism and socialism. The USSR subsequently degenerated into a ‘non-mode of production’. While it ceased to be regulated by the ‘law of value’ it could not adequately regulated through the law of planning without the participation of the working class.

As we saw in Part II, it is within this theoretical framework that Ticktin argued that the USSR was the first attempt to make the transition from capitalism to socialism within the global epoch of the decline of capitalism that Ticktin was able to develop his analysis of the decline and fall of the USSR. However, as we also saw while his analysis is perhaps the most plausible explanation that has been offered for the decline and fall of the USSR it has important failings. As we have argued, despite twenty years and numerous articles developing his analysis of the USSR, Ticktin has been unable to develop a systematic and coherent methodological exposition of his theory of the Soviet Union as a non-mode production. Instead Ticktin is obliged to take up a number of false starts each of which, while often offering important insights into the nature and functioning of the USSR, runs into problems in its efforts to show that the Soviet Union was in some sense in transition to socialism. Indeed, he is unable to adequately explain the persistence and function of capitalist categories in the USSR.

If we are to develop an alternative to Ticktin theory which is rooted in the tradition that has consistently seen the USSR as being state capitalist[106] it is necessary that we are able to explain the non-capitalist aspects of the USSR that previous state capitalist theories have failed to do. To do this we propose to follow Ticktin and consider the USSR as a transitional social formation, but, following the insights of Bordiga and the Italian Left, we do not propose to grasp the USSR as having been in transition from capitalism but as a social formation in transition to capitalism.

But before we can do this we must first consider particular nature of the form of state capitalism.