MIA: History: ETOL: Document: Workers Party/Independent Socialist League: Neither Capitalism nor Socialism

Workers Party/Independent Socialist League

E. Haberkern & Arthur Lipow (eds.)

Neither Capitalism nor Socialism




Neither Capitalism nor Socialism, pp. i–xxi


As this collection was being prepared, the death of socialism and the end of history were once more being announced to the world. For the last several years, the collapse of the international Communist movement and the Soviet Union, so long a thorn in the side of capitalism and its defenders, has been offered as proof that it is no use tampering with the natural order of things.

This is not the first time that such an argument has been made, nor is it likely to be the last. Every previous defeat of a revolution, every previous revelation that a state built by a revolutionary movement has become nothing more than a new bastion of privilege, has produced prophetic warnings against vain, “millenarian”, hopes for a better society. Each time the prophets have predicted that this would be the last such attempt. And yet, each time the prophecies have proved false.

A given revolutionary movement, party or government may betray the hope and trust of the people but the hope born of necessity for a better future itself remains. What the defenders of “really existing capitalism” do not understand is that this hope is not based on the attractiveness of the various revolutionary alternatives that have appeared so far and failed; it is based on the impossibility, for billions of people, to continue living under the existing social order.

The Russian Revolution may have failed, like the American and French revolutions before it. But the idea of revolution, of remaking society from below, is stronger than ever. The revolutionary upheavals in Eastern Europe of the last couple of decades, while repudiating the discredited formulas of Stalinism, have reinforced in the popular mind the power of the revolutionary democratic ideals which gave birth to the Russian Revolution and its predecessors.

In 1815, the end of the revolutionary period that began in 1789 was marked by the triumph of the military force of the old order over Napoleon. The victors established a new world order – which lasted for nearly fifteen years – from above. Stalinism, however, was overthrown in Eastern Europe, not by external military force, but by the pressure of popular opposition. Our would-be Metternichs – Thatcher, Reagan and, in his own way, Gorbachev – exploited this popular movement as best they could. Their successors have yet to reestablish order of any kind, old or new.

Unfortunately, the response of the left, broadly or narrowly defined, has been demoralization and defeatism. For many, the collapse of totalitarian state planning has proved the impossibility of socialism and the permanence of capitalism. That says very little about socialism itself and a great deal about what many who have called themselves socialists meant by “socialism”. Their conclusion is to embrace “the market” unreservedly while arguing for some state aid to help clean up the human mess that is the inevitable byproduct of unregulated capitalism. The triumphant defenders of “market economics” pure and simple see no need for their services. They have nothing to fear and no reason to make concessions.

Others on the left, unwilling to think through the significance of the collapse of “really existing socialism”, and quietly nostalgic for the old order, content themselves with pointing out what a disaster “the free market economy” has proved in Eastern Europe economically as well as in human terms. The solution hinted at, though not very boldly, is that a reformed version of the old regime might not be a bad idea. There is even a certain nostalgia for “the good old days.” The electoral revival of the parties representing the chastened apparatchiks in Poland and East Germany is seen as a hopeful sign even though the programs offered by these parties differ little from those of the professional anticommunists who have been discredited over the years since the collapse of the USSR.

What is missing is any serious attempt to think about what happened. Were these regimes socialist? Is there something worth preserving in the Stalinist past? What about China? Are the defenders there of the state sector – heavily dependent on slave labor – fighting a progressive battle against the encroaching capitalist “enterprise zones”? There is little discussion of such questions.

Yet, there is a political and intellectual tradition on the left which did begin to deal with these problems long before the Soviet Union collapsed. In the late 1930s, Leon Trotsky opened up a political discussion on the Soviet Union and what was happening to it that raised all the questions being discussed today from a revolutionary point of view. This at a time when conservative politicians, for their own reasons, began to look to the new power in the east as a possible ally.

Trotsky’s savage attack on the parvenu class that was liquidating the revolutionary tradition ideologically and the revolutionary generation physically provoked a vigorous debate among his followers and the broader left, especially in France and the United States where Trotsky and his ideas had significant influence among intellectuals and trade unionists.

As Isaac Deutscher pointed out in volume three of his biography of Trotsky, the latter’s 1936 The Revolution Betrayed represented a “new Trotskyism.” Originally, Trotsky, along with most other observers, had thought that by restoring normalcy and rejecting the revolutionary ideology of the period from 1917 through the early 1920s Stalin and the new bureaucracy were moving, consciously or not, in the direction of restoring capitalism. From this it followed that the main task of the left was to mobilize whatever forces could be mobilized in defense of nationalized industry.

The belief that the new class of bureaucrats were planning to “privatize” industry predated the passage of Trotsky and Lenin into the ranks of the opposition. The opposition groups of the early 1920s, the adherents of the Democratic Centralist and Workers’ Opposition factions, also saw this as the main threat. Trotsky’s first attempt at a general synthesis was a “three factions” theory according to which the overwhelmingly peasant population of Russia provided an enormous reservoir of support for an amorphous “right wing” of the Communist Party whose reputed leader was Nikolai Bukharin. On the left was the opposition which remained faithful to the ideals of socialism and revolution. [A]

Stalin, in this schema, represented the inertia of the bureaucracy. These “centrists” defended the new state created by the revolution against both the restorationist right and the revolutionary left. Of course, they would have been happy with a capitalist restoration that left them in possession of their privileges if that were possible. Meanwhile, however, they were forced to confront the openly restorationist politics of the right.

It should be admitted that there was some validity to this analysis. The bureaucracy whose spokesman Stalin and Bukharin had become did pander to the acquisitive instincts of the Russian peasantry. If the capitalist class of the western countries had been in an expansionist mood in the late 20s an alliance with the Russian new class might have been possible. But international capital was having difficulties of its own at the time and was not in an expansionist mood. Left to its own devices, the new bureaucracy in Russia was forced into a confrontation with the peasant mass of the country. Despite the heated rhetoric of most present day historians and journalists, the horrors of collectivization were not the result of blind adherence to a socialist ideology. Stalin in particular didn’t care about ideology – or even about ideas. Without western capital internal accumulation had to come out of the hide of the peasantry. The alternative was the collapse of the economy and the dismemberment of the country.

And this development presented Trotsky with a problem. If the main danger was one of capitalist restoration then the bureaucracy’s half-hearted defense of state property had to be encouraged. But Trotsky had already acknowledged by 1930 that the internal threat of capitalist restoration was illusory. “Further talk of Nepmen [entrepreneur elements] and Kulaks [wealthy farmers]” was “unworthy of Marxists.” What is more, inside Russia, the opposition, led by the veteran Bolshevik Christian Rakovsky, was, by 1930, unequivocally for the abolition of the collective farms. [B]

Clearly, Trotsky’s analysis and his call for a new revolution in Russia made sense only if the bureaucracy was a new ruling class acting independently of both international capital and the Russian small property owning peasantry. It was just a question of dotting an “i” here and crossing a “t” there. Trotsky did not want to go that far. But he didn’t rule out the idea either. As Deutscher, who remained an apologist for Stalinism, complained, this left Trotsky in an awkward position and encouraged his followers to develop his ideas in new directions.

For a while, during the period of the popular front when Stalin and western statesmen, even conservative statesmen, continued their flirtation, the debate on the “Russian Question” remained low key. Stalin’s alliance with Hitler and the dismemberment of Poland made it impossible to temporize further. Trotsky tried to postpone a decision on the grounds that the Soviet Union was bound to collapse shortly and it was foolish to baptize the bureaucracy a new ruling class just as it was about to disappear. It was no use.

Now, the notion that capitalism was being replaced by a new system in which the state bureaucracy or “the managers” ruled in place of the capitalist and economic planning took over from the market was not invented in the course of this debate. James Burnham, in one of the major studies produced during this discussion, was able to point to a number of predecessors. What was new was that Trotsky’s dissident followers were pushed into this debate because they had to decide whether to continue, with Trotsky, to defend this new collectivist society. Was collectivized property, even under Stalin’s regime, “progressive” or not?

The word ‘progressive was itself somewhat vague. It was part of traditional left jargon and was never defined precisely. In the context of this debate, however, its meaning was clear. Was this Russian state, for all its monstrous features, a step towards the socialist future? There were, and are, essentially three answers to this question.

One was that stated most clearly by Isaac Deutscher. It was the one most widely held on the left throughout the 50s, 60s and 70s. And it is the one most discredited by recent events. For all practical purposes, a plurality if not a majority of people who considered themselves on the left tacitly accepted the idea that the Russian bureaucracy was a new ruling class even if, for diplomatic reasons, it was not something one could say openly. The bureaucracy was carrying out the progressive mission of collectivizing the world economy which the working class had proved unable to do. If necessary, the bureaucracy would have to do this in opposition to the working class. Deutscher’s response to the suppression of the uprisings of the East German and Hungarian workers in 1953 and 1956 made it all very clear. It was regrettable that the working-class had to be suppressed by military means but it was also unavoidable.

In a period in which ignorance of Marx is the stock-in-trade of every academic philistine and social democratic politician it is important to assert that this conception of socialism ran completely counter to everything Marx ever wrote about socialism and the historical role of the working class. Of course, this does not stop many commentators even today from referring to this position which turned Marxism on its head as “Marxist” and to those held it as “Marxists.” But this is obscurantism even though apologists for the Stalinist system used the label of Marxism and the terminology of socialism as a means to legitimate that system.

Most leftists, however, tried to avoid confronting the issue so openly. It was simply too embarrassing for soi-disant leftists to say openly that Marx was wrong and that the pre- and anti-Marxists socialists like Lassalle were right.

Given this view of “socialism” even Bismarck could be embraced as a “socialist” and Scott Nearing could wonder, as late as 1939, whether Hitler was not introducing some kind of socialism to Nazi Germany.

The current intellectual debacle of the left is directly attributable to the long-lasting hegemony of the idea that socialism equals state ownership and central planning and that this combination is inherently more efficient and productive than capitalism.

What has been revealed in the last few decades, even before the fall of Gorbachev and the Berlin Wall, is that totalitarian state planning is economically regressive as compared to capitalism. So much so that it has discredited even the mildest forms of political intervention in economic life. It has made the equally fantastic and economically reactionary program of Friedmanite free marketism temporarily respectable.

The second answer to the question which is often used as a fallback is the one Trotsky himself most often had recourse to. Stalinism is nothing but the result of external pressures. Trotsky at least was consistent. He predicted, wrongly, that Stalinism could not expand beyond Russia’s borders because it had no internal dynamism. It could only feed parasitically off, and weaken, the working class movement. The events that followed World War II made this position untenable. Clearly, this new social class was capable of acting on its own. In a period where a native capitalist class was discredited or hardly existed and where the working class was disorganized and demoralized it could impose its own new economic order on a disintegrating society.

And it was this new historic fact that led Trotsky’s dissident supporters to a different answer to our question. Stalin’s new order was not ‘progressive’ and it had nothing in common with socialism. It was a product of, not a way out of, the decay of modern civilization.

Still, in war-ravaged Europe where the prewar ruling class was discredited or in the newly liberated colonial countries threatened with humiliating economic dependence on their late masters, Stalinism could provide some stability and order and some degree of national pride in the midst of chaos. But, after the first flush of excitement, these regimes quickly devolved into rigid and economically backward states. The resentment of the population and in particular of the industrial working class could only be contained by vicious repression.

The articles in this collection were almost alone in predicting, in the late 40s, the dramatic internal convulsions of the 50s and 60s that led to the collapse of these new states. The majority of the left, broadly defined, saw the popular resentment and the police and military measures taken to suppress it as temporary, the result of economic backwardness and outside pressure from the capitalist states which would soon be overcome by the dynamic new economic order. The right sought recourse in military containment. Defenders of the old order had no confidence, right up until the end, that the collapse of Stalinism would lead to a peaceful transition to capitalist normalcy and prosperity. Events have proved them right on this point.

In the 70s and 80s the countries of the Eastern bloc fell further and further behind the developed west. Russia itself was eventually bankrupted by its attempt to compete with the United States as a military and economic superpower. China in the same period went through a series of wild oscillations that have still not ceased.

Not unexpectedly, the collapse of this alternative to capitalism has given rise to an orgy of self-congratulation on the part of right wing ideologues who, right up to the fall of Gorbachev, continued to argue that, unlike merely authoritarian regimes, these totalitarian ones could only be overthrown from the outside. But the tone of the celebration betrays a slightly queasy reaction to this sudden demise of parties and governments which were at least known quantities and did, after all, maintain order. The hollowness of official anticommunism was demonstrated most dramatically by the picture of dedicated cold warriors like Margaret Thatcher, Helmut Kohl and George Bush clinging desperately to Gorbachev long after it became clear that he had lost all popular support in Russia.

The same political point was made when the liberal wing of the Democratic Party in the U.S. Congress, for purely demagogic reasons, tried to embarrass the Republicans by moving a bill that would deny “favored nation” status to the People’s Republic of China. How could the “leader of the Free World” continue to grant favored nation status and, by implication, membership in same “Free World”, to a government that still employed slave labor on a large scale? – The Democrats’ maneuver succeeded. Republicans and their corporate backers fell all over themselves defending their Chinese business partners.

What both these incidents revealed is that the ideological hostility to “big government” and state socialism, however sincere, does not correspond to reality. Long before Gorbachev international capital, especially German and American capital, had been investing in these state run economies. One perceptive author even referred to “Vodka Cola” to describe the volatile mix of capitalist finance and Communist state industry.

In the 1970s and 1980s, the economies of the Eastern Bloc had fallen heavily in debt to international financial institutions and the governments which underwrote this investment. Even in Russia itself the bureaucracy had been turned into something akin to a collective tax farmer for Western banks. They guaranteed that at least some of the interest would be paid and in return were allowed to skim off some for themselves.

In this same period, as we now know, key members of ruling group, particularly those associated with the KGB, were able to export billions and billions of dollars to Swiss Banks or to begin to invest in Hungarian state enterprises which were the first attempts at “market.” The new Russian “capitalism” owes not a little to the far-sightedness of these bureaucratic entrepreneurs who realized the ship was sinking and prepared to privatize state property into their own pockets.

And that is why, despite the propagandistic drumrolls on both sides, the nomenklatura has been the prime beneficiary of the new economic order and the military and the security forces hardly touched. The kind of popular explosion that has everywhere produced revolutionary change has not occurred. The threat of such an explosion clearly played a role in the collapse of the Soviet Union. Polish Solidarity in 1980–81 was a grim warning of what could have happened. But even in Poland the reform of the economic and political system carried out by the Solidarity government required the destruction of Solidarity as a revolutionary movement and preserved as much as could be preserved of the nomenklatura’s privileges and power. No one was more concerned that “stability” and “order” be maintained than the international financial community.

All of this would have been impossible were it not for the internal transformation of capitalism itself. One of the things that the present crisis in the Eastern Bloc reveals is the extent to which contemporary capitalism is dependent on the infusion of enormous sums of money into the private sector by the state. Without such funds the free market produces the devastating result seen in Eastern Europe. In The Economist for 19 January 1991, Jeffrey Sachs, one of the principal advisors to the Polish and Russian governments in the heyday of the Eastern European fascination for free markets, pleaded, in considerable distress, for a “Marshall Plan” for Poland lest failure there discredit the whole project. The article is a testimonial to the impossibility of free market capitalism without massive government support.

Nor is this simply a question of “jump starting” a new capitalist economy. On closer inspection, it is clear that the developed capitalist economies also require such aid. In Britain, for example, the Thatcher experiment depended on massive transfers of state funds into private hands. This took the form most notoriously of “privatization. In the case of the public utilities privatization meant the establishment of chartered monopolies created by billions in “seed money” and supported by a continuing tax collected in the form of fees charged for these monopolized services. But it also took the form of direct subsidy as in the case of the arms industry which is now one of the leading branches of manufacturing in Britain.

In the United States, it is the Republican proponents of “free enterprise” who are now the main political beneficiaries and promoters of the defense industry. Unlike Dwight Eisenhower they are not concerned by the growth of the “military industrial complex.” This patronage serves for them nationally the same political purpose that city jobs used to provide for the Democratic machines.

And it is not just a question of patronage and corruption. Without massive government planning and regulation, without massive infusions of money transferred from the pockets of the tax payer, the whole system would collapse into a 30s style depression. What we are looking at is not individual greed by a few high-placed and arrogant people. What we are looking at is a new system of economic exploitation in which the lines between corporate and state planning are becoming blurred.

But it is not just on the national scale that this “bureaucratic collectivization” of the capitalist system is taking place. Institutions like the World Bank and the IMF and treaties like GATT and NAFTA are not provided for in classical political economy. Not the political economy of Adam Smith nor that of Karl Marx. That is the institutional reality behind glib phrases like “global economy.” In reality, the world economy appears instead to be breaking up into large protectionist trading blocs. But regardless of the way this issue is resolved one thing is clear. The nation state, so far, is not being replaced. Instead, in each country the effect of these international institutions and agreements is to free the executive from democratic legislative control. The admirable goal of international economic cooperation has been subordinated to this bureaucratization of capitalism in the form of corporations which are themselves large bureaucratic entities not accountable to anyone except those who effectively control them.

This is the rational ground for the popular suspicion of the process despite the provincial and even reactionary and xenophobic forms this suspicion has taken. What else can be expected when well-grounded popular fears can find no democratic political outlet? As long as “modernization” on the left is equated with subservience to this growing corporate state opposition will take the form of sentimental nostalgia for a past that never was. And if the economic consequences of this kind of “modernism” continue to be as grim as they have been this nostalgia will continue to manifest itself in increasingly poisonous guises.

What then is the alternative to this new class society?

Let us phrase the question in the abstract manner so popular today. The current attack on socialism takes the form of a diagram more or less like the following:

Schema 1

In this schema, the scale reading from left to right measures the degree of freedom from state interference.

On the left we have FE, or Free Enterprise, which stands for the complete absence of state interference in man’s free exercise of initiative. In some libertarian versions of this extreme no traffic lights are allowed.

At the extreme right is, of course, the Evil Empire. Here we have complete state control over every aspect of the individual’s life. (Unfortunately, this extreme is not just a figment of libertarian imaginations. In the late 40s in Russia and in China during the Cultural Revolution an approximation of this nightmare was achieved.)

In the middle, somewhere, is the Mixed Economy. Here there is some state regulation. It can vary from well-intentioned liberal restrictions on child labor, to taxation of unearned incomes, to extremes such as free medical care and efficient public transportation.

But there is an alternative schema. One which is based on a scale measuring the degree of democratic control over the economic order. This schema can be represented as follows:

Schema 2

Here there is an extreme not found in most orthodox economic paradigms. At the left, we find SE, the socialist economy sketched in Marx’s writings on the Commune and Lenin’s State and Revolution. In this model, democratic control is exercised at every level of the economy, with all officials public or private elected and subject to recall by the appropriate bodies. (This is not a model in which an all powerful state lords it over society after the Jacobin, Stalinist or absolute monarchy patterns.) What is even more important is that official service in this model is not a source of economic privilege. Public officials are treated like, and remunerated like, other public employees. It is not relevant to this discussion here to determine whether or not this model is feasible. Any more than it is relevant here to determine whether or not the Free Market model is feasible or has ever existed in the real world. We are describing abstract tendencies and models.

At the extreme right in this spectrum we still have our old friend the Evil Empire. Judged by the criterion of democratic control it is as far to the right as it is from the point of view of the state-control/free-enterprise spectrum. What is interesting in our new diagram is the position of Free Enterprise. It is close to that of the Evil Empire!

Surprising as this may be, there is no way of avoiding the scientific facts. If we keep in mind the question of democratic control, it is undeniable that the Free Enterprise system results in a regime of uncontrolled authority which approximates that of the Evil Empire. True, the existence of democratic freedoms – a free (actually, expensive) press, freedom of assembly, the right to organize trade unions (for those who want to risk it) and free, if again expensive, elections – provides some protection against the unelected masters of the economy. But these constraints are allowed only to the extent that they are ineffective. Their advantage to those who really control the economy and the state is that they conceal the fact that these parties exist. As the Wizard of Oz said, “pay no attention to the man behind the curtain.”

The Mixed Economy, in this schema is, of course, further to the left than Free Enterprise and quite far removed from the Evil Empire. Socialists, quite rightly, have raised questions about the democratic content of nationalization and state planning. The nationalizations of British industries under the first Labor government, to take one example, have been criticized for leaving in place the old executives and the old chain of command. Nevertheless, there was a qualitative change when these old fossils were for the first time made subject, at least potentially, to public scrutiny.

And democratic public control is the key issue. In a world where the dividing line between state and corporation, between politics and economics, is becoming more and more blurred, democratic control and accountability are more crucial than the juridical detail of who owns what. If the experience of Stalinism has shown that nationalization by itself is not the same thing as public control, the experience of post war capitalism has shown that democracy cannot be confined to the “political” sphere alone without atrophying.

In the past, socialists and conservatives alike tended to see the political and economic spheres as separable. As long as private property was not threatened, the state could be in the hands of any political party. In fact, such a “night watchman state” has never existed. But today it is clear to all parties that the great multinational corporations require a proactive state that is their agent and partner. In most situations they do not require the kind of one party state that characterizes Stalinism or fascism. Instead, they have tried, with considerable success, to turn democratic politics into a plebiscitarian show which does not challenge their authority but ratifies it.

The crucial front in this new class struggle is found within the left wing parties and movements. It is essential that these movements drop even their anti-capitalist rhetoric if the system is to remain stable. They must become “modern” parties which accept multinational corporations and international financial planning institutions as a fact of life, reject their working class roots and confine their role to debating the degree of welfare “the economy” can afford. In effect, rather than being crushed in a one party state, they must be forced to join the no party state.

In this context, it is well worth reconsidering the first attempts to analyze and understand this new bureaucratic society in the 30s and 40s. The particular forms it then took, fascism and Stalinism, are unlikely to be repeated. For one thing, these particular movements are no longer new and untried as they were when they first appeared. For another, the economic tendencies which produced them have continued to operate and have created a different world. Mussolini’s corporatism and Stalin’s Five-Year-Plans appear today as quaintly old-fashioned as the automobiles the dictators drove. What was impressive then is slightly ridiculous today.

Nevertheless, these early political movements, just because they were new and untried, expressed themselves with greater clarity than we can expect today. No member of the Communist Party today would say openly what even relatively timid fellow travelers would have said sixty years ago. Even Mussolini’s grandaughter is today a “post-fascist.” And the corporatist economic projects and plebiscitarian politics of the new social-democratic right are likewise phrased so as reveal as little as possible of their anti-democratic content.

The articles in this collection represent the first attempt to face the fact that there could be something new coming into being and to try and analyze it. Familiarity with this debate about the nature of this new state which was neither capitalist nor socialist is not just a matter of historical interest. Understanding it is a necessary prerequisite to understanding what happened to “socialism” in the twentieth century. It is also provides a starting point for understanding the “transitional economies” in Central and Eastern Europe and the former Soviet Union, as well as in China. Only by understanding that the formula “either capitalism or socialism” is too simple (or simple-minded), moreover, can the evolutionary changes in capitalism itself at the beginning of the 21st century be understood. Following Marx’s own perceptive insights over a century ago into the contradictory nature of the joint stock company, we are now ina position to see that what Michael Harrington termed the “unsocial socialization” of capitalism is laying the foundation for a profound transformation of modern society.

Berle and Means’ classic study, The Modern Corporation and Private Property, provides a useful starting point for understanding the contradictory nature of modern capitalist property, at one and the same time “private” and “collective.” In the 1920s, Walter Rathenau, the brilliant German capitalist and writer, wrote insightfully about the modern corporation:

No one is a permanent owner. The composition of the thousandfold complex which functions as lord of the undertaking is in a state of flux ... This condition of things signifies that ownership has been depersonalized ... The depersonalization of ownership simultaneously implies the objectification of the thing owned. The claims to ownership are subdivided in such a fashion, and are so mobile, that the enterprise assumes an independent life, as if it belonged to no one; it takes on an objective existence, such as in earlier days was embodied only in state and church, in a municipal corporation, in the life of a guild or a religious order ... The depersonalization of ownership, the objectification of enterprise, the detachment of property from the possessor, leads to a point where the enterprise becomes transformed into an institution which resembles the state in character. [1]

At the end of the 21st century, in the age of the transnational corporations, many of whom dispose of financial resources and exercise power far greater than several individual states put together, Rathenau’s words have a great deal of resonance.

In the case of the former Communist states and of China, still under the control the Communist Party, we are told that we are witnessing a transition from “socialism to capitalism”. If this is so, however, the question must be raised: what is the nature of modern capitalism, particularly its dominant form, the corporation, to which this “transition” is being made? Could there not be a survival of the old bureaucratic collectivist structures with an admixture of Western capitalist corporate investment under the aegis of the now reconstructed former Communist parties, which would at very least be compatible with what one must call “really existing capitalism”, to borrow an earlier locution.

The then director of the Soviet “Institute for the Economics of the World Socialist System”, Oleg Bogomolov, told Guardian correspondent Jonathan Steele in 1990 that “societies develop from what already exists. As for the West, I don’t want to use the word capitalism, which Western sociologists themselves rarely use, preferring terms like the post-industrial society, the information society or post-capitalism. What is the nature of property in the West nowadays? The days of one man ownership are over. There is property which we would call collective rather than private, whether it is owned by shareholders, pension funds, or co-operatives.” [2]

Critical insights along these lines are to be found, perhaps not surprisingly, among those who are the most fervent believers in the the free market and the virtues of capitalism. Commenting on an important study by the Adam Smith Institute in London, The Amnesia of Reform, one right-wing columnist for the London Financial Times, writes that “the quality of much privatisation in post-communist societies is very poor”. Indeed, “unless there are substantial reforms in the approach to be taken, what will emerge will not be real market economies, but inefficient, partially collectivized, hybrid economies in which a bureaucratic elite still succeeds in exploiting the bulk of the population.” [3]

“Partially collectivized, hybrid economies”. Bureaucratic collectivism shorn of a single party state but one which is far, far from democratic – not too different in this respect from the British or the French state.

The example of China provides yet another example of how the corporatization of state enterprises – albeit still under the umbrella of the Communist Party – is creating a “hybrid” economic form. “The legal positionof so much private business in China is ... obscure – neither fully state owned nor privately owned in the western sense” comments the doyen of capitalist financial writers, Samuel Brittan. If one sticks to the wooden formula of “either ... or”, what is one to make of Brittan’s entirely accurate observation? Or how can one begin to understand Chinese state corporations which are listed on Western stock exchanges, take on capitalist corporations as partners, set up in business in the United States, hire workers, and act for all intents and purposes like General Motors?

“Privatization of companies” in Eastern Europe, complain the authors of the Adam Smith Institute report in words that echo those of socialists who denied that Morrisonian-style state corporations were in any sense socialist, “represent little more than changing the nameplate on the door, with the same management remaining in charge, continuing the same command-economy practices and with the same umbilical relationship with their sponsoring ministry.” [4]

What of socialism then? We began this essay with the idea that socialism is a necessity for the great and overwhelming majority of humankind. The twentieth century, to be sure, has been a massive setback for socialism and for democracy. But the failure of socialism has also been a setback for all of humanity. The millions upon millions killed in two world wars; murdered in the gas ovens of Hitler’s regime; starved to death in Stalin’s drive for collectivization or murdered in the purges; left to die anonymous, unfulfilled, poverty-stricken lives in the the third world; all are ample evidence of this. If socialism has not triumphed in the twentieth century because it was submerged by the twin totalitarian evils of fascism and Stalinism it is also true that the failure of socialism has meant that civilization has lost as well. The outcome is not the utopia of free marketeers like Hayek or Friedman, but an ever deepening and faster running current leading capitalism into a new kind of barbarism of which fascism and, in its own fashion, Stalinism, will be seen to have been the forerunners. Hebert Spencer’s prediction of the “coming slavery” and Hillaire Belloc’s “servile state” will turn out to be not the outcome of socialism but of its failure, of capitalism’s triumph over the democratic and human-centered reordering of society which is the central meaning of socialism.

If, that is, if socialism fails and the on-going bureaucratic collectivization of society is unimpeded by a new and reborn democratic socialist movement. Yet, as one of the main contributors to the debate in these pages wrote many years ago, “If we can speak of the inevitability of socialism ... it is only in a conditional sense. First in the sense that capitalism creates all the conditions which make the advance to socialism possible; and second, in the sense that the advance to socialism is a necessity for the further progress of society itself – even more, the only way in which to preserve society ... Marxism ends with a program of human activity: fail to carry out the program, and mankind sees doomed capitalism followed by a general decline whose vileness and gloominess we can see much more clearly today than did Marx and Engels; carry out the program, and mankind takes the step necessary for that ‘association in which the free development of each is the condition for the free development of all.’ The choice is not one between capitalism and socialism. The choice must be made between socialism and barbarism.”

“Barbarism”: an evocative word as the new world order falls into disorder and we observe the genocidal passions unleashed by the collapse of the cold war system. With the advantage of another forty years experience and the availability of evidence about the growth and functioning of the modern transnational corporation and its intertwined relationship with the contemporary authoritarian and bureaucratic capitalist state, it is possible to to analyze with a greater precision the shape of the new order which will emerge in the absence of an effective socialist movement. Not inevitably, not the “wave of the future”: it becomes a reality only to the degree that the forces of democracy fail to meet the enormous challenge posed to them. The ease with which the “corporate property form”, slips from one apparently different social order to another, between China and the capitalist west, for example, demonstrates that we are dealing with a qualitative change in the nature of capitalism.

The “unsocial socialization” of capitalism has the potential within it to give way, in the absence of a democratic socialist transformation of society, to a new form of class society – a possibility the reality of which we have seen in Communist or Soviet-type states. The prospects for the recreation of a socialist movement in a world of transnational capitalism in which the major actors are powerful authoritarian corporations and bureaucratically organized states in which democracy becomes more and more of a facade are daunting, to say the least. The impoverishment of the third world and the growing crisis of unemployment in the advanced capitalist countries, however, make it a necessity if we are not to drift into barbarism. The ideologies of private property free markets mask the reality of highly organized corporate capitalism and a centralized state.

What is required is a re-creation of the democratic socialist project to make both state and economic institutions accountable to the democratic control of the people whose lives they affect. It is only in the “Realpolitik of Utopia”, of the socialist vision of democracy and human freedom, that an alternative to barbarism can be found.

The articles presented in the pages which follow are, we believe, an essential starting point for those who would understand the real choices which confront humanity.

Some articles have been edited for reasons of space. We have also used the real names rather than the pseudonyms of authors and others they refer to. In addition, references to political groups and organizations – mostly defunct – have been eliminated in some places. This has not been done systematically but only where we felt such references would needlessly distract the reader. The alternative would have been to burden the text with footnotes explaining who all these groups and individuals were and it was not our intention to write an account of the organizational history of the anti-stalinist left in the 30s, 40s and 50s.

We have felt free to edit the texts for readability since the unedited texts are available to serious researchers in the Greenwood Press editions of Labor Action and The New International from which most of this material is taken. Many of the internal documents are also available at research libraries in the collection of Independent Socialist Mimeographia published by The Independent Socialist Press and edited by Hal Draper.



A. Trotsky sometimes referred to his supporters and the left opposition in general as the “proletarian” wing of the party. But he knew all too well that the massive de-industrialization of the country consequent on years of war, civil war and economic blockade had devastated the Russian working class and destroyed it as an organized political force. “Bolshevik-Leninist” was the more common designation Trotsky chose to describe his position and it more accurately describes the opposition: an ideological current within the Communist Party and its apparatus that remained faithful, or tried to remain faithful, to the socialist tradition of the party. This sociological fact explains the political weakness of the left their personal courage and integrity notwithstanding.

B. See the resolution of April 1930 proposed to the Party Congress. The resolution was, of course, illegal and circulated underground. It was printed abroad in the Biulletin Oppozitsii edited by Trotsky’s son Leon Sedov. Standard histories of this period ignore this development. Deutscher, Alec Nove and most recently Stephen Cohen adhere to a rigid schema in which Trotsky representing “the left” is for rapid industrialization, Bukharin on “the right” defends the peasant and private property while Stalin allies himself first with “the right” and then leaps over Trotsky’s head to take an “ultra left” position on rapid industrialization and confiscation of private property. But, in fact, Bukharin never openly opposed collectivization, the Trotskyist left never advocated it before 1929 and Rakovsky, as leader of the opposition inside Russia, advocated the abolition of the collective farms.



1. Quoted in Adolph Berle and Gardiner Means, The Modern Corporation and Private Property (New York: The Macmillan Company, 1933), p. 352.

2. The Guardian (London and Manchester) January 10, 1990.

3. Martin Wolf, UK Study Criticizes Post-Communist State Sales, The Financial Times, December 28, 1994.

4. Half-hearted Privatization Plagues Eastern Europe, The Wall Street Journal Europe, January 16, 1995. Peter Young and Paul Reynolds, The Amnesia of Reform: A Review of Post-Communist Privatization (London: Adam Smith Institute, 1994.) See also Roman Frydman and Andrzej Rapaczynski, Privatization in Eastern Europe: Is the State Withering Away? (Prague: Central European University Press, 1994). Frydman and Rapaczynski were architects of the privatization programme in Czechoslovakia and Poland: their powerful analysis and their doubts, indicated by the question mark in the subtitle, make the book essential reading.

Last updated on 8 November 2020