When is a workers' state no longer a workers' state?

[LCMRCI <global@xxxxxxxxxxxxxxxx>]

When is a workers' state no longer a workers' state?
Why state capitalism rules in eastern Europe?

The LRCI's Moribund Marxism.

It is now a commonplace to say that the collapse of the Stalinist states was

the acid test for self-professed Trotskyists. Few came out with their faded
red flag flying.
For serious Trotskyists who claimed to defend state property, despite the
repressive Stalinist regimes, the collapses put them to the test. First, how

to defend state property when the majority of workers didn't want to defend
it?  Second, how to decide when capitalism had been restored? In almost all
cases, these groups failed the tests because their degenerate Trotskyist
method could not deal with the collapse as a dialectical process. The
terrible twins of post-war Pabloism, Stalinophiles and Stalinophobes, both
lost the plot.

The closet stalinophiles hung onto the belief that a section of the
bureaucracy, including the Red army, was defending state property as late as

August 1991.  When these bureaucratic "defenders" were defeated, and
restorationists came to power, the workers states were declared to be dead.
Meanwhile the more-or-less closet Stalinophobes had illusions in the ability

of workers to make use of bourgeois democracy to stage  political
revolution. In this view, it is not sufficient for restorationists to take
state power, they have to use it to restore capitalism. What's more, for the

LRCI, capitalism is not restored until the "dominance" of the law of value
is once more established.

The LRCI continues to argue this line in its recent Trotskyist
International, .  Despite  the existence of bourgeois "regimes" in power,
which "intend" to use their power to restore capitalism, these regimes have
not yet succeeded (outside Germany) because of barriers to the complete
return of the rule of the law of value.  These barriers are economic, such
as the failure to force state enterprises into bankruptcy,  and political,
such as the problem of rising social resistance to further market `reforms'.




LRCI's moribund workers state.
To capture this contradictory reality, the LRCI has developed the concept of

a moribund workers' state (MWS). They define it as: "degenerated workers
states that have restorationist governments in power which are actively
demolishing the foundations of the planned economy" (TI, No. ? p40).
Crucial to this definition is the contradiction between the bourgeois state
apparatus ("restorationist governments") and workers property relations
("planned economy"). The LRCI claims that this contradiction exists in
concrete reality and must therefore be appropriated in thought, in order to
address that reality politically.  Our argument is that this contradiction
does not exist in reality, but is imported into the concrete reality as a
false abstraction based on an incorrect understanding and application of
Marx's method.

The LRCI misapplies Marx's method  by confusing levels of abstraction. It
falls foul of the logical fallacy of "misplaced concreteness". Something
that exists in abstract thought, is held to exist in reality. In the place
of an analysis of existing societies in all of their complex concreteness,
the LRCI substitutes two sets of ahistorical abstractions from Capital
concerning the law of value, and from Trotsky on the class character of the
state.

False abstractions.
The first concerns the level of abstraction of Capital where Marx explains
the simple, basic categories of capitalism by holding constant the world of
concrete appearances. The LRCI says that capitalism cannot be restored in
the ex-Stalinists states until it meets the criteria laid down in Capital:
namely, that the law of value must ensure that wage-labour and capital
exchange at their value. Only when this occurs can it be said that the law
of value is dominant over the planned economy.  So long as the state
(bourgeois in form) prevents inefficient state enterprises (workers social
relations) from collapsing by baling them out with "soft loans", then the
law of value is not yet "dominant."  As we will argue, this method of false
abstraction reifies simple categories that are then misappropriated in
thought at the level of complex categories as a false basis for
revolutionary practice.

Secondly, given this abstract schema, the state while bourgeois in form,
still retains a workers content. That is, if the law of value is not
dominant, then planned property relations must be dominant. Here the LRCI
appeals to Trotsky's analysis of the state. [TI, No ?  p. 40] It quotes
Trotsky to prove that the seizure of power by restorationists is not
decisive. What is decisive are the dominant relations of production. But
Trotsky is grossly distorted to arrive at the LRCI's conception of the
state. The fact that Trotsky clearly stated that workers property was state
property is ignored. Workers property is split away from the state which is
essential to its existence.

According to the LRCI: "Trotsky's use of the term degenerated workers state
becomes absolutely clear. In this broad sense he is using it to refer to the

totality of social relations and political institutions prevailing within
its borders - base and superstructure, to use terms anathema to all
fashionable idealising trends in Marxism". (TI.No ? p.40) Yes, in a "broad",

or even "general" sense. The LRCI uses "general" concept of the state which
is a concept that applies to all class society. (ibid, p.38).  Here the
"base" are social relations, and "superstructure", the state.

Yet to abstract base and superstructure from the concrete totality in order
to split state from social relations is to import abstract schemas. Because
abstract schemas cannot substitute for dialectics, the LTT are correct to
accuse the LRCI of "addiction to formal logic categories"..."which do not
allow for contradictions in the real world" ( ibid. P. 40)



Marx's method.
Both of the abstractions imposed on the ex-Stalinist states by the LRCI are
false abstractions. Trotsky already grasped clearly the problem of a
degenerate workers state in which capitalism is restored. This was because
he understood and applied Marx's method correctly. The question of
restoration of capitalism in the workers states was not posed at the level
of abstraction of Capital, but at the level of complex reality. It was posed

at the level of "many determinations" which result in the contradictory
reality of the workers state embedded in the global capitalist system. This
meant that the operation of the law of value as expressed in Volume Three of

Capital, was greatly complicated by a series of increasingly complex,
concrete mediations involving the state, international relations, the world
market and capitalist crisis. Marx outlines in Grundrisse (p.100-108, and p.

227) the importance of level of abstraction in reconstituting the concrete
in thought.

Marx's method as outlined in the Grundrisse means that  we reconstitute the
concrete in thought as complex, concrete categories that bring together the
many-determinations as a totality. In reality, at the most concrete level,
the world market, already the moments of production, distribution, exchange
and consumption are mediated by the state, and international relations. In
the analysis of the crisis of Stalinism and the collapse of the degenerate
workers states, workers property is understood as embedded in the state, and

subject to the many determining influences of the capitalist world market.
Each degenerate workers state becomes integrated into the totality of world
capitalism where the process of restoration of capitalist social relations
internally is mediated by the state, through its key role in reintroducing
the law of value via legislative acts.

Here we deliberately refer to "complex concrete reality" to contrast Marx's
method of abstraction which is used to understand the "concrete complexity"
of the mediations of the state in an historic overturn such as the collapse
of the Stalinist states. We contrast it to the LRCI's normative method of
proceeding directly from a real abstraction "the law of value" and its
operation via "free labour" to the complex concrete reality.

Trotsky on state capitalism.
Given this method, Trotsky understood that workers property is state
property.  He and Lenin applied that method in the concrete instance of the
"healthy" workers state in the USSR, and to its "deformations" which Trotsky

later developed into his conception of the degenerated workers state.
Extending this method, Trotsky clearly expected that the transition back to
capitalism had to be via state capitalism.

Its content would be expressed as state capitalism. But the bourgeois state
would proceed the restoration of capitalism: "The inevitable collapse of
Stalinist Bonapartism would immediately call into question the character of
the USSR as a workers' state. A socialist economy cannot be constructed
without a socialist power. The fate of the USSR as a socialist state depends

upon that political regime that will arise to replace Stalinist
Bonapartism". (Writings, 34-35, p182)

Because the property relations are "indivisibly bound up with the state"
this would require first the "replacement of a workers' government by a
bourgeois or petty-bourgeois government [which] would lead inevitably to the

liquidation of the planned economy and, subsequently, the restoration of
private property. In contradistinction to capitalism, socialism is built not

automatically but consciously. Progress towards socialism is inseparable
>from that state power that is desirous of socialism or that is constrained
to desire it. (ibid, p179.)

In case this may appear to support the LRCI position, it does not. "...the
property relations which issued from the socialist revolution are
indivisibly bound up with the new state as their repository. The
predominance of socialist over petty bourgeois tendencies is guaranteed, not

by the automatism of the economy - we are still far from that - but by
political measures taken by the dictatorship. The character of the economy
as a whole thus depends upon the character of the state power...The collapse

of the soviet regime would lead inevitably to the collapse of the planned
economy, and thus the abolition of state property." (The Revolution
Betrayed, p250)

In running the film of revolution backwards as a counter-revolution Trotsky
argued clearly that in the seizure of power by restorationists, it is not
their intentions to restore capitalism, but their political measures, in
overturning the property relations that are decisive. Obviously the theorist

of "uneven and combined" development  also anticipated the concrete
complexity of the transition process.

Trotsky on when a workers state is not a workers state.
If we take Trotsky seriously then, we have  the guidelines we need to
explain the transition back to capitalism. Of course this means that we
first have to get the class character of the state right.  If, like the
LRCI, we separate form and function and have a bourgeois state in form,
reproducing workers property in content, than all is confusion. We have a
separation of form and content during a counter-revolution! How can this be?

During revolutions and counter-revolutions the use of the state to overthrow

the old and establish the new social relations  is the "defining moment".

The state has to be overthrown, and smashed, before a revolutionary class
can use the state to introduce new social relations. There is only one
possible way of theorising the restoration of capitalism in the ex-stalinist

states, and that is of determining when the seizure of state power takes
place, and then when the class character of this state is decided in
practice. In the case of each country, located in  the capitalist world
economy, it is the state which takes responsibility for restoring
capitalism, but under conditions not of its own determining.

The point of seizure of power is given by analysis of events. The intentions

of those in power is given by their programmes. The point at which the class

character of the state is determined must by that point where the
quantitative actions taken to overturn workers property and restore
capitalist social relations, changes into quality. The only attempt to
theorise this point on the basis of Marxist method to date is that of Brian
Green, which takes as the decisive turning point, the establishment of a
convertible currency.


Convertible currency - the states "defining moment"?
The LRCI has objected to Green's argument since 1991. (TI No ? p.43). Its
objections then, and now, demonstrate a failure to understand Marx's method.

They ask: how can convertible currency be sufficient to restore the
dominance of the law of value? After all, isn't money a commodity which
operates at the level of exchange, and not production? And since when has
money, taken by itself, represented capital? But money is not being taken "
by itself" here. A convertible currency has the effect of decisively
integrating a "national" economy into the capitalist world economy by
representing "value" as it is produced internationally, and acting as a
measure of value in a state in transition back to capitalist production.

As soon as this happens, world capitalism has the national economy in its
firm grip. It revalues all products as commodities, as if they had been
produced capitalistically.  State enterprises, even when kept afloat by
"soft loans", are now state capitalist enterprises. How else can "soft
loans" be defined except by the criteria loans at market interest rates and
hence the law of value? Plant and machinery becomes revalued as constant
capital.  Wage funds becomes revalued as the price of labour-power. But the
law of value is mediated by the state within the context of world capitalism

in crisis. The "price" of constant and variable capital are set not by their

actual values, but by real-world fluctuations around that value. Under the
state capitalism we are discussing, the prices exceed values because of
social and political constraints on economic "reforms".

The mistake the LRCI makes is to see money and exchange in isolation of
production and distribution as expressed at the level of complex concrete
reality. Hence they fail to recognise the concrete "truth" that, in the case

of a specific country, all the many determinations of an "uneven and
combined" transition back to capitalism, combine to make "world money" the
decisive moment in the circuit of capital by which state capitalism is
reintroduced.

As we argued above, Marx explained that at the level of the world market as
a totality, the moment of exchange can be determining, although itself
determined ultimately by production. This is because, at this level,
exchange presupposes the existence of the international circuit of capital
in all of its moments, but mediated by many other factors such as the state
and international relations. Once Marx's method is understood, the LRCI's
objections to convertible currency as the qualitative turning point in the
actual concrete process of restoration, collapse.

Actually existing state capitalism.
Like capitalist countries in which state intervention requires a partial
suppression of the operation of the law of value, so too the restored state
capitalist countries. State enterprises operate capitalistically even though

the law of value is distorted.  The distortion or partial suppression of the

law of value is not evidence of is non-existence.  "Soft loans" are
therefore not a survival of workers property. They result from the
capitalist state allowing the price of labour or commodities to be
subsidised below their value because class struggle requires a gradual
phasing-in of reforms.

The LRCI's further objection that "soft loans" allow a rapid expansion of
the money supply and inflation, and hence against money as a measure of
value is woefully ignorant.[ibid p.43] It is precisely because money is
acting a measure of value, that an increase in its supply causes it to
inflate prices that represent values. [Grundrisse, p.789-791 on money as
measure of value.  p 808-9 on inflation].

Brian Green also emphasises this point. How can the economic restructuring
that followed the "big bangs" which saw shortages give way to surpluses and
rapid price inflation, be evidence of residual planning?  Inflation is no
more evidence that state enterprises remain non-capitalist, than it is
evidence that state enterprises in Western capitalist economies are also
non-capitalist.  They are capitalist, but they are inefficient by the
abstract criteria of Capital, and by the free-market ideology of the
Economist magazine.


Bad method, rotten politics.
The real test of the absurdity of the LRCI position is that it logically
excludes the reality of state capitalism from the transition process.  It
therefore cannot direct its programme at class struggle under state
capitalism. Its claims to programmatic correctness are baseless. If the
state is bourgeois, how can political revolution be on the agenda?  If the
social relations are still workers property what demands do workers put on
the state? Do we call for the smashing of the state to defend workers
property? Do we call on the state to defend workers property?  The sheer
confusion that results from the LRCI's position disqualifies it from
revolutionary leadership. Its method and theory are centrist and so is its
practice.

Dave Brown.
Communist Workers Group of New Zealand.






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