First Published: Young Spartacus, #32, May 1975.
Transcription, Editing and Markup: Paul Saba
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The Maoist bureaucracy of the People’s Republic of China has hailed the 1972 Sino-American rapprochement as the inauguration of its long-sought “peaceful coexistence” with United States imperialism. The Stalinist misleaders ruling in both China and the Soviet Union, by seeking to subordinate the class interests of the international proletariat to the exigencies of bureaucratic self-interest, criminally sacrifice proletarian revolutions and even Communist unity for illusory “peaceful coexistence” deals and class-collaborationist maneuvering with world imperialism.
As state relations between the two nationalist bureaucracies deteriorated and the Sino-Soviet split alarmingly widened, the Stalinists in each camp escalated the ideological-polemical warfare, cynically attempting to cover their respective betrayals of internationalism by mutual accusations of “revisionism.” Although dedicated to the same treacherous policies of “peaceful coexistence” as the Moscow Stalinists, the Chinese bureaucracy resorted to greater verbal “militancy” than the Russians. Threatened by savage imperialist intervention in Vietnam and stripped of the Russian military shield, the Peking bureaucracy was qualitatively more vulnerable than the Russians, so the Chinese line represented “Khrushchevism under the gun.”
The shrill Chinese denunciations of the “revisionist” USSR in part were an overture to U.S. imperialism for detente in return for Chinese refusal to consider joint Chinese-Russian aid to Vietnam. Thus, the Peking Stalinists pledged to imperialism, “We will never take any united action with the new leaders of the Soviet party” (Red Flag, 10 February 1966). At the same time the Chinese bureaucracy pronounced the “people’s war” line, which preached “self-reliance” instead of full Sino-Soviet military, diplomatic and economic aid to the embattled Viet Cong’ and Democratic Republic of Vietnam.
Following the brutal Russian invasion of Czechoslovakia in 1968, the Chinese Stalinists, apprehensive of the menacing and provocative Russian military presence along the Siberian border, sharpened their polemical attacks to the point of declaring that the USSR had passed over to the imperialist camp: “the clique of Soviet revisionist renegades has degenerated long since into social-imperialism and social-fascism” (Peking Review, 26 August 1968). According to the Maoists, the “Soviet revisionists” led by Khrushchev restored “capitalism” in the USSR in 1956 and ever since have exercised “colonial domination” over Eastern Europe and practiced “neocolonialism” in the economically underdeveloped countries (Peking Review, 4 November 1968 and 14 July 1969).
As long as their interests were confined to pushing “peaceful coexistence” with the “non-aligned,” underdeveloped capitalist countries in the era of Bandung, the Chinese Stalinists, despite their sensational “discovery” that the USSR had “long since” become “imperialist,” continued to maintain that the “principal contradiction” was between the oppressed nations of the so-called “Third World” and U.S. imperialism. But when the U.S. admitted China into the arena of international power politics in return for Chinese pressure on the DRV/NLF to accept the robbers’ “Peace Treaty,” the Maoists began to denounce the main enemy as “U.S. imperialism and Soviet social-imperialism” and to call for an international united front against the “two superpowers” (Red Flag, August 1971). Treacherously pursuing its own great-power appetites through “improved relations” with U.S. imperialism, the Chinese bureaucracy subsequently denounced the USSR as “even more deceitful than old-line imperialist countries and therefore more dangerous’” (Peking Review, 6 October 1972, our emphasis).
The Chinese bureaucracy’s betrayals of 1971 in Sudan, Pakistan and Ceylon were “summed up” by the U.S. imperialists as indicating the reliability of the Chinese for a “united front with imperialism” against the “number one enemy,” the USSR. In Sudan, “leftist” generals backed by the powerful pro-Moscow Communist Party attempted a coup against General Nimeiry, who successfully smashed the rebellion, decimated the CP through incarceration and mass slaughter, and unleashed a reign of terror against the working class and all dissidents. The Maoist bureaucracy not only, congratulated Nimeiry for liquidating the “social-imperialists,” but also rewarded the bloody Khartoum regime with $80 million in military and economic aid. Mao then feted in Peking a delegation of these counterrevolutionary swine, who gratefully toasted Mao for supporting the repression of the CP and of the rebellious non-Arab blacks in southern Sudan (Le Monde, 22 December 1971 and 18 February 1972).
To counterbalance long-standing Russian influence in bourgeois India, the Maoists have given full political and economic support to the U.S.-backed military dictatorship in Pakistan, climaxing in Mao’s obscene support for the genocidal war against the Bengali national liberation struggle in East Pakistan (now Bangla Desh). As the maurauding Pakistani army butchered one million Bengalis, Chou En-lai commended “Your Excellency” Yahya Khan for having “accomplished great useful work in preserving the unity of Pakistan” (Pakistan Times, 13 March 1971) and despicably denounced the fallen nationalist fighters as “a handful of individuals intent on sabotaging Pakistan’s unity” (Le Monde, 14 April 1971).
In a bid to compete with Russian influence in Ceylon, the Chinese Stalinists extended all-out support to the extermination of the “people’s war”-inspired Janata Vimukthi Peramuna (JVP–People’s Liberation Front) by the Bandaranaike popular-front government, a coalition including the c1ass-collaborationist pro-Moscow CP. Vying with the “social imperialists” and the U.S. imperialists for recognition as the firmest supporter of the slaughter of thousands of JVP youth, Mao rushed a $25 million loan to “Your Excellency” Bandaranaike and a political statement of solidarity with the crushing of “these acts of rebellion” by a “handful of individuals calling themselves ’Guevarists’” (see “The ’Anti-Imperialist United Front’ in Ceylon,” Young Spartacus, September-October 1973).
Since the inauguration of the Peking-Washington so-called “peaceful coexistence,” the Chinese bureaucracy increasingly has shrieked that “strategically the key point of their [the “two superpowers”] contention is Europe” (Documents of the 10th Congress, CPC). The Maoists have been campaigning hard throughout the “Free World” for strengthening NATO, that imperialist “united front” of 300,000 troops for preventing “Communist aggression” and socialist revolution in Europe. Objectively lining up with U.S. imperialism, the Chinese bureaucracy is advocating an increased direct military threat to the USSR so that the Russians would be forced to withdraw troops from Siberia for strengthening the Warsaw Pact forces!
The mouthpieces of the Maoists have been blaring pro-NATO propaganda tracts, such as “NATO–Need for Improved Military Forces” (Peking Review, 21 December 1973). In one Sino-French communique, Peking called for military unity of the NATO countries “for the preservation of their common security” (Peking Review, 21 September 1973). The Maoists applauded when one reactionary, Lord Chalfont, “criticized the idea that all military threat to Western Europe had disappeared and that consequently all the American troops could be withdrawn and NATO dismantled” (Pekin Information, 6 August 1973).
The Chinese Stalinists invited staunchly anti-Communist, German nationalist Franz-Josef Strauss to China and reportedly assured him that “the security of West Europe can be assured only by the military support of the United States” (Le Monde, 15 January 1975). Likewise, Chou En-lai last year pledged cold-warrior Senator Henry Jackson, leading representative of the anti-U.S./USSR detente wing of the American bourgeoisie, that China would continue to advocate the strengthening of NATO (New York Times, 2 July 1974). Belgian Prime Minister Tindemans, recently returned from Peking, expressed his astonishment at the Chinese leaders’ repeated favorable references to U.S. Defense Secretary Schlesinger’s report to Congress as “a good view of the world” (Christian Science Monitor, 24 April 1975). Numerous articles in the Chinese press this year have reported favorably Schlesinger’s insistence that U.S. troop levels be maintained in Europe and that the U.S. has vital security interests to protect in Europe, the Near East, the Persian Gulf and Asia. For the sake of its “peaceful coexistence,” its “socialism in one country” and its property rights to some sparsely-populated Siberian tundra, the Chinese bureaucracy is willing to be the drummer boy for imperialist militarism.
The gross betrayals Mao has committed in the name of the “anti-imperialist united front” strain the political capacities of the American Maoists to apologize for Peking’s class-collaborationist foreign policy and differentiate it from that of Moscow. Thus, there has arisen within the Maoist movement a felt need for some coherent, “Marxist-Leninist” explanation of the more fundamental social character of the USSR, especially since the “Russian question” has always been synonymous with “Trotskyism” for Stalinists.
The standard Chinese diatribes, such as How the Soviet Revisionists Carry Out Ail-Round Restoration of Capitalism in the USSR (1968) and Leninism or Social Imperialism (1970), bristle with epithets, denouncing Russia as “capitalist,” “state monopoly capitalist,” “imperialist,” “social-imperialist,” “fascist” and even “dark social-fascist,” but provide absolutely no analysis of either the process of “capitalist restoration” or the functioning of “capitalism” in the USSR. The Maoist effusions, furthermore, offer no explanation why this alleged historic counterrevolution has never been noticed by the bourgeoisie and even escaped the attention of the Chinese for over ten years!
Concerned above all with “building socialism in one (their own) country,” the Maoist bureaucrats have no need for an internationalist line and a revolutionary International, For a simplistic “mass line” among the peasants in culturally backward China, the invective “social-imperialist” is adequate; the development of an analysis with historical substance and theoretical dimensions that can be defended by Western Maoists is of no concern to Mao.
A Stalinist bureaucracy, moreover, instinctively avoids any critical analysis of the phenomenon of Stalinism. The Chinese ideologues in Peking may well recall the lesson of the Yugoslav CP, whose leader, Milovan Djilas, responded to the 1949-50 Tito-Stalin rupture by not only branding the USSR “state capitalist,” but also developing a full-fledged theoretical analysis of this Russian “state capitalism” (see Questions du Socialisme, No. 1, April-May 1951). Both Djilas and his theory of “state capitalism” were sacked by the Yugoslav Stalinists when his analysis was turned against the Yugoslav bureaucracy by the pro-Cominform faction of the party and when prospects for a “thaw” with the Soviet Union developed.
Mao’s adamant and belligerent stand on “Soviet social-imperialism” has become an important factor in the dynamic of political polarization among U.S. Maoist groups (for general background, see “Maoist Fusion Fizzles,” Young Spartacus, December 1974). To demonstrate fidelity to “Mao Tse-tung Thought,” each Maoist tendency must come forward as the most consistent and unflinching “anti-Soviets”; and to demonstrate seriousness in “party building,” each tendency must produce “Marxist-Leninist” theory to justify its “anti-Sovietism.”
In its head-long drive to “build a party now,” the Revolutionary Union (RU) has been the most aggressive and ambitious in staking out its claim to orthodox Mao Thought on “Soviet social imperialism” (see Revolution, July, August and October 1973). Most significantly, the RU last October confronted the rest of the American Maoist movement with its Red Papers 7, a 156-page exercise in theoretical adventurism entitled “How Capitalism Has Been Restored in the Soviet Union And What this Means for the World Struggle.”
The RU has attacked the Stalinite Communist League as “attempting to cover up the real nature of Soviet social imperialism” by maintaining the “100 percent counterrevolutionary” position that capitalism has not yet been fully restored in the USSR (Revolution, July 1974); the RU likewise blasted the Guardian for still calling U.S. imperialism the “number one enemy” (Revolution, July 1973).
Recently the RU has even added to the statement of principles of its front-group Revolutionary Student Brigade (RSB), not adherence to “Marxism-Leninism-Mao Tse-tung Thought” or even adherence to a pro-working-class line, but... opposition to “Soviet social imperialism”! While the RU could ram this line through at the RU-dominated RSB National Council meeting in January, the issue of “Soviet social imperialism,” according to the RSB internal newsletter, had become the “major issue of struggle” in the organization (Seize the Times!, No. 8, 9 January 1975).
The appearance of Red Papers 7 (RP 7) has prompted other Maoist tendencies to take up the Russian question. The Guardian began serializing in February a tract by October League-supporter Martin Nicolaus entitled “Is the Soviet Union Capitalist?” The Guardian’s own position continued on next page that capitalism has not yet been “fully restored” and “thoroughly consolidated” in the USSR has now been attacked by the October League, reflecting the ever-widening OL-Guardian rift (The Call, April 1975).
RP 7 is based entirely on the dictum of Mao that socialism is characterized by “the struggle between the socialist road and the capitalist road.” Because the “capitalist roaders” under socialism base their strength on the purportedly “powerful weapon” of “old bourgeois ideas,” the struggle between the proletariat and the “capitalist roaders” is above all ideological-political. Thus, “in this ’struggle between the socialist road and the capitalist road,’ the relationship between the Party and the masses is decisive.” If ideological revisionism gains the upper hand, concludes RP 7, then socialism will be destroyed “relatively bloodlessly” in “a more or less peaceful restoration of capitalism” by a mere “handful of capitalist roaders” and “bourgeois careerists” infected with “’me-first’ ideology”!
So, while the RU’s mentor Stalin upheld “Marxism-Leninism,” his flaw was the “theoretical failure to recognize how class struggle continues under socialism.” Stalin, you must understand, did not realize that hordes of “capitalist roaders” had “managed to worm their way into positions of authority,” closet capitalists who were “political operators of consummate skill.” According to the Stalin-cultist RU, Stalin’s “prestige” was the thumb in the dike holding back the flood of an ocean of cleverly disguised “capitalist roaders.”
After Stalin’s death Khrushchev appeared on the scene, “the right man in the right place at the right time”... with the wrong ideas. At last ripping off his socialist mask, Khrushchev allegedly established “with lightning rapidity” a “rival bourgeois headquarters.” According to RP 7, Khrushchev pulled off his “coup” simply by making a speech at the 20th Party Congress in 1956 criticizing Stalin, a speech “to signal to his fellow capitalist roaders and bourgeois class base that the tide had turned and it was safe to crawl out from the woodwork”!
With Khrushchev’s rallying cry, the “capitalist road” at once became a choked thoroughfare:
“The seizure of power in 1956-57 by the bourgeois headquarters led by Khrushchev marks the crucial turning point in the restoration process. It was at this juncture that political power passed out of the hands of the proletariat and into the hands of the bourgeoisie. The re-establishment of fully capitalist relations of production was now inevitable, for it is impossible for a bourgeois political line to lead society in any direction but that of capitalism.”
The basic premise of RP 7 that the domination of the proletariat in a workers state can be preserved or reversed only by struggle in the ideological realm is a profound revision of Marxism and Leninism. As Lenin explained so clearly in State and Revolution, the state is an organ of class domination through which the given ruling class defends “its external conditions of production” (Engels). Thus, the essence of the state resides in a repressive apparatus, or “armed bodies of men” (army and police, backed up by judicature, prisons and the bureaucracy), not an ideological line, for enforcing class rule. The class character of a state is determined not by the prevailing ideology, but by the forms of ownership of the means of production which that state defends.
The October Revolution led by the Bolshevik Party of Lenin and Trotsky smashed the bourgeois state and established the dictatorship Of the proletariat, which set about “to wrest, by degrees, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state” (Marx). A counterrevolution to restore capitalism in the Soviet Union would have to smash the workers state (essentially the Red Army and police) and ultimately overturn the proletarian property relations (nationalization of the principal means of production and planned economy) which formed the basis for socialist construction.
For Marxists, the destruction of capitalism and the establishment of the dictatorship of the proletariat require a revolution; the destruction of the dictatorship of the proletariat and restoration of capitalism necessitates a counterrevolution. If the concept of a “peaceful transition to socialism” is reformism, then the RU’s schema of a “bloodless,” “peaceful restoration of capitalism” is precisely reformism in reverse’. Both remove the necessity to smash the existing state.
Mao’s “discovery” that under socialism classes and class struggle continue to exist, moreover, stands in flat contradiction to Marxism. As the lower phase of communism, socialism signifies “an end to all class differences and class antagonisms” (Engels). Class conflicts, and hence the state, however, continue to exist under the dictatorship of the proletariat. As Lenin so lucidly stated in his Economics and Politics in the Era of the Dictatorship of the Proletariat:
“Socialism means the abolition of classes. The dictatorship of the proletariat has done all it could to abolish classes. But classes can not be abolished at one stroke. And classes still remain and will remain in the era of the dictatorship of the proletariat. The dictatorship will become unnecessary when classes disappear.” [original emphasis]
But Mao “discovers” class-based conflicts under “socialism” (in reality, the dictatorship of the proletariat) only to disappear the state! RP 7 categorically asserts, “the main focus of the class struggle under socialism is within the Party itself, and particularly in its top ranks.” Thus, the restoration of capitalism can be peaceful, factional or even surreptitious, because Maoist idealism liquidates the state as a public force enforcing the dictatorship of the particular ruling class.
As long as the Russian state continues to rest upon and defend the proletarian property forms, the Soviet Union in its class character remains a workers state. Lenin clearly posed the question, as follows:
“In what does the rule of the class express itself now? The rule of the proletariat is expressed in the fact that landlord and capitalist property has been abolished–The victorious proletariat abolished property and destroyed it utterly, and in this consists the rule of the class. First of all the question of property. When the question of property was decided in practice, the rule of the class was assured. . .. When classes displaced one another, they altered property relations.” –Polnoe Sobranie Sochinenii [Collected Works], 4th ed., Vol. 30, p. 426, 427 [our translation]
Lenin and Trotsky never prattled about building “socialism in one country,” but declared that the fate of the Soviet state depended upon the victory of the revolution in the West. Unless the revolution was victorious in one or several advanced capitalist countries, which would provide the backward and d evastated Russian workers state with the necessary protection and resources to begin socialist construction, the dictatorship of the proletariat would degenerate bureaucratically and ultimately be overthrown by counterrevolution. Even under Lenin when workers democracy still existed in the Bolshevik Party, a bureaucracy had crystallized in the Soviet state, leading Lenin to warn in 1921, “our state is a workers state with bureaucratic distortion” (Polnoe Sobranie Sochinenii, Vol. 32, p. 6). The bureaucracy, however, had not yet been consolidated and was not yet conscious of its power.
Following Lenin’s death, the Stalin-Kamenev-Zinoviev Triumvirate in 1924 strangled the revolutionary vanguard and gutted the Soviets, thereby politically expropriating the proletariat, atomized and prostrated by unrelenting social crisis and demoralized by defeat of the German revolutionary upheavals. The rise of a materially interested party and state bureaucracy represented the reaction, particularly of the Russian petty bourgeoisie, to extreme economic scarcity and social instability and the pressure of dominant world imperialism, materially and ideologically, upon the state of the proletariat. The bureaucracy arose as the arbitrator in the struggle between individual consumption and socialist accumulation in conditions of generalized want. By a political counterrevolution, the Stalinist bureaucracy usurped power from the proletariat, and established its bureaucratic rule on the foundation of proletarian property forms.
The Stalinist bureaucracy has a dual character: on the one hand, the parasitic bureaucracy must defend the proletarian property system which provides it with its material privileges and will fight imperialism to the extent that the capitalists threaten to deprive it of its social underpinnings; on the other hand, the bureaucracy pursues an impossible “peaceful coexistence” with imperialism and subverts international revolution, which is the only real defense of the anti-capitalist state. Far from a stable, independent ruling class, the bureaucracy balances between the interests of the proletariat and the bourgeoisie in order to maintain its rule.
The bureaucracy is thus trapped in a contradiction: to return to capitalism entails the destruction of the planned economy upon which the bureaucracy rests, and to advance to socialism requires restoring direct political power to the proletariat. Because it still maintains the proletarian property forms, the USSR remains a bureaucratically degenerated workers state.
The Trotskyist program calls for the unconditional defense of the collectivized property systems of the Sino-Soviet states from counterrevolution and imperialist attack, recognizing that the nationalized economies of these ^states correspond to the social base of proletarian rule. We support the strengthening of the Warsaw Pact forces against NATO, and demand that the Moscow bureaucracy extend its nuclear shield to cover China and North Vietnam.
We simultaneously call for a workers political revolution to oust the politically reactionary Stalinist bureaucracies and restore soviet power and proletarian internationalism. Stalinist bureaucratic rule is fundamentally unstable and vulnerable, since the bureaucracy rules not on a property system peculiar to itself, but on a social system in which the demands of developing economy, the class position of the proletariat and the formal ideology continually pose the question of workers power. By removing the nationalist-reformist bureaucracies, the political revolution clears the path for a mighty, international united front of workers states against imperialism.
The RU’s analysis of the purportedly “capitalist” character of the Russian economy is as fully idealist as its conception of the “capitalist restoration” process. RP 7 foolishly contends that the economic reforms promulgated by Kosygin in 1965 “made the profit motive the major guiding force in the Soviet economy, and opened a new period, the stage of the conscious construction of a state capitalist economy.” The Liberman reforms, you see, restored to the means of production the character of “capital”: the charge on “capital” and state bank credits comprise “the employment of capital in order to gain a financial return.”
However, the cunning Kosygin “had no intention of reviving a market economy,” so he adeptly arranged that the capital market would not “take on an open, brazen form,” but rather “a new and ’hidden’ form.” Even though admitting there is no competition and capital market, RP 7 maintains that “the assignment of capital over to another in the expectation of receiving a predetermined return, generally in the form of interest is also a type of commodity exchange.” Thus, according to the schema of RP 7, the state is a “finance capitalist” vis-a-vis its own state enterprises.
But, it seems that the RU (to borrow its expression) has picked up a rock only to drop it on its own feet. For RP 7, after having insistently stressed that there is no capital market and competition in the USSR, declares a few pages later, “because the production of goods is subordinate to the production of profit,” the “state monopoly capitalists” become slaves of the law of labor value. The economy of “social imperialism” is, after all, ravaged by the “blind market forces of capitalism” and its “competition,” although “the particular forms this is taking, and the specific individuals and firms involved, have not as yet been clearly exposed”.
The RU must “discover” this capitalist “competition,” which is so “hidden” it can’t be “exposed,” in order to posit that “the drive for the highest profit forces the competing Soviet capitalists to invest increasing amounts of the surplus wherever it will bring the highest return,” that is, to “export capital” as “imperialists.” RP 7 thus labels Russian aid to various economically underdeveloped countries (India in particular), as well as trade with the COMECON countries of Eastern Europe, as imperialist “plunder” and “exploitation.”
The proposition that the class character of the USSR is capitalist does violence to the basic concepts of Marxism. As Marx disclosed, capitalism is a mode of production based on private property in which the production of commodities becomes generalized and all the determinants of production (labor power, instruments of labor, land and so on) become commodities. Generalized commodity production is based on competition in an anonymous market. This competition between individual capitals generates the law of labor value and constitutes the driving force for the historic process of capital accumulation.
The expropriation of the capitalist class and the nationalization of the means of production by the workers state eliminates capitalist competition by establishing a planned economy. With the extinguishing of a market economy, the means of production cease to be a commodity, i.e., capital, and the law of labor value ceases to operate in a capitalist mode.
The contention of RP 7 that in the USSR the means of production comprise a single capital collectively owned by “state monopoly capitalists” is yet another revision of Marxism. Here is what Marx had to say on the subject:
“In competition this inner tendency of capital appears as a compulsion imposed on it by other capital and driving it forward over and beyond the proper proportion with a continuous Marche, marche.’... Conceptually, competition is nothing but the inner nature of capital, its essential character, appearing and realized as the interaction of many capitals on one another, the inner tendency as external necessity. Capital exists and can exist only as many capitals, and its self-determination therefore appears as the interaction of these on one another.” [original emphasis] –Grundrisse der Kritik der politischen Okonomie, Rohentwurf 1857-58, pp. 316-317 [our translation]
Precisely because “capital exists and can exist only as many capitals,” Lenin insisted that monopolization could never be complete, entirely eliminating competition:
“On the contrary, monopoly, coming about in several branches of industry, strengthens and sharpens the chaos characteristic of the entire capitalist production, taken as a whole.” [original emphasis] –Polnoe Sobranie Sochinenii, Vol. 22, p. 196 [our translation]
If the capitalist class cannot organize production according to a rational plan, it is equally impossible for a bureaucracy (or a group of “capitalist roaders”) which arose on the basis of a planned economy to convert itself into a capitalist class without liquidating the planned economy.
RP 7 rests its case charging capitalist restoration not on any coherent economic theory, but on the ideas (rather, the terminology) expressed during the so-called Liberman reform debates. For the RU, the references to the economic categories of “profit,” “capital” and “wages” by the revisionist Russian economists under Brezhnev are incontrovertible proof that capitalism has been restored in the USSR and the Eastern Bloc countries. But why the “capitalist roaders” would choose to “restore capitalism” through the “piecemeal reforms” of Liberman rather than the “rigorous and theoretically coherent blueprint for capitalist restoration” of economists Vaag and Zakharov is a mystery which RP 7 does not even attempt to probe.
The Liberman reforms were measures introduced by the bureaucracy to promote efficiency and curtail bureaucratic waste. Under Stalin the privileges of the bureaucracy at the enterprise level were tied to the single performance index of gross volume of output. This system pressured the factory managers founder-estimate their plant productive capacity, overestimate their resource needs, sacrifice quality and assortment of product and resist technological improvement (which disrupts production) in an effort to maximize their chances of fulfilling, and hopefully overfulfilling, the output target dictated by the plan.
The economic reforms associated with Liberman simply replaced the gross output index with indices of optimum resource efficiency. Sales (“profits”) and return on resource investment (“profitability”) as success indicators were designed to induce managers to replace obsolete machines and equipment and to upgrade output quality; and payment for disbursed resources (“capital charge”) and efficiency incentives would encourage economizing of resources.
While these so-called “economic levers” now tied the bureaucrats’ privileges to “micro-economic” efficiency, the central state apparatus continued to determine both resource allocation and prices. Far from “putting profit in command,” the bureaucracy still tenaciously keeps the plan in command.
Capitalist profit, contrary to the twaddle of RP 7, is meaningless outside of commodity exchange on the market. Marx succinctly revealed the function of profit under capitalism:
“And now let us consider profit. This specific form of surplus-value is the precondition for the fact that the new creation of means of production takes place in the form of capitalist production ... The entire process of capitalist production is furthermore regulated by the prices of the products. But the regulating prices of production are themselves in turn regulated by the equalization of the rate of profit and its corresponding distribution of capital among the various social spheres of production. Profit, then, appears here as the main factor, not of the distribution of products, but of their production itself, as a factor in the distribution of capitals and labor itself among the various spheres of production.” – Capital (International Publishers, 1967), Vol. 3, p. 882.
Under Libermanism, “profits” do not regulate the planned economy, but rather the plan regulates “profits.”, Prices are set by the plan, and do not fluctuate around value in accordance with the blind laws of the market. “Soviet prices,” bourgeois economist Howard J. Sherman points out, “have been such poor measures of the real costs of most commodities that many efficient allocational decisions have been impossible to make” (The Soviet Economy). Enterprise plans include planned payments into the budget in the form of rent payments, the capital charge and remittance of profit residuals.
Under capitalism profit determines the ebb and flow of capital in the various branches of production. In the USSR allocations are made according to the plan, while the “market” mechanisms of Libermanism seek to make predetermined allocations efficient. In fact, numerous key enterprises are operated at planned losses, i.e., the bureaucracy consciously sets prices below costs of production.
Far from comprising “profits,” the “capital charges” of the Liberman accounting system (which also exist in “socialist” China) do not represent surplus value realized on the market, but rather resource flows within the state sector. RP 7 claims that the state is chained to the “profit” motive, because it rents resources... to itself!
Far from restoring capitalism, the Liberman reforms have failed to achieve even their original, much-trumpeted goals of efficiency. Bourgeois economists have analyzed Libermanism as a “half-hearted, halting, harrassed economic reform” which has proved to be a “failure,” precisely because the bureaucracy has organically reverted to Stalin’s methods of “political pressure,” “socialist emulation” and “’moral’, incentives” (Problems of Communism, July-August 1971). From this, the RU should conclude that the Brezhnevites once again have put “politics in command” and at last are back on the “socialist road”!
The Liberman reforms, like Stalin’s earlier system of enterprise profitability, is an indication that the planned economy is being choked by bureaucratism. The only solution to the chronic problems of the Russian economy is the political revolution which restores the proletariat to power in the workers state.
Since the flow of resources in the producer goods sector of the Russian economy is determined by the plan, the USSR is under no compulsion to “export capital.” With the destruction of capitalist competition for a market in the state sector, the Russian economy is liberated from the “declining rate of profit” (the very formation of an “average rate of profit” ceases) and thus from the economic compulsion to export capital to markets where the rate of profit is higher.
For RP 7, Russian aid and investments in India is “Soviet social imperialism” par excellence. Russian loans, grants and joint construction projects are primarily politically, not economically, motivated. The USSR suffers from a scarcity, not a surplus, of investment resources, reflected in the fact that foreign trade amounts to not much more than one percent of Russian GNP. Russian loans carry an arbitrarily fixed interest rate far below world capitalist rates, and the resources allocated for Indian construction projects could far more profitably be invested in the Russian economy.
Furthermore, the Indian government pays for Russian (as well as Polish and East German) imports and loans in non-convertible Indian currency, forcing the “social imperialists” to spend their “plunder” in India. The Moscow bureaucracy’s interest in “Indian dependency” has nothing to do with profit rates, but rather is to ensure a favorable balance of power in Asia through a pro-USSR bourgeois India. The low-interest loans and prestige projects are the economic overhead for the Stalinist bureaucracy’s policy of “peaceful coexistence.”
RP 7’s “proof” of “Soviet social imperialism” reduces itself to denunciations of revisionist foreign policies: the USSR seeks influence through foreign aid and diplomatic support. Thus, Russian aid and (until 1973) diplomatic recognition of the former Lon Nol regime in Cambodia are cited as “the grossest single exposure of Soviet social imperialism.” If this bureaucratic betrayal is “social imperialism,” then what is Mao’s lavish economic assistance to Bandaranaike and Nimeiry, what is Mao’s obsequious diplomatic backing for the Shah and Selassie, and what is Mao’s immediate recognition of the bloody juntas in Algeria and Chile? The rampant idealism of Maoism leads the RU straight to Kautskyism: imperialism simply as a set of preferred policies of capitalism.
RP 7 no more substantiates its allegations of “social imperialism” in East Europe than in India. The RU glibly passes over Stalin’s bureaucratic looting of Eastern Europe in the wake of the military conquest during WWII: the massive removal of industrial machinery, raw materials and even manpower; the extraction of severe reparations payments; and the establishment of joint-stock companies. While not imperialism (quite the reverse: a pattern of importing capital), Stalin’s policy of reconstructing the USSR at the expense of the material and social bases for Eastern European workers states was justified precisely by the perspective of “socialism in one country.” Concerning this brutal bureaucratic looting, RP 7 has the gall to declare, “Stalin encouraged a policy of cooperation, aid and mutual exchange”!
The Cold War bogey of Russian trade “exploitation” of the Eastern Bloc through the Council of Economic Mutual Assistance (COMECON], while still flaunted by revisionist “Marxists,” has been discredited even among liberal bourgeois-academic economists (see Franklyn Holzman, “Soviet Foreign Trade Pricing and the Question of Discrimination,” Review of Economics and Statistics, Vol. 44, 1962).
One of the most powerful weapons of world capitalism against a backward (less productive) workers state is the ability of capitalism to undersell the products of state industry. For this reason, state monopoly of foreign trade is essential for the very survival of such a workers state. COMECON is an attempt, inadequate and internally contradictory, to extend the monopoly of foreign trade beyond the individual states of the bloc.
The contradictions of COMECON arise from the situation that it is almost always possible to purchase products cheaper on the world market, and often possible to get better terms for exports on the world market, than in a geographically limited market. There is thus a strong centrifugal tendency for all COMECON countries, including the USSR, to shift to world market trade. For instance, it would be more economical for the Soviet Union to trade with Japan and Canada for commodities like machinery and wheat, which can be shipped more cheaply over the Pacific than rail-hauled or carried circuitously by water from East Europe. The disadvantages of trading within the Russian-led bloc were important factors in both the Sino-Soviet and Yugoslav-Soviet splits.
As long as the economic plans are determined nationally, COMECON trade prices can only result from the arbitrary interaction of world market prices, domestic costs and political pressures. In most COMECON countries, wholesale prices are fixed at the average costs of production. Newer plants producing at costs below average make “profits” which are largely taxed away; older, high-cost enterprises make accounting losses which are covered by planned subsidies. Because there is central control over total costs, industries operating on subsidies considered too high by the planning commission can be retooled, converted to another line of production or closed.
This control of the price-cost relationship within a COMECON country is precisely what is lacking in trade between the bloc partners. Thus, the Polish bureaucracy has no influence over the costs of Russian steel which it imports; the Russian bureaucracy has no control over the costs of Polish agricultural produce which it imports. COMECON trade prices fluctuate between world market prices and export costs of production, generating intense national conflicts.
If export costs of production were systematically used, the importing country in effect would undertake an open-ended subsidy of the trading partner’s export industry. Thus, the COMECON country which consistently discriminates against its bloc partners the most is not the USSR, but... Bulgaria. Export cost pricing pressures importing countries to escape from COMECON to the world market.
If world market prices were systematically used, each COMECON country would be trading as if in the purely capitalist world market. Some lines of Czechoslovakian and East German machinery, if sold at world market prices, could not recover even labor costs, and Russian collective farmers would starve if they had to compete with Egyptian cotton or Australian wool prices. COMECON would be exploded by the pressure of world imperialism, with disastrous consequences for the defense of the Eastern European deformed workers states from imperialism. Only workers democracy, restored through the political revolution, can replace the dangerous nationalist-autarkic bureaucratic conflicts with the economic, military and political integration of the Sino-Soviet states, from East Berlin to Hanoi.
In its conclusion RP 7 “sums up” its position on “Soviet social imperialism” by decrying “the growing danger of world war between the two superpowers.” The flimsy U.S.-USSR detente aside, the U.S. imperialists have a profound hostility to any country which has wrenched itself from the net of imperialist domination, but above all to the powerful USSR. An historic goal of the U.S. imperialists remains the counterrevolutionary conquest of the enormous wealth of the Soviet Union, and to this end imperialism in its death agony will not hesitate to plunge humanity into a nuclear holocaust.
In the present context of growing inter-imperialist rivalries and sharp trade crises the outlines of a Third World War are taking shape. With their bankrupt policies of “peaceful coexistence” the Stalinist bureaucracies are incapable of arresting the drift toward a new world war. Moreover, the U.S.-China rapprochement and the present role of the Maoist bureaucracy in supporting NATO militarism point toward a U.S.-China alliance against the USSR. The Chinese denunciations of the USSR as “fascist” and “dark social-fascist,” in the Stalinist context, appear as a justification for lining up with the “democracies” to wage a “people’s war” against fascism, just as Stalin embraced British-American imperialism in the so-called “People’s War” against Nazi Germany. In RP 7, the RU pledges to the imperialists that it would refuse to defend the USSR from attack by the U.S.
The Trotskyist movement has always maintained that a correct Marxist understanding of the class character of the Soviet Union (and, by extension, China, Eastern Europe, Yugoslavia, Cuba, Korea, Vietnam and Cambodia is a touchstone of a revolutionary perspective. A failure, or refusal, to recognize the class line separating these anti-capitalist states from world imperialism constitutes a qualitative theoretical departure from Marxism in the direction of reformist subordination of the interests of the proletariat to the bourgeoisie. Only Trotskyism, as the continuity of Marxism and Leninism, has developed an analysis of the USSR that is consistent with Marxist methodology and that leads to consistently revolutionary programmatic conclusions.
To subjectively revolutionary militants who mistake Maoism for a revolutionary alternative to revisionism we say: look where the theoretical clap-trap of the “social imperialist” line leads! If the U.S. defeats the USSR and returns the conquests of October to capitalist exploitation, imperialism would be enormously strengthened and given a new lease on life, which would signify nothing less than an epochal defeat for the world proletariat. With the defeat of the USSR, the People’s Republic of China would be immediately attacked and almost certainly defeated. Refusal to defend the gains of the Russian Revolution is an enormous betrayal of the class interests of the international proletariat and a giant stride toward social-patriotic subservience to imperialism. The RU’s line on the “number one enemy,” “Soviet social imperialism,” is an objective capitulation to anti-communism and backward consciousness in the working class.
As proletarian internationalists, Trotskyists declare: For unconditional defense of the Sino-Soviet states against imperialism: For proletarian political revolution to oust the Stalinist bureaucracies and forge international communist unity against imperialism: For the rebirth of the Fourth International!