Aufheben #6 Editorial

Aufheben #6 Editorial: If nothing else, New Labour's landslide victory last May has brought into sharp focus the crucial issue of the crisis and retreat of social democracy. The retreat of social democracy has been gathering pace for several years now; and it is a phenomenon which is not merely confined to Britain but one that has world-wide significance.

Yet although this retreat of social democracy is profoundly altering the terrain of class struggle, opening up new dangers and possibilities, it is an issue that has not been adequately addressed by revolutionaries. Instead it has remained an issue that has haunted both our practical and theoretical political activity. It used to be a major revolutionary task to oppose the left's role of recuperating working class struggle into social democratic channels. Now that capital has itself undermined the credibility of such 'leftist' manoeuvres - what does this mean for us?

In the next edition of Aufheben we plan to confront this central issue of our time. We shall begin by exploring the historical context of the rise and fall of social democracy both in Britain and elsewhere and consider how this has given rise to Tony Blair's New Labour. We shall then consider the prospects of New Labour and the implications of the decline of social democracy for the future of class struggle both here and abroad. However, lest our readers become a little restive at waiting for our thoughts on this pressing matter we shall make a few preliminary remarks here which will serve to sketch out the outlines of our forthcoming analysis.

Some preliminary remarks on the crisis and retreat of social democracy and New Labour

Of course, of all the major capitalist powers it is perhaps the USA where 'neo-liberalism' has gone the furthest. The dismantling of the welfare state, the criminalization of the poor and unemployed, declining real wages and the introduction of flexible labour regimes have all accelerated in Clinton's America. Yet social democracy, particularly its political expression, was never as strong in the USA as it was Europe. In Europe it is Britain, after twenty years of Thatcherism, that has gone the furthest in emulating the USA, and it is in Britain where we can see the crisis and retreat of social democracy most clearly with the victory of Tony Blair.

Tony Blair, and his fellow so called modernizers, have made no secret of the fact that they want to consign social democracy, which they designate as ëOld Labourí, to the past. Having already jettisoned Clause Four of Old Labour's constitution, distanced himself from the trade unions and re-positioned the Labour Party to the right of the Liberal Democrats, Tony Blair has gone a long way in transforming the Labour Party into a new Liberal Party, restoring the old bourgeois division of British politics before the rise of Labour Party, and with it the political representation of the working class, at the beginning of this century.

Now, having won such a convincing election victory, the way seems open for Tony Blair to completely marginalize the last remnants of social democracy within the Labour Party. As such Tony Blair is completing one of Thatcher's great aims, the eradication of 'socialism' from the mainstream of British politics. Indeed, in many respects Tony Blair is Thatcher's true heir, as he himself readily admits when he expresses his admiration for her. To understand New Labour and the decline of social democracy in Britain it is necessary to consider the rise of Thatcherism.

Compared with much of mainland Europe, Britain escaped much of the devastation caused by the Second World War. This, combined with Britain's continued legacy from her imperial past, meant there was neither the opportunity nor incentive for British capital to radically refashion the social relations of production. In the post-war era Britain never fully adopted Fordism. Instead British industrial capital remained content to maintain outdated production methods and working practices. Thus, whereas Germany, France and Italy all experienced rapid economic growth and transformation during the 1950s and ë60s, Britain continued its long term relative economic decline.

As a consequence, British capital was ill-placed to weather the upsurge in class struggle and the crisis in capital accumulation which broke out in the late 1960s. By the late 1970s the British ruling class faced a dire situation. Following the miners' strike of 1974, which had brought down the Heath government, there were increasing fears that it would not be long before the government would be unable to govern, and management unable to manage, in the face of the 'sheer bloodymindness' of the working class. It was as a last desperate attempt to resolve this growing political and economic crisis in the favour of British capital that Thatcherism took shape.

Social democracy, as the political and economic representation and integration of labour within capital and the bourgeois state, had played a central role in the construction of the post-war settlement. Social democracy provided the basis of the class compromise, established through the post-war settlement, in which the working class gave up all hope of revolution in return for improved housing, health care, the welfare state, and above all a commitment to full employment. However, while the post-war settlement had provided the relative social peace that served as the basis for the post-war economic boom, with the onset of the crisis of capital accumulation and the upsurge of class struggle in the 1960s, it had become an increasing burden on the capitalist class and served to strengthen the hand of the working class.

Armed with monetarism, Thatcher set out to radically reshape the post-war settlement in favour of capital. To do this she not only sought to attack and marginalize social democracy but also the social democratic consensus through which the post-war settlement had been constructed. Through mass unemployment, a succession of anti-strike laws and carefully staged industrial disputes, Thatcher not only succeeded in inflicting serious defeats on the working class but also broke the power of the trade unions as mediators in the sale of labour-power. Yet in order to carry out this barely disguised class war Thatcher had also to overcome the reluctance of those fainthearts in her own camp who still clung to the certainties of the old class compromise. As a result, Thatcher's rule was marked not only by confrontation but also by the increasing concentration of political power.

Ironically Thatcher's success can be seen to be rooted in the previous success of social democracy. During the post-war era, social democracy had succeeded in demobilizing large sections of the working class but in doing so had come to undermine its very own basis. Thatcher was able to exploit the gap between the aspirations of individual working class people and their collective representation. While she launched uncompromising attacks on the bastions of trade union militancy, wages for the majority of workers were allowed to outstrip inflation. Collective action was everywhere punished while individualism was encouraged.

Yet Thatcher's populism, which was centred around the illusion of the 'property and share-owning democracy' in which everyone could feel that they were a capitalist, could not last long beyond the late 80s economic boom. Thatcher's refusal to take heed of warnings from outside her by now narrow circle of advisers ultimately led to her downfall with the mass revolt against the poll tax. In succeeding Thatcher, John Major sought to press on with Thatcherism but with a different presentation. However, despite weathering the depths of early 90s recession, Major's weak leadership eventually left him unable to cope with the growing splits in the Tory Party as the Thatcherite project became exhausted.

The recession of the early 1990s, and, until recently, the subsequent jobless boom which seemed to benefit no one other than the fat cats of the privatized utilities and the city speculators, brought home the bitter fruits of Thatcherism. With job insecurity reaching the very heart of the middle classes there came a growing disillusionment with the Tory policies of social division and crass individualism. It was through mobilizing this widespread disillusionment with the Tories that Blair was able to win his landslide victory.

As the first months of the new government has confirmed, New Labour is committed to maintaining much of the Conservative economic and authoritarian social policies of the previous government. However, Blair is seeking to build a new social consensus around the de facto class compromise established after Thatcher. Thus instead of pushing through reforms with little regard to any opposition, New Labour seeks consultation. Instead of concentrating power in order to push through unpopular measures, New Labour is concerned with devolving power, as we can see in their plans for radical constitutional reform. Blair then, in consolidating the Thatcher revolution, is the true heir to Thatcher.

So what are the prospects for New Labour: and what are the prospects for social democracy? The continuing success of Blair's government depends crucially on relative social peace and economic prosperity. Of course, it could be argued that the crisis of capitalism which broke in the late 1960s with the upsurge in working class struggle, and which led to the radical restructuring of capital in the subsequent decades, has been more or less resolved. The working class has everywhere been beaten back, while the huge imbalances caused by the restructuring of capital which emerged in the 1980s in the form of both the huge US budget and trade deficits and in an enormous overhang of Third World debt, have been unwound. If this is the case, Blairism would seem to fit the needs of the bourgeoisie in this period of social and economic quietude. However, even if the world-wide crisis of capitalism has been resolved for the time being, this does not mean that the long-term relative decline in British capitalism has been arrested.

And what of social democracy? If social democracy ceases to exist will it be re-invented again? And how are we to relate to the decline and possible resurgence of social democracy? For our answers to these and related questions you will have to wait until the next issue!

Notes

In some ways the attack on social democracy has gone further in the UK than in the USA. For example, the sacking of the 500 Liverpool dockers would have been illegal in the USA; while the solidarity action taken by American dockers would have been illegal in Britain, since it would have been regarded as secondary action. It should also be noted that Clinton's new Democratic Party has recently prompted a renewed trade union activism that is less inclined to lobby Congress and is more committed to building a militant rank and file trade unionism. We shall have course to examine the possible renewal of social democracy in our next issue.

With a rather poetic vagueness, Clause Four committed the Labour Party to the extension of public ownership of the means of production and exchange. It was originally written into the constitution in 1918 as means of heading off the growing revolutionary deman ds within the labour movement which had been given added impetus by the Russian Revolution. From that time onwards Clause Four has taken by the left as ultimately committing the Labour Party to socialism. In rewriting Clause Four, Blair has sought to make it quite clear that New Labour had abandoned commitment to 'socialism' and social democracy.

Of course it could be argued that if Blair has his way, and if the Tories die out or become an extreme right-wing nationalist party, New Labour is more likely to end up as the new Conservative Party!

The shift to the right by the New Labour Party is perhaps clearly demonstrated by the recent debate between Roy Hattersley and Gordon Brown - the new Labour Chancellor of the exchequer. A few years ago Roy Hattersley was considered as being on the right of the Party. However, his continued belief in using tax and welfare policies to ensure a minimal amount of redistribution of wealth now seems to place him on the far left of the Party!

Having won power, Thatcher proceeded to purge what she saw as the 'wets' in the Conservative Party who were wary of her policy of confrontation. At the same time the main employersí organization, the Confederation of British Industry, which had represented British capital in the various corporatist forums set up in the post-war era, was displaced by the more Thatcherite Institute of Directors.

What was the USSR? Part 1: Trotsky and State Capitalism

In the past, it seemed enough for communist revolutionaries to define their radical separation with much of the 'left' by denouncing the Soviet Union as state capitalist. This is no longer sufficient, if it ever was. Many Trotskyists, for example, now feel vindicated by the 'restoration of capitalism' in Russia. To transform society we not only have to understand what it is, we also have to understand how past attempts to transform it failed. In this and future issues we shall explore the inadequacies of the theory of the USSR as a degenerated workers' state and the various versions of the theory that the USSR was a form of state capitalism.

What was the USSR?

Towards a Theory of the Deformation of Value under State Capitalism Part I[1]

Introduction

The question of Russia once more

In August 1991 the last desperate attempt was made to salvage the old Soviet Union. Gorbachev, the great reformer and architect of both Glasnost and Perestroika, was deposed as President of the USSR and replaced by an eight man junta in an almost bloodless coup. Yet, within sixty hours this coup had crumbled in the face of the opposition led by Boris Yeltsin, backed by all the major Western powers. Yeltsin's triumph not only hastened the disintegration of the USSR but also confirmed the USA as the final victor in the Cold War that had for forty years served as the matrix of world politics.

Six years later all this now seems long past. Under the New World (dis)Order in which the USA remains as the sole superpower, the USSR and the Cold War seem little more than history. But the collapse of the USSR did not simply reshape the 'politics of the world' - it has had fundamental repercussions in the 'world of politics', repercussions that are far from being resolved.

Ever since the Russian Revolution in 1917, all points along the political spectrum have had to define themselves in terms of the USSR, and in doing so they have necessarily had to define what the USSR was. This has been particularly true for those on the 'left' who have sought in some way to challenge capitalism. In so far as the USSR was able to present itself as 'an actually existing socialist system', as a viable alternative to the 'market capitalism of the West', it came to define what socialism was.

Even 'democratic socialists' in the West, such as those on the left of the Labour Party in Britain, who rejected the 'totalitarian' methods of the Lenin and the Bolsheviks, and who sought a parliamentary road to socialism, still took from the Russian model nationalization and centralized planning of the commanding heights of the economy as their touchstone of socialism. The question as to what extent the USSR was socialist, and as such was moving towards a communist society, was an issue that has dominated and defined socialist and communist thinking for more than three generations.

It is hardly surprising then that the fall of the USSR has thrown the left and beyond into a serious crisis. While the USSR existed in opposition - however false - to free market capitalism, and while social democracy in the West continued to advance, it was possible to assume that history was on the side of socialism. The ideals of socialism and communism were those of progress. With the collapse of the USSR such assumptions have been turned on their head. With the victory of 'free market capitalism' socialism is now presented as anachronistic, the notion of centralized planning of huge nationalized industries is confined to an age of dinosaurs, along with organized working class struggle. Now it is the market and liberal democracy that claim to be the future, socialism and communism are deemed dead and gone.

With this ideological onslaught of neo-liberalism that has followed the collapse of the USSR, the careerists in the old social democratic and Communist Parties have dropped all vestiges old socialism as they lurch to the right. With the Blairite New Labour in Britain, the Clintonite new Democrats in the USA and the renamed Communist Parties in Europe, all they have left is to openly proclaim themselves as the 'new and improved' caring managers of capitalism, fully embracing the ideals of the market and modern management methods.

Of course, for the would-be revolutionaries who had grown up since the 1960s, with the exception of course of the various Trotskyist sects, the notion that the USSR was in anyway progressive, let alone socialist or communist, had for a long time seemed ludicrous. The purges and show trials of the 1930s, the crushing of the workers' uprisings in East Germany in 1953 and in Hungary in 1956, the refusal to accept even the limited liberal reforms in Czechoslovakia in 1968 and the continued repression of workers' struggles in Russia itself, had long led many on the 'revolutionary left' to the conclusion that whatever the USSR was it was not socialist. Even the contention that, for all its monstrous distortions, the USSR was progressive insofar as it still developed the productive forces became patently absurd as the economic stagnation and waste of the Brezhnev era became increasingly apparent during the 1970s.

For those ultra-leftists[2] and anarchists who had long since rejected the USSR as in anyway a model for socialism or communism, and who as a result had come to reassert the original communist demands for the complete abolition of wage labour and commodity exchange, it has long since become self-evident that the USSR was simply another form of capitalism. As such, for both anarchists and ultra-leftists the notion that the USSR was state capitalist has come as an easy one - too easy perhaps.

If it was simply a question of ideas it could have been expected that the final collapse of the USSR would have provided an excellent opportunity to clear away all the old illusions in Leninism and social democracy that had weighed like a nightmare on generations of socialists and working class militants. Of course this has not been the case, and if anything the reverse may be true. The collapse of the USSR has come at a time when the working class has been on the defensive and when the hopes of radically overthrowing capitalism have seemed more remote than ever. If anything, as insecurity grows with the increasing deregulation of market forces, and as the old social democratic parties move to the right, it would seem if anything that the conditions are being lain for a revival of 'old style socialism'.

Indeed, freed from having to defend the indefensible, old Stalinists are taking new heart and can now make common cause with the more critical supporters of the old Soviet Union. This revivalism of the old left, with the Socialist Labour Party in Britain as the most recent example, can claim to be making just as much headway as any real communist or anarchist movement.

The crisis of the left that followed the collapse of the USSR has not escaped communists or anarchists. In the past it was sufficient for these tendencies to define their radical separation with much of the 'left' by denouncing the Soviet Union as state capitalist and denying the existence of any actually existing socialist country. This is no longer sufficient, if it ever was. As we shall show, many Trotskyists, for example, now feel vindicated by the 'restoration of capitalism' in Russia. Others, like Ticktin, have developed a more sophisticated analysis of the nature of the old USSR, and what caused its eventual collapse, which has seriously challenged the standard theories of the USSR as being state capitalist.

While some anarchists and ultra-leftists are content to repeat the old dogmas concerning the USSR, most find the question boring; a question they believe has long since been settled. Instead they seek to reassert their radicality in the practical activism of prisoner support groups ('the left never supports it prisoners does it'),[3] or in the theoretical pseudo-radicality of primitivism. For us, however, the question of what the USSR was is perhaps more important than ever. For so long the USSR was presented, both by socialists and those opposed to socialism, as the only feasible alternative to capitalism. For the vast majority of people the failure and collapse of the USSR has meant the failure of any realistic socialist alternative to capitalism. The only alternatives appear to be different shades of 'free market' capitalism. Yet it is no good simply denouncing the USSR as having been a form of state capitalism on the basis that capitalism is any form of society we don't like! To transform society we not only have to understand what it is, we also have to understand how past attempts to transform it failed.

Outline
In this issue and the next one we shall explore the inadequacies of various versions of the theory that the USSR was a form of state capitalism; firstly when compared with the standard Trotskyist theory of the Soviet Union as a degenerated workers' state, and secondly, and perhaps more tellingly, in the light of the analysis of the USSR put forward by Ticktin which purports to go beyond both state capitalist and degenerated workers' state conceptions of the nature of the Soviet Union.

To begin with we shall examine Trotsky's theory of the USSR as a degenerated workers' state, which, at least in Britain, has served as the standard critical analysis of the nature of the Soviet Union since the 1930s. Then we shall see how Tony Cliff, having borrowed the conception of the USSR as state capitalist from the left communists in the 1940s, developed his own version of the theory of the USSR as a form of state capitalism which, while radically revising the Trotskyist orthodoxy with regard to Russia, sought to remain faithful to Trotsky's broader theoretical conceptions. As we shall see, and as is well recognized, although through the propaganda work of the SWP and its sister organizations world wide Cliff's version of the state capitalist theory is perhaps the most well known, it is also one of the weakest. Indeed, as we shall observe, Cliff's theory has often been used by orthodox Trotskyists as a straw man with which to refute all state capitalist theories and sustain their own conception of the USSR as a degenerated workers' state.

In contrast to Cliff's theory we shall, in the next issue, consider other perhaps less well known versions of the theory of the USSR as state capitalist that have been put forward by left communists and other more recent writers. This will then allow us to consider Ticktin's analysis of USSR and its claim to go beyond both the theory of the USSR as state capitalist and the theory of the USSR as a degenerated workers' state.

Having explored the inadequacies of the theory that the USSR was a form of state capitalism, in the light of both the Trotskyist theory of the Soviet Union as a degenerated workers' state and, more importantly, Ticktin's analysis of the USSR, we shall in Aufheben 8 seek to present a tentative restatement of the state capitalist theory in terms of a theory of the deformation of value.

Section 1: Trotsky's theory of the Soviet Union as a degenerated workers' state

Introduction

It is now easy to deride those who have sought, however critically, to defend the USSR as having been in some sense 'progressive'. Yet for more than a half a century the 'defence of the Soviet Union' was a central issue for nearly all 'revolutionary socialists', and is a concern that still persists today amongst some. To understand the significance of this it is necessary to make some effort to appreciate the profound impact the Russian Revolution must have had on previous generations of socialists and working class militants.

i The Russian Revolution
It is perhaps not that hard to imagine the profound impact the Russian Revolution had on the working class movements at the time. In the midst of the great war, not only had the working masses of the Russian Empire risen up and overthrown the once formidable Tsarist police state, but they had set out to construct a socialist society. At the very time when capitalism had plunged the whole of Europe into war on an unprecedented scale and seemed to have little else to offer the working class but more war and poverty, the Russian Revolution opened up a real socialist alternative of peace and prosperity. All those cynics who sneered at the idea that the working people could govern society and who denied the feasibility of communism on the grounds that it was in some way against 'human nature', could now be refuted by the living example of a workers' state in the very process of building socialism.

For many socialists at this time the revolutionary but disciplined politics of Bolsheviks stood in stark contrast to the wheeler-dealing and back-sliding of the parliamentary socialism of the Second International. For all their proclamations of internationalism, without exception the reformist socialist parties of the Second International had lined up behind their respective national ruling classes and in doing so had condemned a whole generation of the working class to the hell and death of the trenches. As a result, with the revolutionary wave that swept Europe following the First World War, hundreds of thousands flocked to the newly formed Communist Parties based on the Bolshevik model, and united within the newly formed Third International directed from Moscow. From its very inception the primary task of the Third International was that of building support for the Soviet Union and opposing any further armed intervention against the Bolshevik Government in Russia on the part of the main Western Powers. After all it must have seemed self-evident then that the defence of Russia was the defence of socialism.

ii The 1930s and World War II
By the 1930s the revolutionary movements that had swept across Europe after the First World War had all but been defeated. The immediate hopes of socialist revolution faded in the face of rising fascism and the looming prospects of a second World War in less than a generation. Yet this did not diminish the attractions of the USSR. On the contrary the Soviet Union stood out as a beacon of hope compared to the despair and stagnation of the capitalist West.

While capitalism had brought about an unprecedented advance in productive capacity, with the development of electricity, washing machines, vacuum cleaners, cars, radios and even televisions, all of which promised to transform the lives of everyone, it had plunged the world into an unprecedented economic slump that condemned millions to unemployment and poverty. In stark contrast to this economic stagnation brought about by the anarchy of market forces, the Soviet Union showed the remarkable possibilities of rational central planning which was in the process of transforming the backward Russian economy. The apparent achievements of 'socialist planning' that were being brought about under Stalin's five-year plans not only appealed to the working class trapped in the economic slump, but also to increasing numbers of bourgeois intellectuals who had now lost all faith in capitalism.

Of course, from its very inception the Soviet Union had been subjected to the lies and distortions put out by the bourgeois propaganda machine and it was easy for committed supporters of the Soviet Union, whether working class militants or intellectuals, to dismiss the reports of the purges and show trials under Stalin as further attempts to discredit both socialism and the USSR. Even if the reports were basically true, it seemed a small price to pay for the huge and dramatic social and economic transformation that was being brought about in Russia, which promised to benefit hundreds of millions of people and which provided a living example to the rest of the world of what could be achieved with the overthrow of capitalism. While the bourgeois press bleated about the freedom of speech of a few individuals, Stalin was freeing millions from a future of poverty and hunger.

Of course not everyone on the left was taken in by the affability of 'Uncle Joe' Stalin. The purge and exile of most of the leaders of the original Bolshevik government, the zig-zags in foreign policy that culminated in the non-aggression pact with Hitler, the disastrous reversals in policy imposed on the various Communist Parties through the Third International, and the betrayal of the Spanish Revolution in 1937, all combined to cast doubts on Stalin and the USSR.

Yet the Second World War served to further enhance the reputation of the Soviet Union, and not only amongst socialists. Once the non-aggression pact with Germany ended in 1940, the USSR was able to enter the war under the banner of anti-fascism and could claim to have played a crucial role in the eventual defeat of Hitler. While the ruling classes throughout Europe had expressed sympathy with fascism, and in the case of France collaborated with the occupying German forces, the Communist Parties played a leading role in the Resistance and Partisan movements that had helped to defeat fascism. As a result, particularly in France, Italy, Yugoslavia and Greece, the Communist Parties could claim to be champions of the patriotic anti-fascist movements, in contrast to most of the Quisling bourgeois parties.

iii The 1950s
The Second World War ended with the USA as the undisputed superpower in the Western hemisphere, but in the USSR she now faced a formidable rival. The USSR was no longer an isolated backward country at the periphery of world capital accumulation centred in Western Europe and North America. The rapid industrialization under Stalin during the 1930s had transformed the Soviet Union into a major industrial and military power, while the war had left half of Europe under Soviet control. With the Chinese Revolution in 1949 over a third of human kind now lived under 'Communist rule'!

Not only this. Throughout much of Western Europe, the very heartlands and cradle of capitalism, Communist Parties under the direct influence of Moscow, or social democratic parties with significant left-wing currents susceptible to Russian sympathies, were on the verge of power. In Britain the first majority Labour government came to power with 48 per cent of the vote, while in Italy and France the Communist Parties won more than a third of the vote in the post-war elections and were only kept from power by the introduction of highly proportional voting systems.

What is more, few in the ruling circles of the American or European bourgeoisie could be confident that the economic boom that followed the war would last long beyond the immediate period of post-war reconstruction. If the period following the previous World War was anything to go by, the most likely prospect was of at best a dozen or so years of increasing prosperity followed by another slump which could only rekindle the class conflicts and social polarization that had been experienced during 1930s. Yet now the Communist Parties, and their allies on the left, were in a much stronger starting position to exploit such social tensions.

While the West faced the prospects of long term economic stagnation, there seemed no limits to the planned economic growth and transformation of the USSR and the Eastern bloc. Indeed, even as the late as the early 1960s Khrushchev could claim, with all credibility for many Western observers, that having established a modern economic base of heavy industry under Stalin, Russia was now in a position to shift its emphasis to the expansion of the consumer goods sector so that it could outstrip the living standards in the USA within ten years!

It was this bleak viewpoint of the bourgeoisie, forged in the immediate post-war realities of the late 1940s and early 1950s, which served as the original basis of the virulent anti-Communist paranoia of the Cold War, particularly in the USA; from the anti-Communist witch-hunts of the McCarthy era to Reagan's 'evil empire' rhetoric in the early 1980s.

For the bourgeoisie, expropriation by either the proletariat or by a Stalinist bureaucracy made little difference. The threat of communism was the threat of Communism. To the minds of the Western bourgeoisie the class struggle had now become inscribed in the very struggle between the two world superpowers: between the 'Free World' and the 'Communist World'.[4]

This notion of the struggle between the two superpowers as being at one and the same time the final titanic struggle between capital and labour was one that was readily accepted by many on the left. For many it seemed clear that the major concessions that had been incorporated into the various post-war settlements had been prompted by the fear that the working class in the West, particularly in Western Europe, would go over to Communism. The post-war commitments to the welfare state, full employment, decent housing and so forth, could all be directly attributed to the bourgeoisie's fear of both the USSR and its allied Communist Parties in the West. Furthermore, despite all its faults, it was the USSR who could be seen to be the champion the millions of oppressed people of the Third World with its backing for the various national liberation movements in their struggles against the old imperialist and colonial powers and the new rapacious imperialism of the multinationals.

In this view there were only two camps: the USSR and the Eastern bloc, which stood behind the working class and the oppressed people of the world, versus the USA and the Western powers who stood behind the bourgeoisie and the propertied classes. Those who refused to take sides were seen as nothing better than petit-bourgeois intellectuals who could only dwell in their utopian abstractions and who refused to get their hands dirty in dealing with current reality.

Of course, by the early 1950s the full horrors and brutality of Stalin's rule had become undeniable. As a result many turned towards reformist socialism embracing the reforms that had been won in the post-war settlement. While maintaining sympathies for the Soviet Union, and being greatly influenced by the notion of socialism as planning evident in the USSR, they sought to distance themselves from the revolutionary means and methods of bolshevism that were seen as the cause of the 'totalitarianism' of Russian Communism. This course towards 'democratic socialism' was to be followed by the Communist Parties themselves 20 years later with the rise of so-called Euro-communism in the 1970s.

While many turned towards 'democratic socialism', and others clung to an unswerving commitment to the Communist Party and the defence of the Soviet Union, there were those who, while accepting the monstrosities of Stalinist and post-Stalinist Russia, refused to surrender the revolutionary heritage of the 1917 Revolution. Recognising the limitations of the post-war settlement, and refusing to forget the betrayals experienced the generation before at the hands of reformist socialism,[5] they sought to salvage the revolutionary insights of Lenin and the Bolsheviks from what they saw as the degeneration of the revolution brought about under Stalin. The obvious inspiration for those who held this position was Stalin's great rival Leon Trotsky and his theory of the Soviet Union as a degenerated workers' state.

Leon Trotsky
It is not that hard to understand why those who had become increasingly disillusioned with Stalin's Russia, but who still wished to defend Lenin and the revolutionary heritage of 1917 should have turned to Leon Trotsky. Trotsky had played a leading role in the revolutionary events of both 1905 and 1917 in Russia. Despite Stalin's attempts to literally paint him out of the picture, Trotsky had been a prominent member of the early Bolshevik Government, so much so that it can be convincingly argued that he was Lenin's own preferred successor.

As such, in making his criticisms of Stalinist Russia, Trotsky could not be so easily dismissed as some bourgeois intellectual attempting to discredit socialism, nor could he be accused of being an utopian ultra-leftist or anarchist attempting to measure up the concrete limitations of the 'actually existing socialism' of the USSR against some abstract ideal of what socialism should be. On the contrary, as a leading member of the Bolshevik Government Trotsky had been responsible for making harsh and often ruthless decisions necessary to maintain the fragile and isolated revolutionary government. Trotsky had not shrunk from supporting the introduction of one-man management and Taylorism, nor had he shied away from crushing wayward revolutionaries as was clearly shown when he led the Red Army detachments to put down both Makhno's peasant army during the civil war and the Kronstadt sailors in 1921. Indeed, Trotsky often went beyond those policies deemed necessary by Lenin and other Bolshevik leaders as was clearly exemplified by his call for the complete militarization of labour.[6]

Yet Trotsky was not merely a practical revolutionary capable of taking and defending difficult decisions. Trotsky had proved to be one of the few important strategic and theoretical thinkers amongst the Russian Bolsheviks who could rival the theoretical and strategic leadership of Lenin. We must now consider Trotsky's ideas in detail and in their own terms, reserving more substantial criticisms until later.

Trotsky and the Orthodox Marxism of the Second International[7]
There is little doubt that Trotsky remained committed throughout his life to the orthodox view of historical materialism which had become established in the Second International. Like most Marxists of his time, Trotsky saw history primarily in terms of the development of the forces of production. While class struggle may have been the motor of history which drove it forward, the direction and purpose of history was above all the development of the productive powers of human labour towards its ultimate goal of a communist society in which humanity as a whole would be free from both want and scarcity.

As such, history was seen as a series of distinct stages, each of which was dominated by a particular mode of production. As the potential for each mode of production to advance the productive forces became exhausted its internal contradictions would become more acute and the exhausted mode of production would necessarily give way to a new more advanced mode of production which would allow the further development of the productive powers of human labour.

The capitalist mode of production had developed the forces of production far beyond anything that had been achieved before. Yet in doing so capitalism had begun to create the material and social conditions necessary for its own supersession by a socialist society. The emergence of modern large scale industry towards the end of the nineteenth century had led to an increasing polarization between a tiny class of capitalists at one pole and the vast majority of proletarians at the other.

At the same time modern large scale industry had begun to replace the numerous individual capitalists competing in each branch of industry by huge joint stock monopolies that dominated entire industries in a particular economy. With the emergence of huge joint stock monopolies and industrial cartels, it was argued by most Marxists that the classical form of competitive capitalism, which had been analysed by Marx in the mid-nineteenth century, had now given way to monopoly capitalism. Under competitive capitalism what was produced and how this produced wealth should be distributed had been decided through the 'anarchy of market forces', that is as the unforeseen outcome of the competitive battle between competing capitalists. With the development of monopoly capitalism, production and distribution was becoming more and more planned as monopolies and cartels fixed in advance the levels of production and pricing on an industry-wide basis.

Yet this was not all. As the economy as a whole became increasingly interdependent and complex the state, it was argued, could no longer play a minimal economic role as it had done during the competitive stage of capitalism. With the development of large scale industry the state increasingly had to intervene and direct the economy. Thus for orthodox Marxism, the development towards monopoly capitalism was at one and the same time a development towards state capitalism.

As economic planning by the monopolies and the state replaced the 'anarchy of market' in regulating the economy, the basic conditions for a socialist society were being put in place. At the same time the basic contradiction of capitalism between the increasingly social character of production and the private appropriation of wealth it produced was becoming increasingly acute. The periodic crises that had served both to disrupt yet renew the competitive capitalism of the early and mid-nineteenth century had now given way to prolonged periods of economic stagnation as the monopolists sought to restrict production in order to maintain their monopoly profits.

The basis of the capitalist mode of production in the private appropriation of wealth based on the rights of private property could now be seen to be becoming a fetter on the free development of productive forces. The period of the transition to socialism was fast approaching as capitalism entered its final stages of decline. With the growing polarization of society, which was creating a huge and organized proletariat, all that would be needed was for the working class to seize state power and to nationalize the major banks and monopolies so that production and distribution could be rationally planned in the interests of all of society rather than in the interests of the tiny minority of capitalists. Once the private ownership of the means of production had been swept away the development of the forces of production would be set free and the way would be open to creating a communist society in which freedom would triumph over necessity.

Of course, like many on the left and centre of the Second International, Trotsky rejected the more simplistic versions of this basic interpretation of historical materialism which envisaged the smooth evolution of capitalism into socialism. For Trotsky the transition to socialism would necessarily be a contradictory and often violent process in which the political could not be simply reduced to the economic.

For Trotsky, the contradictory development of declining capitalism could prompt the revolutionary overthrow of the capitalist class long before the material and social preconditions for a fully developed socialist society had come into being. This possibility of a workers' state facing a prolonged period of transition to a fully formed socialist society was to be particularly important to the revolution in Trotsky's native Russia.

Trotsky and the theory of permanent revolution[8]
While Trotsky defended the orthodox Marxist interpretation of the nature of historical development he differed radically on its specific application to Russia, and it was on this issue that Trotsky made his most important contribution to what was to become the new orthodoxy of Soviet Marxism.

The orthodox view of the Second International had been that the socialist revolution would necessarily break out in one of the more advanced capitalist countries where capitalism had already created the preconditions for the development of a socialist society. In the backward conditions of Russia, there could be no immediate prospects of making a socialist revolution. Russia remained a semi-feudal empire dominated by the all powerful Tsarist autocracy which had severely restricted the development of capitalism on Russian soil. However, in order to maintain Russia as a major military power, the Tsarist regime had been obliged to promote a limited degree of industrialization which had begun to gather pace by the turn of century. Yet even with this industrialization the Russian economy was still dominated by small scale peasant agriculture.

Under such conditions it appeared that the immediate task for Marxists was to hasten the bourgeois-democratic revolution which, by sweeping away the Tsarist regime, would open the way for the full development of capitalism in Russia, and in doing so prepare the way for a future socialist revolution. The question that came to divide Russian Marxists was the precise character the bourgeois-democratic revolution would take and as a consequence the role the working class would have to play within it.

For the Mensheviks the revolution would have to be carried out in alliance with the bourgeoisie. The tasks of the party of the working class would be to act as the most radical wing of the democratic revolution which would then press for a 'minimal programme' of political and social reforms which, while compatible with both private property and the limits of the democratic-bourgeois revolution, would provide a sound basis for the future struggle against the bourgeoisie and capitalism.

In contrast, Lenin and the Bolsheviks believed that the Russian bourgeoisie was far too weak and cowardly to carry out their own revolution. As a consequence, the bourgeois-democratic revolution would have to be made for them by the working class in alliance with the peasant masses. However, in making a revolutionary alliance with the peasantry the question of land reform would have to be placed at the top of the political agenda of the revolutionary government. Yet, as previous revolutions in Western Europe had shown, as soon as land had been expropriated from the landowners and redistributed amongst the peasantry most of the peasants would begin to lose interest in the revolution and become a conservative force. So, having played an essential part in carrying out the revolution, the peasantry would end up blocking its further development and confine it within the limits of a bourgeois-democratic revolution in which rights of private property would necessarily have to be preserved.

Against both these positions, which tended to see the historical development of Russia in isolation, Trotsky insisted that the historical development of Russia was part of the overall historical development of world capitalism. As a backward economy Russia had been able to import the most up to date methods of modern large scale industry 'ready made' without going through the long, drawn out process of their development which had occurred in the more advanced capitalist countries. As a result Russia possessed some of the most advanced industrial methods of production alongside some of the most backward forms of agricultural production in Europe. This combination of uneven levels of economic development meant that the bourgeois-democratic revolution in Russia would be very different from those that had previously occurred elsewhere in Europe.

Firstly, the direct implantation of modern industry into Russia under the auspices of the Tsarist regime had meant that much of Russian industry was either owned by the state or by foreign capital. As a consequence, Russia lacked a strong and independent indigenous bourgeoisie. At the same time, however, this direct implantation of modern large scale industry had brought into being an advanced proletariat whose potential economic power was far greater than its limited numbers might suggest. Finally, by leaping over the intermediary stages of industrial development, Russia lacked the vast numbers of intermediary social strata rooted in small scale production and which had played a decisive role in the democratic-bourgeois revolutions of Western Europe in the eighteenth and nineteenth centuries.

On the basis of this analysis Trotsky concluded as early as 1904 that the working class would have to carry out the democratic-bourgeois revolution in alliance with the peasant masses because of the very weakness of the indigenous Russian bourgeoisie. To this extent Trotsky's conclusions concurred with those of Lenin and the Bolsheviks at that time. However, Trotsky went further. For Trotsky both the heterogeneity and lack of organization amongst the peasant masses meant that, despite their overwhelming numbers, the Russian peasantry could only play a supporting role within the revolution. This political weakness of the peasantry, together with the absence of those social strata based in small scale production, meant that the Russian proletariat would be compelled to play the leading role in both the revolution, and in the subsequent revolutionary government. So, whereas Lenin and the Bolsheviks envisaged that it would be a democratic workers-peasant government that would have to carry out the bourgeois revolution, Trotsky believed that the working class would have no option but to impose its domination on any such revolutionary government.

In such a leading position, the party of the working class could not simply play the role of the left wing of democracy and seek to press for the adoption of its 'minimal programme' of democratic and social reforms. It would be in power, and as such it would have little option but to implement the 'minimal programme' itself. However, Trotsky believed that if a revolutionary government led by the party of the working class attempted to implement a 'minimal programme' it would soon meet the resolute opposition of the propertied classes. In the face of such opposition the working class party would either have to abdicate power or else press head by abolishing private property in the means of production and in doing so begin at once the proletarian-socialist revolution.

For Trotsky it would be both absurd and irresponsible for the party of the working class to simply abdicate power in such a crucial situation. In such a position, the party of the working class would have to take the opportunity of expropriating the weak bourgeoisie and allow the bourgeois-democratic revolution to pass, uninterrupted, into a proletarian-socialist revolution.

Trotsky accepted that the peasantry would inevitably become a conservative force once agrarian reform had been completed. However, he argued that a substantial part of the peasantry would continue to back the revolutionary government for a while, not because of any advanced 'revolutionary consciousness' but due to their very 'backwardness';[9] this, together with the proletariats' superior organization, would give the revolutionary government time. Ultimately, however, the revolutionary government's only hope would be that the Russian revolution would trigger revolution throughout the rest of Europe and the world.

Trotsky and the perils of transition
While Trotsky's theory of permanent revolution may have appeared adventurist, if not a little utopian, to most Russian Marxists when it was first set out in Results and Prospects in 1906, its conclusions were to prove crucial eleven years later in the formation of the new Marxist-Leninist orthodoxy which came to be established with the Russian Revolutions of 1917.

The revolution of February 1917 took all political parties and factions by surprise. Within a few days the centuries old Tsarist regime had been swept away and a situation of dual power established. On the one side stood the Provisional Government dominated by the various liberal bourgeois parties, on the other side stood the growing numbers of workers and peasant soviets. For the Mensheviks the position was clear: the organizations of the working class had to give critical support to the bourgeois Provisional Government while it carried out its democratic programme. In contrast, faced with a democratic-bourgeois Government which they had denied was possible, the Bolsheviks were thrown into confusion. A confusion that came to a virtual split with the return of Lenin from exile at the beginning of April.

In his April Theses Lenin proposed a radical shift in policy, which, despite various differences in detail and emphasis, brought him close to the positions that had been put forward by Trotsky with his theory of permanent revolution. Lenin argued that the Bourgeois Government would eventually prove too weak to carry out its democratic programme. As a consequence the Bolsheviks had to persuade the soviets to overthrow the Provisional Government and establish a workers' and peasants' government which would not only have the task of introducing democratic reform, but which would eventually have to make a start on the road to socialism.

With this radical shift in position initiated by the April Theses, and Trotsky's subsequent acceptance of Lenin's conception of the revolutionary party, the way was opened for Trotsky to join the Bolsheviks; and, together with Lenin, Trotsky was to play a major role not only in the October revolution and the subsequent Bolshevik Government but also in the theoretical elaboration of what was to become known as Marxist-Leninism.

While both Lenin and Trotsky argued that it was necessary to overthrow the Provisional Government and establish a workers' government through a socialist-proletarian revolution, neither Lenin nor Trotsky saw socialism as an immediate prospect in a backward country such as Russia. The proletarian revolution that established the worker-peasant dictatorship was seen as only the first step in the long transition to a fully developed socialist society. As Trotsky was later to argue,[10] even in an advanced capitalist country like the USA a proletarian revolution would not be able to bring about a socialist society all at once. A period of transition would be required that would allow the further development of the forces of production necessary to provide the material basis for a self-sustaining socialist society. In an advanced capitalist country like the USA such a period of transition could take several years; in a country as backward as Russia it would take decades, and ultimately it would only be possible with the material support of a socialist Europe.

For both Lenin and Trotsky then, Russia faced a prolonged period of transition, a transition that was fraught with dangers. On the one side stood the ever present danger of the restoration of capitalism either through a counter-revolution backed by foreign military intervention or through the re-emergence of bourgeois relations within the economy; on the other side stood the danger of the increasing bureaucratization of the workers' state. As we shall see, Trotsky saw the key to warding off all these great perils of Russia's transition to socialism in the overriding imperative of both increasing production and developing the forces of production, while waiting for the world revolution.

In the first couple of years following the revolution many on the left wing of the Bolsheviks, enthused by the revolutionary events of 1917 and no doubt inspired by Lenin's State and Revolution, which restated the Marxist vision of a socialist society, saw Russia as being on the verge of communism. For them the policy that had become known as War Communism, under which money had been effectively abolished through hyper-inflation and the market replaced by direct requisitioning in accordance with the immediate needs of the war effort, was an immediate prelude to the communism that would come with the end of the civil war and the spread of the revolution to the rest of Europe.[11]

Both Lenin and Trotsky rejected such views from the left of the Party. For them the policy of War Communism was little more than a set of emergency measures forced on the revolutionary government which were necessary to win the civil war and defeat armed foreign intervention. For both Lenin and Trotsky there was no immediate prospect of socialism let alone communism[12] in Russia, and in his polemics with the left at this time Lenin argued that, given the backward conditions throughout much of Russia, state capitalism would be a welcome advance. As he states:

Reality tells us that state capitalism would be a step forward. If in a small space of time we could achieve state capitalism, that would be a victory. (Lenin's Collected Works Vol. 27, p. 293)

Trotsky went even further, dismissing the growing complaints from the left concerning the bureaucratization of the state and party apparatus, he argued for the militarization of labour in order to maximize production both for the war effort and for the post-war reconstruction. As even Trotsky's admirers have to admit, at this time Trotsky was clearly on the 'authoritarian wing' of the party, and as such distinctly to the right of Lenin.[13]

It is not surprising, given that he had seen War Communism as merely a collection of emergency measures rather than the first steps to communism, that once the civil war began to draw to a close and the threat of foreign intervention began to recede, Trotsky was one of the first to advocate the abandonment of War Communism and the restoration of money and market relations. These proposals for a retreat to the market were taken up in the New Economic Policy (NEP) that came to be adopted in 1921.

The NEP and the Left Opposition
By 1921 the Bolshevik Government faced a severe political and economic crisis. The policy of forced requisitioning had led to a mass refusal by the peasantry to sow sufficient grain to feed the cities. Faced with famine, thousands of workers simply returned to their relatives in the countryside. At the same time industry had been run into the ground after years of war and revolution. In this dire economic situation, the ending of the civil war had given rise to mounting political unrest amongst the working class, both within and outside the Party, which threatened the very basis of the Bolshevik Government. Faced with political and economic collapse the Bolshevik leadership came to the conclusion that there was no other option but make a major retreat to the market. The Bolshevik Government therefore abandoned War Communism and adopted the New Economic Policy (NEP) which had been previously mooted by Trotsky.

Under the NEP, state industry was broken up in to large trusts which were to be run independently on strict commercial lines. At the same time, a new deal was to be struck with the peasantry. Forced requisitioning was to be replaced with a fixed agricultural tax, with restrictions lifted on the hiring of labour and leasing of land to encourage the rich and middle-income peasants to produce for the market.[14] With the retreat from planning, the economic role of the state was to be mainly restricted to re-establishing a stable currency through orthodox financial polices and a balanced state budget.

For Trotsky, the NEP, like War Communism before it, was a policy necessary to preserve the 'workers' state' until it could be rescued by revolution in Western Europe. As we have seen, Trotsky had, like Lenin, foreseen an alliance with the peasantry as central to sustaining a revolutionary government, and the NEP was primarily a means of re-establishing the workers-peasants alliance which had been seriously undermined by the excesses of War Communism. However, as we have also seen, Trotsky had far less confidence in the revolutionary potential of the peasantry than Lenin or other Bolshevik leaders. For Trotsky, the NEP, by encouraging the peasants to produce for the market, held the danger of creating a new class of capitalist farmers who would then provide the social basis for a bourgeois counter-revolution and the restoration of private property. As a consequence, from an early stage, Trotsky began to advocate the development of comprehensive state planning and a commitment to industrialization within the broad framework of the NEP.

Although Trotsky's emphasis on the importance of planning and industrialization left him isolated within the Politburo, it placed him alongside Preobrazhensky at the head of a significant minority within the wider leadership of the Party and state apparatus which supported such a shift in direction of the NEP, and which became known as the Left Opposition. As a leading spokesman for the Left Opposition, and at the same time one of the foremost economists within the Bolshevik Party, Preobrazhensky came to develop the Theory of Primitive Socialist Accumulation which served to underpin the arguments of the Left Opposition, including Trotsky himself.

Preobrazhensky's theory of primitive accumulation
As we have already noted, for the orthodox Marxism of the Second International whereas capitalism was characterized by the operation of market forces - or in more precise Marxist terms the 'law of value' - socialism would be regulated by planning. From this Preobrazhensky argued that the transition from capitalism to socialism had to be understood in terms of the transition from the regulation of the economy through the operation of the law of value to the regulation of the economy through the operation of the 'law of planning'. During the period of transition both the law of value and the law of planning would necessarily co-exist, each conditioning and competing with the other.

Under the New Economic Policy, most industrial production had remained under state ownership and formed the state sector. However, as we have seen, this state sector had been broken up into distinct trusts and enterprises which were given limited freedom to trade with one another and as such were run on a profit-and-loss basis. To this extent it could be seen that the law of value still persisted within the state sector. Yet for Preobrazhensky, the power of the state to direct investment and override profit-and-loss criteria meant that the law of planning predominated in the state sector. In contrast, agriculture was dominated by small-scale peasant producers. As such, although the state was able to regulate the procurement prices for agricultural produce, agriculture was, for Preobrazhensky, dominated by the law of value.

From this Preobrazhensky argued that the struggle between the law of value and the law of planning was at the same time the struggle between the private sector of small-scale agricultural production and the state sector of large-scale industrial production. Yet although large-scale industrial production was both economically and socially more advanced than that of peasant agriculture the sheer size of the peasant sector of the Russian economy meant that there was no guarantee that the law of planning would prevail. Indeed, for Preobrazhensky, under the policy of optimum and balanced growth advocated by Bukharin and the right of the Party and sanctioned by the Party leadership, there was a real danger that the state sector could be subordinated to a faster growing agricultural sector and with this the law of value would prevail.

To avert the restoration of capitalism Preobrazhensky argued that the workers' state had to tilt the economic balance in favour of accumulation within the state sector. By rapid industrialization the state sector could be expanded which would both increase the numbers of the proletariat and enhance the ascendancy of the law of planning. Once a comprehensive industrial base had been established, agriculture could be mechanized and through a process of collectivization agriculture could be eventually brought within the state sector and regulated by the law of planning.

Yet rapid industrialization required huge levels of investment which offered little prospects of returns for several years. For Preobrazhensky there appeared little hope of financing such levels of investment within the state sector itself without squeezing the working class - an option that would undermine the very social base of a workers' government. The only option was to finance industrial investment out of the economic surplus produced in the agricultural sector by the use of tax and pricing policies.

This policy of siphoning off the economic surplus produced in the agricultural sector was to form the basis for a period of Primitive Socialist Accumulation. Preobrazhensky argued that just as capitalism had to undergo a period primitive capitalist accumulation, in which it plundered pre-capitalist modes of production, before it could establish itself on a self-sustaining basis, so, before a socialist society could establish itself on a self-sustaining basis, it too would have to go through an analogous period of primitive socialist accumulation, at least in a backward country such as Russia.

The rise of Stalin
With the decline in Lenin's health and his eventual death in 1924, the question of planning and industrialization became a central issue in the power struggle for the succession to the leadership of the Party. Yet while he was widely recognized within the Party as Lenin's natural successor, and as such had been given Lenin's own blessing, Trotsky was reluctant to challenge the emerging troika of Stalin, Kamenev and Zinoviev, who, in representing the conservative forces within the state and Party bureaucracy, sought to maintain the NEP as it was. For Trotsky, the overriding danger was the threat of a bourgeois counter-revolution. As a result he was unwilling to split the Party or else undermine the 'centrist' troika and allow the right of the Party to come to power, enabling the restoration of capitalism through the back door.

Furthermore, despite Stalin's ability repeatedly to out-manoeuvre both Trotsky and the Left Opposition through his control of the Party bureaucracy, Trotsky could take comfort from the fact that after the resolution of the first 'scissors crisis'[15] in 1923 the leadership of the Party progressively adopted a policy of planning and industrialization, although without fully admitting it.

By 1925, having silenced Trotsky and much of the Left Opposition, Stalin had consolidated sufficient power to oust both Kamenev and Zinoviev[16] and force them to join Trotsky in opposition. Having secured the leadership of the Party, Stalin now openly declared a policy of rapid industrialization under the banner of 'building socialism in one country' with particular emphasis on building up heavy industry. Yet at first Stalin refused to finance such an industrialization strategy by squeezing the peasants. Since industrialization had to be financed from within the industrial state sector itself, investment in heavy industry could only come at the expense of investment in light industry which produced the tools and consumer goods demanded by the peasantry. As a result a 'goods famine' emerged as light industry lagged behind the growth of peasant incomes and the growth of heavy industry. Unable to buy goods from the cities the peasants simply hoarded grain so that, despite record harvests in 1927 and 1928, the supply of food sold to the cities fell dramatically.

This crisis of the New Economic Policy brought with it a political crisis within the leadership of the Party and the State. All opposition within the Party had to be crushed. Trotsky and Zinoviev were expelled from the Party, with Trotsky eventually being forced into exile, leaving Stalin to assume supreme power in both the Party and the state. To consolidate and sustain his power Stalin was obliged to launch a reign of terror within the Communist Party. This terror culminated in a series of purges and show trials in the 1930s which led to the execution of many of the leading Bolsheviks of the revolution.

Perhaps rather ironically, while Stalin had defended the New Economic Policy to the last, he now set out to resolve the economic crisis by adopting the erstwhile policies of the Left Opposition albeit pushing them to an unenvisaged extreme.[17] Under the five year plans, the first of which began in 1928, all economic considerations were subordinated to the overriding objective of maximizing growth and industrialization. Increasing physical output as fast as possible was now to be the number one concern, with the question of profit and loss of individual enterprises reduced to a secondary consideration at best. At the same time agriculture was to be transformed through a policy of forced collectivization. Millions of peasants were herded into collectives and state farms which, under state direction, could apply modern mechanized farming methods.

It was in the face of this about turn in economic policy, and the political terror that accompanied it, that Trotsky was obliged to develop his critique of Stalinist Russia and with this the fate of the Russian Revolution. It was now no longer sufficient for Trotsky to simply criticize the economic policy of the leadership as he had done during the time of the Left Opposition. Instead Trotsky had to broaden his criticisms to explain how the very course of the revolution had ended up in the bureaucratic nightmare that was Stalinist Russia. Trotsky's new critique was to find its fullest expression in his seminal work The Revolution Betrayed which was published in 1936.

Trotsky and the Leninist conception of party, class and the state
As we shall see, in The Revolution Betrayed, Trotsky concludes that, with the failure of the revolution elsewhere in the world, the workers' state established by the Russian Revolution had degenerated through the bureaucratization of both the Party and the state. To understand how Trotsky was able to come to this conclusion while remaining within Marxist and Leninist orthodoxy, we must first consider how Trotsky appropriated and developed the Leninist conception of the state, party and class.

From almost the very beginning of the Soviet Union there had been those both inside and outside the Party who had warned against the increasing bureaucratization of the revolution. In the early years, Trotsky had little sympathy for such complaints concerning bureaucratization and authoritarianism in the Party and the state. At this time, the immediate imperative of crushing the counter-revolutionary forces, and the long-term aim of building the material basis for socialism, both demanded a strong state and a resolute Party which were seen as necessary to maximize production and develop the productive forces. For Trotsky at this time, the criticisms of bureaucratization and authoritarianism, whether advanced by those on the right or the left, could only serve to undermine the vital role of the Party and the state in the transition to socialism.

However, having been forced into opposition and eventual exile Trotsky was forced to develop his own critique of the bureaucratization of the revolution, but in doing so he was anxious to remain within the basic Leninist conceptions of the state, party and class which he had resolutely defended against earlier critics.

Following Engels, theorists within the Second International had placed much store in the notion that what distinguished Marxism from all former socialist theories was that it was neither an utopian socialism nor an ethical socialism but a scientific socialism. As a consequence, Marxism tended to be viewed as a body of positive scientific knowledge that existed apart from the immediate experiences and practice of the working class. Indeed, Marx's own theory of commodity fetishism seemed to suggest that the social relations of capitalist society inevitably appeared in forms that served to obscure their own true exploitative nature.[18] So, while the vast majority of the working class may feel instinctively that they were alienated and exploited, capitalism would still appear to them as being based on freedom and equality. Thus, rather than seeing wage-labour in general as being exploitative, they would see themselves being cheated by a particular wage deal. So, rather than calling for the abolition of wage-labour, left to themselves the working class would call for a 'fair day's pay for a fair day's work'.

Trapped within the routines of their everyday life, the majority of the working class would not be able by themselves to go beyond such a sectional and trade union perspective. Hence one of the central tasks of a workers' party was to educate the working class in the science of Marxism. It would only be through a thorough knowledge of Marxism that the working class would be able to reach class consciousness and as such be in a position to understand its historic role in overthrowing capitalism and bringing about a socialist society.

In adapting this orthodox view of the Party to conditions prevailing in Tsarist Russia Lenin had pushed it to a particular logical extreme. It was in What is to be Done? that Lenin had first set out his conception of a revolutionary party based on democratic centralism. In this work Lenin had advocated a party made up of dedicated and disciplined professional revolutionaries in which, while the overall policy and direction of the party would be made through discussion and democratic decision, in the everyday running of the party the lower organs of the party would be completely subordinated to those of the centre. At the time, Trotsky had strongly criticized What is to be Done?, arguing that Lenin's conception of the revolutionary party implied the substitution of the party for the class.

Indeed, Trotsky's rejection of Lenin's conception of the party has often been seen as the main dividing line between Lenin and Trotsky right up until their eventual reconciliation in the summer of 1917. Thus, it has been argued that, while the young Trotsky had sided with Lenin and the Bolsheviks against the Mensheviks over the crucial issue of the need for an alliance with the peasantry, he had been unable to accept Lenin's authoritarian position on the question of organization. It was only in the revolutionary situation of 1917 that Trotsky had come over to Lenin's viewpoint concerning the organization of the Party. However, there is no doubt that Trotsky accepted the basic premise of What is to be Done?, which was rooted in Marxist orthodoxy, that class consciousness had to be introduced from outside the working class by intellectuals educated in the 'science of Marxism'. There is also little doubt that from an early date Trotsky accepted the need for a centralized party. The differences between Lenin and Trotsky over the question of organization were for the most part a difference of emphasis.[19] What seems to have really kept Lenin and Trotsky apart for so long was not so much the question of organization but Trotsky's 'conciliationism'. Whereas Lenin always argued for a sharp differentiation between the Bolsheviks and the Mensheviks to ensure political and theoretical clarity, Trotsky had always sought to re-unite the two wings of Russian social democracy.

To some extent Lenin's formulation of democratic centralism in What is to be Done? was determined by the repressive conditions then prevailing in Tsarist Russia; but it was also premised on the perceived cultural backwardness of the Russian working class which, it was thought, would necessarily persist even after the revolution. Unlike Germany, the vast majority of the Russian working class were semi-literate and uneducated. Indeed, many, if not a majority of the Russian working class were fresh out of the countryside and, for socialist intellectuals like Lenin and Trotsky, retained an uncouth parochial peasant mentality. As such there seemed little hope of educating the vast majority of the working class beyond a basic trade union consciousness.

However, there were a minority within the working class, particularly among its more established and skilled strata, who could, through their own efforts and under the tutelage of the party, attain a clear class consciousness. It was these more advanced workers, which, organized through the party, would form the revolutionary vanguard of the proletariat that would be the spearhead of the revolution. Of course this was not to say that rest of the working class, or even the peasantry, could not be revolutionary. On the contrary, for Lenin and the Bolsheviks, revolution was only possible through the mass involvement of the peasants and the working class. But the instinctive revolutionary will of the masses had to be given leadership and direction by the party. Only through the leadership of the proletarian vanguard organized in a revolutionary party would it be possible to mediate and reconcile the immediate and often competing individual and sectional interests of workers and peasants with the overall and long-term interests of the working class in building socialism.

For Lenin, the first task in the transition to socialism had to be the seizure of state power. During his polemics against those on the right of the Bolshevik Party who had, during the summer of 1917, feared that the overthrow of the bourgeois Provisional Government and the seizure of state power might prove premature, Lenin had returned to Engels' conception of the state in the stage of socialism.

Against both Lassalle's conception of state socialism and the anarchists' call for the immediate abolition of the state, Engels had argued that, while it would be necessary to retain the state as means of maintaining the dictatorship of the working class until the danger of counter-revolution had been finally overcome, a socialist state would be radically different from that which had existed before. Under capitalism the state had to stand above society in order both to mediate between competing capitalist interests and to impose the rule of the bourgeois minority over the majority of the population. As a result, the various organs of the state, such as the army, the police and the administrative apparatus had to be separated from the population at large and run by a distinct class of specialists. Under socialism the state would already be in the process of withering away with the breaking down of its separation from society. Thus police and army would be replaced by a workers' militia, while the state administration would be carried out increasingly by the population as a whole.

Rallying the left wing of the Bolshevik Party around this vision of socialism, Lenin had argued that with sufficient revolutionary will on the part of the working masses and with the correct leadership of the party it would be possible to smash the state and begin immediately the construction of Engels' 'semi-state' without too much difficulty.[20] Already the basis for the workers' and peasants' state could be seen in the mass organizations of the working class - the factory committees, the soviets and the trade unions, and by the late summer of 1917 most of these had fallen under the leadership of the Bolsheviks.[21] Yet this conception of the state which inspired the October revolution did not last long into the new year.

Confronted by the realities of consolidating the power of the new workers' and peasants' government in the backward economic and cultural conditions then prevailing in Russia, it was not long before Lenin was obliged to reconsider his own over-optimistic assessments for the transition to socialism that he had adopted just prior to the October revolution. As a result, within weeks of coming to power it became clear to Lenin that the fledging Soviet State could not afford the time or resources necessary to educate the mass of workers and peasants to the point where they could be drawn into direct participation in the administration of the state. Nor could the economy afford a prolonged period of disruption that would follow the trials and errors of any experiment in workers' self-management. Consequently, Lenin soon concluded that there could be no question of moving immediately towards Engels' conception of a 'semi-state', which after all had been envisaged in the context of a socialist revolution being made in an advanced capitalist country. On the contrary, the overriding imperative of developing the forces of production, which alone could provide the material and cultural conditions necessary for a socialist society, demanded not a weakening, but a strengthening of the state - albeit under the strict leadership of the vanguard of the proletariat organized within the party.

So now, for Lenin, administrative and economic efficiency demanded the concentration of day to day decision making into the hands of specialists and the adoption of the most advanced methods of 'scientific management'.[22] The introduction of such measures as one-man management and the adoption of methods of scientific management not only undermined workers' power and initiative over the immediate process of production, but also went hand-in-hand with the employment of thousands of former capitalist managers and former Tsarist administrators.

Yet, while such measures served to re-impose bourgeois relations of production, Lenin argued that such capitalist economic relations could be counter-balanced by the political control exercised over the state-industrial apparatus by the mass organizations of the working class under the leadership of the Party. Indeed, as we have already noted, against the objections from the left that his policies amounted to the introduction not of socialism but of state capitalism, Lenin, returning to the orthodox formulation, retorted that the basis of socialism was nothing more than 'state capitalism under workers' control', and that, given the woeful backwardness of the Russian economy, any development of state capitalism could only be a welcome advance.

As the economic situation deteriorated with the onset of the civil war and the intervention of the infamous 'fourteen imperialist armies',[23] the contradictions between the immediate interests of the workers and peasants and those of the socialist revolution could only grow. The need to maintain the political power of the Party led at first to the exclusion of all other worker and peasant parties from the workers' and peasants' government and then to the extension of the Red Terror, which had originally been aimed at counter-revolutionary bourgeois parties, to all those who opposed the Bolsheviks. At the same time power was gradually shifted from the mass organizations of the working class and concentrated within the central organs of the Party.[24] As a result it was the Party which had to increasingly serve as the check on the state and the guarantee of its proletarian character.

The degeneration of the revolution
There is no doubt that Trotsky shared such Leninist conceptions concerning the state, party and class, and with them the view that the transition to socialism required both the strengthening of the state and the re-imposition of capitalist relations of production. Indeed, this perspective can be clearly seen in the way he carried out the task of constructing the Red Army.[25] What is more, Trotsky did not balk at the implications of these Leninist conceptions and the policies that followed from them. Indeed, Trotsky fully supported the increasing suppression of opposition both inside and outside the Party which culminated with his backing for the suspension of Party factions at the Tenth Party Congress in 1921 and his personal role in crushing the Kronstadt rebellion in February 1921.

It can be argued that Trotsky was fully implicated in the Leninist conceptions and policies, and that such conceptions and policies provided both the basis and precedent for Stalinism and the show trials of the 1930s. However, for Trotsky and his followers there was a qualitative difference between the consolidation of power and repression of opposition that were adopted as temporary expedients made necessary due to the civil war and the threat of counter-revolution, and the permanent and institutional measures that were later adopted by Stalin. For Trotsky, this qualitative difference was brought about by the process of bureaucratic degeneration that arose with the failure of world revolution to save the Soviet Revolution from isolation.

In his final years Lenin had become increasingly concerned with the bureaucratization of both the state and Party apparatus. For Lenin, the necessity of employing non-proletarian bourgeois specialists and administrators, who would inevitably tend to work against the revolution whether consciously or unconsciously, meant that there would be a separation of the state apparatus from the working class and with this the emergence of bureaucratic tendencies. However, as a counter to these bureaucratic tendencies stood the Party. The Party, being rooted in the most advanced sections of the working class, acted as a bridge between the state and the working class, and, through the imposition of the 'Party Line', ensured the state remained essentially a 'workers' and peasants' state'.

Yet the losses of the civil war left the Party lacking some of its finest working class militants, and those who remained had been drafted into the apparatus of the Party and state as full time officials. At the same time Lenin feared that more and more non-proletarian careerist elements were joining the Party. As a result, shortly before his death Lenin could complain that only 10 per cent of the Party membership were still at the factory bench. Losing its footing in the working class Lenin could only conclude that the Party itself was becoming bureaucratized.

In developing his own critique of Stalin, Trotsky took up these arguments which had been first put forward by Lenin. Trotsky further emphasized that, with the exhaustion of revolutionary enthusiasm, by the 1920s even the most advanced proletarian elements within the state and Party apparatus had begun to succumb to the pressures of bureaucratization. This process was greatly accelerated by the severe material shortages which encouraged state and Party officials, of whatever class origin, to place their own collective and individual interests as part of the bureaucracy above those of working masses.

For Trotsky, the rise to power of the troika of Stalin, Kamenev and Zinoviev following Lenin's death marked the point where this process of bureaucratization of the state and Party had reached and ensnared the very leadership of the Party itself.[26] Drawing a parallel with the course of the French Revolution, Trotsky argued that this point represented the transition to the Russian Thermidor - a period of conservative reaction arising from the revolution itself. As such, for Trotsky, Russia remained a workers' state, but one whose proletarian-socialist policies had now become distorted by the privileged and increasingly conservative strata of the proletariat that formed the bureaucracy, and through which state policy was both formulated and implemented.

For Trotsky, these conservative-bureaucratic distortions of state policy were clearly evident in both the internal and external affairs. Conservative-bureaucratic distortions were exemplified in foreign policy by the abandonment of proletarian internationalism, which had sought to spread the revolution beyond the borders of the former Russian empire, in favour of the policy of 'building socialism in one country'. For the bureaucracy the disavowal of proletarian internationalism opened the way for the normalization of diplomatic relations with the capitalist powers throughout the rest of the world. For Trotsky, the abandonment of proletarian internationalism diminished the prospects of world revolution which was ultimately the only hope for the Russian Revolution if it was to avoid isolation in a capitalist world and further degeneration culminating in the eventual restoration of capitalism in Russia. Domestically, the policy of building socialism in one country had its counterpart in the persistence of the cautious economic policies of balanced and optimal growth represented by the continuation of the NEP, which for Trotsky, as we have already seen, threatened the rise of a new bourgeoisie amongst the rich peasantry and with this the danger of capitalist restoration.

However, just as the Thermidor period of conservative reaction had given way to the counter-revolution of Napoleon Bonaparte which imposed the dictatorship of one man, so the Russian Thermidor, which ended with the crisis in the NEP, gave rise to Stalin as the sole dictator. For Trotsky then, the dictatorship of Stalin represented a 'Bonapartist counter-revolution' from within the revolution itself, which marked the final stage in the degeneration of the Russian workers' state. Yet, just as Bonaparte's counter-revolution was a political revolution which while restoring the monarchy did so by preserving the transformation of property relations achieved by the revolution, so likewise Stalin's counter-revolution preserved the fundamental gains of the Russian Revolution in that it maintained public ownership of the means of production along with state planning. Indeed, while Trotsky dismissed Stalin's claims that, with the collectivization of agriculture and introduction of comprehensive centralized planning of the five year plans, Russia had become fully socialist, he accepted that these were major achievements in the transition towards socialism.

So, for Trotsky, however degenerated Stalin's Russia had become, it remained a workers' state and as such preserved the fundamental gains of the revolution. By preserving public ownership of the means of production and state planning, which opened the way for the rapid development of the forces of production, Stalin's regime could be seen to develop the objective social and material conditions necessary for socialism. As such, for all its crimes, Stalin's Russia objectively represented a crucial historic advance over all capitalist countries. Therefore, for Trotsky, Stalin's Russia demanded critical support from all revolutionaries.[27]

Yet, as we shall see, the increasing tension between the barbarism of Stalin's regime, which condemned millions of workers, peasants and revolutionaries (including many of Trotsky's own former comrades) to death or hard labour, and Trotsky's insistence of its objectively progressive character, prompted many, including Trotsky's own ardent followers, to question his notion that Stalinist Russia was a degenerated workers' state.

The obvious objection was that the totalitarianism of Stalin's regime was virtually indistinguishable from that of Hitler's which had also gone a long way towards nationalizing the economy and bring it under state planning. Trotsky dismissed any resemblance between Stalin's Russia and Hitler's Germany as being merely superficial. For Trotsky, during its period of decline capitalism would necessarily be forced into an increasing statification of the economy which would give rise to authoritarian and fascist regimes. This process towards state capitalism had already reached an extreme in such countries as Italy under Mussolini and Germany under Hitler but could also be seen in the growing statism and authoritarianism in other 'democratic' countries such as France. However, such statification of the economy and the growth in public ownership of the means of production was being carried out as a last ditch effort to preserve its opposite, private property. Stalin's Russia, on the other hand, was developing on the very basis of the public ownership of the means of production itself. Stalinist Russia had crossed the historical Rubicon of the socialist revolution. Thus, while it may have appeared that Stalin's Russia was similar to that of Hitler's Germany, for Trotsky they were essentially very different.

Bureaucracy and class
A more penetrating objection to Trotsky's critical defence of Stalinist Russia concerned the question of the nature of the Stalinist bureaucracy. Against Trotsky, it could be argued that under Stalin, if not before, the Soviet bureaucracy had established itself as a new exploitative ruling class. If this was the case then it could no longer be maintained that Stalinist Russia was in any sense a workers' state, however degenerated. Further, if the bureaucracy was not simply a strata of the proletariat that had become separated from the rest of its class, but a class in itself, it could no longer be claimed that the bureaucracy ultimately ruled in the interests of the working class, albeit in a distorted manner. The bureaucracy could only rule in its own narrow and minority class interests. As a result it could be concluded that either Russia had reverted back to a form of state capitalism, or else had given rise to a new unknown mode of production; either way there could be no longer any obligation for revolutionaries to give Stalin's monstrous regime 'critical support'.

Given that this charge that the Stalinist's bureaucracy constituted a distinct exploitative class threatened to undermine the very basis of his theory of Russia as a degenerated workers' state, Trotsky was at great pains to refute it. Of course, it was central to Trotsky's critique of the Soviet Union under Stalin that the bureaucracy had emerged as a distinct social group that had come to dominate the working class. Indeed, as Trotsky himself put it, the bureaucracy constituted 'a commanding and privileged social stratum'. Yet despite this Trotsky denied that the bureaucracy could in any way constitute a distinct exploitative class.

In denying that the Soviet bureaucracy constituted a distinct social class Trotsky was able to directly invoke the orthodox Marxist conceptions of class and bureaucracy. In doing so Trotsky was able to claim at the same time that he was defending Marxism itself against the revisionist arguments of his opponents; but, as we shall see, by invoking the authority of Marx, Trotsky was spared the task of setting out the basis of his own conception of the nature of class and bureaucracy with any degree of clarity.

For both Marx and Engels social classes were constituted through the social relations that necessarily arose out of the particular mode of production upon which a given society was based. Indeed, for Marx and Engels, the specific nature of any class society was determined by the manner in which the exploitative classes extracted surplus labour from the direct producers.

For orthodox Marxism, such social relations were interpreted primarily in terms of property relations.[28] Hence, within the capitalist mode of production the essential social relations of production were seen primarily in terms of the private ownership of the means of production. While the capitalist class was constituted through its private ownership of the means of production, the working class was constituted through its non-ownership of the means of production. Being excluded from the ownership of the means of production, the working class, once it has consumed its means of subsistence, had no option but to sell its labour power to the capitalist class if it was to survive. On the other hand, in buying the labour power of the working class the capitalist class obtained the rights of possession of all the wealth that the working class created with its labour. Once it had paid the costs of production, including the costs of reproducing labour-power, the capitalist class was left in possession of the surplus-labour created by the working class, as the direct producers, in the specific social form of surplus-value.[29]

On the basis of this orthodox interpretation of the nature of class, backed up by various political writings of both Marx and Engels, it was not hard to argue that, at least within capitalism, the state bureaucracy could not constitute a distinct social class. The state bureaucracy could clearly be seen to stand outside the immediate process of production and circulation, and as such was not directly constituted out of the social relations of production. Even insofar as the state was able to go beyond its mere function as the 'executive committee of the bourgeoisie' so that the state bureaucracy could act as a distinct social group which was able to pursue its own ends and interests, the state bureaucracy still did not constitute a distinct class since its social position was not based in private property but in its extra-economic political and administrative functions. So, even insofar as the state bureaucracy was able to appropriate a share in the surplus-value it did so not by virtue of its private ownership of the means of production or capital but through extra-economic means such as taxation and tariffs.

So, at least under capitalism, it seemed clear that the state bureaucracy could not constitute a distinct social class. But what of the transition from capitalism to socialism? For Trotsky, following Marxist orthodoxy, the question was clear cut. The revolution of 1917 had swept away the private ownership of the means of production and with it the basis for the exploitation of 'man by man' which had been perfected under capitalism. With the nationalization of the means of production and the introduction of social planning there was no basis for the state bureaucracy to exist as an exploitative class.

Trotsky made clear his position at the very outset of his consideration of the social position of the Soviet bureaucracy:

Classes are characterized by their position in the social system of economy, and primarily by their relation to the means of production. In civilized societies, property relations are validated by laws. The nationalization of land, the means of industrial production, transport and exchange, together with the monopoly of foreign trade, constitute the basis of the social structure. Through these relations, established by the proletarian revolution, the nature of the Soviet Union as a proletarian state is for us basically defined. (The Revolution Betrayed, p. 248)

To this extent Trotsky's position is little different from that of Stalin: the abolition of private property ends the exploitation of 'man by man'.[30]

Of course, Trotsky could not simply remain content with Stalin's denial that the Soviet bureaucracy constituted an exploitative class. Indeed Stalin's position even denied the existence of the bureaucracy as a distinct social group. To make his critique of Stalin's Russia, Trotsky had to look beyond the formal and judicial transformation of property relations brought about by the Russian Revolution in 1917. Trotsky recognized that, although the nationalization decrees that followed the October revolution had formally and juridically transferred the ownership of the means of production from the hands of private capitalists to society as a whole, this was not the same as the real transfer of the ownership to the people as a whole. The nationalization of production had merely transferred the ownership of the means of production from the capitalist to the state, which, while a necessary step in the transition to socialism, was not the same as real public ownership. For Trotsky, in a real sense the 'state owns the economy and the bureaucracy owns the state'.

As Trotsky himself points out, the real property relations, as opposed to the formal and juridical property relations, is a social reality acutely apparent to the Soviet worker:

"The worker in our country is not a wage slave and is not a seller of a commodity called labour-power. He is a free workman" (Pravda). For the present period this unctuous formula is unpermissible bragging. The transfer of the factories to the state changed the situation of the worker only juridically. In reality, he is compelled to live in want and work a definite amount of hours for a definite wage. Those hopes which the worker formerly placed in the party and the trade unions, he transferred after the revolution to the state created by him. But the useful functioning of this implement turned out to be limited by the level of technique and culture. In order to raise this level, the new state resorted to the old methods of pressure upon the muscles and nerves of the worker. There grew up a corps of slave drivers. The management of industry became super-bureaucratic. The workers lost all influence whatever upon management of the factory. With piecework payment, hard conditions of material existence, lack of free movement, with terrible police repression penetrating the life of every factory, it is hard indeed for the worker to feel himself a free workman. (The Revolution Betrayed, p. 241)

For Trotsky, the overriding need to develop the productive forces in the backward conditions prevailing in Russia required the state ownership of production. Through the state the Soviet bureaucracy had, in a sense, taken real possession of the means of production and as such had come to constitute a distinct social group. Just as Marx and Engels had observed that under capitalism the state bureaucracy could in certain situations obtain a relative degree of autonomy from the bourgeois ruling class, so in the transition to socialism the state bureaucracy was able to obtain a relative autonomy from the proletarian ruling class. Indeed, Trotsky argues that the autonomy of the Soviet bureaucracy is all the greater than its counterparts under capitalism since the working class is not an inherently dominating class.

Thus, while the revolution had formally freed the worker from the dictates of private property and made him a co-owner of the means of production, in reality the worker found himself in a situation that seemed little different from that under capitalism. Indeed, subordinated to the demands of the state bureaucracy the worker may well feel just as exploited as he had been under capitalism. But for Trotsky, although the worker may subjectively feel exploited, objectively he was not. The plight of the workers' situation was not due to exploitation but to the objective need to develop the forces of production. Of course, like all bureaucracies the Soviet bureaucracy could abuse its position to obtain material and personal advantages and this could reinforce the workers' perception that the bureaucracy was exploiting them. But for Trotsky such material and personal advantages were not due to the exploitation of the working class by the state bureaucracy, but due to the bureaucracy's privileged position within the workers' state.

Hence while the nationalization of the means of production by the workers' state had ended capitalist relations of production and thereby ended exploitation, the backward conditions in Russia had allowed the Soviet bureaucracy to gain a privileged and commanding position and maintain bourgeois norms of distribution. The bureaucracy no more exploited the working class than monopolist capitalists exploited other capitalists by charging monopoly prices. All the Soviet bureaucracy did was redistribute the surplus-labour of society in its own favour. This is perhaps best illustrated by Trotsky's own analogy with share-holding in a market economy:

If we translate socialist relations, for illustration, into the language of the market, we may represent the citizen as a stockholder in a company which owns the wealth of country. If property belonged to all the people, that would presume equal distribution of "shares", and consequently a right to the same dividend for all "shareholders". The citizens participate in the national enterprise, however, not only as "shareholders", but also as producers. On the lower stage of communism, which we have agreed to call socialism, payments for labour are still made according to bourgeois norms - that is, dependence upon skill and intensity etc. The theoretical income of each citizen is thus composed of two parts, a + b - that is, dividend plus wages. The higher the technique and the more complete the organization of industry, the greater is the place occupied by a as against b, and the less is the influence of individual differences of labour upon the standard of living. From the fact that wage differences in the Soviet Union are not less, but greater than in capitalist countries, it must be inferred that the shares of the Soviet citizen are not equally distributed, and that in his income the dividend as well as the wage payment are unequal. Whereas the unskilled labour receives only b, the minimum payment which under similar conditions he would receive in a capitalist enterprise, the Stakhanovist or bureaucrat receives 2a + b, or 3a + b, etc., while b also in turn may become 2b, 3b, etc. The differences in income are determined, in other words, not only by differences of individual productiveness, but also by a masked appropriation of the products of labour of others. The privileged minority of shareholders is living at the expense of the deprived majority. (The Revolution Betrayed, p. 240).

So, for Trotsky, insofar as the revolution of 1917 had abolished the private ownership of the means of production the basis for socialist relations of production had been established. However, in the backward conditions in which the revolution had been made, bourgeois norms of distribution still persisted and had become exacerbated by the growing power of the state bureaucracy in such conditions.

Trotsky and the question of transition
Trotsky's attempt to develop a Marxist critique of Stalin's Russia, while at the same time denying that the Soviet bureaucracy constituted an exploitative class, was far from being unproblematic. In developing this critique of the Soviet Union through his polemics against Stalinists on the one hand, and the left communists and some of his own followers on the other, Trotsky had little time to present in detail the theoretical foundations of his arguments. Instead, as we have already noted, Trotsky for the most part appealed to the commonly accepted tenets of orthodox Marxism. As a consequence Trotsky failed to set out clearly his ideas on such fundamental matters as the connection between the productive forces and the social relations of production, the social relations of production and property relations, and between production and distribution. As we have already indicated, perhaps the most important weakness of Trotsky is his acceptance of the orthodox reduction of social relations of production to simple property relations, we shall briefly examine this now.

As we have seen, not only did Trotsky interpret the social relations of production primarily in terms of property relations but, along with Stalin, insisted that these property relations had to be given an immediate expression in the juridical property relations that regulated society. As Trotsky asserts: 'In all civilized societies, property relations are validated by laws'. But, as we have also seen, in order to press home his critique of the Soviet bureaucracy Trotsky had to go beyond the apparent legal property relations of the Soviet Union and in doing so, at least implicitly, acknowledge that real property relations may differ from their formal and juridical expression.

Of course, this disjunction between real and formal property relations is not unknown in capitalism itself. With the development of the modern corporation from the end of the nineteenth century there has arisen a growing divergence between the ownership of the means of production and their management. The modern joint stock company is formally owned by its shareholders while the actual running of the company is left to the senior management who can be said to have the real possession of the means of production. For Trotsky, the social relations of production would be transformed simply by nationalizing the firm so that it is run for society as a whole rather than for a few shareholders. With nationalization, legal ownership is transferred to the state while the real possession of means of production may remain in the hands of the management or bureaucracy. Hence, just as under certain circumstances the management of joint stock company cream off some of the profits in the form of huge salaries and share options, so under conditions of underdevelopment the management of state enterprises may also be in a position to cream of the economic surplus produced by the nationalized industry.

Yet few would deny that while the management of a capitalist enterprise may not themselves legally own the firm they still function as capitalists with regard to the workers. The management functions to extract surplus-value and as a consequence they function as the actual exploiters of the workers. Within the Soviet enterprise the workers may formally own the means of production but in real terms they are dispossessed. They have to sell their labour-power for a wage. On the other side the 'socialist' management are obliged to extract surplus-labour just as much as their capitalist counterparts, as even Trotsky admits. It would seem that the actual social relations of production between the workers who are really dispossessed and the management who have real possession of the means of production is the same. What has changed is the merely the formal property relations which affects the distribution of the surplus-labour, not its production.

In this view Trotsky's position becomes inverted: the revolution of 1917 only went so far as to socialize the distribution of the economic surplus while leaving the social relations of production as capitalist. This line of argument provides the basis for a telling critique, not only against Trotsky's theory of a degenerated workers' state, but also the 'politicism' of the entire Leninist project which had been inherited from the orthodox Marxism of the Second International.[31] Indeed, as we shall see, this line of argument has often been taken up in various guises by many anarchists and left communists opposed to the Leninist conception of the USSR and the Russian Revolution. Yet, if we are to grasp what has given Trotsky's theory of a degenerated workers' state its hold as one of the principle critiques of the USSR it is necessary to consider the importance of 'transition' to Trotsky.

As we have seen, the notion that the Soviet Union was in a state of transition from capitalism to socialism was central for Trotsky. Indeed, it is this very notion of transition which allowed Trotsky to defend the orthodox Leninist and Marxist positions alongside Stalin, while at the same time distancing himself sufficiently from Stalin to make a thorough critique of the USSR. As we have already pointed out, both Stalin and Trotsky supported the orthodox position that the real social relations of production of any established mode of production would have to find their immediate legal and formal expression. Yet, while Stalin asserted that with the five year plans and the collectivization of agriculture the USSR had become socialist, Trotsky insisted that the USSR was still in a state of transition from capitalism to socialism. Since the USSR was in transition from one mode of production to another, the formal and legal property relations could be in advance of the real relations of production. The disjunction between the real and formal property relations of the USSR was the result of the real contradictions in the transformation of capitalist social relations into those of socialism.

Of course for Trotsky, sooner or later formal property relations would have to be brought into conformity with the real social relations of production. Either the development of the productive forces would eventually allow the formal property relations to be given a real socialist content or else the USSR would collapse back into capitalism with the restoration of the private ownership of the means of production.

Furthermore, for Trotsky, it was this contradiction between the formal property relations and the social relations of production that placed the bureaucracy in a precarious and unstable position which prevented it from constituting itself as a class. To defend its position the bureaucracy had to defend state property and develop the forces of production. Yet, while the social position of the individual capitalist was rooted in the private ownership of the means of production that was backed by law, the individual bureaucrat was simply an employee of the state who owed his or her position to those higher up in the bureaucracy. Unable to reproduce itself over the generations through inheritance Trotsky believed that the Soviet bureaucracy could not last long. The Soviet bureaucracy was merely a fleeting phenomena of transition that would one way or another have to pass away.[32]

It was on this basis that Trotsky argued:

To the extent that, in contrast to decaying capitalism, it develops the productive forces, [the bureaucracy] is preparing the economic basis of socialism. To the extent that, for the benefit of an upper stratum, it carries to more and more extreme expression bourgeois norms of distribution, it is preparing a capitalist restoration. (The Revolution Betrayed, p. 244)

So, for Trotsky, either the Soviet Union would make the transition to socialism, in which case the bureaucracy would be swept away, or else it would fall back into capitalism and the bureaucracy would legalize their position through the reintroduction of private property and capitalism, and in doing so transform themselves into a new capitalist class.

Trotsky's notion that the USSR was in a state of transition from capitalism to socialism was central to his theory of Russia as a degenerated workers' state and, at the time of writing, seemed to give his theory substantial explanatory power. Yet Trotsky's prognosis that the end of the Second World War would see the Soviet Union either become socialist with the support of world revolution or else face the restoration of capitalism was to be contradicted by the entrenchment of the Soviet bureaucracy following the war. As we shall see, this was to provoke a recurrent crisis amongst Trotsky's followers.

Section 2: The theory of the USSR as a form of state capitalism within Trotskyism

Introduction

For Trotsky, the Stalinist system in the USSR could only be but a transitory historical phenomena. Lacking a firm legal basis in the ownership of the means of production, the Stalinist bureaucracy was doomed to a mere fleeting appearance in the overall course of history. Indeed, throughout the 1930s, Trotsky had been convinced that the days of the Stalinist bureaucracy were numbered.

For Trotsky, world capitalism was in terminal decline. The economic stagnation that had followed the Wall Street crash in 1929 could only intensify imperialist rivalries amongst the great capitalist powers which ultimately could only be resolved through the devastation of a Second World War. Yet Trotsky firmly believed that, like the First World War, this Second World War would bring in its wake a renewed revolutionary wave that would sweep the whole of Europe if not the world. In the midst of such a revolutionary wave the Russian working class would be in a position to overthrow the Stalinist bureaucracy in a political revolution which would then, with the aid of revolutions elsewhere, open the way for Russia to complete its transition to socialism. Even if the worst came to the worst, and the post-war revolutionary wave was defeated, then the way would then be open for the restoration of capitalism in Russia. With the defeat of the proletariat, both in Russia and elsewhere, the Stalinist bureaucracy would soon take the opportunity to convert itself into a new bourgeoisie through the privatization of state industry. Either way the Stalinist bureaucracy would soon disappear, along with the entire Stalinist system that had arisen from the degeneration of the Russian Revolution.

As the approach of the Second World War became more and more apparent, Trotsky became more convinced that Stalin's day of reckoning would not be far off. Yet not all of Trotsky's followers shared his optimism.

Following his expulsion from Russia in 1929 Trotsky had sought to re-establish the Left Opposition on an international basis seeking to oppose Stalin within the Third International of Communist Parties. However, in the face of Stalin's resolute hold over the Third International and its constituent Communist Parties Trotsky's efforts to build the International Left Opposition within the official world Communist movement soon proved to be futile. In 1933 Trotsky decided to break from the Third International and attempt to regroup all those Communists opposed to Stalin in an effort to build a new Fourth International.

With the international upturn in class struggle of the mid-1930s, which culminated in the Spanish Revolution in 1936, increasing numbers of Communists who had become disillusioned with Stalinism were drawn to Trotsky's project. By 1938 Trotsky had felt that the time had come to establish the Fourth International. Although the various groups across the world who supported the project of a Fourth International were still very small compared with the mass Communists Parties of the Third International, Trotsky believed that it was vital to have the international organization of the Fourth International in place before the onset of the Second World War. Trotsky believed that just as the First World War had thrown the international workers' movement into confusion, with all the Socialist Parties of the Second International being swept along in patriotic fervour, so the same would happen with the onset of the Second World War. In such circumstances the Fourth International would have to provide a resolute point of reference and clarity in the coming storm which could then provide a rallying point once the patriotic fever had given way to the urge for revolution amongst the working class across the world.

Yet by 1938 the upturn in class struggle had more or less passed. The Spanish Revolution had been defeated and Franco's fascists were well on their way to winning the Spanish Civil War. With fascism already triumphant in Italy and Germany and advancing elsewhere in Europe the situation was looking increasing bleak for those on the left that had become disillusioned with Stalinism. Furthermore, few could have been as convinced as Trotsky was that the onset of a Second World War, which promised to be even more terrible than first, would bring in its wake a renewed revolutionary situation in Europe, if not the world.

As a consequence, many, even within the Fourth International, came to draw rather pessimistic conclusions concerning the world situation. Within such a pessimistic perspective it was easy to conclude that the socialist revolution had failed, both in Russia and the rest of Europe, in the early 1920s. From this it was but a short step to argue that capitalism was not being replaced by socialism, as Marx had foreseen, but by a new and unforeseen form of society in which all political and economic life was subsumed by a totalitarian state, which had become evident not only in Mussolini's Italy and Hitler's Germany but also in Stalin's Russia. This new form of society now seemed destined to dominate the world, just as capitalism had done before it. This view found its expression in the various theories of 'bureaucratic collectivism' that increasingly gained support amongst Trotskyists towards the end of the 1930s.

The theory of bureaucratic collectivism was originally put forward by Bruno Rizzi in the early 1930s. Yet it was in 1939 that this theory became central to the first grave crisis in Trotskyism. As we have seen, on the basis of his theory of the USSR as a degenerated workers' state, Trotsky had argued that, despite all the crimes perpetuated by the Stalin's regime, it was necessary, in order to defend the proletarian gains of the Russian Revolution, to give critical support to the Soviet Union. As we have also noted, this position became increasingly difficult to defend as true nature of Stalin's regime became apparent, particularly after the Moscow show trials of the 1930s and the role of the Stalinists in crushing the workers' revolution in Spain in the May Days of 1937. For many Trotskyists the last straw came when Stalin signed a non-aggression pact with Hitler in August 1939. Here was the USSR openly dealing with a fascist regime!

In September 1939 several leading members of the Socialist Workers' Party of the USA, which, with several thousand members, was one of the largest sections of the Fourth International, announced the formation of an organized minority faction opposed to the official stance towards the USSR. In their polemics with Trotsky and his supporters in the American SWP the notion central to bureaucratic collectivism - that Stalin's Russia was little different from that of Hitler's Germany - proved to be a powerful weapon. Indeed, many of the leading figures in this oppositional faction, which eventually split from the SWP in 1940 to form the Workers' Party, came to adopt the theory of bureaucratic collectivism as their own. As such the theory of bureaucratic collectivism came to pose the main challenge to orthodox Trotskyism from within Trotskyism itself.

In his interventions in the fierce polemics that preceded the split in the American SWP, Trotsky made it clear that he saw the theory of bureaucratic collectivism as nothing less than a direct attack not merely on his own ideas, but on Marxism itself. The notion that the capitalist mode of production was destined to be surpassed, not by socialism but by a form of society based on bureaucratic collectivism, clearly broke with the fundamental understanding of history that had underpinned Marxism from its very inception. Yet, if this was not bad enough, none of the various versions of the theory of bureaucratic collectivism went as far to provide an adequate materialist and class analysis of what bureaucratic collectivism was and how it had come about. As a result, as Trotsky ceaselessly pointed out, these theories of bureaucratic collectivism were unable to go beyond the level of appearance and as such remained merely descriptive.

Such criticisms were seen to be borne out by the eventual fate of the various theories of bureaucratic collectivism and their leading proponents. Having abandoned Marxism, the theories of bureaucratic collectivism lacked any theoretical grounding of their own. As a consequence they were obliged to look to various strands of bourgeois sociology and ended up joining the growing stream of bourgeois theories that saw the increasing totalitarianism and bureaucratization of modern societies as an inevitable result of the complexities of industrial society. This was perhaps best illustrated by one of the leading figures in the split from the American SWP in 1940, James Burnham. As a university professor, Burnham was recognized as one of the leading intellectuals in the minority that split from the American SWP, but he went on to become one of the originators of the theory of the 'managerial society' which was to become popular amongst bourgeois sociologists in the '50s and '60s. Yet while the logic of bureaucratic collectivism led Burnham to become a liberal, for Schachtman, who had been one of the prime proponents of the theory of bureaucratic collectivism, it meant eventually ending up as a virulent anti-Communist who openly backed the McCarthy witch hunts of the 1950s. For those who remained loyal to Trotsky the fate of these supporters of the bureaucratic collectivism could only be taken as a stern lesson in the dangers of straying too far from the teachings of Trotsky and Marxist orthodoxy.

Yet it should be noted here that not all those who split from the American SWP at this time were proponents of a theory of bureaucratic collectivism or variants of one. From the very foundation of the Fourth International there had been a significant minority with the Trotskyist movement who had opposed Trotsky's stance to the USSR by arguing that Russia was not a degenerated workers' state but was simply state capitalist.[33] It was this theory of the USSR as being state capitalist which was to re-emerge with greater force after the Second World War, as we shall now see.

The theory of state capitalism and the second crisis in Trotskyism

Trotsky's predictions for the end of the Second World War, which had sustained the hopes of those who had remained loyal to him, were soon proved to be false. There was no repeat of the great revolutionary wave that had swept Europe at the end of the First World War; nor was the grip of either Stalinism or social democracy on the workers' movements weakened. On the contrary, both Stalinism and social democracy emerged from the Second World War far stronger than they had ever been.

As it became increasingly apparent that the realities of the immediate post-war world contradicted the predictions that Trotsky had made before his death in 1940, and with them the basic orientation of the Fourth International, the strains within the Trotskyist movement between those who sought to revise Trotskyism to meet these new realities and those who feared such revisionism reached the point of crisis. In 1953, less that eight years after the end of the war the Fourth International finally split giving rise to the '57 varieties' of Trotskyism that we find today. One of the crucial issues at the heart of this crisis within Trotskyism was that of the question of the respective natures of the USSR and Eastern Europe.

The retreat of the German armies during the final stages of the war had prompted popular uprisings across Eastern Europe. For the most part these uprisings had either been contained by the Stalinists, where they provided the popular base on which to build broad-based anti-fascist governments, or, to the extent that they could not be contained, they were either crushed by the advancing Red Army, or else abandoned to the vengeance of the retreating German forces.

At first Stalin did not seek to impose the economic or political model of the Soviet Union on the countries of Eastern Europe. The broad-based anti-fascist governments were elected on traditional bourgeois-democratic lines and in most cases came to include not only Communists and socialists but also liberals and representatives of the peasant and rural classes. Although these governments were encouraged to carry out nationalizations of key industries, and implement various social and agrarian reforms, in many respects this differed little from the policies of nationalization of ailing industry and welfare reforms that were happening elsewhere in Europe. But as the Cold War began to set in, and Europe began to polarize between East and West, Stalin began to impose the Soviet economic and political model on to Eastern Europe. If necessary, the post-war coalitions were pushed aside and the wholesale nationalization of industry was carried out and the market was replaced by centralized planning.

The initial phase of the post-war era in Eastern Europe had presented Trotskyists with few problems. The uprisings at the end of the war could be seen as portents of the coming world revolution, while the repression by the Stalinists could be righteously condemned. Furthermore, the fact that these