Lenin acknowledging the intentional implementation of State Capitalism in the USSR

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Alf's picture
Alf
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Oct 5 2014 09:43

Why does referring to general stages in the evolution of capitalism imply that "everything is already decided"?

Regarding the motivations of the capitalist bureaucrats in the USSR, I can't understand why people think they were not constantly preoccupied with "keeping the value of labour power within certain limits". Is using a "reserve army of labour" the only way to do this? What about when the government of East Germany demanded a 10% increase in production "norms" with no corresponding wage increases (the immediate impetus for the revolt of 1953)? And weren't such frontal attacks "motivated", at root, by the demands of international competition, by the failing competivity of the GDR as a national unit?

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Oct 5 2014 10:43
Alf wrote:
Why does referring to general stages in the evolution of capitalism imply that "everything is already decided"?

Because you view these "general stages" as something akin to geological epochs. Anyway, I don't want to get into another argument about decadence and periodization. You brought up stages to justify two claims:

1. that the law of value operated in the Eastern bloc (because at this "stage" the law of value had already gone global and hence must have included the Eastern bloc);

2. that there was capitalism in the USSR (because at this "stage" capitalist regimes elsewhere had similar characteristics in terms of militarism, bureaucratism etc., and what looks like a duck is a duck).

The presuppositions are not even true. Not all capitalist regimes were militaristic and bureaucratized (nor are they today). There are still vestiges of pre-capitalist production (not dominated by the law of value) around today, and were much more so 30 or 50 or 70 years ago.

Alf wrote:
What about when the government of East Germany demanded a 10% increase in production "norms" with no corresponding wage increases (the immediate impetus for the revolt of 1953)? And weren't such frontal attacks "motivated", at root, by the demands of international competition, by the failing competivity of the GDR as a national unit?

You seem to like to respond with questions, I will, too: When feudal lords increased tributes, were they trying to keep up with international competition by setting a new standard of the normal intensity of labor and hence driving down the value of labor power?

Anyway, the GDR bureaucrats don't seem to have been too successful in their efforts. And I think the very fact that the value of labor power is taken care of almost automatically under capitalism (due precisely to the reserve army and the dynamics of the labor market) while in these regimes it required (in the absence of a real labor market) conscious and mostly unsuccessful attempts by the state is telling us something.

S. Artesian
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Oct 5 2014 12:15
jura wrote:
I'd love to hear how the law of value asserted itself in the Eastern bloc without the equalization of rates of profit through competition of individual capitals.

Or how the value of labor power was kept in check in the absence of the reserve army.

Those are the key issues. We can say a lot about the FSU-- my personal favorites are (1) it functioned as an analog-- different origin, similar function-- to capitalism (2) the state administered the impulse to capitalist restoration. However calling it capitalist or state-capitalist is not an accurate description and obscures what capitalism is and how it reproduces itself.

S. Artesian
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Oct 5 2014 12:48
Alf wrote:
Was Marx one of those 19th century social democrats?

No, Marx was not one of those. He did not have a preconceived teleological argument. You can check the Grundrisse, the Economic Manuscripts, and the Ethnographic Notebooks to find how specific, and precise, Marx's analysis of capital as an organization of social labor is and how little "stagism" infests his critiques.

Making a "school" out of Engels remarks about "state capitalism" and arguing about the necessity of stages of history while at the same time ignoring (1) that Engels' "state capitalism" refers to countries where private ownership of the means of production and industrial capitalism are well established and (2) not only did Russia NOT have that preponderance of industrial capitalism, but that the very possibility of the proletarian basis to the Russian Revolution refutes the "stage" theory in its entirety, seems to me to be deliberate disregard of-- the actual content of history.

So what it comes down to is for me: If the FSU was capitalist, where was the capitalist class?

If we say the bureaucracy or the party or the apparatus was the class, then we have to ask what was the specific, unique, historical organization of labor, the social relation of production that this class "carried" for the organization of society?

If we say "wage labor"-- that is not unique, specific to the bureaucracy, but to the capitalist class so on what basis could there even be a revolution?

If the bureaucracy was capitalist but did not introduce a new organization of labor, then we are forced to conclude that everything about uneven and combined development is mistaken; that we have a new capitalist class without a specific unique relation to the means of production nor to the labor power that animates those means; that the Russian Revolution was necessarily capitalist from the getgo.

If the bureaucracy is a new class, or a capitalist class, then we should be able to see it functioning as that class in relation to social labor within the tissues of the old society, even before the revolution. Anybody want to take a stab at that? Show me the nascent state-capitalists and their means of production in 1907?

The FSU was no more state capitalist than pre-revoutionary Czarist Russia was state capitalist simply because it participated in world markets, built railways etc.

If we want to say that the FSU functioned within capitalism, was part and parcel of the international dominance of capitalism-- OK with me.

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Oct 5 2014 14:08

Sorry to sound like a broken record but

jura wrote:
The thing is that the planning decisions weren't driven by the profitability of sectors or enterprises. It wasn't like "this sector is now profitable, let's move all investments there". There were economists and even high-ranking bureaucrats in the Eastern bloc who pushed for that, but it never really became the policy.

This is also a description of the British state owned industries up to the 1980's. Many economists in Britain argued for the abandoning of unprofitable industry but were ignored until the 70's.

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One of the reasons certainly was the fear of working class response, because such policy would inevitably mean bankruptcies (then virtually non-existent) and unemployment (true, there was some unemployment in the Eastern bloc, and unemployment was even used as a form of punishment, but mostly for political or disciplinary reasons, not as a way of coping with investment problems or technological progress)

,

Again in most British state owned/funded industries most sackings were about disciplinary matters, it wasn't until the late 70's and 80's that mass lay offs became more common with the weakening of resistance allowing the introduction of factory modernisations. Unemployment in Western Europe was usually very low and some records show that some nations had an equivalent unemployment rate to the Soviet Union.

Reserve army of labour wasn't a dominant feature of post war Britain because the political commitment to full employment and support for unprofitable industries meant finding other work wasn't very difficult unless you were blacklisted.

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as well as attacks on the wage and working conditions.

The biggest economic headache in Britain after 1945 was how to maintain full employment and prevent wages leading to extreme inflation. Every attempt to cap wages or fix prices failed, until the 1980's.
http://www.hegemonics.co.uk/docs/Incomes-Policy-Hegemony-1970s.pdf

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Even at the lower level, the motives and actions of directors in "socialist enterprises" were quite different from those of capitalist managers. There were few incentives for increasing profitability, and the enterprises instead concentrated on hoarding resources (both material and personal, hence the waste and high employment, although both phenomena had other causes as well),

Again state owned British industry was also famous for its waste and resistance (even from management) to the introduction of new technologies.

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and fulfilling quantitative targets (hence the waste and low quality of products). Although there were attempts, almost periodical, to introduce more elements of competition and the profit-motive – like the khozraschyot – they were never successful. The Eastern bloc developed its own mechanisms, like udarnikism, "socialist commitments" and "socialist competition", but they were quite the farce compared to what is routinely going on in capitalism.

British industry also focussed on quantitative targets with low levels of quality, this is were the jokes about broken gear proudly displaying the Union Jack and "made in the UK" come from. In fact Taylorism is mainly concerned with quantity over quality and this churning out substandard products is a common feature of most planned economies.

And before Thatcher previous governments had also tried to bring in their own reform packages to improve profitability and competition in the state owned industries they weren't successful either.

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So I don't see the law of value working in the same way in the Eastern bloc and in the West.

And I don't really see a difference in what you've described to Western Europe, so I find your coming to a different conclusion rather questionable.

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Now, although I think it's an interesting and important subject, I don't have a theory of the USSR. However, I think that the superficial characteristics of the system ("the workers got paid in money for their work", "products were bought in shops", "sometimes some people were out of work") aren't really helpful in determining its character. There was more going on behind the scenes and simply slapping the "capitalist" label on it is just an easy way out. (I don't think I have to add that I view the Eastern bloc an enemy of the workers and of course it wasn't "socialism".)

Personally speaking this seems like a form of European orientalism. The only differences you've listed are of degree rather then kind. Everything you've listed had an equivalent in Britain and most Western European nations, so is slapping the Capitalist label on them the easy way out too?

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Oct 5 2014 15:59
Reddebrek wrote:
This is also a description of the British state owned industries up to the 1980's. Many economists in Britain argued for the abandoning of unprofitable industry but were ignored until the 70's.

I'm no expert on the British economy. For your argument to work, and this applies to all of the other mentions of the British state-owned industries in your post, you'd have to look at the share of the state-owned industries in the total economy, i.e., how important that sector was. I can't do that for you since I don't have ready access to the data and I don't want to spend Sunday evening looking for it online. I know the Labour Party had a plan to nationalize 20% of the economy in its post-war program. Judging from the list of nationalized enterprises and industries here it doesn't seem like they or anyone else were successful in that. Maybe the list is incomplete, feel free to preach to me on this as I know almost nothing about it.

Perhaps I should have made myself a bit clearer. In my view, the character of capitalism as a mode of production is determined by the operation of the law of value. Some may disagree with this and say that it's wage labor, money, commodities, private property, alienation, or the existence of a capitalist class that matters. Feel free to disagree on that. Now, for the determination of value by socially necessary labor time (as we know it) to work, there has to be, among other things, free movement of capital between competing enterprises and sectors. This movement follows the movement of the profit rates, with a tendency to equalize the differences Of course, historically, this freedom has been realized to various degrees, and what Marx describes in Capital is an ideal state. The credit system and the stock market are key components of that, and have been historically. Depending on the circumstances, even within a capitalist economy a nationalized sector can be removed from this equalization of profit rates, and this tends to introduce various deformations in the system.

However, in the Eastern bloc, I don't see how anything like this could have worked because the entire economy was removed from such equalization. I don't see the Eastern bloc having a financial sector, a stock market, no real competition (with bankruptcies, takeovers, and centralization) – not even a real labor market (although that is presently not the issue). Even the small private sector in some countries (it did, in fact exist, and not just in Hungary) was completely unlike the private sector in the West, in terms of the free movement of capital, free employment etc.

Hence, I don't see how the law of value as we know it would work in the Eastern bloc. Now, there are, I guess, two possibilities:

- the law of value applied, but operated somehow differently (the question, then, is how, and this is what I've been asking about from the get-go; so even if you or anybody else is right about the Eastern bloc being a version of capitalism, you owe everyone an explanation of how the law of value worked; unless, of course, you don't think value is important to capitalism, but that opens other problems. You can't just say "It worked just like in 1950s Britain" because some essential parts of the mechanism were simply not there.)

- the law of value didn't apply, and hence calling the Eastern bloc capitalist becomes problematic (unless, again, you think value is inessential to capitalism).

Like I said: I don't have a theory of the USSR, I do think we need one, and for the reasons above I'm sceptical of the usual approaches, because they seem to ignore how capitalism actually works. It's as if all of these theories, with the exception of Ticktin and Aufheben (and maybe some other stuff I don't know), were written by people who finished reading Capital after the first volume.

Reddebrek wrote:
Reserve army of labour wasn't a dominant feature of post war Britain because the political commitment to full employment and support for unprofitable industries meant finding other work wasn't very difficult unless you were blacklisted.

That's correct, but I don't see how it refutes anything I said. It's one thing to have low unemployment rates during periods of boom, when there's high demand for labor power, and higher unemployment rates when such periods are over and the system enters a crisis, as in late 70s/early 80s Britain. This is exactly how the reserve army works. It's another thing to have a system in which it is basically illegal to be out of work, there is universal obligation to work and enterprises (in the entire economy, not just in coal, steel and fucking public transport) are incentivized to employ people regardless of profitability (employment targets were part of the plans in the Eastern bloc).

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Oct 5 2014 15:57
Reddebrek wrote:
British industry also focussed on quantitative targets with low levels of quality, this is were the jokes about broken gear proudly displaying the Union Jack and "made in the UK" come from. In fact Taylorism is mainly concerned with quantity over quality and this churning out substandard products is a common feature of most planned economies.

Just to be clear, when I'm talking about wasteful production in the Eastern bloc, I don't mean a crappy car that you buy and it breaks down the next year. I mean stuff that cannot be sold or used at all and sits to rot in a warehouse.

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Oct 5 2014 16:55
jura wrote:

I'm no expert on the British economy. For your argument to work, and this applies to all of the other mentions of the British state-owned industries in your post, you'd have to look at the share of the state-owned industries in the total economy, i.e., how important that sector was.

Sorry but I'm going to have to call moving goal posts and double standards here, your argument that I replied to had nothing to do with levels of state ownership it was all about the features of Eastern block economies that you claimed differentiated it from the west. Again your argument is just a difference of degree rather than kind.

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I don't want to spend Sunday evening looking for it online.

Good news then you don't have to as that's irrelevant. There were different levels of state and private ownership in the Eastern Block but you regard their economies to be fundamentally the same so it shouldn't really matter all that much.

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Perhaps I should have made myself a bit clearer. In my view, the character of capitalism as a mode of production is determined by the operation of the law of value.

Ok, so then again why did you bring up all those economic policy, because if they demonstrate a lack of value then they must also do that everywhere they are put in place like in Western Europe. Or they don't in which case they weren't really relevant.

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Some may disagree with this and say that it's wage labor, money, commodities, private property, alienation, or the existence of a capitalist class that matters. Feel free to disagree on that. Now, for the determination of value by socially necessary labor time (as we know it) to work, there has to be, among other things, free movement of capital between competing enterprises and sectors. This movement follows the movement of the profit rates, with a tendency to equalize the differences Of course,

Ok, did you actually bother to read that link about the British economy in this period? Because that was all about how the political project and state industries prevented most of this without the direct influence of the government.

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historically, this freedom has been realized to various degrees, and what Marx describes in
Capital is an ideal state.

I guess you didn't read then.

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The credit system and the stock market are key components of that, and have been historically. Depending on the circumstances, even within a capitalist economy a nationalized sector can be removed from this equalization of profit rates, and this tends to introduce various deformations in the system.

Oh so your argument was nothing but percentages. Again differences of degrees not kinds.

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However, in the Eastern bloc, I don't see how anything like this could have worked because the entire economy was removed from such equalization. I don't see the Eastern bloc having a financial sector, a stock market,

Maybe not but there were investment banks, and last time I check banks were part of the financial sector.

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no real competition (with bankruptcies, takeovers, and centralization)

And as I've said before that was usually the case with state enterprises. In Britain the introduction of foreign products on a large scale that competed with British industries had to be carried through over resistance.

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– not even a real labor market (although that is presently not the issue).

Again the same was true of most western European countries.

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Even the small private sector in some countries (it did, in fact exist, and not just in Hungary) was completely unlike the private sector in the West, in terms of the free movement of capital, free employment etc.

Again difference of degree not kind, if you think there was no regulations on the movement of private industries at this time in Western Europe you are wrong.

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Hence, I don't see how the law of value as we know it would work in the Eastern bloc.

Then how did it work for state owned industries in the west then?

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- the law of value applied, but operated somehow differently (the question, then, is how, and this is what I've been asking about from the get-go; so even if you or anybody else is right about the Eastern bloc being a version of capitalism, you owe everyone an explanation of how the law of value worked;

Well in that case you owe me an explanation for how the Eastern block was different from the Western block when everything you listed as an example of that difference had a direct equivalent.

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You can't just say "It worked just like in 1950s Britain" because some essential parts of the mechanism were simply not there.)

Sorry but you're lying now, I demonstrated that there were equivalents in Britain (from 1945-80) if you still think there's a fundamental difference then why don't you explain it? All you've done is say that its different and then tried to talk about something else entirely.

- the law of value didn't apply, and hence calling the Eastern bloc capitalist becomes problematic (unless, again, you think value is inessential to capitalism).

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Like I said: I don't have a theory of the USSR, I do think we need one, and for the reasons above I'm sceptical of the usual approaches, because they seem to ignore how capitalism actually works.

Well you'd know a lot about that since you seem pretty keen to ignore how Western European economies worked.

Reddebrek wrote:
Reserve army of labour wasn't a dominant feature of post war Britain because the political commitment to full employment and support for unprofitable industries meant finding other work wasn't very difficult unless you were blacklisted.

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That's correct, but I don't see how it refutes anything I said.

Well I'm sorry but you should look again. You said there was no reserve army of labour in the East and that this was a major difference from the economies of the West. Which is absurd because at the exact same time period Western European economies had equivalent rates of unemployment to the Soviet Union. So if it wasn't a feature of one how could be a feature of the other.

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It's one thing to have low unemployment rates during periods of boom, when there's high demand for labor power, and higher unemployment rates when such periods are over and the system enters a crisis, as in late 70s/early 80s Britain. This is exactly how the reserve army works. It's another thing to have a system in which it is basically illegal to be out of work, there is universal obligation to work and enterprises (in the entire economy, not just in coal, steel and fucking public transport) are incentivized to employ people regardless of profitability

(employment targets were part of the plans in the Eastern bloc).

This would be true except its not how that work in East or West, the commitment to full employment at all times regardless of how well the economy was doing led to high retention of staff regardless of profitability within state funded and owned industries. And making unemployment illegal did not magically make unemployment disappear.

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(employment targets were part of the plans in the Eastern bloc).

Yeah you really don't know anything about Western Europe in this time. Employment targets where also part of the economic plans of Britain right up until the 80's. You're like a parody now all you've done is demonstrate what everybody all ready knew that state ownership of the economy was much larger in the East then the West and the political commitment to full employment taken more seriously.

Difference of degree not kind. That's all your argument is.

jura wrote:

Just to be clear, when I'm talking about wasteful production in the Eastern bloc, I don't mean a crappy car that you buy and it breaks down the next year. I mean stuff that cannot be sold or used at all and sits to rot in a warehouse.

Yes I know, that was also a feature of British industry (especially car manufacturing) because over production of some products is also a common feature of every planned economy.

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Oct 5 2014 16:59

S. Artesian, are you saying the USSR was a society where the working class was exploited but without an internal ruling class, with merely a bureaucracy functioning as proxy managers for international capital? Or that the ruling elite was a non-capitalist ruling class?

S. Artesian
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Oct 5 2014 17:03

Capital is all about the production and accumulation of value as value. The means of production have no purpose other than the extraction of value, and thus they are exchanged as any and every other commodity value.

Now where in the FSU do we have that?

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Oct 5 2014 17:04

I agree with Jura that there are still non-capitalist areas or margins of the economy and that they were still important well into the 20th century. Perhaps that's another discussion, but I don't think it alters the reality of a world essentially dominated by the capitalist world market to a far more advanced degree than in, say, 1848.

I also agree that the GDR bureaucrats were not very successful and that capitalism's efforts to operate without the whip of unemployment lead to huge pressures in other spheres of the economy, via inflation for example: Reddebrek's points about Britain even up to the 80s are quite relevant here. Thus after 1989 we saw a very rapid recourse to unemployment in most of the former 'socialist' countries. But this shows that such a deformed version of capitalism, where 'human will' seeks to substitute for economic laws, is both a product of economic weakness and a further factor in it. It doesn't show that what happened in 1989 was a change in the mode of production.

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Oct 5 2014 17:09

Reddebrek, though I basically agree with what you've written, is language like "you're like a parody now" really necessary?

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Oct 5 2014 17:12

Reddebrek, I'll be happy to go on with the discussion, but I think it'd be helpful if you kept the tone civil, did not accuse me of lying etc. With that approach I tend to lose patience quickly. If you could turn down the one-liners, that would be helpful, too.

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Oct 5 2014 17:28
Tyrion wrote:
Reddebrek, though I basically agree with what you've written, is language like "you're like a parody now" really necessary?

Well lets see I'm constantly having to repeat myself because the other user is incapable or refuses to answer direct questions. They pepper their remarks with condescension, passive aggression, demands and deliberate misrepresentations and belittling which is all perfectly ok. But one and only one flippant remark is suddenly off limits?

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Reddebrek, I'll be happy to go on with the discussion, but I think it'd be helpful if you kept the tone civil,

Well then you should of kept it civil first. Calling me a preacher, ignoring my comments and misrepresenting others is very rude regardless of tone.

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did not accuse me of lying etc.

What? well if it bothers you that much then don't lie.

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With that approach I tend to lose patience quickly.

Funny I've been losing my patience with you quite a bit.

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Oct 5 2014 17:33
Reddebrek wrote:
Well then you should of kept it civil first. Calling me a preacher, ignoring my comments and misrepresenting others is very rude regardless of tone.

I'm sorry if it offended you, but the "preaching" remark was an honest admission of my lack of knowledge about the post-war British economy. It wasn't my intention to be condescending or passively agressive, or to belittle you, but again, I'm sorry if you feel that way.

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Oct 5 2014 18:17
Reddebrek wrote:
Sorry but I'm going to have to call moving goal posts and double standards here, your argument that I replied to had nothing to do with levels of state ownership it was all about the features of Eastern block economies that you claimed differentiated it from the west. Again your argument is just a difference of degree rather than kind.

I hope you're not being dishonest here, because it seems a bit like you are! It's a difference in degree that makes for a difference in kind. To put it bluntly, a hoard of zero dollars is not a hoard of dollars.

Or, in other words: if there was no possibility of an equalization of profit rates (done the traditional way, as we know it), then the law of value either did not operate or operated very differently. This possibility is predicated upon how the economy is organized. In Britain, it may well be a fact that the nationalized part of the economy was outside the scope of such equalization, and it probably introduced some deformations into the workings of the law of value in the British economy. But in the Eastern bloc, there was no such "scope" at all, hence I don't see how the law could have worked at all.

Reddebrek wrote:
Good news then you don't have to as that's irrelevant. There were different levels of state and private ownership in the Eastern Block but you regard their economies to be fundamentally the same so it shouldn't really matter all that much.

No, it's not irrelevant. Nowhere in the Eastern bloc was there the freedom of movement of capital that I talked about as essential to the law of value. (The different ratios of state and "private" ownership in the Eastern bloc don't mean a thing, because "private" ownership – like family-run shops etc. – was extremely regulated, there was no expansion, no competition, no bankruptcies, etc. The meaning of those terms is not the same as when discussing the relationship of state-owned and private sectors in the West. I can go more into this if you want.)

Reddebrek wrote:
Ok, so then again why did you bring up all those economic policy, because if they demonstrate a lack of value then they must also do that everywhere they are put in place like in Western Europe. Or they don't in which case they weren't really relevant.

I'm sorry but I don't understand. Perhaps you could rephrase?

Reddebrek wrote:
Ok, did you actually bother to read that link about the British economy in this period? Because that was all about how the political project and state industries prevented most of this without the direct influence of the government.

No, I haven't read it, because it's pretty long. I'm not sure if the text mentions the equalization of the rates of profit (a text search for various keywords of interest shows zero matches). Can you perhaps paraphrase what you see as the core argument of the text and how it relates to our discussion? Again, what I'm saying is that the movement of capital was restricted throughout the economy in the Eastern bloc, including its "privately" owned parts, not just in a part of the economy as in the Great Britain. There may have been problems for capital due to the state-owned sector in Britain, but it wasn't like the whole economy was bizarre, spasmatic and ridden with waste because of that (this is what the East looked like).

Reddebrek wrote:
Maybe not but there were investment banks, and last time I check banks were part of the financial sector.

The investment bank was basically the financial executor, controller and accountant of the plan. It did not compete with anyone inside the economy, nor with other "investment banks" (as the text you linked discusses, at some points there were several ones for different sectors). It was a state organ, unlike the investment banks (Morgan Stanley etc.) of the capitalist financial sector you implicitly mentioned. You wouldn't just go to a "socialist" investment bank and ask them to help you fund a merger or anything. They executed the plan, they didn't choose their investment targets based on profitability, etc.

Reddebrek wrote:
And as I've said before that was usually the case with state enterprises. In Britain the introduction of foreign products on a large scale that competed with British industries had to be carried through over resistance.

Well, yes, but besides these state enterprises, Britain had a blossoming private sector full of competition, takeovers etc. And this has nothing to do with foreign trade and protectionism, either. It is one thing to seal yourself off from foreign competition, and another thing to abolish internal competition. And when I mean internal competition, it's not just between enterprises in a sector – of course, monopolies or oligopolies were and are quite common in the West. But by internal competition, I also mean the one between sectors – when investors, based on the rate on profit, decide whether they'll invest in sector A or sector B. In the Eastern bloc, the only investor was the state (with its investment bank), who didn't compete with anyone (other than on the world market, to a very limited extent), and followed other criteria than profitability.

Reddebrek wrote:
(labor market) Again the same was true of most western European countries.

You mean there was a legal obligation to work? That after finishing school, you received a transfer card and you had to move and go work to the other side of the country? That's what I meant by the non-existence of a real labor market. I've never heard of that in the West, except maybe during wartime.

Reddebrek wrote:
(socialist private sector) Again difference of degree not kind, if you think there was no regulations on the movement of private industries at this time in Western Europe you are wrong.

Actually, I said nothing of the sort. But it's one thing to have regulations and protectionism, and it's another thing to basically disallow reinvestment, limit the number of employees to something like 10 and demand that only members of family are employed in the business. (I could be more specific about how it worked in Czechoslovakia but I'd have to check some souces.)

Reddebrek wrote:
Then how did it work for state owned industries in the west then?

It is quite possible that it only worked in some deformed way, perhaps introducing some problems for the rest of the economy. When discussing some large-scale joint-stock operations with a lower than average profit rate, Marx mentions (in Volume 3 of Capital) that they don't enter the equalization process. A similar argument could be made for true monopolies. It doesn't make them socialist or non-exploitative, but if the whole economy was based on them, it couldn't be regulated by the law of value.

Reddebrek wrote:
Well in that case you owe me an explanation for how the Eastern block was different from the Western block when everything you listed as an example of that difference had a direct equivalent.

(As I tried to show, the equivalents were not really equivalents, due to "differences in degree" which make them into "differences in kind".)

Reddebrek wrote:
Sorry but you're lying now, I demonstrated that there were equivalents in Britain (from 1945-80) if you still think there's a fundamental difference then why don't you explain it? All you've done is say that its different and then tried to talk about something else entirely.

(Hopefully it's clearer now.)

Reddebrek wrote:
Well I'm sorry but you should look again. You said there was no reserve army of labour in the East and that this was a major difference from the economies of the West. Which is absurd because at the exact same time period Western European economies had equivalent rates of unemployment to the Soviet Union. So if it wasn't a feature of one how could be a feature of the other.

Incidentally, the reserve army does not comprise just the unemployed. And what I meant was not a comparison between the absolute numbers of unemployed, but the dynamics of the group. As soon as the boom of high employment and wages ended in Britain, there was unemployment and the wages went down. That's how the dynamic works, and this dynamic is what I mean when I say that the reserve army was absent in the East. As far as I know, nothing of the sort happened in the East (not until the 1990s). Poland was in some deep shit economically since the 1970s, but it didn't experience massive unemployment, which it would have if it were in the West (it more than caught up to them in the 1990s and early 2000s).

Reddebrek wrote:
This would be true except its not how that work in East or West, the commitment to full employment at all times regardless of how well the economy was doing led to high retention of staff regardless of profitability within state funded and owned industries. And making unemployment illegal did not magically make unemployment disappear.

Again, the state-owned and -funded enterprises in the West comprised a relatively smaller part of the economy than in the East. There was ample room for the traditional capitalist dynamics to operate. There was no such room in the East.

Reddebrek wrote:
Yeah you really don't know anything about Western Europe in this time. Employment targets where also part of the economic plans of Britain right up until the 80's.

You mean for the entire economy? Including the private sector? How many enterprises were involved? Do you have a source for that?

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Oct 5 2014 18:25

BTW, I think S. Artesian's point on the non-existence of a market for the means of production in the Eastern bloc is essential. Same goes for the capital market.

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Oct 5 2014 19:17
Artesian wrote:
Capital is all about the production and accumulation of value as value. The means of production have no purpose other than the extraction of value, and thus they are exchanged as any and every other commodity value.

Now where in the FSU do we have that?

So, in your view, was the USSR bureaucracy/ruling elite/state power a ruling class?

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Oct 5 2014 20:06
jura wrote:
I hope you're not being dishonest here, because it seems a bit like you are! It's a difference in degree that makes for a difference in kind. To put it bluntly, a hoard of zero dollars is not a hoard of dollars.

??? The comment that I replied to had nothing to do with laws of value or percentages of state ownership, you rattled off a bunch policies and initiatives and brought up things that were equivalents. Then all of a sudden you being up all this other stuff without establishing a connection.

Quote:
Or, in other words: if there was no possibility of an equalization of profit rates (done the traditional way, as we know it), then the law of value either did not operate or operated very differently. This possibility is predicated upon how the economy is organized. In Britain, it may well be a fact that the nationalized part of the economy was outside the scope of such equalization, and it probably introduced some deformations into the workings of the law of value in the British economy. But in the Eastern bloc, there was no such "scope" at all, hence I don't see how the law could have worked at all.

So you're argument was just the East was different from the West because it nationalised more of their economies.

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No, it's not irrelevant.

Again yes it was and is in regards to what I was interested in discussing. If it was relevant surely you would of mentioned at the start.

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Nowhere in the Eastern bloc was there the freedom of movement of capital that I talked about as essential to the law of value. (The different ratios of state and "private" ownership in the Eastern bloc don't mean a thing, because "private" ownership – like family-run shops etc. – was extremely regulated, there was no expansion, no competition, no bankruptcies, etc.

What? Sorry but you just said ratios of state ownership mean everything in regards to the differences between East and West. Now you're saying they don't mean anything. Make up your mind either ratio matter or they don't.

Reddebrek wrote:
Ok, so then again why did you bring up all those economic policy, because if they demonstrate a lack of value then they must also do that everywhere they are put in place like in Western Europe. Or they don't in which case they weren't really relevant.

Quote:
I'm sorry but I don't understand. Perhaps you could rephrase?

Seriously? The comment I responded to was just a list of things about Eastern economies that you claimed proved were unique to West. When I responded with some equivalents you then started talking about a law of value without explaining the connection between to two. So I'm left with to conclude either: there is no connection, or there is, in which case I would like to know why the effects on the law of value weren't the same in their western equivalents.

Quote:
No, I haven't read it, because it's pretty long.

It was 17 pages on a subject you admit you knew nothing about and apparently wanted more information on. And you wonder why I'm losing patience with you.

Quote:
I'm not sure if the text mentions the equalization of the rates of profit (a text search for various keywords of interest shows zero matches). Can you perhaps paraphrase what you see as the core argument of the text and how it relates to our discussion?

It was background information on how the British economy worked in the period. It relates to our discussion in that you said you wanted more information on it, and also explained why quite a few of your assumptions about the British economy at the time were incorrect.

Quote:
Again, what I'm saying is that the movement of capital was restricted throughout the economy in the Eastern bloc, including its "privately" owned parts, not just in a part of the economy as in the Great Britain. There may have been problems for capital due to the state-owned sector in Britain, but it wasn't like the whole economy was bizarre, spasmatic and ridden with waste because of that (this is what the East looked like).

So your argument is basically the difference between East and West was the level of state ownership. I hope there's more to it because that's very disappointing since I already knew that and again differences of degrees.

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The investment bank was basically the financial executor, controller and accountant of the plan. It did not compete with anyone inside the economy, nor with other "investment banks" (as the text you linked discusses, at some points there were several ones for different sectors). It was a state organ, unlike the investment banks (Morgan Stanley etc.) of the capitalist financial sector you implicitly mentioned.

No I didn't implicitly mention anything, I just pointed out that investment banks with loans and credits would indicate a financial sector of some kind.

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You wouldn't just go to a "socialist" investment bank and ask them to help you fund a merger or anything. They executed the plan, they didn't choose their investment targets based on profitability, etc.

Well actually some of these banks did invest abroad like the international investment bank, so they aren't exactly strangers to this sort of thing. And I'm sure Comecon had investment banks financing joint projects between Eastern bloc countries.

Quote:
Well, yes, but besides these state enterprises, Britain had a blossoming private sector full of competition, takeovers etc. And this has nothing to do with foreign trade and protectionism, either. It is one thing to seal yourself off from foreign competition, and another thing to abolish internal competition.

Ok, name a private manufacturer of coal or steel in the UK in this period, or oil and gas, or train services. There was a private producer of telephones left after BT but they only operated in Hull. I'm sure if I looked hard enough I can find a very small private supplier in Britain for most of these but they would be so small that they would be incapable of providing competition.

Quote:
And when I mean internal competition, it's not just between enterprises in a sector – of course, monopolies or oligopolies were and are quite common in the West. But by internal competition, I also mean the one between sectors – when investors, based on the rate on profit, decide whether they'll invest in sector A or sector B.

??? But I thought we were discussing state owned industries? How could there be investment beyond the state before privatisation? How many millionaires do you think went around giving millions to state industries without receiving at least part ownership? Regardless of how well its doing.

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In the Eastern bloc, the only investor was the state (with its investment bank),

Yes of course, they owned everything, just like the only investor in a state industry that wasn't slated for privatisation was the state itself.

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You mean there was a legal obligation to work? That after finishing school, you received a transfer card and you had to move and go work to the other side of the country? That's what I meant by the non-existence of a real labor market. I've never heard of that in the West, except maybe during wartime.

Ok another misrepresentation here, you didn't mention any of that so don't pretend I was implicitly confirming. I said there was a political obligation to eliminate unemployment, so yes there was obligation under the welfare state system to work (unless you physically couldn't) and the British state regardless of party had committed itself to maintain full employment right up until 1975-76. But in practice just like in the Soviet Union and the East unemployment still existed so different governments tolerated higher or lower rates of unemployment and try different ways to eliminate it.

Reddebrek wrote:
(socialist private sector) Again difference of degree not kind, if you think there was no regulations on the movement of private industries at this time in Western Europe you are wrong.

Quote:
Actually, I said nothing of the sort.

Actually you did, I'll accept that wasn't what you wanted to convey but it was what you said.

Reddebrek wrote:
Then how did it work for state owned industries in the west then?

Quote:
It is quite possible that it only worked in some deformed way, perhaps introducing some problems for the rest of the economy.

Hate to dig in but you would know if that was possible if you read the actual document.

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When discussing some large-scale joint-stock operations with a lower than average profit rate, Marx mentions (in Volume 3 of Capital) that they don't enter the equalization process. A similar argument could be made for true monopolies.

Hate to be rude, but you don't actually know how the economy in Britain work in this time but have kept making assumptions on it based on a passage from Marx which you think is relevant (but can't possibly know since you haven't bothered to check). That's pretty arrogant.

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It doesn't make them socialist or non-exploitative,

Ok now I'm confused who said they did?

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but if the whole economy was based on them, it couldn't be regulated by the law of value.

So again your argument is just a long winded version of "State A owns this much, State B own this much"

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(As I tried to show, the equivalents were not really equivalents, due to "differences in degree" which make them into "differences in kind".)

When did you try? All you did was repeat that they were different.

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(Hopefully it's clearer now.)

?? Yes its clear you misrepresented what I said.

Quote:
Incidentally, the reserve army does not comprise just the unemployed. And what I meant was not a comparison between the absolute numbers of unemployed, but the dynamics of the group. As soon as the boom of high employment and wages ended in Britain, there was unemployment and the wages went down.

Yes but not nearly as much as you seem to think. From 1948 to 1975 the levels of unemployment were actually quite stable, despite several booms and declines. You're acting like mass unemployment was a common feature of Western European economies in this period which wasn't really the case and certainly not true of Britain until the late 70's and 80's.

Quote:
That's how the dynamic works, and this dynamic is what I mean when I say that the reserve army was absent in the East.

I'm sorry are you suggesting that unemployment rates in the East were static and had no relation to economic situation? Because if you are I have to say I find that ludicrous but if your not then you haven't demonstrated a fundamental difference just

Quote:
As far as I know, nothing of the sort happened in the East (not until the 1990s). Poland was in some deep shit economically since the 1970s, but it didn't experience massive unemployment, which it would have if it were in the West

Sorry but the British economy was in "deep shit" since the 50's but it staved off mass unemployment un till the 1980's.In fact in 76 the decision by the Labour government to allow unemployment to rise to 2.5% was considered abnormal and politically dangerous.

What you've just described mate is that the Eastern regimes had serious economic headaches (which I'm sure we all knew) but couldn't take the steps needed to "correct" it. That was also a problem in Western Europe only the difference was that Western European countries were more capable of modernising (privatisation and mass lay offs) But what you're ignoring is that those processes weren't automatic, Western governments tried for many years to overcome resistance and make their state owned industries and services more efficient. Most attempts failed in some cases these failures led to the collapse of a government like Heath's (1970-74).

The transformation of Western European economies took decades and led some very bitter resistance. Just like how attempts to change Eastern economies led to very bitter resistance. The only real difference that I see here is that Western Europe managed to reform its economies without a total political collapse which happened in the East.

Quote:
Again, the state-owned and -funded enterprises in the West comprised a relatively smaller part of the economy than in the East.

The commitment to full employment crossed both sectors.

Quote:
There was ample room for the traditional capitalist dynamics to operate. There was no such room in the East.

Ok but how did they operate within those state sectors? If they didn't operate with them but only alongside them, then the difference is purely about state ownership ratios.

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You mean for the entire economy?

?? Yes that was the point of Keynes unemployment theory. I don't want to be condescending but full employment was the corner stone of British domestic policy from 1944/5-1976, Keynes was the major economic school of thought in Western Europe and especially Britain.

Quote:
Including the private sector?

Yes.

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How many enterprises were involved?

All the ones that complied with British laws.

Quote:
Do you have a source for that?

Well yes I have many, wikipedia for a start, that's pretty limited since its wiki. You could also look up each post war governments unemployment policy upto 76 they're the same. I'm currently reading this

http://www.labour-history.org.uk/support_files/full%20employment.pdf

Which goes into the details of how the policy worked in practice with the different governments and the problems and resistance they received.

S. Artesian
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Oct 5 2014 20:32

No, I do not regard the USSR bureaucracy as being a ruling class; it (the bureaucracy) was not the bearer of a new mode of production. Like Jura, I too have no "theory" about the FSU.

In a way, I think Trotsky had it (unconsciously) correct when he likened the fSU to a "trade union that had seized power," except he didn't grasp what that meant since trade unions are not capable of "organizing" a new mode of production but rather serve to discipline the working class to the demands of international capitalism and destroy the prospects for proletarian revolution.

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Oct 5 2014 20:41
Reddebrek wrote:
So you're argument was just the East was different from the West because it nationalised more of their economies.

In a way that prevented the law of value from operating in the Eastern bloc, yes.

I don't have anything else to add, and the 4chan style of discussion isn't helping either. So if anyone else wants to chime in... For the record, the UK public sector employed about 25% of the workforce in the 1950s.

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Oct 5 2014 20:57
jura wrote:
Reddebrek wrote:
So you're argument was just the East was different from the West because it nationalised more of their economies.

In a way that prevented the law of value from operating in the Eastern bloc, yes.

I don't have anything else to add, and the 4chan style of discussion isn't helping either. So if anyone else wants to chime in... For the record, the UK public sector employed about 25% of the workforce in the 1950s.

For the record the 1950's wasn't the period with the largest public sector in the UK. Nor did government employment policy limit itself to the public sector. So much for your good faith.

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Oct 5 2014 21:06
Reddebrek wrote:
For the record the 1950's wasn't the period with the largest public sector in the UK. Nor did government employment policy limit itself to the public sector. So much for your good faith.

1950: 24.7, 1955: 24.9, 1960: 23.2, 1965: 23.8, 1970: 26.3, 1975: 28.9, 1980: 29...

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Oct 5 2014 21:16
jura wrote:
Reddebrek wrote:
For the record the 1950's wasn't the period with the largest public sector in the UK. Nor did government employment policy limit itself to the public sector. So much for your good faith.

1950: 24.7, 1955: 24.9, 1960: 23.2, 1965: 23.8, 1970: 26.3, 1975: 28.9, 1980: 29...

Yes very good, but as I've said many times if you think government intervention in the UK economy started and ended with the public sector you're grossly mistaken. But you've ignored me every other time why should now be any different?

http://www.labour-history.org.uk/support_files/full%20employment.pdf

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Oct 5 2014 21:23

...and as I've said before, government intervention (in a limited period of post-war reconstruction and worldwide boom) in order to incentivize investments by private capital is not the same as the state commanding an entire economy.

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Oct 5 2014 21:31
jura wrote:
...and as I've said before, government intervention (in a limited period of post-war reconstruction and worldwide boom)

1945-76 was a limited period to you huh?

Quote:
in order to incentivize investments by private capital

What private investment went into state industries before privatisation?

Quote:
is not the same as the state commanding an entire economy.

Are we back to lying again? because I'm pretty sure I never claimed it was the same as commanding an entire economy. Just that it wasn't as different as you think and demonstrating how little you know about post war Western European economies.

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Oct 5 2014 21:58
Reddebrek wrote:
1945-76 was a limited period to you huh?

Certainly more limited than roughly 1925 to 1990.

Reddebrek wrote:
What private investment went into state industries before privatisation?

You said the intervention extended beyond state industries. In the private sector, it basically meant Keynesian incentives to investment and creation of jobs.

Reddebrek wrote:
because I'm pretty sure I never claimed it was the same as commanding an entire economy. Just that it wasn't as different as you think and demonstrating how little you know about post war Western European economies.

Well, they were different enough to have different "laws of motion", which is what matters to me in the context of this discussion.

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Oct 5 2014 22:08
jura wrote:
Certainly more limited than roughly 1925 to 1990.

Strange I thought we were discussing the Eastern block and the Soviet Union from 1945-89. Seems like those goalposts have shifted a few inches.

Quote:
You said the intervention extended beyond state industries. In the private sector, it basically meant Keynesian incentives to investment and creation of jobs.

Yeah but we both talked about state owned industries and you said there was private investment within them too. I asked you about that several times and you never responded. In fact you also ignored the interventions beyond state industries until just now.

Quote:
Well, they were different enough to have different "laws of motion", which is what matters to me in the context of this discussion.

Which is why your argument kept shifting and you ignored information I provided out of hand.

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Oct 6 2014 08:28

On the old Trotskyist question, 'who exactly are the ruling class in the USSR then?': even in the 'classic' period of capitalism, Marx noted that the capitalist more and more becomes a functionary of capital. How much more so in the 20th and 21st century, still dominated by the totalitarian state, despite all the recent attempts to focus all our anger on the bankers and the 'super-rich'. Capital is an impersonal power, that is why it is so different from all other forms of class society.

And unlike previous forms of class exploitation, capital is driven to accumulate. Which is why the extraction of surplus value is not the same as the extraction of surplus labour by a feudal lord. In feudalism, the ruling class consumed the bulk of the surplus; in capitalism it devotes a key element of it to accumulation.

"Accumulate, accumulate, that is Moses and the prophets....". Stalin certainly proved himself a faithful follower of that creed in the frenzied industrialisation of the USSR in the 30s. This brutal process was 'theoretically' envisaged by the false notion of "primitive socialist accumulation" developed by certain elements around the Trotskyist opposition, some of whom capitulated to Stalin precisely because they thought he was carrying out their programme.

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Oct 6 2014 12:56
Alf wrote:
On the old Trotskyist question, 'who exactly are the ruling class in the USSR then?': even in the 'classic' period of capitalism, Marx noted that the capitalist more and more becomes a functionary of capital. How much more so in the 20th and 21st century, still dominated by the totalitarian state, despite all the recent attempts to focus all our anger on the bankers and the 'super-rich'. Capital is an impersonal power, that is why it is so different from all other forms of class society.

And unlike previous forms of class exploitation, capital is driven to accumulate. Which is why the extraction of surplus value is not the same as the extraction of surplus labour by a feudal lord. In feudalism, the ruling class consumed the bulk of the surplus; in capitalism it devotes a key element of it to accumulation.

"Accumulate, accumulate, that is Moses and the prophets....". Stalin certainly proved himself a faithful follower of that creed in the frenzied industrialisation of the USSR in the 30s. This brutal process was 'theoretically' envisaged by the false notion of "primitive socialist accumulation" developed by certain elements around the Trotskyist opposition, some of whom capitulated to Stalin precisely because they thought he was carrying out their programme.

Yeah, Marx noted that-- that "functionary" tendency, and he noted that on the basis of the development of already existing capitalism; on the domination of industrial capitalism of the entire economy. It's very similar to Engels' remarks about the tendency towards "state capitalism."

Now you can abstract those remarks all you want from that historical context but in doing so you directly and immediately step out side the critical method used by Marx and Engels themselves.

Capital is driven to accumulate... but what it accumulates is capital, that is to say expanded value not just the means of production-- Accumulation of the means of production as value extracting mechanisms for the accumulation of.....money-- the embodied disembodiment of exchange value.

Whatever Trotsky's followers did or did not do is immaterial in that, in a way, they make the mistake you make-- identifying accumulation, or development of the productive forces, as an automatic marker of and index to the social organization of labor-- with them it was: "development equals socialism"-- while you argue that "accumulation equals capitalism."