Revisionism, Imperialism and the State: the method of Capital and the dogma of State Monopoly Capitalism

e meniod of Capital and the dogma of State Monopoly Capitalism

INTRODUCTION

*I have already said that you are not likely to find another question deliberately and unwittingly, by which has been so confused, representatives of bourgeois science, philosophy, jurisprudence, political economy and journalism, as the question of the state?

(Lenin)' Lenin's remarks sixty years ago are apposite today. Few as much confusion in the workers' questions have caused movement as that of the state. In every generation this eentury the spokesmen of the bourgeoisie in the labour movement have tried to 'correct' Marx's analysis of the state. Today Santiago Carrillo, general secretary of the Spanish Communist Party and chief spokesman of Eurocommunism, leads the revisionist 'It may strike some people as blasphemous to read that some of Lenin's theses are out of date; there are those who are unaware that Lenin said the same thing about Marx."

For the Eurocommunists Marx and Lenin are 'out of date'; to advance their revolutionary critique of bourgeois society today is to be 'dogmatic'. The new revisionists attempt no theoretical refutation of Marxism - for them superficial generalisations from casual observations suffice. Thus Jack Woddis, theoretician of the Communist Party (CP), substantiates his rejection of the Marxist tradition by noting 'the personnel in the various departments of the British state today bear no comparison with those employed in the Tsarist state of 1917'. Emboldened by his discovery that the Home Office is not inhabited by members of the Russian aristocracy, Woddis adduces more facts to defy Marxist orthodoxy. We are told that the state does not have to be smashed - because in Italy's last election '31 per cent of the police force...voted Communist, making it the first Party among the police' * Carrillo and Woddis represent in the labour movement. Little do they dismissals of Marxism as obsolete dogma rely on ideas which were already old hat when Marx and Lenin were alive. Against Marx they discreetly wheel out the thoughts of Proudhon and Lassalle; against Lenin the tired arguments of Bernstein and Kautsky. The same petit-bourgeois prejudices against which the pioneers of scientific socialism established the foundations of proletarian politics now form the theoretical armoury of Eurocommunism. class in their own lifetimes, the incernational Eurocommunists' ancestors today find their views hidden amongst the jumble of hard facts and pompous speculation that the official communist movement now dignifies with the name 'theory'. The Eurocommunists' new theories about capital and of State Monopoly the state, synthesised in the theory Capitalism (SMC) have enormous consequences for the future of the working class. In official communist circies it is no longer fashionable even to talk about smashing the state. Instead the labour movement is advised that its best interests would be served by 'democratising', 'pressurising', or "transforming' the state - or at least by increasing state intervention.

arguments of reformism seek to reconcile the working class At a time of crisis, when the bourgeois state leads capital's the Marxist analysis of the attack on the working class, state is of crucial practical importance. Today every form of class struggle is confronted with the power of the state. The state pursues the imperatives of capital through wage controls and legal curbs on trade union rights, through its use of troops to break strikes and its deployment of police to harass picket lines. The defence of the working class depends on winning it to an understanding of the class character of the state. That is the purpose of this article.

In Part I we outline the development of the classical Rejecting on the state. the social-democratic position dictatorship of the proletariat has a long history in the labour movement, a history that dates from the days of Marx and Engels. We present not a history of the working class movement, but of its reflection in theory. We present the evolution of the reformist conception of the state and of the political strategy of state socialism which developed alongside it. First formulated into a coherent strategy around the turn of the century, state socialism has, in its different forms, come to dominate the international working class.

In Part II we present Marx's theory of capitalist domination. Through an exposition of Marx's method and the categories of Capital, we explain why reformism finds such strong confirmation in capitalist relations of production.

Marx's critique of political economy does not only show the apologetic character of reformism; it also reveals the origins of these views in the appearances of capitalist production. The aim of this part is to show that Marx's analysis of capital is at

the same time an indispensable tool for challenging the views of democratic republic. In the climate created by the repressive the bourgeoisie in the working class.

Part Ill examines contemporary form of - the theory of SMC. shows that Eurocommunism is simply old wine soured over decades, now even more sour, but served up in bright new bottles — each with its own local label. Our aim is not merely to destroy the theory of SMC or to point out the reactionary consequences of Eurocommunism. Through a critique of SMC we appraise the experiences of the working class that have reactionary theory to take hold in the international labour movement. This appraisal of the circumstances that have lent strength to reformism is vital, for it enables us to set about consciousness today. Likewise the re-establishment of the Marxist through a political struggle against revisionism, is part of the battle to forge a new proletarian leadership.

1 V I Lenin, 'The state', Collecred Works (CW)29, Progress Publishers, Moscow, 1972, p472. All references are to this fourth edition of V I Lenin's collected works.

2 SCarrillo, 'Eurocommunism' and the state, Lawrence & Wishart, 1977, pIo. "The state — some problems, Marxism Today, 3 Jack Woddis, November 1976, p391. 4 Ibid.

I MARXISM AND STATE SOCIALISM

'As the science of the proletariar, Marxism developed through a struggle against reformism. In establishing the scientific basis for the political independence of the working class, Marx and Engels were forced to challenge the traditional views on the state that prevailed in the labour movement. For socialists the state appeared as a potential instrument for working class liberation. They saw state regulation of the economy as an incursion on capitalist property relations. By emphasising the necessity for smashing the bourgeois state and establishing the dictatorship of the proletariat, Marx broke fundamentally with the radical critics of nineteenth century During the early phase of capitalist development, when the bourgeois state openly repressed the European Social Democracy largely accepted Marx's theory of the state. However, this acceptance was undermined when the dictatorship of the bourgeoisie acquired a more democratic form. The limited concession of the vote to the working class gave new strength to the attacks on Marx's theory of the capitalist state. That these attacks were possible showed the political weaknesses in Social Democracy. With the rise of imperialism in the early years of the twentieth century, revisionism became the dominant standpoint in the European Engels waged a continuous state socialist views within the ranks of the international working class movement. In Germany the idea that the state could be used to liberate the working class was formulated most clearly by Lassalle. He argued that the working class should wrest a series of reforms from the state, beginning with a campaign for the extension of the vote. Lassalle's strategy had considerable influence throughout the German labour movement. His state socialist politics extended to the Eisenachers, who formed the Socialist Democratic Labour Party in 1869 on an apparently Marxist platform.

The Eisenachers wanted to establish a 'Free People's State'; they wanted to realise the ideals of the bourgeois revolution in a fully 5 apparatus of the Prussian state, this strategy appeared to be revolutionary, since it rejected the existing form of the state. Its content, however, was reformist.

The state socialist and democratic republican traditions of German socialism were brought Gotha Programme which united the Lassalleans and the Eisenachers. Marx challenged both these traditions in his Critique of the Gotha Programme.: Because German Social Democracy as a whole was unable to grasp the nature of the bourgeois state, Marx was forced to elaborate his conception of the dictatorship of the proletariat as a stage transitional berween capitalism and communism.'

During the period of the repressive Anti-Socialist Laws (1878-90), Marxism was considerably strengthened in the German labour movement. The reformist strategy of the Free People's State lost credibility. Yet this radicalisation of the labour movement represented opposition to the authoritarian nature of the bourgeois state machine rather than to the state scope could not provide the basis for challenging Bismarck's strategy of state intervention in the economy. Bismarck's use of the state to implement a series of social reforms and to nationalise certain industries was seen as progressive by large sections of German society. The response of German Social Democracy to these state measures was ambiguous. It opposed Bismarck's authoritarian regime while vacillating about his other policies.

Much of German Social Democracy saw Bismarck's plans the railways and establishing tobacco monopoly as steps towards socialism.

summer of 1880, articles in Sozialdemokrat endorsed the bourgeoisie...because it because it smooths out the road economically and morally for Social Democracy....'. Sozialdemokrat was for the monopoly because it was 'a part of the overthrow of the The view that state intervention in production was progressive was widespread in the German labour movement.

'of late, since Bismarck went in for state-ownership of industrial establishments, a kind of spurious socialism has arisen, degenerating, now and again, into something of flunkeyism, that without more ado declares all state ownership, even of the Bismarckian sort, to be socialistic. Certainly, if the taking over by the state of the tobacco industry is socialistic, then Napoleon and Metternich must be numbered among the founders of socialism."

The growing influence of state socialism was a reflection of the growing activity of the bourgeois state. This tendency of development, which Marx saw as necessary for the maintenance of capitalist relations, the state socialists interpreted as undermining capital. More and more, Social Democracy saw state intervention in the economy, not as a 1 As early as 1852 Marx noted that 'the class struggle necessarily leads to the dictatorship of the proletariar'. See Marx's letter to Weydemeyer, 5 March 1852, Marx and Engels Selected correspondence, Lawrence & Wishart, London, 1975, p64.

2 This point is well argued in V L Lidtke, The outlawed party: Social Democracy in Germany 1878-1890, Princeton, New Jersey, 1966, p48 3 K Marx, "Critique of the Gotha Programme', Marx and Engels Selected works, Lawrence & Wishart, 1973, p327 4 Sozialdemokrat No 24. 13 June 1880. cited in Lidtke, op cit, p158.

• F Engels, Anti-Dühring, Lawrence & Wishart, 1975, p329.

6 The elder Liebknecht commented in the Reichstag on Bismarck's Bill for Accident Insurance: 'Now then, Gentlemen, Prince Bismarck may move toward our goals — on this course we march together, and we do not hang on his coat-tails'. Lidtke, op cit, p160.

accumulation, but as a prerequisite for continued capital progressive development in and of itself.

In the last part of the nineteenth lism increasingly appeared to make sense. With the rise of imperialism, the bourgeois state was able to make further concessions to the working class. In most advanced capitalist countries the state introduced a set of social and electoral reforms. At the same time, the essentially anarchic aspects of production appeared to intervention and the growing cartelisation of industry. It was these developments that provided the material basis for the revisionist theories of the Second International.

1. The revisionists' new age The social-democratic view of capitalism has little in common with Marx's critique of political economy. By means of his theory of crisis, Marx demonstrated the transient character of capitalism.' He showed that the contradictions inherent in production were barriers to the accumulation of capital barriers which capital finds increasingly difficult to overcome.

By indicating the historically limited nature of capital and tendency towards contradictions contained within it, Marx was able to establish socialist theory on a scientific basis.

However, Marxism in the working class was mined during the period of relative prosperity around the turn of the century. The tremendous growth in the productive forces and the increasing limits to free competition set by state intervention made it seem that capitalism had become a viable form of social organisation.

to capitalism on moral Social Democracy objected grounds. For the reformists the problem was not capitalist production. Rather, capitalism was evil because of its anarchic and wasteful character. It was an unfair system of production society unequally. distributed the resources of Production was seen as a mere natural process: distribution was the arena in which exploitation took place. The socialdemocratic attack was not against the extraction of unpaid labour in production, which is the basis for accumulation, but against cheating and the manipulation of wealth.

The revisionists understood capitalist anarchy as the anarchy of the market. As capital was forced to regulate cartels and new forms of intervention, it appeared that capitalism could organise anarchy out of existence. Bernstein could plausibly argue that the rise of cartels and trusts had undermined Marx's theory of crisis. For Bernstein the existence of cartels and trusts indicated a 'capacity to influence the relation of productive activity to the conditions of the markets so far as to diminish the danger of crisis. The new attempts to regulate the market advanced as proof of a crisis-free capitalism: 'unless unforeseen external events bring about a general crisis —and as we have said that can happen any day - there is no urgent reason for concluding that such a crisis will come to pass for purely economic reasons'. ° In rejecting Marx's theory of crisis, Bernstein and other reformists rejected the historic necessity of Rosa Luxemburg's criticism of Bernstein correctly stated that 'revisionism is nothing else than a lisation made from the angle of the isolated capitalist'. Revisionism mistook 'the phenomena of competition... for the phenomena of the whole of capitalist economy."° Revisionists understand capitalism only as it appears in the competitive struggle between different firms. Like the individual capitalist, whose understanding is based on the way he experiences the laws of capitalism, the revisionist lacks a grasp of the totality of social relations.

The capitalist believes that his profit depends on how well he competes - whether he is The revisionists innovative, skilful or cunning.

prejudice and believe that competition is the source of profits."

Asaresult they failed to see monopolies as a form through which competition takes place and through which existing total surplus-value is redistributed. Instead the revisionists argued that monopolies themselves were productive of profit.!

Indeed, for the right wing of Social Democracy the growth of monopoly control confirmed that capitalism ving towards an organised, even socialist, from ownership of capital that property in favour of socialist suppression of private organisation. Thus Social Democracy adopted an ambivalent, and sometimes positive, approach towards trusts and cartels. In Britain, the Independent Labour Party (ILP) pointed to what it saw as the potential of the monopolies at the same time as it soughttocurb their abuses: 'the problem is how best to retain the beneficent features of trusts, making for organisation co-ordination, whilst eliminating their present or potential powers for extortion, coercion and robbing of the poor'!! The revisionist answer to this problem, like every other, was the bourgeois state. The increased intervention of the state in the economy reinforced the view that capital accumulation was a technical process which could be controlled by experts and modified by politicians.'

were seen by Once the workings of the economy Social Democracy as a technical question the problems facing the working class were reduced to the unacceptable face of capitalism - the bankers, middlemen, speculators rapacious capitalists intent on making 'extra' profits at the expense of everyone else. The conclusion was drawn that the state could run the economy in the interests of the majority.

Georg von Vollmar, one of the leading reformists in the German Social Democratic Party (SPD), heralded the growth of state intervention as a vindication of socialism: "today, however far its execution may lag behind in practice, in principle, at least, the Socialistic conception has prevailed, that economic life is not a sacred preserve for purely private interests... and that consequently, the state, as the organ ot society, has the right and the duty to interfere and regulate economic enterprises wherever the interest of society makes it seem needful requisite. " It the intervention of the state was accepted as stemming from the 'interest of society' it was only a short step to advancing a strategy of redistribution of wealth through the agency of the state. In this vein the ILP argued that the power of the state should be used to tax the rich: "wasteful, extravagant, unnecessary and, indeed criminal, as is the expenditure of the sums now spent on the fighting services, there remain in the hands of the wealthy classes of this country resources which are ample for carrying out immediately large and long overdue schemes of social re- This state socialist strategy survived the First World War. Indeed the tremendous increase of state over the economy during the war appeared to confirm the capacity of the state to manage the economy. To the state socialists the war proved that capitalism had changed: it had become organised The first systematic exposition of the theory of organised capitalism was given by Hilferding. He depicted a capitalism freed from the domination of unlimited competition' and the 'blind laws of the market' — an organised form of economy.

The replacement of free competition by a 'scientific method of competition' was a realisation of the socialist 'principle' ot 'economic control': 'in this way capitalism itself surrenders its main mission to socialism...''? Even prices were no longer determined by value relations in Hilferding's new Through political pressure the state could now become the arbiter of wages and prices.'

With Hilferding the contradictory development of capitalism is completely effaced. Capital no longer

other than subjective ones. The problems facing the working class are not those of exploitation or social oppression but those arising from technical mismanagement.

2. Revisionism and the state The revisionist assessment of the changing forms that capitalist world accumulation imperialism provided the basis for a coherent reformist strategy. The state socialists proclaimed that the experience of social reforms and the extension of democratic rights had validated the evolutionary road to socialism. With the rise of imperialism, state socialism and revisionism came to dominate the labour movements of the advanced capitalist countries and the collective organisation of the social-democratic parties, The reformists' understanding of the state as the representative of the interests of all sections of society in also established the legitimacy of country nationalism in the labour movement. The responsiveness of the state to working class pressure reinforced the loyalty of each labour movement to its own nation. The national chauvinism of the Second International led to its demise in 1914, when the leaders of each of its sections dragged workers into the patible with internationalism and that the bourgeois state had a proper claim on the loyalty of the working class.

According to Bernstein, the Communist Manifesto was wrong to claim that 'the proletariat has no fatherland': 'This sentence might in a degree, perhaps, apply to the worker of the 'forties without political rights, shut out of public life....The workman who has equal rights as a voter for state and local councils, and who thereby is a fellow owner of the common property of the nation, whose children the community educates, protects, whom it secures against injury, has a fatherland without ceasing on that account to be a citizen of the world.'

What Bernstein discovered for the German working class, Millerand discovered for the French. Millerand, who had the distinction to be the first social democrat to join a bourgeois government, declared: 'I need not repeat that we have never had the unnatural and insane idea of breaking and throwing away the unique instrument of material and moral progress forged by the centuries, which is called the French fatherland.... nor when in a few weeks time we go to the international Congress at London, shall we ever forget that, while internationalists, we are Frenchmen and patriots...?2 In Britain too the Fabians had no difficulty in discovering the uniqueness of their own national traditions. Class conflict might do for the authoritarian Continent, but it would never 'The Socialism advocated by the Fabian Society is State Socialism exclusively....England now possesses an elaborate democratic State machinery....the opposition which exists in Continental Monarchies berween the State and the people does not hamper English Socialists.": For the state socialists, state activity represented the road to socialism. They saw the extension democracy the political sphere as ensuring democracy in 'the economy'.

The reformists recognised inequalities in social and economic life but thought they could be eliminated through the intervention of the state. For Ramsay Macdonald socialism was synonymous with the state organisation of society: "socialism could not be defined better than as that stage in social organisation when the state organises for Society an adequate nutritive system; and democratic government is the signal that that change is taking place'. " For him the relationship between the bourgeois state and the working class was Not all revisionists saw society in such simple terms. Numerous conflicts between the bourgeoisie and the proletariat revealed that the state acted in a way that was far from neutral. Consequently some revisionists, such as Kautsky, were quite prepared to admit the class bias of the bourgeois state. But they did not see the state as inherently bourgeois. On the contrary, they thought that the extension of democracy could curb the power of capital and undermine the dictatorship 7 For a presentation of the Marxist theory of crisis see Revolutionary Communist Papers No 3, pp8-10.

E Bernstein, Evolutionary socialism, Schoken Books, New York, 10 R Luxemburg, Social reform or revolution, Merlin Press, London, 11 These points are elaborated in Part II.

12 The prevalence of these vulgar conceptions was such that even Kautsky, the 'Pope of Marxism' as he was known in the Second International, could say: "Competition is limited to a minimum and a new direction is given to the striving of super profit.

easier than increasing the productivity of labour. The cartelised entrepreneur can now raise his profit above the average by charging monopoly prices. The determining factor for profit is no longer the perfecting of technique, but the perfecting of the organisation of entrepreneurs; all the penetration of the capitalist genius is now directed towards completing and perfecting this'. See K Kautsky, Socialism and colonial policy: an analysis, Athol Books, Belfast, 13 W C Anderson, The menace of monopoly, City of Manchester ILP branch pamphlets No 2, 1908, p13. This point was reiterated after the First World War by P Snowden in The menace of the trusts, and how to deal with it, ILP, London 1919: 'It is a folly to attempt to The wise course is for the arrest this natural economic evolution.

community to appropriate the advantages, and to prevent the abuse of monopoly of private profit'. Ibid, p7 14 The bankruptcy of the state socialist approach was apparent to the who assured the Austrian military bourgeois theorist Max Weber, leadership that they had little to fear from Social Democracy.

as it may, these arguments show at any rate that the old revolutionary hope of catastrophe, which gave the Communist Manifesto its compelling power, has given way to an evolutionistic view, i.e. a view of the gradual growth of the old economy with its enormous competitive concerns into a controlled economy, whether it is controlled by civil servants or by syndicates with the participation of civil servants.' M Weber, 'Socialism, speech for the general information of Austrian officers in Vienna, 1918', in J E T Eldridge, ed; Max Weber, Thomas Nelson and Sons Ltd, London, 1972, p211.

15 G von Vollmar, "Social reform in Germany and in France', in R C ed, Modern socialism, second edition, Harper Brothers, London, 1907, pl38. 16 P Snowden MP, A few hints to Lloyd George: where is the money to come from, ILP, London, 1909, p2 i7 R Hilferding, Organisierier Kapitalismus - die Aufgaben der Sozialdemokratie in der Republik (Organised capitalism of Social Democracy in the Republic), speech at 1927 Congress of the SPD in Kiel, reprint, van Eversdijck, s'Gravenhage, 1973, pб.

18 'The masses must recognise that the prices of bread and meat are not merely economical, but political prices, which are determined by the political balance of power. They must be shown that if they desire improvements in this matter, they must seize the initative and support a policy which can reduce or liquidate this political factor in the economic price.' Ibid, p7.

E Bernstein, op cit, pp169-70.

"The Saint Mande programme', in Ensor, op cit, 21 G B Shaw, "Report on Fabian policy', Fabian Tract 10, 1896, quoted in A M McBriar, Fabian socialism and English politics 1884-1918, Cambridge University Press, 1966, p98 22 Ramsay Macdonald, MP, Socialism and government, ILP, London, 1909, p33. The same point was made by Millerand: "to realise the immediate reforms capable of relieving the lot of the working class, and thus fitting it to win its own freedom, and to begin, as conditioned by the nature of things, the socialisation of the means of production, it is necessary and sufficient for the Socialist party to endeavour to capture the Government through universal suffrage.' Millerand, in Ensor, op cit, p54. 7

of the bourgeoisie. The previous extension of democratic rights" through working class pressure was presented as the way towards real power. In his narrow political outlook Kautsky was at one with the most moderate reformist: 'But if the proletariat in a democratic state grows until it is numerous and strong enough to conquer political power by making use of the liberties which exist, then it would be a task of great difficulty for the capitalist dictatorship to manipulate the force necessary for the suppression of democracy' 2 Kautsky and other revisionists recognised the need for a political struggle in order to improve the lot of the working class. But this was political struggle in the narrow sense of politics — a struggle between different groups for control of the state. The state was merely seen as the tool of particular interest groups. Control of this instrument would make possible the transformation of capitalism. As Kautsky argued: "The decisive factor is no longer the material, but the personal one, Is the proletariat strong and intelligent enough to take in hand the regulation of society, that is, does it possess the power and the capacity to transfer democracy from politics to economics?'« The strategy of state socialism which developed in the first two decades of this century was a direct response to Marxism. The state socialists abstracted a number propositions from the experience of the period of relative prosperity around the turn of the century and the rise in state intervention that accompanied and followed it. They believed that capitalism had been transformed into an organised system of production. The growth of monopolies and cartels indicated that the anarchy of the market had been curbed.

These propositions entirely paralleled the consciousness of the individual capitalist. Capital's domination was seen only in its forms of appearance — the monopolies and the state.

These forms were not regarded as expressions of capitalist social relations, but as institutions which allowed problems to The separation of be solved technically, through planning.

control from ownership of capital and state intervention were held to be tendencies which were progressive subverted private property. If strengthened by a more democratic state these tendencies could lead to a socialist society.

While they agreed that capitalism had become more organised, those who held more radical versions of this theory were concerned that the state often acted against the interests of the working class and that the monopolies abused their position.

In order to limit the power of the capitalists the proletariat would have to struggle for democratic rights. The working class would be able to use these rights to curb the power of the monopolies and establish democracy in the economy.

3. Anti-crisis socialism With the First World War capital's tendency towards crisis was reinforced. In these circumstances evolutionary socialism was transformed. Previously the formal aim of Social Democracy had been socialism. However, under the impact of the capitalist crisis the reactionary content of state socialism took the form of a 'progressive' counter-crisis strategy.

In the late 'twenties and 'thirties the capitalist crisis undermined the credibility of Social Democracy. Throughout Europe social democrats in government anti-working class measures in order to re-establish the basis for capitalist accumulation. Socialism was a promise for The humiliation of the Labour Party that another day. followed the downfall of Macdonald's Labour Government in 1931 was one indication of the crisis of Social Democracy, in Europe the most extreme expression of this crisis was the destruction of the SPD by the Nazi regime.

Given popular hatred for its betrayals, Social Democracy had no choice but to evolve a new strategy. The political line it adopted emerged as an alternative both to revolution and to the harsh solutions demanded by capital. Social Democracy offered a programme of 'positive' measures - plans and schemes for the rapid resolution of the crisis.

This strategy of planning was developed from state socialist premises. The counter-crisis strategy shared with earlier forms of state socialism a technical conception of capitalist accumulation. A technical solution to the crisis was therefore possible through the intervention of the state. Social Democracy had become practical socialism, promising no more than "realistic' reforms. State action would solve the crisis while improving the standard of living of the working • class. Planning was advocated not as the realisation of socialism, but as a set of necessary progressive measures that pointed in the direction of socialism. As the influential Labour economist Hugh Dalton argued, "there are difficulties in the application of social planning within the framework of capitalism. But these are not, as some theorists "inherently" insuperable. Such beginnings, moreover, may accelerate the transition to socialism.'25 'Planning' was no more than a term designed to give ideological coherence to the state's attempts to modify the impact of the crisis. The most famous social-democratic planner of the period, the Belgian, Henri de Man, described his proposals as 'Anti-crisis Socialism': 'More precisely, it is that form of Socialism which puts forward in each country a body of immediate measures designed to provide a way of escape from the crisis' 26 The effect of this anti-crisis socialism was to commit the working class to capitalist reconstruction.

The technical resolution of the crisis demanded a positive contribution to it from the working class. De Man made this clear in "The Theses of Pontigny', which he presented at the International Conference for the Study of Socialist Planned Economy in September 1934: "The working class movement should abandon its passive attitude towards the economic crisis. It should substitute for its determinist doctrine of crisis...a voluntarist policy having the limited but immediate object of reabsorbing the unemployed and of overcoming By the 'thirties, state socialists could no longer pontificate on the advantages of organised capitalism. The reality of capitalism as a crisis-ridden system of production could not be ignored. The state socialists now presented the crisis itself as the justification for postponing socialism. For Marx the capitalist crisis had demonstrated the necessity for overthrowing capitalism. The only lesson the state socialists drew was that the crisis should be overcome.

The plans of the state socialists could not save the labour movement from the exigencies of the capitalist crisis — indeed they played an important role in the defeats of the working class in the period before the Second World War. Nevertheless reformism remains, strengthened by the expansion of the world economy in the 'fifties and 'sixties. The enduring character of reformism is shown by the state socialist countercrisis strategies put forward in the world recession of the 'seventies. In understanding the tremendous resilience of these bourgeois ideas in the labour movement Marx's critique of capitalist society is of central importance. It is to this that we 23 K Kautsky, The dictatorship of the proletariat, University of Michigan, 1971, p9. 24 Ibid, p28. 25 Hugh Dalton, Practical socialism for Britain, Routledge, London, 1935, p248. 27 Henri de Man, 'The thesesof Pontigny', ibid, p23.

8

•| THE DICTATORSHIP OF THE

PROLETARIAT AND THE MARXIST

CRITIQUE OF POLITICAL ECONOMY

continued to be a machine which helped the 'Yet the state capitalists to hold the poor peasants and the working class in subjection. But in outward appearance it was free.' (Lenin)' of political economy is a critique of the Marx's critique categories through which the bourgeoisie perceives the world: It provides the key for revealing the roots of the world view of state socialism and the means to fight it. State socialism is an expression of bourgeois ideology reproduced in the labour movement. The concepts of state socialism make sense because they correspond to the prevailaing bourgeois consciousness of capitalism. Marx's method is of central importance in the struggle against reactionary politics.

Marx himself noted that credit is due to me for discovering either the existence of classes in modern society or the struggle between them'.? The existence of class struggle was well known to bourgeois historians. They had merely to take into account the reality around them. What was distinctive about Marx was his method of analysis, which for the first time revealed that capitalist relations inevitably lead to the struggle between classes and that this struggle 'necessarily leads to the dictatorship of the proletariat'.!

1. Marx's method in Capital In Capital Marx shows that the social forms of bourgeois society obscure the real relations of capitalist production.

Through his theory of the fetishism of commodities, Marx shows that a 'definite social relation between men' assumes 'the fantastic form of a relation between things' " The fetishism of commodities originates in the character of social labour Under capitalism labour has a dual character. Firstly it is labour which is concrete, creative not of value but rather of objects of use. However, in this concrete form, the labour of individuals does not become part of the labour of society.

Labour becomes socialised through exchange, a process in which the specific type of concrete labour is disregarded. In this way the second aspect of labour, abstract, exchange-value positing labour, comes to the fore. The fact that labour only becomes social through the exchange of commodities is the basis for the fetishism of commodities: "In other words, the labour of the individual asserts itself as a part of the labour of society, only by means of the relations which the act of exchange establishes directly between the products and indirectly, through them, between the producers. To the latter, therefore, the relations connecting the labour of one individual with that of the rest appear, not as direct social relations between individuals at work, but as what they really are, material relations between persons and social Social relations between producers present themselves in forms in which the social character of labour appears as the objective character of the commodities themselves. These forms are but a materialised expression of these relations. The material forms of value - rent, profit, interest — disguise its origin in social labour. This materialisation of social relations is no mere illusion. The appearances are 'what they really are, material relations between persons and social relations between things' Marx noted that the mystifying character of social forms increases with the complexity of the production relations expressed in them. In the act of simple exchange, the social 9 character of the transaction is fairly clear. However, once the value of a commodity is expressed in the money form, its social character is further concealed.' With the rise of paper money and credit, things get even more complicated.

As capitalism develops, the connection between production relations and the complex forms in which they are expressed is increasingly lost. In order to unravel the links between various production relations Marx begins the presentation of his analysis of capital with the simplest social form in which labour presents itself — the commodity. From this starting point, Marx presents a dialectical reconstruction of capital from its simplest to its more complex forms. Through the analysis of a series of social forms of increasing complexity, Capital presents the logical connection between the outward forms of things and their inner source. In this investigation Marx analyses capital from two basic levels of abstraction: capital in general and many in order to bring to light what is essential to the capitalist social relation Marx first analyses capital in general and presents what is common to all capitals. " Capital in general is an abstraction from the different forms of capital. It abstracts from these forms what all capitals have in common, 'the quality of being capital'.! The presentation of the general nature of capital must precede the investigation of its concrete movement. In this way Marx sought to present the inner mechanism of capital in abstraction from phenomena which The analysis of many capitals relates to the concrete forms which arise out of the movement of capital. It considers the relationship between individual capitalists, the relationship of one capitalist to another, that is, competition. The nature of capital in general must be grasped before the relationship between individual capitalists can be understood. Capital can only exist as many capitals - in the competitive interaction of individual capitalists. '° As a result it is competition that 1 VI Lenin, 'The state', CW29, p484.

2 Marx, letter to Weydemeyer, 5 March 1852, in Marx and Engels, Selected correspondence, op cit, p64.

4 K Marx, Capital, Vol 1, Lawrence & Wishart, 1974, p77 (all references to Capital are to this edition except where stated otherwise).

"This mystification is still a very simple one in the case of a commodity. Everybody understands more or less clearly that the relations of commodities as exchange-values are really the relations of people to the productive activities of one another. The semblance of simplicity disappears in more advanced relations of production. All the illusions of the Monetary System arise from the failure to perceive that money, though a physical object with distinct properties, represents a social relation of production.' K Marx, A contribution to the critique of political economy, Progress Publishers, Moscow, 1970, The concept capital in general is an 'abstraction which grasps the specific characteristics which distinguish capital from all other forms of wealth.... These are the aspects common to every capital as such, or which make every sum of values into capital. And the distinctions within this abstraction are likewise abstract particularities which characterise every kind of capital...'. K Marx, Grundrisse, Pelican Books, 1973, p449 (all references are to this edition).

9 Ibid, p517. 10 'Conceptually, competition is nothing other than the inner nature of capital, its essential character, appearing in and realised as the reciprocal interaction of many capitals with one another, the inner tendency as external necessity. Capital exists and can only exist as many capitals...' Ibid, p419.

appears as the basic capitalist relation and the inner nature of capital remains concealed.'

For the individual, experience of starting point for a comprehension production is understood merely as the interaction between individual capitalists and 'economics' becomes a study of competition. Yet competiton explains little; competition must itself be explained. Marx's method of presentation shows the logical connection between the basic capital relations and the forms they assume on the surface of society in competition.

That is how Marx establishes why the bearers of capitalist relations apprehend their system of production in the way they [a] The standpoint of the individual capitalist The bourgeois conception of capitalism is based on surface appearances; it derives from the experience of capitalist relations in the sphere of competition. Here we want to show why this superficial bourgeois view is plausible.

In the investigation of capital in general the relationship of surplus-value to the appropriation of unpaid labour is "fairly simple'. The only problem is to discover how unpaid labour is appropriated with no equivalent, yet without violating the laws of commodity exchange." Thus in the immediate process of production the relationship between the appropriation of surplus-value and unpaid labour is reasonably clear.

However, this relationship becomes less and less direct once we consider capital in the sphere of circulation. Now the determination of surplus-value cannot simply be related to labour-time. The circulation time of capital now assists in the determination of the mass of surplus-value produced in a given time — "an element foreign to labour-time seems to have The relationship between surplus-value and labour-time is further obscured when we look at capital as the unity of the circulation and production processes. Surplus-value now appears in a separate form - as profit. The individual capitalist receives profit for a definite period of circulation of capital; a period which is distinct from labour-time. In addition, profit, a converted form of surplus-value, is measured not over the capital expended in the purchase of labour-power for a definite period of time, but over total capital. Profit is not determined by the relationship of unpaid to paid labour, but by the relationship of unpaid labour (surplus-value) to the sum of the capital expended on living labour (variable capital) and on the means of production (constant capital).' Therefore the capitalist sees the sum of both parts of his invested capital as the source of his profit and 'lumps them all together in his imagination'. " The origin of profit in the exploitation of the labourer alone is lost.

an average rate of profit is Through competition formed. ' This equalisation of profit rates completely masks the relation of profit to labour-time. Commodities are exchanged not merely as commodities but as products of capital.

Marx showed that the individual capitalist participates as part of total capital in the exploitation of the working class. The capitalist's profit, his share of the total surplus-value of society. is determined by the magnitude of his capital relative to those of other capitalists. The origin of profit in the appropriation of unpaid labour in the sphere of production is "completely obliterated': 'it is quite obvious that capitals of the same magnitude which set in motion very different amounts of labour, thus commanding very different amounts of surplus labour and consequently producing very different amounts of surplus-value, yield the same amount of profit.

Indeed, the basis itself - the determination of the value of commodities by the labour-time embodied in them — appears to be invalidated as a result of the conversion of values into cost-prices.'" In the alienated form of profit capital appears more and more as a thing rather than as a social relation. Indeed capital seems to be a technical relation in which 'the capital appears as a relation to itself, a relation in which it, as the original sum of value, is distinguished from a new value which it generated'.'

The increasingly fetishistic character of social forms finds its ultimate expression in interest-bearing capital. The division of profit into interest and industrial profit suggests that capital exists in isolation from the process of production. The interest-bearing capitalist can apparently expand his capital without it having any relationship to production. Money-capital, not living labour, becomes the goose that lays the golden egg.

Yet in reality interest as capital is a means of appropriating other people's labour: "But it presents this character of capital as something belonging to it apart from the production process itself and by no means as resulting from the specific determinate form of the production process itself. Interest presents capital not in opposition to labour, but on the contrary, as having no relation to labour....

The apparent autonomy of interest from capitalist production relations shows the growing materialisation of social relations in the unfolding of capital. " Through its various social forms, capital acquires a 'fictitious life and independent existence'.

This development is not just an illusion. On the contrary, the independence of capital 'is the form of its reality, or rather its real form of existence' 2 In its apparently independent forms, capital expands, it seems, because of its material property as capital. Money begets more money because of its properties as money. The ultimate conclusion drawn from these appearances is that wealth is not the result of the exploitation of living labour, but is the product of the material properties of land, labour and means of production.

[b] Competition and the individual capitalist Chance and conjunctural factors, not general laws, appear to govern reality in the sphere of competition." But in fact the immanent laws of capital are established prior to competition.

Competition simply allows these laws to be realised: 'Competition generally, this essential locomotive force of the bourgeois economy, does not establish its laws, but is rather their executor. Unlimited competition is therefore not the presupposition tor the truth of the economic laws, but rather the consequence — the form of appearance in which their necessity realizes itself."2* Bourgeois analysis begins with the superificial phenomenon of competition without attempting to understand its origins in capital accumulation. Because the individual capitalist only experiences capitalism through competition he takes his competitive struggle for the process of accumulation itself. The formation of an average rate of profit means that the 'rate of return' of the individual capitalist bears little relationship to the amount of living labour that he employs." Indeed it is immaterial to the individual capitalist how much living labour he sets in motion.

Though he may increase or decrease his workforce he will still realise a profit which corresponds to the total magnitude of his invested capital."6 From the standpoint of the individual capitalist, profit appears to be independent of exploitation. " His profit appears to be limited, not by the process of value expansion, but by competition. As far as the capitalist is concerned he is an autonomous agent; his decisions determine the outcome of the competitive struggle. " He may try to raise his rate of profit by cornering the market or by fixing his prices above the average. " From his efforts to increase profits via interaction with his rivals, the individual capitalist concludes that profits arise out of competition."° In fact competition cannot create additional surplusvalue. No matter how lucky or cunning he is, the individual 10

capitalist cannot conjure up value that has not been previously appropriated by some other capitalist. If a capitalist receives a rate of profit higher than the average, this represents the loss of a part of another capitalist's profits. For example a capitalist in a monopoly position 'would merely transfer a portion of the profit of other commodity-producers to the commodities having the monopoly price. A local disturbance in the distribution of the surplus-value among the various spheres of production would indirectly take place, but it would leave the limit of this surplus-value itself unaltered'."

Competition alters the distribution of surplus-value but not the quantity of surplus-value already produced."

Competition redistributes total surplus-value. The individual capitalist experiences this redistribution as the process through which his profit is created. This is why relations of distribution assume fundamental importance to the capitalist.

Production is taken as given, as a technical process. The relations of distribution that arise from competition appear as the distinctive capitalist relations."

Capitalist relations of production present themselves as relations of distribution. It appears that the different parts into which total value is distributed — interest, rent, wages — are themselves the source of value. To this fetish, which arises trom the sphere ot competition, Marx gave the name the trinity formula." The different forms of value (interest, rent, wages) exist in an apparent separation from each other and it seems that the material properties of land, capital and labour determine capitalist relations. These fetishised forms dominate the thinking of the individual capitalist: 'The different relations and aspects not only become independent and assume a heterogeneous mode of existence, apparently independent of one another, but they seem to be the direct properties of things; they assume a material shape'."

The inner connections of capital become extinguished in this apparent autonomy of social forms.

The sphere of distribution is the whole world of the individual capitalist. In his fetishised world of supply and demand the production of wealth is governed by subjective intentions. Social relations are reduced to the interactions that take place in the distribution of surplus-value. The world view of the bourgeois shared by his vulgar socialist critics. The sphere of distribution is the starting point too of the reformist analysis of capitalism.

[c] Exploitation as a technical relation In capitalist society the clamorous conflicts of the market place, the sphere of distribution, take attention away from the discreet exploitation of wage-labour by capital in the process of production. This basic social relation is hidden in the forms in which it appears. Capital appears to have the character of capital because of its material properties. But in fact capital only acts as capital through the wage-labour/capital social reiation: "Capital is productive of value only as a relation, in so far as it is a coercive force on wage labour, compelling it to perform surplus-labour, or spurring on the productive power of labour to produce relative surplus value'. i In competition there appears to be little relationship between unpaid labour and surplus-value. This illusion is further nurtured by the division of total value into interest, 11 'Thus everything appears reversed in competition. The final pattern of economic relations as seen on the surface, in their real existence and consequently in the conceptions by which the bearers and agents of these relations seek to understand ther, is very much different from, and indeed quite the reverse of their inner but concealed essential pattern and the conception corresponding to it. ' K Marx, Capital, Vol 3, p209.

11 12 Ibid, p25. The various forms of capital developed in this book 'thus approach, step by step, the form which they assume on the surface of society, in the action of different capitals upon one another, in competition, and in the ordinary consciousness of the agents of production themselves. Ibid.

13 This problem was resolved by Marx's development of the category 14 K Marx, Theories of surplus-value (TSV), Part 3, Lawrence & Wishart, 1972, p482 (all references to TSY are to this edition).

15 The fundamental distinction between constant and variable capital disappears when surplus-value takes the form of profit. The portion of capital invested in the purchase of labour-power is a definite quantity of value, but the exploitation of labour-power in the process of production makes this portion variable capital. That part of capital represented by the means of production does not undergo quantitative alteration of value in the production process and is called constant capital. See Capital, Vol 1, pp164, 188, 202, 206.

17 The analysis of the formation of an average rate of profit through the transformation of values into prices of production is one of the main ways in which the analysis of capital in general and that of many capitals can be linked. See Capital, Vol 3, chapter 9.

18 TSV, Part 3, p483 20 TSV, Part 3, p494. 'The further we follow the process of the self-expansion of capital, the more mysterious the relations of capital will become, and the less the secret of its internal organism will be revealed.' Capital, Vol 3, 22 TSV, Part 3, p483. 23 'But in reality this sphere is the sphere of competition, which, considered in each individual case is dominated by chance; where, then, the inner law, which prevails in these accidents and regulates them, is only visible when these accidents are grouped together in large numbers, where it remains, therefore, invisible and unintelligible to the individual agents in production.' Capital, Vol 3, p828.

24 Grundrisse, p552. 25 'His profit appears to him as something outside the immanent value of the commodity. Capital, Vol 3, p168.

26 'How could living labour be the sole source of profit, in view of the fact that a reduction in the quantity of labour required for production appears not to exert any influence on profit? Moreover, it even seems in certain circumstances to be the nearest source of an increase of profits, at least for the individual capitalist.' Capital, Vol 27 It appears so because the transformation of profit into average profit and of values into prices of production divorces the average prices of commodities from their values. See Capital, Vol 3, p828.

28 Ibid, p253. 29 In fact it is through the individual capitalist's drive for higher profits that an average rate of profit is established. In competition, each capitalist 'naturally tries to secure more than the average profit, which is only possible if others secure less. It is precisely as a result of this struggle that the average profit is established.' TSV, Part 3, p83 30 Capital Vol 3, p827. This view is reinforced by the fact that the surplus-value contained in commodities must first be realised in the circulation process and hence appears to arise out of exchange.

31 Ibid. D8Gt. 32 Writing about exchange Marx stated: "The total surplus value, as well as the total profit, which is only surplus value itself, computed differently, can neither grow nor decrease through this operation, ever; what is modified thereby is not it, but only its distribution among the different capitals'. Grundrisse, p760.

33 Marx wrote of John stuart Mill: 'A more advanced, more critical mind, however, 'admits the historically developed character of distribution relations, but nevertheless clings all the more tenaciously to the unchanging character of production relations themselves, arising from human nature and thus independent of all historical development.

«Thus land, capital and labour on the one hand — insofar as they are the sources of rent, interest and wages and these are the constituent elements of commodity prices — appear as the elements which create value, and on the other hand, insofar as they accrue to the owner of each of these means for the production of value, i.e. insofar as he derives the portion of the value created by them, they appear as sources of revenue, and rent, interest and wages appear as forms of distribution.' TSV, Part 3, p499.

35 TSV, Part 3, p514. 36 TSV, Part 1, Lawrence and Wishart, 1969, p93.

rent, profit and wages. In the interaction between industrial capital and money capital it is the moneyed capitalist who appears as the real capitalist. The mere ownership of capital enables the money capitalist to realise value (as interest); he does this while remaining outside the production process.

Interest 'is something due to capital as such, to the ownership of capital, to the owner of capital.... industrial profit on the other hand, appears to be the result of their labour'."

Ironically the industrial capitalist appears as a wage worker a well paid worker who pays his own wages. On the other hand the moneyed capitalist, who plays no direct role in production, appears as the capitalist.

To elaborate on the above. The division of profit presents interest as the 'price of capital' and industrial profit as the 'rate of return' on entrepreneurship. The form of interest gives the other part of profit 'the qualitative form of industrial profit, of wages for the labour of the industrial capitalist not in his capacity as capitalist, but as a worker (industrialist)'."

In other words the profit of the industrial capitalist appears 'not as appropriation of other people's labour, but as the creation of value by one's own labour....The work of the exploiter is identified here with the labour which is exploited'. " The division of profit into different forms of revenue transforms the capitalist into an industrial manager.

The exploitation of wage-labour becomes a technical matter.

The obliteration of the social character of capitalist production turns it into a technical operation. The process of exploitation appears as an ordinary labour process. * Insofar as the term exploitation is used, it is as a moral objection to the cheating and grabbing of the money-capitalist. Thus the fundamental antagonisms between labour and capital are removed from the process of exploitation and are understood as antagonisms that arise in the sphere of distribution.41 The moneyed capitalist is the caricature set up by vulgar bourgeois economists and vulgar socialists alike. From the point of view of the bourgeoisie this is not surprising. Interestbearing capital is the form in which the contradictory nature of capital is totally hidden: 'no contradiction to labour is evident' * Attacks on this irrational form of capital are safe for the bourgeoisie. The obviously shady character of interest- • bearing capital makes it a target for the moralistic left too because it is the form in which capital 'is at its most irrational' and because it provides the easiest point of attack for the vulgar socialists'. *3 The labour process exists in all societies. Once capital is seen in a technical and ahistorical manner the specific features of capitalist production are lost. The antagonisms between labour and capital are transferred from the realm of production to a distributive relation between rich and poor. The object of attack becomes not capital but speculators, property sharks and shifty financiers. The distinctive character of capitalist exploitation is ignored.

2. The nature of capitalist domination [a] Capital as social power Vulgar socialists think that the working class is dominated in bourgeois society as the result of the activity of certain individuals or social groups. For reformists bad laws, bad institutions and bad politicians are the villains. In reality the problem lies elsewhere. As we have seen capitalist production leads to the materialisation of social relations. The productive power of social labour appears as the material property of capital, which assumes an independent form. In this way Social action takes the form of the action of objects, which rule the producers 12 instead of being ruled by them'.* The social character of productive activity confronts individuals as an autonomous power.'s This is the real problem facing the working class — the domination of capital.

The domination of capital over all sections of society advances with the development of capitalist production. Capital as self-expanding value expresses itself in laws which drive on the process of surplus-value extraction. Capital itself provides the compulsion to accumulate: 'the development of capitalist production makes it constantly necessary to keep increasing the amount of capital laid out in a given industrial undertaking, and competition makes the immanent laws of capitalist production to be felt by each individual capitalist, as external coercive laws. It compels him to keep constantly extending his capital, in order to preserve it, but extend it he cannot, except by means of progressive accumulation.'6 Through competition the need to produce surplus-value is imposed as a coercive law on the individual capitalist. The competitive struggle forces the individual capitalist to intensify exploitation and expand the scale of production under the 'penalty of ruin'. The expansion of capital gives it more and more power over the real producers: 'Capital comes more and more to the fore as a social power, whose agent is the capitalist. This social power no longer stands in any possible relation to that which the labour of a single individual can create. It becomes an alienated, independent social power, which stands opposed to society as an object, and as an object that is the capitalist's source of power. "T It is capital as social power that confronts and dominates the working class and compels the individual capitalist to produce surplus-value on an extended scale. But the fact that capital dominates does not mean that capitalists are able to rule and regulate the process of production. The capitalist has no choice but to accumulate. The laws of capital accumulation confront him more and more as natural laws 'working independently' and becoming 'ever more uncontrollable'. * The capitalist holds power only as the personification of capital. " The capitalist 'does not rule over his labourer through any personal qualities he may have, but only in so far as he is "capital"; his domination is only that of materialised labour over living labour, of the labourer's product over the labourer himself' 5º This is a further expression of the fetishism of commodities — the personification of things and the materialisation of persons. Only as the agent of the power of capital is the capitalist able to hold power. Capital is social power and its domination cannot be reduced to the actions of its individual agents. [b] Confusions caused by the forms of capitalist domination We have seen how the antagonisms inherent in capitalist social relations are expressed in money-capital, which seems to be independent of the production process. Capitalist property in the form of money represents power, apparently in complete independence from exploitation."' The existence of capital as a property relation, as manifest in the division of profit into different forms of revenue, obscures the distinctive character of capital as a social relation. This leads to the separation of the juridical aspect of capitalist property, the private ownership of money as rent and interest, from its economic aspect, the power to expand value through the appropriation of surplus-value in production.

The distinguishing feature of capitalist private property, compared with previous forms of property, is that it is not merely 'property' but represents a claim on the unpaid labour of society. This becomes particularly clear in the case of interest-bearing capital. Here we have 'capital as property as distinct from capital as function'. s

Private property is the basis of capitalist production. But the existence of capitalist property in separation from production suggests to the reformist the possibility of separating the capitalist from capitalist production. The role of capital in production appears purely technical. The direction of the labour process can be entrusted to managers and technicians."

If eapitalist production is understood in this narrow way it can be concluded that 'we do indeed require capital but not capitalists'. " And indeed this is the conclusion drawn by many radical critics of capitalism. However the capitalist is not a mere illusion: capital can only exist through capitalists. " The confusion of vulgar socialists arises from seeing the role of capital in production as a technical function and not as a The personification of capital in the capitalist stems from the accumulation process. Capital can only exist as many capitals; the laws of capitalism are realised through their competitive interaction. Since value forms the foundation of capital and since capital 'necessarily exists through exchange' it is clear that the reciprocal repulsion between capitals already contained in capital as realised exchange value' 36 To suggest that capital could exist without the capitalist is to mistake a social relation for a bundle of material goods. Marx replied to the vulgar socialists by pointing out that the elimination of the capitalists would require that 'the means of production cease to be capital'."

Capital exercises its control over society through the process of accumulation. The invisible hand of accumulation ensures that in general capital does not require physical 'accumulation reproduces the capital-relation on a progressive scale, more capitalists or larger capitalists at this pole, more wage workers at that. The reproduction of a mass of labour-power, which must incessantly re-incorporate itself with capital... which cannot get free from capital, and whose enslavement to capital is only concealed by the variety of individual capitalists to whom it sells itself, this reproduction of labour-power forms, in fact, an essential of the reproduction of capital itself.'* As capitalist relations are spontaneously reproduced it is only in rare instances that capital appears as what it really is - a Production relations seem to be free and voluntary. Under capitalism — unlike previous modes of production — there is generally no need to exercise force on producers of surplus.

Capitalist exploitation assumes the fetishistic form of a free and purely 'economic' affair."

The wage-labour/capital relation seems to be governed by natural laws rather than by the social power of capital over the working class. The capitalist social relations which perpetuate the conditions for exploitation are veiled by the contractual form of wage-labour. " Formally, people are free to buy and sell and compete with one another in the labour market as in any other market. The illusory nature of this equality and liberty only emerges through analysis of the exploitation that is concealed by the superficial forms of exchange. In production the apparent equality between wage-labour and capital turns into an exploitative relation where the capitalist appropriates the unpaid labour of the worker. " The freedom of the worker to sell his labour-power is the condition for the freedom of capital to exploit it: "property turns out to be the right, on the part of the capitalist, to appropriate the unpaid labour of others, and to be the impossibility, on the part of the labourer, of appropriating his own product. " We can now see that capital accumulation is at the same time a process of domination. This domination is social. The capital/labour relation is a 'free' and 'voluntary' one and capital does not generally need political agents to enforce the process of surplus-value extraction. In fact, the bourgeoisie cannot rely on the spontaneous movement of capital alone to guarantee the maintenance of its system of production. But 13 when it is forced te resort to different instruments of coercion this appears as an exceptional measure — one not necessarily related to the needs of capital.

When the domination of capital involves the erosion of relations of equality and the oppression of the working class this appears as a political act. Political oppression is seen as the result of abuses of property or the manipulations of some external political agency. Often political oppression seems to fly in the face of the freedoms 'guaranteed' by capitalist society. Because production is understood as a technical, non-exploitative process, oppression seems to arise from forces outside production. The inherently coercive powers of capital are mediated by free economic relations, which make politics appear as something autonomous from capital. The separation of social forms under capitalism leads to the 40 Capital, Vol 3, p382. 41 The preoccupation of the newspapers of the British reformists (like the Morning Star) and of the radical left (like Socialist Worker) with the unfair distribution of wealth and the unscrupulousness of financiers stems from this moral understanding of exploitation.

"What a bloody nerve! The crisis is the crisis of inequality', Socialist Chailenge, 11 January 1979, pl.

42 TSV, Part 3, p467. 44 Capital, Vol 1, p79. 47 Capital, Vol 3, p264. 48 Ibid, p245. 49 'Thus the productive power of social labour and its special forms now appear as productive powers and forms of capital, of materialised labour, of the material conditions of labour — which, having assumed this independent form, are personified by the capitalist in relation to living labour.' TSV, Part 1, p389. See also Capital, Vol 3, 50 TSV, Part I, op cit, p390.

Capital, Vol 3, p555. TSV, Part 3, p496 54 See 'Results of the immediate process of production', in Capital, Vol 1, Penguin edition, 1976, p999.

55 'The concept of capital contains the capitalist.' Grundrisse, p512.

57 TSV, Part 3, p296. Marx argued: 'Of course, socialists sometimes say, we need capital, but not the capitalist.... I may well separate capital from a given individual capitalist, and it can be transferred to another. But, in losing capital, he loses the quality of being a capitalist. Thus capital is indeed separable from an individual capitalist, but not from the capitalist, who, as such, confronts the worker'.

Grundrisse, p303. 58 Capital, Vol 1, pp575-6 59 'on the basis of capitalist production, the mass of direct producers is confronted by the social character of this production in the form of strictly regulating authority and a social mechanism of the labourprocess organised as a complete hierarchy — this authority reaching its bearers however, only as the personification of the conditions of labour in contrast to labour, and not as political or theocratic rulers as under earlier modes of production — among the bearers of this authority... there reigns complete anarchy within which the social interrelations of production assert themselves only as an overwhelming natural law in relation to individual free will.' Capital, Vol 3, the labourer belongs to capital before he has sold himself: 'His economic bondage is both brought about and concealed by the periodic sale of himself, by his change of masters, and by the oscillations in the market price of labour-power'. Capital, Vol 1, 61 Ibid, p547. 62 Ibid

For reformists, oppression and injustice are not the inevitable capital accumulation ensure that the activities of each capital- The state has existed in all class societies. The bourgeois state [a] The fetish of state autonomy the law, it provides the conditions for the maintenance of formal separation of economic and political power. As the separation of politics from economies. More specifically the separation of capital as property from capital as economic function expresses itself in the separation of political from economic domination. The apparent autonomy of politics from economics provides the starting point for vulgar socialists. For them socialism means more 'political' freedom. Marx criticised those radicals who saw socialism as the realisation of the bourgeois ideals of freedom and equality — and for whom the original relations of capital were 'perverted by money, capital, etc'. s consequence of the existing relations of production, but 'abuses of power' that could be put right through 'politics', through the extension of democracy.

3. Capital and the state is the institution which enforces the wage-labour/capital relationship. In mediating between subjects who are equal before property. The bourgeois state guarantees the right of the capitalist to appropriate the unpaid labour of others.

State intervention has been necessary from the dawn of capitalist production. Certain social conditions are necessary to allow capital accumulation to take place. The state must assist in the destruction of all social and political barriers to capital. Complete freedom of trade and the removal of all obstacles to the movement of capital are necessary. Labour must be subjugated to capital and legal barriers to the free movement of workers must be removed. «4 The state is not only necessary to establish the basis for capital accumulation. It is also required to guarantee the conditions for the continued expansion of capital. Driven on by the compulsion to produce more surplus-value, the individual capitalist cannot perform the social functions necessary for the maintenance of capitalist relations.'s The ability of capitalists to function as capitalists already presupposes the existence of the general social relations of capital,* Marx noted that capital in general is an abstraction, but that 'capital in general, as distinct from the real capitals, is itself a real existence' " It is the interests of capital in general that are represented by the bourgeois state.

The state takes on tasks which are unprofitable from the point of view of the individual capitalist, but necessary for the reproduction of capital in general. It establishes the basic infrastructure and other material conditions for production.

These social functions are paid out as revenues deducted from total surplus-value. Thus the state arises, not independently of capital, but as an institution essential to the enforcement of its The state plays a vital function in the reproduction of capitalist social relations.

representing the interests capital in general it is not subject to the same constraints imposed on the individual capitalist by value relations. ® The state can do what no capitalist can - represent the interest of total capital. It can regulate competition and enforce the general interest of capital against the excesses of a particular individual capitalist. In Engels's words, the state of the capitalists is 'the ideal personification of the total national capital. ' However the state cannot escape the laws of capital; it merely expresses these laws in a modified way.

As noted previously the domination of the working class by capital is exercised through the accumulation process. This method of domination is usually adequate to capital's needs.

However, when class antagonisms come to the fore the bourgeoisie is forced to resort to 'political' means. The exercise of class violence by private armies would make the inherently coercive nature of capitalist relations too obvious.

14 Therefore the bourgeois state acquires a monopoly over force.

It is through the state that the capitalist class as a whole confronts the working class.

The individual capitalist cannot represent the interest of capital in general against the working class. He reproduces the wage-labour/capital relation only in relation to his own workers; he constantly attempts to restrict their wages and thus their capacity to consume. But he regards the rest of the working class as potential consumers: he wishes them to consume as much of his product as possible." The laws of ist in relation to his own workers lead to increases in the rate of exploitation of the whole working class. But while the reproduction of capital can take place through the activities of individual capitalists, it is only through the state that these capitalists can enforce the relation of capital in general to labour. The reproduction of capitalist social relations results in the mediator of the domination of capital the state appears to lead an autonomous existence. The state appears to be independent of the laws that govern social production. It even seems that the state can regulate and organise the process of The apparent autonomy of the state is reinforced by its activity. Though it often pursues an overtly class policy, it must also mediate between individual capitalists. For example, state legislation curbs the individual capitalist's drive to exhaust his workers, limits capital's plunder of natural resources and regulates financial and property transactions. The state presents itself as a force above classes. The fact that economic power is not directly related to politics strengthens the view that the state can express the interests of society as a Once the state is seen as an autonomous or relatively autonomous institution, its activities appear to be determined by distinct laws of politics. Indeed the state itself comes to be seen as the product of the subjective interaction of social groups." The essential character of the state as the embodiment of the interests of capital in general is glossed over. It is regarded as a convention between classes - as an institutionalised social contract. In the realm of politics it is the subjective interaction of individuals or classes that is held to determine events; state policy is seen as the outcome of this "Where political parties exist, each party sees the root of every evil in the fact that instead of itself an opposing party stands at the helm of the state. Even radical and revolutionary politicians seek the root of the evil not in the essential nature of the state, but in a definite state form, which they wish to replace by a different state form."

Radical critics of the state do attack political institutions: even vulgar socialists are prepared to call the state a class institution. But this conception is based on a narrow political view of the state. The separation of politics from economics accepted, the state is portrayed as a purely political institution.

vulgar socialists the state is not a product of the contradictory movement of capital but an external influence on 'the economy'. The capitalist character of the state is confirmed by the social links of political agents with big business; particular state policies are interpreted as the result of the influence of a particular fraction of capital - say the financiers or the monopolists. " The essential nature of the state as the form that maintains the general conditions for capitalist production is seen only through the subjective interaction of its political agents. Reformists fail to understand that the domination of capital through the state cannot be reduced to its individual

agents. The existence of the state already presupposes the domination of capital through the wage-labour/capital relation: the state merely provides the general conditions for the reproduction of that social relationship.

The fetishised form of the state has important political consequences. Insofar as the bourgeois state is seen as a class state its class features are held to be the product of the political bias of its agents. From this it is concluded that the direction of the state could be altered by political bias of a different kind. The neutral character of the state is affirmed. Now, the state must be able to respond to political pressure, because as we have seen the conditions necessary for capitalist production do not arise spontaneously. But reformists see in the state's responsiveness to pressure proof of the correctness of their political strategy. In fact, the state responds to pressure only within limits set by capital accumulation. The example of unemployment benefits illustrates this.

The accumulation of capital leads to the establishment of a reserve army of labour. It is a matter of indifference to the individual capitalist what happens to the unemployed. It is not a matter of indifference to capital in general. Capital in general seeks to avoid social instability and prevent the destruction of potential labour-power. Hence society 'undertakes for Mr. Capitalist the business of keeping his virtual instrument of labour — its wear and tear - intact as a reserve for later use'." The state steps in and provides the bare minimum for the subsistence of the living labourer.

The fact that social legislation is enacted and enforced as a result of working class pressure strengthens the view that the state can encroach on capital and serve the interests of the proletariat. * In this way legislation necessary to the maintenance of the wage-labour/capital relation appears as concession to the working class. When the state nationalises a particular industry against the opposition of a group of capitalists, reformists will often celebrate the occasion as a victory for the labour movement. Yet class pressure which accepts the legitimacy of the bourgeois state is no threat to capital. On the contrary, it reconciles the working class to the continued domination of capital and limits it simply to defending its interests within the capital relation.

The antagonism between labour and capital finds only a particular expression on the political level. This antagonism is not simply a political one. It is inherent in capital itself: 'what is overlooked, finally, is that already the simple forms of exchange value and money latently contain the opposition between labour and capital'." Whether this antagonism takes a more or less intense form on the level of politics depends on particular circumstances. But one thing is clear: the struggle for the emancipation of the working class is not 'polities' separated from 'economics'. It is a struggle against capital as social power — it is a social revolution. It cannot be directed against this or that group of capitalists or politicians. It can only be directed against the social power of capital which is enforced through the state.

What is distinct about revolutionary polities is that it is directed not against political relations relations. It is the recognition of the oppression of the working class as not merely political but social that constitutes the basis for the Marxist's rejection of all reformist strategies. The destruction of the bourgeois state is one moment in the fight to overthrow capitalist social relations. It is the precondition for the social emancipation of the working class.

4. Capital in the epoch of imperialism "From all that has been said in this book on the economic essence of imperialism, it follows that we must define it as capitalism in transition, or, more precisely, as moribund capitalism.' (Lenin)" 15 In the imperialist epoch capital accumulation can only continue by modifying its own laws. The rise of monopolies and the tremendous increase in state intervention in the economy have led many to reject Marx's analysis of capital and Lenin's theory of imperialism. In the next section we will examine the trends dominant in revisionism today. Here we want to draw out the relationship between Marx and Lenin in their assessment of imperialism as an era of transition.

Marx's analysis shows the logical development of capital towards its transitional phase. He shows that free competition, the free movement of capital, is 'the adequate form of the productive process of capital'." In Marx's materialist method, abstractions, such as the abstraction of free competition from the general laws of capital, always 'point to a further definite concrete historical basis'." Marx's analysis of the relationship between the movement of capital and the development of capitalism is a historical-logical one: "As long as capital is weak, it still itself relies on the crutches of past modes of production, or of those which will pass with its rise. As soon as it feels strong, it throws away the crutches, and moves in accordance with its own laws. As soon as it begins to sense itself and become conscious of itself as a barrier to development, it seeks refuge in forms which, by restricting free competition, seem to make the rule of capital more perfect, but are at the same time the heralds of its dissolution and of the dissolution of the mode of production resting 65 See Elmar Altvater's useful remarks on this question in 'Some problems of state interventionism', Kapitalistate, No 1, 1973, p98.

68 Marx characterised the relation between capital and the state as 'u specific relation of capital to the communal, general conditions of social production, as distinct from the conditions of a particular capital and its particular production process'. Grundrisse, p533. This analysis runs counter to the vulgar views on state capitalism held by the (British) Socialist Workers Party (SWP). The rejection of Marx's analysis of the relation between capital and the state is clearly expressed by SWP theoretician Colin Barker, who tries to treat the state as 'a capitalist'. 'The state as capital', International Socialism, Series 2, No 1, July 1978, p25.

69 F Engels, Anti-Dühring, op cit, p330.

71 The most sophisticated contemporary exponent of this idealist See his Fascism and Dictatorship, New Left school is Poulantzas. Books, 1977, and in particular Part 3, 'Fascism and the dominant classes'. Atempts to reconcile Marxism with political sociology are now pursued by Eurocommunist theoreticians with great vigour.

'Critical Marginal Notes on the Article "The King of Prussia and Social Reform. By a Prussian", Marx and Engels, Collected Works, Vol 3, p197.

73 Vulgar sociology reduces the rule of capital to its individual agents. It presents the policies of capital as those of a particular interest group — for example, the monopolists. In this way the interest of the capitalise class is depicted as the interest of a particular fraction of capital. This superficial approach leads to the conclusion that basic contradictions exist between different fractions of capital.

way the sociologists obscure the essential nature of the capital/labour relationship - that it is total capital that exploits the whole of the working class and that every individual capitalist is but an individual element of the capitalist class. See our critique of this standpoint in Part III of this article.

75 See W Müller and C Neusüss, 'The illusion of state socialism and the contradictions between wage labor and capital', Telos, No 25, 1975. This article provides a useful line of analysis of the questions under consideration here.

76 Grundrisse, p248. 79 Marx and Engels, Selected correspondence, op cit, p99.

80 Grundrisse, p651.

Once capital overcame the obstacles to its free movement it ™ of social capital (capital of directly associated individuals) as expanded spontaneously. As soon as this stage was reached in the nineteenth century, capital became conscious of itself as a barrier to development and was forced to restrict free competition. Marx derived the tendency for capital to contradict and modify its own laws from the general nature of capital.

Capital must 'seek refuge in forms' other than free competition in its efforts to overcome the barriers to accumulation.

Marx demonstrates that the development of the productive forces comes into conflict with the social relations of capitalist production. The tendency to increase the productivity of labour comes into conflict with the requirements of profitability. This central contradiction is expressed in the tendency of the rate of profit to fall. This tendency reveals that 'beyond a certain point, the development of the powers of production becomes a barrier for capital; hence the capital for the development of the productive relation a barrier powers of labour'. " The very development of the productive process becomes a barrier for capital. The inability of capital to develop the forces of production systematically and its inherent tendency towards crisis — as expressed in the tendency of the rate of profit to fall - bring to light transient nature of capitalist society. It was for this reason that Marx described the tendency of the rate of profit to tall as 'in every respect the most important law of modern political economy'. " The more capital comes into conflict with its own barriers the more it is forced to seek ways of overcoming them. Here we do not want to examine the way capital seeks to resolve its crisis except to discuss the role of the state and monopolies in this process."

[a] Free competition and monopoly The fall in the rate of profit intensifies the competitive struggle between individual capitalists. This leads to the growing concentration and centralisation of capital. " Credit speeds up the process of centralisation. Through credit capital tries to overcome the limitations imposed on the individual capitalist and thus allows an 'enormous expansion of the scale of production and of enterprises, that was impossible for individual capitals' ss Credit is a lever for redistributing capital from the weaker to the stronger capitalists. The process of centralisation is not limited 'by the absolute limits of accumulation'.

masses in a single hand Capital can "grow into powerful because there it has been withdrawn from many individual As credit develops joint-stock companies emerge. These huge units of production further accelerate the pace of capital accumulation. To protect themselves from their competitors they seek to restrict free competition by establishing monopolies and cartels. But monopolies cannot overcome the laws which govern capital accumulation. They can only transfer a part of the profit of other capitalists to themselves - through the redistribution of total surplus-value.* Monopolies seek to overcome the barriers to profitable production by altering the form in which an average rate of profit is realised. Monopolies cannot be counterposed to competition, either historically or logically. They suppress free competition but not competition as such. Marx derived the tendency towards centralisation and monopoly not from an analysis of a particular historical period but from the general nature of capital. Monopoly capitalism as a scientific concept is based on the analysis of the laws of motion of capital.

Derived from capital itself, the tendency towards monopoly has been realised in the historical period characterised as With the concentration and centralisation of capital the social character of production acquires a growing independence from the individual capitalist. Credit stimulates the socialisation of ownership and endows capital 'with the form distinct from private capital'. Marx described this process as "the abolition of capital as private property within the framework of capitalist production itself' as The new forms of competition put the socialisation of production onto a higher level. It is in this sense that they 'constitute the form of transition to a new mode of production'."° At the same time monopolies and joint-stock companies express the contradictions inherent in capitalism in a new form. They show that capital must modify its own laws and that the 'conditions of competition, i.e. of production founded on capital, are already felt and thought of as barriers, and hence already are For Marx the rise of joint-stock companies, credit and monopolies was an important sign of the transient nature of capitalist production. The separation between the ownership of capital and its control that had been indicated by Marx became increasingly realised in the historical development of capital. Marx pointed to the transformation of 'the actually functioning capitalist into a mere manager, administrator of other people's capital and of the owner of capital into a mere owner, a mere money capitalist'." Marx considered that the joint-stock companies represented the ultimate development of capitalist production. They were a 'necessary transitional phase towards the reconversion of capital into the property of producers'. Capital does not overcome its antagonistic nature in this phase of transition. Nor does 'transition' imply the transcen- The forms of dence of capitalist relations of production.

transition indicate the inability of capital to develop the productivity of social labour in accordance with its own laws." The revisers of Marx believe that these new forms contradict the essential laws of capital. For reformists the efforts of monopolies to regulate competition endow them with the power to organise production.

[b] Free competition and the state In order to overcome the obstacles to capital accumulation the bourgeoisie increasingly comes to rely on state intervention in the economy. For Marx state intervention represented a sign of capitalist stagnation. Or, conversely, the more limited the intervention of the state in production, the more developed is the capital relation.'s "The highest development of capital exists when the general conditions of the process of social production are not paid out of deductions from the social revenue, the state's taxes.... but rather out of capital as capital.' » In the imperialist epoch the conditions for capital accumulation can be maintained only through a major expansion of state intervention. The contradictions immanent in the capitalist accumulation process have led to restrictions on free competition - restrictions imposed by state intervention.

As capital develops, every new barrier to accumulation necessitates further state intervention in the economy. Capital 'forces on more and more the transformation of the vast already socialised, into state property'." This tendency has reached massive proportions in the imperialist epoch. State intervention promotes the tendency towards the socialisation of production. This is possible because the state is not subject to the limitations of the individual capitalist. It is, however, constrained by value relations, by the total quantity of surplus-value produced Thus the socialisation of production carried out by the state is always limited by capitalist social relations.

[c] Capitalism transition or moribund capitalism Marx's analysis of the transitional forms of capital acquires a new force in Lenin's analysis of imperialism. In the epoch of 16

imperialism capital can no longer develop in accordance with its own laws. Monopolistic competition and state intervention replace free competition and the increasingly social character of production is revealed by the growing separation of the ownership of firms from their control - in joint-stock companies and state enterprises. The need for capital to adapt these new forms shows that imperialism is an epoch of transition. The fact that the socialisation of production can only proceed through these forms indicates the material possibility of socialism.

Marx's analysis shows that the barriers to accumulation force capital to modify its own laws and 'seek refuge' in transitional forms. Once capital reaches its highest point on the basis of its own laws, further development has a regressive character: 'As soon as this point is reached, the further development appears as decay, and the new development begins from a new basis'." It is in this sense that we can characterise imperialism as an epoch of decay, of moribund The spontaneous movement of capital becomes capitalism. less and less able to overcome the barriers to accumulation contained within capital itself.

Lenin characterised the imperialist epoch as one of stagnation and decay but also indicated the increasing unevenness of this process, acknowledging the possibility of episodes of expansion within the general tendency towards decline." He argued that 'on the whole capitalism is growing far more rapidly than before; but this growth is not only becoming more and more uneven in general, its unevenness also manifests itself, in particular, in the decay of the countries which are richest in capital (Britain)'. The tendency towards decay is revealed on a world scale in the restricted basis for the expansion of capital. The continuous drive to divide and redivide the world only postpones the assertion of the tendency towards capitalist collapse.

What characterises this epoch of transition is that the counteracting tendencies to the falling rate of profit prove increasingly inadequate in overcoming the barriers to accumulation. More and more capital has to use 'extra-economic' means to regulate production and to discipline the working class. In the past 50 years wars, major defeats of the working class and the mass destruction of capital values have been the means by which profitable production has been restored. Lenin's analysis of imperialism as the epoch of transition demonstrated that socialism was not merely possible but necessary for the defence of the independent interests of the working class.

Revisionism seizes upon the social forms which signify the moribund nature of capital and interprets them as no longer capitalist, and often as progressive. These features of imperialism, which for Lenin indicated the necessity for the dictatorship of the proletariat, are used to erase the distinction between capitalism and socialism and to justify the abandonment of the tasks of socialist revolution. The revisionists adopt the standpoint of the individual capitalist and imagine that society is regulated by the conscious actions of the state and the monopolies. They reject the more barbaric features of capital in the imperialist epoch and seek to use the bourgeois state to build socialism. We now turn to the theory of SMC, the major form in which the bourgeois standpoint has become established in the labour movement in the post-war period.

83 For the present-day expression of this process in the British context see RCP No 3, pp8-22 84 The concentration of capital pertains to the 'increasing concentration of the means of production' that arises out of accumulation. It is 'only another name for reproduction on an extended scale'.

centralisation of capital relates to the growing destruction of one capitalist by another; unlike concentration, change in the distribution of capital already to hand, and functioning; 17 its field of action is therefore not limited by the absolute growth of social wealth, by the absolute limits of accumulation.' Capital, Vol 1, pp586-7. 85 Capital, Vol 3, p436. 86 Capital, Vol i, p587. 87 Capital, Vol 3, p861. 88 Ibid, p436. 89 Ibid. 90 Capital. Vol 3, p441. 91 Grundrisse, p652. It is almost as if the bourgeoisie senses its transient role. No wonder that sections of the bourgeoisie pay lip service to free competition even today.

92 Capital, Voi 3, p436. 94 This simply demonstrates the fact that the self-expansion of capital based on the contradictory nature of capitalist production permits an actual free development only up to a certain point, so that in fact it consututes an immanent fetter and barrier to production which are continually broken through by the credit system.' Capital.

95 'The separation of public works from the state, and their migration into the domain of works undertaken by capital itself indicates the degree to which the real community has constituted itself in the form of capital.' Grundrisse, p531.

97 Anti-Dühring, op cit, p332.

98 Grundrisse, p541. 99 Here we take issue with Margaret Wirth, who, in her ofter come criticisms of the revisionist theories of SMC, idencifies Lenin **** these theories. See M Wirth, 'Towards a critique of state morape.

capitalism', Economy and Society, August 1977, p246.Wirth's ara:sis leads her to reject the concept of the imperialist eboch altozete: Marx anticipated the imperialist epoch. See Grundrisse, pp6:0 : 100 Lenin, CW 22, p300.

I|I THE THEORY OF STATE MONO-

POLY CAPITALISM

The theory of SMC provides the basis for the contemporary forms of state socialist strategy. In contrast to the leaders of the Second International, today's revisionists claim that the theory of SMC is consistent with Marxism and Leninism.

There are many variants of the theory of SMC, but its purveyors always focus on certain key points. Competition is taken as the starting point for the analysis of capitalist production. Production is treated as a technical process and social contradictions are relegated to the sphere of distribution. Monopolies are depicted as the force behind capitalist oppression. The state is presented as an instrument in isolation SMC theorists fail to locate the class struggle in the antagonism between capital and labour that is rooted in capitalist social relations. Instead they focus on competition amongst capitalists and conflicts between capitalists and workers over the distribution of surplus-value. By adopting the standpoint of the individual capitalist, the theories of SMC separate politics from economics and relegate class struggle to a narrow political sphere. Theoretically they have paved the way for the rejection of the dictatorship of the proletariat by today's communist parties.

The evolution of the theory of SMC is at once the history of the rise of Stalinism and of the liquidation of Marxism in the working class movement. A Marxist critique of the theory of SMC is necessary not merely to settle theoretical scores with revisionism - indeed on a theoretical level SMC theories have nothing to add to the views of classical social democracy. The importance of the theory of SMC is that it is the theoretical reflection of the reformism that contains the European labour movement. It gives coherence to the radical bourgeois ideology that dominates the working class. A critique of the theory of SMC is at the same time a political weapon for destroying the existing reformist leadership of the working class.

1. The origins of the theory SMC has become the central concept of Stalinist theory.

According to its proponents, SMC is a distinct stage of capitalism in which the immanent laws of capital as presented by Marx have become transformed. There is considerable disagreement over the distinguishing features of the stage of SMC. But there is a general consensus that the state and the monopolies have suppressed the inherent contradictions of the Stalinist theoreticians have always claimed the authority of Lenin for their definition of SMC as a distinct stage of capitalism. One of the more ingenious attempts to link Lenin to the theory of SMC is to be found in the writings of Paul Boccara, a leading economist of the French Communist Party (PCF). According to Boccara, Lenin had no sooner developed his theory of imperialism than he rejected it in favour of a new theory of SMC. ' Boccara argues that, a few months after the publication of Imperialism, the highest stage of capitalism, Lenin discovered that he was wrong. He now identified SMC as a new historic stage. In the case of Boccara an attempt is made to reconcile Lenin with a view of imperialism as progressive. However even those more radical exponents of the theory of SMC who denounce imperialism as reactionary claim the mantle of Lenin.?

A study of Lenin's writings makes clear that the theory of SMC is alien to his method. Lenin used the term state monopoly capitalism to describe the tremendous increase of state intervention in the economy during the First World War.

Unlike the revisionists, Lenin did not see this intervention as the result of the pressure of monopolies. For him the state always pursued the interests of the bourgeoisie as a whole: 'And what is the state? It is an organisation of the ruling class — in Germany, for instance, of the Junkers and capitalists. And therefore what the German Plekhanovs...call «war-time socialism" is in fact war-time state-monopoly capitalism, or, to put it more simply and clearly, war-time protection for capitalist profits."

As we saw in Part II, Lenin noted that in its attempt to overcome the tendency towards crisis, capital increasingly relied on the state. He followed Engels's analysis in Anti- Dühring, which shows that though it is obscured by private property, the social character of production reveals itself in monopolies and the state. For Lenin the tendency towards the socialisation of production demonstrated the possibility of socialism. ' The barbarism of capital's drive to overcome the barriers to its expansion was dramatically exposed in the First World War. In these circumstances Lenin used the term state monopoly capitalism to illustrate that, in the epoch of imperialism, socialisin was not only possible but necessary for the working class.' For Lenin state monopoly capitalism did not constitute a stage distinct from imperialism. Lenin never counterposed 'free competititon' to 'monopolies' but conceived of both as different forms of competition: Imperialism, in fact does not and cannot transform capitalism from top to bottom. Imperialism complicates and sharpens the contradictions of capitalism, it "ties up" monopoly with free competition, but it cannot do away with exchange, the market, competition, crises, etc....The essential feature of imperialism, by and large is not monopolies pure and simple but monopolies in crises." with exchange, markets, competition, conjunction Unlike theorists of SMC Lenin never abstracted monopolies from capitalist production. He fought the grandparents of today's Eurocommunists and their efforts to isolate monopolies and present cartels and trusts as the enemy of the working class. He dismissed this standpoint as 'new Proudhonism'. ' He wrote: "a "fight" against the policy of the trusts and banks... is mere bourgeois reformism and pacifism, the innocent expression of pious wishes.

and benevolent The theoretical roots of SMC are to be found not in Lenin, but in the writings of Bukharin. The focus of Bukharin's analysis was not the process of capital accumulation but the ways in which capital tried to reorganise itself to overcome the barriers to accumulation. His analysis of stale intervention and monopolies is not related to the contradictory tendencies immanent in capitalist accumulation. Lenin criticised Bukharin for his impressionistic method: "Comrade Bukharin's concreteness is a bookish description of finance capitalism. In reality we have heterogeneous phenomena to deal with.. Nowhere in the world has monopoly capitalism existed in will it a whole series of branches without free competition, not exist... To maintain that there is such a thing as integral imperialism without the old capitalism is merely making the wish tather to the Bukharin's error was to abstract the activities of monopolies and state intervention from the accumulation of capital.

As a result he could argue that: 'Finance Capital has abrogated the anarchy of production within the large capitalist countries'." Bukharin's analysis was restricted to the sphere of competition. Bukharin saw the changing forms through which the distribution of surplus-value took place as changes affecting the substance of capitalism. As a result of the changes, he argued, capitalist anarchy only existed within the framework of the world economy. Within the confines of the nation state, on the other hand, the transformation of an "unorganised system of commodity capitalism into an organisation of finance capitalism' had occurred: 'Capitalist "national economy" has moved from an irrational system to a rational organisation, from a subject-less economy to an economically active subject. This transformation has been effected by the growth of finance capitalism and the fusion of the economic and political organisation of the bourgeoisie. At the same time, however, neither the anarchy of capitalist production in general nor the competition of capitalist commodity producers was eliminated. The have not only remained but have deepened by phenomena reproducing themselves in the framework of world economy. The blindly irrational and system of world economy is just as "subject-less" as the earlier system of national economy.'Iz Bukharin's separation of an organised national economy from an irrational world economy had important political consequences. His theory suggested that, under proper guidance, a national economy could be organised and planned. It remained for the Stalinist bureaucracy to draw the conclusion that socialism could be built within the borders of the Soviet Union through state planning. Thus Bukharin provided the theoretical basis for the revisionist theory of socialism in one country. As leading Soviet bureaucrat Manuilsky argued against Trotsky: 'Trotsky said it would be impossible to switch off the socialist system from the world economy as one would switch off electricity from a general network....But what do we see in reality? The crisis creeps across the entire area of western Europe, but stops at the borders of the USSR as though at a magic line.'

Manuilsky was neither the first nor the last to conjure up a the nation state. From Hilferding's "magic line' around 'organised capitalism' to the theories of SMC today, the solution proposed for the working class is a 'national road' to socialism. Bukharin's theories anticipated the utopian strategy of today's communist parties. By restricting his analysis to the sphere of competition, Bukharin ignored the fundamental contradictions of capital that stem from the process of production. His analysis foundered on the materialised forms of social relations that arise in the sphere of distribution.

18

2. The theory of State Monopoly Capitalism and Stalinism The degeneration of the Communist International was paralleled by the erosion of Marxism in the working class. Revisionism came to dominate the official communist movement and Stalinism. Subjective and empiricist explanations were now presented as 'Marxism-Leninism' — a trend reinforced by the opportunist direction of the Soviet bureaucracy.

bureaucracy adapted to imperialism it became necessary to throw new light on Lenin's theory.

In the critical period between the two world wars, the Soviet bureaucracy saw its hopes of survival as resting on the i formation of alliances with imperialist nations. In order to justify its choice of allies the bureaucracy discovered thar inter-imperialist rivalries had changed their character. The rivalry between different imperialisms was now presented as a conflict between 'peaceful' and 'aggressive' national capitals.

Workers should now support the 'peaceful' Roosevelt against the 'aggressive' Hitler. In this classless terminology the world was re-divided into a 'camp of war' and a 'camp of peace'.

Manuilsky told the Seventh World Congress of the Communist International in 1935: 'The growing menace of world imperialist war is causing all class, national and state forces to separate into two camps: the camp of war and the camp of peace'. * In atributing peaceful intentions to a group of imperialist states the Comintern threw out the essence of Lenin's theory of imperialism.

The abstraction of particular imperialist policies (*peaceful' or 'aggressive') from imperialism was accompanied by the counterposition of monopoly to capitalist competition. According to the Icading Stalinist economist of the 'the economic theory of Marx in general and his theory of crisis in particular, are based upon industrial capitalism, upon the capitalism of free competition. Present-day capitalism, however, is monopoly capitalism — imperialism'.'s Varga's empiricist conception of monopolies led him to ignore the contradiction berween labour and capital. Instead he focused on the conflict over the distribution of surplusvalue amongst capitalists. Had Marx lived a few more decades, Varga claimed, he would have noticed 'a new element in the development of capitalism: monopoly profit, the artificial rise of the share of monopoly capital in the total profit at the expense of the income of the smaller capitalists and the "independent producers" still operating' " The view that monopolies rather than capital dominate the economy is the hallmark of the theory of SMC. In it the enemy of the working class becomes the monopolist bourgeoisie. The adoption of an anti-monopoly perspective by the Communist International represented a political convergence with social democracy and radical bourgeois chinking. Populist distrust for big business was given a Marxist veneer. This became the central thrust of the Communist International's Popular Front strategy: the strategy ties, sought an all-class alliance against fascism particular agents of capital and the more extreme forms of capitalist oppression. The Communist International adopted the ideas of the bourgeois revolution in its campaign against a small clique of privileged monopolists. Stalinist spokesman Berlioz invoked the spirit of the Jacobins: 'When the French revolucion abolished feudal rights it intended to protect from the tyranny of a handful of privileged lords the small property resulting from the labour and thrift of individuals and substiture the national interests for the particular interest of a caste Are we not now contemporaries of a new feudal order whose actual powers and aspirations run counter to liberty, small individual property and the national interest?!?

19 The crisis was due to the rapaciousness of the trusts; the of the working class curb the power of big lask was to business. For Berlioz the Popular Front government in France failed 'because no efforts were made to control the trusts and cartels which have a monopoly influence on the workers..?.'

The reformist strategy that stemmed from this analysis pro- 1 Paul Boccara, Etudes sur le capiralisme monopoliste d'étal, sa For a more radical version of this theory see Stephen Wren, 'State monopoly capitalism', Communist Review, April 1951.

3 VI Lenin, 'The impending catastrophe and how in combat it'. CH 'The dialectics of history is such that the war, by extraordinarily expediting the transformation of monopoly monopoly capitalism. has thereby extraordinarily advanced mankind towards socialism.' Ibid, p363 'Or, in other words, socialism is merely state-capitalis: monopol which is made to serve the interesis of the whole people ard has to tai extent ceased to be capitalist monopoly. There is no middle course here. The objective process of development is such that it is impossibie to advance from monopolies (and the war has magnifico cheir number, role and importance tenfold) without advancing iowards socialism.' Ibid, p362. As is to be expected this statement has beer presented by revisionist: as an indication of Lenin's suppor: for the peaceful road to socialism. In fact Lenin's explicit purpose ir. this article is to show the necessity for the proletarian diciatorship 6 VI Lenin, 'Comments on the remarks made by the Comittee of the April All-Russia Conference', CW 24, p464.

V I Lenin, 'Notebooks on Imperialism', CW 39, p116.

"Imperialism, the highost stage of capitalism'. CH' 21.

p271. Proudhon was one of the leading vulgar socialists of the First International. His preocupation with unfair distribution was subjected to a devastating attack by Marx. See Marx's The poverty of V l Lenin, 'Eighth Congress of the Russian Communist Party (Bolsheviks)', 18-23 March 1919, CW 29, p168 10 Lenin aptly remarked in his marginal note to this sentence 'Has not "'abrogated" '. See the Pluto Press edition of Bukharin, economics of the transformation period, 1978, p15.

13 D Z Manuilsky in Pravda, No 3, 3 January 1930, p2. Cited in X J Eudin and R M Slusser, Soviet foreign policy 1928-34: documents and materials, Pennsylvania University Press, Vol 1, 1966, pp36-7. For an assessment of the theory of socialism in one country, see F Richards 'Stalinism, the Communist Party and the RCG's new turn', in Revolutionary Communist Papers No 1, March 1977. Today Bukharin's ideas are used to support the Socialist Workers Party's theory that the Soviet Union is 'state capitalist'. To prop up the superficial notion that competition in the world economy forces the Sovier Union 1o be capitalist, the SWP has recently attempted to give Bukharin a new lease of life. See Mike Haynes, 'The resurrection of Nikolai Bukharin', International Socialism, Series 2, No 2, autumn 14 D Z Manuilsky, Work of the Seventh Congress, speech delivered to the active members of the Moscow organisation of the Communist Party of the Soviet Union (CPSU), 14 September 1935, Modern 15 E Varga, The Great Crisis and its political consequences, Modern Books, London. 1935, pp26-7 16 Ibid. Ol course, Marx had already dealt with the question of monopoly profits in his treatment of capital. The redistribution of surplus-value between different capitals is presupposed in Marx's new is Varga's derivation of the average rate of profit.

subjective interpretation of this process as 'the artificial rise in the share of monopoly capital'.

17 J Berlioz, 'Big business against the nation', International Press Correspondence (IPC), Vol 17, No 1, 2 January 1937, pó.

18 J Berlioz, 'The struggle for economic restoration' and Views (WNV), Vol 18, No 33, 2 July 1938, p783. One of the leaders of the American Communist Party called for working class defence of Roosevelt and the New Deal against 'big business'. See A 'The offensive of reactionary capital', WNV, Vol 19, No

jected a small group of families as the enemy of the working class. Thus French Communist Party leader Thorez described the Popular Front programme as 'the platform which brought together the great mass of the French people against the two hundred families which are devouring and tormenting it'."

Separating 'aggressive' from 'peaceful' imperialists and monopolies from capital, Stalinist analysis also abstracted political domination from the requirements of capital. Stalinism defined fascism as 'the open, terrorist dictatorship of the most reactionary, most chauvinist and most imperialist elements of finance capital' " Fascism arose not out of the needs of capital, but from the subjective intentions of the 'most' imperialist capitalists. The task of the working class was to support democracy — the policy of the "less' imperialist •Now the working masses in a number of capitalist countries are aced with the necessity of making a definite choice, and of making !

bourgeois proletarian democracy, but between bourgcois democracy and fascism'. " We now have the Stalinist Trinity formula: against ag gressive imperialism, monopolies and fascism; for peaceful imperialisın, progressive capitalists and bourgeois democracy.

type of petit-bourgeois reformism that Lenin This is the condemned as the 'new Proudhonism'.

"The Kautskyites... quote these facts about "'healthy", "peaceful" capitalism based on "peaceful relations, and counterpose them to financial robbery, banking robbery, banking monopolies, deals by the banks with the state, colonial oppression, erc, they counterpose them as the normal to the abnormal, the desirable to the undesirable, the progressive to the reactionary, the fundamental to the accidental, etc. This is the new Proudhonism. The old Proudhonism on a new basis and in a new form. Petit-bourgeois reformism: in favour of a cleanish, sleek, moderate and genteel capitalism.': Once it was accepred that the state could pursue 'peaceful' or 'democratic' goals it followed that the bourgeois state could be used to serve the interests of the working class. This abandonment of Marxism did not revisionist theory in the 'thirties. However the premises of the Popular Front provide the foundations for the theory of SMC - a point well recognised by Eurocommunist theoreticians."

3. The Stalin formula The drive behind the formulation of the theory of SMC came from two sources, Firstly, the official communist movement explain to its constituency the nature of was obliged to post-war capitalism. | This trend is examined in the next section. Here we analyse the most immediate impulse for theoretical revision — the need to justify the strategy of the Soviet bureaucracy. The fluid, pragmatic objectives of the Soviet bureaucracy led io changes in the presentation of Stalinist theory.

Soviet Union had managed to survive the war and extend its influence in Eastern Europe through a series of alliances with different sectors of the world bourgeoisie. The Soviet bureaucracy had justified this strategy by using its distinction between "progressive' and 'reactionary' sections of the bourgeoisie. Originally put forward in response to fascism, this distinction still informed the policy of the official communist movement after the Second World War.

In the post-war period the Soviet bureaucracy presented its anti-monopoly strategy in a radical form. With the onset of the Cold War it was not possible to take advantage of inter-imperialist conflicts. Instead, heightened. In this period the Soviet bureaucracy sought to emphasise not the 'progressive', but the 'reactionary' character of the bourgeois state. Stalinism was still committed to the anti-monopoly strategy. However, it now took a radical stance and portrayed the state as no more than an instrument of the monopolies. Hence the state could only pursue reactionary monopolist policies. To justify this shift of emphasis, the Soviet bureaucracy staged a show trial.

In 1947 Varga made the mistake of putting forward Marx's position that the state acts in the interests of the capitalist class as a whole. The Stalinist bureaucracy took issue with this formulation because it suggested that all capitalists, 'progressive' and 'reactionary', ran the state. A scholarly conference was at once organised to denounce Varga's newly published book." It was argued that not all capitalists dominated the state: only the monopolists did. Attributed to Stalin, this argument was used to explain the tensions War. Referring to the relation between monopolies and the state in a speech in 1952, Stalin explained: "The word "coalescence" is not appropriate. It superficially and descriplively notes the process of merging of the monopolies with the state, but it does not reveal the economic import of this process. The l'act of the matter is that the merging process is not simply a process of of the state machine to the coalescence, but the subjugation monopolies. The word "coalescence" should therefore be discarded and replaced by the words "subjugation of the state machine to the monopolies" ""s Stalin's definition served the purpose of a theory. The theoreticians of the official communist movement now had the job of collecting facts to show how this revision of Marx's theory of the state was justified, given the distinct phase of state monopoly capitalism that had been reached. Dozens of articles were written pointing to the growing power of a "financial oligarchy' and its use of the state in its own narrow self-interest. A special issue of the PCF's L'Economie et Politique devoted to the question of monopolies argued that *the French state represented the interest of the entire capitalist class' in the nineteenth century, but that in the twentieth century, with the rise of imperialism, this was no longer the case.? Descriptions were all that was needed to justify the shifts in emphasis of the Stalinist anti-monopoly strategy.

Typical of this approach was Aaronovitch's Monopoly in Britain. In Aaronovitch's version of SMC, 'the state machinery acting in the interests of the most powerful capitalist groups, subjects the entire economy and resources within its reach, to serve the interests of monopoly capitalism'.2 The absence of any theoretical discussion of the laws of motion of the new stage of SMC can be explained by the apologetic character of this theory. Its only intention was to depict monopoly, not capital, as the enemy of the working class.

In the degenerate world of post-war Stalinism only a definition was necessary to revise Marx. After noting the existence of the ubiquitous 'oligarchy', another CP theoretician argued: "In these conditions it is obviously impossible that the State shouid (as Engels called it) of the bourgeoisie as a whole; the bourgeois State becomes subordinated to the interests of the dominant clique of capitalists, oligarchy, and is an instrument which they will use not only against workers but also against smaller capitalists and independent The revisionist theory of the state was paralleled by a fetishised concention that reduced capitalist oppression to the activities of a small clique of capitalists. The populist framework of rich versus poor replaced Marx's critique of capital.

The law of maximum profit [a] The empiricist methods of Stalinism led inevitably to the revision of Marx's Capital. In order to justify their focus on monopolies, the Stalinists had to show that capitalism had fundamentally changed. The cornerstone of their argument was that the existence of monopolies had created a new rate of 20

profit, termed by Stalin the "maximum profit': 'It is not the average profit, but the maximum profit that modern monopoly capitalism demands, which it needs for more or less regular reproduction..."."

)r Stalin the need for monopolies to obtain the ma: um profit' was the 'basic economic law of modern capit: This new discovery was repeated ad nauseam by Stalinist economists. René Creussol claimed that the average rate of profit only existed in the era of free competition." It was argued that monopolies could not accumulate at an average rate of profit; there were now two rates of profit one for the monopolies (maximum profits) and one for the smaller capitalists (an average rate of profit).

In the revisionist schema the subjective intentions of the monopolists become the driving force of capitalism. Through sheer will, the monopolists overcome the barriers inherent in the accumulation process and escape from the tendency of the rate of profit to fall. As Welland, an American Stalinist economist, argued: 'So far as monopoly capital itself is concerned, these counteracting causes actually become the predominant influence, so that the rate of profit for Big Business not only remains above the average rate of profit, but actually rises over long periods. At the same time, the declining average rate of profit asserts itself forcibly in relation to the smaller capitalists in industry and agriculture, who receive at best only the average rate and are often driven below it.... That which is evaded by Big Business, comes home to roost with a vengeance on the remaining, non-monopolised sectors of the economy,"3: According to this crude revision of Marx, the immanent laws of capital accumulation operate only in the era of free competition. But Marx's analysis is not derived from the historical phase of free competition; it is based on the abstract concept of capital. The revisionists however do not attempt to derive new laws of accumulation. Instead their impressions of the new forms through which surplus-value is divided among capitalists lead them to reject the laws presented in Capital.

Thus Marx's analysis of the tendency of the rate of profit to fall became for Welland 'a historical tendency' which only existed in the epoch of free competition. " Now new counteracting tendencies are supposed to have emerged - 'price fixing, blocking of capital flows, patents'." But the individual capitalist used measures like this to try to appropriate surplusvalue in the nineteenth century just as in the post-war period; in any case they can have no effect on the tendency of the rate of profit to decline. It needs only to be recalled that Marx derived the law of the tendency of the rate of profit to fall from accumulation, independently of the distribution of total surplus-value among capitalists. 35 Denials of the formation of an average rate of profit strike at the heart of Marx's Capital, 36 The Stalinist theory of dual rates of profit led inexorably to the abandonment of Marx's theory of value." With this new theory there were no limits to the rate of profit obtainable by hungry monopolists.

The abandonment of Marx's theory of the equalisation of profit rates has crucial political significance. As we have shown in Part II, Marx's exposition of the concept of the average rate of profit shows that capitalists do not obtain the precise quantity of surplus-value that was appropriated 19 M Thorez, France today and the people's front, Victor Gollancz, 20 'Extracts from the theses of the thirteenth ECCI Plenum on Degras, The Cordanger and that asa 191943, documpars, outord University Press (OUP), Vol 3, 1960, p296.

21 G Dimitrov, The Seventh Congress of the Communist International, Red Star Press, London, 1973, p192. For an assessment of this reactionary approach to fascism see F Richards, Under a national flag; fascism, racism and the labour movement, Revolutionary Communist Pamphlets No 2, RCT, August 1978, and 22 V I Lenin, 'Notebooks on imperialism', CW 39, pl16.

23 See Jean Fabre, Francois Hincker, Lucien Sève, Les communistes et l'état, Editions Sociales, Paris, 1973, p81. This text is one of the more ambitious attempts to present the Eurocommunist theory of the state. George Marchais, general secretary of the PCF, likewise draws together the different strands of Stalinist revisionism; in justifying his party's rejection of the dictatorship of the proletariat, he argues: 'We know for example that Lenin, analysing the situation at the beginning of the century, developed the argument that, contrary to what Mary had imagined, socialism could triumph first of all in a single country....

In the same way, the world communist movement put forward in 1960 the new idea that world war was no longer inevitable in contemporary conditions.... Turning now to the case of France, the idea of the Popular Front, which became a reality in 1936, cannot be found in Marx or in Lenin'. Cited in E Balibar, On the dictatorship of the proletariat, NLB, 1977, pp191-2.

24 For the account of the proceedings see, Soviet views on the post-war world economy: an official critique of Eugene Varga's, 'Changes in the economy of capitalism resulting from the Second World War', translated by L Gruliow, Public Affairs Press, Washing- 25 J V Stalin, Economic problems of socialism in the USSR, Foreign Languages Press, Peking, 1972, p43. Originally published in 1952 this.

It was greeted with work consists of a list of empty definitions enthusiasm in the official communist world. The fact that it could be taken seriously at all provides a striking illustration of the degradation of Marxist theory in the working class.

26 Jean Pronteau, 'L'oligarchie financière et l'état', in 'La France el les trusts', L 'Economie et Politique (E and P). Nos 5-6, 1954, pp181-2.

27 Sam Aaronovitch, Monopoly in Britain, International Publishers, New York, 1955, p75 28 Stephen Wren, op cit, pp124-5.

31 René Creussol, 'Les profits', E and P.Nos 5-6, 1954, pl7l. See also A Kashkarov, 'The drive for maximum monopoly profits, New Times, 7 January 1953. 32 C Welland, 'On the law of maximum profits', Part 2, Political Affairs (PA), February 1954, p50.

35 Commenting on the law of the tendency of the rate of profit to fall, Marx wrote: 'We intentionally present this law before going on to the division of profit into different independent categories. The fact that this analysis is made independently of the division of profit into different parts, which fall to the share of different categories of people, show from the outset that this law is, in its entirety, independent of this division, and just as independent of the material relations of the resultant categories of profit.' Capital, Vol 3, p214.

36 Marx noted: "There is no doubt, on the other hand, that aside from unessential incidental and mutually compensating distractions, differences in the average rate of profit in the various branches of industry do not exist in reality, and could not exist without abolishing the entire system of capitalist production.' Ibid, p153.

37 The leading theoretician of the United Secretariat of the Fourth International, Ernest Mandel, repeats in essentials the Stalinist theory of maximum profits: 'A tendency equivalent to the equalisation of surplus-profits thus arises, i.e. ‹wo average rates of profit come into existence side by side, one in the monopolised and the other in the non-monopolised sector of the imperialist countries.' See E Mandel, Late capitalism, NLB, 1976, p95. Mandel's vulgar interpretation of Marx stems from his inability to grasp Marx's method. Throughout this massive text it is competition and not accumulation that is presented as the driving force of capital. One of the earliest and most coherent exponents of this theory in the English language was Paul Sweezy, who argued that the general equalisation of profit rates had been superceded by a 'hierarchy of profit rates'. P M Sweezy, The theory of capitaliss development (1942), Monthly Review, New York, 21

capitalists obtain from elemental calamities. The domination of monopolies greedy for factories." Rather, :. their Oun the total surplus-ralue produced a profit corresponding to the magnitude of their own capital as a proportion of total social capital. 39 Capitalists only appropriate surplus-value and only exploit wage-labour as fractions of total social capital. It is capital in its totality that' engages in the exploitation of the working class. For Marx this social character of exploitation guaranteed the class solidarity of all capitalists: 'capital becomes conscious of itself as a social power in which every capitalist participates proportionally to his share in the total The equalisation of profit rates has important implications for the exploitation of the working class. Marx demonstrated that exploitation was not an individual matter between a capitalist and his workers. On the contrary, the social character of exploitation is shown by the capitalists as a whole, take direct part in the exploitation of the total working class by the totality of capital'" This is why, despite the competitive struggle, capitalists are at one against Having rejected Marx's analysis of the equalisation of a general rate of profit, the Stalinists presented competition as the source of fundamental antagonisms. In this way the social character of exploitation was obscured by the bourgeois preoccupation with distribution. So impressed were the Stalini ts with the might of big business that they now attributed to the monopolies the power to exploit smaller capitalists: 'It is apparent that maximum profits are not secured alone from the more intensive exploitation of the working class.

capitalis able to "milk" the entire domestic economy so as to exploit the majority of the population. This includes the small producers, especially the working farmers. as well as the city middle class (professionals, shop keepers, etc.) and even capitalists.'* This is the theoretical basis for the Stalinists' famed antimonopoly alliance. Exploitation is no longer the appropria-• tion of unpaid labour by capital - it has become the monopolist plunder of society. The material basis for class antagonisms between labour and capital is obliterated. The problem is no longer production, but what happens to the wealth produced. By now we have come a long way from Marx and Lenin. 4. The evolution of the theory The theory of SMC as we know it today is the product of the post-war boom. The formulations of the 'forties and the early *fifties were stop-gap measures designed to give coherence to the Stalinist anti-monopoly strategy. Superficial analyses were combined with blind assertions about the inherent instability of the capitalist order. In the context of the Cold War, the Soviet bureaucracy attempted to mobilise support by presenting its anti-monopoly strategy in a radical form.

Denunciations of monopolists were accompanied by guarantees that the capitalist crisis would lead to the collapse of the system. According to the Stalinist theoreticians, the rapacious appetite of the monopolies would result in capitalist collapse. As PCF general secretary Thorez argued: 'The bourgeois state, far from being the determining force in the economy and directing it in a methodical planned way, is helpless in the face of the economic laws of capitalism, which operate like 22 maximum profit carries to extremes the chaotic character of the national economy.'** These assertions about the coming crisis were part of an attempt to deny that capitalism was expanding and proving more stable than in the past. Unable to challenge the 'mixed economy" of bourgeois ideologues, the Stalinists ignored reality. Articles in the Stalinist press denied the fact that capital had entered a new phase of accumulation. Instead the period was presented as part of a long process of economic 'have made downturn. It was argued that the monopolies impossible any period of relative, partial stabilisation of capitalism comparable to that of the 'twenties'."

At a time when increases in productivity allowed capital to exchange a growing number of use-values for the commodity labour-power, when the working class experienced a modest rise in its standard of living, the communist parties stated flatly that workers were poorer than ever before. In 1955 Thorez argued that in France 'the purchasing power of an hour's pay is, in general, nearly half what it was before the war'. 4 During the latter part of the 'fifties it became clear that this inversion of reality could not be sustained much longer.

The communist parties felt increasingly uncomfortable about the derision with which workers greeted their views. Luckily Kruschev's "de-Stalinisation' created the climate in which doubts about the past prognosis could be brought into the open. Soon one American Stalinist was able to write: «Yet the fact remains that we have had a new boom....And that fact must raise questions as to the validity of our economic analysis in the whole post-war period. '"' Similar reservations about the previous 'analysis' were raised in other quarters.* In some cases they led to the rejection of Marxism altogether. However, at this time most leading Stalinists were reluctant to change the scope of their - instead they looked for new explanations for the analysis coming crisis. Thus an international symposium devoted to the economic crisis and the working class held in Prague in 1958 heard that capitalism was in crisis and that the boom was 'approaching its end'."9 But despite bold assertions about "so-called' prosperity, 'so-called' full employment and the 'so-called' welfare state, Stalinist theoreticians were fighting a rearguard battle. If only implicitly at first, they gradually came round to the bourgeois view that capitalism had indeed changed.S° [a] The impact of the boom The tremendous expansion of production in the post-war boom appeared as proof of the vitality of capitalism — and as a rebuttal to Marxism. Throughout the advanced capitalist world working class politics were eroded in the labour movement. The strength of capitalist ideology forced the reformist organisations to abandon even their formal commitment to socialism." Reality appeared to reinforce the bourgeois contention that capitalism had been reformed and that the state now safeguarded the interests of all. Few could convincingly contradict the spokesmen of the bourgeoisie when they expressed this sort of confidence in the future: "In the private sector the violence of the market has been tamed.

Competition, although it continues to be active in a number of areas, tendsto be increasingly regulated and controlled. The effort to secure an enlarged area of predictability for business management, in a period in which technological change is very rapid and individual

has escouraged sang at are laboran elonger to manure, encouraged long-range collaboration Against the prevailing mood of optimism, the official communist movement could only assert that capitalism could not be planned. As sections of the labour movement itself began to identify more and more with the system, the official communist movement began to reassess its analysis of capitalism. It was the Italian Communist Party (PCI) — the largest in Europe — that was most responsive to the changing mood of the labour movement. Following Italy's economic 'miracle', Amendola, one of the leaders of the PCI, warned: 'Owing to its scope and importance, its rate and targets it had reached the process of economic expansion controlled by monopoly doubtlessly a growing influence on working people... Thus, in spite of our criticism the influence exercised by the miracle succeeds in penetrating widely amidst the working class movement and even in the ranks of the Party itself. The view for instance, that the monopolistic expansion will last out indefinitely...is evidence of the influence exercised by the "miracle" within the working class The post-war boom forced the official communist movement to adapt ideologically to capitalism. The reformist implications of the theory of SMC were now increasingly realised in practice. In Italy this took the form of a coherent strategy of 'structural reforms' - a post-war version of anti-crisis socialism. The aim of this strategy was to win the working class to a "constructive' programme of reforms.

According to the PCI the working class had every interest in fighting for the economic expansion of capitalism: 'Hence our constant and systematic effort to carry out a constructive policy and our definite refusal to consider that the worse things are the better it is for us' s4 The communist parties were forced to recognise that things were 'better' than before and tried to modify their strategy accordingly. In the case of the PCI, prosperity provided the stimulus for an explicitly procapitalist strategy." parties. Increasingly articles appeared in the Stalinist press hard-line PCF was forced to abandon its customary descriptions of the immiseration of the proletariat. In 1961, leading PCF theoretician Boccara warned against the dangers of •sectarian nihilism' in theoretical matters. He noted that imperialism was not simply parasitical; it also had its positive as rechnical development'" Every new aspects attempt to explain the boom led to a further rejection of Marx and Lenin. SMC nou became a formula for explaining the boom.

"theories" were advanced to reconcile previous Numerous analyses with capitalist prosperity. The only thing the myriad of Stalinist explanations had in common was that they ignored Marx's analysis of capital accumulation and looked to conjunctural factors for guidance. The desperation of the official communist movement was apparent at a symposium of Stalinist economists in Prague in 1963. It. was argued that the higher wages and increased purchasing power resulting from working class struggle had averted a capitalist crisis. " Alternatively the compelling example of rising living standards in the 'Socialist world' was adduced as the impetus to capitalist 38 'Thus, although in selling their commodities the capitalists of the various spheres of production recover the value of the capital consumed in this production, they do not secure the surplus-value, and consequently the profit, created in their own sphere by the production of these commodities. What they secure is only as much surplus-value, and hence profit, as falls, when uniformly distributed, to the share of every aliquot part of the total social capital from the total social 23 surplus-value, or profit, produced in a given time by the social capital in all spheres of production.' Capital, Vol 3, p158.

39 Ibid, pl75. 40 Ibid, p195. 41 Ibid, p196. 42 In this vein, Marx notes: 'Here, then, we have a mathematically precise proof why capitalists form a veritable freemason society vis-à-vis the whole working class, while there is little love lost between them in competition among themselves.' Ibid, p198.

43 C Welland, 'On the law of maximum profits', PA, January 1954, 'Mystification and reality: the economic situation in France', PA, July 1955, p63.

45 Mary Norris, "The economic outlook', PA, February 1954, p39 Similarly the PCF argued that the French economy had undergone stagnation for the past fifty years. See P Levy and A Denis, tendence à la stagnation de l'économie francaise depuis cinquante 46 M Thorez, op cit, p63. In the mid 'fifties a major discussion took place in the official communist movement on the impoverishment of the working class. The aim of this discussion was to consolidate working class opinion behind the communist parties. For an example of this approach see M Thorez, La paupérisation des travailleurs francais, Editions Sociales, Paris, 1961.

47 A Brennan, 'On method in political economy', PA, June 1956, 48 See M Dobb, 'Some economic revaluations', The Marxist Quar- 49 See 'Economic crisis and the working class', World Marxisr Review (WMR), September 1958, p54. Summing up, Soviet economist Arzumaryan assured his audience: 'In spite of a greater volume of production, capitalism failed to recover even the partial stabilisation it achieved in the nineteen-twenties after the First World War and the economic crisis of the early nineteen-twenties'. Ibid, p64.

narallel British view see J R Campbell, 'Lost employment" ', Marxism Today, August 1958.

50 Characteristic of the period was Victor Perlo: 'But it would be wrong to conclude that monopoly capital cannot influence the course of the capitalist cycle. A number of Marxists, including myself, have unduly belittled the effectiveness of state monopoly capitalism in this area'. Victor Perlo, 'State monopoly processes in the US economy", WMR, June 1959, p5l. 51 For an analysis of these developments in the British Labour Party see M Freeman and K Marshall, Who needs the Labour Party?

Revolutionary Communist Pamphlets No 3, RCT, September 1978 52 A Shonfield, Modern capitalism: the changing balance of public and private power, OUP, London, 1965, p66.

• The economic miracle" and the democratic 53 G Amendola, alternative', Rinascita, 9 September 1961. For an English translation see Foreign Bulletin of the Italian Communist Party (FBICP), Nos 8-9, August-September 1961, pp46-7.

54 G Amendola, 'Class struggle and economic development', ibid, No 3, March 1962. provided the opportunity for the PCI 10 adopt a comprehensive reformist programme. Amendola argued: 'it must be stressed that the working class has succeeded in safeguarding its autonomy and in waging a relentless struggle to make the economic expansion lead to social and political progress' approach was codified at the Tench Congress of the PCI held in 1962.

See 'Material on the Tenth Congress', ibid, No 4, April 1962.

56 Using Marxist phraseology to cover up his revision of Lenin's theory of imperialism, Boccara wrote: 'The dialectical materialist and revolutionary attitude is able to extract the positive aspects from its and leftist contradictions in contrast to economic romanticism (gauchiste) dogmatism'. Boccara, 'Quelques hypothèses sur le dé.

velopement du "Capital" part 1', E & P, February 196l, p23. Boccara was able to extract positive aspects of imperialism so skilfully that he could show that anti-capitalism was only so much 'economic romanti- 57 The class struggle in the post-war 'growth of production and the expansion of the home market, and has been an important obstacle to the sharpening of the crisis of overproduction'. Not only was the class struggle the saviour of capitalism but the "breakup of colonial empires' had stimulated demand for the industries of the advanced capitalist world. Yves Baret and J Menshillor, 'What is taking place with the world cycle', in A Rumyantser (ed), Crisis and the capitalist cycle: a symposium, New Delhi, 1963,

expansion. ' Sometimes the effects of the boom were presenied as its causes. Thus technological expansion was used to explain prosperity. But to be on the safe side nearly anything was listed as the motor of the boom: "The causes are many. Taken together, they add up to the features of the present stage in the general crisis of capitalism. The cardinal factors are the growth of state-monopoly-capitalism, the impact of and the class struggle of working people, the world socialism disintegration of the colonial system, the scientific and technological revolutions underway, and the consequences of the Second World As confusion led to more confusion and the contradiction between reality and Stalinist theory became more apparent, the cry went up not to reject Stalinist theory, but to revise the analyses of Marx and Lenin still further. Hitherto, Stalinism had tried to reconcile its revisions with Marxism. Under the impact of the post-war boom, Marxism itself had to be re-assessed. Today's Eurocommunist passion for rejecting Marx and Lenin stems from this period Revisionism as a trend was still further consolidated at the international conference of Stalinist economists held in Choisy-le-Roi in the summer of 1966. Everybody accepted the need for a new theory. But the new theory turned out to be our old friend, the theory of SMC. Though definitely 'a new phase of imperialism', '° and not presented as a totally progressive force, SMC was certainly characterised in ambiguous terms.

Previously, the concept of SMC had been employed to justify predictions of the coming crisis; in the 'sixties, it was used to explain why capitalism was crisis-free. As Rumanian Stalinist Urban noted: 'The fact that in many capitalist countries state monopoly growth was accompanied by a relatively long period of good business indicated that state-monopoly capitalism did not stem from wars and crisis alone'. Just what SMC did stem from was left to the imagination.

Illusions in the boom permeated the official communist movement. By the late 'sixties, state intervention was interpreted as progressive - as the first stage of socialism. Typical of this trend was Urban's analysis of SMC. Commenting on increased state activity, he wrote: "Thus the former tendencies toward stagnation are overcome, stabilisation factors strengthened and more favourable conditions for economic growth created, but only at the cost of capitalism in its classical form disappearing and extinct' 62 The material conditions of the post-war boom brought out the reactionary consequences of Stalinist revisionism. Stalinism was now ready to plan capitalism out of existence. SMC became a concept used to obscure the distinction between capitalist and socialist societies. The fact that SMC could be accepted by many in the labour movement as a theory was an indication of the depths to which working class politics had sunk. "s 5. The politics of State Monopoly Capitalism The more the official communist movement adapted to the boom the more it had to present SMC in a positive manner.

The Stalinism of che 'sixties was forced to distance itself from the Stalinism of the past. As a result the reinterpretation of SMC took place through a 'critique' of Stalinist dogmatism.

This 'critique' consisted of modifying old Stalinist formulas to bring them into line with the apparently harmonious character The reconciliation with capital went of capitalist relations. furthest in the PCI. It was this party that was most directly integrated into the bourgeois state. The strongest impulse for revisionism in the PCI came from its sections in Tuscany and Emilia — areas in which the PCI was heavily involved in the running of local government. In July 1962, PCI employees of the Commune of Bologna complained: power, the party's 'The tendency to monopolize political exclusivist concept of power, is based on the assumption that only the working class is truly revolutionary. In the reality of Italian society, this is not true.... We are criticizing the center of the party and every positions for all the, confusion who has accepted its comrade generated over this concept and for preventing the principle of the PCI's renunciation of monopolizing power from penetrating into the consciences of our comrades.'« This explicit rejection of working class politics was the logical outcome of the new consensus that had come to prevail in the official communist movement. The communist parties considered that the prosperity of the post-war boom had created the possibility of further reforms and benefits. Crises had to be avoided because of their negative consequences for the 'people' and the 'economy'. In Britain the Communist Party's economic subcommittee argued: 'The interests of working people will be best served if this upward trend continues ss Like the state socialists of the inter-war period, the Stalinist parties began to elaborate 'positive' policies of reform — not, as in the past, in response to the capitalist crisis, but to provide the basis for the continued expansion of capital itself The commitment of the official communist movement to positive reforms forced it to modify established Stalinist formulas for SMC. As indicated previously, the traditional Stalinist view maintained that the state was the instrument of the monopolies. But how could the instrument of this most reactionary group be used to bring about reforms? The problem was resolved by redefining the relationship between the state and the monopolies: it was now a contradictory relationship. The Stalinists' use of the word 'contradictory' allowed them to suggest that the state could act against the monopolies. Even the reactionary Kennedy administration pressures to pursue antiwas forced by contradictory' monopoly policies. " It is worth pursuing the tortuous logic of this argument. As East German economist Reinhold expressed 'Unfortunately, some Marxist writers still adhere to the Stalin formula. In effect, however, the thesis that the state is subordinated to the monopolies leads to denial of the growing economic role of the capitalist state in the process of reproduction. It does not throw the correct light on the activities of one or another capitalist government.

the Kennedy Administration. It included for example, Take, representatives of a number of monopoly groupings. But although on the whole it sought to pursue, and did pursue a policy serving the interests of monopoly capitalists, in a number of cases when it was it came into forced to make concessions to the working people, conflict with the interests of powerful monopoly groupings."?

Having uncovered the progressive kernel of the Kennedy regime, Reinhold goes on to clinch the arguments: "The formula that the capitalist state is wholly subordinate to the monopolies bars the way to an examination of these contradictions assessment of the of nationalisation. According to this formula, nationalisation is bound to be reactionary move in all cases so long as monopoly rule prevails. Yet the fact is that at present the struggle for nationalisation can be used by the working class and the anti-monopoly coalition gradually to curb and eventually to abolish the undivided power of the finance oligarchy. This formula likewise rules out the struggle for reforms, including far-reaching structural reforms benefiting the working class and socialism. s and furthering the struggle for democracy Reinhold's remarks illustrate the apologetic character of the 'new analysis'. Stalin's formula was rejected not because its -claims to explain SMC had been invalidated, but because the The traditional struggle for reforms was on the agenda.

definition of SMC had to correspond with the new political strategy. In fact the new redefinition of SMC was not inconsistent with the premises of the Stalin formula. In this it had been the monopolies that dominated the state. But once the state was 24

abstracted from capitalist relations and was presented as the agent of a particular social group, it followed sectors of capital and even the working class could use the state in an anti-monopolist way.

The adaptation of the official communist movement to the boom forced it to accept the social-democratic view of the The substance of this position - that the state is state. independent from capitalist production — was already contained in the Stalin formula. Now the form in which it was presented by Stalin - the subjugation of the state to the monopolies — had to be rejected, because in this form the capitalist character of the bourgeois state was still implied.

In the 'sixties the theoreticians of the official communist movement were at pains to point out that the bourgeois state had no essential class content. Soviet economist Mileikovsky argued: 'One cannot say in our days that the state expresses the will of the monopoly bourgeoisie alone. More and more frequently it is obliged to act as the middleman in the class struggle' « Now that the state was presented as a neutral technical institution its policies could be represented as the outcome of its mediation in the 'class struggle'. The struggle for reforms could force the state to act against the interest of capital itself. In 1962, PCI leader Longo noted: 'It is the class struggle that determines the course and the social content of the economic policy of the State. This policy is at present determined by the power of the monopolies, but their power is not everlasting. Far from it, this power can be attacked and cut down starting from the political plan, indenting the present balance of forces, through the common action and pressure of the progressive forces of the country."* This is the essence of the strategy of state socialism. For state socialists the aim of class struggle is the implementation of reforms by the bourgeois state.

As a result of the boom the reactionary implications of the theory of SMC became explicit. All-powerful monopolies were now matched by an almighty state. The communist parties accepted the bourgeois view that the state could plan The only problem was that at present it was planning in the interests of the monopolies. Commenting on De Gaulle's new policy in 1967, French Stalinist leader Waldeck Rochet complained that 'Economic planning, exemplified by the Fifth Plan is to a certain extent effective, but it is entirely in monopoly interests'."

official communist parties was to encourage more planning — in the interests of the working class instead of the monopolies.

This strategy was given a coherent form by the PCI in the late 'fifties and was codified at its Tenth Congress in 1962. As Amendola summed it up: "The battle to decide the political and economic development of the society develops around the problem of planning.

Democracy and its theoreticians advocate a type of planning which in practice is but an instrument to continue the current process of economic expansion. On the contrary we claim planning as an instrument of a policy capable of modifying the process accumulation under way and laying the basis for a democratic alternative to capitalistic developmenc.

Working class pressure on the state could push it in an anticapitalist direction. It might not be socialism, but it would represent a new stage — 'a democratic alternative to capitalistic development'. In reality the content of this strategy was to encourage greater and greater state intervention as part of a thrust towards the utopian goal of state capitalism. This objective was clearly specified in the PCI's theses of 1962. In arguing for economic planning, they noted: 'This means rejecting any pattern of economic planning which regards the present set-up and economic structure as an insuperable limit and therefore tends to bar the road to further extension of state ownership, to a further extension of State capitalism'."

That the PCI could establish state capitalism as the goai for the working class showed how far the official communist 25 movement had gone ideologically. Adapting to the boom, it could criticise the use to which the state was put but not the bourgeois state itself. Indeed the bourgeois state was increasingly presented as a progressive force. The state intervention of the boom period was not understood as a set of steps necessary to provide the conditions for capitalist accumulation. It was interpreted as a series of progressive measures Longo argued: 'the investments in the State enterprises in the South; public intervention in agriculture, even though its original aim is distorted or forgotten during its implementation, all these are democratic conquests proving the possibility and effectiveness of a democratic popular intervention in the determination of the course chosen by the State'." Stateinduced economic expansion was seen as a vindication of the of structural reforms. By the late 'sixties, communist parties had adopted this strategy and incorporated its state-capitalist objective — 'advanced democracy'. The monopolies were still the bogeymen but the Stalinists now 59 Yuri Ostrovityanov and Otto Reinhold, 'Monopolies, state and 60 For the proceedings of the conference see 'Le capitalisme monopo- Conference internationale, Choisy-le-Roi, 26-9 May 1966', E &P, Nos 143-4, June-July 1966.

61 See 'Whither modern capitalism? A round table discussion to "Capital" and the half-century of mark the centenary of Marx's Lenin's "Imperialism"', in WMR, No 12, December 1967.

62 L Urban, "The Leninist concept of state monopoly capitalism and the struggle of progressive forces for democratic state intervention in the economy, Economic Bulletin of the CP, No 13, January 1968, p26. Urban and other East European economists made little analytical distinction between capitalist and non-capitalist economies. Rejection of Marx's analysis of capital as a historically specific system of social relations was the condition for the adoption of this technical ap- 63 There have been a few isolated attempts at a theoretical explanation of SMC. Without exception these works attempt to explain SMC from the standpoint of competition. See for example, R Gundel, H Heininger, P Hess and K Zieschang, Zur Theorie des Staatsmonopolistischen Kapitalismus, Berlin 1967. The most sophisticated attempt to reconcile Marxist categories with SMC is to be found in the works of Paul Boccara. His theory of over-accumulation and devalorisation of capital is devoted to explaining how surplus-value is redistributed in favour of monopolies. See Etudes sur le capitalisme monopolisi?

d'état — sa crise et son issue, op cit.

64 Quoted in G Galli, 'Italian communism', in W E Griffith (ed), Communism in Europe, Vol 1, MIT Press, 1964, pp318-9.

65 • "Britain's crisis and the way out", report by the economic sub-committee and adopted by the Executive Committee of the Communist Party on 19 March, 1965', Marxism Today, May 1965, pl 39. 66 See 'The theses of the Tenth Congress of the Italian Communist Party', in FBICP, No 9, September 1962. Of the Kennedy administration, the theses noted 'it would be a mistake, however, to deny the differentiations that continued to show up in the imperialist ruling groups'. Ibid, p8. 67 'Our round table: finance capital today', WMR, Val 7, October 1964, D7L. 68 Ibid. 69 'Lenin's teaching on imperialism', WMR, May 1967, p43 70 'Comrade Luigi Longo's report to the Central Committee on the preparation of the Tenth Congress of the Italian Communist Party', FBICP, No 4, April 1962, p28 71 Waldeck Rochet, 'The October Revolution and the struggle of the French communists' WMR, Vol 10, No 11, November 1967, p13.

72 G Amendola, 'United struggles to impose democratic planning', FBICP, No 12, December 1962.

73 'The theses for the Tenth Congress of the Italian Communist Party', FBICP, No 9, September 1962, p58.

74 'Comrade Luigi Longo's report to the Central Committee on the preparation of the Tenth Congress of the Italian Communist Party', FBICP, No 4, April 1962, p28.

confidently predicred that the political power of the could curb them. The bourgeois fetish of separating politics from economics became the premise of Stalinist strategy. In France the PCF pursued the millenium through democratic planning and the nationalisation of the monopolies." 'Advanced democracy' - the fetishised label for state capitalism — became the universal slogan of the official communist movement. The former rhetorical hostility towards the state gave way to the vision of the state as the potential instrument of liberation.

for the staie's democratisation and the The PCF called extension of state intervention. Even formal opposition to the - the goal of bourgeois state was out.* Capitalist prosperity the bourgeois state — became the locomotive of the communist parties internationally.

75 For an exposition of the concept of advanced democracy' see 'Manifeste du Parti Communiste Franyais: pour une démocratie avancée, pour une France Socialiste, Cahiers du Communisme, January 1964, pp124-7. 76 One bourgeois analysis of the PF's attitude to the state noted: 'But the State, either as an abstraci political form or a concrete political form of present-day French society, is never contested as and its legitimacy is never denied. The PCF often calls for such. "defence". , desires an extension of its powers, and considers that "public service' ...is the best form of social and economic organisation'. G Lavau. 'The PCF. the state, and the revolution: an analysis of communications and popular culture, in D L. M party policies, Communism in Italy and France, Blackmer and S Tarrow (eds), Princeton University Press, 1975, pl15.

IV EUROCOMMUNISM: REVISIONISM

AND THE CRISIS

The onset of the capitalist crisis found the official communist movement already committed to pro-capitalist reforms. Since the crisis began the communist parties have merely reiterated their commitment 1o the state, arguing that it should be liberated from the clutches of the monopolies. The state is their Saviour to overcome the crisis. During the recession they have merely put the finishing touches on the strategy they formulated in the boom. Once we understand the previous ideological evolution of the official communist movement the much-heralded 'abandonment' of the dictatorship of the proletariat comes as no surprise. The dropping of this term is simply a hint to the bourgeoisie that the official communist movement is completely committed to bourgeois democracy.

tempts of Stalinist theoreticians to reconcile Marxism with the rejection of the proletarian dictatorship have oniy a symptomatic significance. In theoretical terms the Eurocommunists have added little to previous Stalinist contributions - they have merely identified more 'contradictions' in the stare apparatus to be used for progressive ends. It is a quantitarive not a qualitative step which recently led the Eurocommunists to find progressive possibilities in the bourgeois army and in the police. The trend which finds contradictions almost everywhere except between the proletariat and the bourgeoisie as one of its chief spokesmen. In the obscurantist language that finds favour in these circles, he noles: 'We are in a process of breaking with a conception of the State as a monolithic block. without internal cracks and contradictions, against which the only action can be instantaneous and frontal. Instead of this we propose the notion that while traversed by class contradictions the Siate inanages to conserve its materiality, which means that it transforms itself by a series of specific practices; the result being that a modification of the relations of forces can have decisive effects on the 26 State but does not automatically end in changes in the internal structure of the state." What Poulantzas is trying 1o argue for is structural reforms.

Those Stalinists who have opposed relinquishing the term the dictatorship of the proletariat only provide a more lucid exposition of the politics of Eurocommunism. Without exception they accept the premises of reformism. Vociferous in his objection to the PCF decision to abandon the term dictatorship of the proletariat, Althusser dismissed Lenin's theory of the bourgeois state as "pathetic'. As for his views on Marx: 'We have to be very frank about it: there does not really exist any "Marxist theory of the State" '^ Etienne Balibar, who has written a whole book replete with quotations from Marx and Lenin defending the term dictatorship of the proletariat, holds to the Stalinist (née Kautskyist) view that the state is the product of the class struggle.' He is just as committed to a slate socialist strategy as his more open revisionist co-thinkers: 'But at the same time, because the class struggle of the proletariat is not fought out independently of existing social relations...the Party of the working class cannot remain outside of the bourgeois State 'machine!..Now once it is inside that machine, it can function either like acog, or like the grain of sand which causes it to seize up."

state socialist All sides in the discussion accept the approach to the state; the real difference is about how much pressure needs to be brought on the state to force it in a progressive direction. To pursue the theory of SMC further would be fruitless.

Our analysis has shown that the theory of SMC has become a formula for building a utopian state capitalism. Whether it is held that monopolies rule the state or that the state is relatively autonomous from the monopolies makes little difference. All Eurocommunists are agreed that the state is potentially progressive and that its potential will be realised once monopoly power is curbed. In this schema capital is left out of the picture or rather it becomes a spectator in the battle between monopolies and the state. It is in this regard that Santiago Carrillo's recent book is significant.

Eurocommunism and the state is the product of the degradation of Marxism in the working class which was consolidated during the years of the post-war boom. For Carrillo, capital has delivered the goods in the past and there are no social obstacles in the way of future prosperity. Carrillo may talk about SMC but only as an unpleasant parasite on the back of a healthy system of "The development of science and technology - save for a nuclear catastrophe -- cannot be halted; it is equivalent to the development of the means of production. Formerly we Marxists thought that, when a certain ceiling was reached, the capitalist system would become an almost insurmountable obstacle to its own development. But practice has shown that, one way or another, the law of human progress breaks the strait-jacket of the social system.

reproduce itself, capitalism needs the development of the productive forces, even though this may be distorted by the laws of profit, giving rise to fresh conflicts and social contradictions."

Why be a communist if 'the law of human progress' is only 'distorted' by capitalism ? Carrillo amply reveals the reactionary consequences of the theory of SMC.

The importance of the theory of SMC lies in the fact that it provides the foundation for contemporary state socialist strategy. For Eurocommunists the crisis is a technical problem which can be put right by the intervention of the bourgeois state. Relying on state planning, their 'alternative' strategies can only act as obstacles to the defence of the proletariat. The official communist parties are prepared to make the working class pay for the crisis; in return they merely ask the bourgeoisie to promise to make its share of the sacrifices. For the PCI this guarantee 'must be given in order to create more favourable conditions for a whole-hearted effort by the work-.

ers to increase productivity on both the plant and national level, to affect mobility from one job to another and also to contain wage claims'. 'You can cut the standard of living of the Italian working class', says the PCI, 'so long as the State interest of all'. In conditions of promises to act in the capitalist crisis the only policy which the state can implement is a savage attack on the working class. Demands for 'progressive reforms' give way to capitalist reality. State socialism reconciles the working class to a programme of austerity.° In today's crisis Marx's analysis of capital and the state are indispensable weapons in the struggle for the political independence of the working class. As our analysis shows, the labour movement's relationship to the state is legitimised by pseudo-Marxist theories. Expressed through the concept of SMC, these theories are not merely the product of intellectual elaboration. They have a real material foundation in the experience of the working class — the erosion of the political independence of the working class and the eradication of Marxism in the proletarian movement.

This process was consolidated in the post-war boom and led to the convergence of classical social democracy and Stalinism. The concepts of SMC are ideological forms which express the past defeats of the working class. I he strength of state socialism in the laour novement today is not due to the theoretical persuasiveness of the theory of SMC. Rather, this ideology is accepted because it appears to correspond to the experiences of the working class Today the fight for the political independence of the ma with the tors orated and dodged the ratiion of reformism which, in the new form of Eurocommunism.

is still sustained by the theory of SMC. In training a new working class leadership it is insufficient to denounce state socialism. The past experiences of the working class and their reflection in the reformist tradition must be made conscious.

Only in this way can we combat the revisionists and reformists. Today the struggle for Marxism in the working class remains a vital step towards the establishment of the proletarian dictatorship. Frank Richards The Japanese Communist Party (JCP) has gone to great lengths t ansform Marx into a well-meaning liberal. Tetsuzo Fuwa, the JCP: general secretary, argues: 'From the time of Lenin and Stalin the formula dictatorship of the proletariat was utilised to institute an authority by force, implying the suppression of Parliament.

founders of Marxism in reality wanted...a democratic regime based on uniyersal suffrage and having Parliament as the supreme institution.

This accords with the programme of the Japanese communists, when they take power'. Quoted in Le Monde, 4 June 1976. For a more elaborate justification of this opportunism see Fuwa's 'Scientific socialism and the question of dictatorship', extracts in Marxisn Today, June 1977. Probably the most coherent Eurocommunis assault on the Marxist theory of the state is contained in Fabre, op cit.

This book was written to justify the decision of the 22nd Congress of the PCF to drop the term 'dictatorship of the proletariat' 2 See the arguments for 'reforming' the police in Fabre et al, ibid, B18 Poulantzas, "The crisis of the state", Eurored, No 6, CP, 1978, p9. 4 L. Alchusser, "The crisis of Marxism', Marxism Today, July 1978, 27 p219. An explicit defence of revisionism, this article makes clear that Althusser's attachment to the dictatorship of the proletariat is purely sentimental. 5 E Balibar, op cit, pp94-5.

6 Ibid, p92. Reflecting, no doubt, on the history of his movement, he adds: 'But we must admit that there exists an opposite tendency, a permanent risk to which the party is subjected, and from which it cannot escape without a constantly repeated internal struggle — the tendency for it to become the prisoner of the State apparatus against which it is fighting'. Ibid.

7 S Carrillo, op cit, p34.

8 See E Berlinguer: 'An emergency government to tackle a crisis of exceptional gravity' in PCI, The Italian Communists, January 1978, pll. 9 See Keith Tompson, 'Wage control and class independence: the record of British Stalinism', in this issue of Revolutionary Communist Papers. Revolutionary Communist Pamphlets are availabl from BM RCT, London WC1V 6XX No 1 The Struggle for a Revolutionary Propaganda No 2 Under a National Flag: Fascism, Racism and the Labour Movement - Second edition No 3 Who needs the Labour Party?

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