The law of value and the USSR

Derek Howl

First printed in International Socialism Journal 2:49 (Winter 1990), pp.89-113.

Transcribed by Jørn Andersen for Marxisme Online, 12. Dec. 2016.

The law of value
Results of capitalist competition
Stalin and accumulation
Arms competition and commodity competition
Wage labour and the USSR
Contradictions of state capitalist accumulation

The Socialist Workers Party’s theory of bureaucratic state capitalism has often been misunderstood as a theory developed to explain the differences between the USSR and Western capitalism. On the contrary, Cliff developed the theory in response to the spread of Stalinism into Eastern Europe, arguing that if this represented the overthrow of capitalism then Marxists had been wrong to argue that only the conscious proletariat could build workers’ states. He used the Marxist method to abstract from the apparent differences between East and West in order to explore the underlying similarities. [1] Many critics of the theory miss this point. At issue is not only how the USSR and Eastern Europe should be characterised, but also how the concepts of Marx’s Capital should be applied.

We need to develop our theoretical understanding in response to changes in the capitalist mode of production itself. In particular we have to understand how the related developments of the concentration and centralisation of capital and of the increased role of the state in the economy have implications for our analysis. These tendencies took their most extreme form in the bureaucratic state capitalist countries, but the differences between the state capitalist countries and ‘Western’ capitalism are differences of degree rather than of kind.

Under capitalism there is no overall planning or co-ordination in the allocation of labour to the separate tasks in society. Instead capitalists decide whether or not to employ workers according to their estimation of the profits to be made from the sale of the workers’ product. In this process the ability of money to represent value, to be a ‘universal equivalent’, is essential. Prices are based upon the labour consumed in production. [2] Price competition in the market gives an advantage to those capitalists who can increase the productivity of the labour they employ. The social relationship between different producers is expressed through the market comparison of the goods they produce. The social relations between people take the form of relations between things. Marx put it this way in Capital:

Since the producers do not come into social contact until they exchange the products of their labour, the specific social characteristics of their labour appear only in exchange. [3]

For Marx it is the process of exchange on the market, representing the social validation of the labour involved in production, that turns goods into commodities. Because the prices at which commodities exchange are based on the labour time socially necessary for their production, an understanding of the labour theory of value reveals the ‘innermost secret’ of capitalism.

For 60 years these market mechanisms have not operated inside the USSR. Prices have not been based on the labour value of goods, nor have they moved with supply and demand. Money has not determined the allocation of resources between enterprises (although it is a mechanism whereby consumer goods are allocated between individuals). [4] ‘Profit’, in the absence of genuine prices, has been an artificial construct without the social content it has in the West. The relationship between different producers is not just through the exchange of their products. The existence of central administration, even if not real planning, means that labour has a relationship to the total social labour prior to the exchange of the products of labour. The allocation of workers to work, the ratio by which goods exchange, the profit to be made—none of these are governed by market signals. Instead they are the results of decisions by bureaucrats. How then can the USSR be capitalist?

At issue is how to apply Capital to capitalism. The theory of bureaucratic state capitalism does not require us to deny the divergence of the internal organisation of the USSR from the categories of Capital. As long ago as 1948 Cliff wrote:

... if one examines the relations within the Russian economy, abstracting them from their relations with the world economy, one is bound to conclude that the source of the law of value, as the motor and regulator of production, is not to be found in it. [5]

Cliff identifies the key question as whether we look at the USSR ‘in isolation’ or in its relation to the world economy. Our tradition has always emphasised the world economy not as merely the sum of national economies but as an entitity in its own right.

The theory of state capitalism identifies the central economic processes in the USSR with those in the West. Because we are seeking the ‘logic of motion’, the dynamic of the system, the apparent differences between the USSR and Western capitalism are important but not central.

Reading Capital it is clear that many things in Russia don’t fit Marx’s description of capitalism. Equally, modern ‘Western’ capitalism itself doesn’t ‘fit’, enabling bourgeois economists to claim that Marx is outdated. This fails to grasp Marx’s scientific method of abstraction, that the rich empirical evidence of volume 1 is there not as description but as the form of appearance of underlying processes. These processes are the real subject of Marx’s analysis and ‘the general and necessary tendencies of capital must be distinguished from the form of appearance’.

The law of value

The key distinguishing dynamic of capitalism is that competitive accumulation is forced upon units of capital as an external coercive law. This competitive pressure leads to the constant striving to increase the productivity of labour. The rise in the productivity of labour means that the socially necessary labour time to produce any commodity falls. ‘Socially necessary’ implies that the commodity produced is ‘necessary’ in terms of market demand, and that any extra labour expended by less efficient producers is not value creating. Value is only realised when commodities are sold on the market. The ‘law of value’ reflects the processes whereby labour is allocated between different tasks and inefficient producers penalised.

Capital can only exist as many capitals. In the same way that the concept of class implies conflict between classes, the concept of capital contains within it its relation to other capitals. It is only when this relationship is understood that the dynamic heart of capitalism can be grasped. This form of understanding is different from that of bourgeois economists who define capital statically as sums of money or stocks of machinery.

It is the external pressure of competition that makes the individual decisions of capitalists explicable as a law.

Competition subordinates every individual capitalist to the immanent laws of capitalist production as external and coercive laws. It compels him to keep extending his capital, so as to preserve it, and he can only extend it by means of progressive accumulation. [6]

A capitalist who does not accumulate falls behind in the competitive struggle and is liable to go bust or be taken over by a more successful rival. This drive to accumulate is not psychological but an expression of the central processes of capitalism. The need to accumulate means that all else takes second place, whether it be the consumption needs of workers or the luxuries of capitalists. [7] The first essential is to produce new means of production to increase the productivity of labour:

Accumulate, accumulate! That is Moses and the prophets! ... Therefore, save, save, ie reconvert the greatest portion of surplus value, or surplus product, into capital! Accumulation for accumulation’s sake, production for production’s sake. [8]

This explains the dynamism of capitalism, of its ability to ‘constantly revolutionise the instruments of production’ and to create ‘more massive and more colossal productive forces than have all preceding generations together’ . [9] Capitalism is a system which enforces the increase in the productivity of human labour through the development of the forces of production. Capitalist competition is the process by which units of capital compare their productiveness. Productivity assumes an importance it did not have in any previous mode of production.

Although the productivity of labour is central in competition, that competition takes place ‘over the heads’ of the direct producers. The relations between people are subordinated to the relations between the products of their labour. As Marx put it:

[the commodity] ... reflects the social relations of the producers to the sum total of labour as a social relation between objects, a relation which exists apart from and outside the producers. [10]

In the process of competition the less labour used to produce the commodity the cheaper it will be. This is the same as saying that labour becomes more productive. Market success depends on reducing the labour involved in producing commodities. What is important here is the quantity of labour, as a part of total living labour, abstracted from the specific form of the labour (sewing, lathe operating, driving) involved. It is the amount of ‘abstract labour’, labour as a proportion of total labour, that determines the value of a commodity.

Results of capitalist competition

Before turning to the USSR it is worth examining how the development of Western capitalism has altered the operation of the law of value. Capitalism is not simply an ‘ideal type’ with which to compare the reality of the USSR.

Inbuilt into the dynamic of competitive accumulation is the tendency towards the concentration and centralisation of capital. Successful accumulation by a capitalist enables more accumulation in the future, so large capitals get larger still—capital becomes concentrated. Furthermore, the larger capitals are able to take over their less successful rivals, The number of capitals is reduced—there is centralisation of capital. Identified by Marx a century ago, the concentration and centralisation of capital have led to the massive corporations of late capitalism. This has altered the operation of price competition. The larger the capital in relation to its market the more influence it has over price. Indeed the ability of the monopolist to raise prices is a factor in the systematic tendency of late capitalism to inflation. Hilferding attempted to explore the implications of capitalist concentration:

Price ceases to be an amount determined objectively, and becomes a problem of calculation for those who determine it with will and consciousness; instead of a result it becomes an assumption, instead of being objective, subjective, instead of being inevitable and independent of the will and consciousness of the actors it becomes arbitrary and accidental. The realisation of the Marxian theory of concentration—the monopolistic merger—seems to lead to the invalidation of the Marxian theory of value. [11]

Although large capitalists do have greater control over prices this does not invalidate the law of value. The operation of the law is only modified by the concentration and centralisation of capital. Even the monopolist is subject to the pressures of the market, but, as Chris Harman points out, they are able to cushion themselves from its disciplining effects. [12] The greater role played by conscious decision-making acts to further mediate the operation of the law of value.

Planning and competition are not opposing tendencies. Internally in large capitalist firms we do not find market prices or market competition, but instead administrative ‘prices’ and planning. The biggest and most powerful firms can delay internal reorganisation in the face of competition so that waste and ineffeciency can be tolerated for longer. They can also manoeuvre to attempt to influence national government policy in their favour.

The growth in the size of capitals has gone hand in hand with the growth of the state. The development of the concentration and centralisation of capital reaches its highest form with the direct intervention of the state into the national economy. Bukharin looked forward to the ultimate state monopolisation:

There finally comes a time when competition ceases in an entire branch of production. But the war for dividing up surplus value ... becomes fiercer ... The centralisation process proceeds apace. Combines in industry and banking syndicates unite the entire ‘national’ production, which assumes the form of a company of companies, thus becoming a state capitalist trust. Competition reaches the highest, the last conceivable state of development. Competition is reduced to a minimum within the boundaries of ‘national’ economies only to flare up in colossal proportions between them. [13]

Bukharin’s strength was to see these tendencies with great clarity. His weakness was not to recognise the limitations to the trends he describes. ‘Tendencies’ do not work themselves out in some supra-historical way—they operate within real historical conditions. Crucially the development of ‘state capitalist trusts’ depends on class relations, the strength of private capital and so on. It is not the case that full state capitalism is the ‘automatic’ outcome of the tendencies of capitalism. In every case a break with previous social organisation was necessary. In Russia Stalin defeated the revolution; in Eastern Europe it took Red Army tanks. [14]

In every country in the world, however, the state intervenes in one way or another in the ‘national’ economy. This intervention, like monopolisation, implies a modification of the operation of the ‘laws of value’. It is no longer the case that unprofitable capitals automatically go bust. The expression of economic crisis can be altered in form by the effects of government fiscal or monetary policy. Keynesianism, while unable to abolish the contradictions of capitalism, was based on the ability of the state to modify the expression of those contradictions. Particularly in wartime states have seized direct control of production, have maintained control of foreign trade, have taken powers to direct labour. The law of value has been modified, but without any question of capitalism being abolished. [15]

Stalin and accumulation

Cliff argued that if we compare a model of capitalism to the USSR seen in isolation the theory of state capitalism cannot be sustained. Goods have not been compared inside the USSR on the basis of the labour time involved in their production. Indeed this is one the complaints of those pushing perestroika. The pricing system in the USSR obstructs productivity comparisons between competing goods. Prices are as ‘artificial’ as transfer prices inside Fords.

Once the USSR is viewed in its relation to the world economy, things change. The world system is a system of competing states, whatever the temporary play of blocs and alliances, and the USSR is locked into this competition. The SWP dates the establishment of bureaucratic state capitalism in the USSR from 1928 because it is from that point that international competition became the main determinant of the internal processes.

Distortions of the workers’ state had existed throughout the years since the revolution, firstly the years of war communism with its necessary terror, then the conscious retreat of the NEP and the development of alien class forces. Ultra-leftists use these divergences from a ‘model’ of socialism to use the expression ‘state capitalism’ to describe the USSR in these years. [16] This is not our approach. We do not deal in utopian notions of socialism or the workers’ state. During those early years the central thrust of Bolshevik policy was aimed at defending the Russian Revolution in order for it to spread. Although Stalin was increasing his influence, there was still the possibility that ideas of international revolution, of permanent revolution, could win out. The soviets, although weakened, were not yet mere rubber stamps of the bureaucracy.

That changed in 1928. In 1925 Stalin won the battle over the question of ‘socialism in one country’. This theory expressed the objective position of the bureaucracy as ideas of international revolution were replaced by concentration on the development of Russia itself. In 1927 the defeat of the Chinese communists and the diplomatic break with Britain led to a war scare and ‘the changed international situation critically affected internal relations in the USSR’. [17]

With increasing urgency, demands were made for the quickest possible strengthening of the army and the defensive capacity of the Soviet state in general, for a reorientation of the economy and social relations towards a perspective of imminent war, and for more extensive industrialisation. [18]

The 15th Congress of the CPSU was quite explicit in December 1927:

Bearing in mind the possibility of a military attack ... it is essential in elaborating the five-year plan to devote maximum attention to a most rapid development of those branches of the economy in general and industry in particular on which the main role will fall in securing the defence and economic stability of the country in war time. [19]

Raising the productivity of labour became less an aspect of the struggle for socialism and became instead an expression of national competition. The external coercive pressure of competition thus became the major factor shaping the programme of the ruling bureaucracy. In a relatively backward country like the USSR the pace of forced industrialisation required the rulers to use massive repression. The years following 1928 saw the introduction of the Five Year Plans, the forced collectivisation of the peasantry, and the development of the Stalinist machine. By the mid-1930s the apparatus of gulag and show trial was in place, not as the expression of Stalin’s personality, but as an expression of the gap between the level of economic development required to compete with the West and the level sustainable without dictatorship over the masses. There was a violent social counter-revolution. The bureaucracy took on the distinctive social function of overseeing national development as its primary task, and by assuming direct dictatorial power over the working class transformed itself into a new ruling class.

The inability of the weak USSR to compete with the West economically meant that competition primarily took the form of arms competition. It was this that led to the absolute priority of heavy industry, steel, railways, and so on. These were necessary to underpin military strength. Stalin himself located the drive to accumulate in external competition:

To slacken the pace of industrialisation would mean to lag behind; those who lag behind are beaten. We are 50 years behind the advanced countries. We must make good this lag in ten years. Either we do it or we are beaten. [20]

or again:

It is impossible to defend the independence of our country without a sufficient industrial base for defence. It is impossible to create such an industrial base without technology in industry ... either we aquire it or we will be wiped out. [21]

The external nature of the compulsion to accumulate determined the form of the accumulation. [22] As in all capitalist accumulation workers’ needs were subservient to the drive to industrialise. Consumption was subordinated to accumulation, and as accumulation proceeded this subordination intensified:

Percent of gross industrial output going to: [23]


















This was accumulation for the sake of accumulation. The working class was the victim of the process. It makes no sense to describe the Russia of these years as in any sense a ‘workers’ state’. The dynamic of the economy of the USSR was not determined by the needs of the working class either internally or internationally. A far better picture of the situation of Russian workers in the 1930s is given by Marx in his analysis of capitalist accumulation:

... all means for the development of production undergo a dialectical inversion so that they become means of domination and exploitation of the producers; they distort the worker into a fragment of a man, they degrade him to the level of an appendage of a machine, they destroy the actual content of his labour by turning it into a torment; they alienate from him the intellectual potentialities of the labour process as science is incorporated in it as an independent power; they deform the conditions under which he works, subject him during the labour process to a despotism the more hateful for its meanness; they transform his life-time into working-time, and drag his wife and child beneath the wheels of the juggernaut of capital. [24]

Arms competition and commodity competition

The key to understanding capitalism is the operation of the external coercive competitive pressure to accumulate, and the way that this leads to social development of the productivity of labour. There is no reason why this fundamental pressure should not take a variety of forms. The development of capitalism itself alters the operation of the ‘law of value’. But many who wish to accept Marx’s analysis of capitalism cannot get past the empirical differences between 1860s capitalism and the USSR to accept our theory. The absence of a fully operational market in the USSR, our critics argue, means that commodities are not being produced, and as capitalism is ‘generalised commodity production’ the USSR cannot be capitalist. [25]

To pose the operation of the law of value in the USSR in the form of the question, ‘Is there commodity production in the USSR?’ is to pose it in an artificial and static way. Looked at in isolation production in the USSR cannot be the production of exchange values, it is rather production of use-values as the result of concrete labours co-ordinated centrally. Once the analysis is raised to the level of international competitiveness, however, it can be seen that goods in the USSR take on the social role of commodities—of being the embodiment of abstract labour. The Russian bureaucratic ruling class compares the costs of producing goods inside the USSR with the costs of production elsewhere, and this comparison relates concrete labour to abstract labour on a world scale. The bureaucracy must ask itself how much labour it takes to produce something in Russia compared to abroad. Chris Harman put it this way:

Every change in production processes in the West will force changes in production processes in Russia, and vice versa. Accumulation in the West will force accumulation in Russia (and again, vice versa). In other words, a total system of reified relations is set up in which the anarchic and unplanned interaction of the products of labour determine the labour process, in which dead labour dominates living labour, in which every concrete act of labour is related to abstract labour on a world scale. [26]

This is the key to the theory of state capitalism, and grasping the significance of international competition makes it possible to understand developments in the USSR. Our critics often respond with long quotes from Capital, particularly where Marx emphasises private property. This misses the point. Mandel in 1970, arguing against Chris Harman, asked:

Why does arms production competition with the West ‘determine the whole development of the Russian economy’? Through what economic mechanism? By what economic results? One could make a point of saying that arms competition with the West would be a factor slowing down the increase in the standard of living of the workers, or the rate of economic growth. But by this one has not yet proved that, as there is not yet socialism, there has to be capitalism ‘in which every concrete act of (Soviet) labour is related to abstract labour on a world scale’. [27]

Mandel talks of a ‘slowing in the standard of living of the workers’, but the issue is the systematic subordination of workers’ consumption to the requirement to accumulate. Mandel’s demand for an explanation of the economic mechanisms at work is misplaced. Economic mechanisms are not automatic. The options of states and capitals are shaped by both market and non-market competition. The economic is not reducible to the market. Under state capitalism, and generally under modern capitalism, the operation of the law of value is mediated through the attempt to plan.

The mechanism by which arms competition determines the development of the economy of the USSR works through the political operation of the bureaucracy. Economics and politics interpenetrate. [28] Marx’s point that capitalists are the personification of capital is not about capitalists as individuals. In state capitalism the bureaucracy becomes this personification. [29] The political decisions of the bureaucracy are determined by competition even though this is not ‘economic’ in the restricted market sense.

Clarity about the external compulsion which operates on the ruling bureaucracy gives us a materialist understanding of their actions. By contrast, those who ignore the position of the USSR in the world economy tend to end up with subjectivist arguments. Shachtman, who believed the USSR was a new form of class society, wrote:

Production is carried on and extended for the satisfaction of the needs of the bureaucracy, for the increasing of its wealth, its privileges, its power —The driving force behind the bureaucracy is the tendency to increase ... [the] appropriation of the product of the labour of others. Hence, its penchant for methods of exploitation typical of the worst under capitalism; hence, its lust to extend its domination over the peoples of the world. [30]

This explains nothing, and neither does Mandel’s view that: ‘the consumption needs of the bureaucracy ... are the motive force behind bureaucratic management’. [31] Mandel can believe this because for him:

Soviet planning ... is real planning, insofar as the totality of industrial means of production is in the hands of the state, which can centrally decide the level and rate of growth of production and accumulation. [32]

If this were the case then the tendency in the post-war years to economic stagnation, and the urgency of the political response of Gorbachev with perestroika, is a mystery. Why did not the bureaucracy merely decide a higher level of growth and accumulation? The theory of state capitalism helps explain the contradictions of the economy of the USSR.

To establish that international competition means ‘every concrete act of (Soviet) labour is related to abstract labour on a world scale’ requires historical examination. The ideological spokesmen of the Russian ruling class are in no doubt themselves. Abel Aganbegyan in his key book Economics of Perestroika consistently compares the economic performance of the USSR with that of the USA. He argues that:

A very important goal is the effective inclusion of the Soviet Union into the international division of labour ... our backwardness compared to the most developed countries in the world is too great to be overcome before the end of the century. Thus in terms of productivity we are two and a half to three times times behind the USA and two to two and a half times behind other developed Western countries. [33]

The separation from the international division of labour in terms of significant levels of trade has not prevented the Russian ruling class from making comparisons between the productivity of their economy and that of their rivals. Competition has meant that the bureaucrats consistently compare labour times necessary for the production of goods. Clearly this is not the ‘same’ as market competition, but it plays the same social role in determining the economic tasks of the ruling class. Professor V Kossov in Pravda International wrote:

The results of economic competition with the USA over the last twenty five years are not very prepossessing: labour productivity in industry is up from 44 percent of the US level in 1960, to 55 percent in 1986, and in agriculture it has been stuck for a long time at 20-25 percent. [34]

It is not the figures that are important here but the nature of the argument. Advisers to the bureaucracy are clear about the centrality of ‘economic competition with the USA’. In that competition the question of labour productivity is central. This necessarily means it is not the concrete labour of Russian workers that is being compared with that of American workers, but their labour as social labour, in other words, abstract labour.

Supporters of the theory of the USSR being a ‘workers’ state’ sometimes argue that the pressure of military threats would force a workers’ state to build arms to defend that workers’ state. This is true, but they use this to argue that as military competition is universal it cannot be used to sustain the theory of state capitalism. This takes us to the heart of the political significance of the argument. The needs of any individual workers’ state will be subordinate to the interests of the international working class and the relationship between the internal organisation of the workers’ state and international pressure will be determined politically. [35] Decisions to restrict immediate consumption to produce arms will be taken by the working class. They will not be the result of a blind drive to accumulate for the sake of accumulation. To argue that the pressure of external arms competition on the USSR operates no differently than it would on a workers’ state is to ignore Stalin’s counter-revolution.

Mandel’s attempt to use this argument demonstrates that he has not centred on the crucial significance of capitalist competition, that it is a mechanism whereby productivity and the revolutionising of production become central. As Chris Harman explains:

Now if one examines why, say, the competition between Rome and Carthage was not capitalist, the reason is not just the tautological one that it was not based upon ‘commodity production’, but rather that the labour processes which the citizens (and slaves) of Rome were engaged in were not being continually transformed and rationalised so as to keep pace with such changes in Carthage and vice versa. The ‘social relation’ between the Roman and the Carthaginian citizen established by the competition did not continually intrude upon the actual act of production in this way. [36]

Wage labour and the USSR

Capitalism faces two fundamental contradictions. There is the contradiction of capital existing as competing capitals, and there is also the contradiction between capital and labour. Capital can only exist in relation to wage labour. Wage labour is the key to the mechanism of capitalist exploitation, and we can follow Marx when he writes in Capital:

What distinguishes the various economic formations of society—the distinction between for example a society based on slave-labour and a society based on wage-labour—is the form in which this surplus labour is in each case extorted from the immediate producer, the worker. [37]

Capitalism has a specific mechanism for the extraction of surplus labour or labour over and above that necessary for the reproduction of the worker. The basis of capitalist exploitation is that the worker receives money wages which represent less value than that created by the labour expended, the extra value being expropriated as surplus value. This expropriation is disguised from the worker because wages appear in the form of a fair exchange of money for labour. The surplus value is only realised with the sale of the commodity produced—and the worker is not part of that sale.

Wage labour separates the realisation of surplus from its production. In this it is different from slavery or feudalism. As a result capitalist wage labour is uniquely flexible—the worker bringing only the ability to work to the market. The specific freedom of the worker to work or not work for a particular employer underlies the process of raising the productivity of labour in the face of competition. The cheapening of commodities by increasing productivity means it takes less labour to produce the commodities necessary to reproduce the worker. The proportion of the value produced by the worker that has to be returned in wages falls, and the employer keeps a higher share of the value produced—the rate of exploitation increases. Marx calls this an increase in relative surplus value, and it is key to the dynamism of capitalism compared to previous modes of production. This dynamism both rested on and created a labour market to transfer labour between tasks more easily than under slavery or feudalism. [38]

To sustain a theory of state capitalism wage labour must dominate in the USSR. There has certainly been the production of surplus, otherwise the development of the economy under Stalin could not have taken place. That surplus is expropriated from the direct producers by the bureaucracy. The question is whether this exploitation is based upon wage labour and capitalist exploitation. This question requires historical examination.

The tyranny of the Stalinist system has often been portrayed as reducing workers to the position of slaves. Bruno Rizzi, for instance, was explicit about this: ‘Exploitation takes place exactly as in a slave society’. [39] Furedi with typical imprecision talks of workers in the 1930s as being in ‘virtual enslavement’. [40]

In an earlier debate in International Socialism Pete Binns and Mike Haynes argued:

For all intents and purposes there is only one employer in the USSR: the state. The purchase and sale of labour power does not therefore ... turn it into a commodity. It is therefore not as a result wage-labour in Marx’s sense of the word. [41]

Pete Binns argued even more strongly that it wouldn’t make any difference if Russian workers were paid in buttons. [42] His argument was that as the only employer is the state the roubles received in the pay packet are of less significance than the availability of consumer goods, and that is determined from the top by the ‘plan’. The product of the workers is appropriated by the rulers, and a certain portion of resources is allocated for the maintenance of the workforce—the mechanism of slavery.

As Alex Callinicos points out, [43] this ignores the realities of wages in the USSR. It is true that shortages of foodstuffs and other consumer goods in the USSR have meant that in the 1970s household savings grew more than twice as fast as wages, as workers failed to find the goods on which to spend their money. [44] If this were the whole story then indeed we would have to conclude that the wage did not in reality amount to a claim on the value in society. Clearly, though, the level of wages in roubles is relevant to the consumption of workers. Bonus payments are a vital part of the wages of workers in the USSR, and pay differentials are used as a tool of labour policy. Workers in the harsh and unpopular far north get premium payments, and oilfield workers in Siberia can earn up to three times the national average. [45] Aganbegyan outlines the importance of increasing pay scales and of allowing personal bonuses of up to 50 percent to improve the ‘material motivation’ for the work of engineers. [46] He writes:

The state is also defining the principles of workers’ bonuses and incentives. Different types of additional payments for working conditions, regional coefficients for wages in regions with harsher working and living conditions ... additional payments for night shifts ... are all being determined centrally. [47]

If control over the worker was absolute and the monetary wage simply an empty gesture none of this would make sense. If the ‘freedom’ of the worker to work or not is a fiction then why should they be given extra pay for working in particular places? Of course consumer shortages reduce the efficacy of bonus systems, and a variety of non-wage incentives are used, but these are imperfections in the system rather than a denial of it.

The insistence that the wage form in the USSR is real, and that workers retained aspects of economic freedom even under high Stalinism contradicts an argument put by Cliff at one point in State Capitalism in Russia:

In order to see whether labour power in Russia is really a commodity ... it is necessary to see what specific conditions are necessary for it to be so. Marx sets two conditions on this: first, that the labourer must sell his labour power as he has no other means of subsistence ... secondly, that the labourer can sell his labour power as he is the sole owner of it, that is, he is free to do so. The freedom of the worker on the one hand, his bondage on the other, are shown by the ‘periodic sale of himself, by his change of masters, and by the oscillation in the market price of labour power.’ ... If there is only one employer, a ‘change of masters’ is impossible, and the ‘periodic sale of himself’ becomes a mere formality. [48]

As Alex Callinicos points out, [49] this argument is influenced by its context. Cliff is establishing that the USSR viewed in isolation could not be seen as capitalist. But even when we move to the level of seeing the USSR in its international context there is practically no competition for labour between the USSR and its rivals. If labour is to be real wage-labour there must be a labour market inside Russia.

Politically it has been necessary to emphasise the lack of freedom of workers in the USSR, especially under Stalin. This is vital to deny any notion of socialism existing in the USSR, and Cliff spends much of the first chapter of State Capitalism in Russia showing how Russian workers are systematically subordinated. [50] This is not the same as seeing workers under Stalin as slaves. Of course the gulag was a system of slavery, but even if there were five million prisoners [51] forced labour was not dominant but was a supplement to wage labour. As one student of the USSR’s labour policy between 1930 and 1941 wrote:

Whatever the motives for the mass arrests of real or suspected opponents of the government in the 1930s, the resulting captive workforce performed an important economic function in providing labour for industries and for regions to which free labour was difficult and costly to attract. In this sense it remedied some of the deficiencies of the labour recruitment system. That it did so cannot have been fortuitous. It seems an unlikely coincidence that the two largest expansions of the labour camp population, in 1930-31 and 1937-39, took place at times of acute labour shortage. [52]

Similarly the moves to harsher legal controls on labour were only necessary because workers retained freedoms. Had control been absolute it would have been unnecessary to impose such severe penalties for absenteeism, or implement the system of Labour Books. [53] In the 1930s formal systems were created for the recruitment of peasants into the towns, but those moving under orgnabor agreements were more legally restricted than those who migrated to the towns on their own account. ‘Not surprisingly, therefore, despite its initial impact, orgnabor failed to replace traditional migration, the free flow of peasants to the towns.’ [54]

The conclusion is that:

The general picture ... is one of an employment policy still in practice based on a free labour market. For the majority of Soviet workers in the 1930s, the existence of a highly authoritarian government, willing to use harsh sanctions against its population to achieve its ends, nonetheless did not mean the end of freedom to choose their place of work. [55]

This relative freedom is exemplified by the rate of labour turnover, which was high in the 1930s, [56] and has remained higher than in the advanced West. [57]

Cliff’s emphasis on both the freedom and the bondage of the worker, and the resulting periodic sale of wage labour, is correct, but it is not true that a ‘change of masters’ in the USSR is a mere formality. The existence of central administration has given the ability of the worker to exercise the freedom to sell labour power periodically a particular content. Managers, constantly worried that someone higher up may suddenly demand an increase in output, are constantly tempted to hoard resources, including labour. There is a tendency for enterprises to have more workers than necessary thus making it harder to increase productivity, whilst over the economy as a whole there are labour shortages. [58] These shortages enable the high rate of labour turnover. The worker’s freedom to choose where to work is real.

The labour market in the USSR has ‘imperfections’, but this is true of any labour market. The point is that the worker is no slave, and even if not able to choose which master to work for, can still exercise the classic ‘freedom’ Marx talks of—the freedom to exercise some control over the terms of exploitation. [59] That exploitation is disguised through the wage relationship. The money wage represents a claim on a portion of the available consumer goods. Wage labour enables the transfer of workers between tasks on the basis of wage levels. Finally the wage labour system creates the potential for intensive increases in exploitation through the increase in relative surplus value. The practical difficulties faced by the USSR in generating this intensive growth rest on the broader contradictions of the system.

Contradictions of state capitalist accumulation

Western commentators have traditionally emphasised the irrationality of the economic system in the USSR. They have argued that the absence of a genuine internal market makes productivity comparisons between different parts of the economy impossible. There is an element of truth in this, but it is easy to overstate. In fact many bourgeois academics have found the USSR is not significantly less allocatively efficient than the West. The informal horizontal links between firms mean that a quasi-market is established. This market operates not by price but by barter, and this barter is necessary as a response to the bottlenecks that arise. One author argues that:

These trades are ... made at implicit barter prices which reflect real relative productivities and thus serve to improve the allocation of inputs relative to what it would have been based only on the plan. [60]

There are therefore ad hoc arrangements that mirror the functions of the price mechanism in Western capitalism, at least in inter-firm trade. Of course the very need for these arrangements indicates the problems caused by the restriction of the operation of the law of value in enabling the allocation of resources according to profitability and pricing. Furthermore inter-firm trades become less efficient as the expansion of production is required, and even more so with intensive growth involving changes in technology. In this situation the managers of firms will be far less likely to know who can provide the newer technologies, and on what quantitative basis to arrange barter trades.

The need to expand in the face of international competitive pressure makes the ad hoc arrangements between enterprises less efficient. This pressure also generates economic crises in the state capitalist system. This can only be explained as the result of the contradiction between the level of accumulation required by international competition and that which can be sustained given the level of development of the productive forces.

This contradiction has created cyclical movements in the economy. In Western capitalism cycles are the result of competing capitals facing the need to expand in order to reduce unit costs. But because all units of capital share this pressure then all units try to expand together. This leads to a crisis of overproduction—the market becomes saturated with goods—and also to the creation of bottlenecks in production. These bottlenecks create shortages of skilled labour, or of raw materials or of intermediate goods, and these shortages lead to price increases in the ‘inputs’ of capitalist production. The result is that profit falls, less is produced and the weakest units of capital start to make a loss and so become liable to bankruptcy or takeover. The elimination of the less competitive, in its turn, releases resources which can be taken up by the more efficient, and at some stage production becomes profitable again and the system returns to the upswing of the cycle. At the heart of this is competitive accumulation forcing units of capital to attempt a higher rate of accumulation than can be sustained overall.

The concentration and centralisation of capital in the West has altered the operation of economic cycles. The increased size of the units of capital compared to the size of the state means that the failure of one of these units can threaten the stability of the ruling class. In a market with 500 producers, the collapse of 25 may well be disastrous for the workers involved and inconvenient for the capitalists, but the overall stability of the system is not challenged. The releasing of the resources of the failures as a result of such collapse is a precondition for reviving the rate of profit. [61] Monopolisation alters this. If bankruptcy threatens the only aerospace producer inside a country its collapse will weaken the state and is likely to pull down a host of suppliers and related firms with it. In this situation there is pressure on the state to intervene to prop up the ailing industry, restricting the operation of the ‘law of value’.

This state modification of the working out of the ‘law of value’ imposes a cost on the system as a whole. Saving weaker firms may stave off knock-on bankruptcies, but the resources to do this must come from elsewhere and the benefits to the system of the ‘purging’ effect of crises are lost. [62] Economic crisis since the 1970s has not been a rerun of the 1930s. Unlike earlier periods general prices have not fallen with recession. Changes in the structure of capitalism have altered the expression of the underlying contradictions of the mode of production, but those contradictions have not been abolished.

In the USSR the mechanism of economic cycles is different to that in the West, but the process is still one whereby the needs of competitive accumulation force attempts at a higher rate of accumulation than can be sustained. Chris Harman has explained the process in his articles on Poland in the 1970s. [63] Projects are initiated by the bureaucracy and economic activity rises, but the very size of the projects means that bottlenecks and shortages start to grow. Some projects grind to a halt or are put on ice to release resources for others. The economy stagnates. The bureaucracy then intervenes to redirect resources into priority projects, these are finished, pass into production and the possibility of renewed growth returns.

Why, though, does the bureaucracy initiate more and larger projects than can be completed? This is explained by the necessity to compete with the West, and the fact that the level of accumulation determined by competition on the world economy is greater than that sustainable with available economic resources. Attempts by Poland to resolve this contradiction by taking international loans in the 1970s led only to the closer integration of the cycle with that of the West. [64] Capitalist irrationality is enforced as an ‘external and coercive law’, but rather than cycles of overproduction and bankruptcy the same forces lead to cycles of overinvestment and waste. Waste is generated by both such cycles and results from the same underlying factors.

The absence of bankruptcy under state capitalism has acted as an obstacle to the release of resources to the more efficient units of production. It has led to labour continuing to be employed in relatively backward industries and has thus exacerbated the relative weakness of the economy.

Whilst it is true that the process of investment cycles has led to enormous waste under state capitalism, this waste has sometimes been presented as an ‘explanation’ of the contradictions of those economies. Such explanations necessarily ignore the fact that Stalinist accumulation from the 1930s led to enormous economic growth. [65] The explanation of why that growth could not be sustained, and why the economy of the USSR stagnated in the 1970s, is not just a matter of cycles but of long run tendencies. State capitalist accumulation contains within itself a tendency towards a long term slow down in the rate of accumulation.

Under ‘private’ capitalism the tendency of the rate of return on capital invested takes the form of the tendency of the rate of profit to fall. Competition to increase productivity requires investment in more advanced methods of production. This means that greater emphasis is put on the production of means of production than on means of consumption—a higher proportion of investment is used to purchase machines rather than labour power. There is a tendency for machines to replace workers in production, but it is the labour of workers which creates value, and in particular the surplus value which enables further accumulation. To the extent that the proportion of capital invested in buying labour power falls then the smaller is the proportion of invested capital producing surplus value. The ratio of total surplus to total capital tends to fall. The rate of profit is the monetary expression of the ratio of total surplus to total capital employed.

The process underlying the falling rate of profit is produced by the relationship between units of capital. Under Western capitalism the first capitalist to invest in new techniques spends a higher proportion of his investment on the new constant capital than his competitors. This is worthwhile, however, because the higher productivity means a larger number of commodities produced. Although the labour time to produce each commodity has fallen, each can still be sold at the prevailing price, determined by the prevailing socially necessary labour time. The innovator has the advantage of cheapening the production of each of his commodities before the price adjusts to the new labour time necessary for its production. It is only when the new methods of production are generalised that this advantage disappears. Now the higher overall productivity means that the price of each commodity has fallen to the new socially necessary labour time for its production. No one is making extra profits, and the increase in the proportion of investment going to constant capital has lowered the rate of profit overall.

The application of the tendency of the rate of profit to fall to the USSR presents a problem. Profit is one of the forms taken by surplus value in the West. Surplus value also takes other forms, most importantly tax. Under bureaucratic state capitalism surplus value is produced but its relationship to profit is even less clear. The rate of profit is a monetary phenomenon. The tendency to form a general rate of profit requires the flow of capital towards more profitable areas of production. [66] In the USSR bureaucratic administration has precluded this type of movement driven by considerations of profitability. Even at the level of the enterprise the level of ‘profit’, of surplus, is disguised by distortions in the price structure. During the 1930s:

The work done by enterprises was determined by directives, which year after year became more detailed. Financial accountability became a formality; prices were virtually irrelevant and many branches were unprofitable. Losses were hidden in the form of subsidies from the state budget. [67]

Although the modification of ‘profit’ creates difficulties it is possible to see that the mechanisms that produce the tendency of the rate of profit to fall in the West still operate in the USSR. Accumulation has tended to undermine itself in the USSR—greater amounts of investment being needed to generate a certain amount of surplus. Aganbegyan gives figures to show that between 1961 and 1970 the capital output ratio fell. [68] More and more investment was needed to increase production. This supports the conclusion that accumulation determined by competition creates its own contradictions, but there is a difficulty. These figures were calculated in volume terms, estimated in fixed rouble prices. [69] The ‘law of value’ operates in value terms, value expressing the portion of human labour necessary for its production. There is no simple way to derive value relationships from price relationships under Western capitalism, and the difficulties are multiplied when we deal with state capitalism.

The concern of the bureaucracy is not just with the total number of goods produced, or even with how to increase that number. If use value were the sole criterion of success for the bureaucracy then any increase in productivity would be splendid. What matters is how their production compares with that of the West. It is this comparison that is equivalent to value relations established in exchange, and it is on this comparison that they have fallen behind.

The bureaucracy has sought to increase productivity. To do this a higher proportion of investment has gone to means of production rather than wages. Over the long run productivity has risen—the numbers of cars, refrigerators, or any other good produced have risen more quickly than the number of workers. The aim of the extra investment in means of production is to raise productivity to or beyond that prevailing on a world scale. This is what the USSR has failed to do. There has been a tendency to throw more and more capital at the problem without raising production to world levels of productivity. As Chris Harman has pointed out:

The fact that the total number of goods may rise at the same speed as investment does not matter to the bureaucrats. They are concerned with how production compares with that of the West—with the value of output, not its physical quantity. It is this which does not rise as fast as investment. [70]

The USSR is in the position of a capitalist who has tried to invest in up to date methods but is still behind the front runners. Full integration into the world market would have meant that prices for the goods produced would be based on the lower socially necessary labour time of the most advanced economies, and the industries of the USSR would have had to sell at a loss or go bust. Relative isolation from world markets has meant that the competitive pressures operate differently, stagnation rather than collapse has been the picture, but it has also made it more difficult for the USSR to raise its productivity to world levels.

Relative separation from the world division of labour has imposed increasing costs on the more ‘isolated’ economies. In the 1930s autarky provided the economic space to use force to achieve extensive growth. Peasants could be forced from the land to build the new factories and to open Siberia up for development. Centralised control meant that any surplus was thrown back into production. By the time of the capitalist boom in the 1950s and 1960s the isolation of the USSR increasingly implied a separation from the newest methods of production. The USSR on its own could not match the advances made by the combination of the advanced West. This falling behind in the ability of investment to generate advances in output equivalent to the West meant that however much resources were directed to the expansion of existing methods of production, investment produced less and less surplus in terms of the competitive relationship with the world economy. By the 1970s extensive growth had failed to match the West, and that failure to raise labour productivity sufficiently compounded the problems of the investment cycle and led to stagnation.

The reality of the competitive pressure on the USSR is demonstrated by the political disarray of the bureaucracy. They have finally decided that they have no option but to open up to the West. The debate is about how to do this without disaster.


The argument over the class nature of the USSR has sometimes been seen as typical of metaphysical debates on the left, and now that developments in Eastern Europe are moving so quickly it might appear that the theory of state capitalism has been overtaken by events. The rulers in the East now argue for market relations and for integration into the world division of labour; many have dropped even the pretence of socialism. The arguments presented in this article, based upon the isolation of the USSR from world markets and the replacement of market competition by arms competition, are not meant to substitute for an analysis of current events. This journal has consistently presented examinations of the unfolding of ‘perestroika’ over the last two years. [71]

The death agony of Stalinism puts the theories of those who follow Trotsky to the test. Those who have insisted that the East comprised a series of workers’ states have the task of explaining how capitalism is being ‘restored’ without civil war and revolution. They have previously rejected state capitalism on the grounds that no capitalist class conquered Russia in the late 1920s, but they are now trapped by their own argument. The transformation of the Russian bureaucracy into the Stalinist machine, the level of physical force required to push through industrialisation and collectivisation, the numbers dying in labour camps or in famine in the 1930s were qualitatively greater than anything seen in the 1980s.

Defenders of the theory of workers’ states argued that the bureaucracy rested upon state property and therefore was impelled to resist capitalism. They cannot explain why that same bureaucracy can now consider changing to private property. Their predictions for the trajectory of Eastern Europe have proved wrong. [72]

The theory of state capitalism was developed by Cliff in the face of the argument that Eastern Europe had seen the overthrow of capitalism without the active contribution of the working class. The theory remains superior to its rivals because it does not require us to believe that a second change in the mode of production in the East—back to capitalism—is taking place by means of reforms. One absurdity of this sort was enough; the second should lead to the disposal of such ‘theories’ in the dustbin of history.

These are not abstract questions. The analysis of the transformations in Eastern Europe has political repercussions. The idea that the bureaucracies of the East were based upon a defence of the ‘gains of the revolution’ leads to muddle and confusion. ‘Trotskyists’ denouncing Solidarity in Poland in 1980 as a ‘CIA union’, or welcoming the invasion of Afghanistan with the headline ‘All Hail the Red Army’ [73] are only the most extreme examples of bad theory leading to reactionary conclusions. [74]

If revolutionary theory is to inform political practice it must develop in response to developments in the real world. The power of the theory of state capitalism has been shown by its ability to explain recent events. Because it is based upon the developmental tendencies of capitalism it is a dynamic theory. It therefore passes the test of all Marxist theory—it helps us not only to analyse the world but also to change it.


I would like to thank Colin Barker, Pete Green, Chris Harman and John Rees for comments on the draft of this article. I haven’t always followed their advice. Pete Green first helped me to appreciate Capital, and Sue Clegg provided moral support and essential argument. This article has benefitted from my being able to read an unpublished paper by Nick Moore, Marx’s Labour Theory of Value and State Capitalism, which goes more deeply into the issue of money and the USSR. Anyone interested should contact Nick for a copy. I have tried to give references to the most recent editions of sources where possible.

1. The central sources on our theory of state capitalism are:

T Cliff, State Capitalism in Russia (Bookmarks, London, 1988), C Harman, The Inconsistencies of Ernest Mandel in International Socialism (old series) No 41, December 1969/January 1970, also reprinted in Readings on ‘State Capitalism’ (IMG, London, 1973), nb references here are to the latter edition. C Harman, Poland: Crisis of State Capitalism, International Socialism (old series) 93 & 94. A Callinicos, Wage Labour and State Capitalism, International Socialism 2:12, Spring 1981.

2. There is no space here to go into prices of production and the many mediations between labour value and price.

3. Marx, Capital Vol 1 (Penguin, Harmondsworth, 1976), p165.

4. Even here access to special shops by the bureaucracy distorts consumer allocation by price. A bureaucrat’s rouble has a different purchasing power to a worker’s rouble. I owe this point to Nick Moore.

5. T Cliff, State Capitalism, op cit, pp220-221.

6. Capital, op cit, p739

7. Clearly this abstraction does not deny capitalists’ consumption of luxuries, but these are not the basis of the dynamic of capitalism; they are a ‘robbery committed against the accumulation of capital’, ibid.

8. Ibid, p742.

9. Marx, Manifesto of The Communist Party, in Revolutions of 1848 (Penguin, Harmondsworth, 1973), pp70, 72.

10. Capital, op cit, p165.

11. R Hilferding, Finance Capital, cited in Cliff, State Capitalism, op cit, p210.

12. C Harman, The Myth of the Market, International Socialism 2:42, especially pp17-24. The concept of ‘Russia plc’ has a certain value in terms of developing the argument, but it is necessary to stress that the USSR is a national economy, and not a single enterprise. Once again clarity about the level of argument is essential.

13. N Bukharin, Imperialism and World Economy, (Merlin, London,1972), p119.

14. For examination of the historical process see C Harman, How the Revolution Was Lost in Russia from Workers’s State to State Capitalism (Bookmarks, London, 1987), C Harman, Class Struggles in Eastern Europe (Bookmarks, London, 1988). For the establishment of state capitalism in China and Cuba see T Cliff, Deflected Permanent Revolution (SWP, London, 1990).

15. J Burnham in The Managerial Revolution managed precisely to elevate the changing role of the state into a theory of the supercession of capitalism. This impressionistic idea has nothing to do with the theory of state capitalism. Our theory locates the similarities Burnham identified into the specifics of the capitalist mode of production. Incidentally, though, those who hold a superficial insistence on the non-capitalist nature of nationalisation and state control of foreign trade do have a problem with Nazi Germany.

16. See for instance A Buick and J Crump, State Capitalism: The Wages System Under New Management (MacMillan, Basingstoke, 1986), pp126ff.

17. M Reiman, The Birth of Stalinism (I B Taurus, London, 1987), p12.

18. Ibid, p13.

19. Quoted in R W Davies, The Soviet Economy in Turmoil, 1929-30 (MacMillan, Basingstoke, 1989), p442. This book contains a chapter on Russia’s armaments industry 1929-30, which is further confirmation of Reiman’s insistance of the international pressures towards forced industrialisation.

20. Quoted in I Deutscher, Stalin (Penguin, Harmondsworth, 1966), p328.

21. M Reiman, op cit, p86.

22. This raises the important issue of the differences between Stalin’s industrialization and that called for by the Opposition. Crucially the abandonment of an internationalist revolutionary project by the bureaucratic upholders of ‘socialism in one country’ determined both the pace and the repressive nature of the accumulation. Trotsky’s call for industrial growth was a part of a political programme to regenerate the forces of soviet democracy in Russia. The two are chalk and cheese, even if leading members of the Opposition were confused and capitulated to Stalin.

23. T Cliff, Russia, A Marxist Analysis (IS, London, 1970), p33. This is an earlier edition of what is now State Capitalism in Russia.

24. Capital, op cit, p799.

25. See E Mandel, The Inconsistencies of State Capitalism in Readings on ‘State Capitalism’, op cit, p8.

26. C Harman, ‘Inconsistencies’, op cit, p29.

27. E Mandel, ‘The Mystifications of State Capitalism’ in Readings, op cit, p34.

28. T Cliff, State Capitalism, op cit, p191. ‘As in ancient society, so in Russia today, the double function of the state as a guardian of the ruling class and as organiser of social production, leads to a total fusion of economics and politics.’

29. Ibid, pp180-182.

30. M Shachtman, Is Russia a Workers State? from New International January/February 1952, p46. This was originally in New International December 1940, and reappeared as chapter one of The Bureaucratic Revolution (Donald Press, NY, 1962).

31. E Mandel, ‘Inconsistencies’, op cit, p17.

32. E Mandel, Marxist Economic Theory (Merlin, London, 1968), p561.

33. A Aganbegyan, The Challenge: Economics of Perestroika (Hutchinson, London, 1988), pp37, 39.

34. V Kossov, ‘Consuming Interest. The Economic Strategy of Perestroika’, Pravda International 2:8, 1988, p18.

35. On the historical experience of the military defence of the workers’ state in Russia see T Cliff, Trotsky Vol 2, The Sword of the Revolution (Bookmarks, London, 1990).

36. C Harman, ‘Inconsistencies’, op cit, p28.

37. Capital, op cit, p325.

38. For a full discussion of the necessity of wage labour for capitalism see A Callinicos, ‘Wage Labour and State Capitalism’, op cit, especially pp99-l02.

39. B Rizzi, The Bureaucratisation of the World (Tavistock, London, 1985), p80.

40. F Furedi, The Soviet Union Demystified (sic) (Junius, London, 1986), p180.

41. P Binns and M Haynes, New Theories of Eastern European Class Societies, International Socialism 2:7, Winter 1980, p47.

42. In reply to a question at the SWP summer school, Marxism 87. If this were true either buttons would become money, or exchange would have regressed to barter.

43. A Callinicos, ‘Wage Labour’, op cit, pp111-12.

44. M Harrison, ‘Lessons of Soviet Planning for Full Employment’ in D Lane (ed), Labour and Employment in the USSR (Wheatsheaf, Brighton, 1986), p75.

45. Guardian, 22 Jan 1986.

46. A Aganbegyan, op cit, p106.

47. Ibid, p167.

48. Cliff, State Capitalism, op cit, pp218-21.

49. Callinicos, ‘Wage Labour’, op cit, p117.

50. Cliff, State Capitalism, op cit.

51. There is a long and complex debate about numbers in the gulag. See A Nove in Soviet Studies, Vol XLII, No 2, April 1990.

52. J Barber, ‘The Development of Soviet Employment and Labour Policy 1930-1941’ in Lane (ed), Labour and Employment, op cit, p59.

53. Ibid, pp61-2, also T Cliff, State Capitalism, op cit, pp34-39.

54. J Barber, op cit, p55.

55. Ibid, p63.

56. Ibid, p60.

57. Lane and O’Dell, The Soviet Industrial Worker, p75, cited in A Callinicos, ‘Wage Labour’, op cit.

58. P Hanson in Lane (ed), Labour and Employment, op cit, p88, see also A J Pietsch in Lane (ed), op cit.

59. The key here is that the periodic resale of labour power is a reality to workers in Russia. Worker resistance in the face of repression has only occasionally taken the form of overt strike action until recently. But other measures of resistance are important—absenteeism, sabotage, ‘soldiering’ etc. The point is to avoid the image of the ‘soviet’ worker as merely an atomised automaton.

60. R S Whitesell, Why Does the Soviet Economy Appear to be Allocatively Efficient? [PDF] in Soviet Studies Vol 42, No 2, April 1990, p262.

61. For short discussions of this see P Green, Why the World Economy is in Crisis (SWP, London,1988), p17. A Callinicos, Revolutionary Ideas of Karl Marx [PDF] (Bookmarks, London, 1983), p136. C Harman, Explaining the Crisis (Bookmarks, London, 1984), pp30-31.

62. C Harman, Explaining, op cit, p118, and A Callinicos, Revolutionary Ideas, op cit, p192.

63. C Harman, Poland: Crisis of State Capitalism, op cit.

64. C Barker & K Weber, ‘Solidarnosc—From Gdansk to Military Repression’, International Socialism 15, 1982, pp128ff.

65. C Harman, The Storm Breaks, International Socialism 2:46, Spring 1990, pp 30-31.

66. A Callinicos, Revolutionary Ideas, op cit, p122ff, and Nick Moore, ‘Marx’s Labour Theory of Value’, see acknowledgements.

67. A Aganbegyan, op cit, p22. I owe this reference to Nick Moore.

68. Ibid, p80.

69. Ibid, footnote p3.

70. C Harman, Class Struggles, op cit, p365 note 26.

71. C Harman & A Zebrowski, Glasnost: Before the Storm, IS 2:39, Summer 1988. ‘Polish Socialists Speak Out’, IS 2:41, Winter 1988. C Harman, The Myth of Market Socialism, IS 2:42, Spring 1989. C Harman, The Storm Breaks, IS 2:46, Spring 1990. C Harman, From Trotsky to State Capitalism, IS 2:47, Summer 1990. In addition, of course, many articles in Socialist Worker Review and Socialist Worker.

72. My favourite is this: ‘It seems more than probable that only with the overthrow of capitalism [read western capitalism—DH] and the establishment of workers’ states ... in several of the major European countries, will the conditions emerge for the political revolution in the USSR.’ P Bellis, Marxism and the USSR (Macmillan, London, 1979), p236.

73. These obscenities are from the Stalinoid International Spartacist Tendency.

74. See for instance the disgraceful position taken by Militant, 22 June 1990, after the beating of protesting students by Romanian miners at the behest of Iliescu, the Stalinist bureaucrat.

Last updated 23.7.2017