The Illusion of National State Capitalism (1975)

Pamphlet Review from the August 1975 issue of the Socialist Standard

Politically, the world is divided into states, but economically it is one unit. Wealth today is produced by the labour of people all over the world, as can be quickly seen by taking any object of everyday use and considering all the kinds of labour that have gone into it from start to finish. Wealth today is also produced for sale and directly or indirectly, it is world market conditions which determine the amount and kind of wealth that is produced.

It is precisely because capitalism is a world system that the SPGB insists that Socialism too can only exist on a world scale. Socialism can only be a world without frontiers in which the world-wide network of production have become the common heritage of all mankind, used not to produce wealth for sale with a view to profit, but to satisfy human needs .

The fact that capitalism is economically a world system restricts the actions of the various states into which the world is divided. Governments have to react to and be guided by capitalist economic forces and pressures. Many people mistakenly attribute the normal workings of world capitalism to the machinations of "imperialist powers” and of multi-national corporations, and imagine that if governments are determined enough they can overcome these supposed machinations. In effect they believe it is possible for a single country to isolate itself from the effects of world capitalism. Among those who make this mistake are the four Cambridge academics who have written Spokesman Pamphlet no. 44 on Britain's Economic Crisis.

These academics are fully aware of the policy the Labour Party has always pursued. This is what they have to say on the subject:

Labour’s willingness to act as an administrator of British capitalism shows its lack of understanding of the contradictions of such a position. To act as the administration of a capitalist economy means to maintain and reinforce a system built of inequality, hierarchy and the alienation of the working class. Whatever humane and egalitarian ideals the party may have had, in administering the system it has not only attacked the class from which it gains mass support, but has attempted to incorporate the trade union leadership into this attack. For example, fig. 1 [not reproduced in this article] shows how Labour has repeatedly attempted to solve crises by freeing real wages in 1951-56 and 1970-73, have been won under Tory governments: while Labour governments in 1948-51, 1964-70 and 1974 have held them down in a vain attempt to solve the capitalist crisis by adopting capitalist policies. It has often appeared as if Labour's objectives were to integrate the working class into capitalism and to apply reactionary policies which would be violently opposed by the unions if attempted by the Tories, (p. 11).

However, they attribute this failure to the fact that the Labour party has not been prepared to go far enough with its policies of state ownership and control. If it were, they say, then things could be different. In effect they are advocating national state capitalism (which they mistakenly call "socialism”) as a solution to Britain’s economic crisis. They want nationalization of big business, state control of foreign trade, and planning.

Assume for a moment that this programme had been put into practice; how would this isolate Britain from the effects of world capitalism? The government of British state capitalism would still be faced with the same problem: to sell British exports on the world market at a profit. According to these four academics this is easy; all you have to do is “to take international trade out of the hands of market forces” and plan it, “especially by developing new markets with ‘socialist’ and third world countries” (incidentally, this reference to socialist countries, by which they mean Russia and the Comecon countries, betrays the political views of the authors as supporters of the so-called Communist Party). But even in order to "plan” foreign trade, as for instance by long-term trade agreements, British export prices would have to be competitive, i.e. in line with world-market prices. For if they were above this level, Britain’s trading partners, even in the so-called Socialist (really state-capitalist) countries would go elsewhere for their purchases. To be and remain competitive, industry would have to be continually kept up to date by new investments of capital. The source of such investment could only be the surplus labour of the working class of state-capitalist Britain.

Indeed, if the government of a state-capitalist Britain were to pursue a policy of trying to improve the lot of the working class, then it would soon be in desperate economic trouble. The fact is that, so long as capitalism exists, there is no way of overcoming the economic law which dictates that working-class consumption as a whole cannot rise much above what is needed to keep them efficient producers of wealth. The belief that more state ownership and control can overcome this is an illusion. Only the replacement of world capitalism by world Socialism can provide a framework within which today’s social problems can be solved once and for all.

According to these academics, however, people who hold such views as these and argue that trying to solve working-class problems on a national scale "diverts attention away from the basic task of establishing Socialism”, have been taken in by a "starry-eyed internationalism.” In fact, however, it is rather they who are the starry-eyed idealists for believing that capitalism can be reformed, by wide-scale state ownership and control, into functioning in the interests of the working class.

A pamphlet like this at least makes one thing clear: that the gap between Socialists and leftists is as wide as that between Socialists and right-wingers. The only thing we have in common with leftists is, unfortunately, an overlapping vocabulary. But once you get behind their words, it is clear that they stand for something quite different from us. They stand for a national state capitalism where goods will continue to be produced for sale at home and abroad by a class of wage-earners.

(foot of next column)

The Socialist Party of Great Britain, on the other hand, stands for world Socialism where, on the basis of the common ownership and democratic control of the means of production, wealth will be produced solely to satisfy human needs by the co-operative efforts of free and socially equal men and women. Money, the market, profits, buying and selling and the wages system will disappear because they all reflect the fact that mankind does not control its social and economic environment. Once it does, by converting the means of production into their common property, then these economic categories must disappear, giving way to genuine democratic planning for use.

Adam Buick