The British road to state capitalism (1977)

From the November 1977 issue of the Socialist Standard

There are many, opponents and supporters alike, who believe that the so-called Communist Party wishes to destroy capitalism. At most the Communist Party (CP) is against private capitalism, favouring instead state capitalism where the main means of production would be in the hands of the State, where the working class would continue to work for wages and where goods would continue to be produced for sale with a view to profit, but where (as in Russia) the private capitalists have been replaced as the ruling, privileged group by the leaders of the Communist Party and their hangers-on. Not so many are aware that the Communist Party is not consistently opposed even to private capitalism, but is prepared to take part in government while private capitalism continues — so participating, even by its own standards, in the administration of the capitalist system.

As is made clear in the draft revision of their programme The British Road to Socialism to be discussed at their Congress this month, the immediate aim of the British Communist Party is not the state capitalism it falsely calls socialism, but “democratic advance” to be achieved by a “left Labour government” which will nationalize a few big firms (i.e., convert them into state capitalist enterprises) but will leave the rest of private capitalist industry in private capitalist hands:

For a government to exercise effective control over the operation of the economy, the key firms among the top firms which dominate the economy must be nationalised, while at the same time drastic controls must be instituted over the investment, production and employment policies of those remaining in private hands (which at this stage would still constitute the great majority) (our emphasis).

That the nationalization of these key firms, combined with that of the banks and insurance companies, would give a government effective control over the capitalist economy is an illusion, but is one which derives from the CP’s misunderstanding of the nature of capitalism.

According to CP theory, the present stage of capitalism is “state monopoly capitalism” in which the State is controlled by the monopolies and used to further their interests at the expense of the rest of society. Quite apart from the fact that "monopoly” is an incorrect description to apply to the big capitalist enterprises which dominate production (they are not the sole sellers of the products they offer for sale, which is the strict economic definition of a monopoly), this theory mistakenly suggests that the way capitalism works depends on the policies pursued by the State. In fact, the policies of governments are determined by the workings of capitalism and not vice versa.

Monopoly capitalism

The whole strategy outlined in the new draft of The British Road to Socialism is based on this mistaken view that it is “the big monopolies”, rather than the capitalist system as such, which is responsible for today’s social problems. It is even claimed that the non-monopolist sections of the capitalist class have an interest in joining with the workers to defeat the monopolies:

The capitalist class comprises the owners and controllers of the means of production, distribution and exchange—the factories, banks, shops, land, etc. Even as a whole it constitutes only a small fraction of the population. But within it there is a still smaller minority exercising the dominant power—the very big firms, which not only exploit their workers, but also operate at the expense of many smaller businesses, small shopkeepers, and small farmers. These small enterprises are among the first victims in periods of acute capitalist crisis, many of them going bankrupt, being forced to close down, or being swallowed up by the big firms. When working class standards are cut, small producers, shopkeepers and traders are also adversely affected.

There is therefore an objective basis for an alliance between many in these sections of the capitalist class and the working class against the common enemy — the big capitalists (our emphasis).

So, in place of the class struggle between the working class (all those who have to work for a wage or salary) and the capitalist class (the owners of the means of production) we have a struggle between the "victims of monopoly”, including “parts of the capitalist class”, and the “big monopolists”. And this is supposed to be Marxism!

But the CP goes further: all the victims of monopoly, they say, including the non-monopolist capitalists, should unite in a “broad democratic alliance” with the aim of electing a “new type of Labour Government”, one which instead of simply administering capitalism, will take steps to “weaken the grip of the big monopolists” (not end, but only weaken!). The CP explicitly say that the aim of this government will not be socialism even on their definition: (“It would not be a socialist government carrying out a socialist revolution . . .”).

In fact not only will a large private sector remain, but the non-monopolist capitalists are to be offered “cheap credits, the abolition of VAT, rent controls”. Whether this will encourage small employers like George Ward of Grunwicks to vote for a “left Labour government” remains to be seen.

So the proposed left Labour government would be administering capitalism just like all previous Labour governments. In CP theory it would be a capitalism without private monopolies (or at least only with monopolies with weakened powers), but a capitalism without monopolies is no more in the interests of the working class and can no more be made to work for their benefit than capitalism with monopolies.

Capitalism, including the state capitalism which the CP sets as a longer-term aim, can only work in one way, as a profit-making system based on the exploitation of the working class.

Capitalism is an economic system subject to its own unchangeable economic laws which governments cannot control or overcome. Under capitalism wealth takes the form of commodities, or goods produced with a view to sale at a profit. The aim of capitalist production is the accumulation of more capital out of the profits made from exploiting the wage-labour of the working class. Whenever profits cannot be realized, as occurs periodically because of the unplanned and exploitative nature of production under capitalism, production in some spheres slows down or stops; a crisis occurs.

Reformist illusions

In suggesting that a left Labour government would be able to do something for the working class under capitalism—such as reducing unemployment or improving living standards—the CP is encouraging reformist illusions amongst the workers. But then the CP itself is thoroughly reformist, having a gradualist conception of the establishment of Socialism. What we call Socialism—a society based on “from each according to his abilities, to each according to his needs” —the CP calls “communism”. Society will gradually pass, we are asked to believe, from a stage of “democratic advance” to the stage of state capitalism and from the stage of state capitalism to the stage of communism by means of a series of democratic and social reforms passed by Parliament. Just as was imagined by the early Labour Party reformers and gradualists!

Our objection to this strategy is not that it involves using the ballot box or Parliament. This is the only practical way for the working class to win political power—as we have been saying for the past seventy or so years, including the period when from its foundation in 1920 to 1934 the CP preached armed insurrection. What we object to is its gradualist strategy, the suggestion that capitalism can be gradually transformed into Socialism through a series of reform measures.

Socialism can only be established by the conscious political act of a socialist-minded working class. Once a majority of the working class want and understand Socialism they can win control of political power by using the existing electoral machinery to send a majority of mandated socialist delegates to the House of Commons and similar institutions in other countries. Once in control of political power they will immediately abolish capitalism and establish Socialism by the single revolutionary act of making the means of production the common property of society under the democratic control of all the people. This done, the State, as the machinery of political power, is dismantled so that to talk of a “socialist government" is a contradiction in terms. As long as the working class does not want Socialism then capitalism must continue. Which is why gradualists, once elected to power (by a non-socialist working class), have no alternative but to administer capitalism—and that in the only way possible, as a profit-making system in the interests of those who live off profits.

The vital task today is not to try to reform capitalism but, by persistent and effective argument, to win over a majority of the working class to abolishing it. This is the road to Socialism.

Adam Buick