Are the Managers Really in Control? Part Two (1981)

From the February 1981 issue of the Socialist Standard

Link to Part 1. 

In Part One (Socialist Standard, January 1981 ) we discussed James Burnham’s clearly expressed  argument that class society could exist without property titles vested in individuals. He was of course proved wrong by events: industrial managers have not replaced private capitalists as the possessing, ruling class, on the basis of the state ownership of the means of production (for Burnham never expected the managers to come to power within the legal framework of private capitalism).

Burnham gave as the reason why the “managers”, by which he meant those who actually managed the process of production, would be the new ruling class the alleged fact that a ruling class must have some function in the process of production :

“Social rule . . . depends on de facto control of the instruments of production—the means whereby society lives; and such control can be held only by some group which plays a direct and integral role in production” (The Managerial Revolution, p. 232).

In the past when the means of production were small-scale and scattered this was so. At that time the various means and instruments of production could be, and were, controlled individually. But today, due precisely to the development of modern industry brought about by capitalism, this is no longer so; the production of wealth has become socialised. The wealth of modern society is produced by the co-operative labour of those who work. In this sense the point of production is not the individual mine or factory, but society. Thus it is those who control society, not those who manage production at factory level, who are really in a position to control the use of today’s means of production.

It is the state which is the centre of social control so that whoever controls the state controls society and so, potentially at least, the means of production. This is so even in Western capitalism with its legal property titles. The private capitalists of the West, just as much as the possessing class in Russia (which in fact is also a capitalist class), now possess the means of production because they control the state rather than vice-versa. They use this control to back up their historically-inherited legal property titles, having long ceased to have any necessary productive function. Whereas in Russia the possessing class own the means of production directly through the state, in the West this is done indirectly through individual property titles ultimately enforceable by the state. In the end this amounts to the same thing: today’s socially-operated means of production are possessed and controlled by a minority class socially, through the state, the centre of social control.

Actually, Burnham himself unwittingly recognisedthat access to the modern means of production can only be controlled socially when he argued that managerial rule would be based on the state ownership of the means of production. For, on the basis of state ownership, any group which established its exclusive stable control over the state would become a collective possessing class precisely because it would therefore control the use of the means of production. If industrial managers were to organiseas a group, win popular support or acquiescence, and come to gain control of state power they would indeed become the ruling and possessing class—but  by virtue of controlling the state not of being managers.

Burnham was wrong, then, in assuming that the managers’ technical function in production was a compelling reason why they should emerge as such a group whereas in fact they were no more, or less, likely than any other group to do so.

State Capitalism

Both Rizzi and Burnham (and, indeed, Wittfogel also) rejected the view that Russia could be described as state capitalism. Both of them regarded Russia as a new class society: “bureaucratic collectivism” for Rizzi and “managerial society” for Burnham. This rejection of a state capitalist analysis of Russia was an inheritance from their Trotskyist past where they had learned to identify capitalism with private capitalism. For Trotsky, capitalism could not exist without private property titles vested in individuals; for him “state capitalism” was state control of private capitalist industry.

Capitalism, however, is not characterised by the legal form that class possession of the means of production takes, but by the social fact that those who “possess” the means of production exploit wage-labour and accumulate the surplus-value thus obtained as capital. An examination of “the specific economic form in which unpaid surplus labour is pumped out of the direct producers” in Russia shows this to be the case there. The excluded majority live by selling their labour-power to various state enterprises; the products of these enterprises are sold on the market with a view to profit; and the difference between the wages of the producers and the value of what they produce is surplus value which is used for capital accumulation and the consumption of the privileged class. Russia is thus capitalist and its possessing, ruling, privileged class a capitalist class.

Russia can be described as state capitalist in order to distinguish the form of capitalist class possession of the means of production there from the legal property-holding of the West. It should not be forgotten, however, that private property titles do still exist in Russia (though, admittedly, not as the predominant form) and that this could grow in the future. Equally, elements of non-legal de facto class possession through the state exist in Western countries, though the capitalist title-holders are able through their control of Parliament to prevent politicians and state officials gaining a permanent and widespread privileged consumption at their expense.

We see, then, that in East and West alike control of the use of today’s socially-operated means of production rests ultimately in the hands of those who control the state. It is clear that on the basis of class possession of the means of production a variety of such forms—both with regard to control of production and to the allocation of consumer goods among the privileged class—are possible. Each particular case needs to be examined on its own in the light of the historical and social facts. It is not possible to lay down a priori, as Burnham tried to do, which particular group would be most likely to emerge as the ruling class on the basis of state-owned industry. Nor can it be said that there is any particular reason why there should be any tendency for individual property titles to be abolished and replaced by de facto possession through the state.

Classless Society

The above analysis has certain practical implications. Since the state is the organ of social control, and since it is through controlling this organ that the capitalist class, East and West, is able to maintain its possession of the means of production, it is clear that the excluded producing class of wage and salary earners must, in order to establish a classless society, begin by gaining control of the state. Not, be it quickly added, to form a “socialist government” or a “workers state” (both absurd contradictions; when there is socialism there will be no state and where there is a state there is no socialism), but simply and solely to take state power out of the hands of the capitalist class, so removing the last obstacle to society establishing common ownership and democratic social control over the means of production. This presupposes both a widespread desire and understanding among the working class to establish a classless, socialist society and that the working class have democratically organised themselves, without political or industrial leaders, to carry out this desire. In the absence of such majority socialist understanding any attempt to establish socialism would inevitably fail and most probably lead to the sort of state capitalist society, based on de facto class possession of the means of production which we have been discussing.

The essence of class possession is precisely control over the use of the means of production by a section only of society. Once the use of the means of production is under the democratic control of the whole of society then “class possession”, “private property”, “class ownership”, call it what you will, has been abolished. The means of production could still be said to “belong” to those who controlled their use—in other words, to be “commonly owned” by the democratically-organised community.

But to talk of “common property”, “social property”, and the like can be misleading in that these terms do not fully bring out the fact that the transfer to society of the power to control the production of wealth makes the whole concept of “property” redundant. The question “who would own the means of production in socialist society?” can be answered just as correctly by saying “nobody” as by saying “everybody”, or “society”, or the “community”.

What social control over production will mean in practice is that every member of society will be free to take part, on equal terms with every other member, in deciding how the means of production should be used. As Burnham put it:

“For society to be ‘classless’ would mean that within society there would be no group (with the exception, perhaps, of temporary delegate bodies, freely elected by the community and subject always to recall) which would exercise, as a group, any special degree of control over access to the instruments of production; and no group receiving, as a group, preferential treatment in distribution” (The Managerial Revolution, p.55).

Society’s power to control production would be embodied in various democratic institutions. “Common ownership” and “democratic social control” of the means of production are merely, as we have said, two different ways of describing the same situation. This is why discussion as to whether one could exist without the other is quite meaningless.

Socialism is democratic or it is not socialism. A society where the means of production were formally the common property of society but where only a minority took part in deciding how they should be used would be one in which “common property” was merely a fiction since in practice the means of production would be the sectional possession of the decision-making minority.

In the end the only guarantee in socialist society against the emergence of a new ruling class which would negate the common ownership of the means of production is people using the democratic institutions—the actual democratic participation of all the people in the running of society. This is why it is absolutely essential that those who establish socialism—the majority working class who will constitute also the major part of the people of socialist society—must be fully aware of its implications, being prepared and organised to participate not only in its establishment but also in its subsequent running.

Adam Buick

Letter: Russian steps (1985)

Letter to the Editors from the December 1985 issue of the Socialist Standard

Russian steps

Dear Editors

In the November Socialist Standard the nature of the Russian socio-economic system is discussed and "bureaucratic collectivism", as suggested by Bruno Rizzi. rejected in favour of "state capitalism".

It may therefore be of interest to note that Lenin, in a speech delivered to the Central Executive Committee of the Soviets in 1918. had this to say about the situation:

Reality says that State Capitalism would be a step forward for us; if we were able to bring about in Russia in a short time State Capitalism it would be a victory for us. How could they [Lenin's critics] be so blind as not to see that our enemy is the small capitalist, the small owner? . . . What is State Capitalism in the hands of the Soviet Power? To bring about State Capitalism at the present time means to establish that control and order formerly achieved by the propertied classes. (Translated from the Official Version in Isvestia, 30 May 1918.)

The "transition to complete Socialism" to which Lenin also refers has of course never taken place.

J E Moore,

Evenley, 

Northamptonshire

Private Property and Class Possession (1981)

From the January 1981 issue of the Socialist Standard

Are the managers really in control? Part One

The basis of any society is the way its members are organised for the production of wealth. Where a section only of society controls the use of the main means of production then we can speak of a class society.

Control of the means of production by a minority class implies the exclusion from such control of the rest of society, an exclusion which can only rest ultimately on physical force. A social organ of coercion, the state, is thus a feature of all class societies and historically first made its appearance with the division of society into classes.

The class that controls the means of production can be said to constitute a stable ruling and privileged class when it:

   1. controls the use of the means of production (possession);

   2. controls the state (rule);

   3. has preferential treatment in the allocation of goods for consumption (privilege).

It is important to keep these three feature—possession,  rule and privilege—separate since they don’t always automatically go together. It is possible for a possessing class to be neither the ruling class nor a privileged class. For instance, it might not actually control the state but just have its protection against the excluded majority. Another minority class might control the state and use it to allocate itself, at the expense of the possessing class, a privileged consumption. In this case there is a socially and politically unstable situation in which the possessing class, starting from the finally decisive fact of controlling the means whereby society lives, will strive to capture state power for itself—strive to become the ruling class as well as the possessing class. This done, it can easily end the privileged consumption of the previous ruling class.

Just such a struggle for power occurred in Western Europe in the five hundred years up to the 19th century. In feudalism the power of the nobility was based on their control of the then main means of production, the land. In time a new possessing class arose in the towns whose economic power was based on trade, money and industry. At first the bourgeoisie (originally, those of the bourg or market town) were often plundered, legally and illegally, by the feudal barons, but in time the nobles learned not to kill the goose that laid the golden egg. The bourgeoisie grew in economic and political influence until eventually they were able to overthrow the feudal aristocracy and shape the state in their own interest. This was done in England in the 17th century, culminating in the so-called Glorious Revolution of 1688, in America with the victory in the War of Independence and in France with the Revolution of 1789.

All three revolutions had a similar aim and result: to establish, in their own words, the “rule of law”; “no taxation without representation”; “the rights of property”. The bourgeoisie wanted their possession of the means of production legally recognized and protected and taxes (which, in the end, are a charge on property and property income) levied on them only in accordance with the law, in whose making they would have a say through representation in Parliament.

The bourgeoisie succeeded in shaping the state and society in their own interest and the popular concept of “property” is still very much that of the bourgeois tradition. “Property” is generally taken to mean not only the fact that a person actually possesses a thing, but that he has the legal right to possess it. “Property” has come to mean legally recognised possession and to be almost inextricably associated with the idea of a legal title.

Before we proceed any further we need to be clear on what we mean by “property”. We have a choice: either stick to the meaning which it has historically come to have—legally recognised possession, or substitute for this legalistic definition a broader sociological one which would allow us to say that any class society was a property society on the basis of the fact that a section only of the population controlled the use of the means of production, whether or not this was recognised by legal titles.

In view of the danger of confusion in introducing new meanings to words, we will stick to the established usage, but won’t object to others adopting the sociological definition as long as they make it clear that they are doing this. So we will use “property” to mean the legal recognition of possession. When we wish to refer to the social fact which the law merely acknowledges we shall use the word “possession”. Thus all class societies are based on the “possession” of the means of production by a section only of society. Some, in particular capitalism as it evolved in Western Europe, supplement this possession with legal property titles which the state recognisesand will if necessary enforce through the courts and ultimately the armed forces.

De facto class possession means that the absence or abolition of individual property titles to the means of production in any society does not necessarily confirm that society is a classless one. We must look beyond mere legal forms and determine whether or not there is a section of society which has, as a matter of social fact, control of the use of the means of production.

The Bolshevik leader, Trotsky, is in large part responsible for spreading the opposite view. He and his orthodox Trotskyist followers confuse “property” and “possession” and imagine that the abolition by a vanguard party of professional revolutionaries of legal property titles to the means of production—and hence of a class of legal property holder—is tantamount to establishing a classless society. This is why they describe Russia as a “workers state” (a meaningless term in any case, as we shall see later). The Russian revolution, they claim, abolished bourgeois property rights and vested ownership of the means of production in the state. As long as this state ownership of the means of production is maintained, they go on, then Russia can not be called a class society. Certainly, they admit, there is a privileged group in Russia but its members are privileged only with regard to the allocation of the products, not with regard to production. They thus constitute not a class but only a “caste”. As far as the production of wealth is concerned, we are asked believe that both this “caste” and the working class stand in the same relationship.

This analysis, which places the Russian worker in the same basic social position as the privileged top state and party officials, was so absurd that it did no take long for it to be rejected within the Trotskyist movement itself. In fact it is thanks to the resulting controversy that we owe much of the clarification of the difference between what we called above “property” and “possession “, and in particular to two ex-Trotskyists: Bruno Rizzi and James Burnham.

Rizzi, in a book published in France in 1939 with the title La bureaucratisation du Monde (The Bureaucratisation of the World), argued that capitalism was being replaced throughout the world, not by socialism but by a new exploiting class society not foreseen by Marx. Rizzi called this new class society “bureaucratic collectivism”. In it individual ownership of the means of production was replaced by collective ownership, as foreseen by Marx, but the collective ownership not of all society but of only a section of it. Bureaucratic Collectivism was a class society based not on individual property titles, but on the possession of the means of production by a class, collectively as a class:

  “In our opinion another ruling class, the bureaucracy, has emerged from the October revolution, and its receding, while the bourgeoisie has been dispensed with and consequently has no possibility of returning. The possession of the state gives the bureaucracy possession of all movable and immovable goods which, although socialised, do not the less belong in toto to this new ruling class. It goes without saying that the new ruling class takes good care not to officially declare that it enjoys this possession but it in fact controls all the economic levers and has its property guarded by the GPU and the bayonets of the ‘purged’ army. 

  The class property which in Russia is a fact is certainly not registered with any lawyer or in any register of property. The new soviet exploiting class has no need of such nonsense. It has the force of the state in its hands and that is worth much more than the old registrations of the bourgeoisie. It defends its property with machine-guns, with which its all-powerful oppressive apparatus is provided, and not with lawyers’ deeds. In soviet society exploiters do not appropriate the surplus value directly, as the capitalist class does in cashing the dividends of his enterprise, but they do so indirectly, through the state which appropriates the whole national surplus value and then shares it out amongst the officials themselves . . . We see then that exploitation passes from its individual form to a collective form, in accordance with the transformation of property. There is a class which en bloc exploits another in accordance with class property and which then goes on to distribute internally, through its state, the proceeds amongst its members” (our translation from the French).

Burnham, in his more widely known Managerial Revolution published in 1941, put forward the same general theme as Rizzi about a new class taking over from the capitalists, but for him these were the industrial managers rather than the political bureaucrats.

Burnham wrote very clearly and concisely about how class society could exist without property titles vested in individuals, so clearly that he is worth quoting at some length:

  “In most societies that we know about, and all complex societies so far, there is a particular, and relatively small, group of men that controls the instruments of production (a control which is summed up legally in concept of ‘property right’, though it is not the legal control but the fact of control which concerns us). This control (property right)is never absolute; it is always subject to certain limitations or restrictions (as, for instance, against using the objects controlled to murder others at will) which vary in kind and degree. The crucial phases of this control seem to be two: first, the ability, either through personal strength, or as in complex societies with the backing—threatened or actual—of the state power acting through the police, courts and armed forces to prevent access by others to the objects controlled (owned). Where there is such a controlling group in society, a group which, as against the rest of society, has a greater measure of control over the access to the instruments of production and a preferential treatment in the distribution of the products of those instruments, we may speak of this group as the socially dominant or ruling class in that society. It is hard, indeed, to see what else could be meant by ‘dominant’ or ‘ruling’ class. Such a group has the power and privilege and wealth in society, as against the remainder of society. It will be noted that this definition of ruling class does not presuppose any particular kind of government or any particular legal form of property right; it rests upon the facts of control of access and preferential treatment, and can be investigated empirically. 

  Effective class domination and privilege does, it is true, require control over the instruments of production; but this need not be exercised through individual private property rights. It can be done through what might be called corporate rights, possessed not by individuals as such but by an institution: as was the case conspicuously with many societies in which a priestly class was dominant—in numerous primitive cultures, in Egypt, to some degree in the Middle Ages. In such societies there can be and have been a few rich and many poor, a few powerful and many oppressed, just as in societies (like the capitalist) where property rights are vested in private individuals as such.
  We have defined “ruling class” as consisting of the group of persons which has (as a matter of fact, not necessarily of law or words or theory), as against the rest of the population, a special degree of control over access to the instruments of production and preferential treatment in the distribution of the products of those instruments”.

(We would prefer to define “possessing class” in this way, reserving the term “ruling class” for a possessing class which also controls the state).

Burnham refers above to the priest-ruled societies of ancient times as examples of class societies without individual property rights. A study of such societies by Karl Wittfogel, Oriental Despotism was published in 1957. Wittfogel was concerned to show the inadequacy of the view (which he attributed to Marx) that the ruling class in any society is always a class of private possessors of the means of production. In oriental despotism, or “hydraulic society” as Wittfogel also called it, a state bureaucracy, headed by an absolute ruler (the despot), ruled on the basis of the control of large-scale waterworks providing irrigation for agriculture.

These waterworks, however, were not the private property of the despot or his bureaucracy. They were state property. But the state being despotic and bureaucratic, they were, in the terminology we have chosen to use, the collective “possession” of the bureaucracy. Individual private possessors of means of production—merchants, moneylenders, even landowners—did exist in oriental despotism, but they did not constitute a ruling class. Indeed the real ruling class—the state bureaucracy—was in so powerful a position that it was easily able to control the class of private owners and prevent them from becoming the ruling class.

Wittfogel concluded that the existence of oriental despotism with its bureaucratic ruling class was proof of the inadequacy of the view that all states exist to protect individual private property. He was right, but then this is not aview which Marxists are called upon to defend. Our view, expressed earlier, is that the class which controls the use of the main means of production will, in periods of social stability, also be the ruling class (= the class which controls the state). We made no claim that such a class had to control the means of production as individual possessors or private title-holders, but merely that they had to effectively “possess” them. The state bureaucracy of Wittfogel’s hydraulic society clearly satisfies this condition. For, in controlling waterworks in a society where large-scale irrigation was essential to agriculture, they controlled the key means of production, thus making the actual producers, whether slaves, serfs or “free” village communities, dependent upon them.

Wittfogel’s merit, despite his unfair criticisms of Marx, is to have shown from history that private property vested in individuals as individuals is not the only form of class possession, but that a class can collectively possess the means of production.

Adam Buick

(to be continued next month)

The Nature of Russian State Capitalism (1985)

From the November 1985 issue of the Socialist Standard

A few months before the outbreak of the Second World War was published in Paris, in an edition of 500, a book entitled La bureaucratisation du monde. Its author was Bruno Rizzi (who identified himself simply as “Bruno R.”), an Italian travelling salesman who had come to Paris from Milan in 1938. Rizzi had at one time been a member of the Italian Communist Party and was a Trotskyist sympathiser without ever being a member of any Trotskyist organisation.

This book, despite being frequently referred to in all Marxist discussions on the nature of Russian society, has only just become available in English with the publication of a translation of its first part under the title The Bureaucratisation of the World. The USSR: Bureaucratic Collectivism, with a useful and informative introduction by Adam Westoby (Tavistock Publications, £9.95).

The book’s main theme was that capitalism was being replaced throughout the world by a new social system called “bureaucratic collectivism”. This was, like capitalism, a class-divided society based on the exploitation of the producers but one in which the capitalists had been replaced as the exploiting class by a bureaucracy which collectively owned the means of production through the State. Thus Rizzi argued:

  Class ownership, which in Russia is a fact, is quite certainly not registered with notaries, nor in the most detailed of surveys. The new exploiting Soviet class had no need of such things. It holds state power and that is worth much more than the old records of the bourgeoisie. It guards its property with machine guns, with which its all-powerful oppressive apparatus is well supplied, and not with legal scribblings (p.64). 

  In the USSR, in our view, it is the bureaucrats who are the owners, for it is they who hold power in their hands. It is they who manage the economy, just as was normal with the bourgeoisie. It is they who take the profits, just as do all exploiting classes, who fix wages and prices. I repeat – it is the bureaucrats. The workers count for nothing in the governing of society. And what is still worse, they have nothing to do with the defence of this peculiar nationalised property. Russian workers are still exploited, and it is the bureaucrats who exploit them (p.69). 

  In Soviet society the exploiters do not appropriate surplus value directly, as the capitalist pockets the dividends from his enterprise, they do it indirectly, through the state, which appropriates the whole national surplus value and then distributes it amongst its own functionaries. A good part of the bureaucracy, that is to say technicians, directors, specialists, stakhanovites, profiteers, etc is authorised, in one way or another, to exact its high salaries directly within the enterprises they control. Over and above this they also enjoy, as do all bureaucrats, state services, provided out of surplus value, and in the USSR these services are both numerous and important, as befits the pattern of ‘socialist’ life (p.75).

The transition to Bureaucratic Collectivism, said Rizzi, had been completed in Russia, was well on the way to completion in Nazi Germany and Fascist Italy and had also begun in the old capitalist democracies with measures such as the New Deal in America.

A copy of the book was sent to Trotsky in Mexico. What interested him was not so much the characterisation of Russia as a new class society – which he did not accept since he always considered Russia to be a “Workers’ State”, a degenerate one, but a “Workers’ State” nevertheless – as Rizzi’s analysis of what might happen if, with capitalism in decay, the working class should fail to establish socialism. Trotsky regarded such a failure as a remote theoretical possibility only, but conceded that, in that event, the Trotskyist movement would have to revise its political perspectives because it would be faced with the prospect of defunct capitalism being replaced by the new bureaucratic class society described by Rizzi. As the working class did fail to establish socialism after the Second World War Trotsky was committed to revising his analysis of, among other things, Russia and it can be plausibly argued that, had he not been murdered by Stalin’s agents in 1940, he would have come to regard Russia as “bureaucratic collectivism”.

The idea that Russia under Stalin was pro-working class was so patently absurd that, towards the end of the Thirties, it began to be challenged even within the Trotskyist movement. In France Yvan Craipeau suggested that Russia might be some new class society with the bureaucracy as the collective owning and exploiting class. In America James Burnham argued that, although Russia was not capitalist, it could not be described as a “Workers’ State” either. Rizzi followed, and took part in the French Trotskyists’ discussion of this issue and clearly derived many of his ideas and arguments from it.

The discussion was particularly acrimonious in the American Trotskyist Party where it came to a head over the related issue of “unconditional defence of the USSR” (which is of course a logical consequence of attributing some working class character to the Russian State). Burnham, Max Shachtman and the others who rejected this slogan were, with Trotsky’s approval, expelled from the Trotskyist movement in 1940.

Burnham, disillusioned with Trotskyism, went on to write his best-seller The Managerial Revolution, which first appeared in 1941, where he argued that the capitalists were everywhere being replaced as the ruling class by the managers. Shachtman and his supporters, on the other hand, continued to regard themselves as Trotskyists and founded a new organisation, the Workers’ Party, which, despite a minority led by Raya Dunayevskaya and C.L.R. James which came to regard Russia as state capitalist, adopted as its official policy the view that what existed in Russia was neither capitalism nor socialism, but bureaucratic collectivism. The Workers’ Party, which later changed its name to the Independent Socialist League, continued to exist as an independent organisation committed to the bureaucratic analysis of Russia until 1958.

Many have claimed that Burnham plagiarised Rizzi, a view endorsed by Rizzi himself. Certainly Burnham, like Rizzi, saw the world, led by Stalinist Russia, Nazi Germany and Fascist Italy, evolving towards a new class society based on State ownership where the workers exploited by a class which owned and controlled the production. On the other hand, there is no evidence that Burnham ever read La bureaucratisation du monde; he may have done in the unlikely event of Trotsky having lent him his copy, but it is much more probable that he learned of Rizzi’s theory through the references to it in Trotsky’s articles and letters.

Trotsky, we have noted, had dealt with the theoretical possibility of what might happen if, with capitalism in decay, the working class failed to establish and had conceded that Rizzi would be right: the world would be heading towards Bureaucratic Collectivism. Burnham, who in his disillusionment had come to the working class as incapable of establishing socialism, merely drew a logical conclusion from Trotsky’s admission: the world was heading towards a new class society based on State ownership of the means of production.

Burnham, however, called this new society “managerial society” and not “bureaucratic collectivism”. This is significant and a reason for concluding that Burnham did not simply plagiarise Rizzi. For Burnham rejected the term “bureaucratic collectivism” precisely because he held that the new ruling class would not be the political bureaucrats but rather the industrial managers, who were directly involved in production. In the final chapter of his book he distinguished his theory from what he called “the similar theory of the bureaucratic revolution”, a reference to theories such as Rizzi’s. Further, Burnham had suggested that Russia might be some sort of “non-bourgeois, non-proletarian State” before Rizzi wrote his book. For he is the B of the “Comrades B and C” referred to by Rizzi at the beginning of Chapter II.

There is another important difference between the theories of Burnham and Rizzi, At the end of Chapter VII, Rizzi suggests that the orthodox Trotskyists should drink the cup of bitterness to the last dregs and recognise that Stalinist Russia was not a “Workers’ State”. But he did not himself drink the cup to the last dreg since he continued to regard the Russian revolution as a proletarian one. Burnham, on the other hand, had no hesitation in declaring: “The Russian revolution was not a socialist revolution . . . but a managerial revolution” (The Managerial Revolution, 1945, p,185).

This is a much more logical position for those who hold Russia to be a class society (whether managerial, bureaucratic collectivist or state capitalist) to adopt – and much more in accord with the Marxist method of judging historical events by their practical outcome instead of by what their participants said they were doing – since it makes the revolution which overthrew the old ruling class part of the process of the rise of the new ruling class.

Rizzi could have made a better case for having been plagiarised by Shachtman who adopted his view of Russia, including the name “bureaucratic collectivism”, unchanged. But then Shachtman did not agree that Nazi Germany and Fascist Italy were bureaucratic collectivist or that the whole world was evolving in such a direction.

The fact is that Rizzi, Burnham, Shachtman, Dunayevskaya, James and the others drew their ideas from a common pool provided by the discussion in the Trotskyist movement on “the nature of the Soviet State”. In this discussion all sorts of ideas were put forward even if only to be rejected by those who brought them up: that the bureaucracy was a class; that Russia was state capitalist; that a class could own without legal property titles; that Stalinist Russia and Nazi Germany had the same social system . . . In these circumstances it is quite out of place for one of the participants to claim that he was plagiarised by another. Rizzi can however be allowed to regard himself as the originator of the term “bureaucratic collectivism”.

In any event, “the theory of the bureaucratic revolution” was proved wrong. It is now more than a generation since both Rizzi’s and Burnham’s books were written, but the capitalist class in the West are as firmly established as ever and show no signs of being ousted by industrial managers or a political bureaucracy. Certainly the Russian system has spread to Eastern Europe and China and to a number of countries in Africa, Asia and Latin America, but the question here is whether the system in Russia can really be regarded as a new, non-capitalist exploiting society.

It is true that in Russia the exploiting class collectively own the means of production and do not have legal property titles to it, and in this respect they do differ from the capitalist class of the West. But, to use a phrase of Marx’s which comes up in Rizzi’s book, this does not necessarily mean that “the specific economic form in which unpaid surplus labour is pumped out of the direct producers” is different. In fact it is basically the same: the producers are separated from the means of production and, in order to live, are forced to sell their labour-power for a wage or salary. In the course of their work they create, over and above the value of their labour power, a surplus value which is realised when the commodities in which it is embodied are sold. Thus in Russia, as in the West, the working class are exploited through the wages system. All the other features and categories of capitalism also exist in Russia: commodity production, value, profits, capital accumulation, and so on. The difference – in the form of ownership but not of exploitation – between Russia and capitalism in the West is best indicated by referring to Russia as State capitalism.

That there is, and has been, a continuous trend towards state capitalism all over the world is undeniable. This has taken place not only in the underdeveloped countries where various groups controlling State power (army officers, party leaders, nationalist intellectuals) have substituted themselves for weak or non-existent private capitalists in the process of primitive capital accumulation (as, indeed, the Bolsheviks had been forced to do in Russia). It has also taken place in the developed capitalist countries where the State has more and more intervened to organise national capital for the struggle for a share of the world market. In this sense Rizzi and Burnham did correctly identify a trend, but they analysed it wrongly. What they saw as a struggle between the old capitalist class and a “new class” was in fact the continuation of the tendency seen by Marx towards the centralisation of production under capitalism, a tendency which makes the private capitalist more and more obviously superfluous.

Supporters and opponents alike often mistakenly analyse this tendency towards state capitalism as socialist. Indeed, as a result of years of misuse the word “socialism” has now virtually come to mean “state capitalism” for most people. But socialism must be clearly distinguished from State capitalism otherwise the working class will be intervening on the political scene only to support State capital against private capital, just as in the last century they intervened to support the industrial capitalists against the landed aristocracy. Socialism means a system of society based on the common ownership and democratic control of the means of production by and in the interests of society as a whole. While State capitalism retains all the features and categories of the capitalist economy – the wages system, commodity production, profits, money, banks socialism abolishes them. Socialism is opposed to both private and State capitalism and alone is in the interests of the working class.

Adam Buick

Marx and the State (1979)

Book Review from the November 1979 issue of the Socialist Standard

Karl Marx's Theory of Revolution. Volume 1: State and Bureaucracy by Hal Draper, Monthly Review Press, £5.60 paperback.

This is an interesting book by the man who wrote the very useful study of Marx's references to the 'dictatorship of the proletariat' which confirmed the view we had long held. In New Politics, Vol. 1, No.4, Summer 1962, he shows that the phrase was used by Marx comparatively rarely and, when it was, to mean simply the democratic exercise of political power by the working class.

In this new book, Draper is arguing a case which cannot be fully understood without some knowledge of his background. He is a Trotskyist, but of the dissident variety known to other Trotskyist sects as 'the Shachtmanites'. During the great controversy on the nature of Russian society in the American Trotskyist movement just before the last war, three views emerged: 1) that Russia was a 'degenerate Workers' State', the view of Trotsky himself and the Trotskyist orthodoxy to this day; 2) that it was state capitalist; and 3) that it was neither a 'Workers' State' nor state capitalism but a new exploiting class society which Shachtman, borrowing a term from Bruno Rizzi, called 'bureaucratic collectivism'. Draper was for years a leading figure in the Shachtmanite tendency which existed as an independent group until 1958 when its members joined the reformist SP of America.

So in showing that Marx held that a state bureaucracy could be a ruling class and that a class society could exist on the basis of the state monopoly of the means of production, Draper is demolishing one of the arguments used by orthodox Trotskyists to defend their preposterous theory about Russia, Marx not only admitted this as a theoretical possibility but used the terms 'Asiatic mode of production' and 'Oriental despotism' to describe just such a society as had existed in ancient times, and not just in Asia. The ruling class had then been a state bureaucracy, controlling the means of production and hence collectively monopolising them. The parallel with present-day Russia is obvious; though not, of course, with regard to the mode of production itself (which is capitalism).

In The Communist Manifesto Marx and Engels referred to the 'executive of the modern State' as 'but a committee for managing the common affairs of the whole bourgeoisie'. Draper warns that, if taken too literally to mean that the government is always directly controlled by the capitalist class, then this is an oversimplification; there are cases where the government, though still used in the interest of the capitalist class, is not actually controlled by them.

Marx in fact devoted quite a bit of time to studying one such case: the Second French Empire (1852-1870). Napoleon's nephew, Louis Bonaparte, had been elected President of the Republic established in 1848 after the overthrow of the bourgeois King Louis Philippe. In 1851 he staged a coup d'etat and a year later had himself proclaimed Emperor (the events are written up in Marx's inimitable journalistic style in the pamphlet The Eighteenth Brumaire of Louis Bonaparte). Here was an example of a capitalist society where the government was not controlled by the capitalist class through a parliament, elections and so on, but by a dictator not subject to their control even if he did protect their interests. Marx called this phenomenon 'Bonapartism', and Engels argued that Bismarckian Germany exhibited similar characteristics. This phenomenon—where the capitalist class has been prepared, sometimes even compelled (sections of it, at least) to surrender political control of the government through representative institutions in exchange for the law and order imposed by a strong dictatorship — has been fairly widespread since, from fascist Italy, Nazi Germany and Franco Spain to the present-day dictatorships in Chile and Argentina.

Of course, such dictatorships are still governments of capitalism and have to run capitalism in the only way it can be; as a profit-making system and so ultimately in the interests of the capitalist class. Thus Draper's conclusion about Marx's theory of the state, not just in capitalism but in class societies generally, is fair enough (the quotes are from Engels):

The state, 'necessary and logical product of the [given] social conditions', is always in the last analysis 'the executor of the economic necessities of the national situation'. Thus it is always the organizer of society in the interests of the class (exploitative) structure taken as a whole.

One criticism. As a Trotskyist, even if an unorthodox one, Draper still believes in a 'Workers' State' (a term never used by Marx himself), and he sometimes seems too keen to play down the the anti-state element in Marx's thinking. Certainly Marx thought that the working class should use the state to abolish capitalism, but this was to be a temporary affair leading fairly rapidly to the dismantling of the state and the establishment of a stateless socialist society.

Adam Buick