Vodka-cola (1979)

Book Review from the November 1979 issue of the Socialist Standard

Co-production deals between Western enterprises and East European governments are becoming big business and attract a lot of notice in the press. These deals now represent 10 per cent of East-West trade and are rapidly growing in number and importance.

Co-production is distinct from normal East-West trade, which is handicapped by the fact that it doesn’t allow the Eastern bloc to buy all it needs. The West doesn’t want payment for exports in roubles or other Eastern currencies as these are practically worthless. Russia has been paying for much of its imports with large amounts of gold but as this tends to reduce its price then Russia’s trading position simply worsens, while other Eastern countries have little or no gold anyway.

Barter deals are hopelessly inadequate as Western exporters rarely want the commodities being offered in exchange. Even so, barter does exist. Pepsi-Cola, long reviled by communist propagandists as a “monopolist”, has built a plant in Russia capable of producing 74 million bottles a year for Russian consumption. Since Pepsi wouldn’t take roubles and Russia needed its gold for American wheat, payment is made in Vodka and Pepsi were given the monopoly for selling Russian wines in the USA.

Despite Kruschev’s boast that Russia would surpass the West economically within 15 years, she has fallen further behind and the gap is widening all the time. To catch up, Russia and her satellites need Western technology but cannot acquire enough of it for the reasons given. Also, they already owe the West such a staggering debt (at least 80 billion dollars) that they cannot count on extended credit forever.

However, steps are being taken to rescue the Eastern bloc from its predicament, for a price, by none other than Western big business —the very “multinationals” who are supposed to be the mortal enemies of “international communism”. Just how and why this is being done is explained in a new book, Vodka Cola, by Charles Levinson. (Gordon and Cremonesi, £7.90.)

In the book Levinson lays bare the reasons for the current “detente” between the West and the Eastern bloc. This has nothing to do with either side learning to love the other but is dictated by their respective economic needs. The East must modernise its industry in order to keep its population passive. After all, expectations of a better life must be met someday. For Western big business there is the glittering prospect of a potential new market of 400 million people, plus the opportunity to switch its production away from a unionised, high-wage, strike-prone labour force to one which is state regimented, low-wage and forbidden to strike.

So the last thing the multinationals want to do is disturb the status quo behind the Iron Curtain. Any growth of political freedom there would produce genuine trade unions and the inevitable inroads into profit margins. Hence their enthusiasm for detente. Levinson also points out that the agreements signed by Eastern and Western politicians are only political window dressing. It was the businessmen of both sides who made the real breakthrough and all the politicians have done is merely help smooth the way for future deals. When it comes down to it, ideological differences are demolished by economic realities.

These co-production deals enable the West to sell the East what it needs and get paid, not in dud currencies or shoddy, inferior products, but in cheap Eastern made goods manufactured to Western standards which can be sold on the world market at a fat profit.

Co-production takes a variety of forms:

LICENCING: until the early 1960s only a few licences to use Western technology were purchased in the East. Now there are several thousand. These were previously paid for in scarce hard currency but now payment is likely to be in the products being made under licence. For example, Fiat, Volkswagen and British Leyland have been paid for their licences in vehicles and parts.

BUY-BACK: this means that industrial giants like Renault of France and Montedison of Italy will supply—in this case Russia—with an entire car factory and chemical plant and be paid in cars and chemicals for sale throughout the world. The Eastern partner is also helped to market its share of production through distribution companies specially set up for the purpose. In this way much needed hard currency flows back to the East to enable it to buy more of what it requires.

LEASING: the Eastern bloc also uses equipment rented from Western companies. So far this has not happened within Russia itself, but its merchant fleet has leased thousands of cargo containers and other equipment from the West, so privately owned means of production and distribution exist in part of the Russian economy. Levinson’s view is that leasing will increase because of the advantages it offers the East, among which is the acquiring of modem technology without spending huge amounts of hard currency. He predicts that it is only a matter of time until leasing will be allowed within Russia.

The list of “monopolists” involved in co-production deals makes fascinating reading: General Motors, Exxon (Esso), Ford, Unilever, IBM, Krupp, ITT (played a leading part in setting up Pinochet’s regime in Chile), Coca-Cola, Du Pont, Westinghouse, ICI, Union Carbide, Fiat . . . Many of them are bitter opponents of trade unionism in their own plants and all of them, needless to say, collect their share of the surplus value created by the Eastern workers employed in the various projects.

Cyrus Eaton, the American multimillionaire, revealed how it is done when he explained his 40 million dollar 50/50 deal for building a tyre factory in the East in 1970. The communist state partner would own and operate the plant. Eaton’s half would be in tax-haven Switzerland and would market the tyres in the West. Eaton says

“This enabled the Eastern country to earn hard currency and because of lower labour costs the venture can sell tyres cheaper than Western countries can. The plant in the East sells the tyres to the marketing subsidiary at cost —thus leaving profits to the joint marketing subsidiary.” (p. 87.)

Nice one, Cyrus.

All of this must have its effect on Western jobs. Naturally, the co-production partners deny this and claim that the increased trade will provide the West with 2 million new jobs. But the Eastern products, because they are made by low-wage labour, consistently undercut similar Western products. Indeed Western manufacturers and trade unions are forever protesting about “dumping” on Western markets. In Britain the footwear, textile, tailoring, motor car and TV tube industries, to name a few, have been badly hit by cheap imports from many countries and thousands of jobs have been lost. So while the British Communist Party demands action to “fight unemployment” their Eastern counterparts are busily contribute: it.

Unfortunately for the Eastern bloc the present type of co-production deal cannot fully solve their problem. The technology they are buying tends to be second rate and outmoded by Western standards. The West will not hand over the latest developments because it feels it does not have sufficient safeguards as things stand. For example, equipment and know-how supplied under one deal can easily be pirated and used by the East for other projects of its own, so Western companies are increasingly demanding a 50/50 share in the ownership of the plants as well as the products and profits. Because the Russians have refused to allow this they have failed to clinch several important deals. The Russian government’s refusal stems from an unwillingness to lose face: how would it be able to explain away such a blatant example of private, as opposed to state, ownership of part of “socialist industry?

Hungary and Rumania have gone some way towards meeting this problem. Although not allowing Western-owned plants, they do permit Western companies to own a large share of the profits of the joint venture (payable of course in hard currency). Volvo of Sweden has an agreement with Hungary for the assembly of Volvo cars with 48 per cent of the profits going to Volvo shareholders. This represents legal ownership of part of Hungary’s means of production. In Poland the government has gone all the way; foreign companies can legally own the entire project and if the deal is terminated then company can take out its original investment plus its share of capital gains.

The pressure on Russia to come some sort of compromise is enormous. Russia apparently needs the latest in mini computers but IBM and other suppliers are refusing to provide them. They want to protect their technology by retaining control over its use and means joint ownership of the project where it is being used. Only in this way can the company prevent its technology being applied outside of the contract.

Levinson frequently refers to the theories of Karl Marx and seems to have understood these better than most writers. For example, he says

“The end result of co-production operations is profits for the capitalists, and this means that the socialist enterprises are involved in creating the surplus value which Marxism regards as the basis of the capitalist class’s exploitation of the worker.” (p. 261.)

If the words “Eastern state capitalist” had been substituted for “socialist” then we couldn’t have put it better. He mistakenly attributes the failure of Russian nationalisation to “Marxist ideas” but continues

“Nobody (in Russia), unfortunately, had raised the minor question, ‘Whether the business be private or nationalised, how does it profit the worker who is subjected to the same authoritarian labour methods in either case?’ ” (p. 224.)

Although the book contains several other mistakes regarding Marx’s views, these cannot obscure the value of Levinson’s work as an aid to understanding how business, East and West, operates and what its priorities are. And we cannot help noticing that the analysis of modern society by Levinson, and many others outside our ranks, is very similar to our own. Nowadays, you don’t have to be a socialist to be struck by capitalism’s glaring contradictions and antisocial nature.

Vic Vanni

Blogger's Notes:

Charles Levinson replied to this review in the March 1980 issue of the Socialist Standard.

In connection to Levinson's book, the following might be of interest to some readers. In 1981, there was a fictional adaptation of the book entitled Beloved Enemy. Directed by Alan Clarke (who also directed Scum, The Firm and Elephant) and adapted for television by David Leland, it was transmitted on the BBC as part of the Play for Today series of dramas.

Beloved Enemy is available to watch on YouTube:

Letter: Vodka-Cola (1980)

Letter to the Editors from the March 1980 issue of the Socialist Standard

Vodka-Cola

I should like to express my appreciation for your letter of 11th November and the review of “Vodka-Cola” in the November issue of the Socialist Standard.

I also very much appreciate your positive comments on “Vodka-Cola”, which will be the core conflict of the ’80s between democratic socialism and authoritarian state capitalism.

I also appreciate your comments in the utilisation of the term “socialist” and the loose handling of “Marxism” in the text. I share entirely your definition of the USSR as an example of state capitalism -and not socialism. And, of course, the entire tenor and objective of “Vodka-Cola” is to confirm what you state that the means of production and the distribution of its output have now largely been accumulated by small elitist minority groups whose interests converge on the exploitation and the expense of the majority of the population, and especially those who relate to society through their earned incomes.

Charles Levinson

Geneva

Political Notebook: Nationalised Democracy (1980)

The Political Notebook Column from the January 1980 issue of the Socialist Standard

NATIONALISED DEMOCRACY 

British Leyland, as a state-run industry, is said to be owned by the public. Members of ‘the public’ who neither own state bonds nor gain from BL’s profits would be right to conclude that nationalisation is just another way of running capitalism in the interest of the capitalists. According to the Labour Party, however, nationalisation benefits us all, partly because, unlike in private industry where a few bosses make decisions, in state-run enterprises ‘the public’ appoints administrators like Sir Michael Edwardes, chairman of British Leyland. This public appointment, so the myth goes, makes nationalised industries more democratic.

Two men who probably voted Labour at the last election are Terry Duffy, president of the AEWU and Derek Robinson, a sacked shop steward who was chairman of the Leyland Combine Trade Union Committee which issued a pamphlet entitled The Edwardes Plan and Your Job, seeking to persuade the BL workers not to accept the management’s plans for the contraction of the company.

If ‘industrial democracy’ means anything it must include the freedom of people like Derek Robinson to express their views as forcefully as they wish. But Robinson was sacked on the grounds that the distribution of his pamphlet was disruptive. Terry Duffy, Robinson’s union leader, refused to call an official strike to protect Robinson against this clear victimisation by a management which is supposedly representative of ‘the public’ and supposedly a part of Labour’s more democratic industrial framework. Terry Duffy, his fellow leaders of the engineering union and Derek Robinson — the left wing militant — should begin to question the validity of ideals which equate state ownership with socialism.

Robinson’s Reforms

Alas, when we come to read Robinson’s pamphlet we find a collection of sterile proposals for the continuation of capitalist production, but in a benevolent guise. He argues for increased investment in BL, an extensive sales campaign to boost BL’s profits, the introduction of new technical developments, better wages and conditions and — a typical dose of left-wing nationalism — the imposition of import controls:

The UK’s imports are running way above those of any other country with a motor industry of its own. And they are increasing.

In the section in which he advises the workers at BL about what must be done, Robinson states that:

Around the demands for ‘the right to work’ and ‘BL must be saved’ we must develop a campaign that involves every BL worker, every component worker and the whole labour movement . . .  In the interests of our members, workers generally, and in the national interest, Britain’s manufacturing base must be defended. (His emphasis)

It would do Derek Robinson no harm to contemplate a few economic realities during his period of enforced retirement. There is no right to work, just the employer’s right to exploit your labour, should it be profitable to do so. This is so whether capital is privately or state owned. ‘BL must be saved’ is the slogan of the slave who is dedicated to the retention of his master’s property, as is the patriotic claptrap about the ‘national interest’. Instead of devising elaborate schemes to put the capitalists’ house in order, Robinson would do better to campaign for a society in which cars are produced, if they are produced at all, because they are needed and not because they are profitable.

CONSTITUTIONAL CONTORTIONS

Article 13 of the Constitution of the People’s Republic of China states that:

Speaking out freely, airing views fully, holding great debates and writing big-character posters are new forms of carrying on socialist revolution created by the masses of the people. The state shall ensure to the masses the right to use these forms to create a political situation in which there are both centralism and democracy, both discipline and freedom, both unity of will and personal ease of mind and liveliness . . .

According to the Peking Daily, on 2 December guards were stationed on the so-called Democracy Wall in Peking because the wall has been a forum for the sale of magazines criticising the government and the Communist Party. Such criticism, it seems, takes the words of Article 13 too literally and risks imprisonment for doing what is constitutionally legal. Are there any Maoists who would care to write in and tell us that the Chinese dissidents are simply CIA hirelings plotting to subvert the Thatcher-loving communist dictatorship.

MORE VODKACOLONISATION

A very interesting report has been issued by Charles Levinson, general secretary of the International Federation of the Chemical, Energy and General Workers’ Union. In it he points out that between 1971 and 1975 400,000 jobs were lost in Europe’s synthetic fibres industry because of cheap imports from Eastern Europe, where workers are not able to organise in free trade unions to improve the price of their labour-power. The benefit of importing from the Soviet Union and its satellites, says Levinson, is that there are

. . . adequate supplies of cheap, non-militant labour . . . workers belong to the state-run organisations whose officials are appointed and whose policies are set by the same control committee which are concluding agreements with the capitalist firms.

PIN-STRIPES AT THE TUC

A minor event at the TUC Headquarters has received hardly any media attention. For some years the British Foreign Office has had close relations with the International Department of the TUC. As from this month, the FO will have a permanent member of staff at the TUC to ensure close collaboration between the unions and the government. So those of you who mistakenly believed that the unions were being manipulated by Russian spies can rest safely in your beds in the knowledge that it is being manipulated by patriotic chappies from Lord Carrington’s Foreign Office.

Steve Coleman

State capitalism in the Russian Empire (1984)

From the Winter 1984 issue of the World Socialist 

Probably the greatest obstacle to the acceptance of socialist ideas in the present century has been the belief on the part of millions of workers that socialism - or communism - has been established. Quite understandably, workers look at the tyrannies of Eastern Europe, China, Albania and the other self-proclaimed "socialist countries" and reject what they see. The media in the West are quite happy to accept the myth that these police states are "socialist". Since the 1920s the Communist Parties of the world have been spreading the lie that socialism exists; for example, the Communist Party of Great Britain's official policy document, The British Road to Socialism, asserts that

Today socialism is a reality for all to see. Countries with a population of hundreds of millions are socialist states. (October 1968, p.17) 

The constitutions of these countries repeat the lie: article I of the Polish constitution declares that 

The Polish People's Republic is a socialist state in which power belongs to the working people . . . . 

The first article of the most recent constitution of the USSR (established in 1977) states that 

The USSR is a socialist state of the whole people, expressing the will and interests of the workers, peasants and intelligentsia . . .

It is the contention of the World Socialist Movement that these countries are not socialist or communist and must be exposed for what they are: capitalist state dictatorships. It is not our view that the countries of the Russian Empire used to be socialist, but ceased being so on a certain date. (We leave such crackpot theories to the Trotskyists and other assorted confusion-mongers who wish to advocate the Bolshevik recipe while spitting out the Stalinist cake). The Russian Empire - by which term we include the seven members of the Council for Mutual Economic Assurance (Comecon) - is a group of countries which exhibit the features of capitalism. 

As scientific socialists, we shall explain what we see as the two main defining characteristics of capitalism and will then proceed to demonstrate that these exist within the Russian Empire. Firstly, capitalism is a system in which wealth takes the form of commodities. i.e. objects produced for sale on the market. Commodity production is not unique to capitalism, but the commodity nature of labour power is. So, capitalism is defined by the fact that the mental and physical energies of most people have to be sold on the market for a price called a wage or a salary. Where there is wage labour there is capitalism. Secondly, capitalism is defined by the law of value. Value is a social relationship which exists in property society where commodities are exchanged. Where there are no commodities, because production and distribution have advanced beyond the stage of buying and selling relationships, there will be no need for the concept of value or for prices and money. As Marx pointed out, "Value is the expression of the specifically characteristic nature of the capitalist process of production" (quoted in T. Cliff, Russia A Marxist Analysis, p.148). 

Most early socialists, including Marx and Engels, accepted the logical supposition that the abolition of capitalism would necessitate the ending of commodity production, wage labour and the law of value, including prices and profits. In short, they were under no illusion that socialism - which is to be the antithesis of capitalism - could exhibit the social features of the capitalist system. For example, Engels pointed out that "With the seizing of the means of production by society, production of commodities is done away with. .," (Socialism: Utopian and Scientific). Marx, replying to a German writer called Wagner who thought that the law of value would exist in socialism, rejected explicitly "the presupposition that the theory of value, developed for the explanation of capitalist society, has validity for socialism". This point is explained in greater detail elsewhere in this issue (see pages 34-42). 

THE BOLSHEVIK DREAMERS 

It is often imagined that the Bolshevik revolution of November 1917 (October according to the old Russian calendar in force at the time) was the most significant event in Russia that year. In fact, this is far from the case. In March (February) 1917 a far more significant revolution took place. This was not led by any party or faction, but resulted from the spontaneous indignation of Russian workers and peasants who were suffering huge losses in the imperialist war, were starving in the towns and deprived of land in the vast peasant areas. The workers of Petrograd and Moscow set up soviets (councils) without any help from the Bolsheviks who later claimed credit for these bodies - in fact, Lenin was living in exile in Switzerland when the revolution broke out and did not return to Russia until April. The workers and peasants of 1917 were not interested in ideas about socialism - their demands were for peace, land and bread. When Lenin turned up in April 1917 he told the Bolshevik party that they should turn the revolution into a socialist revolution - in a country which had only developed capitalism in a few cities and in which three million industrial workers were overshadowed by over a hundred million peasants. Listening to Lenin's unpractical scheme, Bogdanov - a fellow Bolshevik - described such ideas as "the delirium of a madman". Bogdanov had a point. The Bolsheviks won power mainly by offering everything to everyone, even though many of the promises conflicted. Using the anger of the workers and peasants against the provisional government which was set up in March and insisted in pursuing the unpopular war, the Bolsheviks seized power. Having obtained power, the Bolsheviks were forced to act like puppets, dancing to the tune of the existing historical conditions. In short, they were forced to develop capitalism. But, being a party which was led by a number of dogmatic intellectuals, the Bolsheviks maintained the myth that they were creating genuine socialism. For example, in 1919 Bukharin and Preobrazhensky wrote that

Communist society will know nothing of money . . . Thus, from the very outset of the socialist revolution money begins to lose its significance . . . By degrees a moneyless system of accounting will come to prevail. (The ABC of Communism). 

In 1920 Zinoviev declared boldly: "We are moving towards the complete abolition of money" (quoted in E.H. Carr, The Bolshevik Revolution, Volume 2, Penguin, p.263). This was pure utopian fantasy. 

Lenin and his fellow Bolshevik leaders in Petrograd, who tended to be less taken in by their own rhetoric than were their Moscow comrades, did not take long to realise that their job was to develop state capitalism. Leninists often gasp with horror when it is suggested that Lenin ever had such intentions - they should read the man himself: 

. . . state capitalism would be a step forward . . . if in approximately six months' time state capitalism became established in our Republic, this would be a great success . . . ('Left-Wing' Childishness and the Petty- Bourgeois Spirit, May 1918). 

By March 1919 the Bolshevik party congress resolved that "in the period of transition from capitalism to communism the abolition of money is an impossibility". The so-called period of transition, which the Bolsheviks called socialism, was a period of state capitalism - a point which Lenin had explicitly made even before the Bolsheviks seized power: 

Socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people . . . (The Impending Catastrophe and How to Combat it, September 1917). 

So, when the Russian Empire describes itself as socialist it does so in the logically perverse Leninist sense of meaning that it is state capitalist. 

In the early days of state capitalism the Bolsheviks claimed that the basic features of their society were different from those which define capitalism in the Marxist definition. By the time of Stalin this had all changed, and in his Economic Problems of Socialism in the USSR, written in 1952, Stalin admitted that commodity production and the law of value existed in Russia: 

 . . . our commodity production radically differs from commodity production under capitalism . . . It is sometimes asked whether the law of value exists and operates in our country, under the socialist system. Yes, it does exist and does operate. 

So, Stalin admitted that he was presiding over a system of buying and selling, wage labour, value and price- all of the features which Marx attributed to capitalism - but kept up the illusion that this was socialism. 

NO STATE IN A SOCIALIST SOCIETY 

According to the Communist Parties the Russian Empire is socialist, despite its capitalist characteristics, because there is a workers' state. According to them, the state in Russia is controlled by the working class. Logically, this must mean that the workers operate a police state to exploit themselves. Other Leninists, who think that Trotsky's analysis was correct, say that Russia is a "degenerate workers' state" (whatever that is), while others disagree vehemently, declaring that it is a "deformed workers' state". Lengthy theoretical arguments between various brands of Trotskyists' typewriters have gone on for years in this heated and utterly silly debate. The simple fact is that the existence of socialism - a classless society - can have no need of a state machine - an instrument for the coercion of one social class by another. Socialism entails the abolition of the state machine. Leninists answer this by saying that the state in socialist society is "withering away". In fact, the coercive state under so-called socialism has grown more powerful, not less. 

In the state capitalist countries the function of the state is to act as the functionary of capital in the exploitation of wage labour. The bureaucratic elite who run the state live in comfort and privilege as a result of the exploitation of the working class. Of course, just as the state owns some parts of the means of wealth production in the private capitalist countries, so there is some degree of private capital ownership under state capitalism: 80 per cent of Polish land is owned by individuals, some of whom are very rich, and in Russia there are several millionaires who enjoy lifestyles substantially different from the workers simply because they are living off surplus value. In general, the ruling class of the Russian Empire have less legally established rights of power than their Western counterparts. But the essential point is not to point to individuals and say, Look, there is the capitalist class, but to be able to point to the exploitative social force of capital, which in the Russian Empire is represented by the state machine. 

COMECON AS A PART OF WORLD CAPITALISM 

The socialist analysis of capitalism is not based upon the localised investigation of individual nations: under capitalism all nations are involved in, and dictated to by, the world market. It is often claimed the Comecon countries are removed from the capitalist world market. This is not so. In October 1976 the London Times published a supplement headed as follows: " ANGLO-SOVIET TRADE: A SPECIAL REPORT TO MARK THE 60th ANNIVERSARY OF THE BRITISH- SOVIET CHAMBER OF COMMERCE". One does not have to be a mathematical wizard or a searching historian to realise that sixty years before 1976 was 1916, ie one year before the so-called socialist revolution in Russia. In short, the revolution did not interrupt the commercial links between Russia and its capitalist neighbours. 

From the middle of the nineteenth century onwards Tsarist Russia attempted to develop capitalism in Russia by trading with the more advanced countries of the West. When the Bolsheviks took power they had no option but to continue that policy if they were to successfully build up state capitalism. In 1918 Radek reported to Sovnarkom, the council for national economy, that: 

For Russia . . . it is an indispensable condition of restoration of her national economy to establish economic relations with the central powers as well as to maintain and broaden relations with the Entente countries. (quoted in Carr, p.135) 

So Russia set about trading within the world capitalist market. Krasin, who was one of the few Bolsheviks to know much about business, was appointed as President of the Council for Foreign Trade. Such commerce has taken three main forms: 

1 .Counter purchase The earliest form of trade between Russia and the West took the form of barter agreements: products of equivalent values would literally be swapped. In modern times barter has developed into counter- purchase agreements whereby Western firms export vitally needed capital to the Comecon states, but, instead of paying for them, the Comecon countries send back cheaply-produced Comecon commodities to the West. For example, Fiat has exported heavy machinery to the Comecon states and has accepted in return Comecon - made car components. These components allow Fiat to produce cars at a lower price than would be the case if they were produced by the relatively more expensive West European labour power. 

2. Leasing By leasing capital equipment to the Comecon countries the Western capitalists can receive their share of Comecon surplus value in rent on machinery , while leaving open the option of removing the capital if economic or political conditions so dictate. Companies like ITT and Rank-Xerox receive very lucrative rents on technology rented to the Russian Empire. The political strategists also like the arrangement as it allows the West to place pressure on Comecon: You fit in with our market arrangemets or we'll take back our capital. For example, US companies decided in the late 1970s that they would only lease container ships to the Comecon countries if they agreed to join the World Shipping Conference, which is a cartel that regulates world shipping trade. 

3. Co-production Western investment in Comecon industry does not end with counter-purchase and leasing agreements. It is now possible for Western investors to buy shares in Comecon enterprises. In other words, capitalists can, without legal restriction, invest in the exploitation of East European wage slaves. According to the most recent statistics - published by Comecon in 1982 - there are currently over 6,000 co-production projects, ie jointly owned capital enterprises, with one share owned by the state and the other by Western investors. In reality, we can assume that there are many more than 6,000 deals of this kind in existence, but both sides have a political interest in hiding them: the state capitalist governments do not want it to be known how much of their industry is co-owned by the multinational companies which the Western Communist Parties claim to be absent from their beloved "socialist states", and the Western capitalists do not want it to be known that they are invested heavily in their professed ideological enemies. In fact, there are now over 100 US multinationals with trading offices in Moscow. (Deals with the Russian Empire used to be carried out through Austrian and Swiss intermediaries, but the traders have these days thrown out the pretence.) 

Investment in the Russian Empire is very profitable. Since 1976 Poland and Romania have allowed Western capitalists to buy up to 100 per cent shares in their enterprises. There is no shortage of capital for investment in Comecon capital. Why? Cheap labour power-the best reason in the world for a parasite to invest. 

THE EMPIRE OF REGIMENTED LABOUR 

Unlike the unionised workforces in the advanced West (who have the cheek to strike for higher wages and better conditions from time to time) the workforce which investors are exploiting in the Russian Empire is paid little, non-unionised, and disciplined stringently. The Russian Empire is an exploiters' dream - the sort of set-up in which the charlatan, freedom-loving bosses of the West can make money out of the acquiescent wage slavery of an exploited class who are told that they are living in a non-exploitative, classless society. 

Trotskyists like to claim that ruthless exploitation was not intended by Lenin and the early Bolsheviks, but was an invention of nasty Joe Stalin. They should study their history: in fact, as early as 1918 Lenin was making it clear that workers would have to be regimented if state capitalism was to be developed: 

A condition of economic revival is an improvement in the discipline of the workers, in knowing how to work, in speed and intensity of work, in its efficient organisation . . . (Current Task of the Soviet Power, March-April 1918) 

In 1919 Tomsky, the Commissar for Labour, told the All-Russian Trade Union Congress that at that time " . . . no strikes can take place in Soviet Russia. Let us put the dot on this i." (quoted in Carr, p.204) So, Russian trade unions were taken over by the Bolshevik state and used as instruments of labour regimentation. Still today the unions of Eastern Europe are dominated entirely by the state bosses. How many Western workers would be prepared to join a union which is run by the employer? They would be mad if they were - yet that is what the Communist Parties of the West are content with for the workers of the Russian Empire. 

1983 witnessed the initiation of a series of newly repressive labour laws in Russia. These were welcomed by the All-Russian Trade Union Congress, according to a report entitled "STEPS TAKEN TO TIGHTEN LABOUR DISCIPLINE" published in Pravda on 7 August 1983: 

Loafers, truants and drifters frequently feel free to do as they wish, and in terms of wages . . . they are on a par with conscientious employees. In combating phenomena of this sort, poor use is being made of disciplinary sanctions. In future, while making full use of material and moral incentives for selfless labour, it is necessary to resolutely eradicate instances of conciliatory attitudes towards violators of production discipline . . . Violations of labour discipline should be regarded as a deviation from the fulfilment to work conscientiously, which is established by the USSR constitution. 

And that is only what the unions think! The new labour laws are very severe, including penalties of sending workers for up to three months to work in a different area of the country if they are absent from work without leave and the loss of a week's holiday for "loafing or intoxication". We must assume that trade unionists in the Western Communist Parties are fighting to achieve such "socialist" labour conditions? 

With workers as well regimented as that, one can appreciate the words of the American capitalist, Cyrus Eaton, in 1974 when his tyre company entered into a joint-ownership agreement with Comecon: 

This (deal) enabled the East European countries to earn badly needed hard currency and, because of lower labour costs, the venture can sell tyres much cheaper than Western companies can (quoted in C. Levinson, Vodka-Cola) 

Indeed, some Western firms are now objecting to the uncompetitive Comecon - made commodities coming on to the Western market and reducing the sales of the unionised - made products. Examples are Czech and Polish shoes, the Czech-made Fiat 125 and Czech sugar-beet harvesters. Ironically, in Britain the Communist Party, which has a policy of opposing import controls, at the same time is running a campaign to increase imports from the Russian Empire.

BANKING LINKS 

Space does not allow us to investigate the important links between the loans made to the Comecon countries by Western banks and the policies of those countries. At the moment Romania is a member of the International Monetary Fund and Poland has recently applied to join. Most of the major Western banks have offices in the main East European capital cities. Russia applied to the Western banks recently for a £600 million loan; if they receive it, then Russian workers will have to work harder than ever in order to produce the surplus value to pay the interest rates. 

In 1980 Poland owed 27 billion dollars to the Western banks: 500 million dollars interest had to be paid in that year alone. In order to pay the banks food prices were increased. For the first time in the history of state capitalism millions of workers resisted the state's cut into their already impoverished real wages. Solidarity came into being and, despite our criticisms of the religious and nationalist illusions of many of its members, socialists greeted this great emergence of resistance with sympathy and admiration. In the West there was no shortage of rhetorical support for Solidarity from politicians who were busy bashing their unions at home. But the Western banks, on whose behalf the Polish state was trying to exploit its workers, were not concerned about so-called free trade unions: they wanted their loot, even if that meant dealing with the resistance of the Polish workers by force. As one official of a London bank put it in the London Sunday Times of 13 December: 

Speaking only as a banker, it would be a good thing if Russia invaded Poland, because then she would be obliged to honour Poland's debts. 

That day martial law was introduced in Poland. The brute force of the state (using Polish troops and police) did the job which the bankers had asked to be done. 

STATE CAPITALISM VERSUS SOCIALISM 

Nationalisation or state-run capital is simply another form of capitalism. There are plenty of ways to run exploitation and calling it socialism will only fool those who read the labels without examining the contents of the bottles. Socialism will be a classless, wageless, moneyless, stateless world society. It will in no way resemble the hideous dictatorship over the proletariat of the Leninist police states. As the Solidarity newspaper, Jednosc stated in one of its articles: 

State ownership and social ownership of the means of production are two completely different concepts which should never be confused. The means of production may be owned by the state, but this does not mean that they are thereby the social property of the working class. 

And until the property of the world does belong to the workers - or rather, until we have abolished both property and class - those who speak of the existence of socialism in the world today are either fools, liars or both. 

Steve Coleman (Britain)