Back in the USSR (2003)

Book Review from the June 2003 issue of the Socialist Standard

Class Theory and History: Capitalism and Communism in the USSR. By Stephen A Resnick and Richard D. Wolff. Routledge, 2002

"The exploitation of workers”, the authors contend, “prevailed across the entire history of the USSR. When one kind of exploitative class structure was overthrown, another soon took its place . . . The 1917 revolution displaced private capitalism in industry but established an enduring state capitalism there instead”.

This is the sort of thing we say but, as the authors point out, how you regard(ed) the former USSR depends on your definition of class and exploitation. According to them, those in the Marxist tradition have used two different criteria for defining class: one based on property (legal ownership) and one based on power (actual control). The first view (embraced by the official ideologists of the former regime and the Trotskyists and by many in the old Labour Party) is that capitalist class society is abolished when legal private property rights over means of production vested in individuals are abolished and replaced by state ownership.

Although a classless society will have to involve the ending of such legal private property rights, it is clear, if only from the experience of Russia, that this is not enough. Nor is it really a Marxian approach since it emphasies what the law (formal property relations) says rather than looking at what the underlying productive relations actually were. Hence the alternative definition: that class is defined in relation to who actually controls access to and the use of means of production. On this, arguably more Marxian approach, where there is state ownership the question arises of who controls the state; those who do would, in practice if not in law, be the owners of the means of production.

This second is the approach we came to adopt, arguing that Russia was not, and never at any time since 1917 had been, a classless society but a class society in which the workers were exploited by an exclusive group that controlled the state. In fact, it is the approach adopted by nearly all those who argue that Russia was, or became, state capitalist.

But, as Resnick and Wolff point out, it still leaves open the question of what a classless, socialist (or communist, the same thing) society might be. Some who use this argument say that Russia would have been socialist (or become socialist) if only the state had been democratically controlled by the population or if only industries had been controlled and managed by those working in them. We don't take this view because, for us, common ownership of the means of production implies the disappearance of production for sale and with it of markets, prices, wages and money itself. If Russia had retained these but become democratic it would still have been capitalist, even though a democratic state capitalism or a worker-managed capitalism would be an unrealistic utopia.

Resnick and Wolff use this ambiguity to criticise not just the “property” theory (the Trotskyist nonsense about Russia having been a “degenerate workers' state” is an easy target) but also the “power” theory and to advance their own “surplus” theory of class: that class structure is determined by who appropriates and distributes the surplus produced at enterprise level. If it's not the direct producers then there's exploitation of them by another class; if it is the direct producers then that's communism. That right from 1917-18 the surpluses of enterprises were appropriated by state officials is the reason they give for saying that Russia always was state capitalist. (We say it was because commodity production, the wages system and money never disappeared.)

This theory raises a number of difficulties, the first being the definition of communism. Because Resnick and Wolff concentrate on what happens at enterprise level their argument leads to the conclusion that communism can exist at enterprise level. This is, in fact, their argument; which makes producer co-operatives the typical communist organisation. Insofar as communism is equated with any kind of “common ownership” then such co-operatives could be called “communist” since the co-operative's assets and products are commonly owned by its members. In fact, in their detailed economic history of the USSR between 1917 and 1990 that takes up most of the book, the only example of “communism” they identify in Russia are the collective farms set up in the 1930s, on the ground that, legally, the surplus they realised was not directly appropriated by state officials but belonged to the farmers as a collective group.

Traditionally, however, “communism” has meant a communist society, i.e., a whole social system based on the common ownership of the means of living and their democratic control by all the people (when we ourselves talk of “common ownership” this is to be taken as shorthand for common ownership of all the means of production by society).

Resnick and Wolff are prepared to consider “communism” existing above enterprise level, by for instance whole industries being commonly owned by those working in them and even (as a theoretical limiting case) of all industry being commonly owned by all productive workers. So that, for them, a fully communist society would be one in which all enterprises and all industries would be owned by those working in them, so that it would be the producers who would not only produce the surplus but also appropriate it (i.e., it would belong to them as soon as it was produced) and, even if through delegation either to professional managers or to state officials, decide its distribution.

Such a society would have more in common with what the co-operative movement and syndicalists used to envisage than with what we understand by socialism or communism, especially as Resnick and Wolff envisage buying and selling relationships existing between the various commonly-owned enterprises and industries. Thus they talk about “communist” markets and even “communist” value, surplus value, price and profit—enough to make our hair stand on end and conclude that they are not talking about communism or socialism in the original sense of a society in which all the means of production and distribution are commonly owned and democratically controlled by all the people. Since in such a society what was produced would also be commonly owned by everybody (or by nobody, the same thing from another angle), the question that would arise would not be how and where to sell it but how to distribute it through non-market mechanisms. Value, prices, profits, wages, money, etc are capitalist economic categories that won't exist in socialism.

That Resnick and Wolff are thinking in terms of an economic system based on capitalist economic categories is also evident from their treatment of productive labour, which is behind their workerist position that the surplus(-value) produced in an enterprise should belong only to that enterprise's “productive” workers to the exclusion of its “non-productive” workers such as its purchasing, sales, cleaning and guarding staff.

Here again, they are employing a concept that is relevant only to capitalism. Under capitalism a “productive” worker is a worker who produces surplus value. This is because the aim of capitalism is to maximise the amount of surplus value produced. Thus, for it, only workers whose labour is exchanged against capital (as opposed to being paid out of income) are productive. This does not mean that other workers, paid out of someone's income, are not productive in the broader (and more normal) sense of productive of use-values. A tailor employed by a landowner or a capitalist to make him a suit still produces a suit even if they don't produce surplus value. Similarly, a civil servant by his or her work still provides a service (even if in many cases one that is only useful under capitalism). Anyone who works, whether for an employer, on their own account or as a volunteer, is productive insofar as they produce something, whether an object or a service, that is in some way useful to somebody. All such workers are productive of use-values.

Since socialism (communism) will be a society that will produce wealth solely in the form of use-values then everybody who produces any use-value will be productive, and there will be no sense in trying to distinguish those who, if society were still capitalist, would have been regarded as producers of surplus value. And even less sense in placing such producers in a privileged position with regard to other producers by allowing them the first say in how products should be distributed. That wouldn't be democratic and it's not socialist either. Socialism, we insist, is the common ownership of the means for producing and distributing wealth (i.e., use-values) by and in the interest of the whole community (including non-producers such as the sick and the old).

Adam Buick

‘Surplus Theory’ versus Marxian Theory (2013)

From the April 2013 issue of the Socialist Standard

The work of Richard Wolff and Stephen Resnick contains some insights for socialists but it is not Marxian economics and is not socialist.

The late twentieth-century saw the demise of many governments that viewed themselves as heirs of the ideas of Karl Marx. The failure of these regimes was seen by their opponents as the triumph of capitalism and the death of socialism. With the rise of neoliberal economics in advanced industrial countries the future of the left did indeed seem bleak. The legacy of Karl Marx and Marxian socialism, however, was far from dead. As the current global recession shook the confidence of neoliberal prescriptions Marx’s economic ideas received renewed attention. We examine here the theories of Stephen Resnick and Richard Wolff in relation to class, surplus value, their definition of communism and how to achieve it. Richard Wolff in particular has gained much attention in light of the recession through his video When Capitalism Hits the Fan.

Reformist road to nowhere

The Socialist Party rejects the minority seizure of power or governing with a programme of reforms with the aim of achieving socialism at some point in the future. We argue that pursuing an objective of seizing power in the name of the working class or of a programme of reforms that aim at removing the worst excesses of capitalism do not move society any further towards socialism. Replacing the immediate objective of socialism with more immediate aims in effect removes the socialist objective altogether. Others, most others in fact, who have called themselves socialist or communist in the last century and today have rejected this approach. They have argued for the necessity of the seizure of state power by minority parties or, more often, have seen in the reform programmes of labour parties the hope of gradual socialist transformation. The experience of the twentieth century saw the failure of these approaches to transform society on socialist lines. What ensued was the collapse of confidence in the possibility of socialism and indeed in the belief that there was any alternative to capitalism.

If it was assumed that various governments had been or were in fact variants of socialism or communism then it is quite understandable that confidence in that political outlook would either diminish or that a reworking of assumptions would occur, given that the populations of these ‘socialist’ countries appeared to prefer capitalism. Marxism or ‘socialism’ could either be discarded or the understanding of them reassessed. Stephen Resnick and Richard Wolff are in the latter category and have reworked Marxian economics into ‘surplus theory’, which attempts to reinterpret Marxian economics in the light of the failure of so-called ‘socialist’ and ‘communist’ governments to arrive at their declared communist objective.

To their credit they do not define the former USSR, China, Cuba, etc. as socialist but as state-capitalist. Likewise they acknowledge that the various attempts to regulate or reform capitalism in the name of socialism resulted in merely more regulated capitalism rather than something different to capitalism. In fact, Wolff and Resnick describe quite nicely the swings, often in response to economic crises, between relatively less or relatively more regulated capitalism in the last century or so. They reject the idea of socialism as it is commonly misunderstood – as state ownership and planned production as against capitalist private ownership and production for the market. At the root of their argument is the understanding that private or state capitalism merely changes the exploiter and does not remove the exploitation. However, their understanding of the root of the exploitation of the working class is at odds with the arguments developed by most Marxian socialists who regard the former USSR and other such regimes as state capitalist.

Russian state capitalism

For us in the Socialist Party capitalism remained intact in the USSR because buying and selling, commodities, value, prices and profit continued. The employers, ceased to be private individuals owning capital and became instead the state, which owned and controlled the large scale means of production and received the surplus value produced. In place of a narrow elite of private owners of the means of production emerged a narrow social elite who controlled the state. The fundamentally exploitative relationship between capital and labour remained intact with the continued existence of money, wages, commodities, exchange, prices and the growth of a bureaucratic and brutal state. We argue that the disappearance of all of these facets of capitalist society would in fact be necessary before a socialist society could be argued to exist.

For Resnick and Wolff on the other hand capitalism remained intact because the mere legal transfer of private to state property and the shift of power from private capitalists to the state did not produce change at the enterprise level. The workers, the producers of surplus value, they argue, must also become the appropriators of surplus value. Their definition of communism is a society where those who produce the surplus in a given enterprise are the same people who own it and control its distribution. Their argument is the result of the application of their ‘surplus theory’, which condenses the three volumes of Capital into saying that Marx was essentially analysing past and present societies according to who appropriates and distributes the surplus produced in a given society. In this way their ‘surplus theory’ can be applied to areas like the family, where it is argued that men have historically extracted surplus labour from women in the home.

Conflict over surplus

Whilst Resnick and Wolff promote their analysis as Marxian, it is in fact a simplified departure from classical Marxian ideas that would have Marx turning in his grave. Marx and Engels and many subsequent socialists considered socialism to be a society which transcends wage-labour and money. ‘Surplus theory’, by contrast, sees no problem with the continuance of money, wages, commodities, exchange, prices and the state. From its perspective, as long as the productive workers obtain the surplus-value of their work and control its distribution then society is communist.

There is a thorny issue for ‘surplus theory’ to deal with in the relationship between ‘productive’ and ‘unproductive’ workers. This is a distinction between those workers in capitalist societies who produce surplus value (e.g. factory workers) and those workers who do not (civil servants, sales staff, security guards, etc.). Of course the one cannot exist without the other and in socialism, according to our definition, there would no longer be such a distinction as there would be no surplus value (although there would be a surplus of goods, of use-values). However, in a socialist society as defined by Resnick and Wolff there would be a tension between those who produced the surplus value and those that drew from it without contributing to it. They get around this by suggesting job-rotation and other practicable but pointless solutions.

The whole concept of ‘surplus theory’ is simplistic and misleading. Wolff and Resnick describe a process within capitalism where capitalists appropriate surplus value and then redistribute portions of it in order to reproduce the process. These payments are termed ‘subsumed class payments’ and include such things as taxes, wages to ‘unproductive’ employees, rent, interest, advertising, etc. In practice capitalists do not immediately appropriate surplus value but rather the products of the labour of their employees which they hope to sell on the market as commodities at a price that will provide them with a profit (the realisation of surplus value as money). It is not possible to distinguish the appropriation of surplus from the distribution of it as ‘subsumed class payments’ since the process is simultaneous and mostly determined behind the backs of those involved as market transactions (although boards do deliberate on how to distribute accumulated surplus value as cash reserves). Capitalism is an anarchic system of social production in which the capitalist class as a whole appropriates surplus value from the working class as a whole and cannot be understood adequately at the level of the individual enterprise.

What is class?

The use of ‘surplus theory’ can be confusing because it is written in terms familiar to Marxian socialists but with a quite different meaning. When they discuss class, for example, they define it by relationship to surplus value and reject definitions based on power, property or consciousness. For them, your place in capitalism is defined by whether you produce surplus value, derive your wages from surplus value (both working class according to our definition) or whether you appropriate the surplus value and control its distribution (the capitalist class). All processes which do not relate to the direct production of ‘surplus value’ are classified as ‘non-class processes’, such as education, culture and even politics. Their philosophical concept of over-determination (seehttp://www.worldsocialism.org/spgb/education/study-guides/overdetermination-and-marxian-theory-socialist-view-work-richard-wolff-and-st ) comes into play again because class is also argued to be no more important than non-class aspects of society – it is argued that that would be reductionism. By this reasoning if you change the class relationship, if you change the ownership and control of surplus value, other changes (at this point unknowable) will follow as class relates dialectically to all other areas of life.

This is a deliberate attempt to try to keep ‘surplus theory’ clear of issues of ownership or power. Socialism has failed to date, Resnick and Wolff argue, because socialism has been defined according to who owns the means of production and/or who controls them. This has led to various governments being called socialist because some of the means of production have passed into state ownership and, if enough of the means of production have been transferred, a large measure of social and political power is likewise conferred. This leads to their abstruse and obfuscating ‘surplus theory’ in which ‘communism’ according to their definition can exist in an economy with state ownership or private ownership and with state planning or markets or a blend of all of these features.

However, capitalism is a system of social production in which private property and the state developed to enable and maintain the expropriation of surplus value via wage-labour. Class (in the classical Marxian sense of the relation of the individual to the means of production) is, of course, not the only or necessarily the most important relation in a given identity or event – it does not determine our lives in any mechanical way. It does, though, suffuse our social experience and shapes and limits our individual and social possibilities. The position of the Socialist Party is at odds with Resnick and Wolff‘s ‘surplus theory.’ Socialism, for us, entails a working-class consciousness of the basis of our exploitation and the necessity of political action to gain control of the state as part of a revolutionary process in which common ownership and democratic control of the means of production would replace capitalism, the private or state ownership of the means of production. Our understanding of class involves awareness of the importance not just of the appropriation of surplus value but its mutual dependence on property relations and the state as well as, crucially, the developed political consciousness of the capitalist class and the currently limited political consciousness of the working class.

Worker co-operatives

So, after all their work developing the theories of over-determination and ‘surplus theory’ what are the practical solutions offered up by Wolff and Resnick. How are the working class to advance towards a world in which they appropriate and distribute their own surplus? Wolff in particular promotes a strategy to achieve social change around the concept of Workers Self Directed Enterprises (WSDEs). These are, despite Wolff’s efforts to argue that they are something new, essentially worker’s co-operatives. These, it is argued, combined with activism to promote democracy and gain political support could be the basis for achieving social transformation. Here we are on familiar and not new ground. Wolff’s argument is similar to that of Eduard Bernstein who argued over a century ago that worker’s co-operatives were transforming capitalism from within, obviating the need for social revolution. Rosa Luxemburg countered then, as we do now, that workers forming a co-operative “are obliged to take toward themselves the role of capitalist entrepreneur – a contradiction that accounts for the usual failure of production co-operatives which either become pure capitalist enterprises or, if the workers’ interests continue to predominate, end by dissolving.” To achieve meaningful change through WSDEs would require massive social and political struggle with the end being a form of capitalism in which workers collectively exploit themselves.

Colin Skelly