Archive for the ‘Exchange theory’ Category
The RCIT (Revolutionary Communist International Tendency), in response to our article ‘Russia, China and the Unfinished Permanent Revolution”, claims that we, the Liaison Committee of Communists (LCC), don’t understand Trotsky’s theory of Permanent Revolution. On the contrary we do understand it and apply it as he did himself. It is the RCIT that tries to turn Permanent Revolution into a pseudo-Trotskyist cover for its adaptation to social imperialism. Social Imperialism is the democratic petty bourgeois policy that imperialism can be progressive if reformed by the mobilisation of the proletariat. We will show that beginning with its semi-Cliffite method, the RCIT’s fetishism of bourgeois democracy is a chronic form of centrism, in reality objectively part of the permanent counter-revolution which we as revolutionaries are pledged to expose and defeat.
The RCIT’s main argument against the LCC is that we are ultra-lefts who claim that “nothing can change in any semi-colonial country at any time without the dictatorship of the proletariat”:
“Desperately searching for a theoretical hook on which to base their notions, the LCC looks to Trotsky who wrote the following in his book on the permanent revolution:
“With regard to countries with a belated bourgeois development, especially the colonial and semi-colonial countries, the theory of the permanent revolution signifies that the complete and genuine solution of their tasks of achieving democracy and national emancipation is conceivable only through the dictatorship of the proletariat as the leader of the subjugated nation, above all of its peasant masses.”
From this fundamental insight of Trotsky the LCC derives … that nothing can change in any semi-colonial country at any time without the dictatorship of the proletariat. Poor pedants! From Trotsky’s statement that “the complete and genuine solution of their tasks of achieving democracy and national emancipation” (our emphasizes) in the “countries with a belated bourgeois development, especially the colonial and semi-colonial countries” the LCC distortedly concludes that not even one single aspect of belated capitalist development can change in any country, at anytime, anywhere in the world!” (RCIT ibid)
We agree with Trotsky’s quote. We say nothing about capitalist development being impossible short of the Dictatorship of the Proletariat. What we do say is that in the epoch of imperialism capitalist development is based on state monopoly finance capital which develops the forces of production unevenly, accumulating super-profits in the imperialist states, and under-developing the forces of production in the semi-colonies. Even imperialism is capable of making big changes as it ravages what is left of nature, but these are mainly destructive of the forces of production, and do not add up to the qualitative change from semi-colony to imperialism.
This is entirely consistent with Lenin’s theory of imperialism and Trotsky’s theory of permanent revolution. It is exactly why Trotsky explained that the completion of the bourgeois revolution is impossible except as part of the socialist revolution. Following Lenin, we argue that semi-colonies are not economically independent of imperialism and cannot accumulate sufficient capital to become imperialist themselves. Therefore, only Russia and China could make this transition, having escaped semi-colonial servitude by making socialist revolutions and remaining economically independent after the restoration of capitalism. And that is why we don’t agree that South Korea and Israel are new imperialist powers. We see them as US dependencies, whose economic growth is subsidised in order to maintain them as armed outposts of US imperialism.
We think that the RCIT has a fetish of ‘bourgeois democracy’ that is inseparable from its view that imperialist super-exploitation and oppression of semi-colonies can under “exceptional circumstances” allow them to become imperialist. By ‘fetish’ we mean Marx’s view that capitalist production relations are inverted as exchange relations misrepresenting value as inherent in commodities rather than as socially necessary labour time. This fetishism is reproduced in the capitalist state creating the illusion that it is separate from society and hence is not determined by society.
If you believe that semi-colonies can become imperialist then you must subscribe to the illusion that bourgeois democracy can be used by the proletariat in the imperialist countries to moderate the drive for super-profits enabling the semi-colonial masses to can carry through a national revolution that wins economic independence from imperialism short of the Dictatorship of the Proletariat. Hence capitalist state-centred fetishism underlies the illusion that bourgeois democracy today is still capable in ‘exceptional’ circumstances of being ‘progressive’, that is, social imperialism. Finding such ‘exceptional circumstances’ is no more than selecting isolated ‘facts’ that confirm the RCITs pre-existing bourgeois democratic fetish.
We can see this empiricist method in operation when the RCIT promotes the illusion that bourgeois democracy, even when expressed in popular fronts, or popular front parties, are a ‘lesser evil’ to Stalinism in Russia and Yugoslavia, military dictatorships in Thailand and Egypt, and fascism in Brazil. We will prove below, that Marx, Lenin and Trotsky never confused ‘bourgeois democracy’ with ‘workers democracy, and so never saw one form of class rule, the bourgeois democratic dictatorship, as capable of smashing another form, bourgeois reactionary dictatorship, whether it be the Prussian Army in 1871 or German and Spanish fascism in 1933. The RCIT is in danger of becoming a Menshevik apologist for the bourgeois popular front as a part of the ‘democratic revolution’ and a necessary stage in capitalist development preparing the conditions for the dictatorship of the proletariat.
In this article we argue that the key to understanding the counterrevolutionary role of Menshevism is the concept, program and strategy of Permanent Revolution. Conceived by Marx in 1850, continued in the transitional program of Lenin and Trotsky, it is the strategy of the historic struggle of the proletariat to break through the ideology of bourgeois democracy by means of workers democracy and to complete the permanent revolution with the abolition of classes and the birth of communism.
From bourgeois to proletarian ‘permanent revolution’
According to Trotsky the Permanent Revolution has three aspects: the proletarian revolution would complete the bourgeois revolution; the permanent revolution would continue through the development of socialism to communism; third, the permanent revolution is an international revolution. These aspects are united in Marx’s conception of Permanent Revolution:
“The permanent revolution in the sense which Marx attached to this concept, means a revolution which makes no compromise with any single form of class rule, which does not stop at the democratic stage, which goes over to socialist measures and to war against reaction from without; that is, a revolution whose every successive stage is rooted in the preceding one and which can end only in the complete liquidation of class society”. (L. Trotsky The Permanent Revolution, Pathfinder edition, p. 130. Introduction)
Trotsky acknowledges that Marx applied the concept to the bourgeois revolution in France to signify the struggle of the French bourgeoisie to prevail against Napoleon. To counter Napoleon Bonaparte’s illusion that his state stood “above” bourgeois society and was free to draw on the national treasury, the bourgeoisie conspired to create a grain shortage, delaying Napoleon’s Russia campaign by two months and causing its defeat. This was a victory in the ‘permanent revolution’ of the bourgeoisie over Napoleon’s ‘permanent war’ as an intolerable expense to the economy. However, the bourgeoisie soon had to resort to the ‘Bonapartist’ state standing “above” society in order to suppress the unruly national proletariat. This marked a decline of the progressive bourgeoisie into its opposite, a reactionary bourgeoisie.
The failure of the bourgeois revolutions of 1848 was proof of the beginning of the end of the progressive bourgeoisie in Europe. The Prussian bourgeoisie feared the proletariat more than the feudal Junkers, signalling to Marx that the time for the proletarian revolution had begun. While the feudal regime remained in place and Prussian capitalism remained backward, only the proletarian revolution could develop the forces of production. As Trotsky puts it:
“In 1848 a class was needed that would be able to take charge of events without and in spite of the bourgeoisie, a class which would not only be prepared to push the bourgeois forward by its pressure but also at the decisive moment to throw its political corpse out of the way…The proletariat was too weak, lacked organization, experience and knowledge. Capitalism had developed sufficiently to render necessary the abolition of the old feudal relations, but not sufficiently to bring forward the working class, the product of the new industrial relations, as a decisive political force.” (‘Results and Prospects’, in The Permanent Revolution, p. 56-57, ibid)
The failed bourgeois revolutions of 1848
The RCIT quotes the example of the revolutions of 1848 against us, claiming it proves we don’t understand Permanent Revolution:
“Let us give yet another example which unmasks the LCC’s wooden, mechanistic way of thinking. In his book, Trotsky illustrated his concept of permanent revolution with the case of Germany. There he explained that the failed bourgeois-democratic revolution of 1848 resulted in the absence of democracy:
“The concept of the permanent revolution was advanced by the great Communists of the middle of the nineteenth century, Marx and his co-thinkers, in opposition to the democratic ideology which, as we know, claims that with the establishment of a ‘rational’ or democratic state all questions can be solved peacefully by reformist or evolutionary measures. Marx regarded the bourgeois revolution of 1848 as the direct prelude to the proletarian revolution. Marx ‘erred’. Yet his error has a factual and not a methodological character. The Revolution of 1848 did not turn into the socialist revolution. But that is just why it also did not achieve democracy. As to the German Revolution of 1918, it was no democratic completion of the bourgeois revolution, it was a proletarian revolution decapitated by the Social Democrats; more correctly, it was a bourgeois counter-revolution, which was compelled to preserve pseudo-democratic forms after its victory over the proletariat.”” (RCIT ibid)
Marx recognised that the failure of the bourgeois revolution in Prussia in 1848 to bring about bourgeois democracy did not lead directly to the proletarian revolution. That is a fact. But Marx also said that while the failure of the bourgeois revolution did not immediately turn into a successful proletarian revolution, it was the prelude to the ‘permanent revolution’:
“Although the German workers cannot come to power and achieve the realization of their class interests without passing through a protracted revolutionary development, this time they can at least be certain that the first act of the approaching revolutionary drama will coincide with the direct victory of their own class in France and will thereby be accelerated. But they themselves must contribute most to their final victory, by informing themselves of their own class interests, by taking up their independent political position as soon as possible, by not allowing themselves to be misled by the hypocritical phrases of the democratic petty bourgeoisie into doubting for one minute the necessity of an independently organized party of the proletariat. Their battle cry must be: The Permanent Revolution.” (‘Address of the Central Committee to the Communist League,’ March 1850. The Revolutions of 1848, p. 330, Pelican edition)
In the same address to the Communist League in 1850, Marx writes the ‘petty bourgeois democrats’ try to limit the proletarian revolution to the reforms conceded by the bourgeoisie rather than “make the revolution permanent.” Bourgeois ‘democracy’ then is already counter-revolutionary, holding back rather than advancing the permanent revolution:
“While the democratic petty bourgeois want to bring the revolution to an end as quickly as possible, achieving at most the aims already mentioned, it is our interest and our task to make the revolution permanent until all the more or less propertied classes have been driven from their ruling positions, until the proletariat has conquered state power and until the leading countries of the world – that competition between the proletarians of these countries ceases and at least the decisive forces of production are concentrated in the hands of the workers. Our concern cannot simply be to modify private property, but to abolish it, not to hush up class antagonisms but to abolish classes, not to improve the existing society but to found a new one.” (Marx, ibid, p. 323) [Our emphasis]
Here Marx is stating clearly that to “make the revolution permanent” it is necessary to “abolish private [capitalist] property”. Implicit in his statement is his view that this requires the end of bourgeois democracy which is premised on the reproduction of private property. During the 1840s, Marx in his ‘Early Writings’[i] formulated his concept of the capitalist state as derived from the fetishised reality of exchange relations, where the private interests of individuals as buyers and sellers of commodities becomes represented as the ‘general interest’ in a state form standing above society. Bourgeois democracy then functions to reproduce capitalist property and the class contradiction between labour and capital, by masking that contradiction in the ideology of national unity. Social Democracy is merely the incorporation of that ideology into the program of Social Democratic parties.
The RCIT does not realise that Trotsky is making the same point when he refers to the German counter-revolution of 1918. The ‘democratic petty bourgeoisie’ (the Social Democrats) used the “pseudo-democratic forms conceded” by the bourgeoisie to mask the counter-revolution as the ‘victory of the permanent revolution’. The failure of the revolution was due to the failure of the Communist Party of Germany (KPD) to win the masses from reactionary ‘bourgeois democracy’ to the revolutionary ‘proletarian democracy’ of the armed insurrection and dictatorship of the proletariat. Following Marx, Trotsky is pointing out that it is the petty bourgeois democrats who paint the “pseudo-democratic forms” as the victory of the permanent revolution to mask the bourgeois counter-revolution. To prove that Marx and Trotsky are one on this question we need to go back to the Paris Commune and the first major test of permanent revolution.
Lessons of the Paris Commune
If the failed revolutions taught Marx and the First International that it was time for the proletarian revolution, the Paris Commune drowned ‘bourgeois democracy’ in the blood of the Communards. The Paris Commune proved that the revolution that failed in ‘backward’ Prussia had also been accompanied by a retreat in the great French Revolution. Such was the fear of the rising proletariat on the part of the French ruling class that it found its expression in the Second Empire of Louis Bonaparte who came to power in a coup d’état in December, 1851, and installed himself emperor. In July, 1870, Bonaparte declared war on Prussia against much popular opposition in France. He was defeated soon after at Sedan, when his army surrendered, and two days later a Republic was declared in Paris with massive support across France. However the National Assembly of the Republic was dominated by bourgeois and petty bourgeois, who rushed to make an armistice and negotiate peace with Prussia, so as to conspire to defeat the workers Commune of Paris.
“Armed Paris was the only serious obstacle in the way of the counter-revolutionary conspiracy. Paris was, therefore, to be disarmed…The seizure of her artillery was evidently but to serve as a preliminary to the general disarmament of Paris, and, therefore, the revolution of 4 September. But that revolution had become the legal status of France. The Republic, its work, was recognized by the conqueror in the terms of the capitulation. After the capitulation it was acknowledged by all the foreign powers, and in its name the National Assembly had been summoned. The Paris Workingmen’s revolution of 4 September was the only legal title of the National Assembly seated at Bordeaux, and of its executive.” (Marx, The Civil War in France, pp.198-9, Part 2)
Marx and the 1st International declared support for the Republic and its defence against the Prussian army. The thrust of its position was to defend the Republic against both Prussian and the reactionary National Assembly:
“Let the sections of the International Working Men’s Association in every country stir the working classes to action. If they forsake their duty, if they remain passive, the present tremendous war will be but the harbinger of still deadlier international feuds, and lead in every nation to a renewed triumph over the workman by the lords of the sword, of the soil, and of capital. Vive la republique”. (‘Second address of the General Council’, p.186)
Thiers[ii] could not overthrow the legitimate Republic that replaced the Second Empire of Louis Bonaparte without making a reactionary military alliance with Bismarck. The armed workers of Paris, supported by the 1st International, had to defend a bourgeois republic against a French royalist reaction backed by the Prussian state. But they could only defend the republic as a Workers Republic. As a result of the experience of the Commune, Marx and Engels drew the conclusion that the Workers Republic had to smash the bourgeois state and create the Dictatorship of the Proletariat, or suffer defeat.
Thus the bourgeois ‘permanent revolution’ had turned into its opposite, the ‘permanent counter-revolution’, conceding French national sovereignty to the Prussians to impose the bourgeois dictatorship in its most naked form with the slaughter of the Communards. Better a national defeat for France than the defeat for private property! Yet from the ashes of the heroic Commune the proletariat emerged for the first time on the world stage of ‘permanent revolution’:
“If the Commune was thus the true representative of all the healthy elements of French society, and therefore the truly national government, it was at the same time, as a working men’s government, as the bold champion of the emancipation of labour, emphatically international. Within sight of the Prussian army, that had annexed to Germany two French provinces, the Commune annexed to France the working people all over the world.” (Class Struggles in France, p. 216 Part 3) [Our emphasis]
Marx’s conclusion, and subsequently that of Lenin and Trotsky, was that after 1871 the epoch of the proletarian ‘permanent revolution’ had opened. The material forms of revolutionary ‘workers democracy’ that arose in the Commune to defeat the reactionary ‘bourgeois democracy’ of the National Assembly, that is, direct representation, right of recall, workers councils, workers militias, etc., were now an example to be held up internationally. Henceforth, the ‘permanent revolution’ was the strategy that transformed the unfinished bourgeois tasks of the national revolution, agrarian reform, the bourgeois republic, and so on, into socialist tasks, where nations became the workers socialist republics, agrarian reform became peasant communes on nationalised land, and bourgeois democracy became the Dictatorship of the Proletariat. Moreover, it becomes clear that the concept of the strategy of permanent revolution reflects Marx’s transitional method that the minimum program for the bourgeois republic must be combined with the maximum socialist demands for the Dictatorship of the Proletariat in a transitional program.
Marx Critiques the Gotha Program
The defeat of the Paris Commune coincided with the beginning of the transition of world capitalism from its competitive stage to the monopoly capitalism of the imperialist epoch. This led to a period of several decades of economic growth in Europe where the export of capital began to produce super-profits in the colonies giving rise to high living standards in the top layers of the proletariat in the imperialist countries. As a result, these layers called by Engels ‘bourgeois workers’, and Lenin, the ‘labour aristocracy,’ began to identify their economic interests with imperialism. This was reflected in the divisions in the International, and the emergence of a majority backing Lassalle at Gotha in 1875.
The Gotha Program was a retreat from the Marxist program to the petty bourgeois national socialism of Lassalle. It was a retreat from the permanent revolution of the Commune on the question of socialism, internationalism and communism. First, Marx critiqued its adaptation to the Prussian state, putting bourgeois democratic demands on the police state of Bismarck for graduated taxes, free education, and state aid for workers cooperatives. The overthrow of labour exploitation was replaced by the utopia of a “free state” regulating wages, taxes and funding education, welfare and employment. This ‘free state’ was the same state that had recently helped put down the Commune.
Second, Marx asks:
“And to what is the internationalism of the German workers’ party reduced? To the consciousness that the result of their efforts ‘will be the international brotherhood of peoples’ – a phrase borrowed from the bourgeois League of Peace and Freedom and which is intended to pass as an equivalent for the international brotherhood of the working classes in the joint struggle against the ruling classes and their governments. Not a word, therefore, of the international role of the German working class! And this is how it is meant to challenge its own bourgeoisie, which is already fraternally linked with the bourgeoisies in all other countries, and Herr Bismarck’s international policy of conspiracy!” (‘Critique of the Gotha Programme’, The First International after Marx, p.350. Part 1) [Our emphasis]
Third, its program is confined to the ‘present national state’ which means ‘their own state, the Prusso-German Empire’, and doesn’t speak of the Dictatorship of the Proletariat or the transition from socialism to Communism. Marx states:
“…Between capitalist and communist society lies a period of revolutionary transformation from one to the other. There is a corresponding period of transition in the political sphere and in this period the state can only take the form of a revolutionary dictatorship of the proletariat.” (ibid, p. 355) [Our emphasis]
It is clear by 1875, that in Marx’s conception, permanent revolution is a process, not a sudden leap over the bourgeois revolution, and completed only when the proletarian revolution is complete. That is, it is a strategy, which is more or less continuous and uninterrupted, except by advances and retreats, and complete only when socialist society culminates in communist society. Lenin and Trotsky would speak of an ‘epoch’ of the permanent revolution in 1905. The permanent revolution would extend for an indeterminate ‘epoch’ and would be completed only when the revolution in Russia had unified its three aspects, finishing the bourgeois revolution as socialist revolution, incorporating that into the international socialist revolution, and making the transition to communism.
1905 and “The Permanent Revolution”
The RCIT claims that we do not understand Trotsky’s Permanent Revolution, and quote from The Permanent Revolution.
“Desperately searching for a theoretical hook on which to base their notions, the LCC looks to Trotsky who wrote the following in his book on the permanent revolution:
“With regard to countries with a belated bourgeois development, especially the colonial and semi-colonial countries, the theory of the permanent revolution signifies that the complete and genuine solution of their tasks of achieving democracy and national emancipation is conceivable only through the dictatorship of the proletariat as the leader of the subjugated nation, above all of its peasant masses.”
From this fundamental insight of Trotsky the LCC derives … that nothing can change in any semi-colonial country at any time without the dictatorship of the proletariat. Poor pedants! From Trotsky’s statement that “the complete and genuine solution of their tasks of achieving democracy and national emancipation” (our emphases) in the “countries with a belated bourgeois development, especially the colonial and semi-colonial countries” the LCC distortedly concludes that not even one single aspect of belated capitalist development can change in any country, at anytime, anywhere in the world!” (RCIT, ibid)
Do we say: “That nothing can change in any semi-colonial country at any time, without the dictatorship of the proletariat”? We have already rejected this as untrue. We agree with Trotsky and consistently argue for his conception of the Permanent Revolution. The RCIT seems to think however, that up to the present day capitalism under “exceptional circumstances” can develop the forces of production in semi-colonies even if this leads to “incomplete” and “pseudo” solutions to its historic tasks. Well, we have pointed out that the bourgeoisie has had more than a century in which to continue with its historic mission in opposition to the already existing proletarian permanent revolution. Since 1850 its “mission” is clearly a permanent counter-revolution to suppress the permanent revolution!
More critical at this point in our argument is that the RCIT seems to think that because capitalism developed the forces of production in imperialist Russia in 1905 that this refutes our argument that semi-colonies cannot become imperialist after the First Imperialist War. They imply that if it could happen in Russia in 1905, why not in this same imperialist epoch could we not expect new imperialisms to arise “in exceptional circumstances” in the former workers states of Russia and China and the capitalist semi-colonies such as South Korea and Israel right up to the present?
Why not? For the very reason that Trotsky and Lenin knew that in 1905 imperialist Russia was a hybrid, a combination of modes of production, in which to develop the forces of production further the bourgeoisie had to be overthrown. Not because it was an “exception” from other imperialisms, but because it represented the extreme contradiction between advanced finance capital and backward Russia that was determined by the laws of state monopoly capital. Russia was a hybrid conjunction of the Tsarist feudal state and parasitic finance capital to create the conditions for maximum super-exploitation and hence maximum state oppression. Far from an ‘exceptional’ case opening the way for future ‘exceptional’ cases, Russia for Lenin and Trotsky expressed the extreme contradictions of imperialism and its decay as a system. The contradiction between its feudal backwardness and modern capitalist industry meant it was the ‘weak link’ in the imperialist chain that would be the first to fall to permanent revolution and start a chain reaction to bring an end to capitalism as a mode of production.
All three aspects of the ‘permanent revolution’ were put to the test in Russia in 1905 when Trotsky published his theory of The Permanent Revolution. Trotsky took Marx’s concept and applied it to Tsarist Russia. He argued that Russia had developed in a belated and uneven way so that the bourgeoisie was even weaker than those of France and Germany in 1848. The working class was concentrated in the cities in modern industry recently developed by French and British finance capital and more politically advanced than French and British workers! The urban proletariat was prepared by Tsarist reaction and modern industry sufficiently to lead the poor peasant masses in a Permanent Revolution to complete the bourgeois tasks in a proletarian revolution.
The reception was mixed. The Mensheviks took their centrist position for a bourgeois revolution led by the bourgeoisie. Lenin agreed with Trotsky that, despite important differences over whether it would be necessary to share power with the peasants in the early stages of the revolution, the revolution would be led by the proletariat to overthrow the Tsar and would have to proceed ‘uninterrupted’ to the socialist revolution. Lenin took Trotsky’s side stating that the permanent revolution was not ‘a single blow’ or ‘leap’, and while uninterrupted, would take a “whole historical epoch” which could not be predicted in advance. Despite attempts by the reformists to exaggerate the split between Lenin and Trotsky on the question of Permanent Revolution, Lenin quotes Trotsky in November, 1905, to express his agreement with him. Trotsky recounts this episode in The Permanent Revolution quoting Lenin:
““Comrade Trotsky said that the proletarian revolution can, without halting at the first stage, continue on its road, elbowing the exploiters aside; Lenin on the other hand, pointed out that the political revolution is only the first step. The publicist of Nasha Zhizn would like to see a contradiction here…The whole misunderstanding comes, first, from the fear with which the name alone of the social revolution fills Nasha Zhizn; secondly, out of the desire of this paper to discover some sort of sharp and piquant difference of opinion among the Social Democrats; and thirdly, in the figure of speech used by Comrade Trotsky; “at a single blow”.
In No 10 of Nachalo, Comrade Trotsky explains his idea quite unambiguously:
“The complete victory of the revolution signifies the victory of the proletariat”, writes Comrade Trotsky. “But this victory in turn implies the uninterruptedness of the revolution in the future. The proletariat realises in life the fundamental democratic tasks, and the very logic of its immediate struggle to consolidate its political rule poses before the proletariat, at a certain moment, purely socialist problems. Between the minimum and the maximum programme (of the Social Democrats) a revolutionary continuity is established. It is not a question of a single “blow”, or of a single day or month, but of a whole historical epoch. It would be absurd to try to fix its duration in advance.””” [Our emphasis] ibid p. 210)
In his speech to the Fifth Party Congress in 1907 Trotsky explains why the proletariat is ready to play the role in the Russia of 1905 of the sansculottes in the French revolution. Capitalism has not grown as in Europe but been introduced from above by imported British and French finance capital funding state loans to set up modern industry.
“As a result of this process there appeared among us as the main force in the towns, at the moment of the bourgeois revolution, an industrial proletariat of an extremely highly developed social type. This is a fact. It cannot be disputed, and must be taken as the basis of our revolutionary tactical conclusions…As the petty bourgeoisie urban democracy in the Great French Revolution placed itself at the head of the revolutionary nation, in just the same way the proletariat, which is the one and only revolutionary democracy in our cities, must find a support in the peasant masses and place itself in power – if the revolution has any prospect of victory at all.” (‘Speech at the Fifth Party Congress’, London, 1907, ibid p. 217)
For Trotsky, the epoch of Permanent Revolution now included Russia in 1905 with the first of three revolutions, when already the Petersburg Soviet characterised itself as proletarian! He and Lenin had no truck with the Mensheviks who thought that Russia’s backwardness meant that the proletariat had to play the historical role of ‘assisting’ the bourgeoisie to take power and complete its bourgeois revolution to prepare the conditions for the socialist revolution.
If we understand Trotsky’s theory of Permanent Revolution correctly as an application in a particular capitalist country of Marx’s more general formulation, we can see that it is true to Marx. Trotsky is at one with Marx:
“The permanent revolution in the sense which Marx attached to this concept, means a revolution which makes no compromise with any single form of class rule, which does not stop at the democratic stage, which goes over to socialist measures and to war against reaction from without; that is, a revolution whose every successive stage is rooted in the preceding one and which can end only in the complete liquidation of class society”. (ibid p. 130)
To repeat: the Permanent Revolution finishes the bourgeois revolution. It does not stop at the “democratic stage” because bourgeois democracy is counter-revolutionary. It has to be smashed by proletarian “revolutionary democracy” which continues the transition from socialism to communism and finally succeeds as world communism. For Lenin and Trotsky Permanent Revolution was a class strategy as understood by Marx. It had begun in the mid-19th century when the bourgeois revolution was already in decline. By 1905 in Russia the Permanent Revolution was part of the program of the revolutionary Marxists against the ‘evolutionary’ Marxists. It was now a part of the subjective reality in the program of the revolutionary party developing the theory and practice of Marxism in the epoch of decaying imperialism, facing war, revolution and counter-revolution. Included in the concept of permanent revolution is the end of “democracy,” no longer bourgeois democracy, but “revolutionary proletarian democracy,” which is abolished along with the “liquidation of class society” in communist society.
War, Revolution and Counter-revolution
The onset of the imperialist epoch in the late 19th century marked the qualitative change from the progressive bourgeoisie developing the forces of production in the epoch of competitive capitalism to a reactionary bourgeoisie now parasitical on the forces of production, monopolising and destroying those forces. The majority of the 2nd International represented the rise of the labor aristocracy adapting to social imperialism. This was the current of ‘evolutionary’ socialism critiqued by Marx and Engels in the Commune and the Gotha Program. This was the program of the democratic petty bourgeois who believed that the workers could transform the capitalist nation state by relatively peaceful, parliamentary means. Against the ‘evolutionary’ socialists were the minority ‘revolutionary’ socialists, who since 1871 had rejected the program of bourgeois democracy as reactionary, and stood on the transitional program of permanent revolution. The workers’ struggle for ‘democracy’ necessitated the ‘smashing of the bourgeois state’ and the imposition of the Dictatorship of the Proletariat.
The First Imperialist War was proof of this in the extreme, as the imperialists went to war using their workers as cannon fodder and their parliamentary bourgeois democracies to provide war credits. After the historic 4 August 1914 betrayal of the majority of the 2nd International, the flag of Permanent Revolution was kept aloft by the Bolsheviks of 1905 who formed the core of the tiny Zimmerwald Left against the betrayal of the SPD majority and Kautskyite centre. The imperialist defence of the nation was at the expense of other nations, proving that capitalism had now outstripped the national state as a progressive force in developing the forces of production. Now the bourgeois nation states and nationalist ideology were in a reactionary retreat from the bourgeois revolution and transmitting its imperialist ideology into the ranks of the workers via the petty bourgeois democrats and the betrayals of Social Democracy.
The Zimmerwald Left position was to keep alive the program of permanent revolution. It called on workers to turn the imperialist war into a civil war, uniting the proletariat across national borders to overthrow the imperialist nations ruled by feudal remnants in league with the imperialist bourgeoisie and their reformist agents in the working class. Utopian? No! The Bolsheviks knew that imperialist war had both revolutionary and counter-revolutionary aspects. The experience of war by the working classes proved to them that bourgeois democracy was a fraud and their instinct even without a revolutionary party and program was to refuse to fight imperialist wars. After 3 years of mutual destruction, the Russian workers in uniform rejected imperialist war for civil war, as did the German workers in uniform who mutinied after 4 years of slaughter.
Bolshevism wins in Russia but loses in Germany
Put to the test in 1917 the February Revolution proved that the proletariat was advanced and that the bourgeoisie was weak, frightened of the proletariat, and conspiring with the remnants of Tsarist reaction to smash the revolution. The Mensheviks continued to support the bourgeoisie as the revolutionary class. The Old Bolsheviks around Stalin, Kamenev, etc., were ready to support the popular front government as the lesser evil to the Tsarists and imperialists. Only Lenin and Trotsky were in agreement on the Permanent Revolution. They shared the same dialectical or transitional method. Both saw that the Permanent Revolution combined the minimal and maximum program in what would later become for Trotsky the Transitional Program. The workers would take power on the basis of soviet majorities, rapidly complete the bourgeois tasks by forming a socialist republic with a national army that would complete the civil war; fight imperialism with weapons and with diplomacy to advance the revolutions everywhere, especially in Europe; adopt land reform to win over the poor peasants, and when convinced that they had won over the Kulaks (middle peasants), abolish the Constituent Assembly.
But the Permanent Revolution in Russia was not finished. It had to spread to Europe, in particular Germany; otherwise it would succumb to counter-revolution. It had to advance its international aspect in order to advance its socialist aspect. As we know the imperialists called off their war and ganged up on the Soviet Union so there were more retreats than advances. The isolation of the Permanent Revolution in the Soviet Union with the defeat of the German revolution set back the international revolution. The lesson of the Permanent Revolution in Russia had been that either workers took power, or the bourgeois popular front would usher in the fascist counter-revolution. In Germany, the rotten role of Social Democracy and the Kautsky centrists combined with a weak Communist Party led to the isolation and defeat of the armed workers uprisings.
We come back to the RCIT on its view (above) that even after the counter-revolution in Germany in 1918 the defence of the “incomplete and pseudo” forms of bourgeois democracy is part of the permanent revolution. We have already shown that we agree with Marx that 1848 marked the failure of a bourgeois revolution and the opening of the permanent revolution. And this was confirmed by a growing Bonapartist reaction and the Prussian army’s bloody repression of the Paris Commune in 1871. Now we are asked by the RCIT to swallow that, after the First Imperialist War for super-profits and the defeat of the German revolution, the proletariat should defend bourgeois democracy in its “pseudo-democratic forms” in the Weimar Republic. Perhaps the RCIT mean the right to vote for the same ‘disguised popular front’ that put the noose around the workers necks. Perhaps the RCIT is referring to a posthumous right to vote for the proletarians slaughtered at the hands of the Freikorps and the fascists. Is the RCIT saying that such ‘pseudo-democratic’ concessions would obligate revolutionaries to “defend bourgeois democracy” in the Weimar Republic against the fascists?
Broué quotes from the resolution on the united front tactic at the Fourth Congress of the Comintern in 1922, specifically about the “Workers Government” in Germany in 1918-19:
“In 1918-1919, Germany had experienced a ‘Social-Democratic workers’ government’. These were not revolutionary workers’ governments, but ‘disguised coalitions between the bourgeoisie and the counter-revolutionary workers’ leaders’: “These ‘workers’ governments’ are tolerated in critical periods by the enfeebled bourgeoisie, in order to deceive the proletariat about the true class character of the state, or even to divert the revolutionary offensive of the proletariat and gain time with the help of corrupted workers’ leaders. Communists must not take part in such governments. On the contrary they must pitilessly demonstrate to the masses the real character of these false ‘workers’ governments’. In the period of capitalist decline, in which our main task is to win the majority of the proletariat for the revolution, these governments can objectively contribute to the process of decomposition of the bourgeois regime.”” (Quoted in P. Broué, The German Revolution, p. 672 Chapter 34 ‘The Development of the Tactic’)
Such a ‘disguised coalition’ we would call a ‘popular front’ today. We would not have supported such a ‘workers’ government’ against fascism in Germany. The SPD was in a coalition with the army to put down workers risings, and the army was constitutionally independent of the Government. Nor in 1923 when the KPD wasted time debating joining a ‘grand coalition’ with the SPD and the bourgeoisie (to expose the ‘popular front’ to the SPD workers!) while a showdown on the streets was rapidly building between revolutionary workers and the fascist shock troops. The defeat of the revolution in Germany in 1923 can be attributed in the last analysis to the ‘subjective’ weakness of the KPD, but was mainly due to the ‘objective’ role of the SPD in popular front regimes with the reactionary bourgeoisie, to ‘deceive’ and ‘divert’ the workers, and ultimately tie their hands before the rise of fascism that would end in the historic defeat of the international proletariat with Hitler’s seizure of power in 1933.
Since 1850 the Marxist strategy of ‘making the revolution permanent’ was marked by both revolutionary advances and counter-revolutionary retreats. The historic victory of the Three Russian Revolutions culminating in the October Revolution now met with a historic defeat in the German October. As a consequence of the isolation of the Soviet Union, the Stalinists deepened the counter-revolution in Russia, as well as in China, Germany and Spain. Nonetheless, despite the Stalinists counter-revolutionary role in alliance with imperialism, the existence of workers property in the Soviet Union as the most advanced victory of the Permanent Revolution dictated that the unconditional defence of the Soviet Union was to become the central platform of the Left Opposition and the Transitional Program.
Permanent Revolution vs Counter-revolution in China, Germany and Spain
The next major development in the Permanent Revolution was the widening international confrontation between it and the counter-revolution. It was first put to the test in China 1925-27. Here the Stalinists recast the line of the Mensheviks in 1917 as the bloc of four classes; workers, peasants, intellectuals, and the ‘democratic’ national bourgeoisie against the landlords and imperialists. This time the Communists were trapped in the popular front and wiped out by the ‘democratic’ bourgeois General Chiang Kai Shek who was also made an honorary member of the Comintern by Stalin –another instance of the popular front acting as jailer of workers awaiting the executioner.
Germany: From disguised to open popular front
Germany was another defeat for the international working class. As we saw, the failure of revolution in Germany in 1923 did not resolve the crisis for the ruling class. The Weimar Republic went from the ‘disguised popular front’ of the SPD and the army in 1919 to an open popular front in 1923 and then a succession of Bonapartist presidents with the power to directly suppress the workers until its final fall to Hitler in 1933. The SPD could no longer string out its popular front with Bonapartism to pacify the working class and prevent the rise of fascism. The depression that began in 1929 proved it could not fulfil this task, but it still continued to suck up to the Bonapartist regime. The Stalinized KPD took an ultra left line and sabotaged a united front between the KPD and SPD against fascism. Even worse, it backed the fascists in the “red referendum”. In August, 1931, Trotsky sounded the alarm:
“Were this theory to entrench itself in the German Communist Party, determining its course for the next few months, it would signify a betrayal on the part of the Comintern of no lesser historical proportions than the betrayal of the Social Democracy on August 4, 1914, and at that, with much more frightful consequences. It is the duty of the Left Opposition to give the alarm: the leadership of the Comintern is driving the German proletariat toward an enormous catastrophe, the essence of which is panicky capitulation before fascism!”(Germany, Key to the International Situation, Section 31)
Trotsky sees that the victory of fascism in Germany will be a defeat for many of the accumulated historic victories of Permanent Revolution. It will lead to war with the Soviet Union with Nazi Germany representing the imperialist world. “The crushing of the German proletariat by the fascists would already comprise at least half of the collapse of the Soviet republic.” The Left Opposition (Bolshevik Leninists) held up the banner of Permanent Revolution and campaigned to save the world revolution in Germany. While the Stalinists said Social Democracy must be defeated before fascism can be defeated, Trotsky points out that this cannot be done in time when the fascists are at the point of taking power. It is necessary to oppose social democracy politically but demand a military united front with them against fascism. For those who think that social democracy is no different from fascism, Trotsky points out that:
“In the course of many decades, the workers have built up within the bourgeois democracy, by utilizing it, by fighting against it, their own strongholds and bases of proletarian democracy: the trade unions, the political parties, the educational and sport clubs, the cooperatives, etc. The proletariat cannot attain power within the formal limits of bourgeois democracy, but can do so only by taking the road of revolution: this has been proved both by theory and experience. And these bulwarks of workers’ democracy within the bourgeois state are absolutely essential for taking the revolutionary road. The work of the Second International consisted in creating just such bulwarks during the epoch when it was still fulfilling its progressive historic labor.” (Trotsky What Next? ‘Democracy and Fascism’, The Struggle Against Fascism in Germany’ p. 158-9, Pathfinder edition.)
These historic “bulwarks” of ‘workers democracy’ within capitalism are the victories of the Permanent Revolution and “essential for taking the revolutionary road”. They are “strongholds” and “bases” of the united front.[iii] Trotsky insists that the formation of soviets are on the agenda, “…since the soviets, in themselves, represent the highest form of the united front in the revolutionary epoch, therefore their inception must be preceded by the policy of the united front in the preparatory period.” Trotsky summed up the Bolshevik-Leninist position: “Only on the basis of the united front, only through the mass organizations, can the KPD conquer the leading position within the future soviets and lead the proletariat to the conquest of power.” [iv]
Hitler staged the Reichstag fire in February, 1933, on the pretext of a communist revolution to then make his coup d’état. The SPD cowered before Hitler while the KDP was isolated and impotent. Trotsky called the defeat the worst defeat of the proletariat in history, as the Nazis set about smashing working class “strongholds” and “bases”. By July, 1933, Trotsky was forced to conclude that the Comintern had betrayed the German and world’s workers and that the Left Opposition could no longer reform the Comintern or the Soviet state. A political revolution would be necessary to overthrow the Stalinist bureaucracy and restore workers democracy to power in the Soviet Union. The Left Opposition now had the task of building a new revolutionary international to overcome the historic defeat of the Permanent Revolution, to restore the “bulwarks of workers democracy”, in particular the defence of workers property in the Soviet Union. A fundamental principle of its Transitional Program would be the ‘unconditional defence of the Soviet Union.’
“Only the creation of the Marxist International, completely independent of the Stalinist bureaucracy and counterposed politically to it, can save the USSR from collapse by binding its destiny with the destiny of the world proletarian revolution.” (‘It is Necessary to Build Communist Parties and an International Anew.’ The Struggle Against Fascism in Germany, p. 425, ‘The USSR and the Comintern’)
Spain: Stalinism as the ‘shadow’ of the popular front
Spain was like a laboratory of the Permanent Revolution vs the Permanent Counter-revolution. Stalinism again blocked with the bourgeoisie in the popular front government where it was the ‘shadow’ of the bourgeoisie, since most bourgeois had gone over to the fascists. Stalin took on the role of keeping the popular front respectable to demonstrate to the imperialists they did not need fascism to manage capitalism. To demonstrate the moderation of the Republic, Stalin executed the leaders of the centrist POUM and the anarchists, who, despite being part of the popular front could not guarantee the support of their ranks. Spain was a major defeat for the Permanent Revolution as the weak bourgeoisie collaborated with its ‘shadow’ Stalinism as a ‘left-fascist’ regime inside the republic to smash the revolution in advance of the fascists!
We agree with Trotsky’s application of Permanent Revolution in Spain. Trotsky in Lessons of Spain: Last Warning spells out the program of Permanent Revolution and the failure of the POUM and the anarchists to implement it. It meant fighting fascism independently of the Republican army, at the same time calling for the ranks in the Republican, Stalinist and anarchist unions and militias to break from the popular front. That is our position, whereas the RCIT in numerous examples (Yeltsin, Kosovo, Thailand, Egypt) calls for armed independence of workers, but does not call for the break from the bourgeois popular fronts, or popular front parties, to establish that independence, as a pre-condition of the defeat of fascism.
Trotsky on the other hand states clearly that only the proletarian revolution can defeat fascism:
“The Spanish revolution once again demonstrates that it is impossible to defend democracy against the methods of fascist reaction. And conversely, it is impossible to conduct a genuine struggle against fascism otherwise than through the methods of the proletarian revolution. Stalin waged war against “Trotskyism” (proletarian revolution) destroying democracy by the Bonapartist measures of the GPU. This refutes once again and once and for all the old Menshevik theory, adopted by the Comintern, in accordance with which the democratic and socialist revolutions are transformed into two independent historic chapters, separated from each other in point of time. The work of the Moscow executioners confirms in its own way the correctness of the theory of permanent revolution.” (Lessons of Spain: Last Warning ‘Stalin confirms in his own way the correctness of the theory of permanent revolution’) [Our emphasis]
This is the basis of our criticisms of the RCIT, which defends bourgeois popular front regimes or parties on the basis that they are a ‘lesser evil’ to fascism (or military Juntas or dictatorships). In fact, Trotsky says, no doubt drawing on the lessons of ‘October’ in both Russia 1917 and Germany 1923, that the Popular Front coming to victory in Spain would be “nothing but a different form of military dictatorship on the backs of the workers and peasants.
“Even a complete military victory of the so-called republican army over General Franco, however, would not signify the triumph of “democracy.” The workers and peasants have twice placed bourgeois republicans and their left agents in power: in April 1931 and in February 1936. Both times the heroes of the Popular Front surrendered the victory of the people to the most reactionary and the most serious representatives of the bourgeoisie. A third victory, gained by the generals of the Popular Front, would signify their inevitable agreement with the fascist bourgeoisie on the backs of the workers and peasants. Such a regime will be nothing but a different form of military dictatorship, perhaps without a monarchy and without the open domination of the Catholic Church.” (ibid ‘The Denouement’) [Our emphasis]
In the epoch of imperialism, the popular front is the jailer for the fascist executioner. The proletariat has to break out of jail to stop the execution!
The Second Imperialist War: revolution and counter-revolution.
The Second Imperialist War was a continuation of the First. Like the First, it had revolutionary and counter-revolutionary aspects. The defeats of the workers in Germany before the Stalinist bloc with Hitler, and the Stalinist popular fronts in France and Spain, proved that Stalinism, in the absence of workers property, was the ‘fascism’ of the left. The flag of Permanent Revolution was held high by the 4th International founded in 1938, just months before the final defeat of the Spanish Revolution. The imperialists, who failed to stop Permanent Revolution advancing in Russia at the end of the First Imperialist War, embarked on the Second, with the immediate aim of destroying Germany and its allies and preventing it from expanding its sphere of influence.
But the real enemy remained the Soviet Union and the threat of ‘communism’ in the West. This was an acknowledgement by all the imperialist bourgeoisies, that their mortal enemy was the survival of workers property. Despite the existence of Stalinism as the ‘fascism’ on the left, the unconditional defence of workers property was the main principle of the Permanent Revolution and of the Transitional Program of the 4th International. The Bolshevik stand against imperialist war was an integral part of the strategy of Permanent Revolution, which meant that where an imperialist power was supplying the Soviet Union in the fight against fascism workers did not campaign to blockade or sabotage the aid to the Soviet Union, while refusing to renounce the necessity to turn imperialist war into civil war at home.
The Trotskyists split between those for whom the Stalinists’ political character as ‘fascists’ made them no different to the Nazis, and those who defended workers property in the Soviet Union unconditionally despite the Stalinists. Among the latter there were those who wavered towards the Stalinist/imperialist line that the Nazis were the main enemy. So there emerged pro-Stalinist and anti-Stalinist currents within Trotskyism. This left Trotsky almost alone in adhering to the Bolshevik Leninist program that had been forged out of Marx’s strategy into the weapon of the Permanent Revolution in Russia. With Trotsky’s assassination the 4th International suffered a decline and fall within the space of ten years that left the world’s workers without a revolutionary communist international.
The Soviet Union bore the brunt of the war in Europe with 20 million dead. It was workers’ property that forged the Red Army and the resistance, not the Stalinist caste, which had purged the best generals before the war. Fascism rose up to suppress the revolutionary potential of the Permanent Revolution in the First Imperialist War because the popular front and Bonapartist regimes proved insufficient. Yet it was the Permanent Revolution in its degenerated Stalinist form that defeated fascism. In the process of defeating the German army, the Soviet Union created the satellite states in Eastern Europe, which prompted the US to form NATO and embark on the Cold War to isolate the Soviet sphere and force it into submission. As part of this global struggle, China and then Indo-China fought national revolutions that became Permanent Revolutions with the expropriation of the bourgeoisie and the creation of Degenerate Workers States. We will deal with the counter-revolutionary aspect of the post-war settlement before discussing the revolutionary extension of Permanent Revolution in China and Indochina.
German “bourgeois democracy” in 1945
The RCIT claims that bourgeois democracy existed, however imperfect, in post-1945 [West] Germany:
“However, it would be pure nonsense to claim that after World War II Germany was still without a bourgeois democracy (irrespective of all the democratic deficiencies which, in general, are characteristic of bourgeois democracy as a form of capitalist dictatorship). Again, in the LCC’s mindset, this post-1945 bourgeois democracy in Germany is an irresolvable mystery. Based on their misunderstanding of Trotsky, they would have to deny that bourgeois democracy exists in imperialist Germany, since otherwise Trotsky’s theory of permanent revolution is false!” (RCIT, ibid)
The RCIT knows that bourgeois democracy is a form of capitalist dictatorship. And there is no doubt that bourgeois democracy was restored in the 1945 post-war settlement. The point however, is that it could only be restored on the basis of an historic defeat of the German working class as a result of two imperialist wars, the Great Depression and finally the partition of Germany. Such bourgeois democracy is a bulwark of the counter-revolution. The defence of such bourgeois democratic forms is out of the question. Communists do not participate in elections (post 1989) on the basis of the post-war German Democratic Republic (GDR) constitution, except to use them as a forum for revolutionary propaganda to smash all workers illusions in bourgeois democracy by means of permanent revolution. The same applies to elections in the German Federal Republic (GFR.)
Moreover, there is nothing ‘exceptional’ about the restoration of bourgeois democracy. The RCIT want to explain every instance of the survival of bourgeois democracy as the result of “exceptional circumstances”:
“In reality, of course, Trotsky’s theory of permanent revolution, understood dialectically, is in harmony with the contradictory historical process of class struggle; it is only the LCC’s distorted caricature of this theory which rams its head against the wall. Exceptional historical circumstances – first and foremost the counter-revolutionary defeat of the working class by fascism, the abortion of the revolutionary crisis in Europe and a number of Asian countries by the Stalinist parties, the agreement between imperialism and the Stalinist bureaucracy to establish a reactionary new world order, and finally the post-war boom in 1950s and 1960s – facilitated the creation of conditions in which imperialism could solve, in a distorted manner, one or another of the unresolved democratic tasks.” (RCIT, ibid) [Our emphasis]
The RCIT forgets that, as part of the “counter-revolutionary defeat of the working class etc…which facilitated the creation of conditions in which imperialism could solve, in a distorted manner, one or other of the unresolved democratic tasks”, these counter-revolutions were all made possible by bourgeois democracy, in particular by the popular fronts in one or other form, where Social Democracy collaborated with the bourgeois military and/or fascism to effect these counter-revolutions. These are not “exceptional circumstances” but a series of historic defeats that follow from the victories of the permanent counter-revolution over the permanent revolution that necessarily reflect the balance of class forces between the revolutionary proletariat and the reactionary bourgeoisie. If “counter-revolutionary defeats” are exceptional, the RCIT may as well claim that capitalism itself is “exceptional.”
We will now show how the RCIT’s “democracy” in post-war Western Germany was part of the permanent ‘counter-revolution’, and that the ‘new imperialists’ in the post WW2 period were part of that counter-revolutionary settlement. We saw that in 1918 the defeat of the revolution was at the hands of a ‘disguised coalition of Social Democracy and the bourgeoisie.’ The objective content of ‘bourgeois democracy’ was bourgeois reaction. The imperialists’ collaboration with Social Democracy prevented the Permanent Revolution from becoming a European and even global revolution. When the “pseudo-democratic forms” of counter-revolution in the bourgeois republic failed to stem the tide of revolution, this forced the bourgeoisie to appoint the former wartime Army Chief of Staff, Hindenburg, as Bonapartist president in an attempt to ‘balance’ the classes. This failed when Hindenburg finally made Hitler Chancellor, and Hitler then appointed himself dictator.
What was left of bourgeois democracy in Germany after the Second Imperialist War? NATO drew the line between Permanent Revolution and Permanent Counter Revolution. Germany was divided and the West stood for imperialist counter-revolution against the Stalinist ‘degenerated Permanent Revolution’ in the East. Germany was the most important plug in the dyke to sustain, so the Marshall Plan was necessary. West Germany had to be able to absorb the GDR and reunify on a capitalist basis and sustain a front line status. Today the independence of Germany is clearly displayed as it navigates and projects its power and leverage in the EU, NATO and beyond. Germany of course, never ceased being imperialist. Twice defeated, its bourgeoisie remained in power; its labor aristocracy elevated under conditions of US military occupation.
A fundamental task of the bourgeois revolution is national self-determination. Since 1871 the bourgeoisie have expressed national self-determination as national aggrandisement at the expense of others’ national rights. The partition of Germany in 1945 was a ‘pseudo-democratic’ form of defence of the GDR from “communism.” The task of the international proletariat was to fight for the subjective program of Permanent Revolution, to expose the ‘disguised popular fronts’ of bourgeois governments with Social Democracy, to reunite Germany as a healthy workers’ state, overthrowing the Stalinist regime in the East and the imperialist regime in the West. The “democracy” we stood for in 1945 is straight out of the Transitional Program. For the unconditional defence of East Germany occupied by the Red Army as an extension of the Soviet Union by means of political revolution and world revolution, and the revolutionary unification of Germany as a socialist republic in a socialist united states of Europe.
Subcontracting Imperialism: South Korea and Israel
The RCIT makes a lot of the apparent development of the ‘Asian Tigers’, Taiwan and Republic of Korea (ROK) as capable of emerging as ‘new imperialists’. In fact it cites the ROK as an example of a new imperialist power to disprove our claim that no new imperialist powers could have arisen from semi-colonial status since WW1. We agree that these countries have developed large international corporations that export capital. If that were the only basis on which to determine imperialism, the RCIT might have a case. But other semi-colonies such as Brazil and India also have considerable Outbound Foreign Direct Investment (hereafter OFDI) and yet remain dominated by imperialism. However, in the case of Taiwan and the ROK capitalist development is the direct result of their national oppression as militarily divided and occupied forward bases of US imperialism resulting from its war against China and the DPRK.
Taiwan was formerly Formosa and part of China until Chiang Kai Shek with his Kuomintang entourage defeated by the Revolution of 1949 then retreated to Formosa and founded the bourgeois Republic of China as a puppet of the US. Similarly, the ROK was split off from the North at the 38th parallel by a ceasefire that still remains in existence. South Korea like Taiwan is the result of an imperialist partition of an existing nation in the ‘UN’ sponsored war against the DRPK. These are puppet military outposts of US imperialism. The militarisation of the ROK economy saw the USAID administration overseeing the planning of the economy, in particular the export growth strategy under the Park dictatorship in the 60s and 70s. The US still retains command of both its forces and ROK forces in the event of war arising from its intensifying rivalry with China.
Taiwan and the ROK are therefore not politically, militarily or economically independent bourgeois nations, let alone imperialist nations. Their economies are heavily subsidised by US as virtual security colonies of the US. ROK for example pays the annual equivalent of the cost of one destroyer towards maintaining the 28,500 US occupation forces. Without this special status as US military bases there could be no rapid growth of national capital. While the large Taiwanese and ROK conglomerates are today global multinationals, they could arise only with the aid of massive US economic and military subsidies and control over state planning that made their development possible.
Israel too fits this characterisation of a puppet regime. Israel is not the answer to Jewish national democratic rights since it occupies and oppresses Palestine. It is an armed Zionist state created by Anglo-American imperialism as a gendarme in the Middle East. Since its origins made it dependent on imperialism its finance capital is intertwined with Anglo-American capital and has no separate national existence. Israel’s OFDI as an indicator of imperialism must be offset against decades of heavy military subsidies, military transfers to say nothing of the black box budgets for ‘intelligence’ and military integration with the US military. Israel could not have made a transition from settler-colony to imperialist state for the reason that it cannot escape its subordination to external finance capital. If we subtracted Israel’s dependence on US foreign policy that treats it as a special ‘gendarme’ of US imperialism, then Israel would no longer have the security status that guarantees its high economic performance. In other words we think Israel began as an armed Settler state with Anglo-US finance capital backing, and remains so today.
Israel and the ROK: Comparing FDI and OFDI Stock with Total US Aid
|FDI Stock||OFDI Stock||Total US Aid|
Sources: OECD FDI in figures April 2014 in US$ billions
* Total US foreign aid to Israel 1949-2014 in US$ billions (includes loans) https://www.jewishvirtuallibrary.org/jsource/US-Israel/U.S._Assistance_to_Israel1.html
** Total US Economic and Military Aid, 1948-2012. (Includes US loans but excludes estimates of the economic impact of the US military occupation.) https://eads.usaid.gov/gbk/data/country_report.cfm
The national independence of the ROK and Israel (say nothing of the democracy) would be laughable if the truth of the material cost to the masses weren’t so brutal and sustained. Military and economic subservience may have diminished to some extent but even Israel knows which direction its nuclear bombs are obliged to point and under whose watchful eye they are allowed their “independence”. The ROK also knows damn well that without US imperialism in their corner they are just days away from singing praises to the “Great Leader”. As part of the post-war imperialist settlement with the Stalinists, the primary task in West Germany, ROK and Israel was to elevate and sustain a labor aristocracy committed to the anti-communist task. In the ROK and Israel a semi-colonial bourgeoisie with a counter-revolutionary backbone was selected or elevated itself among the candidates. In all three some social gains were needed to advertise the ‘free market’ to those just across the borders in the DWSs and were reeled out (as least to the chosen ones) and held aloft as propagandist’s examples of how democratic imperialism is benevolent with those who owe their very existence to its sustained military prowess. These states are sustained as military bulwarks based on concessions to a client bourgeoisie and a labor aristocracy (a seat at the imperialist table for the 2nd International, i.e. GFR and Israel) as long as they are committed to their counter-revolutionary role.
China and Indo-China
It was the Permanent Revolution surviving in workers property in the Soviet Union that was internationalised in China and Indo-China as revolutions that overthrew the bourgeoisie and completed the bourgeois revolution in the East. However, as largely peasant revolutions led by Stalinist bureaucracies trained under Stalin in Moscow, the proletariat was never in power. There was never a Dictatorship of the Proletariat. Like the Eastern European states, although not as direct extensions of the Soviet Union, China and the Democratic Republic of Vietnam were ‘degenerate’ at birth. Nevertheless, these states were post-capitalist and represented an advance in the Permanent Revolution as a distorted form of ‘workers democracy’ in the bureaucratised workers councils and peasant communes.
Conversely, the imperialist determination to surround, divide and isolate these Degenerate Workers States (DWSs) in the name of ‘bourgeois democracy’ could not but be a reactionary attack on ‘workers democracy.’ China and Indo-China expropriated the bourgeoisie but could not deepen their Permanent Revolution to advance workers democracy and build socialism because of their isolation from the international working class. That means, as always, that the limits of the permanent revolution are set by the balance of international class forces between revolution and counter-revolution.
This brings us to the last significant retreat in the Permanent Revolution, the world-historic defeat of workers property in the DWSs from 1989 to 1991. While capitalist property was restored and with it a new bourgeoisie, this counter-revolution was incomplete as it failed to destroy the legacy of the unfinished Permanent Revolution. That legacy was the economic independence of Russia and China in the lifetime of the DWSs that advanced the forces of production beyond that possible in a capitalist semi-colony. That means that the legacy of the workers states was not wiped out by the restoration of capitalism and imperialism was not able therefore to reduce the former workers states to the status of semi-colonies. As a result, the Cold War ended not as an outright victory for US imperialism and its allies because they were not able to break up and plunder the former workers states and destroy their capacity to accumulate capital in their own right. Only then can we properly understand why the rise of Russia and China as imperialist states was possible, and that capitalist semi-colonies cannot complete their bourgeois revolution without the Dictatorship of the Proletariat. As we have seen above, Taiwan, South Korea and Israel are not independent imperialist states, but proxies of Anglo-US imperialism.
1989-91: the ‘democratic counter-revolution’
1917 marked the most historic advance in Permanent Revolution. Despite all setbacks, from Germany 1917-23 and 1933 and the defeats of depression and war, revolution expanded as workers property in the post-war DWSs. So long as workers property remained, the major gain of 1917 was undefeated. Trotsky made unconditional defence of the Soviet Union the fundamental plank of the 1938 program. But the 4th International failed to survive as a healthy international. And the Stalinist bureaucracy could not sustain growth, as the failure of planned production not under the democratic control of the workers inevitably led to economic stagnation. Both Stalinism and pseudo-Trotskyism succumbed to restoration via the democratic road. By the late ‘80s a bourgeois restorationist faction of the bureaucracy was introducing market reforms and bourgeois democratic reforms. Another faction based on the military command recognised the need to restore capitalism but opted for the slow ‘Chinese’ road. Now unconditional defence of the Soviet Union and workers property required the political overthrow of both wings of the bureaucracy.
Trotsky in the ‘30’s had foreseen the possibility of capitalist restoration taking the form of a ‘democratic counter-revolution’; that the main factor in the defeat of workers resistance to capitalist restoration would be their acceptance of the illusions of bourgeois democracy.
“Trotsky did not and could not foresee the actual way in which the bureaucratized workers’ states were destroyed fifty years later. Trotsky predicted correctly that if restoration would take place in his time (1930’s), it could succeed primarily with the brutality of fascism and civil war. But, brilliantly, he did not exclude in his writings the possibility that capitalism would be restored principally by the instruments of bourgeois” democracy”. At that time (the 1930’s), the Soviet masses were willing to give their life for socialism. Illusions in bourgeois democracy were barely in existence. But to succeed in its restorationist project, bourgeois democracy needs to get active support from some sectors of the broad masses – this was out of the question in the 1930’s. It was clear that the masses would not have tolerated bourgeois democracy and they were willing to actively resist restoration… The betrayal of the working class by social democracy and Stalinism in Western Europe brought about one the quietest decades of the class struggle (the 1980’s). This combined with the total capitulation of the Stalinist bureaucracy in the East, convinced imperialism and is agents to proceed with the creation of bourgeois parliaments and elections as the safest way to take state power. Thus the creation of such bourgeois bodies was a central step in the restorationist process.” (Introcor, Special Issue, LO Fete, 1993)
In the Spring of 1990 the first major test of unconditional defence of the DWSs was the re-unification of Germany. The LRCI demands were correct; unconditional defence of the GDR, political revolution in the East and socialist revolution in the West, and reunification of Germany as a socialist republic in a socialist united states of Europe. To win, workers must build workers’ councils and workers’ militia and convoke a “…congress of workers’ councils as the organ of state power of a German Workers’ Republic!” There was no mention of bourgeois parliaments or political parties to contest elections except to fight them with the institutions of ‘workers democracy’:
“If however, the bureaucracy is obliged to call parliamentary elections then we call for workers to call prior mass meetings to select their candidates and to hear the candidates of all parties. The workers should demand annual elections and deputies who are recallable by their constituents. They should demand of all candidates a pledge to defend statified and planned property. By these means the fraud of bourgeois parliamentarism can be exposed, its dangers minimised and the principles of the system of workers’ councils fought for.” (‘The Political Revolution in East Germany’, Trotskyist International, 4, Spring, 1990)
Of course the outcome was decided by the betrayals of the Stalinists to imperialism and the pseudo-Trotskyists incapable of unconditional defence of the DWS. Despite the LRCI’s correct line, there was no revolutionary party with influence on the masses able to offer a revolutionary alternative to the ‘democratic counter-revolution.’ In October, 1990, the new East German section of the LRCI condemned the cynical use of bourgeois democracy by the imperialists and the Stalinists to fool the workers:
“The speed of the reunification and the brutal form of the Anschluss of the GDR, which contradicted the democratic pretences of the Federal Republic’s own constitution, has forced the helpless and confused left to the sidelines of events…[the PDS] proposed alternative to Kohl’s unification of the two states – a referendum on the draft constitution drawn up by the Round Table – was trapped completely within the logic of bourgeois parliamentarism.” (‘Germany, united fatherland…’ Trotskyist International, 5, autumn, 1990, not online)
Why then, after such a spirited fight for workers democracy against bourgeois democracy in the German reunification, did the LRCI abandon the central plank in the Transitional Program in Russia a year later to align itself with a bourgeois restorationist faction of the bureaucracy lead by Boris Yeltsin? To explain this we develop the argument that we first put forward as the Proletarian Faction in the LRCI in 1995 to explain why instead of fighting the democratic counter-revolution, the LRCI joined it.
For all Dave Hughes’ knowledge of the Soviet Union, the break from Cliffism to orthodox Trotskyism in the mid-1980s proved incomplete. The Degenerated Revolution, which resulted from Hughes’ analysis of the workers states contained a basic flaw hidden in its method. The Soviet Union was conceived as an isolated DWS in which the main contradiction was between the Stalinist bureaucracy and workers’ (statified) property. For Trotsky the main contradiction was between workers property and global capitalism. The bureaucracy was a secondary or mediating contradiction and thus could be removed by a political revolution. This contradiction was represented in the separation of a ‘bourgeois state form’ and ‘statified property’.
The flaw in method emerged when the crisis of the workers states in E. Europe blew up in the late ‘80s. This disoriented the LRCI as the road to restoration proved not to be ‘civil war’ but “peaceful counter revolution.” The LRCI faced up to this fact with the German Anschluss, but lost its way in the Soviet Union when it confused bourgeois democracy and workers democracy. The LRCI began to talk of “democracy” in the abstract when describing the mobilisation of workers organisations against the Stalinist bureaucracy, suppressing the fact that behind this “democracy” was the main enemy, imperialism.
The IEC Resolution on the world situation in July, 1990, (section on “The Death Agony of Stalinism in the degenerated workers’ states”) refers to the “coming revolutionary crisis” in the USSR:
“The USSR is moving rapidly towards a revolutionary situation. This is shown by the mounting economic shortages, the mushrooming of independent workers’ organisations and the results of the Spring 1990 local elections which saw wholesale defeats for party candidates…[t]he oppressed nationalities, the civil rights activists and the working class have all taken action in defiance of [Gorbachevs] decrees. The workers are fighting for their democratic rights, for free trade unions, freedom of assembly, the right to strike, for improvements in wages, for greater equality, and against bureaucratic corruption. The foundation of an independent miners’ union and of the Confederation of Labour representing millions of Soviet proletarians, opens a whole new phase of the crisis.” [Our emphasis]
Already a year before the Yeltsin coup, we see that the LRCI ‘contradiction’ between Stalinism and statified property is manifest as workers fighting for bourgeois rights against the Stalinists. This is not the continuation of the permanent revolution by means of workers democracy – that is, workers organs of struggle independent from capital, but bourgeois ‘free’ trade unions, right to strike, equality, etc., of capitalist democracy; not workers democracy, but the ‘democratic counter-revolution’ independent from the Stalinist bureaucracy – the now familiar democratic imperialist program of the ‘colour revolutions’. What we see here is the secondary contradiction displacing the main contradiction in an historic showdown within the ‘bourgeois’ state apparatus between fascism (Stalinist dictatorship) and democracy (workers control) disguised as the defence of workers property.
In the IEC Resolution on East Germany in July, 1990, we also find the LRCI leadership redefining Trotsky’s ‘unconditional defence of the Soviet Union’ as a conditional defence:
“Within the strategy of political revolution a vital distinction had to be drawn between defence of the post-capitalist property relations –obligatory for all Marxists – and illegitimate defence of the bureaucratic state apparatus, which was the principle enemy of the working class within the GDR; failure to make this distinction lay at the heart of the impotence of the left wing opponents of the state. It led the majority of those who genuinely wanted to prevent the restoration of capitalism into identifying mass mobilisations against the regime principally as attacks upon the property relations. By the same token, it also led them to see in the state apparatus a potential means of defending those property relations.” [Our emphasis]
The LRCI’s origins in the Cliffite tendency come back to the surface. For Trotsky ‘unconditional defence’ meant despite the bureaucracy, not against it. The bureaucracy is not the ‘main enemy’. This is a caricature of Trotskyism. As soon as you say the Stalinists are the main enemy you make ‘democratic imperialism’ the “lesser evil” to the Stalinist dictatorship. Then you begin to swim with the tide of workers who also see the Stalinists as the main enemy and begin to adapt to bourgeois democracy as the means of defeating the Stalinists. The failure of the left to fight for workers democracy is the failure of revolutionary leadership to stand firm on ‘unconditional defence’ as the main plank of the permanent revolution. Having only recently broken from state capitalism, the LRCI reverted to its flawed method, bending under the pressure of democratic imperialism and the influence on the E. German masses against the ‘main enemy’ Stalinism, subordinating ‘workers democracy’ to ‘bourgeois democracy.’ The logical endpoint of this Anschluss in the LRCI program was its capitulation to Yeltsin’s restorationist popular front in August, 1991.
The International Secretariat Resolution “The USSR at the Crossroads” adopted in February, 1991, already made clear that Yeltsin is moving to rally the pro-market forces in the Soviet Union..:
“Although the radical marketisers are excluded from the inner Bonapartist clique around Gorbachev, they still have positions of mass influence. Yeltsin and company were able to mobilise mass demonstrations in Moscow and other cities against the clampdown in Lithuania. Middle ranking officers and senior commanders in the army have expressed support for Yeltsin. He remains the most well known and popular alternative figure to Gorbachev. Gorbachev’s plebiscite on preserving the USSR and accepting the new Federation proposals will be a major trial of strength. Yeltsin’s own referendum for a popularly elected Russian and all-Union Federation is aimed at mobilising mass support and giving himself a “democratic mandate” to defy Gorbachev. Together with the Baltics, the western borderland republics and the Caucasus, the Russian Federation still presents a major obstacle to the conservatives.” [Our emphasis]
Nevertheless “Independent class forces will be obliged to defend…their democratic freedoms…alongside Yeltsin…”
“The final outcome will rest upon the attitude of the masses in general and the soldiers in particular. The working class has no interest in the triumph of either side in this debate between bureaucrats. Its historic and immediate interests lie in the preservation and extension of democratic freedoms and the nationalised and planned property relations. Independent class forces will be obliged to defend these liberties alongside Yeltsin and company, whilst not for one minute supporting the Yeltsinites’ seizure of power. On the other hand independent class forces are obliged to defend the statified economy alongside the conservatives whilst not for one minute abandoning the objective of overthrowing them.” (ibid. [our emphasis])
In the event of the conservatives’ coup 6 months later in August, the LRCI stood alongside Yeltsin defending ‘bourgeois democracy’ while refusing to back the coup because it was directed at the bourgeois democracy of the pro-market forces! The only position for revolutionaries in that situation was to defend the Red House in a workers’ united front to restore workers democracy by rebuilding the soviets independently of both the bureaucracy and the restorationists to defend workers property unconditionally. The RCIT continues to defend the LRCI position of a ‘conditional’ defence of workers’ property, that condition being that it will not bloc with Stalinists to defend workers’ property, while it will bloc with the bourgeois democrats aligned to imperialism! The fact that the LRCI saw the demise of Stalinism as a victory opening the road for workers to defend workers property explains its characterisation of the period as a “revolutionary period, counter-revolutionary phase.” For them, there was no world-historical defeat so long as the ‘main enemy’ was defeated, and the proletariat could live to fight for political revolution. For the LRCI and RCIT today bourgeois democracy was and is the ‘lesser evil’ to Stalinist ‘fascism’ and not a betrayal of permanent revolution.
From Permanent Revolution to Bourgeois Democracy
We have undertaken to trace the Epoch of permanent revolution beginning with Marx’s conception, including the three aspects isolated by Trotsky in his analysis, documenting the balance of forces for and against Permanent Revolution from 1871 through all the significant advances and retreats up to the present, and projecting its final victory in the future communism. We argued that from 1850 the task of developing the forces of production became the task of the proletariat. From that point the bourgeoisie became a reactionary class. In particular, bourgeois democracy was a reactionary class ideology that objectively formed a bulwark to revolutionary class consciousness and permanent revolution as the strategy of the proletariat playing its historic role as the revolutionary class capable of developing the forces of production.
We argue that the RCIT does not see the bourgeoisie as a completely reactionary class, and moreover does not see bourgeois democracy as a barrier to permanent revolution. In fact it argues that by defending bourgeois democracy the proletariat can “assist” the bourgeoisie to develop the forces of production. For us, this is the basis of Menshevism, where the proletariat plays an “auxiliary role” (in popular fronts) in completing the bourgeois democratic revolution to prepare the conditions for socialist revolution. Menshevism as a revisionist ‘evolutionary’ Marxism is a capitulation to social imperialism under pressure from the imperialist bourgeoisie.
The root of this revision is the RCIT conception of bourgeois democracy. We trace this to an incomplete split of the MRCI/LRCI from the state capitalist Cliffite SWP (Britain) in 1975. Trotsky explained that state capitalism was rooted in petty bourgeois Stalinophobia, which rejected dialectics and revived the split between state and society of bourgeois ideology. In the crisis of 1991 the LRCI reverted to its roots and blocked with the bourgeois restorationists against the Stalinist bureaucracy. The RCIT has never repudiated this betrayal by the LRCI and this is shown in its current defence of bourgeois democracy, reinforcing illusions in popular fronts and popular front parties.
We have seen that bourgeois democracy was only conceded by the bourgeoisie when forced by fear of socialist revolution to contain the revolution with “pseudo-democratic forms” that combined parliament backed by the bourgeois army. Bourgeois democracy traps the proletariat in the fetishised ideology of exchange relations, masking unequal production relations reproduced daily in the workplace and reinforced by the labour bureaucracy and Social Democracy inside or outside the popular fronts with the bourgeoisie and its “shadow” the Stalinists. Therefore, from the Paris Commune onward, to escape its exploitation, the proletariat has always sought to destroy the objectively counter-revolutionary bourgeois democracy by opposing to it a subjective workers democracy, implicitly and explicitly challenging the social relations that underpin the former with the strikes and occupations, councils, communes and armed insurrections of the latter.
However, this revolutionary subjectivity cannot transcend the reactionary objectivity of bourgeois democracy unless it becomes class-conscious. It has to break from fetishised bourgeois ideology that limits consciousness to the “class-in-itself” of labour subordinated to capital, to “class for-itself” as represented by the revolutionary party. Only the active intervention of the revolutionary party can transcend the bourgeois democratic and immediate demands of the old minimum program by means of the transitional method of the Transitional Program. That is why the strategy of Permanent Revolution is the method of the Transitional Program.
LCC, 13 June, 2015
[iii] “No common platform with the Social Democracy, or with the leaders of the German trade unions, no common publications, banners, placards! March separately, but strike together! Agree only how to strike, whom to strike, and when to strike! Such an agreement can be concluded even with the devil himself, with his grandmother, and even with Noske and Grezesinsky. On one condition, not to bind one’s hands.” (Trotsky, The Workers United Front against Fascism, ‘We Must Force the Social Democracy into a Bloc Against the Fascists’).
Trotsky refers to the Bolshevik policy towards Kerensky in 1917 where the Bolsheviks formed a military bloc with Kerensky against Kornilov, simultaneously exposing and splitting Social Revolutionary and Menshevik workers from its bourgeois leadership. Does this make Kerensky the “lesser evil”? No, the “democrat” Kerensky is no less a counter-revolutionary than the “reactionary” Kornilov but a military bloc can unite the workers against Kornilov and prove this fact to those who have illusions in the popular front government. In the event Kornilov was defeated, Kerensky was exposed as conspiring with Kornilov to smash the revolution, and shortly after the Bolsheviks won a majority in the Soviets to stage the insurrection.
[iv] “Verbal genuflections before the soviets are equally as fashionable in the “left” circles as the misconception of their historical function. Most often the soviets are defined as the organs of struggle for power, as the organs of insurrection, and finally, as the organs of dictatorship. Formally these definitions are correct. But they do not at all exhaust the historical function of the soviets. First of all they do not explain why, in the struggle for power, precisely the soviets are necessary. The answer to this question is: just as the trade union is the rudimentary form of the united front in the economic struggle, so the soviet is the highest form of the united front under the conditions in which the proletariat enters the epoch of fighting for power. The soviet in itself possesses no miraculous powers. It is the class representation of the proletariat, with all of the latter’s strong and weak points. But precisely and only because of this does the soviet afford to the workers of divers political trends the organizational opportunity to unite their efforts in the revolutionary struggle for power. In the present pre-revolutionary environment it is the duty of the most advanced German workers to understand most clearly the historical function of the soviets as the organs of the united front…The Social Democracy and the Communist Party divide in Germany the influence over the working class. The Social Democratic leadership does its best to repel the workers from itself. The leadership of the Communist Party strives with all its might to counteract the influx of the workers. As a consequence we get the formation of a third party and a comparatively slow change in the correlation of forces in favor of the Communists. But even if Communist Party policies were entirely correct, the workers’ need for a revolutionary unification of the class would have grown incomparably faster than the preponderance of the Communist Party within the class. The need of creating soviets would thus remain in its full scope. The creation of the soviets presupposes that the different parties and organizations within the working class, beginning with the factories, become agreed, both as regards the very necessity for the soviets and as regards the time and methods of their formation. Which means: since the soviets, in themselves, represent the highest form of the united front in the revolutionary epoch, therefore their inception must be preceded by the policy of the united front in the preparatory period.” (What Next: vital questions for the German Proletariat. Section 8 ‘Through the United Front to the Soviets as the Highest Organs of the United Front’)
If one thing unites the left of all shades right now its a sort of satisfaction that the market has been shown to fail dramatically if not yet apocalyptically. On the left there are broadly three responses. The first is social democratic or Keynesian, of which Krugman, Henwood or Monbiot are examples. The second is radical, such as that of the Monthly Review School and many others who call themselves ‘socialist’, and the third is what I would call classic Marxist; Marx, Lenin and Trotsky of course, but also others like Paul Mattick who lived through the 1930s depression, David Yaffe in the 1970s and Anwah Sheikh today. We can call these standpoints Keynesian, Radical and Marxist for short. Each has a theory of how the capitalist economy works and as a result a theory of crisis and crisis solutions. All three are attempts to rectify what they see as the shortcomings of neo-classical, or what Marx called vulgar, political economy.
As Mattick notes (in Marx and Keynes p.20) Keynes was hardly a revolutionary. In fact he could be said to have “partially” returned to the classical theory of Adam Smith in which labor produced value. Keynes did not think that the market could establish an equilibrium between consumption and production without state intervention. Say’s Law that supply creates demand did not work in reality and capitalists would tend to hoard rather than invest in production to meet demand. Only the intervention of the state to boost consumption would stimulate production, and that too would have to be pump primed by state investment to start.
For Keynes then the business cycle was a thing of the past and could be eliminated by judicious state policies to balance consumption and production. This does not mean ideally building pyramids in Eygpt or military expenditure, since these do not normally increase workers incomes and consumption. Keynes policies were designed to transfer income from the savings of employers to the consumption of workers. This is why social democracy has seized on Keynes and applied it where possible, drawing on the lessons of the New Deal and Labour Governments in UK, Australia and NZ.
A good example of that is George Monbiot’s call for a return to Keynes.
Today the response of social democrats to the financial crisis is to jump at the opportunity to redirect social spending at increasing the incomes and hence consumption of workers. However the sheer scale of the crisis has taken them by surprise and they have been overwhelmed by the banks and goverments spending pontentially many trillions of dollars to stave up the collapsing financial system. Calls for social spending on jobs, wages and consumption have been lost in the rush to bail out the banks.
Social democrats have a problem. They know that state spending on the banks and big corporates does not necessarily mean more production since there is no matching consumption. The bailing out of the banks could end up being hoarded. The logic of Keynesianism is therefore to take ownership of the banks or to found state banks to ensure that productive investment takes place. This however would end up in the state regulating and even owning production itself. Yet social democrats have not seized the time to demand complete nationalisation of the economy. Why is this?
One interesting comment is from Steve of Marx Redux Blog
Henwood in my view is not a Marxist, but a left Keynesian. His claim that “If the credit markets could not function properly, the economy would grind to a halt and cause immense suffering to those who could least afford it” is clearly false, since it is being shown to us every day since August 2007 that the intermediation of the “credit markets” can be replaced by the direct financial intermediation of the state. Unfortunately, actual state intervention is being perverted into intermediation for the purpose of preserving the position of the financial sector in the economy rather than for the benefit of the economy as a whole, not even for the benefit of capitalist sectors excluded from the charmed circle of military-financial parasitism, much less for the rest of the population.
But since state intervention IS occurring on a massive scale in full public view (if except for the details of the diversion of enormous sums from the U.S. Treasury), why not call for direct state intermediation NOW (Doug!) and cut out the middleman who, after all, precipitated the crisis. These “too big to fail” operations should, of course, be taken over, shutdown, broken
up, their officers imprisoned and the remainder restricted to public utility functions.
But no, Henwood can’t even bring himself to support this minimal reform because there is no “realistic” chance of it occurring. But it is precisely this diversionary hijacking of the Treasury that will now be an immense barrier to any US economic restructuring that would constitute a “way out”
of the crisis, even in narrow capitalist terms. Henwood in his call to support the AIG bailout therefore is calling for a worsening of mass misery, not its alleviation. Henwood refuses to see that the immediate PROBLEM is that the advancement of “future wages” in the form of credit in lieu of actual wages earned (and actually stagnant and declining) – the “Payday Loan Economy” – has exhausted itself at the point where significant sectors of workers no longer earn actual wages to minimally pay the interest on this credit, resulting in a profit crisis for finance and a massive devaluation of financial capital. Reinflation of the balloon will not address this fundamental contradiction.
Doug’s call is now directly opposed to what should now be called for: the reversal of the Treasury hijacking. Realize a stanza of the International: “That the thief return his plunder”. Without that there will be no class struggle over where these funds should be going: in essence to bail out the capitalists or the workers. They will all be gone down the financial rathole. Instead this is the line at present in the class struggle and once
again Henwood is to be found on the other side of the front line as it presently stands.
This comment is interesting as it confirms the views of radicals and Marxists that the social democrats franchise is not to expropriate capital, merely to reform its workings. Radicals are summed up by the line from the Internationale: capitalists “steal” their profits from workers and the task is to take it back. But both radical and Marxists agree that Keynesian policies are designed to rescue capitalism from a crisis of excess capital by boosting consumption, not take over the banks and corporates. For that would be socialism!
The radicals objection to neo-classical equilibrium theory goes beyond a rejection of Say’s law. Radicals argue that the accumulation of wealth in the hands of the ruling class is at the expense of the impoverishment of the working class. This theory goes back to a radical reading of David Ricardo the best political economist before Marx came along. Hence as wages are kept down to maximise profits, underconsumption is a chronic condition of the market and cannot be simply corrected by Keynesian policies. Because normally the ruling class controls the state boosting of jobs and incomes is always subject to their resistance to funding such a redistribution adequately. Of course radicals support Keynesian policies but say it is necessary to go further to nationalise the means of production so that it can be planned to meet the needs of consumption.
Again, as with social democracy, the capitalist state is the instrument of this radical reform. Just as the welfare state redistributes income to boost consumption in the Keynesian system, the radical advocates state investment in industry to plan production. Thus the radical response to the current crisis is to push the state intervention to support the banks and corporates further to public ownership and control of finance and industry.
For the Monthly Review School and many others including Robert Brenner and Noam Chomsky, public ownership of finance and industry would overcome the basic cause of the failure of the market – the tendency for capitalists to hoard their wealth unless they can drive down wages and conditions sufficiently to justify further investment. The social democratic solution is no solution for them because taxing their profits to pay a social wage prevents wages falling and profits rising.
Given that understanding radicals go to the ‘root’ of the problem as they see it, the cause of inequality itself, the unequal exchange between capitalist and worker when the capitalist buys labour power below its real value. In the place of the capitalist the state steps in and in the name of the democratic people creates an equal exchange between labour and state capital.
There is therefore no shortage of radicals calling for state bailouts of the banks to go further then state shareholding to complete nationalisation and control of the banks. Similarly, as big corporates like Ford, General Motors and Chrysler start to fall over, the call is for these firms to be nationalised.
This call is now being made as the banks being bailed out by the taxpayers (whose taxes draw on future labor) refuse to themselves bail out bankrupt firms. Example: Republic Windows in Chicago occupied the plant to get their redundancy from the bailed out Bank of America. They won and are now reemployed by a new boss. What is at issue here is workers using direct action to force the employer to shell out some of the public bailout money. Its about getting what is ‘fair’ and not about workers control of production!
While workers limit their actions to pressure the nationalisation of the banks however, their political solution to the financial crisis does not go beyond the nationalisation of money. Marxists call this radical theory of capitalism ‘utopian socialism’ as in Marx’s critique of radical Ricardians and in particular of Proudhon.
Marxism was a development of classical political economy, so Keynes return to Smith and the radicals return to Smith and Ricardo, are a return to a pre-Marxist political economy. Keynes system is a redistribution of income towards the social wage. It assumes equal exchange as did Smith. Radicals assume unequal exchange after Ricardo and want the state to intervene to equalise exchange. Marxism critiques both these theories as limited by the level of analysis.
Marxists critique Keynesians as theorists of capitalist distribution. To illustrate this lets look at one ex-Marxist, James Heartfield, who has moved from Marx back to Keynes. Ironically, Heartfield was once a member of the British Marxist Revolutionary Communist Party that was founded on the economic analysis of David Yaffe who was heavily influenced by classic Marxists Paul Mattick and Henryk Grossmann.
In a recent article Heartfield claims that the current crisis has nothing to do with a crisis of overproduction, but rather a ‘subjective’ psychological aversion of capitalists to productive investment that has led to speculation. Heartfield argues that a crisis of overprodution results from the TRPF and while the crisis of the 1960s could be seen as such, today the crisis originates in the sphere of finance.
Steve of Marx Redux again has pointed to the arguments against this that Heartfield must be aware of.
Of all the cases Heartfield could have chosen to illustrate supposed ‘subjectivism’ (aka psychologism), he made an unfortunate choice.
There is absolutely nothing novel about the burgeoning of finance and its attempts to distance itself from capitalist production. The case of the money market is *precisely* the one which Engels uses in his classic letter to Schmidt (Oct 27 1890) about historical materialism to discuss the relative independence of certain social developments from production – without ever having to resort to a deus ex machina or any form of idealism.
His account of the reception of Mattick’s ‘Marx and Keynes’ is ignorant – it was one of Merlin Books’ Book Club choices and was widely read and debated on the British left in the ’70s. Mattick remarks:
‘A depression may “sneak” into existence by a gradual slowing down of economic activity, or it may be initiated by a dramatic “crash” with sudden bank failures and the collapse of the stock market. The crisis itself is merely the point at which the reversal of business conditions is publicly recognized. … Even the last phases of the boom preceding the crisis are, viewed in retrospect, already unprofitable; but recognition of this fact has to await the verdict of the market. Commitments made on the assumption of a continuous upward trend cannot be met. The conversion of capital from commodity to money form becomes increasingly more difficult. The crisis of production is at the same time a financial crisis. The need for liquid funds and the attempt to avoid losses intensify the fall of securities and commodity prices.’ p84.
As for copy-editing Grossman, Heartfield seems to have skipped several pages, at the end of Chapter 3, where Grossman clearly, if briefly explains how the expansion into finance is actually a consequence and symptom of overaccumulation!
‘I have shown how the course of capital accumulation is punctuated by an absolute overaccumulation which is released, from time to time, in the form of periodic crises and which is progressively intensified through the fluctuations of the economic cycle from one crisis to the next. At an advanced stage of accumulation it reaches a state of capital saturation where the overaccumulated capital faces a shortage of investment possibilities and finds it more difficult to surmount this saturation. The capitalist mechanism approaches its final catastrophe with the inexorability of a natural process. The superfluous and idle capital can ward off the complete collapse of profitability only through the export of capital or through employment on the stock exchange.’ p 191 and so on for pages.
As an alumni of the RCP, Heartfield seems to have forgotten, probably for good reason, ‘RC Papers’ tedious attack on Yaffe and Bullock’s ‘Inflation, the Crisis and the Post-War Boom’.
There, several pages (22-26) describe in detail exactly the evolution of the financial crisis showing how it comes about precisely because of the constraints imposed by overaccumulation! Although developed to explain the limits on state expenditure (since Keynesianism was still the dominant economic ideology) the article is virtually a tutorial on the relationship of Marx’s theory of credit to his theory of overaccumulation, and can readily be used to understand the current financial crisis.
Heartfield is clearly well aware of these three sources which refuted him in advance. Yet he either fails to mention them or gives the impression that they don’t address the issue of the connection of the financial crisis with overaccumulation.
So, on these long cold dark winter nights, drawn up a chair close to the fire, pull down volume three and take another gander through parts 4 and 5, perhaps with some help from Yaffe and Bullock, the latter end of Grossman’s chapter 3, and Mattick’s analysis of the Great Depression, all conveniently online … and reassure yourself that things are undoubtedly going to get worse – thanks to the overaccumulation of capital, not to the fleeting whims and tastes of capitalists.
Not only does Heartfield abandon classic Marxism he arrives back at the distributional analyis of Keynes. Heartfields psychological causes of speculation are exactly the same as Keynes reference to ‘animal spirits’ of capitalists who choose to hoard rather than invest productively. It is the same failure of will on the part of the capitalist who ‘chooses’ to hoard or speculate. The thing about hoarding is that money inevitably loses value, speculation however creates the a fictitious value to disguise the loss of value. All that is needed is another dose of Keynesian state discipline to force the weak minded bosses to invest or else be punished by high taxes that the state will use to invest and reflate the economy. Like making spoiled children behave really. Problem is that the spoiled children do not want their toys taken off them, and rather than lose them they will destroy them.
James Petras has come out condemning the resurgence of the radical right in Latin America. He blames the centre-left for failing to make inroads into ruling class power and instead acting like they were neo-liberals, balancing budgets and protecting the interests of international capital. Well, this is exactly what the history of Latin America is all about, the middle class co-opting the unruly masses into popular fronts until the right has had time to reorganise its strength and re-asserted its political rule.
The title of Petras article is the ‘Paradoxes of Latin American Development’. But there is nothing paradoxical about the phenomenon he observes. It is very clear. Center-left governments are bourgeois governments and will not seriously challenge private property. They are actually popular fronts designed to coopt the ‘left’ -workers and poor peasants -into the center, and stop it from taking power. But in order to convince workers that popular fronts can solve their problems, left wing parties must actually claim that the center-left is ‘socialist’. The more revolutionary the workers and poor peasants are, the more apparently ‘revolutionary’ must the left wing of the popular front be to succeed in deceiving the workers.
Petras should know his history. In the very country where the popular front has been most successful, Bolivia, all of its features are well known. The most revolutionary vanguard in Latin America’s history, the miners who adopted the Trotskyist Theses of Pulacayo and led the 1952 national revolution, could only be diverted from revolution by a so-called Trotskyist party – the POR Lora.
Instead of calling for a workers’ government in which the bourgeoisie and petty bourgeoisie would have no place, the POR Lora labeled the MNR bourgeois government ‘petty bourgeois’ and said that it could be controlled by the miners by appointing more miners as ministers in the to government. The result was that the bourgeoisie were able to recover their power and drive back and defeat the revolution over the next decades.
In Bolivia today, a new popular front, that of Morales and Linera is backed and kept in power by the same POR Lora and other fake Trotskyists, as well as by Castroite union leaders. Meanwhile, the workers and poor peasants who are willing and ready to fight are kept isolated and diverted from mobilising while the center-left organizes yet another referendum and the right is freely attacking workers and organising to secede with 80% of the nation’s resources.
The problem is that Petras doesnt want to know this history because he advocated a vote for Morales in 2005 deceiving the workers and poor peasants who had forced Mesa to resign and the government to flee from La Paz to Sucre, and trapping them in the Morales/Linera centre-left popular front that he now condemns. This is because Petras does not acknowledge centre-left governments as popular fronts. He sees them as governments that can be pressured to the left by social movements and the unions who join such governments demanding ministers and policies that require strong measures to limit the power and wealth of the ruling class.
So instead of owning up to his own popular front politics for helping to bring about the reactionary situation in Bolivia today, Petras must always ultimately blame the masses for failing to put enough pressure on the popular front to force it to attack the right instead of doing deals with it. Petras feels particularly aggrieved at the moment, because having worked so hard to get all these center-left regimes in power, they are all betraying him. He has, rightly, condemned Chavez for calling for the disarmament of the FARC. It is time that Petras recognised that his politics are bankrupt because they rely on popular fronts and an exchange theory of capitalism.