Socialist Studies Socialist Studies

Socialist Party of Great Britain - Camden and North West London Branches SPGB Lectures - (1970).

Held at Marchmont Community Centre, Marchmont Street, Camden, London

The Socialist Party of Great Britain and Russian Capitalism

Introduction

This lecture is on the subject of Russian capitalism. The conception of Russia as a capitalist country from 1917 to 1970 is a conception not foreign to members of the Socialist Party of Great Britain.

In 1917 the Socialist Party of Great Britain took the view, put it in writing and have used it in our propaganda ever since that it was absurd to believe that in 1917 that Russia could become Socialist. No other line of development was possible for Russia than to become a capitalist state where commodity production took place for profit through the exploitation of the working class.

We will begin with a potted history of Russia. In 1918 Lenin was foolishly telling the workers that what they needed was State Capitalism. 52 years later this is exactly what Russia has got.

A lot of events have occurred between these two dates but the basic proposition that Russia, today, is capitalist, remains true.

Look at the appearance of the thing. The media, academics and politicians, both friends and enemies of Russia alike, refer to the country as “socialist” or “Communist”. How then, can the Socialist Party of Great Britain justify its position for being so out of step with these people?

The Socialist Party of Great Britain being out of step with those who refer Russia as Socialist or Communist requires no apology. What the SPGB is saying to workers is that if you think there are a number of Socialist/Communist parties in the world and the SPGB is just but one of them then you have made a mistake. The SPGB has a Socialist objective and principles that single the Party out from these other organisations’ outlook and attitudes.

The Socialist objective of the Socialist Party of Great Britain has been, since 1904, has to been the establishment of common ownership of the means of production and distribution by all of society. Our political activity is to see the formation of a Socialist majority in the world and for this majority to consciously and politically abolish capitalism. Nothing short of this objective and political activity will do.

The only way in which the working class can abolish poverty, war and unemployment, which is caused by capitalism, is to abolish the private ownership of the means of production and distribution and introduce production and distribution by and for the whole community. And this involves abolishing the market, the price mechanism, buying and selling commodities, wages and the wages system. We take the same view as Marx that workers should “abolish the wages system”.

The future of humanity requires the abolition of capitalism and for the profit system to be replaced with a Socialist system in which production takes place solely for use. Socialism will be a system where goods and services are produced solely for the purpose of meeting human need.

Nationalisation is not Socialism

Let us look further at the difference between the socialist party of Great Britain and other political organisations.

The question of nationalisation brings out the central difference between the Socialist Party of Great Britain and other political parties. The Liberals and the Tories all advocated and backed nationalisation policies before Lenin came to power. The Socialist Party of Great Britain is alone in this country that it has never supported nationalisation. The rejection of nationalisation by the SPGB pin points the difference between us and the modification of capitalism by the so-called left-wing parties who claim to be Socialist or Communist.

There is of course the case of the Labour Party and nationalisation and who pay lip service to being Socialist but refer to themselves increasingly a “Social Democrats”. Do workers ever believe that when the Labour Party referred to itself as “Socialist” and when Labour governments nationalised industries that they were really socialist and we were in fact living in a Socialist country? It isn’t.

What in fact goes on is capitalism administered by a Labour government. The Labour government minister Arthur Houghton, Minister in the Wilson government, wrote in THE TIMES in 1967: “Never has a government done so much in so short a time to make capitalism work”. This is what the Labour Party is about; running capitalism.

We are now going from the situation in the UK to Russia. There again in Russia you have a situation where people who claim that Russia is Socialist/Communist/Marxist. But if you apply the test already given that Socialism means production for use and the absence of the wages system then Russia fails to meet the test.

Although you have people in Russia paying lip service to Socialism what you have in fact got in Russia is capitalism. There is of course a difference between Britain in 1970 and Russia in 1970; in Britain about a fifth of industry is nationalised while in Russia a higher percentage of industry is nationalised but not a hundred per cent. Is The Socialist Party of Great Britain saying that Britain and Russia are identical? We are not; there are some differences and there are some similarities. What we are saying is that they are both capitalist countries.

The Economics of Capitalism.

Let us first place capitalism in a historical context. When there was chattel slavery the slave owner owned the slave and put him to work and the product belonged to the slave owner. And all the slave owner had to do was to fee, clothe and house the slave. When chattel slavery was replaced by Feudalism the serf worked three days a week on the land and three days for the Lord of the Manor who kept the produce. Clearly, in both cases there was exploitation with one class living at the expense of an exploited class.

Capitalism is a little more complicated but it is the same situation. However, the worker is neither a slave nor a serf. In capitalism, the capitalist buys the physical and mental energy of the worker for a particular period of time; day, month or year. The capitalist sets the worker to work. The product of the worker’s work, what he produces in the factory like a car or a washing machine, does not belong to the worker but to the capitalist.

Say the worker works 2 ½ days to meet the wage rate necessary to produce himself and his family. The worker cannot stop working because he has been contracted to work a further 2 ½ days free for the capitalist. In fact, what the worker is doing is working necessary time for himself and surplus time for the capitalist.

The worker is creating extra value, what Marx called surplus value. This surplus value is expropriated in its entirety by the owner of the means of production; the capitalist.

Now it does not mean that the capitalist; the owner of the means of production, consumes all of this surplus value. Capitalism is a competitive system; of capitalists competing against other capitalists. It is one of the laws of capitalism that capital has to constantly expand.

The proceeds of the profit which goes to the industrial capitalist also has to be shared with the landlord in the form of rent and with the banker in the form of interest. A portion also has to go to support the capitalist State and pay for the machinery of government; the civil service, courts, police and armed forces.

The capitalist has also to invest and re-invest his capital to remain in the game against his competitors. That is the economics of capitalism.

The Politics of Capitalism

Next, look at the politics of capitalism. How is this system possible? How does the worker work 2½ days socially necessary days for himself and 2 ½ days surplus days for the capitalist? Why does not the worker just produce what he wants or take what he and his family needs? Why does the worker put up with all the social problems of capitalism?

None of this would be possible without the capitalist State in the background law making bodies, police and armed forces. The State is there primarily to protect the property interests of the capitalist class.

This is the politics of capitalism; to protect the private ownership of the means of production. Look at Britain in the 18th century. It was primarily an agricultural country with a landed aristocracy having complete political power. By the 19th century, particularly after 1832, Britain has become an industrial country with a powerful capitalist class exercising its interests through Parliament.

Every other country in Europe went through a similar process. The development of the capitalist class meant a simultaneous growth in capital; machinery, irrigation of land, transport and so on.

Russia is no exception.

For several decades the Russian State, through State enterprises, has accumulated capital, kept down the wages of workers, re-invested profit in capital goods and increased the mass of capital. Russian capitalism has had to compete and catch up with other capitalist countries. The Russian State has carried this out through nationalisation which is a form of capitalism.

The people who claim Russia is Socialist point out that you cannot have private individuals owning the means of production and employing workers for profit. These people say that Russia is different to Britain; it is not capitalist; it is Socialist although this is not wholly true since there are private capitalists in Russia employing wage labour, particularly in the Black Market.

Let us assume, for the sake of argument, that Russia was an entire nationalised undertaking. The Government employs all the workers in State enterprises. Then what you have is a highly privileged minority with authority over the workers. There income may be called “salaries” but they are no more salaries than the income, going to the directors of the nationalised Boards in Britain or the Boards of Directors in private companies in Britain with their high pensions and preferential shares. They may all be “employees” but they are highly privileged and not for minute can be considered members of the working class.

And in Russia there is an entrenched elite with high salaries, benefits and privileges which are denied to the rest of the working class there. There was a report in the FINANCIAL TIMES (20.02.70) about a series of industrial reforms allowing senior managers in industrial enterprises to have more control over how and where they produce and that out of the profits they make some would be made available to workers in the factory. However, there was an outcry because the process of distributing to the workers the additional profits as bonuses to their often low wages did not take place since it was channelled instead to the bank accounts of the senior executives.

The newspaper article highlights the privilege group which exists at the top of the Communist Party, the bureaucracy and the industrial enterprises. They enjoy incomes; special hospitals, restaurants, travel, shops and holiday homes denied the rest of the working class. Rich parents can also get their children into the top universities. There are many other things of this sort going on in Russia. This is a long way of the idealism of Lenin and the early Bolsheviks. They looked at the principle of wage income during the short-lived Paris Commune where all workers were paid the same no matter what they did. In the early days of the Russian Revolution they tried to get all the workers to take the same rate of pay.

Lenin was forced to abandon this policy because they could not get any one to do the managerial functions at the same pay as those on the shop floor. Lenin had to give up his dream of ideal pay. He should have learnt from Marx.

In WAGES, PRICE AND PROFIT, Marx wrote:

The cry for an equality of wages rests, therefore, upon a mistake, is an insane wish never to be fulfilled…Upon the basis of the wages the value of labouring power is settled like that of any other commodity; and as different kinds of labouring power have different values, or require different quantities of labour for their production, they must fetch different prices in the labour market. To clamour for equal or even equitable retribution on the basis of the wages system is the same as to clamour for freedom on the basis of the slavery system” (SELECTED WORKS 1, p.426).

Continued inequality has now become the principle upon which Russian industry is based. In short, the privilege position of the elite continues and grows.

Russian Economic Reforms

After Lenin’s death in 1953 Khrushchev attacked the powerful elite who dominated Russia by cutting down their salaries and withdrawing privileges. The elite was modified but not abolished. The elite in fact continued to grow to represent a closed community with a constant power struggle between the Communist Party, the bureaucracy and the managerial elite. The Communist Party temporarily won this struggle under Khrushchev because it had the backing of the Military and Secret Police but the tension between these three groups has continued.

Of course, the Russian ruling class is presented as a monolithic bloc because there are no separate political parties thrashing out their respective interests in Parliament. The power struggle is similar to the one which took place in the early 19th century between the landed aristocracy and the industrial capitalists. What each respective class tried to do was to gain support from the working class which then led to the extension of the franchise. This process is going on in Russia.

And of course there is disposable money in Russia. In 1969 there was £15,000 million worth of bonds. And there is also a large amount of currency being hoarded.

Then there is the black market. There was a report in THE TIMES (7th November 1969) of people flying into Moscow, setting up markets and selling fruit and vegetables despite not being permitted by the Russian authorities.

And one Russian economist complained that 1 in five workers were “missing” that is working for themselves or in the unofficial private sector which accounts for about ¼ of the economy. And vast amounts of gold are stolen from Siberia which ends up on the black market to be exchanged for dollars.

Where is Russia Going?

So where is Russia going?

First let us look at the current economic reforms proposed by the Russian economist E. G Liberman (Plans, Profits, Bonuses”, in PLANNING PROFIT AND INCENTIVES IN THE USSR, VOL.1: The Liberman Discussion edited by Nyron E. Sharpe International Arts and science Press, 1966).

The reforms had at its centre the use of profit as the only measurement for judging the performance of a State enterprise

The Liberman reforms were necessary largely because of a decrease in productivity, shortages and under capacity. There was a shift of power from the central planners to some 6000 industrial enterprises whose managers were allowed greater autonomy. There has been reports that one chemical factory has made 400 workers redundant

The Liberman reforms have not finished. The implication of these reforms is that it will mean the power struggle between the Communist Party, the bureaucracy and the State managers will continue. The balance of power will be away from the Communist Party since revolutionary zeal becomes less pronounced after time like it did with the French Revolution. A new generation of Party leaders have different views and priorities to the early revolutionaries.

One final point and that is the pressure of Russia being within a world of capitalist rivals, notably China and the US. A Russia economist has recently stated that a quarter of all Russian workers are working in the defence industry. That is an enormous burden on the economy. There are also the problems associated with the satellite countries like Czechoslovakia and Poland.

Russia, then, will go on changing in the direction set out by the Liberman reforms.

[The above was based on a Lecture given in 1970 by Comrade Hardy. Comrade Cyril May was in the chair. Some of the transcript has been amended to remove repetitions and a few minor mistakes have been corrected].

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