The other day I received an inquiry by email:
Hello, I am a young Marxist, and I have a question regarding production. In a Socialism, Utopian and Scientific, Engels stated:
“The modern state, no matter what its form, is essentially a capitalist machine, the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of the productive forces, the more does it actually become the national capitalist, the more citizens does it exploit. The workers remain wage workers – proletarians. The capitalist relationship is not done away with. It is rather brought to a head. But, brought to a head, it topples over. State ownership of productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution.” –Engels.
From what I take from this, State Ownership was only advocated to further develop productive forces to make way for socialism. But in the Manifesto, it called for Nationalization of productive forces. However, this is now redundant because production is already built up.
So my question is this: if state ownership of industry is not socialist; what is? Would it be a decentralized planned economy run by the workers through worker councils? If so; how would this operate and how would planning go about? Without planning, we slip back into the chaotic production of capitalism; only this time it’s worker owned. Would the state own land and workers exercise workplace democracy on it?
As for communism (which obviously has no state to direct planning), can you also describe the economic system it would operate on?
I am very confused about this subject, and I’d like to understand it better.
Since many other people might have the same kinds of questions, I am going to reply publicly.
Essentially Engels is writing about trusts, joint-stock companies—the monopoly capitalism that Lenin wrote about in his “latest stage” pamphlet, prompted by the outbreak of WWI. One can imagine that it was possible to see only the plus side of monopolies in 1880, when Engels wrote Socialism, Utopian and Scientific. They were “transitional forms” that would lend themselves to socialist planning. In fact you can see the same kinds of enthusiasm in Edward Bellamy’s “Looking Backward”, written in 1889 and inspired by the early development of large-scale department stores and technological breakthroughs made possible by monopoly production. He even writes of “the nation” being “the sole employer and capitalist”.
I am not quite sure what exactly is the nature of the “state ownership” that Engels is referring to, however. To my knowledge, most of the big trusts were privately owned—such as Standard Oil or Carnegie steel works. There is a good chance that Engels was referring to developments in the future.
Later on the term “state capitalism” became more familiar in the lexicon of the Russian Communist Party. In Bukharin and Preobrazhensky’s The ABC of Communism, the term does not mean that the state has taken ownership of production but that the monopoly capitalists have taken over ownership of the government. They write:
Thus in the end we arrive at the following picture. The industry of the whole country is united into syndicates, trusts, and combined enterprises. All these are united by banks. At the head of the whole economic life there is a small group of great bankers who administer industry in its entirety. The governmental authority simply fulfils the will of these bankers and trust magnates.
In other words, John D. Rockefeller, Andrew Carnegie and J.P. Morgan never lost ownership of their empires. Instead they took over ownership of the state.
You also find a reference to state capitalism in Lenin’s writings on the NEP, where the Soviet government allowed a certain amount of market relations to help revive a war-ravaged economy. In 1922 you can find a section of an article on the NEP titled
State Capitalism In The Proletarian State And The Trade Unions that states:
The proletarian state may, without changing its own nature, permit freedom to trade and the development of capitalism only within certain bounds, and only on the condition that the state regulates (supervises, controls, determines the forms and methods of, etc.) private trade and private capitalism. The success of such regulation will depend not only on the state authorities but also, and to a larger extent, on the degree of maturity of the proletariat and of the masses of the working people generally, on their cultural level, etc. But even if this regulation is completely successful, the antagonism of class interests between labour and capital will certainly remain.
What Lenin was describing might be compared to the experiments that Cuba has been making with foreign-owned hotels, privately owned restaurants, etc. They can best be described as pockets of production for profit in a society that has broken with profit as the ruling principle of the economy. On the other hand, it has little to do with China where capitalism is so widespread that even the state-owned enterprises operate on the same basis as the factories owned by Apple, et al. For profit and only for profit.
Perhaps the best example of state-owned enterprises in the more recent past in the capitalist world are those that flourished under fascism. For example, Volkswagen was formed in 1937 by the Nazi trade union. You also have state ownership in a capitalist country when it is critical to the capitalist economy as a whole. Airlines and other transportations systems fall within this rubric. Finally, you see plenty of it in third world countries that have just liberated themselves from imperialism but have not had a chance to develop a native bourgeoisie. My Turkish professor at Columbia University once quipped that the state owned more companies under Mustafa Kemal than were owned in Stalin’s Russia. He was exaggerating but not by much.
You referred to the call for nationalization in the Communist Manifesto. I am not exactly sure what that is a reference to. By and large, Marx tended not to lay down rules for how socialism would be built. In chapter two of the CM, there are demands put forward, including one that calls for “Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.” That’s really about it. Keeping in mind that the CM was written in 1848, the main political concerns of Marx and Engels was how to rid Europe of the feudal restraints on production and to create the conditions for the emergence of working class power in a democratic framework—in other words, pretty much the same goals as Lenin in 1905 or so.
This leads me to the big questions you raise:
So my question is this: if state ownership of industry is not socialist; what is? Would it be a decentralized planned economy run by the workers through worker councils? If so; how would this operate and how would planning go about? Without planning, we slip back into the chaotic production of capitalism; only this time it’s worker owned. Would the state own land and workers exercise workplace democracy on it?
As for communism (which obviously has no state to direct planning), can you also describe the economic system it would operate on?
To get to the last question first, I don’t see any difference between socialism and communism. In fact, Marx and Engels used the terms interchangeably. Years later, and especially under the influence of Stalin, socialism became an intermediate stage between capitalism and communism but there is no basis for that in Marx’s writings.
As to how socialism would operate, I confess that I have not written much about that over the years. My emphasis is on how given post-capitalist societies function, with a particular emphasis on Cuba. I recommend this piece in particular: http://www.columbia.edu/~lnp3/mydocs/state_and_revolution/cuba.htm. It was written primarily to answer a member of the British SWP, a group that believes that the USSR was “state capitalist” but not even in the sense of what Lenin wrote above. It saw no particular connection between the Soviet economy and the Marxist project despite the lack of a profit motive in production.
I do strongly recommend that you look at the writings of Michael Lebowitz, an economist living in Venezuela, who has written many articles and a number of books on exactly the questions you posed. It was he, in fact, who convinced me that the distinction between socialism and communism was a bogus one. I have reviewed a couple of his books that you might find useful. Here’s an excerpt from my review of his “The Socialist Alternative”:
Although The Socialist Alternative is very much about conceiving how a future socialist system might function, it wisely avoids the neo-utopian parecon of Michael Albert and Robin Hahnel. As Marx said in an 1873 afterword to volume one of Capital, he was not interested in writing recipes for the cookbooks of the future. Given the catastrophic tendencies of global capitalism, however, a socialist alternative is clearly on the agenda.
For Lebowitz, the goal is what he has dubbed the “socialist triangle,” consisting of:
1. Social ownership of the means of production. It is, of course, not the same thing as state ownership since that has led to a kind of class differentiation exploited by bureaucrats in the Soviet model.
2. Social production organized by workers. This is an attempt to eradicate the distinction between intellectual and manual labor in the plants and offices of the capitalist system, a social relationship that tends to breed apathy and resentment.
3. Satisfaction of communal needs. This breaks with the paradigm of the individualist consumer and stresses the need for a collective definition of social needs. Without democracy, of course, this would be impossible.
In breaking with Leninist orthodoxy, Lebowitz rejects the distinction between socialism and communism. Lenin conceived of socialism as the first stage of communism, but Lebowitz finds no support for this in Marx. He also makes what I think is an essential point:
The term communism communicated something different when Marx wrote in the nineteenth century. Communism was the name Marx used to describe the society of free and associated producers — “an association of free men, working with the means of production held in common, and expending their many different forms of labour-power in full self-awareness as one single social labour force.” But very few people think of communism that way now. In fact, people hardly think of communism as an economic system, as a way in which producers organize to produce for the needs of all! Rather, as the result of the understanding of the experiences of the last century, communism is now viewed as a political system — in particular, as a state that stands over and above society and oppresses working people.
Finally, I recommend googling “Michael Lebowitz” and “socialism”. This will give you plenty of food for thought, including those gathered at the Monthly Review website: https://monthlyreview.org/author/michaelalebowitz. Here’s an excerpt from a 2011 interview titled “The Unifying Element in All Struggles Against Capital Is the Right of Everyone to Full Human Development”.
First of all, Capital is written from the perspective of an alternative society, the inverse situation in which the products of society serve what Marx called “the worker’s own need for development.” I think the struggle for human needs, for the satisfaction of needs is not simply giving people gifts, but it is a whole process of people having the power to work together in the communities to produce for communal needs and communal purposes. That is the revolutionary demand and struggle. For those people who say “well, that’s communism (a utopian society), but socialism has a different principle—to each according to their contribution,” I say that’s a distortion of Marx. Marx didn’t have two stages: socialism and communism. Marx had one society which comes on to the scene defective initially because it inherits all these defects from the old society. But developing that new society cannot be carried on by building on those defects. That argument goes back to Lenin, who argued that until people are highly developed, we have to have the state control where they work, how much they get, and the “socialist principle” is to each according to his contribution. But the tendency to want an equivalent for everything you do is the defect inherited from the old world. That’s what you have to struggle against, not build upon. And it obviously can’t happen overnight. Because people culturally don’t immediately accept it. But you have to say “this is the goal.” How will we proceed to build that goal? And you can’t put off this ideological and practical struggle until a distant stage. We have to build socialist human beings while developing new productive forces—a point that Che made so eloquently.
They didn’t do that in the Soviet Union. They had a focus there on self-interest (bonuses in that case), and the same was true in Yugoslavia. Unfortunately, the same pattern is emerging in Cuba—a growing emphasis on how “we can’t have distribution of subsidized food, we can’t have cheap electricity, we can’t have all this inefficiency, it’s waste, etc.” These are things that have been part of the revolution which are now being rejected. The perspective reflects in general the idea that these are things for a higher stage (and it is not the only thing put off to a later stage—e.g., there’s worker management). I think that is a very unfortunate tendency which is going along with a re-emphasis upon distribution according to contribution. However, the whole concept of a separate stage of socialism and a separate stage of communism has been the way in which a principle alien to Marxism was introduced. Building on selfishness which is what distribution in accordance with contribution is (“I will give you this only if you give me that”) is not building anything except building the basis of return to capitalism.