"As in private life one distinguishes between what a man thinks and says of himself and what he really is and does, still more in historical struggles must one distinguish the phrases and fancies of the parties from their real organism and their real interests, their conception of themselves from their reality."
Karl Marx, The 18th Brumaire of Louis Bonaparte.
This alleged history of Trotskyism after Trotsky is an exercise in self-aggrandisement by its author, Tony Cliff. Cliff's pamphlet is a slapdash cut-and-paste job of old articles. Since this is myth-making and not political history there is a great deal about the idiocies of the Cannon-Pablo-Mandel "orthodox" Trotskyists, but no mention of the other "unorthodox Trotskyists", in the first place Shachtman and his comrades in the US. In the decade when Cliff was still an orthodox Trotskyist, they developed the ideas of Trotsky's last period - initially in conflict with Trotsky himself - into a rational alternative to the "orthodox Trotskyists" who lost their way.
Cliff was an "orthodox Trotskyist" on the USSR until 1947-8, and on key questions he remains in that tradition to this day [for example in his caricatural Cannonite/Zionoviest idea of the revolutionary party].
Cliff argues that Trotsky's four main prognoses at the end of his life turned out to be false. These were:
1. that the Stalinist regime in Russia could not survive the war;
2. that capitalism was in terminal crisis, so there would be no expansion of production and therefore no prospect of social reforms;
3. that in backward, underdeveloped countries, according to the theory of permanent revolution, bourgeois-democratic tasks such as national liberation could only be advanced by the working class;
4. that the Fourth International [FI] would quickly grow into the leading force of the international proletariat.
All were mistaken. Stalinism not only survived the war but emerged stronger, expanding into further territory; capitalism underwent its greatest period of economic expansion from 1950-73 and new welfare and social reforms were fought for and won; in China, Cuba and Vietnam, Stalinist regimes were created and there was a wave of decolonisation and later capitalist economic development in parts of the so-called Third World. The "FI" remained tiny.
Cliff claims to have single-handedly provided the only Marxist explanations of the origin, development and decline of Stalinism. Though Cliff's body of theory does contain some useful insights, all of the ostentatious boastings here of Cliff's omniscience are not only ridiculous but simply false. He even presents himself as the first state capitalist! This myth-making booklet is the SWP's equivalent of Pierre Frank's vacuous "history" of the Cannon-Pablo-Mandel "Fourth International".
State capitalism
Cliff's 1948 argument to prove that Russia was a "bureaucratic state capitalism" had two disadvantages: it was both incoherent and not really a theory of state capitalism!
Cliff says that the two main features of capitalism are the separation of the workers from the means of production and the transformation of labour power into a commodity which the workers are forced to sell, and the accumulation of capital forced on capitalists by their competitive struggle. He says both of these features characterised the Soviet Union during the first Five Year Plan (1928-32). Popular consumption in the USSR was subordinated to accumulation. The USSR was organised like a single capitalist enterprise; the competitive dynamic was provided by military competition with Western capitalism. He wrote:
"In order to see whether labour power in Russia is really a commodity, as it is under traditional capitalism, it is necessary to see what specific conditions are necessary for it to be so [Cliff quotes Marx]... If there is only one employer, a 'change of masters' is impossible, and the 'periodic sale of himself' becomes a mere formality. The contract also becomes only a formality when there are many sellers and only one buyer. (That even this formal side of the contract is not observed in Russia is clear from the system of fines and punishments, the 'corrective labour', and so on.)" [State Capitalism in Russia 1988: 218219)]
Logically, for Cliff in 1948, labour power in Russia is not, can not be, a commodity. Cliff's pupils were explicit. Binns and Haynes, for example, wrote 30 years later that, "Labour power cannot be a commodity in the USSR because with only one company (USSR Ltd) purchasing it, there cannot be a genuine labour market" (IS: 2,7, 1979: 29). Cliff in 1999 ignores this question.
In 1948 Cliff wrote of the law of value:
"Hence if one examines the relations within the Russian economy, abstracting them from their relations with the world economy, one is bound to conclude that the source of the law of value, as the motor and regulator of production, is not to be found in it. In essence, the laws prevailing in the relations between the enterprises and between the labourers and the employerstate would be no different if Russia were one big factory managed directly from one centre, and if all the labourers received the goods they consumed directly, in kind."
By what mechanism then is the USSR capitalist? Recognising the virtual absence of trade between Stalin's USSR and western capitalism, Cliff argued, "Because international competition takes mainly a military form, the law of value expresses itself in its opposite, viz. a striving after use values." (1988: 222)
But there is nothing specifically capitalist about military competition. Marxists analyse and categorise class societies by the specific economic form in which surplus labour is pumped out of the direct producers - under capitalism, as distinct from feudalism and ancient slave-labour societies, by the exploitation of formally and legally free wage labour by capital under conditions of free sale of labour power. Workers and capitalists appear to meet and trade as equals - an illusion of equality which was one aspect of what Marx called: "the fetishism of commodities".
Marx's starting point in Capital was the essential contradiction within the commodity between its use value and exchange value - between the natural (use) and the social (exchange) form of the products of labour. Capitalists do not just accumulate ever more varied kinds of wealth in it's natural form, or engage in military competition, they accumulate wealth in a specific social form: money as capital. What matters for a capitalist is not whether they accumulate tanks, or tractor factories or Black Sea villas, what matters is the accumulation of ever expanding amounts of money.
A capitalist for Marx is someone for whom "the circulation of money as capital is an end in itself, for the valorization of value takes place only within this constantly renewed movement [M-C-M1]. As the conscious bearer of this movement, the possessor of money becomes a capitalist. His person, or rather his pocket, is the point from which his money starts and to which it returns."(Capital, Vol 1, Pelican Marx Library).
Whatever can be said for Cliff's theory, one thing he didn't demonstrate is how the "accumulation" of means of production - and of destruction - by the Stalinist bureaucracy was driven by the circulation of money as capital as an end in itself.
Even in retrospect Cliff does not believe that these and other fundamental tendencies of capitalism operated in the USSR. His "state capitalism" was a capitalism without commodity fetishism, capitalists or the accumulation of money as capital. It was never anything more than a label in search of a theory.
Arms production in Russia, Cliff says, explains why it did not suffer from the cycle of boom and slump" (1999: 52). In a somewhat gentle review of the first [1955] book version of Cliff's work on Russia, Hal Draper [in 1956] wrote that, "The 'state capitalist' theory sometimes shades into versions which make it virtually identical to our own [that the USSR was a bureaucratic collectivist state, a distinctive form of class society]. This tends to happen where the 'state capitalism'... is labelled as hyphenated capitalism only as a matter of terminological taste. Cliff's analysis does not begin that way, but it tends to wind up so" (WL 49 1998:43). Cliff calls Russia state capitalist but what he describes is not a capitalist society!
Cliff's basic syllogism was faulty: such and such occurs in the Eastern Bloc, the same happens in the West; the West is capitalist, therefore the Eastern Bloc is capitalist. As far back as Aristotle serious thinkers have understood that, though analogy can be very illuminating, reasoning by analogy - as if distinct things with some common traits were fully identical - is necessarily fallacious. Reasoning by analogy, and as if analogy is identity, Cliff assumed what needed to be proved - the existence of capital and a capitalist class. Impermissibly he redefined the dynamic of capitalism as the competition of use values in the production of armaments. This grasped neither the essence of capitalism as a world system nor the origin and development of Stalinism. Joseph Carter made the same point against Cliff's unacknowledged predecessor with a state capitalist analysis of the USSR C. L. R. James, in 1942, when he wrote, "It is the 'specific manner' in which the factors of production are united, this specific way in which surplus labour is extracted from the working class, that differentiates bureaucratic collectivism from capitalism" ('Aspects of Marxist Economics', New International, April 1942: 80).
Cliff doesn't even bother to acknowledge and evaluate attempts by his pupils to develop his state capitalist theory. In 1980 Duncan Hallas wrote against Binns and Haynes that, "If labour power is not a commodity in the USSR then there i s no proletariat. Moreover if labour power is not a commodity, then there can be no wage/labour relationship and therefore no capital either. Therefore, there can be no capitalism in any shape or form." (IS:2:9, 1980: 128130). Alex Callinicos argued that labour power was a commodity in the USSR because enterprises did compete for workers (IS:2: 12, 1981: 15), correcting Cliff's "obscure" and "misleading" account, and Derek Howl (IS:2: 49, 1990) wrote that the law of value did apply to the internal workings of the USSR. Such a debate amongst the SWP mandarinate was surely needed - yet none of this is even mentioned in Cliff's review of the history of the theory. This is because to argue that all the laws of (private) capitalism applied to Russia would junk virtually all that was distinctive in Cliff in 1948.
Cliff's merit in 1948 over Trotsky's "workers' state" epigones lay only in the insistence that this was an exploitative class society. Many others had already said that and not only in theories of state capitalism, and continued to say it. His specific ideas were worthless mystifications: there can be no greater proof of that than the fundamental modifications [above] his "school" has had to make to 1948 Cliff. SWP "state capitalism" is reduced to a general label behind which there are conflicting versions of the elements that make up the theory. Who was it said sects change their doctrines far more readily than they change their names?
Cliff argues that the changes in Eastern Europe in the '90s can only be seen as a "move sideways", a change "within the mode of production" because it was accomplished so easily, without revolutionary violence or a wholesale change of either the ruling class or the state. Those who believe a more profound change has taken place were revising the Marxist theory of the state.
This is the eclectic Cliff using arguments long-cherished by upholders of the workers' state position.
It is true that the working class cannot seize power without smashing the old bourgeois state machine and that, once in power politically, it cannot be supplanted without a counter-revolution, crucially by the smashing of the democratic organs of workers' self-rule, that is, the working class character of the state, the soviets (and the Marxist leadership). This is what Stalin accomplished after 1928.
The socialist revolution is qualitatively different from previous revolutions in that the workers must take and hold power consciously in their own interests. The bourgeoisie do not necessarily have to rule politically in order to rule socially and economically: nor did they in fact come to power in most cases through revolution (France after 1789 was of course a crucial exception). In most cases the German Bismarckian road to power is the dominant form of bourgeois revolution, where a section of the old ruling class facilitated the introduction of capitalism from above. When all sorts of formations have made bourgeois revolutions in the past. Why should this pattern not unfold in Russia and elsewhere in the current period?
The Permanent Arms Economy
Cliff's most ridiculous piece of self-aggrandisement here is the claim to have originated the theory of "permanent arms economy", which, he says, explained both the extent and the limits of the post-war capitalist boom between 1950-73. He claims that the theory of the permanent arms economy avoided both the capitalism-is-about-to-experience-another-great-slump catastrophism typical for decades of "orthodox Trotskyism", and the endless optimism of Keynesian economists. Here he repeats the idea that the basic cause of capitalist crisis is the relatively low purchasing power of the masses compared to the productive capacity of industry ("underconsumptionism"), so that periodically goods are produced which cannot be sold.
Capitalism avoids permanent slump by cycles of investment in capital goods. Capital goods will eventually produce consumer goods. The massive increase in armaments expenditure by some imperialist states such as the US and Britain, beginning with World War One and continuing from the '30s through to the Second World War into the Cold War, worked to counteract this tendency - arms production, unlike Department I production of machines, makes goods that never produce Department II (consumer) goods dependent on the mass market. It allowed for both investment and consumption to grow for an unprecedented period after 1945. However, in fact, other states such as Germany and Japan, defeated in World War II, gained a competitive advantage from not enduring the heavy burden of arms expenditure, and this eventually reintroduced the classic boomslump cycle of earlier capitalism.
Cliff says that his 1948 analysis of Russia contains the germ of the permanent arms economy (PAE) theory (military competition between Russia and the West). But, in fact, he only formulated his PAE in 1957, in a short article ['Permanent Arms Economy', in Neither Washington nor Moscow, 1982]. As always, Cliff, who knows no shame on these matters, fails to acknowledge his intellectual debts, here to the real originators of this theory - Paul Sweezy who with Leo Huberman edited the soft Stalinist journal Monthly Review, and Ed Sard (who wrote under the pseudonyms of Frank Demby, Walter S Oakes and T. N. Vance). The US "Shachtmanite" bi-monthly magazine New International carried a book-length series of articles signed T. N. Vance throughout 1951.
There are elements of the arms economy thesis in Luxemburg and Bukharin ["Imperialism and the World Economy"] before the '40s, but Paul Sweezy formulated the essence of "Cliff's" view in 1942, in his book The Theory of Capitalist Development. He argued that the rise of militarism had serious consequences for capitalism: firstly it fostered the development of a special group of capitalists in the steel and shipbuilding industries (and the munitions magnates) who produce the armaments; secondly, arms spending offsets the tendency towards underconsumption; and, finally, armaments production offers a profitable field for the investment of capital.
Sweezy? Sard? C'est moi!
Ed Sard developed "Cliff's" theory of the arms economy, marshalling the data to illustrate it. He defined a war economy as, "whenever the government's expenditure for war (or 'national defence' become a legitimate and significant end purpose of economic activity" (1944: 12, in Dwight McDonald's magazine Politics). The state could address the problem of what he called "excess accumulated unpaid labor" - capital - by war outlays (equal to around 10% of national income) or by public works. In his 1951 New International articles, Sard added rapid capital accumulation, a huge national debt and interest burden, Bonapartist tendencies [the state rising to a position of command over society] and military-economic imperialism, to these basic characteristics of the "new epoch".
Both Sweezy's and Sard's theories had a heavy Keynesian twist. So did Cliff. He defined the basic cause of capitalist crisis as underconsumption. He argued that arms alone was the "great stabilising factor for contemporary capitalist prosperity". He added that by undercutting workers' living standards, encouraging developments in technology and facing competition on the world market the PAE would undermine itself. Cliff: "With the huge strides of Russian industry, it is possible that in another 10 or 20 years, she may, even if she does not reach the absolute level of United States industry, at least challenge the United States on the world market in certain branches - those of heavy industry."
While "underconsumption" in the sense argued by Sweezy and Cliff might play some role in explaining crises, it does not do so directly. Capitalists can have an adequate market for what they produce even when wages are very low. Demand by capitalists and their hangers-on for new machinery, equipment, materials and luxuries can make up the market. Low living standards for workers alongside vast luxury for capitalists make us angry, but they do not necessarily cause trouble for capitalism. It is not clear what "under" means here: at what level does the workers' share have to fall to, to cause a crisis? Marx himself wrote, as well as the usual quotation produced by underconsumptionists, that "it is pure tautology to say that crises are provoked by a lack of effective demand or effective consumption. The capitalist system does not recognise any other forms of consumer other than those who can pay... The fact that commodities are unsaleable means no more than that no effective buyers have been found for them..." Capital Vol 2 (L&W1956: 486-7).
Armaments production may act as a stabiliser, as some sort of replacement market, but it will only be a pre-condition for the expansion of capital, not its prime determinant. As Phil Semp, referring to the period 1937-42, put it, "It is not arms as such which increases the profits, but the recovery which increased arms production stimulated" (Permanent Revolution No1, September 1973). Cliff's old view, presented here once again much as in 1957, was riddled with problems. Cliff's disciple Harman, in his book on crisis, says Cliff's errors were a matter of his form of presentation - in language explicable to Keynesian economists. This begs the question why Cliff would make so many concessions to this milieu, rather than present his theory in its "real" Marxist form.
Kidron
Michael Kidron's development of PAE, which argued that arms might have offset the tendency for the rate of profit to fall "perhaps permanently" [Western Capitalism since the War 1967], fared little better. As late as 1967 he argued that the signs of instability were merely "spots on the horizon".
In fact Kidron's model of capitalism, as a closed economy with leaks - export of capital, wars, slumps and luxury good production such as armaments [as set out in IS36, "Maginot Marxism"], is still far from a consistent Marxist analysis. The concept of a "closed system" is nonsense if it means a single capitalist country, and a false starting point for an analysis of capitalism, which is an international system. His "leaks" are in fact integral to capitalism, as Marx's discussion of luxury goods (Department III) indicates. In his arithmetic, Kidron allows for changes on the organic composition of capital (c/v) to take place in this sector without this affecting the overall rate of profit. Like Cliff, he fails to register that arms still have to be paid for out of the total social product, a deduction which, like other forms of state expenditure, the bourgeoisie have been keen to reduce, especially since the crisis broke in 1973.
Chris Harman has tried to put a square circle around this muddle, but all his accumulated empirical material cannot hide the flaws in the basic arguments.
An explanation of boom and slump in the wider context of the whole circuit of capital can therefore incorporate the role which arms expenditure played since before 1914, and especially after 1945, in prolonging the boom. The technological innovations brought about by the pressure of war and the wholesale replacement of old means of production by American technology undoubtedly gave a boost to the development of the productive forces. But this was part of a wider feature of the post-war world - the increased role of the state. Any explanation of the boom would also have to include the "imperialism of free trade" under US domination, the role of the dollar and other international financial arrangements, and so on. By isolating a department of arms production, one useful insight, one cannot explain the postwar boom.
Cliff unintentionally recognises that the "arms economy" alone cannot explain the onset of crisis after 1973, when he points to the competition from non-military capitalisms - Germany and Japan - in precipitating this downturn. He dares not stretch the "arms economy" theory to the present crisis. If the arms economy were so essential to the last one hundred years of imperialism, to a new stage of capitalism, then what is the nature of the present epoch? Kidron of course drew these conclusions even earlier within Cliff's tradition, claiming that the post-war world was a new epoch altogether, a new higher stage of capitalism. ["Imperialism, Highest Stage but One", IS:9, 1962] But these confusions are best dealt with under Cliff's final theoretical edifice, the deflected permanent revolution.
Deflected Permanent Revolution
Cliff's (1963) theory about developments in the "Third World", known as "Deflected Permanent Revolution", purported to explain the emergence of Third World Stalinism, that is, what he called "bureaucratic state capitalism".
Cliff argues that where the bourgeoisie cannot carry through a bourgeois revolution, if the working class is not revolutionary (because of Stalinism and reformism), the outcome will not, as in Trotsky's theory of Permanent Revolution, be workers' power, but Stalinism. This account of developments in the Third World, where some regimes took Russian Stalinism as a modal of development, is, of course, only as good as Cliff's theory of state capitalism. The collapse of Stalinism has dealt it a shattering blow. China is still a Stalinist hybrid - but essentially Cliff's theory of Third World Stalinism is now only an intellectual curiosity.
The most profound problem with Cliff's state capitalist version of permanent revolution is his failure to disentangle the various elements of the bourgeois revolution which are knotted up in permanent revolution. Thus while the SWP has moved on from Lenin's conception of imperialism, they appear to have stuck to a very narrow conception of the national question, derived from the 2nd Congress of the Comintern in 1920. In fact, Lenin's wider arguments on the right of nations to self-determination, and the Bolshevik championing of rights for national minorities as the best means to unite workers divided by national antagonisms, seems to have been completely lost. Instead the SWP indulges in precisely the kind of two camp "anti-imperialism of idiots" that their earlier theories attempted to avoid.
The house that Cliff built
The measure of any revolutionary socialist political tendency is its intervention in the living class struggle. The record of the SWP is that of a tendency that has often been distant from some of the core conceptions of the tradition of Marx, Engels, Lenin and Trotsky.
On the issue of capitalist integration in the European Union, they jumped on the little Englander bandwagon. On the national question in Ireland, they have failed to provide a programme to unite Catholic and Protestant workers on the basis of consistent democracy, which recognises their respective rights as national minorities (the Catholics within the unviable northern statelet, the Protestants within the whole of Ireland) - some form of federalism.
On IsraelPalestine, Cliff's group combine a recognition of the legitimate rights of Palestinians to their own state with a shrill anti-Zionism which effectively argues that the Jews do not have national rights in Palestine. As the Jewish people appear to be the only nation denied this right to self-determination, this argument is dangerously close to antisemitism. Far from learning from Lenin, on these two questions the SWP appear to have a notion of "good" and "bad" peoples. Some have more rights than others.
The worst mistakes on imperialism have undoubtedly been their assessment of the Gulf wars. In 1987, having assessed the IranIraq war since 1980 as a war between rival subimperialisms, the presence of US ships in the region led the SWP to "militarily support" Iran because of the "intervention of imperialism". Then, after Iraq had seized Kuwait in 1990, they flirted with critical support for Saddam: "Socialists must hope that Iraq gives the US a bloody nose and that the US is frustrated in its attempt to force the Iraqis out of Kuwait..." (Socialist Worker 18 August 1990). Only later did the SWP sober up and analyse the war as a conflict between US imperialism (and its allies) and an ambitious sub-imperialism, Iraq.
Ensnared by his own contradictions Cliff repeatedly falls back on one argument - that socialism is about the selfemancipation of the working class. This means socialists should champion working class independence. Even here, Cliff's record is very bad. In South Africa in the '80s this issue was posed sharply: how to break the unions (COSATU) from the political domination of the ANC in the struggle against apartheid. Some socialists, including our own tendency, argued that COSATU should form a labour party to fight for the interests of workers; the SWP disagreed but offered no strategy in its place. When in the presidential elections in 1994 the same issue came up, and the Workers' List stood against Mandela and de Klerk, and put forward working class demands, the SWP swung in behind Mandela. So much for promoting working class independence.
This book glorifies Cliff's theories which, he says, generated the politics of the SWP. If that is so, then they would have little to recommend them even if they were far more coherent than they ever were.
Cliff never had a coherent theory of the Eastern Bloc, but a label underneath which the politics wavered opportunistically. The SWP believed that "state capitalism" was the next phase of capitalist development and did not anticipate or explain the terminal decline of Stalinism in the late '80s. In reality, Cliff's theories explained very little. The politics of the group are and were shaped and reshaped mainly by catch-penny opportunism.
There is tremendous potential for Marxists in the present period, and accounting for past analyses is indeed part of the role of theory as a guide to action in the living struggle. False, boastful, factionally fabricated "history" is no use at all
The book: Tony Cliff, Trotskyism after Trotsky: the Origins of the International Socialists (Bookmarks, 1999)
Workers' Liberty #55, April 1999
