China’s Communes

[p001] — Chinas Communes GEORGE KANE Book Reviews

[p002] ~ Communism in One Country? VOLUME 6 Number —_ summer — 1961 cannes u 86 #FLK, GIRLING: The Course of Capitalist Detelopment An Outline Analysis by TOM KEMP China's Communes GEORGE KANE Book Reviews MEXZMIzaemrmrs

[p003] Communism in One Country? Ait and economic sources. WE publish in this number of the Labour Review an important article by Frank Girling. It contrasts refreshingly with the great number of writers and speakers on the Left who confine themselves to an extended commentary on the theme, ‘ History is on our side’. This becomes a substitute for a probing analysis of the actual forces in the world class - struggle, their objective interests and their political programmes. Its political outcome is a departure from the Marxist principle that only the organized force of the working class itself can carry through the abolition of capitalism and the construction of socialism. Foremost among the modern revisionists are the leaders of the Communist Party of the Soviet Union. They .are followed in this country and elsewhere by the Communist Party and fellow travellers who hasten to assure us that Stalinism has _ been eliminated, democracy restored, and so the con- struction of ‘the higher phase of communism’ now .proceeds apace. Certainly the magnificent achieve- ments of Soviet technology in the field of space exploration and associated problems have demon- strated the superiority of planned production without private profit, but what should Marxists say about this prospect of building communism in the USSR? Surely we should only judge the persistence or disappearance of Stalinism by asking if its basic features have been removed or not. KHRUSHCHEV AND STALINISM The forced confessions, rigged trials and physical tortures of Stalin’s day sprang from specific social In conditions of isolation, backwardness, fatigue, and the defeat of several revolutions in the outside world, there arose in the Soviet Union a privileged apparatus of political and administrative authority. This bureaucracy found in Stalin with his theory of Socialism in One Country an ideal representative. This theory was well adapted too to the exhausted and even disintegrated 4] Editorial Russian proletariat. But socialism in one country was in essence a Utopia. Russia’s peasant back- wardness, and the need for socialism to be based upon the great technical advances and international division of labour created by capitalism itself, brought enormous contradictions into Soviet life. The forced march to industrialization was carried through by centralizing all authority and control in the higher organs of party and state, and eventually in the person of Stalin personally. This could only be done if every vestige of real Bolshevism was crushed. The trials and ‘ liquidations’ of the thirties were the means for this end. Only by demolishing Trotsky and all other oppositionists could Stalinism clear the decks for its policy of accommodation to imperialism, the purpose of which was to achieve relative international stability in which Soviet socialism could be built even if the rest of the world’s workers remained under the rule of capital. Khrushchev represents the bureaucratic ruling caste in the USSR _ no less than did Stalin. Oppos:ng groups in the Party are defeated, expelled and condemned as ‘enemies of the party and the people’ without reference or explanation to the ranks, just as they always were. Had Molotov’s ‘anti-Party group’ won out, then Khrushchev would have received the same ‘ unanimous’ condemnation as did Molotov. Soviet democracy has not returned to political life or to the industrial sector in the USSR. The continued degeneration and technique of the big lie is shown by the latest version of the ‘History of the CPSU’, meant to replace the earlier version said to have been written largely by Stal'n. It is no improvement, persisting in tortuous distortions of the history of the Party and the Revolution, and providing extra references to Khrushchev himself, perhaps to make up for the removal of many of the more laudatory references to Stalin. {n the sphere of foreign policy it is difficult to see any basis for the argument that Khrushchev has -forsaken Stalinism. Superficial commentators contrast his trips to the West and appearances at the UN

[p004] 42 with the ‘hard’ line of Stalin supposedly carried on by the Chinese. But Stalin, like Khrushchev, veered from left to right and back again in his dealings with the imperialists. What they have in common is this: the policies of Communist Parties throughout the world are determined by whatever Stalin or Khrushchev takes to be the interest of the Soviet bureaucracy. That is why the Communist Party of Britain, for example, supported Bevan in his betrayal of the struggle against the H-bomb at Brighton in 1957; the assumption, after Bevan’s visit to Khrushchev, was that Bevan would be the next Foreign Minister and would be more partial to Russia than were the Tories. As Bevan put it, he must not go ‘naked into the conference chamber ’. For similar reasons, the staking of hopes upon corrupt bourgeois politicians, the opposition to the Algerian war has been consistently betrayed by the Communist Party of France. In no capitalist country can the Communist Party carry out the real ‘ defence of the Soviet Union’, the consistent pursuit of revolutionary policies. SOCIALISM AND THE BOURGEOIS “NATIONALISTS The latest declaration of the 81 Communist Parties “from Moscow, together with several other official Russian’ publications, tries to provide ‘ theoretical’ justification for a line of compromise with the imperialists. Thus the recent textbook, ‘ Funda- mentals of Marxism-Leninism’ avers that ‘state capitalism’ (the rule of the national bourgeoisie in “the newly independent nations) in backward economies can play ‘a progressive role’. Not satisfied with * Socialism in One Country’ they want to foist upon the movement the concept of inde- pendent progressive state capitalism in one country in the epoch of decay of imperialism! This breaks away completely from Marxist method in failing to take into account first and foremost the international network of finance capital and the monopolies, the countless ties of the bourgeois nationalist leaders with international capital, and the paramount need to create independent working-class parties in those countries. Instead, a contributor to the Moscow International Affairs (June 1960) argues that the struggle in the backward countries will ‘not be solely, or chiefly, a struggle of the proletarians in each country against the bourgeoisie’, and the declaration of the 81 Parties finds a new Ssocio- economic category of ‘national democracies’ with a progressive role in world affairs. All this is a ‘ theoretical ’ smokescreen, a deception to cover up the abandonment of any perspective of socialist revolution. The fulsome praise of Nasser LABOUR REVIEW—Summer 1961. only two years ago, when he was banqueted and toasted as a ‘ national hero ’, has finally give place to protests against the jailing and murdering of» Communists in Nasser’s Egyptian and Syrian jails. The Stalinist adaptation to the national bourgeoisie pursued by Khrushchev is not just a doctrinal mistake, but a betrayal of the lives of tens of thousands of fighters in the class struggle. Mean- while here in Britain the Daily Worker’s Walter Holmes faithfully echoes the Moscow line with his comment on the 40th anniversary of Labour Monthly: ‘ Both President Nkrumah and Governor- General Azikiwe of Nigeria sent messages which were read to the assembly and heartily received. Rising Africa extends a hand to old but ever-growing British Socialism. This is our road.’ No attempt to distinguish in any way the African workers and peasants from the agents of imperialism. No distinction between the capitalist present and. ‘the socialist future of Africa. BUILDING COMMUNISM? The same Daily Worker gives us a ludicrous ' feature article on the courtship of Yuri Gagarin as part of its picture of the construction of Communism in the USSR. . But this is an even greater travesty of the facts than was Stalin’s claim of Socialism. - The Soviet press is filled with reports of the constant. growth of racketeering, embezzlement of state funds, _ and even ‘ private businesses’ which grow up in the gaps created by bureaucratic mismanagement. The sphere of consumption, which is distorted by the . privileges of the bureaucracy, constantly creates tendencies and opportunities which threaten to disrupt the planned basis of production itself. What a ‘transition to Communism’ which reintroduces the death penalty for ‘ offenders against state property ’! Is it no longer true then that crime springs from the character of the social order? Is Com- munism compatibfe with the power of physical extinction vested in State officials for economic offences? It remains true as ever it was that the ‘withering away of the state’ to a position where men in association administer the economy in their own interest, is Communism, a society that can only be based on abundance and all its cultural and moral consequences. The ‘theory’ of constructing Communism, like the theories of peaceful co- existence and national democracy, is a deception and a lie to cover up the real privileges of the bureaucracy. A recent report in the British Press commented on a meeting of the first all-Union meeting of scientific. workers in Moscow. Now Khrushchev had already repeated more than once the emphasis placed by

[p005] EDITORIAL Stalin upon ‘ material incentives’. In a speech last December to the Party organization of the Higher Party School and others, he said: -*Qur Party devotes much attention to the correct application of the Socialist principle of distribution and the transition in the future to the communist principle of distribution. It has shown the economic failure and harmfulness of all manifestations of levelling and weakening of the principle of material incentive. As is well known, in the past we had cases of deviation from the principle of material incentive, particularly in agriculture, which caused serious damage to agricultural production and the kolkhoz system. Contempt for the material requirements of the working people and the concentration of emphasis .on enthusiasm and awareness, on social and moral forms of incentive and reward, hampered development of production and the raising of the living standards of the working people.’ But it is especially interesting that even science is brought under this rule. The Times reported on June 15: ‘the President of the Academy suggested that thought should be given to stimulating the _ solution of the most important (scientific) problems ‘by the introduction of premiums and advertizing ~ competitions for the solution of the problems.’ Is this the transition to Communism? '.Conference was specially concerned with the lack of co-ordination of the research going on in over 3,800 different establishments. The 354,000 scientific workers in these institutes ‘ were divided among some 170 Union and republican ministries and authorities, each of which has been concerned with its own sphere of activity.’ These bureaucratic distortions led to grave problems of overlapping, duplication and. consequent waste. Thus ‘some [00 different organizations were working on the subject of the direct conversion of heat energy into electricity, and 150 different institutions were conducting research on the automatic control of machine tools.’ A recent issue of Kommunist, journal of the The same © 43 Central Committee of the Soviet Communist Party, carried an article entitled, ‘An Important Aspect of Life ’, which was devoted to the persistence in Soviet life of religious ritual and ceremony. Instead of following out the Marxist method of analyzing the social roots of the persistence of this ritual, which ‘would of course lead to a criticism of Soviet society itself, the article in fact suggests that the remedy is to substitute ‘ bright and impressive ceremonies of a . Communist (!) type.” It goes on to recommend more ‘Komsomol weddings’, harvest festivals and celebrations of the seasons as suitable for this treatment. Other occasions for ritualization are birth, the first day at school, joining the Komsomol, getting a passport, the first pay-day, call-up and_ demobilization, graduation, marriage, silver wedding, decoration, qualification for pension, and death. All modern techniques of tape recording, T V and film should be used in this macabre modern version of the old Egyptian and Chinese philosopher-priests who devised religious ceremonies to keep the masses contented with their lot. In understanding the planned economy and abolition of capitalist property relations which have made possible the great economic advances of the USSR, Marxists have at the same time the duty of explaining the persistent and deepening contra- diction between that planned economy and the power of the parasitic bureaucracy which dominates. the economy and the State in that country as well as the Communist Parties throughout the world. The creation of revolutionary Marxist parties in the advanced and the underdeveloped countries for a consistent struggle to overthrown imperialism is the- greatest contribution we can make to the restoration of workers’ democracy in he USSR. Only when the Soviet workers overthrow their bureaucratic masters will that be achieved.

[p006] 44 Opportunism in 1961. ~ LABOUR REVIEW—Summer 1961. *,.. The international ideological trend represented in all countries of the world by “the most prominent theoreticians” and leaders of the Second International (Otto Bauer and Co. in Austria, Ramsay Macdonald and others in England, Albert Thomas in France, etc., etc.) and a multitude of Socialists, refonmists, pacifists, bourgeois democrats and parsons.’ (V. I. Lenin, Preface to the French and German Editions, J uly 6, 1920, of Imperialism, the Highest Stage of Capitalism, Foreign Languages Publishing House, _ Moscow, p. 13.) .The vocabulary of politics has been debased. Terms which once stood for definite scientific con- cepts have become used as words of mere abuse. *Opportunism ’ is one such term. For Lenin opportunists were those who acted as ‘the real agents of the bourgeoisie in the working- ' class movement’. illusions about reforms, peace, democracy, etc., being possible within the framework of the modern monopoly capitalist system which, already in Lenin’s day, had embraced the whole world. ‘They were distinguished by their methods of investigation and analysis. Instead of starting from world monopoly capitalism as a whole economic system, they isolated particular aspects of it, and proceeded from there to confirm their own a priori assumptions. The opportunists listed in the above quotation from Lenin are, of course, still with us. And the need to expose them is as urgent as ever. In this article, however, I shall try to distinguish three additional categories of opportunists, to identify their ‘ theories ’, and to explain the social conditions in which they have developed. They are: 1. The ‘bureaucratic’ opportunists: the representa- tives of the bureaucratic caste who have secured control of political power in the states where the bourgeoisie has already been overthrown. These include the officials of the Russian and Chinese Communist Parties, and of other Communist Parties throughout the world. They were those who spread. 2. The ‘ nationalist > opportunists: the representa- F. K. Girling 7 tives of the national petty-bourgeoisie who have _ -been installed in positions of local authority in some of the backward countries still under oes imperialist domination. 3. The ‘ internationalist’ opportunists: the bureau- cracy made up of the petty-bourgeoisie of all - - nationalities who staff the financial, military, administrative, cultural and other organizations organized round the UN General Assembly, the World Bank, the World Health Organization, UNESCO, etc. These categories collaborate with one another closely and in some respects they tend to coincide. Nevertheless they can, I believe, be distinguished by . which they profess and by: the separate ‘theories’ the different courses they follow. It is clearly not fortuitous that they should have appeared at this period or that they should behave in this way. I shall try to explain what are the economic bases of their appearance and behaviour. Imperialism’s Main Features: An analysis of the economic, political and social system known as imperialism, and of the means by which this system will be overthrown, are contained respectively in Lenin’s book with that title, and in the Theses on the National and Colonial Question! 1In Jane Degras (ed.) The Communist International, 1919-1943, Vol. 1, pp. 138-144.

[p007] OPPORTUNISM IN 1961 drafted by Lenin and adopted by the Second Congress of the Communist International on July 28, 1920 (just after he had completed the Preface to the French and German editions of Imperialism). It is necessary to read these two texts in conjunction: one is not complete without the other. The book was completed in 1916 while Lenin was still in exile in Zurich. It was based on a detailed study of diplomatic history, economics and politics which he - had carried out over a period of nearly two years. It contains no more than a bare outline of the more important facts and a summary of Lenin’s con- clusions. Moreover these conclusions are stated in a highly abstract form; in addition the book is written in ‘allegorical’, ‘Aesopian’ language in order to deceive the Tsarist censor. For all of these reasons Imperialism is not an easy book to under- stand, and this might, perhaps, excuse some of the * bureaucratic’ opportunists for their departures from its theories. However, the practical tasks are set out in the Theses in such clear and unequivocal terms that any deviations from these policies could hardly be due to misunderstanding. It is not mere chance but specific economic reasons which lead a whole section of society to take up a consistently counter-revolutionary position over a long period. It is necessary to state the main points, both of the theoretical analysis and of the practical tasks, before discussing the ‘theories’ and activities of the oppor- tunists which deviate from these. ~* According to Lenin, imperialism was the ‘ highest’ and ‘last’ stage of capitalism; already within imperia- lism itself certain of capitalism’s fundamental charac- teristics had begun to change into their opposites (free competition had given way to monopoly). The productive forces of society had reached a high stage of development and their further development was prevented by the capitalist social system. ‘ Imperia- lism is the eve of the social revolution of the prole- — tariat’ and the establishment of socialism. Lenin gave several short definitions of imperialism but he was not completely satisfied with any. None included all the characteristic features of the pheno- menon and thus some of the most important remained to be deduced by the reader. The briefest possible definition was: ‘imperialism is the mono- poly stage of capitalism’. But this left too much to be deduced and he set out a more extensive definition which listed seven of the basic features of the system. These were: ‘1. The concentration of production and capital has developed to such a high stage that it has 2 The complete data used by Lenin are contained in Notebooks on Imperialism published in Moscow in 1939. (See Note 1 to Imperialism F L P H edition). 45 created monopolies which play a decisive role in economic life. 2. The merging of bank capital with industrial capital, and the creation on the. basis of this “finance capital” of a financial oligarchy. 3. The export of capital as distinguished from the export of commodities acquired exceptional importance. 4. the formation of international monopolist capitalist combines which share the world among themselves, and 5. the territorial division of the whole world among the biggest capitalist powers is completed.’3 These five are the basic ‘purely economic’ concepts; it was necessary also to take into account the historical relations of this stage of capitalism to capitalism in general, and also the political relation between imperialism and the two main trends in the working-class movement of that day (i.e., Bolshe- vism and Menshevism, or Marxism and reformism). 6. On the historical aspect, Lenin wrote that imperialism was ‘ parasitic or decaying capita- lism’ which in the future would be more and More uneven in its growth. Some areas of the world would grow more rapidly, others would remain backward and stagnant. 7. On the political aspect, Lenin traces the con- nection between imperialism and opportunism or ‘“Kautskyism’. All forms of opportunism were in fact summed up in Kautsky’s approach. Objectively the ‘theories’ of Kautsky were an attempt to preserve imperialism by consoling the masses with hopes of permanent peace being possible under capitalism, ‘ by distracting atten- tion from present conflicts to benefits which the masses would enjoy under an imaginary future “ultra-imperialism”.’ This was quite unrealistic and amounted to no more than ‘deception of the masses ”.4 To turn to the practical tasks outlined in the Theses. National freedom for the proletariat and the peasants could only be achieved through revolu- tionary struggles. There was no other way. The ideas that it was possible for nations to be equal under capitalism or that there was any possibility of permanent peaceful co-existence between socialist and capitalist states are described as petty-bourgeois illusions. ‘There is no salvation’, he wrote, ‘for dependent and weak nations except as an alliance of Soviet republics’. In the same year, 1920, Lenin declared to the Central E.C. of the Communist Party, ‘We have now passed from war to peace, but we 3 Ibid, 4 Ibid, p. 191.

[p008] 46 have not forgotten that war will come again. So long as both capitalism and socialism remain, we cannot live in peace. Either the one or the other in the long run will conquer. There will be a funeral chant either for the Soviet Republic or for world capitalism. This is a moratorium in a war.’ With regard to the form of assistance to be given to the national liberation movements the Theses are no less explicit. The purpose of the Communists’ supporting these movements was not in order to win national independence under bourgeois governments —this was quite impossible. ‘The Communist International has the duty of supporting the revolu- tionary movement in the colonies and backward countries only with the object (my emphasis F K G) of rallying the constituent elements of the future proletarian parties ... . (They) must consistently maintain the independence of the proletarian move- ment even if it is only in an embryonic stage.’ There could be no question of ‘democratic roads’ to socialism being found or of different countries aiming at socialism ‘ by different means’. The entire policy of the Communist International must be based ‘on bringing together the proletariat and working classes of all nations and all countries for the common revolutionary struggle for the overthrow of the landowners and the bourgeoisie.’ Neither could there be any question of non-interference in the affairs of so-called sovereign states. The Communist International would use all possible means to give direct support to the revolutionary movements among the dependent nations and to oppressed minorities such as the Negroes in the U S. It would be the duty of those nations which were the first to overthrow their own bourgeoisie to make sacrifices in order to overthrow international capitalism. Until this was done there could be no question of socialism being established. Socialism, wrote Lenin in the Theses, required for its basis ‘a world economy on a common . plan controlled by the proletariat of all nations.’ The policies of the bureaucratic opportunists diverge from those of Lenin and the C.I. in every respect. They do not differ only in matters of emphasis or timing, or on minor issues of tactics, Are There New Features in Imperialism? A basic divergence of this kind from the policies of Lenin would impose on the leaders of a serious revolutionary party certain clear obligations. They would have to establish that their policies were based on the recognition of certain definite ‘new’ features in imperialism. It would be necessary to show first, either that Lenin had not recognized these ‘new’ 5 Cited in L. D. Trotsky, History of the Russian Revolution, Vol. I, Appendix 2, p. 386. LABOUR REVIEW—Summer 1961 features or that they had emerged since 1920, and, second, that these were essential to an analysis of modern politics, This would require a detailed study of modern society in which full consideration was given to the new economic basis and to the effect of the ‘new’ features on all of the five economic basic concepts mentioned by Lenin. In fact no such study is available. The modern bureaucratic ‘opportunists’ revise Lenin’s theories out of all recognition while claiming to remain faithful to Leninism. They use Marxism-Leninism not as a tool of scientific analysis but as a holy icon to deceive the masses. The latest official exposition of ‘ bureaucratic’ opportunism is contained in the statement issued in Moscow in November last year. Here it is stated that one new feature of our epoch is ‘the world socialist system’ which is ‘becoming the decisive factor in the development of society. ...’ It is claimed that this will have become the decisive - feature when the production of the ‘socialist system’ exceeds that of the ‘capitalist system’. Then ‘capitalism will be defeated in the decisive sphere of human endeavour, the sphere of material produc- tion.”? If this means anything at all it means that the bourgeois will surrender power to the proletariat in the imperialist countries when the ‘socialist system’s’ share of the world. industrial product reaches 51 per cent. In other words technical efficiency, not conscious revolutionary activity, has become the decisive force in history; bureaucratic planning replaces class struggle. This goes beyond even a revision of Leninism, to a questioning of the whole basis of Marxism. It seems that the bureaucratic opportunists have been making an intensive study of Dale Carnegie’s theories on ‘how to win friends and influence people’. They believe that the policy which they advocate, that of peaceful co-existence, has the support of a ‘definite section of the bourgeoisie of the developed capitalist countries.’ Then there is the ‘national bourgeoisie of the colonial and dependent countries’ which is unconnected with imperialist circles. Not forgetting of course the working classes and the peasants, who can be brought together with these two to fight for peace. The policy statement is like a bran tub at a Christmas bazaar, there is something in it for everybody. With typical scholastic zeal the bureaucratic opportunists devote some space to an analysis of the different stages of development of the com- ponent parts of the ‘world socialist system’. In Russia they are ‘successfully carrying on the full- scale construction of a communist society.’ In 196 36 Million Communists say . . .. Communist Party, 0. 7 Ibid, p. 4. 8 Ibid, p. 17.

[p009] OPPORTUNISM IN 1961 China they are ‘successfully laying the foundations of socialism ’ and in the People’s Democracies they ~ have ‘already entered the period of construction of a developed socialist society.” Perhaps the extension of the death penalty to counterfeiters, those who _ damage state property, which was announced on May 6, is part of the construction of communism! Can the setting. up of concentration camps for idlers be regarded as a sign of the ‘moral and political unity of society ’ which the bureaucratic opportunists claim in the same document? The document proclaims that national liberation movements ‘ have triumphed in the vast areas of the world.’ The sign of this is seen in the setting up of 40 new ‘sovereign states’ in Asia and Africa. There is no mention here of the limitations on indepen- dence imposed by imperialism; nor is there any suggestion that proletarian dictatorship is a necessary condition for the carrying out of agrarian reforms, developing industry or introducing democracy. The alliance of the working class, peasantry and national bourgeoisie in a broad national front is the means suggested of ‘ ensuring social progress’. (‘ Socialism’ is not mentioned in this connection, only ‘non- capitalism ’.) In some capitalist countries (according to the document) the working class has the opportunity of winning state power without civil war by securing majorities in parliaments. And only in the event of the capitalists’ actually beginning to take violent measures should the possibility of ‘non-peaceful * transition be considered. (The world ‘revolution’ has apparently been taken out of the dictionary together with ‘socialism’ and other such terms, while words such as ‘peace’, ‘democracy’, ‘freedom’ ‘independence’ occur in every other line.) Socialism in One Country It is clear that the dogma of ‘socialism in one country ’, invented by Stalin in order to defeat his opponents in the Soviet Union, lies somewhere at the bottom of this pile of specious nonsense. The bureaucrats are determined to cling to political power and they will hold back the process of the world revolution to do so. They will make use of the bureaucratic machinery of the Communist Parties for this end both in the Soviet Union and other countries. They will use the ‘ nationalist’ and the ‘internationalist’ opportunists for this purpose too. In the blind fashion of office worms they ignore the forces making for socialism in the world, the international working class. , They are concerned only with their own survival and for this they rely on alliances with the enemies of the working class and of socialism, the national ‘of awkward political problems. ‘and error . 47 petty-bourgeoisie, and also on what The Economist calls ‘ tacit negotiation’ with the chosen representa- tives of imperialism.2 Since they have expunged the word ‘revolution’ from their vocabulary, no doubt ‘they think they have exorcised the reality. But the revolutionary upsurge of the world working class cannot be banished by such magical procedures. Clearly the statements of the bureaucratic oppor- tunists can have no consistent theoretical content. They reflect merely the stages in the process leading to their downfall and in the temporary patchwork of alliances brought into being by all kinds of blandishments. The blandishments addressed to the different elements in the alliances are dignified with the name of theory and sanctified by repetition of the names of Marx and Lenin. Stalin’s name is absent but his voice speaks from every page. In fact none of these ‘ theories’ are new; they all appear in a book which was written before Stalin’s death. It seems clear that Khrushchev is no more than the spokesman of the bureaucratic caste, for A. I. Sobolev’s book People’s Democracy: a new Form of Political Organization of Society, which; has been widely accepted both in the Soviet Union and in the other ‘socialist’ countries, contains an authoritative statement of all the present doctrines. Khrushchev’s speeches and those of the Communist. Parties do no more than elaborate on Sobolev. Like. the book they make continuous use of abstract verbal formulae in order to avoid the concrete posing And as one writer has expressed it, all of these writings constitute an unavowed debate with the ghost of Leon Trotsky. and the theory of ‘ permanent revolution ’.10 . The ‘nationalist’ opportunists The policies of the ‘ bureaucratic’ opportunists encourage and actually assist the development of the ‘nationalist’ opportunists. Some of these latter claim to be Marxists themselves. Nkrumah in Ghana, on his release from prison in 1951 declared to a press conference with a fine inclusiveness: ‘I am a Marxian socialist and a non-denominational 9* The two leaders (Khrushchev and Kennedy) cannot set down the details of such a rule on a piece of paper. They will have to be worked out by the process known in the current jargon as tacit negotiation ... Russia and the United States will have to find out by ‘cautious trial . . where and by what means it is safe to play this game . (of encouraging revolution and counter-revolution).’ " ‘The Economist, May 6, 1961, p. 324. 101. G. Churchward, ‘Contemporary Theory of the Soviet State’, Soviet Studies, Vol. No. 4, p. 423. XU, April 1961.

[p010] 48 Christian’.!! not a Communist and never had been one. He was, perhaps, a little dazzled by the prospects which were just opening before him. Touré spoke in a similar way to an invited audience in London. ‘We are Marxists ’, he said, ‘ but in the Guinean Democratic Party, the national political front, we do not discuss Marxism, but whether to build a bridge or a school. Our peasants and workers are practical people.’ But it does not really matter whether the ‘ nationalist’ opportunists claim to be Marxists, neutralists, Pan- Africanists, Pan-Arabists, liberals, democrats or Islamic socialists, they all have characteristics which justify their being included within the same category. They all believe that it is possible to win indepen- dence and freedom for their own particular nation, continent, race, clan, tribe or religious sect, within - the framework of imperialism. They will enter into agreements with any other forces which seem to support this view. In general the nationalist oppor- tunists belong to the petty-bourgeoisie, the army or the intelligentsia of backward countries. As a consequence of the policy and theories of the ‘bureaucratic’ opportunists represented by the Communist Parties, the working class in these countries is unable to assume the leadership of the national liberation movements. Or perhaps in some cases it is too weak numerically to be able to do so. The policy of the nationalist opportunists is marked by violent oscillations between right and left. They assume the leadership of the movements for national liberation at a stage when open conflict with the forces of imperialism is taking place, or about to do so. They are able to rely on support in the form of arms, technical advisers, credits, etc., from the ‘socialist* countries. This support further reinforces their own position with regard to their working class, and peasants, who conveniently still regard the Soviet Union and China as the countries of the Revolution. In this first stage the nationalist opportunists may announce the setting up of a new Constitution, the formation of a Republic, the carrying through of land reform policies, etc. This stage will continue until some kind of a ‘ victory’ over the forces of imperialism has been won. Since defeat of the national independence forces by ‘military means is impossible while the Soviet Union can threaten to use nuclear weapons, imperialism is compelled sooner or later to negotiate with the nationalists. The longer warfare continues the greater is the power which the working class and peasants achieve within the movement, and therefore it is in the interest of imperialism to avoid or at least limit any conflict. At this stage the imperialists too will offer concessions, credits for the building. a me 1955 by Bankole Timothy in Kwame Nkrumah, He went on to make it clear that he was. LABOUR REVIE w—Summer 1961 of new industries, equipment for the. armies, etc. _ They will seek at all costs to establish some form of — social equilibrium. In consequence the * nationalist ’ opportunists will begin to acquire imperialist ambitions of their own. They will create new Federations in which they seek to dominate other nations, and they will begin a policy of repression with regard to their working class and peasants. They will ban all political parties, restrict the activities of the trade unions and—at the same time organize demonstrations for Pan-Continental freedom. There is no space here for a detailed considera- tion of the separate nationalist movements. Each has its own peculiar features and. in subsequent articles I will try to examine these. All that I have tried to do is to explain the main lines of their development and to show their inevitability in the present situation. The line of the ‘ bureaucratic’ opportunists is to maintain that the swings to the right in the backward countries are ‘negative’ features which are not ‘characteristic’ of the whole process. The main direction of the movement is to the left, they claim, just as the disappearance of imperialism is something inevitable. Thus the fact that Nasser has filled the jails of Egypt with Marxists and trade union leaders is an anomaly to be explained only as a ‘ hangover from the colonialist past’! (It is interesting that this is the same explanation which is offered for the appearance of antagonistic features in Soviet society.) If we take Nasser as an example of a ‘nationalist’ opportunist, however, we see that his policy of repression is not an anomaly but a necessary consequence of the relationship of the Egyptian petty-bourgeoisie to imperialism. From 1955 to 1959 they had made use of the Egyptian - working class and peasants in order to establish a favourable bargaining position with regard to imperialism. During this time the Left wing in Egypt did not organize a campaign of opposition to Nasser — instead they made moderate and ‘con- structive ’ criticisms of his policies. Nor did they organize an independent working-class movement. They attempted to ‘preserve national unity’ to safeguard the gains of the ‘national liberation struggle ’, they were committed to the Bandung policy of positive neutralism’.!2 Nasser’s policy, however, was determined by the interests of the 12 See N. Numade, ‘ The Choice before New Africa ’, The African Communist, No. 5, May 1961. ‘ Nasser’s cruel jails are crammed with patriotic Communists, - trade unionists, Syrian and Egyptian democrats. . . . But such negative factors are not characteristic of the new ‘Africa that is being born. The main direction of the national liberation e novement in Africa is—decidedly and increasingly—democratic, anti-imperialist and anti- capitalist.” (p. 19)

[p011] OPPORTUNISM IN 1961 Egyptian petty-bourgeoisie, who were seeking to expand and to control the markets of the whole Arab world; and who hoped to gain control of the oil wells in the neighbouring Arab countries. In 1960 Nasser became the champion of anti- Communism, and’ re-established relations with Britain and the USA. He negotiated loans from America, Germany, Italy and Japan. He sent trade unionists, writers, students and intellectuals to concentration camps. There he ‘organized’ the deaths of many of the leaders of the working class and trade unions. There was nothing ‘ accidental’ or ‘uncharacteristic ’ about these developments, they cannot be explained as resulting from the ‘ negative’ effects of the features left over from the colonialist past. They are the direct consequences of the features in Nasser’s regime which belong to the imperialist present.13 There is, however, a sense in which the policies of the ‘nationalist’ opportunists: Pan-Africanism, Pan-Arabism, etc.—can be traced to roots which lie in the past, although not in the way that the ‘bureaucrats’ claim. ‘They stem from the dogma of ‘socialism in one country’, first invented by the bureaucrats under Stalin’s leadership to defeat their enemies in the Soviet Union, Trotsky and the Left Opposition. The theory of ‘permanent revolution’ advanced by Marx, Trotsky and Lenin was con- demned as ‘heresy’ at the same time; and in its place there was substituted the out-dated theory of the universal ‘two stages’ of the revolution. This led in turn to the subordination of the proletariat to the bourgeoisie in thé national liberation movements. These policies enforced by the Comintern from 1926 onwards and more recently by the national Com- munist Parties under the direction of the bureaucracy have cost the working class dear and have retarded the growth of the revolution immensely. This is indeed a ‘hangover’ from the imperialist past still nursed by the bureaucracy. The tragic defeat of the Chinese Communists at the hands of Chiang Kai-shek’s forces in 1927 was one result. In 1936 the Comintern suddenly proclaimed a ‘Black Republic’ policy for the Negro minority in the Union of South Africa. This was an attempt— in accordance with the ‘two stage’ theory—to win the support of the small petty-bourgeoisie in both the US and South Africa for national liberation struggles in which the workers would play a secondary role. It had the effect of completely “disrupting the Communist Parties in both countries 13 There is a useful account of developments in Egypt from 1955 onwards in an article by Adel Montarser, “La Repression en Egypte’, Les Temps Modemes. Nos. 173-174, Aug.-Sept. 1960, pp. 418-441. This appeared long before the article in World Marxist Review which drew attention to the position in Egypt. 49 and of driving the intelligentsia away from Com- munism. They saw that Stalin used the Comintern as an instrument of the policy of Russia, as they thought, and sacrificed the interests of the African and Negro masses.!4 Thenceforward they regarded Communism as a ‘ white man’s creed’, they turned their attention to their own masses, both in Africa and in the US, under such slogans as ‘ négritude ’, ‘African personality’, ‘the revival of African culture ’, etc., which in fact constitute a surrender to imperialism. The consequences of Stalin’s policies have still to be overcome if a genuine revolutionary movement is to be built in the backward countries. The ‘ Internationalist ’ opportunists We come now to the last category of opportunists with which this article deals. This includes bankers, administrators, technical experts of all kinds, journalists, economists, sociologists and other academics. The development of this new category has occurred with great rapidity since the setting up of UNO and its various Commissions and Agencies in 1946. These people perform many different functions, and serve imperialism in many different ways. I shall deal only with their relationship to the backward countries. In a report published in 1950 one of the UNO Commissions listed 12 conditions which would have to be present in any country before private investors would sink their capital there. They were: *1) Political stability and freedom from external aggression. 2) Security for life and property. 3) Availability of opportunities for earning profits. 4) Prompt payment of fair compensation and its remittance to the country of origin in the event of compulsory acquisition of a foreign enterprise. 5) Facilities for the remittance of profits, dividends, interest, etc. 6) Facilities for the immigration and employment of foreign technical and administrative personnel. 7) A system of taxation that does not impose a crushing burden on private enterprise. 8) Freedom from double taxation. 9) Absence of vexatious controls. 10) Non-discriminatory treatment of foreigners in the administration of controls. 11) Absence of competition of state-owned enter- prises and private capital. 14 George Padmore. Pan-Africanism or Communism 1956, particularly the Preface by Richard Wright.

[p012] 50 12) A general spirit of friendliness to the foreign investor.”!5 The fact is that in recent years there have been few backward countries in which these conditions have prevailed. I shall examine the reasons for this situation later, but the consequence has been a breakdown of the system in many areas of the world. And in consequence UNO and its agencies have been engaged in a salvage operation. They are attempting to create the conditions required in these countries so that private capital will once more flow into them as it did formerly. This is probably impossible; imperialism has reached a stage in its development when the breakdown of the system has gone too far to be arrested by such small-scale reforms. The United Nations Special Fund, the World Bank, the International Monetary Fund and other organizations have all been set up in an attempt to deal with this problem. ’ The plan is that there should be three stages in the economic development of a backward country. In the first of these the UN Special Fund should organize a number of projects to be financed partly by the Fund and partly by the recipient country. It is not expected that these projects should be profit- able. They include the detailed investigation of the country’s resources, minerals, oil, water, power, etc., and also the training of certain categories of skilled manpower. In the second stage the World Bank should be responsible for providing capital, from its own resources and from private sources for ‘sound investment projects’, that is for schemes which will . provide profits for the investors.!6 So far only India, Brazil and Mexico have reached even this second stage. In the third stage it is hoped that private capital will begin to flow into the backward countries without any assistance from the U N agencies. These plans involve the intervention of the agents of imperialism in the domestic affairs of all the backward countries. They can do so much more effectively as representatives of the U N O organiza- tions than as direct agents of private monopoly capital. In some countries they prop up corrupt feudal regimes with loans and military equipment. In others they help to instal representatives of the local petty bourgeoisie: Sekou Touré, Nyerere, etc. In all of them they are engaged in the training of a new ‘middle class’ made up of teachers, doctors, engineers, lawyers, factory managers, skilled techni- cians, etc. They hope that these people will provide the basis for a government acceptable to the local population and to whom administrative responsibility 15 UN Economic Commission for Asia and the Far East, Foreign Investment Laws and Legislation in the ECAEF Region, Bangkok, March 1950, pp. 4-5. 16 Andrew Shonfield, The Attack on World Poverty 1960, p. 21. LABOUR REVIEW—Summer 1961 can be given, while capitalism gets on with the real job—making profits. It is significant that the bureaucratic opportunists are following the same policy: they, too, are engaged in the training of technicians, etc., who will form a ‘ reliable’ political element in the backward countries.!7 There are many examples of the way in which UNO agencies have provided a disguise for the operations of private monopoly capitalism. In 1959 the World Bank financed a loan to Japan, ostensibly for certain development projects within the country, but actually in order to improve the financial status of the banking institutions so that private capital could be invested more plentifully in Japanese industry. After a small World Bank loan, commercial banks in the US and Germany came in as partners in loan issues. In 1960 the World Bank organized a loan for the development of the manganese deposits in Gabon, West Africa. Important U S steel companies were interested in these and as soon as the loan was issued half of it was taken up by US insurance companies on their behalf. In Bolivia after the Revolution, in Guinea after the departure of the French, in Laos and in the Congo, the U N agencies have stepped in to ‘save’ dangerous situations, i.e., to prevent the workers and peasants from taking control of their economies. The I L O is another U N agency which has helped capitalism to sustain itself over a difficult period. 17 Both the imperialist powers and also the communist states lay stress on the importance of ‘ educating’ the teachers, technicians, scientists and administrators required in the backward countries. There are, for example, thousands of students from the backward countries of Africa, Asia and South America in Moscow as well as in New York. It is of interest in this con- nection to recall Lenin’s views on education. In The Revolution of 1905 he wrote: ‘When the bourgeois gentry and that uncritical chorus of satellites and: social reformists talk priggishly about the “ educa- tion” of the masses they mean usually something school- masterly, pedantic, something which demoralises the masses and imbues them with bourgeois principles. ‘The real education of the masses can never be separated from the independent political, and particu- larly the revolutionary struggle of the masses themselves. Only the struggle educates the exploited class. Only the struggle discloses to it the magnitude of its own power, © widens its horizons, enhances its abilities, clarifies its mind, forges its will . . . the economic struggle, the struggle for immediate and direct improvement of conditions, is alone capable of rousing the backward strata of the exploited masses, gives them a real educa- tion and transforms them during a revolutionary epoch —into an army of political fighters within the space of a few months... ”’ For ordinary formal academic education Lenin had a profound contempt. In peacetime, he wrote ‘ univer- sities and lecture halls ... are used to befuddle youthful heads with pedantic professorial wisdom and turn them into docile servants of the bourgeoisie and Tsarism’ pp. 42-48.

[p013] OPPORTUNISM IN 1961 Ostensibly concerned with workers’ wages and con- ditions, the ILO experts have actually helped employers to depress both. In the initial stages of the development of an industry, they claim, it is more important that the employer should receive high profits than that the workers should receive high wages or good conditions. In the backward ‘countries they ‘advised’ against granting wage increases. And since the capital was coming from ‘UNO sources the government was in no position to resist. : The strategy of this intervention by the agents of imperialism has been worked out in some detail by economists and sociologists. The participation of the economists Berle and Schlesinger in the plans for the invasion of Cuba is a recent notorious example.!8 At a more abstract academic level the sociologist Talcott Parsons is, however, equally as much an ‘interventionist’, The problem in the backward countries is one, he maintains, of pro- moting economic development in these countries in -~ order to hold back the advance of Communism. This can be done by ‘locating the centre of develop- mental initiative in the bureaucratic component of the political structure’. In simple terms the UN agencies should set up health services, hospitals and schools in the backward countries, because there is less likelihood of opposition to such activities, and also because this is the way in which a non- communist, pro-imperialist leadership can be created. For the same reason ‘democratic socialists’ in the backward countries should receive the maximum possible support. The main alternative to -the control of economic development by communists is a development ‘ which for the time being is one in the direction of “democratic socialism” in which intellectuals with contacts in Western culture will play a prominent part ’.!9 Imperialism in 1961 An up-to-date analysis of the economic situation in the present-day world is urgently needed. Without such an analysis the bases of the existence of the new opportunists cannot be properly examined. There is an abundance of statistical and economic data. The co-operation of a team of Marxist scholars is needed to bring order into this material and trace the processes which are at work. Meanwhile I shall try to make a few tentative suggestions. In the first place I believe that none of the five 18 Cf. Time magazine, April 28, 1961, p. 24. 19 Talcott Parsons, ‘Some Reflections on the Institu- tional Framework of Economic Development’, in The ChaHenge of Development, Jerusalem, 1958. 51 basic economic features of. imperialism listed by Lenin have disappeared. The sixth feature, the historical, is still present, too. All of these processes have, however, reached a higher stage of develop- ment since 1916, and in particular the decay of the system has proceeded much further. One symptom of this decay is the overthrow of the bourgeois state in wide areas of the world. Another symptom is the economic stagnation which is affecting the backward countries. While the productive forces in the advanced countries are still developing, the backward countries are falling further away. A number of different factors are responsible for this situation. The increased technical efficiency of agriculture in North America, Western Europe, Australia and New Zealand has enabled fewer people to produce more food and thus to restrict the markets for the sale of the agricultural commodities of the backward areas. At the same time the advance of . science in industry has developed synthetic materials to take the place of natural products such as jute, rubber, cotton, diamonds, wood, etc., all raw materials produced by the backward countries. There is still a market in the advanced countries for the natural oils, tea, coffee, cocoa, sugar, etc., pro- duced in the backward areas but the market for these cannot expand indefinitely, while the demand for manufactured products in these countries is almost inexhaustible. Further there has been a large increase in the population of the backward countries, while that of the advanced countries has either’ declined -or increased much more gradually. For this reason the standard of life of the populations of the backward countries is declining. Imperialism dragged them out of their self-contained natural economies but has not provided the means by which they can develop their own resources. Tables 1 and 2 illustrate the position. The first shows that the advanced countries contain 22 per cent of the world’s population, while the backward countries have 71 per cent of this population. The level of industrial development in different countries, as measured by the per capita net national product, is shown in the second table. The lowest figures are those for Uganda, Burma and India. The highest are those for the United States and Canada followed by Switzerland, Sweden, New .Zealand and_ the European countries. There is an intermediate group of countries with a range in their per capita national product of 250-200 dollars, which includes a number of South American, Asian and European countries. It should be noted that a country like the Union of South Africa (with a per capita figure of 300) contains a large number of Africans earning low wages and a small number of Europeans earning high wages; this raises the per capita figure and thus gives a

[p014] ‘areas for investment are developing. 52 misleading idea of the economic position of the country. 7 After 15 years of United Nations efforts the industrialization of the backward countries has still not begun. Conditions in these countries have become progressively more unfavourable for private investment and more capital is now being invested in the more backward areas of the advanced countries themselves, i.e., Greece, Spain, Italy. The increased investment in the advanced countries is bringing about the intensification of competition and rivalry between monopolist countries. New struggles for markets, sources of raw material and The con- centration of production and capital is reaching an even higher level. New crises are likely to occur at any time. ~ Fable 1 LABOUR REVIEW—Summer 1961 The key to the situation lies in Lenin’s seventh feature of imperialism—the political. The theories of the ‘bureaucratic’ opportunists are the main means by which imperialism is enabled to survive. They claim that a peaceful transition to socialism is possible through an increase in the level of pro- duction in the ‘socialist system’. They constitute a counter-revolutionary force and present the main obstacle to the creation of an international revolu- tionary party with sections in all countries. They do so because of their privileged position in Soviet society. Like the ‘nationalist’ and the ‘ interna- tionalist’ opportunists they have a stake in the survival of imperialism. But the interests of the working class in the advanced and in the backward countries demand the overthrow of the system. ESTIMATES OF PER-CAPITA NET NATIONAL PRODUCT OF 55 COUNTRIES EXPRESSED IN US DOLLARS: ANNUAL AVERAGE 1952-54 (At factor cost) AMERICA Per capita Country EUROPE Per capita Country OCEANIA Per capita Country Per capita Uniied States 1870 zg Canada 1310 Switzerland 1010 = weden 950 New Zealand 1000}~ g Luxembourg 890 Australia és Belgium 800 o United Kingdom 780 3 Iceland 760 & Denmark 750 2 France 740 < Norway 740 Finland 670 Venezuela* W. Germany 510 Netherlands Argentina Puerto Rico 30 Ireland 410 Union of Chile 360 Austria 370 South Africa 300 Cuba 310 Malaya‘ 310 Italy 310 Colombia 250} Lebanon 260 Panama Brazil -Mexico 220 Greece 220 Turkey ~ 210 Portugal Jamaicat 180 Japan 190 : e Dominican 2 Republic 160 Table = Guatemala 160 oo PERCENTAGE OF THE WORLD’S 5 Ecuador 150 Philippines ‘807 POPULATION IN DIFFERENT AREAS v Honduras 150 ¥ Paraguay 140 Advanced Countries Millions % z Egypt 120}! Peru 120 Euro 420 15 3 Rhodesia and Ceylon 110 North America 193 & g Nyasaland 100 Thailand* 80 Oceania 16 _ Belgian Congo 70 Korea 70 _ —_—— Kenya 60 Pakistan 70 629 29 Uganda 50 India 60 : Burma USSR 206 7 *1952 and 1953 Backward Countries 41952 Asia 1591 (56) Source: United Nations, Per-capita National Product of Fifty-five Countries 1952-54, erica ; 4 ” . - ou merica Statistical Papers Series E. No. 4 (New York, 1957) Mid-America 63 Q) 2019 71 Total World Population 2854 100 Source: United Nations Demographic Year Book 1959, p. 127.

[p015] 53 In the course of the next year, Labour Review will carry a number of articles on general aspects of the international situation, with a view to contributing to the understanding of the present phase of the decline of capitalism and the struggle for Socialism. We begin with this article by Tom Kemp. It is an evaluation in Marxist terms of modern capitalist development, and lays the basis for refuting the many revisionist theories. Such theories have claimed that capitalism has fundamentally changed its nature since the days of Marx, and that its economic contradictions have disappeared. All of them tend to see the capitalist system in unhistorical and partial terms, rather than as a developing whole. The editors hope that this and subsequent articles will provoke written discussion from our readers. _ The Course of Capitalist Development: z em ORR Le ee Ra MN eT a FO THE - generally An Outline Analysis ascending curve of capitalist development since the end of the Second World War has provided many economists with easily-accepted evidence that Marxism has failed, that capitalism has changed and that the system has won a more or less permanent new lease of life. On the other hand, not a few Marxists, or those claiming to be such, have manifestly failed to account for the new phase of capitalist development and to rid them- selves of the type of characterization of the ‘general crisis of capitalism’ which did service in the 1930s. However, the fault has lain, not in the theories of Marx, but in the unwillingness or inability of many of those who claim to be his followers to do for their day what Marx did for his, to track the working out of the ‘laws of motion’ of the capitalist mode of production in its latest phase. Without claiming that this can be done within the confines of a single article, at least some attempt can be made here to re-state some leading principles in the light of con- temporary developments, and perhaps to indicate some future lines of work. MARX’S MODEL The forward movement of the capitalist economy as a whole is kept going by the ability of capitalist enterprises (‘firms’) to extract surplus value from the working class and to realise it (according to the Tom Kemp process which Marx called ‘extended reproduction’). Unless surplus value can be realised practically in its entirety then the rate of advance slackens. In the absence of outlets for the profitable re-investment - of a sufficient part of the proceeds of the past exploitation of labour, all the surplus value which it is possible to extract cannot be realised, and if it cannot be realised it will not pay capitalists to extract it. The system will adjust itself to this situation by a slowing down and generally by a positive con- traction; in the latter case we have the basis for the familiar trade cycle; however, a more or less pro- tracted period, spanning over several trade cycles, in which the conditions for realization become un- usually difficult, is also possible and has been a feature of capitalist development.! The individual capitalist enterprise (‘firm’) is geared essentially to accumulation, which proceeds normally as long as surplus value can be realised and. money capital thus becomes available for expansion. What happens in 1 Upon these observed historical facts a number of theories of the long cycle have been built, following the analogy of the (ordinary) trade cycle. These theories have in common a mechanical approach, which artificially separates the economic forces from the whole historical process and is foreign to Marxism. They may be studied in the writings of Kondratieff, Schumpeter, Rostow .and others. Trotsky’s short and concentrated comment on Kondratieff’s theories (see, e.g., Readings in Business Cycle Theory) states the Marxist position: it will be found in ‘ Fourth International’, May 1941,

[p016] 54 the system as a whole (‘ macro-economics’) is the aggregate of the results of the component ‘firms’, some of which, therefore, may be behaving in a way different from the system as a whole. ~ Tf the workings of the capitalist mode of produc- tion are reduced to their elements and a ‘ model’ is made from them, not one but an infinite variety of possibilities could emerge. At best a theoretical model is an imperfect replica of the real world, more or less adequately representing a small part of it while holding constant other operative components. As soon as the model is made more realistic by adding to the number of variables, the whole picture becomes increasingly complex. Since values and weights have to be more or less arbitrarily given to each new factor the more complex picture does not cease to be abstract or necessarily approach more closely to the real world. Indeed it may well become no more than a theorist’s toy, helping, perhaps, to perfect certain tools of analysis but offering no formula for a clearer understanding of the real world. These limitations of the economic model, in which aggregates are the resultant of numerous interactions by separate profit-oriented enterprises, as is the case under capitalist conditions, apply to Marxist as well as orthodox economics. In fact, confusion between simplified models as used by Marx, e.g., the reproduction schema, and the real operation of the capitalist economy, has been a ready source of confusion.2 Of course, Marx’s political economy permits of the construction of different models, which behave differently, according to what is built into them at the start. From simple models, used by Marx for a limited and specific purpose, it is therefore illegitimate to make deduc- tions applicable to capitalism as a whole under all It is typical of Marx’s method that he conditions. abstracts from the whole complex functioning of the living world the narrow segment which he wishes to subject to detailed investigation in order to bring out a relationship, to suggest what tendency will operate if the surrounding conditions are given—as they seldom are in practice. In fact, the several laws which Marx discerned in the capitalist mode of production have at one or another time been sufficiently strongly marked to enable it to be said that they received practical verification. At other times, to a superficial view, they have not been in evidence at all: they have not been in evidence because counter-tendencies have prevented their appearance. Indeed ‘laws’ which on the basis of an abstract model stand out powerfully may in the history of capitalism have been almost always counteracted by other forces within the system. 2 It is the source, for example, of the errors—brilliant as they are—of Rosa Luxemburg’s The Accumulation of Capital. LABOUR REVIEW—Summer 1961 Raising these questions does not mean that the laws are not laws or that the method is a wrong one. Rather it means caution in using the tools which Marx provided when probing into the secrets of capitalist development over the past century. There was not, in Marx’s writing, a ready-made model for the future working-out of the laws of capitalist development or a kind of advance pro- gramme to which he expected it to adhere. When Marx did permit himself a prediction—and for him predictions included expectations about what men would do to bring about the situation which he hoped would ensue—he was often wrong. -But then he was not a prophet, least of all in ‘Capital’, and it is pointless to argue whether he was right about this single point or wrong about any other. Marx showed the conformity of capitalist development to laws, and that development has taken place according to those laws, but in combinations and under given conditions which were the creation of living forces giving patterns of infinite variety and richness impossible to contain in any model. The model is a necessary methodological device, as long as its. limitations are recognized. ~ WORLD CAPITALISM When considering the history of capitalism since Marx’s day the question is not to compare actual developments with one or another statement made by Marx in the course of his many-sided abstractions from the whole, but to see how, in combination, the different laws to which he gave prominence throw light on the system as a whole in movement. In his day capitalism was still a youthful system, it existed in only a small part of the globe and it was an all-conquering system. Capitalism spread out from two or three areas to become a world system centred on a few advanced countries with their less developed tributaries throughout the world. This geographical extension, spread out over a whole historical period—the epoch of imperialism—facili- tated, at the same time, the intensive development of the capitalist mode of production in the advanced countries and revealed the unevenness of the whole development. To connect this with our starting-point, this extension of capitalism on a world scale provided vast new possibilities for the extraction and realiza- tion of surplus value, enabled the process of accumulation to proceed without pressure on the rate of profit, and kept up the real standard of living in the countries of advanced capitalism. This, of course, is to take the broad sweep with the emphasis on only one side of reality. The very conditions which assisted the capitalist mode of production to

[p017] COURSE OF CAPITALIST DEVELOPMENT 55 grow at the same time brought world wars, sub- jugation of colonial peoples, crises and mass insecurity. Capitalism did not collapse, despite these paroxysms, for the simple reason that as long as the capitalist ruling class retained power it was able to keep the system in being, at a price. The survival of capitalism arises not from the vitality of the system itself, but from the weakness of the working-class movement. But for present purposes we can leave this aside: capitalism has survived—more than that, it has been able to expand, and grow. It has been able to do so even though, for some decades now, it has not been the only system and its undisputed world domination is now past history. We are not concerned here with capitalism in any one country in particular. Capitalism is essentially a world system, to which the different national capitalisms stand in definite historically-given relations marked out in the world market. The health. of the world system conditions the prospects of the individual capitalist countries and reflects the relationship between the parts. A healthy and expanding world market is, in all but the rarest circumstances, the necessary basis for national economic growth; this relationship helps to explain why the maladies of capitalism are international in scope. CAPITALISM’S THREE PHASES The history of capitalism can be handled schematically in a number of long period trends, the last three of which particularly concern us, namely 1873-1914, 1914-39 and 1939 to date. (1) In the last quarter of the nineteenth century Britain’s undisputed supremacy in the world market came to an end and a new phase of international competition began. This competition for trade reflected the need to realise surplus value and in turn led to the geographical expansion of capitalism and especially the export of capital. Every growth of capital meant new sources of accumulation and thus the need for new outlets. As long as these could be found continued expansion was possible; but it was expansion which was accompanied by increased rivalry. between the capitalist states, especially as the undeveloped areas were divided out—and without any relation to needs. The first part of the twentieth century was, however, generally favourable to expanded reproduction. The major capitalist countries grew and provided markets for each other’s products at the same time as they competed more intensively for a position in the other areas. The flow of investment abroad kept up the rate of profit in the advanced countries at the same time as it opened up a ready-made market for industrial products. This took place within a framework of stable currencies, the international gold standard and multilateral trade: in fact, the world market functioned effectively as such and was able to expand fairly evenly. Even the capitalist countries without colonies (or only insignificant ones) benefited from the colonies of the others—though that did not make the struggle for a colonial re-division any the less acute.3 The growing international tension itself con- tributed to expansion through the pull of increased arms production; i.e., this opened up further possi- bilities for the realization of surplus value. This period before the First World War, shot through with contradictions, but permitting extended repro- duction and, looking only at the economic indices, what looked like indefinite expansion, was the back- ground for ‘revisionism’ in the German Social- Democratic Party. It was likewise the period in which monopoly trends became marked. The capitalist enterprise itself was changing along lines which Marx had foreseen. (2) The First World War was the outcome and fulfilment of the preceding period of capitalist development, not an accidental or external event. The major political-economic consequences of the war are well known. The United States took the place of Britain as the dominant world power. The October Revolution laid the foundations for a rival system. Instability and crises dominated the new period. The most significant outcome for the inter- war years was the disruption of the capitalist world market as it had existed prior to 1914: currency disorder, protectionism and chronic imbalance became the overt signs of this. The different 3 This is frequently forgotten by those who see economic development primarily in national terms. Britain’s colonies provided income which could be used for the purchase of commodities from, e.g., Germany, a country whose own direct stake in colonial exploitation was, before 1914, still small. It is sometimes pointed out that Britain and Germany were among each other’s best customers and that, therefore, the war of 1914 could not have had an economic root. In fact, though Germany benefited from Britain’s colonies, via direct trade with Britain, this was not sufficient. The struggle was only focused the more intensively on the markets and areas without which expanded reproduction would be checked. Though Rosa Luxemburg’s explanation of this process is flawed, her description is accurate when she writes of the ‘contradictory phenomena that the old capitalist countries provide ever larger markets for, and become increasingly dependent upon, one another, yet on the other hand compete all the more ruthlessly for trade relations with non-capitalist countries.” See The Accumulation of Capital, pp. 366-7. 4 These trends were examined by such Marxists as Hilferding, Bauer, Bukharin and Lenin while most other economists for long continued to assume ‘ perfect competition’ as the general case,

[p018] 56 countries were affected by this disruption more or less in proportion to their dependence upon the international economy of the pre-war type. The deteriorating position of Britain in the 1920’s con- trasted with the relative prosperity which prevailed - in the United States and Germany until the great crash of 1929 when depression became deep and general throughout the capitalist world. The failure of the world market to grow at its previous rate cumulated with other historically rooted problems of the British economy to produce the characteristic troubles of the twenties and thirties. But Britain shared with the older capitalist countries of Europe an incapacity to grow as rapidly and smoothly as before and to adopt the newer techniques of the twentieth century. For enterprises in the older industries it was no longer possible to extract and realise surplus value on an expanding scale, largely owing to the ‘abnormalities’ of international economic relations, the breakdown of the world market. However, such conditions did not prevail throughout the economy: in fact some sectors showed signs of vigorous growth in the twenties and hardly flagged even in the worst years of the depression, thus providing a sustaining force for the economy as a whole. Not only were there still opportunities here for new and profitable invest- ment, but the advanced countries continued to benefit from the flow of tribute from past investment abroad, and especially in the colonies and semi-colonies. Once again, the advantages of this inflow were not confined to countries such as Britain and France who were the main recipients; it was a vital link in the chain of multilateral payments which was impaired, but not entirely destroyed, in this period.5 If these factors cushioned the shock of the depression, nonetheless the main characteristic of the 1930s remained the general narrowing of oppor- tunities for the realization of surplus value, and thence a relatively low rate of accumulation reflected in the chronic excess capacity in the industries producing means of production. At the Same time there was necessarily a high rate of unemployment, greatly exceeding, in fact, the ‘normal’ requirements of a reserve army and a witness to the fact that the particular combination of forces in the depression had produced a chronic crisis of a quite exceptional kind. In the nature of things a period in which values were destroyed and investment fell below replacement needs opened up the conditions for revival, but revival which, even with new artificial stimuli, remained partial and precarious. In a number of countries political 5 See note 3. Meanwhile, of course, the strain on the less favourably placed capitalist countries, notably Germany, Italy and Japan, became especially acute—with well-known consequences. LABOUR REVIEW—Summer 1961 changes took place which safeguarded capitalist — property relations by measures of repression.6 The arms programme put in hand by some of these countries, while enabling surplus value to be realised more adequately—and thus promoting ‘recovery’-— opened the way for the next international struggle. Despite some technical change and the rise of new industries, despite public policies designed to supple- ment market forces, there was never a sign, before 1939, of a real and permanent rebuilding of the world market. Indeed national recoveries largely took place on the basis of some degree of turning away from the world market, of insulation from it; if for no other reason this made it likely that such recovery could not be permanent, In any event it ‘was accompanied by bitter struggles for markets waged with bilateral agreements, exchange controls, currency depreciation and allied weapons of economic warfare. The task of the various govern- ments was to open up for the firms in their own territory the possibility of realising surplus value, to which the bringing in of valued strategic raw materials was subordinate, if necessary at the expense of firms in other countries. But the possi- bility of opening up new outlets in this way was Strictly limited, and one’s gain was often another’s loss. - The all-round response to international dislocation . consisted of measures which made it more certain and more prolonged, and which provided the con- ditions for a new conflict. (3) War economy took the capitalist economies into a phase of expansion which has not yet come to an end. With production geared to the needs of the war machine by an intricate system of controls all the surplus value which could be extracted could be realized, at a profit. Since a major part of the production did not appear on the normal market the realization problem was ideally ‘solved’: the problem shifted to getting the right product mix in terms of the logistics of war strategy to which the civilian - market was (partly) subordinated. This meant curtailment of the discretionary powers of the individual enterprise in order to secure the right aggregate pattern—by measures, of course, which were tender of established property rights and entirely consistent with capitalism.? In any case, the survival of the system was in question—or so it was believed on both sides—and warranted some incon- veniences. The transition to peace-time economy took place 6 As in the countries mentioned in the previous note, where the working-class movement was smashed, parliamentary government discarded and fascist-type dictatorships installed. 7 This kind of pseudo-planning outlived the war and is, in fact, what right-wing Labour policy amounts to. (Continued on page 65)

[p019] Six Books on China