What comes after Capitalism?

Neither Capitalism nor Socialism:

Theories of Bureaucratic Collectivism

THE VIEW that socialism “inevitably” follows capitalism as a natural instead of a willed historical event derives from an old mechanical Marxist current that drew its principal strength from various social democratic and Stalinist sources. Against this view, many revolutionary socialists took their cue from Marx’s notion that the decay and crises of capitalism can bring about the mutual ruin of the contending classes, and pointed to barbarism as a possible post-capitalist alternative. As chilling as the prospect of barbarism is, it has remained undertheorized in the Marxist tradition, perhaps because of the understandable inclination to concentrate on the road to power and victory rather than to cataclysmic defeat and powerlessness.

Neither Capitalism Nor Socialism contains a useful collection of essays about one post-capitalist social system, the Soviet Union, which represented a new form of class society and a very serious defeat for the working class and its allies—but was not quite barbarism. After the end of the 1920s, Stalin unleashed a massive terror campaign, killing millions of people, including most of the old Bolshevik leaders of the October Revolution of 1917, and consolidated a bureaucratic totalitarian system. Stalin’s rule was also marked by a nationalist and imperialist great power policy culminating, in the late 1930s, in the Soviet invasion of Finland and the Hitler-Stalin pact, which divided Poland into zones controlled by the Germans and the Russians.

Leon Trotsky, an exiled leader of the October Revolution, had already chronicled the shift in Russia’s course under Stalin. The disastrous events of the late 1930s, however, confronted Trotskyism with new questions about how to analyze the USSR. Should it be defended as a still progressive but “degenerated workers’ state?” Or had the USSR become a new form of class society that could no longer be supported by the international workers’ movement and its allies? While vigorously denouncing Stalinist policies, Trotsky continued to defend the “degenerated workers’ state” analysis that he had developed earlier in the thirties, although he began to consider the possibility that the USSR could eventually become, under certain historical conditions, a class society.

Two dissident leaders of American Trotskyism, Joseph Carter and Max Shachtman, broke with Trotsky on this critical issue. The two developed somewhat different versions of a theory of bureaucratic collectivism, which saw the USSR as a new form of class society. About a decade later, Tony Cliff also departed from Trotskyist orthodoxy and concluded that the USSR had become a new form of class society, which he called “bureaucratic state capitalism.”

While these sister theories were united in their joint “Neither Washington Nor Moscow” political stance, which followed from their common view of Russia as a class society in which there was exploitation, they differed in other respects. Bureaucratic collectivist theory emphasized private property in the means of production as a defining characteristic of capitalism, and thus made a central point about its absence in the USSR. In addition, theorists of bureaucratic collectivism argued that the Soviet Union had eliminated the law of value—which connects market prices to labor-time—in its own national economy. Cliff, on the other hand, pointed to capital accumulation as the defining element of capitalism and maintained that the law of value prevailed in the USSR through the mechanisms of international competition and preparation for armed conflict with other powers.

As a result of the debates between the supporters and critics of Trotsky’s position, other major issues in Marxist theory were also discussed and are explored in some detail in this volume. Among these were the questions of whether state property is necessarily progressive, and whether a society can be considered a workers’ state when the working class and its allies are deprived of democratic rights, let alone their power to control society. Both sides in the debate—orthodox and dissident Trotskyists—agreed on a key issue: Stalin had led a counterrevolution against the nature and goals of the original Bolshevik Revolution.

By branding Stalin as a counterrevolutionary, Trotskyists gave a new meaning to a term that had usually referred to the effort to return society to the way it was before the revolution. But the political and social system that Stalin created was radically different from the Russian society that existed before 1917. To address this problem, one could argue that Stalin was a counterrevolutionary from a normative revolutionary socialist and democratic perspective. But viewed from a purely descriptive perspective, there is no doubt that he was a revolutionary, although a revolutionary from above. After all, Stalin had led an incredibly brutal process that shaped an entirely new form of class society with its own internal dynamic and, revealingly in this context, had generated social and cultural demagoguery against what he claimed were the remnants of the old, pre-revolutionary privileged order.

In addition, he considerably expanded his empire to encompass Eastern Europe in the aftermath of the Second World War. This expansion surprised the orthodox Trotskyists, who had characterized Stalinism with such categories as conservative, reformist, and centrist. These traditional left-wing categories are based on a logic applicable to opposition parties and movements that are primarily nationally based, but they were irrelevant and inapplicable to a new empire and its political agents abroad. These functioned primarily along the lines of the logic of organizational machines, power politics, and the national self-interest of the USSR as defined by its rulers in Moscow. It was a calculus based on these considerations, and not on the traditional left/right, reform/revolution notions that determined Stalin’s boldness or caution under varying circumstances.

For those Trotskyists who thought that the USSR had become a new class system, one important question was whether the new system would be limited to the USSR. Did the USSR become a new class society because of a unique and non-reproducible set of circumstances—the isolation and decay of a workers’ revolution in a backward country under capitalist encirclement? Max Shachtman originally thought so in 1941, but he was wrong then, as subsequent world developments amply demonstrated. Not only did the USSR expand its power to Eastern Europe in the postwar period, but successful revolutions in China, Vietnam, Cuba, and other countries replicated the Soviet model, albeit with national variations. In his analysis of “deflected permanent revolution,” Tony Cliff showed how the peculiarities of the peasantry, working class, and intellectuals in many Third World countries facilitated the autochthonous reproduction of the Stalinist model as a perceived way out of internal social decay, national subordination to imperialism, and economic underdevelopment.

But are the economically developed capitalist countries immune from the sort of fate that Tony Cliff analyzed in the context of Third World countries? Or are the forces of social decay and systemic economic crises of late developed capitalism encouraging the growth of forces advocating the replacement of advanced capitalism by some new form of class society? Conservative analysts of capitalism have long pointed to forces generated by capitalism that, to one degree or another, are out of step with the nature and interests of the system. This is the case, for example, of Daniel Bell in his discussion of the “cultural contradictions of capitalism.” The influential economist Joseph Schumpeter in Capitalism, Socialism and Democracy went much further and saw intellectuals as fatally undermining the system and bringing about something that he called “socialism.”

To illuminate these and related questions, the volume under review includes two articles that the Marxist scholar Hal Draper—a leading proponent of the theory of bureaucratic collectivism—published in the socialist quarterly New Politics in 1962 and 1963, respectively titled “Neo-Corporatists and Neo-Reformists,” and “The New Social-Democratic Reformism.” For many years before the publication of these articles, Draper had been researching and writing on the sources of what he called “socialism from above.” This was a central theme of his major essay “The Two Souls of Socialism,” which was first published in the socialist youth magazine Anvil in 1960. This piece has been republished many times since then, has been translated into Spanish and other languages, and has had a major impact on several cohorts of socialists.

Concerned with the tendencies within mature capitalism toward the development of bureaucratic collectivism, Draper focused, in his 1962 piece, on the work of W.H. Ferry and other people associated with the Center for the Study of Democratic Institutions. This was an influential liberal think tank located in Santa Barbara, California, which was founded by Robert Hutchins, the reformer of higher education and famed former Chancellor of the University of Chicago. Looking for a better and more efficient system than private capitalism, these thinkers latched on to the corporate managers as a group who would rise above the narrow and selfish interests of shareholders and work for the benefit of society as a whole. In this, they were following and building on the legacy of A.A. Berle, who had years earlier proclaimed that in modern America power had shifted from the old private property system of shareholders to a new managerial class.

What Ferry and his associates were proposing fit very well with classic corporatism. Draper saw these new and older forms of corporatism, as a “framework for the radical reform-from-above of capitalist society through what were thought of as “non-statist” or non-political channels. It looked to a transformation of society not through a struggle for political power but through the assignment of social power to “autonomous bodies.” The new order would consist of a commonwealth of corporations run by non-statist civil servants, who would be highly competent experts. To be sure, workers were to be incorporated into this scheme through the inclusion of the unions on a very explicit class-collaborationist basis. Democracy was clearly not an important concern for the efficiency-minded people working at the Center for the Study of Democratic Institutions. Not surprisingly, these thinkers shared the notion that the capitalist and Soviet systems were converging with each other, an idea with a wide intellectual and academic following at the time.

Draper’s shrewd presentation and analysis of the perspectives of the thinkers at the Center stimulate and provoke other types of questions that he did not address in his 1962 article. Foremost is the question of agency. Why would managers, who have always been amply rewarded by corporate capitalism, be motivated to follow the advice of elitist academics and intellectuals and turn against the system? Or put in another way, what possible crises and reasons could lead the highly privileged managers to an unlikely turn against the capitalist system? Or would conditions of severe crises lead other forces to bring about systemic changes that would benefit the managers and bring them to power?

There are also questions concerning the historical period in which these corporatist intellectual and political tendencies flourished. With the benefit of hindsight, one can look back at the greatest economic boom that the Western capitalist world has ever experienced, which lasted from the end of the Second World War to the early 1970s. Even conservative analysts, such as Edward Luttwak in his Turbo Capitalism, have pointed out that this economic boom did not take place under the neoliberal nostrums that are today considered indispensable to economic growth. Instead, the boom took place within the context of a regulated capitalism featuring important welfare state institutions, although more so in Western Europe than in the United States. These were the outcome of the working-class upsurges and the regulatory and Keynesian policies of the Depression thirties and the virtual state capitalism of the Second World War. Was the Center’s lucubration another symptomatic expression of this Depression-to-Boom period, which also featured the competition with the Soviet bloc, thereby giving birth, after the 1953 death of Stalin, to the notion of convergence among important circles?

It is clear that such thinking declined after the 1970s, witnessed by the receding influence of the liberal think tanks and the rising hegemony of major conservative think tanks such as the American Enterprise Institute and the Heritage Foundation, which were unknown or did not even exist earlier. Another question would be: What kind of economic and social conditions are likely to revive, if at all, the corporatist intellectual and political tendencies that were so influential up to the 1970s?

These types of historical questions come up again upon reading Draper’s 1963 essay on “The New Social-Democratic Reformism.” He noted that the old social-democratic reformism of Edward Bernstein in Germany and the Fabian Society in England looked for the gradual transformation of capitalism into socialism. Draper described this perspective as “an inherent process working out through patchwork changes, however minute but cumulative in effect, which would eventually mean that capitalism itself grows into socialism, without any visible break in the continuum of change. Capitalism would not be ‘abolished,’ let alone ‘overthrown’; it would become ‘socialism.’”

But by the 1960s, this old reformism had almost disappeared. The French socialist prime minister Guy Mollet, besides no longer being a traditional reformist on the domestic front, had become a vicious imperialist in his pursuit of the colonial war in Algeria. The German Social Democratic Party officially gave up Marxism and socialism in the Bad Godesberg program of 1959. In the United Kingdom, Anthony Crosland, the main official theoretician of the Labor Party, fully endorsed the capitalist system. But Crosland, on whom Draper concentrates most of his attention, took full employment and the welfare state so much for granted that he thought they were no longer an issue under debate. In fact, Crosland, who also advocated the ideas of convergence with the Soviet system, believed that the British government should do more, not less, for example, to insure greater equality of opportunity through education, a traditional bulwark of great inequalities in the British class system.

Crosland’s politics look way to the left of Tony Blair and Gordon Brown, the neoliberal Labor apostles. Today, the goal of full employment is a mirage totally dependent on the capitalist business cycles, tweaked by the management of interest rates, and privatization has been the order of the day whether in terms of the National Health Service or other social services. But nationalization is perfectly in order to protect the capitalist class from the effects of their greed and the recurring crisis generated by their system. Gordon Brown is even pushing for an extension of the number of days that people can be incarcerated under the so-called anti-terrorist legislation, against the objections of Liberals and even Tories who are to his left on this and other questions. It is ironic that Crosland had limited the definition of capitalism to laissez-faire economics, so even by Crosland’s definition, both Blair and Brown are capitalist politicians pure and simple. These dramatic changes in social democratic thinking pose the key question of whether they were primarily due to changes in the fortunes of capitalism and “what it could afford,” the declining strength of the workers’ movement, or a combination of the above.

If you liked and were influenced by Draper’s The Two Souls of Socialism, you should read this volume. It is part of the essential memory for anybody who is trying to understand today’s world while maintaining the banner of socialism from below under difficult and adverse circumstances.


Issue #73

September 2010

From Reform to Rebellion

Image and reality in the Bolivia of Evo Morales
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