Saturday, February 17, 2007


Extra note by Roger on "the impossibility of state capitalism"

I agree with Martin that attempts to prove state capitalism to be logically impossible have little value. Nevertheless, attempts have been made and in some cases appear to have some backing from Marx.

For example, in a debate with Harman, Mandel brandished a quotation from the Grundrisse, to the effect that capital can only exist as many capitals. The logical point is that a hypothetical single capital would have no other capital to be compared with, and so couldn’t have exchange value. (In the same way there could not be only one commodity in the whole world). Mandel implied that this purely logical point made state capitalism an impossibility.

Yet state capitalism, in the mundane sense of the state acting as a capitalist, is a commonplace in capitalist societies. For example, in Australia, until recently, the Commonwealth Bank was a state bank, operating in much the same way as the other banks, similarly Qantas was a state owned airline, run along commercial lines. We can imagine a society where production is dominated by state capital and so call that society “state capitalist”, without in any way endorsing the idea of a single capital.

Even in the limit of a whole country being a “single trust” there is no logical impossibility. The trust buys means of production and labour power on the world market and sells its products on the world market and makes a profit. Trotsky thought such a single trust could not exist in practice (because it would be overthrown by the workers), but that is a different issue from logical impossibility.

Kautsky (and others) have argued that a “single master” is necessarily extremely onerous for the workers. But a “single master” only arises if the workers are forcibly denied access to the world labour market. In a hypothetical state capitalist East Germany, the workers could freely move to and work in West Germany. Unfortunately in the real East Germany, attempts to move to West Germany could easily be fatal – casting much doubt on the notion that East Germany actually was an example of state capitalism.

Bukharin considered a single trust covering the entire globe. There would now really be a single master and commodity production would not exist. Bukharin concluded: “This would be capitalism no more, for the production of commodities would have disappeared; still less would it be socialism, for the power of one class over the other would have remained (an even grown stronger). Such an economic structure would, most of all, resemble a slaveowning economy where the slave market is absent”.

This is the only case where state capitalism is logically impossible, but the circumstances are so extremely hypothetical, that this one case has no relevance to the issue of whether some countries were or are state capitalist..

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