Chapter Four

World Relations since World War II

Against the blindness of the Soviet bureaucracy, who even placed trust in a “peace” pact with Hitler, Trotsky in the 1930s all along warned of the inevitability of war between Nazi Germany and the Soviet Union. He believed that this war would settle the fate not merely of the Soviet Union, but of human society.

The defeat of Fascism, he anticipated, would bring the overthrow of the bureaucracy by the working class in the Soviet Union, and re-ignite world socialist revolution. The victory of Fascism would bring disaster. “Without a socialist revolution, in the next historical period at that, a catastrophe threatens the whole culture of mankind.” (The Death Agony of Capitalism and the Tasks of the Fourth International, 1938)

But the Second World War (1939-1945) developed differently from what Trotsky anticipated. Its consequence was, in fact, the strengthening of Stalinism internationally. In Eastern Europe and in China new proletarian Bonapartist regimes arose, modelled on Stalin’s Russia. All this meant the stabilisation of Stalinist rule for a whole period. In Western and Southern Europe there was, as Trotsky anticipated, a new revolutionary upsurge, but as a result of Stalinist mis-leadership it was defeated. A boom of world capitalism ensued, bringing a protracted period of stable bourgeois democracy in the most advanced capitalist countries.


The war in Europe

In June 1941 Hitler invaded the Soviet Union. Lulled by his “peace” pact with Hitler, Stalin was unprepared for this. Moreover, the cream of the leadership of the Russian army had been wiped out in the purges. Nevertheless, though at the cost of 20 million dead, the fighting resilience of the Russian masses against Nazi savagery beat back Hitler.

The ‘Allied’ imperialist powers, though at war with Hitler, banked on Germany and Russia bringing each other to their knees. This would have enabled them — so they hoped — to redivide Eastern Europe into their own spheres of domination and reimpose capitalism on Russia.

Instead, the underlying strength of nationalised and planned economy, and the determination of the Russian workers and peasants to defend it against Hitler, proved decisive. The Red Army was the overwhelming factor in the defeat of Fascism in Europe. It forced Hitler on the retreat, occupied all Eastern Europe east of the Elbe, and could have continued into Western Europe as well.

The role of the Soviet Union in the war was an inspiration to the peoples of the whole of Nazi-occupied Europe, and led to a big growth of the Communist Parties.

Faced with this growth of Russian power and influence, the British and American imperialists had belatedly invaded Nazi-occupied Europe across the English Channel. They also now found it expedient to come to terms with Stalin. Scandalously, Stalin sat down at top-level meetings at Yalta and Potsdam in 1945-6 with the capitalist leaders Churchill and Roosevelt and reached secret agreements, effectively dividing the world into ‘spheres of influence’.

Stalin was accorded hegemony in Eastern Europe, including (eventually) the Eastern zone of a divided Germany. In these areas the collapse of Nazism and its collaborators under the advance of the Red Army meant the flight of the old ruling class. Stalin set about establishing “Popular Front” governments in these countries on the model of Spain in the 1930s.

But conditions were different. Effective power was in the hands of the Red Army, not the old bourgeois state machine. The social basis of capitalism had been shattered. In country after country economic collapse could only be prevented by the nationalisation of the major means of production and the establishment of planned economy.

The states which arose in Eastern Europe thus be-came formed in the image of Stalinist Russia. They were workers’ states in their forms of property. But it was not — as in October 1917 — the working class which won these conquests through its own conscious revolution. The transformation was carried out under the guns of the Red Army, which ensured that these new workers’ states were deformed from the outset: proletarian Bonapartist regimes, presided over by a bureaucratic caste, obedient to the Kremlin, and totally excluding any form of control by the working class.

All these regimes have been falsely described as “socialist” by the bureaucracies which ruled them, and ‘Communist’ Parties around the world, including the SACP. This ‘certificate of health’ is not unrelated to the lavish funds provided by these corrupt state machines to the Communist Parties in capitalist countries.



In China after the Second World War a proletarian Bonapartist regime also emerged, but by a different route.

The defeat of the Chinese revolution in 1927-28 and the brutal dictatorship of Chiang Kai Shek solved nothing for the Chinese ruling class. Japanese, American, British and French imperialism took advantage of the situation to extend their sway. The Stalinised Chinese Communist Party abandoned the working class. Its leaders, notably Mao Tse Tung, took to the countryside to organise peasant guerilla war against the regime. Chiang, rather than fighting Japanese invasion, directed his armies against the peasant Red armies, in a losing battle.

In 1936/7, with Chiang nearing defeat, the Chinese CP leaders offered him a “united front” against Japanese imperialism — in reality a “Popular Front”, in which the CP diluted their program of land reform and other social demands in the interests of “unity with the national bourgeoisie”, as personified in the murderer Chiang!

Through this, however, the Red Army developed into the main force fighting Japanese imperialism. The mass of the peasants were driven to the side of the Red Army by the barbarism of the invading Japanese fascist forces. The Kuomintang’s armies played a passive role. With its soldiers deserting to the Red Army, Chiang’s KMT was increasingly weakened.

In 1945 Japan was defeated in the Pacific War by US imperialism. But the American troops, having defeated fascism, would have mutinied against attempts by their generals to intervene in China to prop up Chiang’s decrepit regime against Mao’s popularly-supported Red Army.

By 1949, directing itself against the collapsing armies of the Kuomintang, Mao’s Red Army was in a position to march into the cities and take power.

In the 1930s Trotsky had believed that the Chinese guerilla leaders, despite their “Communist” label, if they were victorious, would nevertheless prop up capitalism and establish a bourgeois Bonapartist regime. Their social base, he pointed out, was not the working class, but the peasantry, which did not have a socialist conscious-ness. There had been many parallels in the previous two thousand years of Chinese history when the leaders of victorious peasant armies had fused with the then ruling classes in the towns.

Trotsky’s perspective was not borne out — because of the changed relation of forces on a world scale by the time Mao took power. Not only was imperialism unable to intervene in China. Also Stalinism and its model of “socialism” were a strengthened pole of attraction.

Capitalism in China was in decay. The Chinese capitalist class mostly fled with the defeated Chiang and his armies to the island of Taiwan. As in Eastern Europe, the economy was threatened with collapse. In power, Mao had no option but the reorganisation of the economy on the basis of nationalisation and planning. As in Eastern Europe, a proletarian Bonapartist regime arose, modelling itself on Stalin’s Russia — a bureaucratic dictator-ship, with no element whatsoever of workers’ democracy.

The overthrow of capitalism in the most populous country on earth was a historic event second only to the Russian revolution. But, though Mao called himself a “Communist”, this victory was not achieved on the basis of a conscious movement of the working class. Mao’s pro-gram, up to the conquest of power — and even while capitalism was being dismantled — was in words still the program of “democratic revolution” in alliance with “the progressive national bourgeoisie” — democratic revolution separated from and preceding “socialist revolution”!

Yet, albeit in a distorted way, the overthrow of capitalism in China confirmed the theory of permanent revolution. The bourgeois-democratic tasks of agrarian revolution and uniting the nation could not he carried through on a capitalist basis. Matters were too desperate for society to “wait” for conscious workers’ revolution. With the absence of Marxism, it was a peasant army, led in fact by middle-class intellectuals, who “substituted” themselves for the working class, and established a deformed, Bonapartist, workers’ state.

On the basis of nationalised and planned production, the Chinese economy has leaped forward, vastly improving the conditions of the mass of the people. But the bureaucracy in China, like every Stalinist bureaucracy, is terrified of the working class and workers’ democracy.

Again this was revealed last year when, on June 4, they turned the guns of their troops to massacre unarmed youth and students on Tiananmen Square, demonstrating for democracy, who went to their deaths singing the “Internationale”.


Western Europe

The cynical deal struck between the imperialist powers and Stalin after the Second World War assigned Western and Southern Europe to imperialism. As in the 1930s, Stalin duly played his full part in ensuring that in these areas capitalism remained intact.

In Greece, Italy, France, etc. armed resistance movements had developed against Nazi occupation. Nazism was defeated and driven out of these countries by the combined weight of the armies of the “Allies”, and mass resistance, with differing measures of each in different cases. The defeat of Nazi occupation in these countries sparked mass revolutionary upsurges, of workers and peasants with arms in hand.

Stalin, to appease his capitalist “allies”, had dissolved the Comintern in 1943. Now he instructed the leaders of the Communist Parties in these countries of Western and Southern Europe, in essence, to physically and politically disarm the working-class movement and restrain it from a struggle for power.

One victory for democratic workers’ rule in Europe at that time could have sparked Europe-wide and world-wide social revolution, as had been possible after the First World War also. It would have meant the downfall of the Soviet bureaucracy at the hands of the working class. But — though the particular history of events varied from country to country — it was the criminal role of Stalinism which ensured the survival of capitalism.

The political defeat for the working class in Western Europe prepared the way for the economic revival of capitalism, at least in the most advanced capitalist countries.


The post-war capitalist boom

The United States emerged from the war as the overwhelmingly strongest capitalist power. It had a 50% share of world capitalist production, a 70% share of world trade, and held 75% of the world’s monetary gold in the vaults of its central bank.

It used this economic power to compel the other capitalist powers to dismantle the protective barriers which had risen up between “blocs” in the 1920s and 1930s, and to re-establish “free trade” around the world. It used its dominance to establish the dollar as a stable currency for world trade, exchanging at a fixed price for gold. It poured massive amounts of aid into West Germany, Japan and elsewhere, to revive their economies, create markets for US goods and buttress these countries against ‘going communist’.

These measures served the imperialist ambitions of US capitalism. But, simultaneously, they led to a massive expansion of world trade and a new world division of labour, which revived the world capitalist economy for a whole period.

The multi-national monopolies which grew hugely in this period represented a partial overcoming of the limits of private property and nation-based economy. The use of the dollar as the “universal currency”, and the enormous expansion of credit — “fictitious capital” — to “prime the pump” of national economies and “even out” the cycles of upturn and downturn inherent to capitalism were artificial measures serving the same purposes.

The forces of production and the productivity of labour in the advanced capitalist countries developed enormously — carrying even sections of the “Third World” forward. But this was at the price of storing up huge problems for the future of capitalism.

Inherent in the system of private ownership of the means of production is the anarchic competition of the market-place. Inherent in capitalist exploitation is the ex-traction of unpaid labour from the working class, and the resulting tendency to produce more goods than can be absorbed by the buying power at the disposal of the toilers. Capitalism develops by finding means to overcome these contradictions, but it cannot eliminate them. Sooner or later they burst out again.

However the post-war boom ushered in a long period of relative stability between the classes in the advanced capitalist countries. The strength of the working class in the West secured the survival of bourgeois democracy. Economic expansion permitted the capitalists to make concessions to the working class, and led to unprecedented improvements in standards of life in the advanced capitalist countries.

At the same time, within the mass workers’ organisations, a careerist bureaucracy arose, resting on the passivity of the working class, and becoming integrated with bourgeois society and its state. The reformist leaders of Social Democratic Parties regarded proletarian revolution as a curiosity of the past and came to declare that capitalism had “solved all its problems”, and there was an indefinite future of improvements for the working class. In one form or another, the leadership of the Communist Parties in the West put forward essentially the same position.

Even the post-war boom, however, did not guarantee complete stability for capitalism. In France in May 1968 a revolutionary movement of 10 million workers erupted, in a general strike and with factory occupations. The army and police were paralysed. Power was within the grasp of the working class. The French President, de Gaulle, fled to an army base in Germany and offered government to the CP! But the CP leaders, at the head of the biggest unions instead called off the strike and the occupations, and ensured that power remained in the hands of the capitalists!

In the United States, in opposition to its imperialist war against the people of Vietnam, there were uprisings of the ethnic minorities and of the youth, and mutinies in the armed forces, which could have put US capitalism at risk save that the leaders of the powerful organised working class were conscious agents of the bourgeoisie.


Stalinism in the post-war period

During the post-war capitalist boom, the “socialist” Soviet Union and the other Stalinist states were still striving to catch up with the levels of productivity of labour in the West. In the late 1950s Kruschev, who became ruler in the Kremlin after Stalin’s death, boasted to US capital-ism that “we will bury you” by competition in productivity. This could have been possible on the basis of the resources and skills existing in the Soviet Union, but was prevented because of the constraints imposed by bureaucratic control over the economy.

Nevertheless, the advantages of nationalisation and planned economy produced, during the 1950s and 1960s at least, big advances in the standards of living of the mass of the people in the Soviet Union and other Stalinist states.

In the 1930s, Trotsky had explained the factors which held the working class in the Soviet Union back from overthrowing the bureaucracy.

The vast majority of the Soviet workers”, he wrote, “are even now hostile to the bureaucracy. The peasant masses hate them with their healthy plebian hatred. If in contrast to the peas-ants the workers have almost never come out on the road of open struggle, thus condemning the protesting villages to confusion and impotence, this is not only because of the repressions. The workers fear lest, in throwing out the bureaucracy, they will open the way for a capitalist restoration.


The mutual relations between state and class are much more complicated than they are represented by the vulgar ‘democrats’. Without a planned economy the Soviet Union would be thrown back for decades. In that sense the bureaucracy continues to fulfill a necessary function. But it fulfills it in such a way as to prepare an explosion of the whole system which may completely sweep out the results of the revolution. The workers are realists. Without deceiving themselves with regard to the ruling caste — at least to its lower tiers which stand near to them — they see in it the watchman for the time being for a certain part of their own conquests. They will inevitably drive out the dishonest, impudent and unreliable watchman as soon as they see another possibility. For that it is necessary that in the West or the East another revolutionary dawn arises. (The Revolution Betrayed, pp. 285-6 Our emphasis)

In fact, objectively, the possibility of restoring capital-ism in Russia by military intervention was ended by the defeat of Hitler’s invasion. In conventional military forces, the Soviet Union and the Warsaw Pact have had an overwhelming superiority since the Second World War. In military terms, the nuclear arms race has been self-defeating, since a nuclear war would result in the mutual destruction of the capitalist and Stalinist world. Only mad Bonapartist dictators arising in the imperialist powers on the basis of a series of crushing defeats of the working class could contemplate this.

The Soviet working class had suffered the destructive invasion of imperialism after 1917, as well as the ruthless savagery of Hitler. Even though military intervention was no longer possible, the threat of it was a powerful weapon used by the Soviet bureaucracy during the “Cold War” to try to frighten the working class against rising up to over-throw it. In the same way imperialism used the “danger of Russian world domination” to try to inoculate the working class in the West against socialism.

In addition, during the post-war capitalist boom, the working class in the Stalinist states could see no new “revolutionary dawn” in the West. Despite all this, there were heroic revolutionary upsurges of the working class in Eastern Europe — above all in Hungary in 1956, but also, in different forms, in East Germany, Poland, Czechoslovakia — as well as waves of illegal strikes in the Soviet Union itself. These were all crushed by the police-military power at the disposal of the bureaucracy.


Proletarian Bonapartism in the “Third World”

Weakened militarily and politically after the Second World War, imperialism could not resist the tidal wave of struggle by the masses of the colonised countries of Asia, Africa, etc. for national independence. But the over-whelming majority of the peoples of the capitalist “Third World” gained no benefits from the post-war boom. Remaining on a capitalist basis, these countries have experienced deepened and intensified exploitation by the imperialist powers and the multi-national monopolies.

While some layers of the masses, in some countries, experienced some improvements, the general pattern has been one of greater impoverishment and misery. The general pattern of government has been of vicious and corrupt Bonapartist dictatorships, of exploitation by capital-ism combined with the predatory exactions of feudal landlords and pre-capitalist chiefs. Political independence has not guaranteed the unity of these nations, but rather worsened ethnic, tribal and religious conflicts, and the oppression of minorities.

Marxism champions the democratic right of op-pressed nations to self-determination. At the same time, as Lenin put it, “The domination of finance capital and of capital in general is not to be abolished by any reforms in the sphere of political democracy; and self-determination [i.e. political independence] belongs wholly and exclusively to this sphere.” (“The Socialist Revolution and the Right of Nations to Self-Determination, 1916).

The peoples of the “Third World” are victims of the law of unevenness of human development, of the fact that capitalism, particularly in the imperialist epoch, is incapable of developing the forces of production in an all-round way on a global scale. It is impossible for these countries to pass through the same pattern of development as that of the first-arising capitalist countries.

As Trotsky explained (in the course of criticising the draft program of Stalin’s Comintern in 1928):

“Capitalism finds various sections of mankind at different stages of development, each with its profound internal contradictions. The extreme diversity in the levels attained, and the extraordinary unevenness in the rate of development of the different sections of mankind during the various epochs, serve as the starting point of capitalism. Capitalism gains mastery only gradually over the inherited unevenness, breaking and altering it, employing therein its own means and methods. In contrast to the economic systems which preceded it, capitalism inherently and constantly aims at economic expansion, at the penetration of new territories, the surmounting of economic differences, the conversion of self-sufficient provincial and national economies into a system of financial inter-relationships. Thereby it brings about their rapprochement and equalizes the economic and cultural levels of the most progressive and the most backward countries….

“By drawing the countries economically closer to one another and levelling out their stages of development, capitalism, how-ever, operates by methods of its own, that is to say, by anarchistic methods which constantly undermine its own work, set one country against another, and one branch of industry against another, developing some parts of world economy while hampering and throwing back the development of others. Only the correlation of these two fundamental tendencies — both of which arise from the nature of capitalism — explains to us the living texture of the historical process.

“Imperialism, thanks to the universality, penetrability, and mobility and the break-neck speed of the formation of finance capital as the driving force of imperialism, lends vigour to both these tendencies. Imperialism links up incomparably more rap-idly and more deeply the individual national and continental units into a single entity, bringing them into the closest and most vital dependence upon each other and rendering their economic methods, social forms, and levels of development more identical. At the same time, it attains this ‘goal’ by such antagonistic methods, such tiger-leaps, and such raids upon backward countries and areas that the unification and levelling of world economy which it has effected, is upset by it even more violently and convulsively than in the preceding epochs.” (The Third International After Lenin, pp. 15-16)

Out of these dialectical realities comes the possibility for backward countries also to take “leaps”. As Trotsky put it, generalising the theory of permanent revolution:

Although compelled to follow after the advanced countries, a backward country does not take things in the same order. The privilege of historical backwardness — and such a privilege exists–permits, or rather compels, the adoption of whatever is ready in advance of any specified date, skipping a whole series of intermediate stages… The laws of history have nothing in common with a pedantic schematism. Unevenness, the most general law of the historic process, reveals itself more sharply and complexly in the destiny of the backward countries. Under the whip of external necessity their backward culture is compelled to make leaps. From the universal law of unevenness thus derives another law which, for the lack of a better name, we may call the law of combined development — by which we mean a drawing together of the different stages of the journey, a combining of separate steps, an amalgam of archaic with more contemporary forms. Without this law, to be taken of course in its whole material content, it is impossible to understand the history of Russia, and indeed of any country of the second, third or tenth cultural class. (History of the Russian Revolution, pp. 26-28)

The 1917 Russian revolution, establishing proletarian rule in a backward country, represented such a “leap”. In a different way, and under the conditions we have de-scribed, so did the Chinese Revolution of 1949, establishing a new proletarian Bonapartist regime.

Since the Chinese revolution proletarian Bonapartist regimes have sprung up elsewhere in the colonial world. This is the result of similar conditions: the bankruptcy of capitalism in the colonial world, the models of nationalised and planned economy existing in Russia and China albeit on a Stalinist basis, and the weakness of the forces of Marxism on a world scale.

The intolerable material conditions of the masses has driven these societies forward, unable to wait for conscious workers’ revolution in the advanced capitalist countries, or political revolution in the East. In some cases this has been on the basis of successful peasant guerrilla wars similar to that in China.

In other cases it has resulted from coups by discontented sections of the officer caste, basing themselves on support among the masses. Cuba, Syria, Burma, Vietnam, Cambodia, Mozambique, Angola, Ethiopia, are among the countries where distorted revolutions of this kind have taken place.

The Stalinist Dialego, we have seen, who claims to accept a theory of permanent revolution, in reality rejects permanent revolution in favour of Menshevik-Stalinist ideas of “objectively necessary stages” in revolution in any country: “But — and this is the decisive point — democratic revolution comes first“, he says.

But even these distorted “Third World” revolutions where capitalism has been overthrown without a conscious movement of the working class disprove his ideas. Where was the “democratic stage” in these revolutions? They overthrew bourgeois dictatorships, and replaced them with bureaucratic dictatorships organising a nationalised and planned economy.

In many cases these revolutions were opposed or held back by the Moscow bureaucracy and those loyal to it. In China after the Second World War Stalin tried vainly to encourage Mao Tse Tung to form a coalition government on a capitalist basis with Chiang Kai Shek. In Cuba, the guerilla leader Castro was at first denounced by the Cuban Communist Party as an adventurer. In most cases, those who have led these revolutions either broke with orthodox Communist Parties, or had never been part of them.

The support of the Russian bureaucracy for the over-throw of capitalism in these revolutions has taken place only after the accomplished fact.

The example of Nicaragua, where the Sandinista government has recently been voted out of office, shows the dangers in trying to artificially construct a “democratic stage” where none exists.

The Sandinistas — who also broke with the “official” Communist Party — waged a successful guerrilla war against the Somoza dictatorship to take power. On the basis of the new state machine, they could have nationalised the main means of production (which were largely in the hands of the Somoza family). Instead, on the advice of the Russian and the Cuban bureaucracies, and in a vain attempt to appease US imperialism, they held back and left the bulk of the economy in capitalist hands.

This did not appease US imperialism. Instead, trapped by the constraints of capitalism, with sabotage by the bosses, with war raging against the counter-revolutionary “Contras”, the economic crisis reached devastating proportions. Inflation mounted to reach 33 600% in 1988 — and was reduced only by an austerity package which slashed living standards further. The patience of the masses became exhausted. If this was all the Sandinistas could offer, then why not replace them by an openly capitalist government which might secure aid from US imperialism: this was the reasoning of sections of the masses in the recent election.

The counter-revolution in Nicaragua is still weak. All is not yet lost. But it is taking place because of the failure of the Sandinistas to carry revolution to its conclusion, but rather halting it in a so-called “democratic” stage.

With nationalisation and planning, and with aid from more developed Stalinist countries, proletarian Bonapartist regimes in the “Third World” were once able (but to varying degrees) to develop the economy and advance the living standards of the masses — though on the basis of ruthless dictatorship over the mass of the people. But, generally arising in the smaller and least developed countries, with a nationally narrow-minded bureaucratic leadership, their ability to develop the forces of production has been desperately constrained.

Over all these countries towers the crushing weight of a world market dominated by the capitalist monopolies, which dooms them also to poverty without world workers’ revolution and the achievement of international socialism.

Now, with the crisis of Stalinism in its heartlands, these countries are losing a political and economic anchor which has sustained them to greater or lesser extent. The Russian bureaucracy is even threatening to drastically cut back the aid to Cuba which has been the crucial lifeline in sustaining this small off-shore island against the might of US imperialism.

For the peoples of all these countries, democracy and a real uplift in living standards depends on the progress of the political revolution in the East and the social revolution in the West.

In the “Third World”, where revolutionary movements have erupted in conditions that have not led to proletarian Bonapartist regimes, the Menshevik, “Popular Front” theories of Stalinist leaderships have resulted in crushing defeats for the masses.

In Chile the overthrow of the Allende regime by the dictator Pinochet in 1973 resulted in the murder of up to 70,000 activists. In Indonesia in the 1960s a counter-revolution against the Sukarno regime led to murder of at least 300, 000, and possibly up to a million, Communist and non-Communist workers and peasants. In these and other countries the masses have paid as dearly for Stalinist policies as the workers of Germany, China and Spain in the 1920s and 1930s.

Yet, again and again, explaining these defeats, the “Communist” Party leaders return to the reactionary ideas of Menshevism. “The proletariat did not hide its aims enough”, they say, that is why other classes “re-coiled” from the “democratic revolution.” The truth is the opposite. It is policies which hold back the working class from leading a struggle to take power and establish its own democratic rule which have caused these defeats.

For “Communist” Party leaders around the world, no country is ever “ripe” for socialist revolution. In the back-ward countries, they cling to the fiction of “stages”. In the advanced capitalist countries they argue, like the reformists, that socialism can be achieved by “gradual” means.

The real fact is…any excuse to hide from the working class the need for it to take power in society — because this would mean the end of the privileged rule of the bureaucracies in the Stalinist states also.


Limits of the capitalist upturn

The economic recession in 1974-5 and 1979-81 in all the advanced capitalist countries, soaring inflation in the period in between, the stock exchange crash in October 1987, are all signs that the post-war capitalist boom has been reaching its limits. Since 1981 however, paradoxically, the capitalist world has enjoyed a longer period of uninterrupted economic upturn — now eight years — than was even the case in 1950-74.

But this upturn, too, is now beginning to show its limits. Unlike 1950-1974, its main initial stimulus was not a wave of new investment in the manufacture of productive capital goods — but massive arms spending by the Reagan government in the United States, together with intensified super-exploitation of the “Third World”.

The United States has lost its overwhelming post-war dominance in the world economy as the result of the regeneration of West Germany and Japan. But it remains the largest single capitalist economy, and the main motor of world capitalism. Now, its ability to continue to stimulate economic upturn is running into huge contradictions. The arms boom was funded by the US government spending each year far more than it earned in taxes. This budget deficit was financed by borrowing from big banks around the world. As a result the accumulated national debt of the United States is more than $1 trillion: $1,000 billion! It has increased by as much in the last ten years as in the preceding two hundred years since US independence!

The upturn has also resulted in the US consistently importing far more from the rest of the world than it exports: on a chronic trade deficit which is matched by equivalent trade surpluses in its major rivals, West Germany and Japan.

All this represents an unsustainable situation in the longer run. Yet any serious attempt to eliminate the US budget or trade deficits would involve drastically shrinking the US market, or trying to protect it from the competition of its rivals, or both. Such measures would inevitably lead to severe economic recession in the US, and internationally.

The capitalist class internationally is terrified by these prospects, and has taken all manner of measures to head them off. Such measures can postpone the problems, and temporarily alleviate their repercussions, but cannot eliminate them.

At the root of all this is the fact that the barriers of private ownership of the means of production and nation-state boundaries have only been partially and artificially overcome. As these harriers inherent to capitalism reassert themselves, they hold hack further development of the forces of production, and load the costs of this on the mass of working people.

Investment in modern industry, the key to the development of the forces of production is — in comparison with 1950-1974 — sluggish, and sporadic, rather than on an all-round basis. Monopoly industry, at best, uses only 80% of the productive forces at its disposal.

Unlike between 1950 and 1974, the present upturn has resulted in increased class polarisation and conflict in the advanced capitalist countries. There is gross parasitism and squandering of wealth at the top, and growing pauperisation at the base of society. In all the advanced capitalist countries there have been attacks on the state-sector health, welfare and education services won by the working class after the Second World War.

Substantial sections of the middle and the working class in the advanced capitalist countries have benefitted during the upturn. But the middle class now pays the price of “living on credit” in crippling interest and mort-gage rates which the capitalist class is using against the renewed threat of inflation. The working class has achieved wage rises at the cost of being pushed to the limits of stress by speed-ups and overtime. Throughout the “Third World”, with only isolated exceptions, there are conditions of increasing economic devastation.

Even without renewed world recession, conditions are building up for explosive movements of the working class in the advanced capitalist countries. The recent general strike in Sweden, the struggle against the poll tax in Britain, are early signs of what is to come.


The crisis of Stalinism

In parallel with all this, the system of Stalinism in the Soviet Union and throughout Eastern Europe is now plunged into an unprecedented crisis from which it can-not recover.

Trotsky long ago pointed out that corruption, wastage, increasing differentiation, and mismanagement were endemic to the rule of the bureaucracy. He also explained that the bureaucracy could prove relatively successful in introducing heavy industry and modern infrastructure to a backward society, but that its rule would become an in-creasing obstacle to the extent that the economy became modernised.

A modern nationalised and planned economy re-quires workers’ democracy, he often explained, as the body needs oxygen. Requiring the inter-connected production and distribution of millions of different products, it cannot be efficiently organised by bureaucratic diktat from the top.

On a bureaucratic basis, it becomes increasingly impossible even to work out the quantitative relationships that need to exist among all these products: the numbers of items of each thing that must be produced to fit into an efficient overall system, and the real labour-cost of different items. But, he explained, it is above all in the quality of the goods that are produced that a bureaucratically-controlled planned economy falls down:

The progressive role of the Soviet bureaucracy coincides with the period devoted to introducing into the Soviet Union the most important elements of capitalist technique”, Trotsky wrote in 1936. “The rough work of borrowing, imitating, transplanting and grafting, was accomplished on the bases laid down by the revolution. There was, thus far, no question of any new word in the sphere of technique, science or art. It is possible to build gigantic factories according to a ready-made Western pattern by bureaucratic command — although, to be sure, at triple the nor-mal cost. But the farther you go, the more the economy runs into the problem of quality, which slips out of the hands of the bureaucracy like a shadow. The Soviet products are as though branded with the grey label of indifference. Under a nationalised economy, quality demands a democracy of producers and consumers, freedom of criticism and initiative — conditions incompatible with a totalitarian regime of fear, lies and flattery.



Behind the question of quality stands a more complicated and grandiose problem which may be comprised in the concept of independent, technical and cultural creation. The ancient philosopher said that strife is the father of all things. No new values can be created where a free conflict of ideas is impossible…


While the growth of industry and the bringing of agriculture into the sphere of state planning vastly complicates the tasks of leadership, bringing to the front the problem of quality, bureaucratism destroys the creative initiative and the feeling of responsibility without which there is not, and cannot be, qualitative progress. The ulcers of bureaucratism arc perhaps not so obvious in the big industries, but they are devouring, together with the co-operatives, the light and food-producing industries, the collective farms, the small industries — that is, all those branches of economy which stand nearest to the people. (The Revolution Betrayed, pp. 275-6)

So wrote Trotsky of the developing crisis of Stalinism as long ago as 1936!

On the basis of nationalised and planned economy the Soviet Union today has a greater number of scientists, engineers, technicians, etc. per head than any country in the world. It is able to send expeditions into space. It has the most highly-educated working class of any major country.

Yet, on the basis of bureaucratic rule, it has not been able to deploy all these resources even to catch up with the forces of production and labour-productivity of the most advanced capitalist countries. It is not even able to guarantee supplies, let alone supplies of adequate quality, of the most basic goods in the shops.

After more than seventy years of the nationalised and planned economy, Andrei Orlov, deputy chairman of the State Commission for Economic Reform, admits that out of 1,200 basic commodities that should be available in big cities, only 56 can be bought on a regular basis. (British Independent on Sunday, 27/5/1990) Where obtainable, sugar, soap and detergent are rationed almost every-where, and meat, sausages and butter are rationed in one in five cities.

A British journalist accompanied two Moscow house-wives on a shopping expedition in May. They had 60 roubles available to spend. After visiting thirteen shops, in three different shopping areas, taking three hours in all, they had only managed to spend 24,27 roubles, and could find no decent meat, rice, cheese, eggs, or fruit. They faced shops unaccountably closed, queues too long to wait in (for flour, for example!), or produce too rotten to buy. “They had barely enough for one evening meal, let alone a weekend.” (Independent on Sunday, 27/5/1990)

That is the real symptom of the crisis of Stalinism.

Despite all the additional resources of production that became available with the establishment of proletarian Bonapartist regimes in Eastern Europe, China, etc. –despite the formal integration of many of them into COMECON — the Stalinist world moreover has been unable to overcome the essentially national basis of bureaucratic rule, and develop these resources in terms of an overall plan.

To try to solve these problems — the bureaucratic regimes in Eastern Europe and in the Soviet Union also, are now set on a course (though at different paces) to-wards the re-introduction of the market, stock exchanges, private banks, etc. and the dismantling of planning and nationalisation.

Before our eyes, Trotsky’s analysis and perspectives are being borne out: that Stalinism is not socialism, that it is at most a transitional regime — and that, unless workers’ democracy were re-established by overthrowing the bureaucracy, the bureaucracy would end up by restoring capitalism.

In their short-sightedness, the bureaucracy has become intoxicated by the apparent success of capitalism in the advanced countries over the last eight years.

But capitalism offers no way out for these regimes. The consequences are already revealed in Poland –among the furthest along this road — are massive price rises, and growing unemployment since the start of this year. There are now goods in the shops, but only the privileged few can afford to buy them. The same results will follow to the extent that the “market” replaces the plan as governor of the economy in East Germany, Hungary, Czechoslovakia, the Soviet Union, etc.

For the most part, the Western capitalist powers –despite rubbing their hands with glee at what they falsely regard as the “failure of socialism” — are not prepared to pump massive amounts of investment into Eastern Europe or the Soviet Union. They are not confident there are opportunities for safely reaping profits.

Monetary union between West and East Germany, to be followed by political unification, means capitalism has effectively been restored in the East. West German capitalism was driven so rapidly on this road because, once the Berlin Wall was brought down, the alternative would have been mass exodus of the people of East Germany to the West. West German capitalism declares itself ready to pay the price of re-unification by pouring state and private funds into the East. But this will not hold off the reality of unemployment, and attacks on living standards.

Already, since monetary union on July 1, unemployment in East Germany is reported to be increasing by 40,000 a week.

Should capitalism be restored in the Soviet Union, moreover, it will not ease but increase the contradictions of world capitalism. The underlying antagonism between capitalism and planned economy through the whole of the last period has been a key factor limiting inter-imperialist rivalry. A newly capitalist Soviet Union, in contrast, would not only free the United States, Japan, and Germany to engage in fiercer competition, but would become an imperialist rival in its own right.

In all the Stalinist countries, however, what Trotsky wrote in 1936 remains true: “on the road to capitalism the counter-revolution will have to break the resistance of the workers.” (The Revolution Betrayed, p.255) Outside East Germany and Poland, the main factor that holds back the bureaucracies from a lemming-like rush to re-storing capitalism is the fear of provoking the working class.

The fundamental reason why capitalist restoration in Eastern Europe or the Soviet Union cannot promise the prosperity of West Germany, Sweden, Japan, the United States, etc. — is that the productivity of labour in these Stalinist countries is only one half or one third the levels of the advanced capitalist countries. This is now recognised even by some sections of their intelligentsia. In a keynote speech at a recent such gathering, Boris Kagarlitsky, an elected member of the official Moscow ‘Soviet’, “warned that Soviet capitalism would have more in common with Brazil or Colombia than with the models to be seen in Western Europe.” (Independent, 25/6/1990)

To reimpose the discipline of capitalist production, to crush discontent at job losses, price rises, the removal of state subsidies on rents and transport, etc., new capitalist regimes in Eastern Europe or the Soviet Union could not be democracies. It would be a question of replacing proletarian Bonapartism by… new bourgeois Bonapartist dictatorships.

Seven million working days were lost in the Soviet Union through strikes between January and September 1989. In the biggest movement since 1917, 100 000 miners struck in Siberia and the Ukraine in July. The rate of strikes in 1990 is higher than in 1989. Independent democratic unions are being established by the miners and other sections of workers, with increasingly political demands.

“Theoretically everything is the people’s property”, a Siberian metalworker told a British capitalist journalist in November 1989. “In fact, an uncontrolled apparatus decides everything. The only answer is to make us real masters of the factories and the land.” (Independent, 171 11/1989)

That statement is a vindication of the ideas that Leon Trotsky struggled and gave his life for. It is the authentic voice of the workers’ revolution which is beginning throughout the Stalinist world — beginning along with the danger of capitalist counter-revolution.

Reclaiming its heritage — the traditions of Marx, Engels, Lenin, Trotsky, and the October revolution — and cleansing that heritage from all the filth in which it has been smeared by Stalinism — the huge and powerful working class of the Soviet Union and Eastern Europe can carry through a political revolution to overthrow the bureaucracy, and link with fellow-workers around the world in carry through the world socialist revolution.


Trotsky’s legacy

“No revolution has ever taken place in accordance with the mystifying principles of Trotskyist logic”, asserts the Stalinist Dialego.

The fact is that, since the victorious 1917 revolution in Russia, the ideas of Lenin and Trotsky, the ideas of Bolshevism, have never again been tested at the head of a revolutionary movement. The Marxist opposition in the Soviet Union was drowned in blood by Stalinism. Despite all Trotsky’s efforts, the attempt to rebuild the forces of Marxism in the West was overtaken by events.

Stalinism emerged massively strengthened from the Second World War. Reformism, too, gained a new lease of life for a whole historical period on the basis of the post-war upswing of world capitalism. Adding to the pernicious effects of reformism in the workers’ organisations, the ideas of the Stalinist bureaucracy, resting on and criminally abusing the authority of the October Revolution, for a whole period had a grip on working people striving for revolution — resulting in a series of catastrophic defeats.

It is true that there are numerous sects and sectlets around the world who call themselves “Trotskyists”, but who peddle every political stupidity imaginable. For the most part intellectuals with no grounding in the working class, they never absorbed the real method of Marx, Engels, Lenin and Trotsky. Most of their errors derive from the degeneration which took place in the circles of Trotsky’s supporters after his death, when most of his followers were thrown off course by unexpected world developments which the ‘Old Man’ had not foreseen.

Murdered in 1940, Trotsky did not anticipate the post-war advance of proletarian Bonapartism in Eastern Europe, nor its establishment in China. He did not fore-see the 1950-1974 world capitalist boom. Marx, Engels and Lenin before him had likewise been unable to fore-cast exactly the course or timing of events, and their de-tailed prognoses often had to be corrected later. Marxism is not fortune-telling, but a scientific method for orienting the cadre of the working class in the midst of changing conditions.

Unable to work out independently, as Trotsky would have done, the correct course to follow, most of his followers after his death hared after every ultra-left or opportunist fashion. Abandoning Marxism while continuing to wear its label, they have made themselves irrelevant to the outcome of the mass struggle. This, together with the mountain of lies heaped on Trotsky’s name by the slander-industry of Stalinism, accounts for the disrepute of “Trotskyism”.

But today everything is stood on its head. So-called “socialism” — in reality Stalinism — is in the grip of irretrievable decay and collapse. The false authority which Stalinist regimes and parties have exerted internationally can never be fully revived. Temporarily triumphant capitalism crows about the “death of Marxism” — but is itself sitting on a time-bomb of social contradictions and dis-content.

The reformists and Stalinists are capitulating whole-sale to capitalist ideas, abandoning completely the struggle to overthrow it. But the working class cannot and will not abandon this struggle. To find the way forward the genuine science of Marxism — the marvellous legacy of Marx, Engels, Lenin and Trotsky, freed of distortions — must be unearthed, studied, and applied.

Trotsky’s theory of permanent revolution — together with his explanation of proletarian Bonapartism — are priceless elaborations of the armoury of Marxism. Applied and re-applied, they are invaluable for the working class internationally in understanding why revolutions in the West and in the colonial world have been defeated, or carried through only in distorted form — and in working out the tasks for the working class movement today.

Fortunately, in the difficult decades after Trotsky’s death, the red thread of his method was carried forward, although at first by only a tiny handful of Marxists. His ideas have been extended, corrected where necessary, and systematically applied to the changing world. Today, in the company of comrades such as the Militant tendency now leading the mass movement against the poll tax in Britain, and others in Spain, India, Nigeria, Chile, the USA and 20 other countries — we are part of a rising force of genuine Marxism in the mass organisations around the world.

Genuine Marxism is inseparable from Trotsky’s name. Moreover, Trotsky’s dedicated life of struggle for freedom and socialism, the fact that he never capitulated to capitalism or to Stalinism, his ultimate sacrifice in the workers’ cause — these make his legacy all the more price-less for our movement today.

Fifty years after his assassination, we are proud to honour Trotsky.


Continue to Chapter Five.