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Reply to RCIT on Permanent Revolution, Bourgeois Democracy and Social Imperialism

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Introduction

The RCIT (Revolutionary Communist International Tendency), in response to our article ‘Russia, China and the Unfinished Permanent Revolution”, claims that we, the Liaison Committee of Communists (LCC), don’t understand Trotsky’s theory of Permanent Revolution. On the contrary we do understand it and apply it as he did himself. It is the RCIT that tries to turn Permanent Revolution into a pseudo-Trotskyist cover for its adaptation to social imperialism. Social Imperialism is the democratic petty bourgeois policy that imperialism can be progressive if reformed by the mobilisation of the proletariat. We will show that beginning with its semi-Cliffite method, the RCIT’s fetishism of bourgeois democracy is a chronic form of centrism, in reality objectively part of the permanent counter-revolution which we as revolutionaries are pledged to expose and defeat.

The RCIT’s main argument against the LCC is that we are ultra-lefts who claim that “nothing can change in any semi-colonial country at any time without the dictatorship of the proletariat”:

“Desperately searching for a theoretical hook on which to base their notions, the LCC looks to Trotsky who wrote the following in his book on the permanent revolution:

With regard to countries with a belated bourgeois development, especially the colonial and semi-colonial countries, the theory of the permanent revolution signifies that the complete and genuine solution of their tasks of achieving democracy and national emancipation is conceivable only through the dictatorship of the proletariat as the leader of the subjugated nation, above all of its peasant masses.

From this fundamental insight of Trotsky the LCC derives … that nothing can change in any semi-colonial country at any time without the dictatorship of the proletariat. Poor pedants! From Trotsky’s statement that “the complete and genuine solution of their tasks of achieving democracy and national emancipation” (our emphasizes) in the “countries with a belated bourgeois development, especially the colonial and semi-colonial countries” the LCC distortedly concludes that not even one single aspect of belated capitalist development can change in any country, at anytime, anywhere in the world!” (RCIT ibid)

We agree with Trotsky’s quote. We say nothing about capitalist development being impossible short of the Dictatorship of the Proletariat. What we do say is that in the epoch of imperialism capitalist development is based on state monopoly finance capital which develops the forces of production unevenly, accumulating super-profits in the imperialist states, and under-developing the forces of production in the semi-colonies. Even imperialism is capable of making big changes as it ravages what is left of nature, but these are mainly destructive of the forces of production, and do not add up to the qualitative change from semi-colony to imperialism.

This is entirely consistent with Lenin’s theory of imperialism and Trotsky’s theory of permanent revolution. It is exactly why Trotsky explained that the completion of the bourgeois revolution is impossible except as part of the socialist revolution. Following Lenin, we argue that semi-colonies are not economically independent of imperialism and cannot accumulate sufficient capital to become imperialist themselves. Therefore, only Russia and China could make this transition, having escaped semi-colonial servitude by making socialist revolutions and remaining economically independent after the restoration of capitalism. And that is why we don’t agree that South Korea and Israel are new imperialist powers. We see them as US dependencies, whose economic growth is subsidised in order to maintain them as armed outposts of US imperialism.

We think that the RCIT has a fetish of ‘bourgeois democracy’ that is inseparable from its view that imperialist super-exploitation and oppression of semi-colonies can under “exceptional circumstances” allow them to become imperialist. By ‘fetish’ we mean Marx’s view that capitalist production relations are inverted as exchange relations misrepresenting value as inherent in commodities rather than as socially necessary labour time. This fetishism is reproduced in the capitalist state creating the illusion that it is separate from society and hence is not determined by society.

If you believe that semi-colonies can become imperialist then you must subscribe to the illusion that bourgeois democracy can be used by the proletariat in the imperialist countries to moderate the drive for super-profits enabling the semi-colonial masses to can carry through a national revolution that wins economic independence from imperialism short of the Dictatorship of the Proletariat. Hence capitalist state-centred fetishism underlies the illusion that bourgeois democracy today is still capable in ‘exceptional’ circumstances of being ‘progressive’, that is, social imperialism. Finding such ‘exceptional circumstances’ is no more than selecting isolated ‘facts’ that confirm the RCITs pre-existing bourgeois democratic fetish.

We can see this empiricist method in operation when the RCIT promotes the illusion that bourgeois democracy, even when expressed in popular fronts, or popular front parties, are a ‘lesser evil’ to Stalinism in Russia and Yugoslavia, military dictatorships in Thailand and Egypt, and fascism in Brazil. We will prove below, that Marx, Lenin and Trotsky never confused ‘bourgeois democracy’ with ‘workers democracy, and so never saw one form of class rule, the bourgeois democratic dictatorship, as capable of smashing another form, bourgeois reactionary dictatorship, whether it be the Prussian Army in 1871 or German and Spanish fascism in 1933. The RCIT is in danger of becoming a Menshevik apologist for the bourgeois popular front as a part of the ‘democratic revolution’ and a necessary stage in capitalist development preparing the conditions for the dictatorship of the proletariat.

In this article we argue that the key to understanding the counterrevolutionary role of Menshevism is the concept, program and strategy of Permanent Revolution. Conceived by Marx in 1850, continued in the transitional program of Lenin and Trotsky, it is the strategy of the historic struggle of the proletariat to break through the ideology of bourgeois democracy by means of workers democracy and to complete the permanent revolution with the abolition of classes and the birth of communism.

From bourgeois to proletarian ‘permanent revolution’

According to Trotsky the Permanent Revolution has three aspects: the proletarian revolution would complete the bourgeois revolution; the permanent revolution would continue through the development of socialism to communism; third, the permanent revolution is an international revolution. These aspects are united in Marx’s conception of Permanent Revolution:

“The permanent revolution in the sense which Marx attached to this concept, means a revolution which makes no compromise with any single form of class rule, which does not stop at the democratic stage, which goes over to socialist measures and to war against reaction from without; that is, a revolution whose every successive stage is rooted in the preceding one and which can end only in the complete liquidation of class society”. (L. Trotsky The Permanent Revolution, Pathfinder edition, p. 130. Introduction)

Trotsky acknowledges that Marx applied the concept to the bourgeois revolution in France to signify the struggle of the French bourgeoisie to prevail against Napoleon. To counter Napoleon Bonaparte’s illusion that his state stood “above” bourgeois society and was free to draw on the national treasury, the bourgeoisie conspired to create a grain shortage, delaying Napoleon’s Russia campaign by two months and causing its defeat. This was a victory in the ‘permanent revolution’ of the bourgeoisie over Napoleon’s ‘permanent war’ as an intolerable expense to the economy. However, the bourgeoisie soon had to resort to the ‘Bonapartist’ state standing “above” society in order to suppress the unruly national proletariat. This marked a decline of the progressive bourgeoisie into its opposite, a reactionary bourgeoisie.

The failure of the bourgeois revolutions of 1848 was proof of the beginning of the end of the progressive bourgeoisie in Europe. The Prussian bourgeoisie feared the proletariat more than the feudal Junkers, signalling to Marx that the time for the proletarian revolution had begun. While the feudal regime remained in place and Prussian capitalism remained backward, only the proletarian revolution could develop the forces of production. As Trotsky puts it:

In 1848 a class was needed that would be able to take charge of events without and in spite of the bourgeoisie, a class which would not only be prepared to push the bourgeois forward by its pressure but also at the decisive moment to throw its political corpse out of the way…The proletariat was too weak, lacked organization, experience and knowledge. Capitalism had developed sufficiently to render necessary the abolition of the old feudal relations, but not sufficiently to bring forward the working class, the product of the new industrial relations, as a decisive political force.” (‘Results and Prospects’, in The Permanent Revolution, p. 56-57, ibid)

The failed bourgeois revolutions of 1848

The RCIT quotes the example of the revolutions of 1848 against us, claiming it proves we don’t understand Permanent Revolution:

“Let us give yet another example which unmasks the LCC’s wooden, mechanistic way of thinking. In his book, Trotsky illustrated his concept of permanent revolution with the case of Germany. There he explained that the failed bourgeois-democratic revolution of 1848 resulted in the absence of democracy:

The concept of the permanent revolution was advanced by the great Communists of the middle of the nineteenth century, Marx and his co-thinkers, in opposition to the democratic ideology which, as we know, claims that with the establishment of a ‘rational’ or democratic state all questions can be solved peacefully by reformist or evolutionary measures. Marx regarded the bourgeois revolution of 1848 as the direct prelude to the proletarian revolution. Marx ‘erred’. Yet his error has a factual and not a methodological character. The Revolution of 1848 did not turn into the socialist revolution. But that is just why it also did not achieve democracy. As to the German Revolution of 1918, it was no democratic completion of the bourgeois revolution, it was a proletarian revolution decapitated by the Social Democrats; more correctly, it was a bourgeois counter-revolution, which was compelled to preserve pseudo-democratic forms after its victory over the proletariat.”” (RCIT ibid)

Marx recognised that the failure of the bourgeois revolution in Prussia in 1848 to bring about bourgeois democracy did not lead directly to the proletarian revolution. That is a fact. But Marx also said that while the failure of the bourgeois revolution did not immediately turn into a successful proletarian revolution, it was the prelude to the ‘permanent revolution’:

“Although the German workers cannot come to power and achieve the realization of their class interests without passing through a protracted revolutionary development, this time they can at least be certain that the first act of the approaching revolutionary drama will coincide with the direct victory of their own class in France and will thereby be accelerated. But they themselves must contribute most to their final victory, by informing themselves of their own class interests, by taking up their independent political position as soon as possible, by not allowing themselves to be misled by the hypocritical phrases of the democratic petty bourgeoisie into doubting for one minute the necessity of an independently organized party of the proletariat. Their battle cry must be: The Permanent Revolution.” (‘Address of the Central Committee to the Communist League,’ March 1850. The Revolutions of 1848, p. 330, Pelican edition)

In the same address to the Communist League in 1850, Marx writes the ‘petty bourgeois democrats’ try to limit the proletarian revolution to the reforms conceded by the bourgeoisie rather than “make the revolution permanent.” Bourgeois ‘democracy’ then is already counter-revolutionary, holding back rather than advancing the permanent revolution:

“While the democratic petty bourgeois want to bring the revolution to an end as quickly as possible, achieving at most the aims already mentioned, it is our interest and our task to make the revolution permanent until all the more or less propertied classes have been driven from their ruling positions, until the proletariat has conquered state power and until the leading countries of the world – that competition between the proletarians of these countries ceases and at least the decisive forces of production are concentrated in the hands of the workers. Our concern cannot simply be to modify private property, but to abolish it, not to hush up class antagonisms but to abolish classes, not to improve the existing society but to found a new one.” (Marx, ibid, p. 323) [Our emphasis]

Here Marx is stating clearly that to “make the revolution permanent” it is necessary to “abolish private [capitalist] property”. Implicit in his statement is his view that this requires the end of bourgeois democracy which is premised on the reproduction of private property. During the 1840s, Marx in his ‘Early Writings’[i] formulated his concept of the capitalist state as derived from the fetishised reality of exchange relations, where the private interests of individuals as buyers and sellers of commodities becomes represented as the ‘general interest’ in a state form standing above society. Bourgeois democracy then functions to reproduce capitalist property and the class contradiction between labour and capital, by masking that contradiction in the ideology of national unity. Social Democracy is merely the incorporation of that ideology into the program of Social Democratic parties.

The RCIT does not realise that Trotsky is making the same point when he refers to the German counter-revolution of 1918. The ‘democratic petty bourgeoisie’ (the Social Democrats) used the “pseudo-democratic forms conceded” by the bourgeoisie to mask the counter-revolution as the ‘victory of the permanent revolution’. The failure of the revolution was due to the failure of the Communist Party of Germany (KPD) to win the masses from reactionary ‘bourgeois democracy’ to the revolutionary ‘proletarian democracy’ of the armed insurrection and dictatorship of the proletariat. Following Marx, Trotsky is pointing out that it is the petty bourgeois democrats who paint the “pseudo-democratic forms” as the victory of the permanent revolution to mask the bourgeois counter-revolution. To prove that Marx and Trotsky are one on this question we need to go back to the Paris Commune and the first major test of permanent revolution.

Lessons of the Paris Commune

If the failed revolutions taught Marx and the First International that it was time for the proletarian revolution, the Paris Commune drowned ‘bourgeois democracy’ in the blood of the Communards. The Paris Commune proved that the revolution that failed in ‘backward’ Prussia had also been accompanied by a retreat in the great French Revolution. Such was the fear of the rising proletariat on the part of the French ruling class that it found its expression in the Second Empire of Louis Bonaparte who came to power in a coup d’état in December, 1851, and installed himself emperor. In July, 1870, Bonaparte declared war on Prussia against much popular opposition in France. He was defeated soon after at Sedan, when his army surrendered, and two days later a Republic was declared in Paris with massive support across France. However the National Assembly of the Republic was dominated by bourgeois and petty bourgeois, who rushed to make an armistice and negotiate peace with Prussia, so as to conspire to defeat the workers Commune of Paris.

“Armed Paris was the only serious obstacle in the way of the counter-revolutionary conspiracy. Paris was, therefore, to be disarmed…The seizure of her artillery was evidently but to serve as a preliminary to the general disarmament of Paris, and, therefore, the revolution of 4 September. But that revolution had become the legal status of France. The Republic, its work, was recognized by the conqueror in the terms of the capitulation. After the capitulation it was acknowledged by all the foreign powers, and in its name the National Assembly had been summoned. The Paris Workingmen’s revolution of 4 September was the only legal title of the National Assembly seated at Bordeaux, and of its executive.” (Marx, The Civil War in France, pp.198-9, Part 2)

Marx and the 1st International declared support for the Republic and its defence against the Prussian army. The thrust of its position was to defend the Republic against both Prussian and the reactionary National Assembly:

“Let the sections of the International Working Men’s Association in every country stir the working classes to action. If they forsake their duty, if they remain passive, the present tremendous war will be but the harbinger of still deadlier international feuds, and lead in every nation to a renewed triumph over the workman by the lords of the sword, of the soil, and of capital. Vive la republique”. (‘Second address of the General Council’, p.186)

Thiers[ii] could not overthrow the legitimate Republic that replaced the Second Empire of Louis Bonaparte without making a reactionary military alliance with Bismarck. The armed workers of Paris, supported by the 1st International, had to defend a bourgeois republic against a French royalist reaction backed by the Prussian state. But they could only defend the republic as a Workers Republic. As a result of the experience of the Commune, Marx and Engels drew the conclusion that the Workers Republic had to smash the bourgeois state and create the Dictatorship of the Proletariat, or suffer defeat.

Thus the bourgeois ‘permanent revolution’ had turned into its opposite, the ‘permanent counter-revolution’, conceding French national sovereignty to the Prussians to impose the bourgeois dictatorship in its most naked form with the slaughter of the Communards. Better a national defeat for France than the defeat for private property! Yet from the ashes of the heroic Commune the proletariat emerged for the first time on the world stage of ‘permanent revolution’:

“If the Commune was thus the true representative of all the healthy elements of French society, and therefore the truly national government, it was at the same time, as a working men’s government, as the bold champion of the emancipation of labour, emphatically international. Within sight of the Prussian army, that had annexed to Germany two French provinces, the Commune annexed to France the working people all over the world.” (Class Struggles in France, p. 216 Part 3) [Our emphasis]

Marx’s conclusion, and subsequently that of Lenin and Trotsky, was that after 1871 the epoch of the proletarian ‘permanent revolution’ had opened. The material forms of revolutionary ‘workers democracy’ that arose in the Commune to defeat the reactionary ‘bourgeois democracy’ of the National Assembly, that is, direct representation, right of recall, workers councils, workers militias, etc., were now an example to be held up internationally. Henceforth, the ‘permanent revolution’ was the strategy that transformed the unfinished bourgeois tasks of the national revolution, agrarian reform, the bourgeois republic, and so on, into socialist tasks, where nations became the workers socialist republics, agrarian reform became peasant communes on nationalised land, and bourgeois democracy became the Dictatorship of the Proletariat. Moreover, it becomes clear that the concept of the strategy of permanent revolution reflects Marx’s transitional method that the minimum program for the bourgeois republic must be combined with the maximum socialist demands for the Dictatorship of the Proletariat in a transitional program.

Marx Critiques the Gotha Program

The defeat of the Paris Commune coincided with the beginning of the transition of world capitalism from its competitive stage to the monopoly capitalism of the imperialist epoch. This led to a period of several decades of economic growth in Europe where the export of capital began to produce super-profits in the colonies giving rise to high living standards in the top layers of the proletariat in the imperialist countries. As a result, these layers called by Engels ‘bourgeois workers’, and Lenin, the ‘labour aristocracy,’ began to identify their economic interests with imperialism. This was reflected in the divisions in the International, and the emergence of a majority backing Lassalle at Gotha in 1875.

The Gotha Program was a retreat from the Marxist program to the petty bourgeois national socialism of Lassalle. It was a retreat from the permanent revolution of the Commune on the question of socialism, internationalism and communism. First, Marx critiqued its adaptation to the Prussian state, putting bourgeois democratic demands on the police state of Bismarck for graduated taxes, free education, and state aid for workers cooperatives. The overthrow of labour exploitation was replaced by the utopia of a “free state” regulating wages, taxes and funding education, welfare and employment. This ‘free state’ was the same state that had recently helped put down the Commune.

Second, Marx asks:

“And to what is the internationalism of the German workers’ party reduced? To the consciousness that the result of their efforts ‘will be the international brotherhood of peoplesa phrase borrowed from the bourgeois League of Peace and Freedom and which is intended to pass as an equivalent for the international brotherhood of the working classes in the joint struggle against the ruling classes and their governments. Not a word, therefore, of the international role of the German working class! And this is how it is meant to challenge its own bourgeoisie, which is already fraternally linked with the bourgeoisies in all other countries, and Herr Bismarck’s international policy of conspiracy!” (‘Critique of the Gotha Programme’, The First International after Marx, p.350. Part 1) [Our emphasis]

Third, its program is confined to the ‘present national state’ which means ‘their own state, the Prusso-German Empire’, and doesn’t speak of the Dictatorship of the Proletariat or the transition from socialism to Communism. Marx states:

“…Between capitalist and communist society lies a period of revolutionary transformation from one to the other. There is a corresponding period of transition in the political sphere and in this period the state can only take the form of a revolutionary dictatorship of the proletariat.” (ibid, p. 355) [Our emphasis]

It is clear by 1875, that in Marx’s conception, permanent revolution is a process, not a sudden leap over the bourgeois revolution, and completed only when the proletarian revolution is complete. That is, it is a strategy, which is more or less continuous and uninterrupted, except by advances and retreats, and complete only when socialist society culminates in communist society. Lenin and Trotsky would speak of an ‘epoch’ of the permanent revolution in 1905. The permanent revolution would extend for an indeterminate ‘epoch’ and would be completed only when the revolution in Russia had unified its three aspects, finishing the bourgeois revolution as socialist revolution, incorporating that into the international socialist revolution, and making the transition to communism.

1905 and “The Permanent Revolution”

The RCIT claims that we do not understand Trotsky’s Permanent Revolution, and quote from The Permanent Revolution.

Desperately searching for a theoretical hook on which to base their notions, the LCC looks to Trotsky who wrote the following in his book on the permanent revolution:

With regard to countries with a belated bourgeois development, especially the colonial and semi-colonial countries, the theory of the permanent revolution signifies that the complete and genuine solution of their tasks of achieving democracy and national emancipation is conceivable only through the dictatorship of the proletariat as the leader of the subjugated nation, above all of its peasant masses.

From this fundamental insight of Trotsky the LCC derives … that nothing can change in any semi-colonial country at any time without the dictatorship of the proletariat. Poor pedants! From Trotsky’s statement that “the complete and genuine solution of their tasks of achieving democracy and national emancipation” (our emphases) in the “countries with a belated bourgeois development, especially the colonial and semi-colonial countries” the LCC distortedly concludes that not even one single aspect of belated capitalist development can change in any country, at anytime, anywhere in the world!” (RCIT, ibid)

Do we say: “That nothing can change in any semi-colonial country at any time, without the dictatorship of the proletariat”? We have already rejected this as untrue. We agree with Trotsky and consistently argue for his conception of the Permanent Revolution. The RCIT seems to think however, that up to the present day capitalism under “exceptional circumstances” can develop the forces of production in semi-colonies even if this leads to “incomplete” and “pseudo” solutions to its historic tasks. Well, we have pointed out that the bourgeoisie has had more than a century in which to continue with its historic mission in opposition to the already existing proletarian permanent revolution. Since 1850 its “mission” is clearly a permanent counter-revolution to suppress the permanent revolution!

More critical at this point in our argument is that the RCIT seems to think that because capitalism developed the forces of production in imperialist Russia in 1905 that this refutes our argument that semi-colonies cannot become imperialist after the First Imperialist War. They imply that if it could happen in Russia in 1905, why not in this same imperialist epoch could we not expect new imperialisms to arise “in exceptional circumstances” in the former workers states of Russia and China and the capitalist semi-colonies such as South Korea and Israel right up to the present?

Why not? For the very reason that Trotsky and Lenin knew that in 1905 imperialist Russia was a hybrid, a combination of modes of production, in which to develop the forces of production further the bourgeoisie had to be overthrown. Not because it was an “exception” from other imperialisms, but because it represented the extreme contradiction between advanced finance capital and backward Russia that was determined by the laws of state monopoly capital. Russia was a hybrid conjunction of the Tsarist feudal state and parasitic finance capital to create the conditions for maximum super-exploitation and hence maximum state oppression. Far from an ‘exceptional’ case opening the way for future ‘exceptional’ cases, Russia for Lenin and Trotsky expressed the extreme contradictions of imperialism and its decay as a system. The contradiction between its feudal backwardness and modern capitalist industry meant it was the ‘weak link’ in the imperialist chain that would be the first to fall to permanent revolution and start a chain reaction to bring an end to capitalism as a mode of production.

All three aspects of the ‘permanent revolution’ were put to the test in Russia in 1905 when Trotsky published his theory of The Permanent Revolution. Trotsky took Marx’s concept and applied it to Tsarist Russia. He argued that Russia had developed in a belated and uneven way so that the bourgeoisie was even weaker than those of France and Germany in 1848. The working class was concentrated in the cities in modern industry recently developed by French and British finance capital and more politically advanced than French and British workers! The urban proletariat was prepared by Tsarist reaction and modern industry sufficiently to lead the poor peasant masses in a Permanent Revolution to complete the bourgeois tasks in a proletarian revolution.

The reception was mixed. The Mensheviks took their centrist position for a bourgeois revolution led by the bourgeoisie. Lenin agreed with Trotsky that, despite important differences over whether it would be necessary to share power with the peasants in the early stages of the revolution, the revolution would be led by the proletariat to overthrow the Tsar and would have to proceed ‘uninterrupted’ to the socialist revolution. Lenin took Trotsky’s side stating that the permanent revolution was not ‘a single blow’ or ‘leap’, and while uninterrupted, would take a “whole historical epoch” which could not be predicted in advance. Despite attempts by the reformists to exaggerate the split between Lenin and Trotsky on the question of Permanent Revolution, Lenin quotes Trotsky in November, 1905, to express his agreement with him. Trotsky recounts this episode in The Permanent Revolution quoting Lenin:

““Comrade Trotsky said that the proletarian revolution can, without halting at the first stage, continue on its road, elbowing the exploiters aside; Lenin on the other hand, pointed out that the political revolution is only the first step. The publicist of Nasha Zhizn would like to see a contradiction here…The whole misunderstanding comes, first, from the fear with which the name alone of the social revolution fills Nasha Zhizn; secondly, out of the desire of this paper to discover some sort of sharp and piquant difference of opinion among the Social Democrats; and thirdly, in the figure of speech used by Comrade Trotsky; “at a single blow”.

In No 10 of Nachalo, Comrade Trotsky explains his idea quite unambiguously:

“The complete victory of the revolution signifies the victory of the proletariat”, writes Comrade Trotsky. “But this victory in turn implies the uninterruptedness of the revolution in the future. The proletariat realises in life the fundamental democratic tasks, and the very logic of its immediate struggle to consolidate its political rule poses before the proletariat, at a certain moment, purely socialist problems. Between the minimum and the maximum programme (of the Social Democrats) a revolutionary continuity is established. It is not a question of a single “blow”, or of a single day or month, but of a whole historical epoch. It would be absurd to try to fix its duration in advance.””” [Our emphasis] ibid p. 210)

In his speech to the Fifth Party Congress in 1907 Trotsky explains why the proletariat is ready to play the role in the Russia of 1905 of the sansculottes in the French revolution. Capitalism has not grown as in Europe but been introduced from above by imported British and French finance capital funding state loans to set up modern industry.

“As a result of this process there appeared among us as the main force in the towns, at the moment of the bourgeois revolution, an industrial proletariat of an extremely highly developed social type. This is a fact. It cannot be disputed, and must be taken as the basis of our revolutionary tactical conclusions…As the petty bourgeoisie urban democracy in the Great French Revolution placed itself at the head of the revolutionary nation, in just the same way the proletariat, which is the one and only revolutionary democracy in our cities, must find a support in the peasant masses and place itself in power – if the revolution has any prospect of victory at all.”  (‘Speech at the Fifth Party Congress’, London, 1907, ibid p. 217)

For Trotsky, the epoch of Permanent Revolution now included Russia in 1905 with the first of three revolutions, when already the Petersburg Soviet characterised itself as proletarian! He and Lenin had no truck with the Mensheviks who thought that Russia’s backwardness meant that the proletariat had to play the historical role of ‘assisting’ the bourgeoisie to take power and complete its bourgeois revolution to prepare the conditions for the socialist revolution.

If we understand Trotsky’s theory of Permanent Revolution correctly as an application in a particular capitalist country of Marx’s more general formulation, we can see that it is true to Marx. Trotsky is at one with Marx:

“The permanent revolution in the sense which Marx attached to this concept, means a revolution which makes no compromise with any single form of class rule, which does not stop at the democratic stage, which goes over to socialist measures and to war against reaction from without; that is, a revolution whose every successive stage is rooted in the preceding one and which can end only in the complete liquidation of class society”. (ibid p. 130)

To repeat: the Permanent Revolution finishes the bourgeois revolution. It does not stop at the “democratic stage” because bourgeois democracy is counter-revolutionary. It has to be smashed by proletarian “revolutionary democracy” which continues the transition from socialism to communism and finally succeeds as world communism. For Lenin and Trotsky Permanent Revolution was a class strategy as understood by Marx. It had begun in the mid-19th century when the bourgeois revolution was already in decline. By 1905 in Russia the Permanent Revolution was part of the program of the revolutionary Marxists against the ‘evolutionary’ Marxists. It was now a part of the subjective reality in the program of the revolutionary party developing the theory and practice of Marxism in the epoch of decaying imperialism, facing war, revolution and counter-revolution. Included in the concept of permanent revolution is the end of “democracy,” no longer bourgeois democracy, but “revolutionary proletarian democracy,” which is abolished along with the “liquidation of class society” in communist society.

War, Revolution and Counter-revolution

The onset of the imperialist epoch in the late 19th century marked the qualitative change from the progressive bourgeoisie developing the forces of production in the epoch of competitive capitalism to a reactionary bourgeoisie now parasitical on the forces of production, monopolising and destroying those forces. The majority of the 2nd International represented the rise of the labor aristocracy adapting to social imperialism. This was the current of ‘evolutionary’ socialism critiqued by Marx and Engels in the Commune and the Gotha Program. This was the program of the democratic petty bourgeois who believed that the workers could transform the capitalist nation state by relatively peaceful, parliamentary means. Against the ‘evolutionary’ socialists were the minority ‘revolutionary’ socialists, who since 1871 had rejected the program of bourgeois democracy as reactionary, and stood on the transitional program of permanent revolution. The workers’ struggle for ‘democracy’ necessitated the ‘smashing of the bourgeois state’ and the imposition of the Dictatorship of the Proletariat.

The First Imperialist War was proof of this in the extreme, as the imperialists went to war using their workers as cannon fodder and their parliamentary bourgeois democracies to provide war credits. After the historic 4 August 1914 betrayal of the majority of the 2nd International, the flag of Permanent Revolution was kept aloft by the Bolsheviks of 1905 who formed the core of the tiny Zimmerwald Left against the betrayal of the SPD majority and Kautskyite centre. The imperialist defence of the nation was at the expense of other nations, proving that capitalism had now outstripped the national state as a progressive force in developing the forces of production. Now the bourgeois nation states and nationalist ideology were in a reactionary retreat from the bourgeois revolution and transmitting its imperialist ideology into the ranks of the workers via the petty bourgeois democrats and the betrayals of Social Democracy.

The Zimmerwald Left position was to keep alive the program of permanent revolution. It called on workers to turn the imperialist war into a civil war, uniting the proletariat across national borders to overthrow the imperialist nations ruled by feudal remnants in league with the imperialist bourgeoisie and their reformist agents in the working class. Utopian? No! The Bolsheviks knew that imperialist war had both revolutionary and counter-revolutionary aspects. The experience of war by the working classes proved to them that bourgeois democracy was a fraud and their instinct even without a revolutionary party and program was to refuse to fight imperialist wars. After 3 years of mutual destruction, the Russian workers in uniform rejected imperialist war for civil war, as did the German workers in uniform who mutinied after 4 years of slaughter.

Bolshevism wins in Russia but loses in Germany

Put to the test in 1917 the February Revolution proved that the proletariat was advanced and that the bourgeoisie was weak, frightened of the proletariat, and conspiring with the remnants of Tsarist reaction to smash the revolution. The Mensheviks continued to support the bourgeoisie as the revolutionary class. The Old Bolsheviks around Stalin, Kamenev, etc., were ready to support the popular front government as the lesser evil to the Tsarists and imperialists. Only Lenin and Trotsky were in agreement on the Permanent Revolution. They shared the same dialectical or transitional method. Both saw that the Permanent Revolution combined the minimal and maximum program in what would later become for Trotsky the Transitional Program. The workers would take power on the basis of soviet majorities, rapidly complete the bourgeois tasks by forming a socialist republic with a national army that would complete the civil war; fight imperialism with weapons and with diplomacy to advance the revolutions everywhere, especially in Europe; adopt land reform to win over the poor peasants, and when convinced that they had won over the Kulaks (middle peasants), abolish the Constituent Assembly.

But the Permanent Revolution in Russia was not finished. It had to spread to Europe, in particular Germany; otherwise it would succumb to counter-revolution. It had to advance its international aspect in order to advance its socialist aspect. As we know the imperialists called off their war and ganged up on the Soviet Union so there were more retreats than advances. The isolation of the Permanent Revolution in the Soviet Union with the defeat of the German revolution set back the international revolution. The lesson of the Permanent Revolution in Russia had been that either workers took power, or the bourgeois popular front would usher in the fascist counter-revolution. In Germany, the rotten role of Social Democracy and the Kautsky centrists combined with a weak Communist Party led to the isolation and defeat of the armed workers uprisings.

We come back to the RCIT on its view (above) that even after the counter-revolution in Germany in 1918 the defence of the “incomplete and pseudo” forms of bourgeois democracy is part of the permanent revolution. We have already shown that we agree with Marx that 1848 marked the failure of a bourgeois revolution and the opening of the permanent revolution. And this was confirmed by a growing Bonapartist reaction and the Prussian army’s bloody repression of the Paris Commune in 1871. Now we are asked by the RCIT to swallow that, after the First Imperialist War for super-profits and the defeat of the German revolution, the proletariat should defend bourgeois democracy in its “pseudo-democratic forms” in the Weimar Republic. Perhaps the RCIT mean the right to vote for the same ‘disguised popular front’ that put the noose around the workers necks. Perhaps the RCIT is referring to a posthumous right to vote for the proletarians slaughtered at the hands of the Freikorps and the fascists. Is the RCIT saying that such ‘pseudo-democratic’ concessions would obligate revolutionaries to “defend bourgeois democracy” in the Weimar Republic against the fascists?

Broué quotes from the resolution on the united front tactic at the Fourth Congress of the Comintern in 1922, specifically about the “Workers Government” in Germany in 1918-19:

“In 1918-1919, Germany had experienced a ‘Social-Democratic workers’ government’. These were not revolutionary workers’ governments, but ‘disguised coalitions between the bourgeoisie and the counter-revolutionary workers’ leaders’: “These ‘workers’ governments’ are tolerated in critical periods by the enfeebled bourgeoisie, in order to deceive the proletariat about the true class character of the state, or even to divert the revolutionary offensive of the proletariat and gain time with the help of corrupted workers’ leaders. Communists must not take part in such governments. On the contrary they must pitilessly        demonstrate to the masses the real character of these false ‘workers’ governments’. In the period of capitalist decline, in which our main task is to win the majority of the proletariat for the revolution, these governments can objectively contribute to the process of decomposition of the bourgeois regime.””   (Quoted in P. Broué, The German Revolution, p. 672 Chapter 34 ‘The Development of the Tactic’)

Such a ‘disguised coalition’ we would call a ‘popular front’ today. We would not have supported such a ‘workers’ government’ against fascism in Germany. The SPD was in a coalition with the army to put down workers risings, and the army was constitutionally independent of the Government. Nor in 1923 when the KPD wasted time debating joining a ‘grand coalition’ with the SPD and the bourgeoisie (to expose the ‘popular front’ to the SPD workers!) while a showdown on the streets was rapidly building between revolutionary workers and the fascist shock troops. The defeat of the revolution in Germany in 1923 can be attributed in the last analysis to the ‘subjective’ weakness of the KPD, but was mainly due to the ‘objective’ role of the SPD in popular front regimes with the reactionary bourgeoisie, to ‘deceive’ and ‘divert’ the workers, and ultimately tie their hands before the rise of fascism that would end in the historic defeat of the international proletariat with Hitler’s seizure of power in 1933.

Since 1850 the Marxist strategy of ‘making the revolution permanent’ was marked by both revolutionary advances and counter-revolutionary retreats. The historic victory of the Three Russian Revolutions culminating in the October Revolution now met with a historic defeat in the German October. As a consequence of the isolation of the Soviet Union, the Stalinists deepened the counter-revolution in Russia, as well as in China, Germany and Spain. Nonetheless, despite the Stalinists counter-revolutionary role in alliance with imperialism, the existence of workers property in the Soviet Union as the most advanced victory of the Permanent Revolution dictated that the unconditional defence of the Soviet Union was to become the central platform of the Left Opposition and the Transitional Program.

Permanent Revolution vs Counter-revolution in China, Germany and Spain

The next major development in the Permanent Revolution was the widening international confrontation between it and the counter-revolution. It was first put to the test in China 1925-27. Here the Stalinists recast the line of the Mensheviks in 1917 as the bloc of four classes; workers, peasants, intellectuals, and the ‘democratic’ national bourgeoisie against the landlords and imperialists. This time the Communists were trapped in the popular front and wiped out by the ‘democratic’ bourgeois General Chiang Kai Shek who was also made an honorary member of the Comintern by Stalin –another instance of the popular front acting as jailer of workers awaiting the executioner.

Germany: From disguised to open popular front

Germany was another defeat for the international working class. As we saw, the failure of revolution in Germany in 1923 did not resolve the crisis for the ruling class. The Weimar Republic went from the ‘disguised popular front’ of the SPD and the army in 1919 to an open popular front in 1923 and then a succession of Bonapartist presidents with the power to directly suppress the workers until its final fall to Hitler in 1933. The SPD could no longer string out its popular front with Bonapartism to pacify the working class and prevent the rise of fascism. The depression that began in 1929 proved it could not fulfil this task, but it still continued to suck up to the Bonapartist regime. The Stalinized KPD took an ultra left line and sabotaged a united front between the KPD and SPD against fascism. Even worse, it backed the fascists in the “red referendum”. In August, 1931, Trotsky sounded the alarm:

“Were this theory to entrench itself in the German Communist Party, determining its course for the next few months, it would signify a betrayal on the part of the Comintern of no lesser historical proportions than the betrayal of the Social Democracy on August 4, 1914, and at that, with much more frightful consequences. It is the duty of the Left Opposition to give the alarm: the leadership of the Comintern is driving the German proletariat toward an enormous catastrophe, the essence of which is panicky capitulation before fascism!”(Germany, Key to the International Situation, Section 31)

Trotsky sees that the victory of fascism in Germany will be a defeat for many of the accumulated historic victories of Permanent Revolution. It will lead to war with the Soviet Union with Nazi Germany representing the imperialist world. “The crushing of the German proletariat by the fascists would already comprise at least half of the collapse of the Soviet republic.” The Left Opposition (Bolshevik Leninists) held up the banner of Permanent Revolution and campaigned to save the world revolution in Germany. While the Stalinists said Social Democracy must be defeated before fascism can be defeated, Trotsky points out that this cannot be done in time when the fascists are at the point of taking power. It is necessary to oppose social democracy politically but demand a military united front with them against fascism. For those who think that social democracy is no different from fascism, Trotsky points out that:

“In the course of many decades, the workers have built up within the bourgeois democracy, by utilizing it, by fighting against it, their own strongholds and bases of proletarian democracy: the trade unions, the political parties, the educational and sport clubs, the cooperatives, etc. The proletariat cannot attain power within the formal limits of bourgeois democracy, but can do so only by taking the road of revolution: this has been proved both by theory and experience. And these bulwarks of workers’ democracy within the bourgeois state are absolutely essential for taking the revolutionary road. The work of the Second International consisted in creating just such bulwarks during the epoch when it was still fulfilling its progressive historic labor.” (Trotsky What Next?Democracy and Fascism’, The Struggle Against Fascism in Germany’ p. 158-9, Pathfinder edition.)

These historic “bulwarks” of ‘workers democracy’ within capitalism are the victories of the Permanent Revolution and “essential for taking the revolutionary road”. They are “strongholds” and “bases” of the united front.[iii] Trotsky insists that the formation of soviets are on the agenda, “…since the soviets, in themselves, represent the highest form of the united front in the revolutionary epoch, therefore their inception must be preceded by the policy of the united front in the preparatory period.” Trotsky summed up the Bolshevik-Leninist position: “Only on the basis of the united front, only through the mass organizations, can the KPD conquer the leading position within the future soviets and lead the proletariat to the conquest of power.” [iv]

Hitler staged the Reichstag fire in February, 1933, on the pretext of a communist revolution to then make his coup d’état. The SPD cowered before Hitler while the KDP was isolated and impotent. Trotsky called the defeat the worst defeat of the proletariat in history, as the Nazis set about smashing working class “strongholds” and “bases”. By July, 1933, Trotsky was forced to conclude that the Comintern had betrayed the German and world’s workers and that the Left Opposition could no longer reform the Comintern or the Soviet state. A political revolution would be necessary to overthrow the Stalinist bureaucracy and restore workers democracy to power in the Soviet Union. The Left Opposition now had the task of building a new revolutionary international to overcome the historic defeat of the Permanent Revolution, to restore the “bulwarks of workers democracy”, in particular the defence of workers property in the Soviet Union. A fundamental principle of its Transitional Program would be the ‘unconditional defence of the Soviet Union.’

“Only the creation of the Marxist International, completely independent of the Stalinist bureaucracy and counterposed politically to it, can save the USSR from collapse by binding its destiny with the destiny of the world proletarian revolution.” (‘It is Necessary to Build Communist Parties and an International Anew.’ The Struggle Against Fascism in Germany, p. 425, ‘The USSR and the Comintern’)

Spain: Stalinism as the ‘shadow’ of the popular front

Spain was like a laboratory of the Permanent Revolution vs the Permanent Counter-revolution. Stalinism again blocked with the bourgeoisie in the popular front government where it was the ‘shadow’ of the bourgeoisie, since most bourgeois had gone over to the fascists. Stalin took on the role of keeping the popular front respectable to demonstrate to the imperialists they did not need fascism to manage capitalism. To demonstrate the moderation of the Republic, Stalin executed the leaders of the centrist POUM and the anarchists, who, despite being part of the popular front could not guarantee the support of their ranks. Spain was a major defeat for the Permanent Revolution as the weak bourgeoisie collaborated with its ‘shadow’ Stalinism as a ‘left-fascist’ regime inside the republic to smash the revolution in advance of the fascists!

We agree with Trotsky’s application of Permanent Revolution in Spain. Trotsky in Lessons of Spain: Last Warning spells out the program of Permanent Revolution and the failure of the POUM and the anarchists to implement it. It meant fighting fascism independently of the Republican army, at the same time calling for the ranks in the Republican, Stalinist and anarchist unions and militias to break from the popular front. That is our position, whereas the RCIT in numerous examples (Yeltsin, Kosovo, Thailand, Egypt) calls for armed independence of workers, but does not call for the break from the bourgeois popular fronts, or popular front parties, to establish that independence, as a pre-condition of the defeat of fascism.

Trotsky on the other hand states clearly that only the proletarian revolution can defeat fascism:

 “The Spanish revolution once again demonstrates that it is impossible to defend democracy against the methods of fascist reaction. And conversely, it is impossible to conduct a genuine struggle against fascism otherwise than through the methods of the proletarian   revolution. Stalin waged war against “Trotskyism” (proletarian revolution) destroying democracy by the Bonapartist measures of the GPU. This refutes once again and once and for all the old Menshevik theory, adopted by the Comintern, in accordance with which the democratic and socialist revolutions are transformed into two independent historic chapters, separated from each other in point of time. The work of the Moscow executioners confirms in its own way the correctness of the theory of permanent revolution.” (Lessons of Spain: Last Warning ‘Stalin confirms in his own way the correctness of the theory of permanent revolution’) [Our emphasis]

This is the basis of our criticisms of the RCIT, which defends bourgeois popular front regimes or parties on the basis that they are a ‘lesser evil’ to fascism (or military Juntas or dictatorships). In fact, Trotsky says, no doubt drawing on the lessons of ‘October’ in both Russia 1917 and Germany 1923, that the Popular Front coming to victory in Spain would be “nothing but a different form of military dictatorship on the backs of the workers and peasants.

Even a complete military victory of the so-called republican army over General Franco, however, would not signify the triumph of “democracy.” The workers and peasants have twice placed bourgeois republicans and their left agents in power: in April 1931 and in February 1936. Both times the heroes of the Popular Front surrendered the victory of the people to the most reactionary and the most serious representatives of the bourgeoisie. A third victory, gained by the generals of the Popular Front, would signify their inevitable agreement with the fascist bourgeoisie on the backs of the workers and peasants. Such a regime will be nothing but a different form of military dictatorship, perhaps without a monarchy and without the open domination of the Catholic Church.”  (ibid The Denouement’) [Our emphasis]

In the epoch of imperialism, the popular front is the jailer for the fascist executioner. The proletariat has to break out of jail to stop the execution!

The Second Imperialist War: revolution and counter-revolution.

The Second Imperialist War was a continuation of the First. Like the First, it had revolutionary and counter-revolutionary aspects. The defeats of the workers in Germany before the Stalinist bloc with Hitler, and the Stalinist popular fronts in France and Spain, proved that Stalinism, in the absence of workers property, was the ‘fascism’ of the left. The flag of Permanent Revolution was held high by the 4th International founded in 1938, just months before the final defeat of the Spanish Revolution. The imperialists, who failed to stop Permanent Revolution advancing in Russia at the end of the First Imperialist War, embarked on the Second, with the immediate aim of destroying Germany and its allies and preventing it from expanding its sphere of influence.

But the real enemy remained the Soviet Union and the threat of ‘communism’ in the West. This was an acknowledgement by all the imperialist bourgeoisies, that their mortal enemy was the survival of workers property. Despite the existence of Stalinism as the ‘fascism’ on the left, the unconditional defence of workers property was the main principle of the Permanent Revolution and of the Transitional Program of the 4th International. The Bolshevik stand against imperialist war was an integral part of the strategy of Permanent Revolution, which meant that where an imperialist power was supplying the Soviet Union in the fight against fascism workers did not campaign to blockade or sabotage the aid to the Soviet Union, while refusing to renounce the necessity to turn imperialist war into civil war at home.

The Trotskyists split between those for whom the Stalinists’ political character as ‘fascists’ made them no different to the Nazis, and those who defended workers property in the Soviet Union unconditionally despite the Stalinists. Among the latter there were those who wavered towards the Stalinist/imperialist line that the Nazis were the main enemy. So there emerged pro-Stalinist and anti-Stalinist currents within Trotskyism. This left Trotsky almost alone in adhering to the Bolshevik Leninist program that had been forged out of Marx’s strategy into the weapon of the Permanent Revolution in Russia. With Trotsky’s assassination the 4th International suffered a decline and fall within the space of ten years that left the world’s workers without a revolutionary communist international.

The Soviet Union bore the brunt of the war in Europe with 20 million dead. It was workers’ property that forged the Red Army and the resistance, not the Stalinist caste, which had purged the best generals before the war. Fascism rose up to suppress the revolutionary potential of the Permanent Revolution in the First Imperialist War because the popular front and Bonapartist regimes proved insufficient. Yet it was the Permanent Revolution in its degenerated Stalinist form that defeated fascism. In the process of defeating the German army, the Soviet Union created the satellite states in Eastern Europe, which prompted the US to form NATO and embark on the Cold War to isolate the Soviet sphere and force it into submission. As part of this global struggle, China and then Indo-China fought national revolutions that became Permanent Revolutions with the expropriation of the bourgeoisie and the creation of Degenerate Workers States. We will deal with the counter-revolutionary aspect of the post-war settlement before discussing the revolutionary extension of Permanent Revolution in China and Indochina.

German “bourgeois democracy” in 1945

The RCIT claims that bourgeois democracy existed, however imperfect, in post-1945 [West] Germany:

“However, it would be pure nonsense to claim that after World War II Germany was still without a bourgeois democracy (irrespective of all the democratic deficiencies which, in general, are characteristic of bourgeois democracy as a form of capitalist dictatorship). Again, in the LCC’s mindset, this post-1945 bourgeois democracy in Germany is an irresolvable mystery. Based on their misunderstanding of Trotsky, they would have to deny that bourgeois democracy exists in imperialist Germany, since otherwise Trotsky’s theory of permanent revolution is false!” (RCIT, ibid)

The RCIT knows that bourgeois democracy is a form of capitalist dictatorship. And there is no doubt that bourgeois democracy was restored in the 1945 post-war settlement. The point however, is that it could only be restored on the basis of an historic defeat of the German working class as a result of two imperialist wars, the Great Depression and finally the partition of Germany. Such bourgeois democracy is a bulwark of the counter-revolution. The defence of such bourgeois democratic forms is out of the question. Communists do not participate in elections (post 1989) on the basis of the post-war German Democratic Republic (GDR) constitution, except to use them as a forum for revolutionary propaganda to smash all workers illusions in bourgeois democracy by means of permanent revolution. The same applies to elections in the German Federal Republic (GFR.)

Moreover, there is nothing ‘exceptional’ about the restoration of bourgeois democracy. The RCIT want to explain every instance of the survival of bourgeois democracy as the result of “exceptional circumstances”:

“In reality, of course, Trotsky’s theory of permanent revolution, understood dialectically, is in harmony with the contradictory historical process of class struggle; it is only the LCC’s distorted caricature of this theory which rams its head against the wall. Exceptional historical circumstances – first and foremost the counter-revolutionary defeat of the working class by fascism, the abortion of the revolutionary crisis in Europe and a number of Asian countries by the Stalinist parties, the agreement between imperialism and the Stalinist bureaucracy to establish a reactionary new world order, and finally the post-war boom in 1950s and 1960s – facilitated the creation of conditions in which imperialism could solve, in a distorted manner, one or another of the unresolved democratic tasks.” (RCIT, ibid) [Our emphasis]

The RCIT forgets that, as part of the “counter-revolutionary defeat of the working class etc…which facilitated the creation of conditions in which imperialism could solve, in a distorted manner, one or other of the unresolved democratic tasks”, these counter-revolutions were all made possible by bourgeois democracy, in particular by the popular fronts in one or other form, where Social Democracy collaborated with the bourgeois military and/or fascism to effect these counter-revolutions. These are not “exceptional circumstances” but a series of historic defeats that follow from the victories of the permanent counter-revolution over the permanent revolution that necessarily reflect the balance of class forces between the revolutionary proletariat and the reactionary bourgeoisie. If “counter-revolutionary defeats” are exceptional, the RCIT may as well claim that capitalism itself is “exceptional.”

We will now show how the RCIT’s “democracy” in post-war Western Germany was part of the permanent ‘counter-revolution’, and that the ‘new imperialists’ in the post WW2 period were part of that counter-revolutionary settlement. We saw that in 1918 the defeat of the revolution was at the hands of a ‘disguised coalition of Social Democracy and the bourgeoisie.’ The objective content of ‘bourgeois democracy’ was bourgeois reaction. The imperialists’ collaboration with Social Democracy prevented the Permanent Revolution from becoming a European and even global revolution. When the “pseudo-democratic forms” of counter-revolution in the bourgeois republic failed to stem the tide of revolution, this forced the bourgeoisie to appoint the former wartime Army Chief of Staff, Hindenburg, as Bonapartist president in an attempt to ‘balance’ the classes. This failed when Hindenburg finally made Hitler Chancellor, and Hitler then appointed himself dictator.

What was left of bourgeois democracy in Germany after the Second Imperialist War? NATO drew the line between Permanent Revolution and Permanent Counter Revolution. Germany was divided and the West stood for imperialist counter-revolution against the Stalinist ‘degenerated Permanent Revolution’ in the East. Germany was the most important plug in the dyke to sustain, so the Marshall Plan was necessary. West Germany had to be able to absorb the GDR and reunify on a capitalist basis and sustain a front line status. Today the independence of Germany is clearly displayed as it navigates and projects its power and leverage in the EU, NATO and beyond.  Germany of course, never ceased being imperialist. Twice defeated, its bourgeoisie remained in power; its labor aristocracy elevated under conditions of US military occupation.

A fundamental task of the bourgeois revolution is national self-determination. Since 1871 the bourgeoisie have expressed national self-determination as national aggrandisement at the expense of others’ national rights. The partition of Germany in 1945 was a ‘pseudo-democratic’ form of defence of the GDR from “communism.” The task of the international proletariat was to fight for the subjective program of Permanent Revolution, to expose the ‘disguised popular fronts’ of bourgeois governments with Social Democracy, to reunite Germany as a healthy workers’ state, overthrowing the Stalinist regime in the East and the imperialist regime in the West. The “democracy” we stood for in 1945 is straight out of the Transitional Program. For the unconditional defence of East Germany occupied by the Red Army as an extension of the Soviet Union by means of political revolution and world revolution, and the revolutionary unification of Germany as a socialist republic in a socialist united states of Europe.

Subcontracting Imperialism: South Korea and Israel

The RCIT makes a lot of the apparent development of the ‘Asian Tigers’, Taiwan and Republic of Korea (ROK) as capable of emerging as ‘new imperialists’. In fact it cites the ROK as an example of a new imperialist power to disprove our claim that no new imperialist powers could have arisen from semi-colonial status since WW1. We agree that these countries have developed large international corporations that export capital. If that were the only basis on which to determine imperialism, the RCIT might have a case. But other semi-colonies such as Brazil and India also have considerable Outbound Foreign Direct Investment (hereafter OFDI) and yet remain dominated by imperialism. However, in the case of Taiwan and the ROK capitalist development is the direct result of their national oppression as militarily divided and occupied forward bases of US imperialism resulting from its war against China and the DPRK.

Taiwan was formerly Formosa and part of China until Chiang Kai Shek with his Kuomintang entourage defeated by the Revolution of 1949 then retreated to Formosa and founded the bourgeois Republic of China as a puppet of the US. Similarly, the ROK was split off from the North at the 38th parallel by a ceasefire that still remains in existence. South Korea like Taiwan is the result of an imperialist partition of an existing nation in the ‘UN’ sponsored war against the DRPK. These are puppet military outposts of US imperialism. The militarisation of the ROK economy saw the USAID administration overseeing the planning of the economy, in particular the export growth strategy under the Park dictatorship in the 60s and 70s. The US still retains command of both its forces and ROK forces in the event of war arising from its intensifying rivalry with China.

Taiwan and the ROK are therefore not politically, militarily or economically independent bourgeois nations, let alone imperialist nations. Their economies are heavily subsidised by US as virtual security colonies of the US. ROK for example pays the annual equivalent of the cost of one destroyer towards maintaining the 28,500 US occupation forces. Without this special status as US military bases there could be no rapid growth of national capital. While the large Taiwanese and ROK conglomerates are today global multinationals, they could arise only with the aid of massive US economic and military subsidies and control over state planning that made their development possible.

Israel too fits this characterisation of a puppet regime. Israel is not the answer to Jewish national democratic rights since it occupies and oppresses Palestine. It is an armed Zionist state created by Anglo-American imperialism as a gendarme in the Middle East. Since its origins made it dependent on imperialism its finance capital is intertwined with Anglo-American capital and has no separate national existence. Israel’s OFDI as an indicator of imperialism must be offset against decades of heavy military subsidies, military transfers to say nothing of the black box budgets for ‘intelligence’ and military integration with the US military. Israel could not have made a transition from settler-colony to imperialist state for the reason that it cannot escape its subordination to external finance capital. If we subtracted Israel’s dependence on US foreign policy that treats it as a special ‘gendarme’ of US imperialism, then Israel would no longer have the security status that guarantees its high economic performance. In other words we think Israel began as an armed Settler state with Anglo-US finance capital backing, and remains so today.

Israel and the ROK: Comparing FDI and OFDI Stock with Total US Aid

FDI Stock OFDI Stock Total US Aid
Israel 74 74 120*
ROK 156 202 78**

Sources: OECD FDI in figures April 2014 in US$ billions

* Total US foreign aid to Israel 1949-2014 in US$ billions (includes loans) https://www.jewishvirtuallibrary.org/jsource/US-Israel/U.S._Assistance_to_Israel1.html

** Total US Economic and Military Aid, 1948-2012. (Includes US loans but excludes estimates of the economic impact of the US military occupation.) https://eads.usaid.gov/gbk/data/country_report.cfm

The national independence of the ROK and Israel (say nothing of the democracy) would be laughable if the truth of the material cost to the masses weren’t so brutal and sustained. Military and economic subservience may have diminished to some extent but even Israel knows which direction its nuclear bombs are obliged to point and under whose watchful eye they are allowed their “independence”. The ROK also knows damn well that without US imperialism in their corner they are just days away from singing praises to the “Great Leader”. As part of the post-war imperialist settlement with the Stalinists, the primary task in West Germany, ROK and Israel was to elevate and sustain a labor aristocracy committed to the anti-communist task. In the ROK and Israel a semi-colonial bourgeoisie with a counter-revolutionary backbone was selected or elevated itself among the candidates. In all three some social gains were needed to advertise the ‘free market’ to those just across the borders in the DWSs and were reeled out (as least to the chosen ones) and held aloft as propagandist’s examples of how democratic imperialism is benevolent with those who owe their very existence to its sustained military prowess. These states are sustained as military bulwarks based on concessions to a client bourgeoisie and a labor aristocracy (a seat at the imperialist table for the 2nd International, i.e. GFR and Israel) as long as they are committed to their counter-revolutionary role.

China and Indo-China

It was the Permanent Revolution surviving in workers property in the Soviet Union that was internationalised in China and Indo-China as revolutions that overthrew the bourgeoisie and completed the bourgeois revolution in the East. However, as largely peasant revolutions led by Stalinist bureaucracies trained under Stalin in Moscow, the proletariat was never in power. There was never a Dictatorship of the Proletariat. Like the Eastern European states, although not as direct extensions of the Soviet Union, China and the Democratic Republic of Vietnam were ‘degenerate’ at birth. Nevertheless, these states were post-capitalist and represented an advance in the Permanent Revolution as a distorted form of ‘workers democracy’ in the bureaucratised workers councils and peasant communes.

Conversely, the imperialist determination to surround, divide and isolate these Degenerate Workers States (DWSs) in the name of ‘bourgeois democracy’ could not but be a reactionary attack on ‘workers democracy.’ China and Indo-China expropriated the bourgeoisie but could not deepen their Permanent Revolution to advance workers democracy and build socialism because of their isolation from the international working class. That means, as always, that the limits of the permanent revolution are set by the balance of international class forces between revolution and counter-revolution.

This brings us to the last significant retreat in the Permanent Revolution, the world-historic defeat of workers property in the DWSs from 1989 to 1991. While capitalist property was restored and with it a new bourgeoisie, this counter-revolution was incomplete as it failed to destroy the legacy of the unfinished Permanent Revolution. That legacy was the economic independence of Russia and China in the lifetime of the DWSs that advanced the forces of production beyond that possible in a capitalist semi-colony. That means that the legacy of the workers states was not wiped out by the restoration of capitalism and imperialism was not able therefore to reduce the former workers states to the status of semi-colonies. As a result, the Cold War ended not as an outright victory for US imperialism and its allies because they were not able to break up and plunder the former workers states and destroy their capacity to accumulate capital in their own right. Only then can we properly understand why the rise of Russia and China as imperialist states was possible, and that capitalist semi-colonies cannot complete their bourgeois revolution without the Dictatorship of the Proletariat. As we have seen above, Taiwan, South Korea and Israel are not independent imperialist states, but proxies of Anglo-US imperialism.

1989-91: the ‘democratic counter-revolution’

1917 marked the most historic advance in Permanent Revolution. Despite all setbacks, from Germany 1917-23 and 1933 and the defeats of depression and war, revolution expanded as workers property in the post-war DWSs. So long as workers property remained, the major gain of 1917 was undefeated. Trotsky made unconditional defence of the Soviet Union the fundamental plank of the 1938 program. But the 4th International failed to survive as a healthy international. And the Stalinist bureaucracy could not sustain growth, as the failure of planned production not under the democratic control of the workers inevitably led to economic stagnation. Both Stalinism and pseudo-Trotskyism succumbed to restoration via the democratic road. By the late ‘80s a bourgeois restorationist faction of the bureaucracy was introducing market reforms and bourgeois democratic reforms. Another faction based on the military command recognised the need to restore capitalism but opted for the slow ‘Chinese’ road. Now unconditional defence of the Soviet Union and workers property required the political overthrow of both wings of the bureaucracy.

Trotsky in the ‘30’s had foreseen the possibility of capitalist restoration taking the form of a ‘democratic counter-revolution’; that the main factor in the defeat of workers resistance to capitalist restoration would be their acceptance of the illusions of bourgeois democracy.

“Trotsky did not and could not foresee the actual way in which the bureaucratized workers’ states were destroyed fifty years later. Trotsky predicted correctly that if restoration would take place in his time (1930’s), it could succeed primarily with the brutality of fascism and civil war. But, brilliantly, he did not exclude in his writings the possibility that capitalism would be restored principally by the instruments of bourgeois” democracy”. At that time (the 1930’s), the Soviet masses were willing to give their life for socialism. Illusions in bourgeois democracy were barely in existence. But to succeed in its restorationist project, bourgeois democracy needs to get active support from some sectors of the broad masses – this was out of the question in the 1930’s. It was clear that the masses would not have tolerated bourgeois democracy and they were willing to actively resist restoration… The betrayal of the working class by social democracy and Stalinism in Western Europe brought about one the quietest decades of the class struggle (the 1980’s). This combined with the total capitulation of the Stalinist bureaucracy in the East, convinced imperialism and is agents to proceed with the creation of bourgeois parliaments and elections as the safest way to take state power. Thus the creation of such bourgeois bodies was a central step in the restorationist process.” (Introcor, Special Issue, LO Fete, 1993)

In the Spring of 1990 the first major test of unconditional defence of the DWSs was the re-unification of Germany. The LRCI demands were correct; unconditional defence of the GDR, political revolution in the East and socialist revolution in the West, and reunification of Germany as a socialist republic in a socialist united states of Europe. To win, workers must build workers’ councils and workers’ militia and convoke a “…congress of workers’ councils as the organ of state power of a German Workers’ Republic!” There was no mention of bourgeois parliaments or political parties to contest elections except to fight them with the institutions of ‘workers democracy’:

“If however, the bureaucracy is obliged to call parliamentary elections then we call for   workers to call prior mass meetings to select their candidates and to hear the candidates of all parties. The workers should demand annual elections and deputies who are recallable by their constituents. They should demand of all candidates a pledge to defend statified and planned property. By these means the fraud of bourgeois parliamentarism can be exposed, its dangers minimised and the principles of the system of workers’ councils fought for.” (‘The Political Revolution in East Germany’, Trotskyist International, 4, Spring, 1990)

Of course the outcome was decided by the betrayals of the Stalinists to imperialism and the pseudo-Trotskyists incapable of unconditional defence of the DWS. Despite the LRCI’s correct line, there was no revolutionary party with influence on the masses able to offer a revolutionary alternative to the ‘democratic counter-revolution.’ In October, 1990, the new East German section of the LRCI condemned the cynical use of bourgeois democracy by the imperialists and the Stalinists to fool the workers:

“The speed of the reunification and the brutal form of the Anschluss of the GDR, which contradicted the democratic pretences of the Federal Republic’s own constitution, has forced   the helpless and confused left to the sidelines of events…[the PDS] proposed alternative to Kohl’s unification of the two states – a referendum on the draft constitution drawn up by the Round Table – was trapped completely within the logic of bourgeois parliamentarism.” (‘Germany, united fatherland…’ Trotskyist International, 5, autumn, 1990, not online)

Why then, after such a spirited fight for workers democracy against bourgeois democracy in the German reunification, did the LRCI abandon the central plank in the Transitional Program in Russia a year later to align itself with a bourgeois restorationist faction of the bureaucracy lead by Boris Yeltsin? To explain this we develop the argument that we first put forward as the Proletarian Faction in the LRCI in 1995 to explain why instead of fighting the democratic counter-revolution, the LRCI joined it.

For all Dave Hughes’ knowledge of the Soviet Union, the break from Cliffism to orthodox Trotskyism in the mid-1980s proved incomplete. The Degenerated Revolution, which resulted from Hughes’ analysis of the workers states contained a basic flaw hidden in its method. The Soviet Union was conceived as an isolated DWS in which the main contradiction was between the Stalinist bureaucracy and workers’ (statified) property. For Trotsky the main contradiction was between workers property and global capitalism. The bureaucracy was a secondary or mediating contradiction and thus could be removed by a political revolution. This contradiction was represented in the separation of a ‘bourgeois state form’ and ‘statified property’.

The flaw in method emerged when the crisis of the workers states in E. Europe blew up in the late ‘80s. This disoriented the LRCI as the road to restoration proved not to be ‘civil war’ but “peaceful counter revolution.” The LRCI faced up to this fact with the German Anschluss, but lost its way in the Soviet Union when it confused bourgeois democracy and workers democracy. The LRCI began to talk of “democracy” in the abstract when describing the mobilisation of workers organisations against the Stalinist bureaucracy, suppressing the fact that behind this “democracy” was the main enemy, imperialism.

The IEC Resolution on the world situation in July, 1990, (section on “The Death Agony of Stalinism in the degenerated workers’ states”) refers to the “coming revolutionary crisis” in the USSR:

“The USSR is moving rapidly towards a revolutionary situation. This is shown by the mounting economic shortages, the mushrooming of independent workers’ organisations and the results of the Spring 1990 local elections which saw wholesale defeats for party candidates…[t]he oppressed nationalities, the civil rights activists and the working class have all taken action in defiance of [Gorbachevs] decrees. The workers are fighting for their democratic rights, for free trade unions, freedom of assembly, the right to strike, for improvements in wages, for greater equality, and against bureaucratic corruption. The foundation of an independent miners’ union and of the Confederation of Labour representing millions of Soviet proletarians, opens a whole new phase of the crisis.” [Our emphasis]

Already a year before the Yeltsin coup, we see that the LRCI ‘contradiction’ between Stalinism and statified property is manifest as workers fighting for bourgeois rights against the Stalinists. This is not the continuation of the permanent revolution by means of workers democracy – that is, workers organs of struggle independent from capital, but bourgeois ‘free’ trade unions, right to strike, equality, etc., of capitalist democracy; not workers democracy, but the ‘democratic counter-revolution’ independent from the Stalinist bureaucracythe now familiar democratic imperialist program of the ‘colour revolutions’. What we see here is the secondary contradiction displacing the main contradiction in an historic showdown within the ‘bourgeois’ state apparatus between fascism (Stalinist dictatorship) and democracy (workers control) disguised as the defence of workers property.

In the IEC Resolution on East Germany in July, 1990, we also find the LRCI leadership redefining Trotsky’s ‘unconditional defence of the Soviet Union’ as a conditional defence:

“Within the strategy of political revolution a vital distinction had to be drawn between defence of the post-capitalist property relations –obligatory for all Marxists – and illegitimate defence of the bureaucratic state apparatus, which was the principle enemy of the working class within the GDR; failure to make this distinction lay at the heart of the impotence of the left wing opponents of the state. It led the majority of those who genuinely wanted to prevent the restoration of capitalism into identifying mass mobilisations against the regime principally as attacks upon the property relations. By the same token, it also led them to see in the state apparatus a potential means of defending those property relations.” [Our emphasis]

The LRCI’s origins in the Cliffite tendency come back to the surface. For Trotsky ‘unconditional defence’ meant despite the bureaucracy, not against it. The bureaucracy is not the ‘main enemy’. This is a caricature of Trotskyism. As soon as you say the Stalinists are the main enemy you make ‘democratic imperialism’ the “lesser evil” to the Stalinist dictatorship. Then you begin to swim with the tide of workers who also see the Stalinists as the main enemy and begin to adapt to bourgeois democracy as the means of defeating the Stalinists. The failure of the left to fight for workers democracy is the failure of revolutionary leadership to stand firm on ‘unconditional defence’ as the main plank of the permanent revolution. Having only recently broken from state capitalism, the LRCI reverted to its flawed method, bending under the pressure of democratic imperialism and the influence on the E. German masses against the ‘main enemy’ Stalinism, subordinating ‘workers democracy’ to ‘bourgeois democracy.’ The logical endpoint of this Anschluss in the LRCI program was its capitulation to Yeltsin’s restorationist popular front in August, 1991.

The International Secretariat Resolution “The USSR at the Crossroads” adopted in February, 1991, already made clear that Yeltsin is moving to rally the pro-market forces in the Soviet Union..:

“Although the radical marketisers are excluded from the inner Bonapartist clique around Gorbachev, they still have positions of mass influence. Yeltsin and company were able to mobilise mass demonstrations in Moscow and other cities against the clampdown in Lithuania. Middle ranking officers and senior commanders in the army have expressed support for Yeltsin. He remains the most well known and popular alternative figure to Gorbachev. Gorbachev’s plebiscite on preserving the USSR and accepting the new Federation proposals will be a major trial of strength. Yeltsin’s own referendum for a popularly elected Russian and all-Union Federation is aimed at mobilising mass support and giving himself a “democratic mandate” to defy Gorbachev. Together with the Baltics, the western borderland republics and the Caucasus, the Russian Federation still presents a major obstacle to the conservatives.” [Our emphasis]

Nevertheless “Independent class forces will be obliged to defend…their democratic freedoms…alongside Yeltsin…”

“The final outcome will rest upon the attitude of the masses in general and the soldiers in particular. The working class has no interest in the triumph of either side in this debate between bureaucrats. Its historic and immediate interests lie in the preservation and extension of democratic freedoms and the nationalised and planned property relations. Independent class forces will be obliged to defend these liberties alongside Yeltsin and company, whilst not for one minute supporting the Yeltsinites’ seizure of power. On the other hand independent class forces are obliged to defend the statified economy alongside the conservatives whilst not for one minute abandoning the objective of overthrowing them.” (ibid. [our emphasis])

In the event of the conservatives’ coup 6 months later in August, the LRCI stood alongside Yeltsin defending ‘bourgeois democracy’ while refusing to back the coup because it was directed at the bourgeois democracy of the pro-market forces! The only position for revolutionaries in that situation was to defend the Red House in a workers’ united front to restore workers democracy by rebuilding the soviets independently of both the bureaucracy and the restorationists to defend workers property unconditionally. The RCIT continues to defend the LRCI position of a ‘conditional’ defence of workers’ property, that condition being that it will not bloc with Stalinists to defend workers’ property, while it will bloc with the bourgeois democrats aligned to imperialism! The fact that the LRCI saw the demise of Stalinism as a victory opening the road for workers to defend workers property explains its characterisation of the period as a “revolutionary period, counter-revolutionary phase.” For them, there was no world-historical defeat so long as the ‘main enemy’ was defeated, and the proletariat could live to fight for political revolution. For the LRCI and RCIT today bourgeois democracy was and is the ‘lesser evil’ to Stalinist ‘fascism’ and not a betrayal of permanent revolution.

From Permanent Revolution to Bourgeois Democracy

We have undertaken to trace the Epoch of permanent revolution beginning with Marx’s conception, including the three aspects isolated by Trotsky in his analysis, documenting the balance of forces for and against Permanent Revolution from 1871 through all the significant advances and retreats up to the present, and projecting its final victory in the future communism. We argued that from 1850 the task of developing the forces of production became the task of the proletariat. From that point the bourgeoisie became a reactionary class. In particular, bourgeois democracy was a reactionary class ideology that objectively formed a bulwark to revolutionary class consciousness and permanent revolution as the strategy of the proletariat playing its historic role as the revolutionary class capable of developing the forces of production.

We argue that the RCIT does not see the bourgeoisie as a completely reactionary class, and moreover does not see bourgeois democracy as a barrier to permanent revolution. In fact it argues that by defending bourgeois democracy the proletariat can “assist” the bourgeoisie to develop the forces of production. For us, this is the basis of Menshevism, where the proletariat plays an “auxiliary role” (in popular fronts) in completing the bourgeois democratic revolution to prepare the conditions for socialist revolution. Menshevism as a revisionist ‘evolutionary’ Marxism is a capitulation to social imperialism under pressure from the imperialist bourgeoisie.

The root of this revision is the RCIT conception of bourgeois democracy. We trace this to an incomplete split of the MRCI/LRCI from the state capitalist Cliffite SWP (Britain) in 1975. Trotsky explained that state capitalism was rooted in petty bourgeois Stalinophobia, which rejected dialectics and revived the split between state and society of bourgeois ideology. In the crisis of 1991 the LRCI reverted to its roots and blocked with the bourgeois restorationists against the Stalinist bureaucracy. The RCIT has never repudiated this betrayal by the LRCI and this is shown in its current defence of bourgeois democracy, reinforcing illusions in popular fronts and popular front parties.

We have seen that bourgeois democracy was only conceded by the bourgeoisie when forced by fear of socialist revolution to contain the revolution with “pseudo-democratic forms” that combined parliament backed by the bourgeois army. Bourgeois democracy traps the proletariat in the fetishised ideology of exchange relations, masking unequal production relations reproduced daily in the workplace and reinforced by the labour bureaucracy and Social Democracy inside or outside the popular fronts with the bourgeoisie and its “shadow” the Stalinists. Therefore, from the Paris Commune onward, to escape its exploitation, the proletariat has always sought to destroy the objectively counter-revolutionary bourgeois democracy by opposing to it a subjective workers democracy, implicitly and explicitly challenging the social relations that underpin the former with the strikes and occupations, councils, communes and armed insurrections of the latter.

However, this revolutionary subjectivity cannot transcend the reactionary objectivity of bourgeois democracy unless it becomes class-conscious. It has to break from fetishised bourgeois ideology that limits consciousness to the “class-in-itself” of labour subordinated to capital, to “class for-itself” as represented by the revolutionary party. Only the active intervention of the revolutionary party can transcend the bourgeois democratic and immediate demands of the old minimum program by means of the transitional method of the Transitional Program. That is why the strategy of Permanent Revolution is the method of the Transitional Program.

 

LCC, 13 June, 2015

 

[i] K. Marx, Early Writings, Introduction by L. Colletti. Pelican edition; Marx, Capital Volume 1, Chap 1 ‘Commodities’, Section on Fetishism of Commodities.

[ii] see Civil War in France,France capitulates and the Government of Thiers’.

[iii] “No common platform with the Social Democracy, or with the leaders of the German trade unions, no common publications, banners, placards! March separately, but strike together! Agree only how to strike, whom to strike, and when to strike! Such an agreement can be concluded even with the devil himself, with his grandmother, and even with Noske and Grezesinsky. On one condition, not to bind one’s hands.” (Trotsky, The Workers United Front against Fascism, ‘We Must Force the Social Democracy into a Bloc Against the Fascists’).

Trotsky refers to the Bolshevik policy towards Kerensky in 1917 where the Bolsheviks formed a military bloc with Kerensky against Kornilov, simultaneously exposing and splitting Social Revolutionary and Menshevik workers from its bourgeois leadership. Does this make Kerensky the “lesser evil”? No, the “democrat” Kerensky is no less a counter-revolutionary than the “reactionary” Kornilov but a military bloc can unite the workers against Kornilov and prove this fact to those who have illusions in the popular front government. In the event Kornilov was defeated, Kerensky was exposed as conspiring with Kornilov to smash the revolution, and shortly after the Bolsheviks won a majority in the Soviets to stage the insurrection.

[iv] “Verbal genuflections before the soviets are equally as fashionable in the “left” circles as the misconception of their historical function. Most often the soviets are defined as the organs of struggle for power, as the organs of insurrection, and finally, as the organs of dictatorship. Formally these definitions are correct. But they do not at all exhaust the historical function of the soviets. First of all they do not explain why, in the struggle for power, precisely the soviets are necessary. The answer to this question is: just as the trade union is the rudimentary form of the united front in the economic struggle, so the soviet is the highest form of the united front under the conditions in which the proletariat enters the epoch of fighting for power. The soviet in itself possesses no miraculous powers. It is the class representation of the proletariat, with all of the latter’s strong and weak points. But precisely and only because of this does the soviet afford to the workers of divers political trends the organizational opportunity to unite their efforts in the revolutionary struggle for power. In the present pre-revolutionary environment it is the duty of the most advanced German workers to understand most clearly the historical function of the soviets as the organs of the united front…The Social Democracy and the Communist Party divide in Germany the influence over the working class. The Social Democratic leadership does its best to repel the workers from itself. The leadership of the Communist Party strives with all its might to counteract the influx of the workers. As a consequence we get the formation of a third party and a comparatively slow change in the correlation of forces in favor of the Communists. But even if Communist Party policies were entirely correct, the workers’ need for a revolutionary unification of the class would have grown incomparably faster than the preponderance of the Communist Party within the class. The need of creating soviets would thus remain in its full scope. The creation of the soviets presupposes that the different parties and organizations within the working class, beginning with the factories, become agreed, both as regards the very necessity for the soviets and as regards the time and methods of their formation. Which means: since the soviets, in themselves, represent the highest form of the united front in the revolutionary epoch, therefore their inception must be preceded by the policy of the united front in the preparatory period.” (What Next: vital questions for the German Proletariat. Section 8Through the United Front to the Soviets as the Highest Organs of the United Front’)

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BRICS around the neck of the proletariat

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 brics-summit

The Sixth BRICS Summit meeting held in Brazil was held in July. The occasion was one of wheeling and dealing between the two big BRICS bloc leaders and their Latin American supporters looking to set up an alternative to the traditional US dominance of the continent and an alternative to US global financial hegemony. The leaders also took time out to test the loyalty of US allies in the EU facing US-dictated sanctions on Russia that will cost the EU economies $billions. Putin used the FIFA World Cup to meet Merkel and discuss Ukraine. No doubt Russia is motivated to strengthen its push into Latin America as a reprisal to the US determination to push NATO right up against its borders. Not content to put pressure on the US bloc in Europe and Asia, Putin’s deal to write off most of Cuba’s debt and reopen a former Soviet spy base at Lourdes rubs the National Security Agency (NSA’s) nose in its own business. The rise of BRICS is regarded by many on the left today as a dynamic ‘anti-imperialist’ bloc challenging US imperialist hegemony. We challenge this view and show that BRICS may be a rival bloc but is neither ‘progressive’ nor ‘anti-imperialist’, because it is led by the emerging imperialist powers, Russia and China. We argue that the mounting inter-imperialist rivalry between the two blocs means we can only advance the world revolution by opposing and defeating both blocs.

The rise of BRICS is taking place in the context of the global crisis of capitalism. The post-Soviet, post capitalist-restorationist China, world of capitalism in decay is shaping up to look much like the world of a century ago, with inter-imperialist rivalry leading inexorably to another imperialist war. The emerging imperialist powers of China and Russia are positioning themselves as a bloc of BRICS against the traditional NATO bloc, with the United States as the dominant imperialist power since World War II.

As recent moves have shown, the declining United States is bent on maintaining this dominant position through preventing BRICS re-division of the world or re-dividing it for their benefit. The Pacific Pivot and the TPPA is directly aimed at China’s growing power in the Pacific, as was the sabre-rattling against North Korea, which was not only targeting the remaining gains of the collectivized property of the deformed workers state (DWS), but also served as a warning to capitalist China that they would call the shots in the region. Japan, an imperialist ally of the United States, has provoked China over the Senkaku islands.

Now the China-led BRICS nations have formed the BRICS Development Bank as a counter to the Bretton Woods IMF/World Bank. Although starting with a relatively meager $50 billion fund, the goal is to reach a financing capacity of $350 billion in a few years and eventually rival the World Bank, particularly with extra capital funding from China and Russia. Recently BRICS representatives were courting Latin American countries, a direct challenge to the United States. It is obvious that BRICS is wielding increasing influence, but as what? Is BRICS now beginning to pose a challenge to US hegemony as an anti-imperialist bloc or a bloc led by emerging imperialist powers, Russia and China?

Four Class Perspectives on BRICS

It is useful to breakdown the different views of BRICS by their ideological basis in one or other social class. Otherwise we have the spectacle of free-floating standpoints that reduce to national cultures, national geography, ‘blood, race or nation’, or ‘great leaders’ – ultimately, biology or genetics. The bourgeois class ideology of sovereign individuals in the free market is the default ideology of capitalism. This is the fetishised form that unequal production relations take as equal exchange relations. Value, rather than representing the labour time of workers, becomes the value of commodities as determined by the market. Individuals cease to be workers, capitalists or landlords and become sovereign individuals as buyers and sellers of commodities in the market and citizens with equal political rights. Capitalism is the best of all possible worlds provided individual freedoms in the market and nation state are not limited by other individuals and states. Today, bourgeois ideology takes three main forms –‘neoliberal’, ‘liberal’ and ‘radical’.

(A) Neoliberals

Neoliberals are neither new nor liberal. They claim to be liberal in the sense of 18th Century liberalism of free market capitalism. However, such liberalism (now neo-liberalism) never represented the reality of capitalism. The arrival and survival of capitalism since its beginning has required massive state intervention. Moreover, since the late 19th century state intervention developed into its highest form as capitalism had to move from competitive capitalism to state monopoly capitalism to deal with increasingly frequent and serious crises. (Lenin, Imperialism)

Neoliberals are apologists for state monopoly capitalism destroying organised labour and buying votes in order to dominate the ‘free market’. Neoliberalism was born out of the end of the post-war boom and onset of structural crisis in the early 1970s and announced its presence in the Chilean military coup with the overthrow of the populist president Salvador Allende to maintain US domination of the economy. Neoliberals don’t have any doubt that China, allied to Russia, leading the BRICS bloc poses a threat to US hegemony calling forth a New Cold War. Cynically the U.S. is presented as the bastion of the free market, individual rights and democracy rather than the dominant state monopoly imperialist power. Its mission is to defend these ‘values’ against those who would destroy them with superior state monopoly power, e.g., Russia and China. For neoliberals it’s as if the Soviets have come back from the dead and the cold war never ended. That is why they back date to 1949 the White House policy of expanding NATO and rallying the Pacific allies of RIMPAC to militarily box in Russia and China from making a transition from ‘regional powers’ to global powers.

The Liberal critique of neoliberalism recognises the hypocrisy of the ‘free market’ that was never free and always manipulated by power elites. Neoliberalism is defined as the specific period of US global hegemony that arose in the last 40 years, often referred to as the ‘Washington Consensus,’ under the leadership of the so-called ‘neo-conservatives,’ i.e. the subset of neoliberals who try to disguise the realpolitik of monopoly of state power behind ‘traditional’ bourgeois cultural values of family, nation and god. Liberals therefore share the neo-liberals assumption that the problem is not the imperialist epoch of state monopoly capitalism, but rather the monopoly of power held by the wrong class, the imperialist elite. Therefore the liberal trick is to replace the imperialist elite with the power of the people! Enter the BRICS.

(B) Liberals

Against this official ‘neo-liberal-con’ view of the old (now revived) cold war where confrontation and war are necessary means to prop up U.S. state monopoly capitalism, the bourgeois liberal ideologues see the rising economic power of BRICS as a ‘counter-balance’ to the ‘Washington Consensus’ that can lead to ‘multipolarity’. There are some like Tom Engelhardt who discount multipolarity in the face of an overwhelming US global power that dominates geopolitics. Others like neo-Stalinist F William Engdahl see multipolarity arising like a phoenix as Russia and China challenge US economic and financial hegemony:

“Taken as a totality, along with other measures by Russia’s Putin to deepen political, economic and military ties with China and the other nations of Eurasia, the latest energy agreements have the potential to transform the global geopolitical map, something Washington’s war faction will not greet willingly. The world, as I’ve noted before, is in the midst of one of a fundamental transformation, such as occurs only every few centuries. An epoch is ending. The once-unchallenged global hegemony of the Atlantic alliance countries of the USA and EU is crumbling rapidly.”

Today’s liberals are more the descendants of Adam Smith than the neoliberals because they agree that the equal exchange in the market has been distorted by the concentration of power in the hands of ruling elites. Smith believed that the market was rational and that competition and ‘comparative advantage’ was sufficient to organise the economy and the ‘wealth of nations’. Comparative Advantage was based on the exchange of commodities at their labour value. The ‘hidden hand’ rewarded each person according to the amount of labour they could command in the market. Equal exchange would result unless nation states intervened to manipulate or monopolise the market. We can now see how liberals today see the distribution of power as determining the distribution of income and the need for a liberal state to regulate power relations in the marketplace. This is clear in the history of liberal reforms that attempt to balance the power of organised labour and capital.

‘Multipolarity’ is therefore the 21st century liberal road back to the utopia of Adam Smith, where the ‘rebalancing’ of excessive state power, allows the ‘free market’ to become the guarantor of the ‘commonwealth’ of citizens. The main tools of ‘multipolarity’ focus on the destruction of monopoly power to control production, distribution and exchange of value on the world market. For liberals who are fixated on the fetish of the market and the symbol of the market, money, this means breaking the dominance of the US ‘juggernaut’ over the “international finance system” – the U.S. Dollar as the global reserve currency–by setting up rivals to the World Bank and IMF.

Pepe Escobar, at the Asia Times, writes:

“ It’s been a long and winding road since Yekaterinburg in 2009, at their first summit, up to the BRICS’s long-awaited counterpunch against the Bretton Woods consensus – the IMF and the World Bank – as well as the Japan-dominated (but largely responding to US priorities) Asian Development Bank (ADB). The BRICS Development Bank – with an initial US$50 billion in capital – will be not only BRICS-oriented, but invest in infrastructure projects and sustainable development on a global scale. The model is the Brazilian BNDES (Brazilian Development Bank ed.), which supports Brazilian companies investing across Latin America. In a few years, it will reach a financing capacity of up to $350 billion. With extra funding especially from Beijing and Moscow, the new institution could leave the World Bank in the dust. Compare access to real capital savings to US government’s printed green paper with no collateral.

And then there’s the agreement establishing a $100 billion pool of reserve currencies – the Contingent Reserve Arrangement (CRA), described by Russian Finance Minister Anton Siluanov as “a kind of mini-IMF”. That’s a non-Washington consensus mechanism to counterpunch capital flight. For the pool, China will contribute with $41 billion, Brazil, India and Russia with $18 billion each, and South Africa with $5 billion. The development bank should be headquartered in Shanghai – although Mumbai has forcefully tried to make its case (for an Indian take on the BRICS strategy, see here ).

Way beyond economy and finance, this is essentially about geopolitics – as in emerging powers offering an alternative to the failed Washington consensus. Or, as consensus apologists say, the BRICS may be able to “alleviate challenges” they face from the “international financial system”. The strategy also happens to be one of the key nodes of the progressively solidified China-Russia alliance recently featured via the gas “deal of the century” and at the St. Petersburg economic forum.”

Using such tools, multipolarity will result in a rebalancing of the share of global power among the big powers, as a means of both increasing and redistributing economic wealth. But the utopia of the liberal bourgeoisie won’t work unless the working class and other oppressed people are won to it by reformist political parties and trades unions. Thus the working masses must be convinced that the BRICS bloc can reform global capitalism and reverse the massive social inequalities by redistributing global wealth. This liberal perspective is the basis of Hardt and Negri’s Empire, published in 2000 that promoted the liberal left utopia of a world where imperialism was outmoded and the Empire was being ‘civilised’ by the ‘multitude’ now led by the a new middle class of ‘immaterial workers’. Empire was immediately confounded by 9/11 and the onset of the ‘war on terror’ and the Argentinazo. U.S. imperialism re-asserted its hegemonic power in invasions and wars in Afghanistan and Iraq and the liberal utopia was rudely dashed by the rampant neo-cons. The rise of BRICS – the so-called ‘emerging markets’ – since 2000 however, has given the liberal standpoint renewed hope in the form of ‘multipolarity’.

One of the ways that Russia and China are presented as ‘progressive’ leaders of BRICS is the claim that they represent the former or present forms of ‘socialism’ that facilitate the transition from capitalism to 21st century socialism. Where they lack credibility as models of 21st century socialism for the masses, then at least they can be pushed in that direction by the example of the ALBA (Bolivarian Alliance for the Peoples of our America) states, namely; Venezuela, Brazil and South Africa that all have popular front Governments with strong mass support. This is also the case in Cuba, which in our view has restored capitalism under the influence of China and has now become the ideological cheer-leader linking BRICS to Bolivarian socialism that is promoted by the World Social Forum (WSF) as embodying the phoenix that rises out of the ashes of the ex-Soviet world. These popular front regimes are the models for a global popular front. Under the control of the governmental and corporate elites, BRICS continue business as usual exploiting the masses and polluting the planet.  Yet mass pressure from below can force the BRICS to implement a popular socialist program. The strongest expression of this liberal populism was that of the “Brics from Below” conference held in South Africa during the 5th BRICS summit in 2013.

This theme was also taken up in the 6th Summit in Brasilia and Fortaleza, notably by Russia with its emphasis on political and military cooperation with Latin American countries, especially Venezuela and Cuba. Andrew Korybko writing in “Russia and the Latin American Leap to Multipolarity” argues that Russia’s resurgence from collapsed Soviet state to ‘Great Power’ status means it is attempting to recover its old spheres of influence. Latin America figures strongly in this recovery:

“Russia has restored its Soviet-era global reach under Vladimir Putin, extending its influence all across the world. Because it fulfils the role of a strategic balancer, relationships with Russia are now more prized than ever as the world moves towards multipolarity. Certain contextual backgrounds make Latin America overly receptive to multipolarity and Russia’s grand foreign policy goals in this regard. Over the past decade, Moscow has spun a complex web of relationships to directly and indirectly extend its influence in the Caribbean and along both coasts of the South American continent. This strategy is not without risks, however, since all of Russia’s partners are vulnerable to various US-sponsored destabilizations. If managed properly, however, Russia’s return to Latin America can be a godsend for multipolarity, and it can even reverse the Pentagon’s strategic initiative and for once place the US on the defensive within its own natural sphere of interest…[a]round this time [around 2000], Russia was rising from the ashes of the Soviet collapse and finally returning to its Great Power status. It thus felt the need to expand its sway back into areas which it once held influence, and this of course included Latin America. Mutual visits, weapons deals, and energy contracts flourished between Russia and Venezuela since 2000, and both countries were already deep strategic partners by the time of Putin’s 2010 trip to Caracas. Military cooperation in the naval and aerial fields solidified the relationship and showed both sides’ commitment to one another. All of this influenced and has been in line with Russia’s 2013 Foreign Policy Concept, where the pursuit of multipolarity is taken as an assumed granted (having first been stated as an official foreign policy goal in 2000) and increased interaction with Latin America is emphasized.”

Cuba and Venezuela are the bridgeheads for Russia’s return to Latin America, just as they have been for China. The ALBA states have established ‘strategic’ relations with both major BRICS powers. Bolivarian socialism or 21st Century Socialism has seized on Russia and China as non-imperialist, if not ‘socialist’, powers that can rescue them from U.S. imperialist subjugation and bring about the self-determination of the underdeveloped and ‘emerging’ nations globally. “Win-Win” deals will enable all partners in the BRICS to prosper together in harmony. Thus the rise of the BRICS represents a re-balancing of the global situation where U.S. imperialist hegemony is reigned in and power is more evenly distributed among a number of ‘great powers’.

Not surprisingly, the 20th century socialism of Lenin and Trotsky is replaced by the 21st century utopia of multipolarity as the BRICS reform global capitalism, which once rid of the aberration of financial parasitism, realises a Smithian equilibrium of non-exploitative social relations among all nations. This liberal utopia is translated via the labour bureaucracy in the unions and politics adopting a more ‘left’, even ‘Marxist’ language. The debt to Kautsky, Menshevism and Stalinism is obvious in the potential of all these global powers to arrive at a policy of ‘peaceful coexistence’. This marks the death of Lenin’s theory that in the epoch of imperialism the major imperialist powers must fight for supremacy, or go into decline. Imperialism for Lenin might have been the highest stage of capitalism, but that is now passé as it is peacefully passing over into 21st century socialism.

So, it is no irony that 21st century ‘Bolivarian socialism’ replicates the patriotic fronts of 20th century Stalinism, which advocated that the international working class form political alliances, or popular fronts, with the ‘democratic’ bourgeoisies against fascism. Only the language has changed. In the new millennium, these popular fronts are between workers and the populist capitalist regimes posing as “market socialist,” striking an anti-imperialist posture against the US ‘evil’ empire. The model for this is Latin America where national populism is an historical response to the domination of the US Empire and its direct intervention in regime change from 1896 in Cuba to 2009 in Salvador. Russia’s late return and China’s recent arrival in Latin America are as the ‘saviours’ of such populist regimes. China has bankrolled Cuba’s restoration of capitalism while Russia now steps in to forgive Cuba’s debts and boost its military defence. However, as we have pointed out in Beware Falling BRICS, the idea that all the BRICS partners, even when pushed from ‘below’ by unions, NGOs and populist movements, can share equitably in a new ‘multipolar’ world, is a bourgeois utopia. Russia and China are emerging imperialist powers and their relations with the other BRIC partners are far from ‘equitable’!

(C) Radical Left

The Radical Left rejects the liberal reformist view of ‘peaceful coexistence’ between great powers and the potential for capitalism to be transformed into socialism without workers revolutions. The issue then becomes how is the socialist revolution to be won in the 21st century? The role of the Radical Left is to convince workers that capitalist exploitation can be eliminated by mobilising the working class behind the leadership of the petty bourgeoisie to equalise exchange. Imperialism therefore is no longer conceived as the ultimate stage of crisis ridden-capitalism where imperialist powers go to war to re-divide the world. Lenin’s concept of imperialism as anarchic state monopoly capital, adopted by the Bolsheviks, must be replaced by the Menshevik view of imperialism as political policy of the ruling class that can be replaced by a proletarian policy of socialist revolution as ‘peaceful coexistence’ between classes. So while the radical left has to accept that Russia and China are emerging ‘super powers’ they must argue that they cannot be new imperialist powers. Rather they are reduced to relatively minor powers subordinated to the existing U.S.-led imperialist bloc and for that reason have a ‘progressive’, ‘anti-imperialist’ character that can counter US hegemony and bring ‘peaceful coexistence’ between capitalist nations. We argue here that those who deny that Russia and China are imperialist do so having decided in advance that this is not possible because the U.S. is hegemonic. All sorts of labels are fixed to these subordinate powers – sub-imperialist, regional imperialist, capitalist semi-colony, or even Deformed Workers States!

We will prove that these are the empiricist impressions of petty bourgeois radicals. At the heart of their impressionism is their fetishised concept of finance capital. They break from Lenin who defined finance capital as the fusion between banking capital and productive capital. Imperialism is the epoch of monopoly where banks and large enterprises are jointly owned and collaborate closely to finance the accumulation process. When banking (money capital) is separated from productive capital because of a crisis of overproduction, excess money capital outside the circuit of production cannot create new value and money begins to lose value. Speculating in existing values does not maintain the value of money since the claim of money on existing value leads to its devaluation until such time as it can be turned into money capital productive of value.

That is why much of the U.S. banking capital and the U.S. dollar in particular is increasingly fictitious capital that does not represent real wealth. The U.S. massive national debt reflects that its U.S. rising dollar wealth cannot be exchanged for declining U.S. owned production of value, and the debt is only sustainable by printing U.S. dollars. Instead of uncontrollable price inflation that would normally result, the U.S. dollar value is kept artificially high because it is in demand as the world currency that has to be purchased to exchange for the value of commodities, in particular oil. Therefore the argument that the U.S. is the world hegemonic power because of its control of global finance capital does not follow. On the contrary, the overproduction of capital due to the Tendency of the Rate of Profit to Fall, means that U.S. imperialism must undergo the huge destruction of its surplus capital. The spark will be the bursting of the debt bubble and collapse of the value of the U.S. dollar.

The hegemony of U.S. imperialism is therefore as fragile as the agreement of U.S. rivals to pay for commodities in U.S. dollars! We will prove that petty bourgeois ‘Marxists’ who fail to understand this reality overestimate the capacity of the U.S. to dominate its imperialist rivals financially, and thus underestimate the capacity of those rivals to accumulate their own genuinely finance capital based on the fusion of banking capital and productive capital. And this is of course a fatal mistake when it comes to understanding the current rise of Russia and China. The fact that Russia and China are over-accumulating capital and at the same time overproducing capital as fictitious capital that will have to be destroyed, is conclusive evidence that they are not subordinated to U.S. finance capital, but have developed their own finance capital.

  • Regional Imperialist (United Secretariat of the Fourth International hereafter USec)

The regional imperialist view is held by the USec, the official ‘Pabloite’ international that claims falsely to represent Trotsky’s Fourth International, but ends up junking Lenin on imperialism and rehabilitating Kautsky’s ultra-imperialist position that the period we are living in is no longer one of inter-imperialist war!

“Today, capitalism is a global intertwined and integrated system under US hegemony in a way which it was not in 1914. The two world wars of the 20th century were mainly wars of inter-imperialist rivalry to gain or maintain control of areas of the world. The outcome of these wars was the establishment of the USA by far and away as the major power in the world, ruling the capitalist system through its massive economic and even greater military power, and through institutions such as the World Bank, the IMF and NATO. This global capitalist system has further expanded with the restoration of capitalism in Russia and China, but this does not mean that inter-imperialist rivalries and the threat of regional wars are no longer on the agenda.

The form of US hegemony in operation today means that weaker states are allowed to pursue their own imperialist ambitions and regional geo-strategic interests, including through military interventions conditional on them at least not challenging the main thrust of US interests; something which is delicate to achieve as the imperialist ambitions of Russia and China have to a certain extent be at the expense of US imperialism. If they step out of line, they become “rogue” states that have to be subdued militarily as in the case of Iraq, or sanctions imposed such as for Iran and now Russia. To maintain weaker states within the framework of US imperialism, the latter has to carry out a lot of sabre-rattling. This is a dangerous game, as any incident such as the accidental downing of MH17 in Ukraine, or of the Iran Air plane by the US navy in 1988 killing 269 people, can rapidly escalate into a full military confrontation, the dynamics of which may no longer be in the hands of US imperialism and its allies. But sabre-rattling should not be confused with a dynamic towards inter-imperialist war like that leading to the two world wars. This is not the nature of the period today.

As long as Russia remains within its regional geo-strategic sphere, Western imperialism (i.e. the USA and NATO) is not greatly concerned by Russia’s annexation of Crimea. The few sanctions against Russia announced are so far symbolic – mainly against individuals – and there are deep divisions on extending them because of arms and gas deals, and because of the globalisation of the capitalist system. Sanctions that hurt Russian capitalism also affect Western capitalism.”

Claiming Leninist orthodoxy, the USec says that Russia and China are unable to become more than ‘regional’ powers and that they are tolerated by the U.S. unless they challenge US global hegemony. The U.S. remains the global power dominating its imperialist rivals without the need for major war. This is a as throw back to Kautsky’s “ultra-imperialism,” where the U.S. can impose its dominance across the globe with impunity. While the left must oppose Russia’s ‘regional’ imperialist designs such as in Ukraine, there can be no war between the U.S. and Russia because that would backfire and damage U.S. imperialism. This means that the left is disoriented and disarmed when it fails to recognise the decline of the U.S. bloc and the rise of the Russia China bloc which express their inter-imperialist rivalry in regional disputes and proxy wars. And where these proxy wars inevitably blow up into direct military confrontations between the two blocs, the left is faced with the pressure to defend the regional imperialist powers, Russia and China, against the world hegemonic power, the U.S. The fallacies of this neo-Kautskyism can be shown simply by going back to Lenin’s own critique of Kautsky:

“…the best reply that one can make to the lifeless abstractions of “ultra-imperialism” is to contrast them with the concrete economic realities of the present-day world economy…Compare this reality –the vast diversity of economic and political conditions, the extreme disparity in the rate of development of the various countries, etc., and the violent struggles among the imperialist states –with Kautsky’s silly little fable about “peaceful” ultra-imperialism…an example of the division and the re-division of the world…The question is: what means other than war could there be under capitalism to overcome the disparity between the development of the productive forces and the accumulation of capital on the one side, and the division of colonies and spheres of influence for finance capital on the other?

Below we will prove that this theory is all the more applicable today to explain the rise of Russia and China as new imperialist powers driven by the necessity to re-divide the world by means of war.

  • Sub-imperialist (Socialist Fight)

Gerry Downing in Socialist Fight has a similar view to the USec. He attempts to establish a firmer Leninist theoretical explanation of the difference between the dominant U.S. imperialism and the rise of Russia and China as rivals rather than regional geography. Socialists should side with Russia and China against the U.S. not because they are mere ‘regional’ or minor imperialisms, but because they are not imperialist, i.e., ‘sub-imperialist’. Gerry Downing is not the only one who adopts the concept of ‘sub-imperialism.’ It originated in Brazil to characterize that country’s role in the world. It means that such states are intermediary between semi-colonies and imperialist nations. They fall short of imperialism on the grounds that while they collaborate in the imperialist super-exploitation of semi-colonies, they remain semi-colonies and are exploited by the US dominated international finance capital. There is no suggestion that ‘sub-imperialist’ states can become imperialist.

Downing uses the term to acknowledge Russia has ‘imperialist’ characteristics, but is prevented from developing into a full imperialism by U.S. financial hegemony. The barrier is not productivity since the “sub-imperialist” corporations are competitive with US corporations, but political and military. Downing claims the U.S. is in decline (he implies that this is a decline of manufacturing competitiveness) and must increasingly go to war to stop Russia and China emerging as global rivals. Therefore the solution is for the international working class to defend Russia (and China) from U.S. warmongering and in the process trigger the defeat of U.S. imperialism.

The false premise in this theory is the ability of U.S. finance capital to subordinate Russian and Chinese imperialism in the same way it does other “sub-imperialist” nations (e.g., Brazil, India or South Africa) through control of global finance capital. Downing points out, that ‘finance capital’ is universal yet the U.S. is able to impose its hegemony because it owns the biggest banks including the IMF and World Bank. So no matter how competitive Russian and Chinese corporations are in the global market, U.S.-owned banks always take the lion’s share of the super-profits extracted from the semi-colonial world. But to work, this must mean that the U.S. can monopolise finance capital and its accumulation in Russia or China. As we have shown elsewhere, this is not the case. Joint ventures with U.S. (and EU) capital in Russia and China allow value to be expropriated on the basis of low wages and low rents, but both Russia and China accumulate a major part of the value produced. The U.S. may have the biggest banks but these cannot monopolise the production of value in Russia or China, and hence cannot trap these countries in “sub-imperialism”.

This is the same trap that Sam Williams falls into when he reduces finance capital to money capital in search of surplus value. This is the “decisive factor” in determining if a country is imperialist or not. But finance capital is separated from ‘industrial’ capital for Williams, while for Marx and Lenin finance capital is the fusion of bank and industrial capital. So for Williams finance capital makes a claim on surplus value; it does not have to be invested in the production of surplus value. By equating finance capital with money in banks, Williams reduces imperialism to “big banks.” We reject this non-Marxist method and follow Lenin’s criteria of ‘export of finance capital’ as measured today by Outward Foreign Direct Investment (OFDI) ‘directly invested’ in producing surplus value. It means that Williams like Downing overestimates the power of U.S. banks to prevent Russia and China from accumulating value. In fact, Williams draws the conclusion that both Russia and China are semi-colonies of the US (see below). However both Downing and Williams over-estimate the capacity of the U.S. to accumulate value, since the U.S. dollar cannot be a repository of value, and the vast bulk of its money capital value is fictitious capital. U.S. banks are technically insolvent because without the Fed printing of U.S. dollars they would be bankrupt. This explains why far from being hegemonic, U.S. imperialism is in decline and must go to war to plunder raw materials and labour power as the sources of more value. Here they face the emergence not of sub-imperialist powers, but of new rival imperialist powers that accumulate more real value than the U.S. and seek to replace the U.S.-dominated banking system with a rival system.

To fit their preconception that Russia and China cannot be imperialist, petty bourgeois Marxists look for empirical “facts” to validate their theory. Fictional pseudo-Marxist concepts like ‘sub-imperialism’ and ‘regional imperialism’ then reflect the fetishisation of the capacity of the U.S. economy to monopolise the production of value on the basis of fictitious value, and the ‘de-valuing’ of the production of real value by the Chinese and Russian economies.

Logically, this leads to a reformist program that is no different essentially than 21st century liberal ‘multipolarity’ at the fetishised level of exchange relations. The radical concept of ‘sub-imperialism’ arises out of Underdevelopment Theory associated with Baran and Sweezy, in which exploitation occurs at the level of exchange leading to ‘unequal exchange’. As a result the international class struggle, specifically a Bolivarian-type popular front with Russia and/or China, or ‘BRICS from below’, led by modern Mensheviks, can create a BRICS Development Bank and other mechanisms (e.g., a rival Society for Worldwide Interbank Financial Telecommunication –SWIFT) to challenge U.S. dollar domination of international finance capital over ‘sub-imperialist’ states, bringing about an ‘equalisation of exchange’, a redistribution of money as value, and a peaceful global socialist utopia.

  • Capitalist Semi-colony (International Leninist Trotskist Fraction – FLTI)

 

Carlos Munzer of the FLTI argues that Russia and China are semi-colonies. This is because as former workers states when they restored capitalism they were slotted back into the global capitalist division-of-labour as semi-colonies super-exploited by imperialism, in particular U.S. imperialism. Munzer’s main argument against Russia and China as imperialist is that imperialist partition of the globe was completed by WW1 and therefore the oppressed countries recognised by Lenin at that time as colonies, semi-colonies or ‘independent’ countries, could not make the transition to imperialism. Munzer explains the role of Russia and China as that of semi-colonies serving the interests of U.S. imperialism. He explains their rapid economic growth and increased outward foreign direct investment (OFDI) as the provision of cheap raw materials and cheap labour as inputs into U.S. multi-nationals’ production in China. Therefore, China cannot profit from its growth and accumulate capital in its own right, as it has to pass the lion’s share of the surplus value on to U.S. imperialism.

As we have pointed out in a number of articles on this question, this is the other side of the coin of Pabloist empiricism. Empiricism fits the “facts” to preconceptions without investigating the essence of reality. Pablo was the main leader of the post WWII Fourth International, who argued that Stalinism was a progressive force allied to democracy to smash fascism and so would power on into the future dragging the working class along with it. That is, he fitted the “facts” that Stalinism was historically progressive into a preconceived Menshevik schema that capitalism would peacefully evolve into socialism without a Bolshevik revolution! The reverse side of this position is to state one’s preconceptions as dogma and ignore all facts that don’t fit the dogma. Thus Munzer ignores the need to explain the surface appearances of a ‘superpower’ and takes the dogmatic position that, since Lenin excluded the rise of new imperialist powers, the economic expansion of Russia and China must be to serve existing imperialism. Hence Munzer made a propaganda bloc with the JRCP (Japan Revolutionary Communist Party-Koroda) in Japan which recognises Russia and China as ‘super-powers’ while simultaneously rejecting Lenin’s theory of imperialism as no longer relevant!

All these radical left positions on Russia and China today seek to apply sundry revisions of Lenin’s theory of imperialism to prove their preconception that they are NOT imperialist powers. Williams’ is perhaps the most blatant revision of Lenin’s concept of ‘finance capital’ as the merger of banking and industrial capital, to mean money in banks that has a claim on surplus value. This conflates capital productive of surplus value directly invested to realise super-profits, as a response to the Tendency of the Rate of the Profit to Fall (TRPF), with fictitious capital speculating in existing values, as a symptom of the TRPF, i.e. the overproduction of money capital. As we have argued elsewhere, this fails to grasp the essentials of Lenin’s theory based on his dialectic method. The Bolshevik Revolution broke the reality that the whole world was partitioned among imperialist powers. They spent the next 70 years invading or blockading Russia and China in the attempt to collapse the Soviet bloc but only succeeded around 1990. The assumption that history then jumped back to 1917 and the imperialists simply squabbled over who would get the spoils of the ex-soviet world cannot explain the reality that Russia and China, unlike the other smaller members of the Soviet bloc – Vietnam, Cuba etc.,– did not become mere semi-colonies of one or another imperialism, but emerged as new imperialist powers.

Thus both the empiricist and dogmatic deviations from Marx, Lenin and Trotsky’s dialectics fail to resolve the dilemma that the obvious appearance of new ‘super-powers’ cannot be explained by other than the rise of new imperialisms. The answer to this dilemma is provided by revolutionary Marxists who understand and apply materialist dialectics to all questions.

(D) Revolutionary Marxist

For Marxists this dilemma can only be resolved by recognising the reality that emerging ‘super powers’ must be imperialist. ‘Multipolarity’ therefore is no master plan for peaceful coexistence but rather a Kautskyite-Stalinist-Menshevik ‘smokescreen, thrown up to disguise the rapid escalation of inter-imperialist rivalry between two major imperialist blocs.

As we have argued, Lenin’s theory was based on materialist dialectics which can be developed to explain the rise of imperialist Russia and China out of the ashes of the former workers states. The partition of the world by the imperialist powers was broken by the Bolshevik Revolution which began the process of forming a Soviet bloc which was independent of imperialist domination and oppression. This national independence from imperialism (the overthrow of the national bourgeoisie and defeat of imperialist invasions) created the conditions for the development of the forces of production beyond that possible in a capitalist semi-colony.

If follows that we draw political conclusions from dialectics. Theory and practice are united in the class struggle in which Marxists participate. Unlike the neo-liberal ruling class who preach cold war between nations, and their liberal ideologues who take sides according to which nation is judged as ‘oppressive’, ‘rogue’ or ‘terrorist’ in its use of power against the people, or the radical left that subcontracts the defence of ‘oppressed’ countries to populist leaders, we take Lenin’s position and declare that the working class is the only revolutionary class and that our main enemy is the ruling class of our own country or the imperialist power(s) that oppress it. It is the first duty of workers in the imperialist countries to defeat their oppressors at home.

The Marxist view is that Russia and China are developing as imperialist rivals to the U.S. led bloc of powers. Each annual BRICS meeting hosted by one or other member, shows that it is becoming a new power bloc seriously threatening the U.S. led bloc. This is not just evident from the fact that both Russia and China clearly display the features of imperialism, in particular crises of overproduction and export of capital, but that through their BRICS partners, Brazil, India and South Africa, they have strong partners in extending their influence in Eurasia, Middle East and North Africa (MENA), Asia, Africa and South America.

In our view only Russia and China are imperialist members of BRICS while the others are subordinated as semi-colonies. This is evident from their trade, production and finance deals as we will show. The semi-colonial BRICS serve as dutiful allies in the expansion of the China-led imperialist bloc into their respective South Asian, Latin American and African spheres of influence. Those who argue that all or some of the BRICS are either regional- or sub-imperialist are empiricists basing their arguments on criteria that owe nothing to Marxism. Patrick Bond, writing in Links, defines sub-imperialism as enabling neo-liberal imperialism to further its policy of ‘accumulation by dispossession’. This is a definition of imperialism at the level of exchange which means that all the BRICS act as ‘sub-imperialist’ cronies or agents of U.S. and EU imperialist powers. However, as we will prove, Russia and China extract imperialist super profits from their BRICS semi-colonies in their own right, and far from serving US and EU imperialism, are the basis of the emergence of the rival China/Russia spheres of influence.

What this dynamic reflects is that the conditions that allowed Russia and China to escape semi-colonial subservience to the US bloc of powers also enable them to follow the same classic road of rising imperialisms competing with existing imperialisms. This means exporting capital to the semi-colonial world, and then as super-profits accrue, draining this world of surplus value, and setting limits on the semi-colonies capacity for their own capital accumulation. So we can document in Eurasia, Africa and Latin America, Russia and China acting on the basis of the laws of capitalist accumulation. Russian and Chinese Foreign Direct Investment (FDI) becomes the basis for vertical integration and monopoly control of production, distribution and exchange. As we shall see, Russia and China are expanding their OFDI into the semi-colonial BRICS (not all at the same rate) through loans in exchange for oil, and mergers and acquisitions in mining, agriculture, construction and manufacturing, etc., all of which is designed to create a monopoly of production from raw materials to finished products shipped to market. The essence of this is the rapidly rising share of surplus going to Russia and China, and the much smaller rise in the share going to India, Brazil and South Africa.

Table 1 below shows that from a weak start in 1995 when capitalism was barely restored in Russia and China, all the BRICS had modest levels of FDI. Since then both FDI and OFDI has increased markedly. But we can see that the trajectory is different for Russia and China on the one hand and India, Brazil and South Africa on the other. First, the magnitude of both FDI and OFDI is much greater in the case of Russia and China. Second, while OFDI is 55% of FDI averaged over India, Brazil and SA in 2013, for the same year, OFDI averages 80% of FDI for Russia and China. This is a snap shot of a dynamic process however, and flows of OFDI exceeded flows of FDI in Russia after 2010 while China is expected to become a net exporter of FDI in 2014. On the other hand we would expect the rise of OFDI in the semi-colonies to stagnate and even decline as the ownership of the Multi National Corporations that engage in export of capital succumbs to imperialist ownership and control.

BRICS FDI Stock in $billions OFDI Stock in$billions FDI Stock in$billions OFDI Stock in $billions FDI Stock in$billions OFDI Stock in$billions FDI flow over OFDI flow
1995 1995 2010 2010   2013 2013 2013
Russia        6        3     490   366      576     501 79/95
China    101      18     588     317      957   614 124/101
India        6        0.5     206      97      227   120 28/2
Brazil      48      45     682     191      735   293 64/-4
S Africa      15      23     180      83      140    96 8/6

Table 1 Based on UNCTAD World Investment Report – Country Fact Sheets

That the BRICS semi-colonial partners serve the interests of Russia and China is also evident from the fact that this is recognised as such and is provoking a retaliatory response on the part of the U.S. led bloc. It is this response that confirms that BRICS is not merely an association of ‘emerging markets’, ‘regional powers’, or the rise of a ‘multipolar’ system that replaces the US ‘unipolarity’. Rather, it is perceived by the U.S. as a rising imperialist bloc that has created a core sphere of influence as BRICS based on production, trade, finance and political agreements that can onlyored sphere of influence as BRICS advance at the cost of U.S. decline. Currently while the two power blocs are facing each other in MENA, Africa and Latin America, it is in Eurasia where the stakes are highest. Here we can see the growing inter-imperialist rivalry escalating from trade wars to military confrontation and local wars, accompanied by rising threats and nuclear sabre rattling.

What is missing on the revolutionary left is a coherent critique of the role of BRICS as a new brand of “social imperialism from below” promoted by the World Social Forum (WSF) and fusing the neo-Stalinist and fake Trotskyist left into a new batch of Mensheviks, diverting the workers into a global popular front and tying their hands in the face of the escalating economic, political and military wars between the two imperialist blocs. In the absence of such a revolutionary theory there is no program to unite the international working class behind a revolutionary party and a revolutionary communist international.

  • EURASIA

The stakes are highest in Eurasia because here the heartlands of the two power blocs confront each other directly from Europe to the Pacific Ocean. The NATO powers confront Russia directly over the Ukraine. The U.S. and its ally Japan confront China directly over the territorial waters of the East and South China seas. These hotspots are therefore the most convincing test of the liberal ‘multipolarity’, radical ‘regional’ / ‘sub’ imperialism, and Marxist inter-imperialist rivalry theories. Already we see the liberal and radical theories bankrupted by events. In the Ukraine, the U.S. bloc is using NATO not to ‘negotiate’ the containment of Russia to prove that its global hegemony remains intact, but to impose economic and military sanctions to weaken Russia and challenge its regional power in Eurasia.

The result is not a victory for the U.S. bloc, but the consolidation of the China/Russia bloc and the weakening of the links tying the European powers to the U.S. bloc, as the two blocs exchange political, economic and military threats.

This is evident as Russia looks to China in building trade relations and joint ventures to counter sanctions. Most notable is the huge deal over gas. This deal ignores the U.S., dollar showing the petroyuan is on the way. A 21st century Silk Road is being driven from China into Europe and by sea from China into the Middle East. In meeting financial sanctions we have seen how BRICS is attempting to set up a rival development bank to counter the World Bank and IMF. Russia and China are now responding to U.S.-driven financial sanctions against Russia by advancing talks to set up a rival SWIFT bank of international settlement that will further undermine dollar hegemony. This will integrate the Russia-China bloc’s competitive advantage in production of energy and manufacturing with a banking system that challenges U.S. dollar hegemony.

The current weakening of the EU is the outcome of the so-called Global Financial Crisis (GFC) of 2008. The U.S. downloaded its profit crisis onto the EU and forced the weakest states into bankruptcy. Greece and Italy had crisis regimes run by former employees of the U.S. finance broker Goldman Sachs, to ensure that austerity measures imposed on the working class make it pay for the U.S. crisis. The debt burden of the weakest states impacts heavily on Germany and France. Germany is attempting to produce its way out of the risk of default rather than print money and is now heavily economically interdependent on Russia and increasingly China for economic inputs and markets:

“Merkel will be under pressure to prioritise the economic relationship even more than before because of the slowdown in Germany” says Hans Kundnani at the European Council on Foreign Relations, a foreign policy think-tank based in London. “The EU is China’s largest trading partner, with Germany accounting for about one-third of total Sino-EU trade.”

Other European states are being torn between the two blocs. Armenia is to join the Eurasian Economic Union (EEU). Turkey is to consider joining the EEU. Bulgaria is dependent on Russian Gas. Serbia proposes an FTA with Russia and sides with Russia on the South Stream pipeline. This strengthens the Russia/China bloc position with the EU as growing tension within the EU over alignment to the rival blocs is reflected in the strong popular opposition to the U.S.-driven trade war with Russia that will cost jobs and profits. The U.S. is trying to counter the powerful pull of Eurasia with its Transatlantic Trade and Investment Partnership deal, the TTIP. There is widespread opposition to this partnership as advantaging U.S. corporations at the expense of the sovereign rights and powers of EU states.

Does this amount to an emerging ‘multipolarity’? Not as the liberals conceive it, since the EU states are being pulled in two directions by the two big blocs. Nor as the radicals conceive it because every move that attempts to break the EU away from Russia-China is pulling the EU apart and strengthening the China/Russia bloc. The US is in decline and to survive it has to impose costs on its EU partners. US wealth in turn is propped up by a hugely overvalued dollar pegged to oil prices. The China/Russia bloc is on the rise and offers benefits to the EU which the U.S. cannot match. Moreover these countries are not doing oil deals in their own currencies rather than the U.S. dollar. This dynamic tug of war over Europe between a declining bloc and a rising bloc invalidates the dogmatism that U.S. dollar hegemony prevents Russia and China from becoming more than regional powers.

To sum up, Germany is drawing closer to the China/Russia bloc as a weakening of solidarity inside the U.S. bloc allows Russia and China to make inroads. This is a tale of two blocs not of multipolarity. The win-win liberalism is a mirage as the zero-sum nature of the ‘Great Game’ unfolds.

If we go to the other side of the Eurasian land mass, the Asia-Pacific Rim, we see that the U.S. bloc is ramping up hostility to China’s attempts to stake claims to oil and other resources in the East and South China Seas. It has yet to reach the level of crisis that is evident in the direct military confrontation in Ukraine. But there is no doubt this is not a negotiated settlement between equals. This is a display of U.S. power to deter China from stepping beyond its regional limits, because the U.S. fears China’s global expansion at U.S. expense. Thus the U.S. is pushing its Trans Pacific Partnership Agreement (TPPA) to a quick completion, ahead of China’s rival multilateral deal, so that the TPPA will allow U.S. corporations to make further inroads into China. U.S. investors in countries like Australia, NZ, Chile, ASEAN members, etc., that already have FTAs with China will be able to maintain their leverage in China. And just as the TPPA is the Pacific partner to the Atlantic TTIP, the U.S. military alliance RIMPAC in the Pacific is the beginnings of an equivalent of NATO in Europe, which so far allows China to participate.  Now this may seem odd for rivals to participate in joint military exercises, but this is a temporary quid pro quo in return for China’s participation in the anti-piracy flotilla off east Africa and guarding access to Middle East oil.

In South Asia, India is the BRICS partner that dominates that region. However it is not an imperialist power and is dominated by the U.K., Japan and U.S. imperialism. Nor in our view is India a ‘regional’ or ‘sub-imperialist’ power. A comparison of Chinese and Indian OFDI shows that the accumulation of surplus capital leading to capital export in India is relatively small and not rising significantly in relation to FDI. The drivers of OFDI are not primarily the need for raw materials or new technology but the more liberal regulatory regime in India which allowed OFDI into larger developed markets for services and manufactures. What this shows is that India’s OFDI is not primarily the result of the export of capital to counter the tendency for the rate of profit to fall by sourcing cheaper raw materials, land and labour power. India’s OFDI is much smaller than its FDI and targeted at developed markets.

This indicates that its place in the global division of labour is as a semi-colonial source of super-profits more than the ‘colonial’ super-exploitation of ‘developing’ markets. This supports our argument that longstanding semi-colonies like India cannot break free of imperialist super-exploitation to become new imperialist powers. It also means that India as a member of BRICS is now being integrated into the China/Russia bloc as a semi-colonial source of super-profits rather than an emerging imperialist power, in the same way that Brazil and South Africa are. This is confirmed by the vulnerability of these three BRICS to the ‘great recession’ of 2008 which saw their growth rates lag compared to those of Russia and China.

Let’s look at the evidence. Is India becoming a semi-colony of Russia-China rather than U.S. and EU imperialism? Not yet. China is India’s main trading partner with two-way trade reaching $70 billion in 2013. Its trade deficit with China was $40 billion. The comparative figure for U.S.-India trade is $64 billion while the US has a trade deficit of $20 billion. But beyond trade China has yet to get begin seriously investing in India. US FDI stock since 2000 is $12.2 bn compared with China’s miniscule $0.4 bn in the same period. It remains to be seen if China uses BRICS to strengthen economic and political relations and overtake the US, Japan and U.K. as the main imperialist investors in India. President Xi Jinping’s promise of a loan of $20bn during his recent visit to India fell well short of Prime Minister Modi’s expectations:

“During his [election] campaign, Modi was wagering that India would increase its economic might and strengthen its position in the world, and he was looking to economic cooperation with China as a way to achieve that goal. Modi gives China credit for its economic buildup, and he is striving to transfer its experience to benefit India’s industrial growth. He is primarily pinning his hopes on Chinese direct investment, which in the last 14 years has not exceeded $400 million because of previous policy restrictions.”

Given China’s recent emergence as an imperialist power, and the long-standing domination of India by U.K., Japan and the U.S., China’s relationship is still mainly about exporting cheap manufactures to India. Yet the trajectory of its dynamic relationship will probably follow the same pattern as Brazil and South Africa where it has developed FDI from resource extraction to include infrastructure and/or setting up branch factories producing home appliances, autos, etc. Bi-lateral relations between India and Russia point in the same direction with deals in the areas of defence, space and nuclear energy.

  • MENA

The Middle East is once again proven to be an ongoing site of inter-imperialist rivalry via proxy wars. No sooner had Israel’s latest bombardment of Gaza ended in a fragile ceasefire, than the ISIS began its campaign in Iraq and Syria. The rise of ISIS challenged the pact between the two rival blocs. The relative stalemate between the imperialist powers in Iraq and Syria as part of the containment of the Arab Revolution broke down again as Obama launched another war in these countries. Everywhere we can see the evidence of the latent rivalry between the rising bloc against the declining bloc. The Arab Revolution had not been contained by the NATO powers and by Israel without the rise of Islamic militancy filling the vacuum left by the relative weakness of the secular left. To counter this threat, the US has chosen to compromise with the BRICS (Russia, China and their client Iran and possibly Egypt) so long as this does not threaten its power base in MENA. The US initially looked to Iran, backed by China and Russia to re-stabilise Iraq. However, after its collaboration in replacing Maliki with another Shia head of government, the U.S. and Iran have not reached agreement on the latter’s participation in the coalition against IS. Thus the rival interests of the two blocs are revealed by the direct return of the US to military intervention in MENA.

Obama’s new turn to war on the Islamic State (formerly ISIS) is being sold as a continuation of the ‘war on terror’ but its real target is to contain China and the BRICS influence in MENA. Under the pretext of a war on IS ‘terror’, the U.S. keeps a military presence in MENA to counter China’s growing influence on the Arab states. The war against IS will be a long war and inevitably lead to the partition of Iraq into (1) an Islamic State tolerated by Assad, Russia and Turkey as a barrier to the Arab and Kurd social revolutions; (2) a Kurdish state in Iraq backed by the U.S. against the Kurd social revolution; and (3) a Shia state in the south backed by Iran and China, each staking out rival oil claims. But none of these militarised states will in the long run be able to suppress the masses by invoking sectarian or religious terror.

Syria and Libya will also be drawn into the war on the Islamic State creating rival national bourgeois factions backed by the China and U.S. blocs against the masses and radical Islam. NATO intervention in Libya was unpopular in Africa and MENA, with China and South Africa backing Gadaffi. Yet neither side was able to disarm the rebels and the re-opening of civil war will see both blocs try to control the outcome with BRICS backing the armed rebels against the NATO backed regime. If the revolutionary international forces do not intervene to support the Arab revolution, the rival blocs will continue to fight proxy wars to defend their interests at the expense of the Arab Revolution.

Syria today also reflects a stalemate where the BRICS power Russia backs Assad while the U.S. and its Saudi and Gulf allies back their factions in the opposition. Turkey is balanced between the two blocs since its main concern is to stop the Kurdish social revolution in Rojava from destabilising the Turkish state. So far neither side is able to win but given the failure of the world revolutionary left to decisively intervene on the side of the revolutionary masses, a prolonged stalemate is likely.

While there is no clear outcome yet in MENA, it is obvious that the U.S. and China led blocs are staking out their oil holdings, not as partners but as rivals. However MENA is repartitioned, this is clearly not a process in which Russia and China are mere regional powers, nor are they engaged in a negotiated re-balancing of U.S. ‘unipolarity’ as ‘multipolarity.’ Imperialism is a zero-sum game. While the power blocs may cooperate to suppress the masses, in the end it is the masses that will pay for their crises and wars unless an independent workers movement throws out both imperialism and their mercenary regimes.

            (3) Africa

Nick Turse claims that Washington’s ‘Pivot’ to Africa now involves Africom in 49 of 54 countries. Its objective is to checkmate China’s reach into Africa. If we want a test case that proves the point that Russia and China are neither sub-imperialist nor ‘regional imperialisms’ we only need to look at the war in South Sudan. Here, there is a brutal proxy war that proves beyond doubt that the US and China are deadly rivals in the war for oil. Nick Turse writes that South Sudan is second only to Liberia as a state that the U.S. has propped up in the hope of creating a ‘democratic’ bridgehead in Africa. But after pumping many billions of dollars to break the South away from the North, the experiment has failed. It is China that has stolen the march and controls most of the oil and is bankrolling the new regime. The war that is now raging is a proxy war between the regime armed by China and a rebel army backed by Uganda and the U.S.

China presents itself in Africa as an “equal partner” in development, making “win-win” deals which creates “double-happiness.” Against this propaganda, Howard French, in his recent book “China’s Second Continent”, recounts one of many cases in which Chinese investment in Africa exploits African labour and natural resources. The Chambishi Copper Mine in Zambia reveals a record of labour abuse and violence against protesting workers. It is obvious that Chinese firms will try to pay starvation wages ($100 a month versus a $700 subsistence cost of living) and unsafe working conditions, when it can get away with it. After a decade of super-exploitation at Chambishi under a succession of pro-China regimes a change of government in 2011 almost overnight forced a wage increase of 85%. Deputy Minister of Labour in the new Michael Sata government, a former mining workers’ union President interviewed by French stated that in Zambia, China treats workers unfairly, was corrupting politics, and was not developing Zambia to share in the wealth of its natural resources.

But it is South Africa (SA) that proves beyond doubt how BRICS serves Russian and Chinese imperialism in Africa. SA is the BRICS member that is the intermediary between Russia and China and the whole African continent. The African National Congress (ANC) dominated by the South African Communist Party (SACP) leadership takes a similar line to the Bolivarian left in Latin America. The movement to counterpose a “BRICS from Below” to the business interests of the BRICS corporations has its origins at the 2013 BRICS meeting in SA. The ANC has a strategic relationship with China and Russia to develop Africa as the ‘socialist’ alternative to U.S. and EU imperialism. In particular it has opened the door to China to use SA as a launching pad to produce and assemble Chinese made goods for the African market. The BRICS meeting in SA included a proposal for a new Development Bank, symbolic because small and funded by equal shares. But in reality China already has investments in Africa via the China Export-Import bank which are bigger than the World Bank. And bilateral finance follows trade deals, and other loans are targeted at specific development projects. BRICS has been attacked as a back door for Russian and Chinese ‘colonial’ exploitation of Africa, and as having no regard for climate change. Bond calls this “co-dependence on Eco-Financial imperialism”. If we want an especially brutal example of “eco-financial imperialism” , China’s bankrolling of the Mugabe’s regime in Zimbabwe to plunder its rich minerals and diamonds destroys the livelihoods of indigenous miners and lays waste to the environment.

If we need convincing proof of Lenin’s charge that inter-imperialist rivalry must lead to war:

“…the best reply that one can make to the lifeless abstractions of “ultra-imperialism” is to contrast them with the concrete economic realities of the present-day world economy…” (Imperialism, the Highest Stage of Capitalism)

Clearly, in opposition to Lenin, the ANC Stalinist view of African development in which the African states share in “win-win” deals with Chinese and Russian investment, is a popular front with imperialism no less than its long-term relationship with British and U.S. imperialism. And as the rival blocs scramble to plunder Africa to extract super-profits and maintain their capital accumulation, this rivalry is already leading to local proxy wars. The military build up of AFRICOM means that the U.S. recognises that China and Russia are not ‘sub-imperialist’ nor ‘regional imperialist’ powers but deadly rivals. Those on the left who hold the BRICS to be a ‘progressive’ alternative to imperialism are the enemy of the proletariat and poor peasants.

  • Latin America

The BRICS as ‘alternative to imperialism’ propaganda is most advanced in Latin America for the reasons outlined above. Brazil as the only Latin American BRICS partner plays a key role. Some of the Brazilian Trotskyist left regards Brazil as sub-imperialist. However, it is clear to us that this is not the case. Ana Garcia’s ‘Building BRICS from below’ provides evidence of the “concrete economic realities” proving that Brazil is a semi-colony in the global popular front with Russia and China, doing corporate doing deals, and its unions and NGOs are attempting to negotiate terms on ‘labour’s share’, sustainability, climate change, etc. Garcia lists all the ‘organisations’ which participate ‘from below’ in this popular front in Brazil. On the far left of this popular front, ostensibly revolutionary organisations such as Coletivo Lenin advocate a vote for the PT popular front with the BRICS against the right-wing threat of a coup. So it is in Latin America that the Trotskyist left is most strongly hooked on the illusion that China and Russia are ‘anti-imperialist’ partners in development as the alternative to Yankee Imperialism! Here we will follow Lenin’s lead again and put the “ultra-imperialist” abstractions to the test of reality of “concrete economic realities”.

We have written at length elsewhere on how Cuba has joined Venezuela as semi-colonies of China. We now have to add the role of Russia in Cuba. Here we want to concentrate on Argentina and Peru as special cases where Russia and China are making inroads, sometimes using Brazil as semi-colonial intermediary, in expanding their ‘sphere of interest’. In doing so we are critiquing particularly the FLTI and the COR in Argentina and the NRCI in Peru. The BRICS invited Argentina to the 6th summit as a prospective member. Here is Pepe Escobar’s take on Argentina:

“This Russia-China commercial/diplomatic offensive fits the concerted push towards a multipolar world – side by side with political/economic South American leaders. Argentina is a sterling example. While Buenos Aires, already mired in recession, fights American vulture funds – the epitome of financial speculation – in New York courthouses, Putin and Xi come offering investment in everything from railways to the energy industry.”

Escobar is here claiming that Argentina is a fit case to join the BRICS ‘multipolar’ world to escape from the predatory, ‘scavenging’ US imperialism. Will China bail out a bankrupt Argentina? Is the currency swap between Argentina and China part of the BRICs policy of ‘de-dollarization’? Can the West keep Putin’s hands off Argentina’s oil or the nuclear industry? Will Argentina join the BRICS and participate in the ‘multipolar’ utopia? This is the hopeful view shared by the Bolivarian left for which Russia and China are ‘anti-imperialist’ if not ‘socialist’ powers that can be pushed to the left (“BRICS from Below”) to share in a “win-win” economic and social development in Latin America.

A more cynical Trotskyist left such as the FLTI and COR rejects this benign view and damn the BRICs as the agents of hegemonic U.S. finance capital. Our differences with the FLTI are well known in our literature, and we have summarised them above, so we will not repeat them. Here, we will take up the position of the COR on the BRICS and subject it so Lenin’s dialectics. For the COR of Argentina:

“The6thBRICSsummitheld inBrazil is theintent of thesemi-capitalist “Emerging”andBonapartismChineseand Russianrestorationiststo showdecadent capitalismstill has afuture under thealleged newopportunity for growththat a”multipolar world would give.”This reactionaryfictionresonates with allbourgeois and petty bourgeoischarlatansnot only inthe “periphery”, but alsoin the financial centersof New York,London,Frankfurtand Paris.Thisis not surprising to anyone,as thismotleygrouping of “emergingcapitalisms” called “BRICS” was an inventionofthe financial institutions such asGoldmanSachs,seeking toprovide a solutionforspeculative capitalafter thecrisis of 2000-2001.”

For the COR the BRICS are semi-colonies and Russia and China are restoring capitalism as Bonapartist states oppressed by the U.S. and EU. This is a conspiracy of Wall Street to download the crisis onto the BRICS and fool the masses into believing that this is an ‘anti-imperialist’ alternative to U.S. imperialism. This puts the COR into the same dogmatic ultraleft camp as the FLTI in denying that Russia and China form a new imperialist bloc which includes the BRICS, with increasing influence in Latin America. The dogmatic rejection of reality depicting BRICS as U.S. agents is the reverse side of the opportunist “BRICS from Below” coin. It is a weak explanation for the increasing direct involvement of Russia and China, which like in Eurasia, MENA, and Africa, is obviously antagonistic to U.S. imperialist interests. The dogmatic position is therefore unable to counter the opportunism of the Bolivarian left popular front with BRICS. Both disarm the masses in the face of the development of inter-imperialist rivalry between the two blocs.

The NRCI is a recent split from the FLTI based in Peru. As far as we know, the NRCI shares the FLTI view of Russia and China as ‘independent’ capitalist states subordinated to hegemonic U.S. imperialism. Yet Peru of all Latin American nations has been subjected to direct Chinese investment in mining that has faced militant mass resistance for more than 10 years. Let’s check out these ‘concrete economic realities’.

Bolivarian opportunists like Morales claim that Chinese investment in Latin America is somehow more “progressive” than U.S. investment. This would mean extracting lower profits than the U.S., and certainly not ‘super-profits’ from mining. The dogmatists also argue that China has to extract lower super-profits as a ‘proxy’ of U.S. imperialism; not because it is “progressive” or “anti-imperialist” but because it is subsidising the raw material and labour costs of US-owned corporations, such as Apple producing electronics in China. We argue elsewhere that there is no evidence that China subsidises the inputs of foreign investors in China. To be able to do that and accumulate capital at the rate it is doing, it would have to gain access to very cheap labour and raw materials to extract huge super profits so as to be able to share part of its surplus value with U.S. imperialism.

What we find in Peru however, is that when the historical anomalies are accounted for, Chinese and non-Chinese mining corporations operate in much the same way. The first Chinese mine acquired in Latin America in 1992, Shougang Hierro Peru, has a 20 year old legacy of labour problems due to its failure to modernize. This mine operates with outdated machinery and has a tough labour regime to extract super-profits by intensive exploitation. Yet allowing for its outdated machinery, when Shougang Hierro Peru is compared with a more modern U.S. metals mine dating from 1997, Doe Run Peru, the rate of exploitation, labour and environmental conditions are not significantly different. This is an important finding and it is confirmed by the comparison of more recent Chinese FDI in mining in Peru with non-Chinese FDI.[i]  Using Irwin and Gallagher’s data, we argue that more recent Chinese mining investment, as with US and other mines, follows a similar pattern.

While all take advantage of the relatively lax enforcement of labour and environmental regulations to drive down wages by employing contract labour, there is no firm evidence to show that China behaves any differently than non-Chinese investment in mining in Peru. There is a clear trend from intensive labour exploitation at Shougang Hierro Peru, dating from 1992 (at which point China was restoring capitalism), towards rising labour productivity in more modern, efficient mines that are operated in much the same way as non-Chinese mines. Therefore China is no more or less exploitative than its FDI rivals when cost of raw materials, level of technology and labour and environmental regulation are taken into account. The opportunist belief that China is a “progressive” non-imperialist alternative to US and other imperialist powers in mining in Peru is false. Equally false is the dogma that China acts as the ‘agent’ of US imperialism (FLTI and NRCI) or “Wall Street” (COR Argentina).

The liberal and radical ideology of BRICS as a ‘multipolar’ grouping of  ‘emerging markets’ or ‘sub-imperialists’ that are a global counter-force to U.S. hegemony has no basis in the truth in the mines in Peru. We would say that this must also be the case from Cuba to Patagonia. The workers of Latin America and every continent where BRICS operates are no less exploited by the rise of Russia and China as emerging imperialist powers than they are by U.S., EU and Japanese imperialist powers.[ii]

Conclusion

There is nothing ‘progressive’ or ‘anti-imperialist’ about BRICS. BRICS are not all the same. They are not all ‘emerging markets’, not ‘developing’ countries, not ‘sub-imperialist’ nations subservient to U.S. and EU imperialism. Such false impressionistic conceptions allow their bourgeoisies to masquerade as the ‘multipolar’ alternative to U.S. imperialism, capable of redistributing global wealth. And on this basis the labour bureaucracy, reformists and centrists, present popular front governments as ‘anti-imperialist’ and ‘progressive’. That is why Evo Morales can claim that the recent electoral victory of the MAS popular front party was a victory for ‘anti-imperialism’. This is just another instance of states that subscribe to the Bolivarian, Castroist, ANC and World Social Forum global popular front with China and Russia. But BRICS are not equal, and we have shown that they cannot make ‘win-win’ deals. Even if the bourgeoisies of South Africa, Brazil and India get a share of the super-profits, it is the workers and poor peasants that will lose both their livelihoods and their lives.

This is because the BRICS are all capitalist countries subject to the laws of motion of capitalism in its imperialist epoch. This means that they are either semi-colonies of existing imperialisms, or become semi-colonies of new imperialisms. The new BRICS Development Bank is no better than the World Bank or the IMF. It is finance capital concentrated in the two imperialist powers that enters into the circuit of production to produce super profits in the semi-colonial world including India, South Africa and Brazil as well as any prospective members such as Argentina and Egypt. It thus competes with finance capital of the U.S. bloc to plunder the world’s resources to the point of climate chaos and human extinction.

We have explained why Russia and China have emerged as new imperialist powers. They escaped semi-colonial oppression when their national revolutions expropriated the capitalist ruling classes. Such independence could only be sustained by isolation from global capitalism which enabled these states to escape the fate of semi-colonies. Capitalist restoration allowed these states to jump straight into highly centralised state monopoly capitalism and emerge as new imperialist powers. Those BRICS which never expropriated their national bourgeoisies could not and cannot escape the trap of semi-colonialism within BRICS itself. Their membership of BRICS cannot protect them from the laws of motion of the imperialist epoch. BRICS is governed by these laws as much as the semi-colonies of U.S. and EU imperialism. That is why SA, Brazil and India (and prospective members of BRICS) look to Russia and China to rescue them from U.S. hegemony. They think that Russia and China have succeeded in ‘breaking these laws’, in part attributing it to their history as Deformed Workers States but also to their capacity to out-produce the declining U.S. bloc.

But there is no escaping the laws of motion of capitalism in its imperialist epoch. Capitalism can only survive by increasing the rate of exploitation of workers and peasants. And in the epoch of imperialism, capitalist crisis drives the imperialist powers to send their workers to war to re-partition the world and grab what is left of nature to destroy. For humanity and nature to survive the working class as the only revolutionary class must overthrow its ruling class. This is as true of Russia and China as of the U.S. and EU imperialist powers. BRICS cannot rise from soviet ashes to put an end to capitalism, only the revolutionary proletariat led by the revolutionary Marxist party and program can make the socialist revolution.

Reblogged from CWG (US)

 

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Petras is wrong on …Latin America   https://livingmarxism.wordpress.com/2008/07/02/petras-wrong-on-the-resurgent-right-in-latin-america/

Ann Garcia Building BRICS from Below? http://www.socialistproject.ca/bullet/1018.php

Trotsky on the Lessons of Spain https://www.marxists.org/archive/trotsky/1937/xx/spain01.htm

http://redrave.blogspot.co.nz/2014/06/why-are-russia-and-china-imperialist.html

Howard French book Million migrants in Afica http://www.economist.com/news/books-and-arts/21613162-mass-immigration-chinese-people-africa-almost-entirely-driven-money

Howard French in NYTs http://www.nytimes.com/2014/05/17/opinion/into-africa-chinas-wild-rush.html?_r=0

Capitalist agriculture in Africa http://www.chinaafricarealstory.com/2014/10/praise-for-faostat-3-great-interface.html

China extracts LIBOR plus 1.5% in Africa http://www.chinaafricarealstory.com/2012/01/chinas-foreign-aid-economist-still.html

China ‘industry par’ http://www.chinaafricarealstory.com/2014/08/china-in-zambia-on-par-with-industry.html

Great academic resource on China Africa http://explore.tandfonline.com/page/bes/economics-in-africa/china-in-africa

Win-Win in Africa http://explore.tandfonline.com/page/bes/economics-in-africa/china-in-africa

China beating US in Africa http://nationalinterest.org/feature/five-reasons-why-the-united-states-can%E2%80%99t-beat-china-africa-11094

Howard French on Win Win vs imperialist power http://www.aljazeera.com/indepth/opinion/2014/09/china-africa-cooperation-win-w-2014924202811161705.html

Zambia: Chinese imperialism reverses the logic of China’s growth in Africa. African states are not able to put conditions on China FDI such as technology transfer; limit penetration of banks etc. http://www.newyorker.com/news/news-desk/china-in-africa-the-new-imperialists

State subsidies allows China to pay more for minerals http://resourceinvestingnews.com/41702-china-africa-mining-sector-investing-barrick-gold.html

Investments in mining on increase http://www.ft.com/intl/cms/s/0/7c2c6478-8f42-11e3-be85-00144feab7de.html#axzz3Gzass8Vb

China partnering with State firms risks patronage and competitiveness: China and competitiveness of SA mining http://www.saiia.org.za/policy-briefings/nationalism-with-chinese-characteristics-how-does-it-affect-the-competitiveness-of-south-africas-mining-industry

China’s wild rush into Africa. http://www.nytimes.com/2014/05/17/opinion/into-africa-chinas-wild-rush.html?_r=0

Tufts Working Group/Excellent updated resource on China investment etc in LA http://www.ase.tufts.edu/gdae/policy_research/ChinaLatinAmerica.html

China OFDI soon to exceed FDI http://www.ft.com/intl/cms/s/0/28f6b8d4-59cd-11e4-9787-00144feab7de.html#axzz3Gzass8Vb

Risk to LA of China slowing down. This is the context for China Russia entry of finance capital to ensure that LA can pay off debt and remain as stable suppliers. Motive is extraction of value and not win/win. http://www.brookings.edu/research/opinions/2014/06/06-risks-china-latin-america-talvi

Good recent overview: China the new hegemony in LA? http://www.coha.org/the-dragon-in-uncle-sams-backyard-china-in-latin-america/

China has reinforced LA as raw material suppliers (de-industrialisation) http://www.economist.com/news/americas/21600686-china-lends-disproportionately-countries-lack-other-options-flexible-friends

http://www.modernghana.com/news/561217/1/russias-investment-in-africa-new-challenges-and-pr.html

Breakdown of US/UK/France and BRICS investment in Africa http://online.wsj.com/articles/SB10001424052702304422704579571363402013176

 

 

[i] “Peru has been the recipient of the latest Chinese investment — the purchase of Las Bambas mine, in southern-central Peru, from Swiss-based company Glencore Xstrata PLC (LON:GLEN), announced on Monday. Chinese consortium MMG Ltd. (HKG:1208) bought the mine for $5.8 billion, the largest transaction for a mining site in the history of Peru.”

[ii] The Tufts Working Group pdf shows that LA supplies raw materials to China which are subject to price fluctuations typical of semi-colonies. “Over half of LAC exports to China are in four major commodity groups. Table 1 shows that each of these four groups (refined copper, copper ores and concentrates, iron ore and concentrates, and soybeans and other oilseeds) saw substantial growth in 2012 between six and 37 percent by weight. Considered as a single group, they grew by 11.4 percent: nearly identical to their average annual growth rate over the five-­‐year period of 2007-­‐2012, of 11.7 percent. But the revenue from their sale grew by much less than the quantity exported, and actually declined for iron and copper ores and concentrates. Export revenue for all four groups combined was essentially flat, growing only 1.8 percent. This is a huge drop from the 18.9 percent average annual growth rate over the last five years. Behind the increase in export quantity and flat export revenue is a drop in the price of each kilogram exported. Three of the four groups saw a price decline, and together they fell by nearly 11 percent. In effect, LAC exporters were running in place in 2012: selling more goods but not seeing more revenue from the sales.4”

Is Russia Imperialist?

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[Update: I recently came across an valuable article written by bourgeois economists perplexed by Russia’s sudden emergence as a net capital exporter! Actually their conclusions, written up as a test of various schools of bourgeois economics, fit Lenin’s conception of imperialism very well. It turns out that Russia has been able to rapidly transit from so-called ‘socialism’ to net capital export because it retained the advantages of a monopoly structure of production (state and crony capitalist owned) and its former economic division of labor which has allowed China to profit from the highly integrated economies of the former soviet republics with the Russian economy. That is Russia can take advantage of its state monopoly over a sphere of influence in Central Asia, accumulate capital and export it to take ownership of  its ‘downstream’ energy markets and new sources of energy.]

Is Russia Imperialist? A hot topic raised dramatically by the brief war in the Caucasus the subject of a recent post here. My view expressed in that post was that Russia had indeed become imperialist again, given the export of capital to what are now formally independent states that had belonged to the SU in central Asia. I admit that this judgment was based on a fairly cursory swing through the internet looking for evidence of Russian FDI. It is something that I want to return to here. But before I do that, there is a larger question, and that is the definition of imperialism itself, since today the Left seems very confused as to whether or not Lenin’s definition still applies today, and if it does, is there agreement on what it is? This post is designed to address that larger question before returning to a consideration of what this means in the case of Russia. The first question then, is: what did Lenin mean by Imperialism?

What did Lenin mean by Imperialism?

In his pamphlet written in 1916 titled Imperialism: the highest stage of capitalism, Lenin summarizes the massive amount of research he had undertaken into this question collected in his Notebooks on Imperialism -Volume 39 of the Collected Works. Lenin reads all the material written by bourgeois writers like Hobson and former ‘Marxists’ like Kautsky. They agree that in the late 19th and early 20th century there has been a growing concentration and centralization of capital in the form of big banks, corporations with strong links to states that are pursuing predatory foreign policies designed to gain territory and raw materials from their rivals. The capital of these banks dominates and fuses with corporate capital to form finance capital. These banks and corporations form cartels (a few firms) or trusts (1 or 2 firms) in each of the major industries, railroads, oil, chemicals etc. While they often operate in several homelands (as in the case of oil) and make agreements to share territories and raw materials, the tendency is for these corporations to form monopolies that compete with one another using protectionist trade and military interventions to defeat their rivals. Thus, says Lenin, the bourgeoisie are quite capable of describing the emergence of state monopoly finance capitalism where increasingly market competition is displaced by state monopoly in determining investment and in the distribution of profits.

While Lenin agrees with this description, he disagrees with the bourgeois (and pseudo-Marxist) explanation of the nature of imperialism.  The bourgeois view is that imperialism is a policy of the ruling classes in the dominant countries pursued to advance their national interests at the expense of their competitors.  The most right-wing nationalists see this as some march of civilisation bringing its virtues to the uncivilised. The liberals see it as a process of enlightened humanitarism. The pseudo-Marxists like Kautsky etc. see it as a wrong policy that can be corrected by the mass intervention of the working class in bourgeois parliament.  Kautsky backs up his view with the argument that already this nationalist policy is being supplanted by an ‘ultra-imperialism’ in which the monopolies in the big powers have invested heavily in their rivals monopolies so that war between them is against their profit interest.  Lenin demolishes this argument quickly showing that despite the multinational character of monopoly capital, it relies on a national state to advance its interests in competing with other monopolies, and that this competition must inevitably lead to war.  In other works when Lenin’s talks of politics as concentrated economics, he is talking about Imperialism.

What Lenin insists on is that state monopoly capital does not lead to a peaceful process of transition from capitalism to socialism. Rather it opens up a succession of trade wars and military wars as each big power seeks to re-partition by force, territory and raw materials claimed by other big powers.  Monopoly therefore does not mean the end of competition, rather its shift from the market into the sphere of big power politics where workers would be conscripted to fight to defend national monopolies rather than uniting as an international working class to defeat their own ruling class.  Thus the epoch of imperialism is the epoch of crises, counter-revolution and revolution. Imperialism was necessarily the highest stage of capitalism at its extreme limit forced to destroy the forces of production to survive.  The alternative facing humanity was barbarism or socialism.

While it was one thing to agree with the bourgeois analysis of state monopoly finance capital, and to prove the pseudo-Marxists wrong -that imperialism would not peacefully evolve into socialism, but necessarily causes wars which must end in counter-revolution or revolution -Lenin did not need the first imperialist war to prove his theory correct. Though “imperialism” is a pamphlet and was therefore written for a mass working class readership, it does contain within it a short theoretical section where Lenin seeks to link his theory back to Marx’s Capital. In this section Lenin popularises Marx’ view of crises and extends his analysis to show how such crises much necessarily give rise to imperialism.  And more than that, he proves that imperialism cannot resolve those crises other than by counter-revolution or revolution.

The starting point is Lenin’s understanding of Marx’s method in Capital, that is, the reasoning that led Marx to explain in Capital the laws of motion of Capital that must necessarily express the fundamental contradiction between the relations and forces of production as a tendency for the rate of profit to fall- the TRPF, “the most important law of political economy” as Marx called it.  There were a number of means of offsetting or weakening that tendency – called Counter-Tendencies (CTs).  Let us see how Lenin takes up and develops Marx’s theory of crisis.

The Marxist/Leninist theory of crisis

Marx calls the TRPF the “most important law” because it explains why capitalism is an historically finite mode of production – a transitional mode between feudalism and socialism – and why that transition could not be peaceful.  But first we have to look at the method Marx used to arrive at this law in order to assess its validity. Marx used a method of abstraction which he worked out over decades of critiquing Hegel’s philosophy and the British political economists.  In the Introduction to the Grundrisse Marx explains his method as avoiding falsely abstracting from the observable events of the market to insert assumptions about timeless human nature and capitalism as the high point in some evolutionary story. Hegel did this in assuming that God was the universal idea and the society evolved according to his divine plan. The political economists did the same arguing that capitalism arose from an historic struggle to accumulate wealth so that the class structure reflected a natural evolution of the survival of the fittest.

Marx critique of Hegel and political economy rejected these stories as idealist: a set of ideas are taken as universal and projected back into history to explain it.  Marx reverses this process. Ideas are the product of social relations -being precedes consciousness – so that capitalist ideas produced by capitalist social relations projects an inverted view of capitalism as a natural state of being.  Marx’s method is to reject the surface phenomena and the ideological assumptions that define them and dive deeper into material substance of society, its social relations, so that he can then return to the surface and explain everyday events as the result of the laws arising from the social relations.  Capital represents this method self-consciously. The familiar commodity of the market is analysed as the ‘cell’ of capitalist society and is found to have two contradictory aspects, exchange value and use value.

Capital Vol 1 demonstrates that in his intellectual laboratory where capital is reduced to the commodity, that the use value of the commodity is necessary for it to be useful in meeting a need through consumption. The exchange value is the value of the labor-time required to produce it.  These two aspects are contradictory because under capitalist social relations commodities are sold to realise an exchange value and thus allow their consumption only if that exchange value contains sufficient surplus value to return a profit over the cost of production. Hence production expropriates surplus labor time for profits.  Capital Vol 2 shows that capitalism as a system must try to coordinate its production so that investment is balanced out to ensure production of use values necessary for it to be reproduced in an equilibrium. Thus all commodities and produced and reproduced at their value. Capital Vol 3 shows that this is impossible, because under conditions of competition between capitals insufficient surplus-value is extracted to return a profit over total capital invested – hence the TRPF and crises.  Capitalism cannot be in equilibrium and is more like a state of moving anarchy which poses the question of socialising the means of production to stave off anarchy, but in the process creating the conditions for its transformation into socialism.

Lenin goes beyond Marx

Marx did not complete his project of diving into the substance of capital in order to return to the surface to explain the complexity of concrete events. He didnt live long enough. Capital 2 and 3 had to be edited and pasted by Engels after Marx’ death.  His projected volumes on world trade, International relations and the state, would have meant coming back to the surface and allowed Marx to finish his project. Some foreshadowing of these volumes can be found in Marx’ journalism, and his later work on the Russian commune. Here Marx links his more abstract concepts with current events. What were the class interests that drove the British in India, or the Paris Commune of 1871. Would the coexistence of the Russian commune and backward capitalism in Russia allow a short-cut to socialism, bypassing mature capitalism? No systematic body of work left by Marx provided the answers. It was to be Lenin who had the task of completing these unwritten volumes. Notably in his book on the Development of Capitalism in Russia, and in his highly condensed pamphlet Imperialism. Let’s see how this happens.

In his book on capitalism in Russia, Lenin applies Marx theory of rent in agriculture to prove that Russian agriculture had made the transition to capitalism. This is an important book because it shows that as soon as production on the land enters into the capitalist market it becomes valued in terms of its productivity of value.  The social relations on the land shift from landownership deriving rents in kind to money rents representing exchange value.  Rent is now a deduction from surplus value in the sphere capitalist distribution having already been produced and exchanged in the market. This is the analysis of capitalist agriculture that enables Lenin to define Tsarist Russia as imperialist in Imperialism, a point I will come back to.

The small section of Imperialism where Lenin attempts to explain why capitalism had to develop into an imperialist stage he pins the cause onto capitalist agriculture. Again this is based on Marx’s analysis of agriculture.  Rent in agriculture is in two forms. First, absolute rent is that part of the surplus deducted by landowners. Ownership of land in limited supply means that landowners can always demand a share of the profits of non-owners – hence monopoly.

Second, differential rent is that amount of surplus-value that can be deducted from non-owners above the price of production of the worst land. Monopoly rent therefore varies depending on the quality of land and distance from market, and takes the form of differential rent.  Industrial capitalists who pay rent therefore constantly look for land where the costs of production on the best most productive land means paying less differential rent. This is the basis of Lenin’s development of Marx’ theory of crisis.

Marx’s TRPF means that the rising costs of constant capital – raw materials, plant and machinery that do not add value – call into existence CTs that cut the costs of constant capital.  Taking his cue from Marx, Lenin argues that capitalist agriculture in the more developed capitalst powers becomes ‘over-ripe’.  Despite its growing productivity its organic composition reduces profitability so that investment in agriculture falls. Moreover, the differential rent set by the worst land imposes a barrier on the reduction of costs of raw materials and wage goods in industry. As production on the land stagnates the price of production on the worst land sets the prices of agricultural commodities.

The land then sets a barrier to the CTs reducing the costs of agricultural inputs as constant capital, so the TRPF begins to bite and overproduction of capital results. This necessary overproduction of capital cannot find an outlet in the ‘home’ countries and looks for new land and productive investments abroad. It is the barrier of capitalist production in the land and the rising organic composition of capital at home that necessitates the export of capital, the search for new land, raw materials and markets.  Hence Lenin is able to prove that Marx’ laws of motion arrive necessarily at the highest stage of capitalism where the concentration and centralisation of capitalism takes the form of state monopoly finance capital.

State Monopoly Finance Capital

We have now arrived at Lenin’s concept of Imperialism as a necessarily highest stage of capitalism transitional to socialism. This theory as sketched out in his pamphlet Imperialism is the practical application of Marx method of abstraction used to explain the complex concrete reality of the world economy, international relations and the state in at the time of the first imperialist war. The famous 5 criteria of imperialism are a summary of these results which can be unpacked further to prove this point:

(1)The concentration of production and capital has developed to such a high stage that it has 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 ‘finance capital’, of a financial oligarchy;

(3)The export of capital as distinguished from the export of commodities acquires exceptional importance;

(4) the formation of international monopolist capital associations which share the world among themselves,

(5) the territorial division of the whole world among the biggest capitalist powers in completed. Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed.

These five points are different aspects of the same process. The concentration and centralization of capital in the form of monopoly trusts results from their ability to monopolize rent, i.e. redistribute profits from weak to strong capitals. This sees monopoly capital associated with the states of the biggest capitalist powers whose foreign policies are designed to advance the interests of the monopolies. Moreover, state monopoly finance capital is dependent upon the export of finance capital and the import of ‘super-profits’.

To recap, Marx theory of crisis in Capital 3 explains the root cause. The rising organic composition of capital is the result of competition between capitals for larger shares of the market which causes capitalists to increase labor productivity by introducing new techniques. This requires a rise in investment in constant capital made up of plant and machinery and raw materials as a ratio to variable capital. This causes a tendency for the rate of profit to fall (TRPF) when the rate of exploitation of variable capital cannot return sufficient surplus to realize a profit. Marx talks about the role counter-tendencies in cheapening both Constant and Variable capital which act to moderate but not prevent the TRPF. Following Lenin then, It is easy to develop his arguments to show how these CTs become implemented in the epoch of imperialism in the form of state monopoly capitalism.

Lenin encapsulates this argument briefly in Imperialism. As the rate of profit falls capital is overproduced in the home country facing a land barrier to further capital accumulation, the result is capital export to new colonies and markets where new sources of land, raw materials and labor power holds down the value of both CC and VC. The result is super-profits that allow the further accumulation of capital as state monopoly capitalism. Let us see how Lenin arrives at this view.

The counter-tendencies Marx nominates act to reduce the costs of Constant and Variable capital. However they are also part of the same development of capitalism that causes the organic composition to rise. But while they can “weaken” they cannot “annul” the law. These CTs include:

(1) More intense exploitation of labor: the increase in relative and absolute surplus value without increasing the proportion of constant capital.

(2) Reduction of wages below their value: this is the result of competition among workers that drives down the value of labor power below the level necessary for its reproduction.

(3) Cheapening the elements of Constant Capital: this is a CT that shows that Marx was fully aware that rising productivity actually cheapened the elements of constant capital such as raw materials or machines. However, unlike many of his critics who seize on this fact to prove Marx wrong, he was clear that this acted as a CT and could not in itself prevent the TPRF.

(4) The Relative Surplus Population: here Marx is talking about the general tendency of the development of labor productivity expelling living labor from production and creating a surplus population. This increases the competition among workers driving down the value of labor power below the average, driving up profits above the average.

(5) Foreign Trade: Marx states that the “expansion of foreign trade was the basis of capitalist production in its infancy”. It both cheapens the elements of constant capital as well as wage goods so raises the rate of surplus value and hence the rate of profit. Capitalism however introduces a rising organic composition which reduces the rate of profit. He then states:

There is a further question, whose specific analysis lies beyond the limits of our investigation [i.e. in Capital 3 Marx is analyzing ‘many capitals’ but not yet at the level of the market, the state and international relations]: is the general rate of profit raised by the higher profit rate made by capital invested in foreign trade, and colonial trade in particular?”

Marx’s answer to that question is that a surplus profit can be realized on the basis of unequal exchange where labor is cheaper and can be sold above its price of production but below the average price in the home country. This situation however will be equalized as capitalism develops in the colonies “unless monopolies stand in the way.” Marx does not go beyond this since he is theorizing at a level of abstraction that does not take into account the actual colonial trade, not the degree to which monopolies prevent the equalization of profits. It is this shift up in level of analysis that Lenin makes in his application of Marx theory of rent in Imperialism.

While Marx argues that these CTs are contradictory in their application, we can see that he does allow that monopoly in foreign trade can prevent the equalization of profits and maintaining ‘surplus profits’. If we look at Lenin’s theory of Imperialism it is clear that he argues that monopoly is the main feature of Imperialism. Therefore the application of these CTs understood in relation to the highest stage of capitalism must operate on the basis of monopoly rather than competition. Hence the rate of profit is not equalized and surplus profits result. Thus monopoly gives rise to the state form in the imperialist epoch to defend and extend monopoly of territory, markets and raw materials etc.; the ‘international relations’ among states are now oppressor/oppressed relations; and the world market as ‘divided’ among the big capitalist powers and colonies, semi-colonies, and independent countries etc. Hence, the 3 volumes that Marx had planned to write to finish his analysis of capitalism at the level of the concrete, complex world of international relations and world market, had to wait for Lenin to write his pamphlet Imperialism: the Highest Stage of Capitalism. [page refs that follow are from Imperialism, NB means Lenin’s Notebooks on Imperialsm, Lenin, Collected Works, Vol 39]

Back to Russia

From this theory flows Lenin’s programmatic position on the national question. Finance capital flows from the imperialist powers to the non-imperialist countries. This means that there are imperialist oppressor countries and oppressed colonial and semi-colonial, and independent capitalist countries. Among the former is Russia. According to Lenin writing in Imperialism, Russia is an imperialist power of a special kind. Lenin speaks of three types of imperialist countries;

“firstly, young capitalist countries (America, Germany, Japan) whose progress has been extraordinary rapid; secondly, countries with an old capitalist development (France and Great Britain), whose progress lately has been much slower than that of the previously mentioned countries, and thirdly, a country most backward economically (Russia), where modern capitalist imperialism is enmeshed, so to speak, in a particularly close network of pre-capitalist relations.” [259]

By 1914 Russia is second only to Britain in the area and population of its Empire [258] which includes a protectorate in Mongolia, and a sphere of influence in Persia and Northern Manchuria. [NB 675] Lenin calculates that 96 million poor peasants and workers are oppressed by Russia. [NB 300]

“Russia’s final aims in Central and South Asia…can be reduced to a single formula. The final aim is to bring the states concerned –Armenia with Turkey, Persia, Afghanistan and the adjacent small states – under Russian influence, then under a Russian protectorate and ultimately incorporate them in the Russian Empire.” [NB 676]

Thus, owing to the formation of capitalist monopolies, the merging of bank and industrial capital has also made enormous strides in Russia.” [232].

And while Britain is using Egypt to produce cotton

“…the Russians are doing the same in their colony, Turkestan, because in this way they will be in a better position to defeat their foreign competitors, to monopolise the sources of raw materials and form a more economical and profitable textile trust in which all the processes of cotton production and manufacturing will be “combined” and concentrated in the hands of one set of owners.” [262]

However, Russia was a relatively minor imperialist power dominated by the finance capital of France, Germany and Britain which in 1913 use “holding banks” to extract around 75% of the surplus value created in Russia, dividing this booty among them (France, 55%, Germany 35%, Britain 10%). [232]  By 1910 the bulk of French capital exports to Russia were loans to the government rather than industrial production. German capital export was divided roughly equally between Europe (including Russia) and North America. [243] Russia’s largely foreign owned banks were ‘highly leveraged’ [i.e. loans far in excess of reserves] but were guaranteed by the Russian Finance Ministry and Credit Office. [NB 126-135]

Thus the Russian state acted as the agent of French loans, German extraction of raw materials, by means of a foreign policy of highly centralized expansion beyond its borders. Lenin quotes of Rosa Luxemburg (Junius) on this point.

“In Russia, imperialism is “not” so much “economic expansion” as “the political interest of the state” [NB 309]

While Luxemburg wants to give the priority to politics, Lenin shows that Russian imperialism is politics as concentrated economics. That is, Russian imperialism in 1915 has the general features of imperialism, but the role of the state is central in facilitating the fusion of banking and industrial capital to a degree more pronounced than in any of the other imperialist states because of the relative backwardness of the Russian economy. The state acted to use its power to dominate its capital export to its colonies and extraction of surplus-profits in return, as well as guarantee the interests of its imperialist ‘partners’.

Russia Today

If Russia was imperialist in 1915, notwithstanding its relative backwardness and “network of pre-capitalist social relations”, the dominance of French (and lesser extent German and British) finance capital, and given that the fusion of banking and industrial capital under the political control of the state was ‘developing’, might these same characteristics be found in the Russia of today where capitalism has been restored and where the Russian state plays a central role in organizing the economy? Is Russia a semi-colony, independent capitalist state, or imperialist state?

The critical factor is not gross DFI and extraction of surplus by other imperialists in Russia. Nor is it the monopoly character of the corporations. Nor is it the centrality of the state. Nor is it the extraction of surplus value inside Russia itself. These are characteristics of all capitalist economies in the epoch of imperialism especially weaker semi-colonial countries. The critical factor is the overproduction of capital  in Russia that poses a problem of insufficient opportunities for profitable investment, and that requires the export of surplus capital abroad to Russia’s ‘protectorates and semi-colonies as well as in other imperialist powers, in order to return surplus-profits.

The key indicator as to whether Russia is imperialist today is its net export of capital (and the net return of surplus profit).

According to a Deutsche Bank research report Russia’s Outward Investment (April, 2008)

In recent years, emerging market multinationals have increasingly expanded abroad to enhance their competitiveness, i.e. the ability to survive and to grow while maximising profits. This is achieved by saving costs, improving efficiency, applying new technologies as well as gaining access to new markets and resources.

Capital export to the Central Asian CIS states where Russia plays the dominant role in the exploitation of oil and gas has expanded to capital export to Europe, North America and Africa. In the biggest CIS states such as Kazakhstan and Turkmenistan the oil and gas resources are extracted by multinational joint ventures [JVs] and most are exported via Russia. In other words Russia has been able to maintain its dominant role in the central Asian former soviet Republics despite the independence of these states and the opening up of their economies to foreign investment.

According to Deutsche Bank:

The expansion of Russian corporations started predominantly in the member countries of the Commonwealth of Independent States (CIS) in the 1990s, moving on to developed markets and continuing in Africa more recently. Russian corporations established a prominent position close to their home market due to linkages already in place in the Soviet Union as well as a lack of foreign investors from elsewhere. Armenia, Belarus and Uzbekistan have accounted for the bulk of the Russian FDI flows to the CIS (see chart 7). Examples of Russian investment in the CIS include state-owned energy supplier RAO UES, which has invested in energy distribution chains in Armenia, Georgia, Moldova and Ukraine. In addition, Gazprom controls infrastructure assets in Kazakhstan and Moldova. Furthermore, Russian mobile telecom services providers are competing for the leadership in the CIS, having invested USD 1.38 bn in M&A [mergers and acquistions] since 2001 and accounting for 40% of the CIS cell phone market. However, the proportion of Russian direct investment flows to CIS member states shows a downward trend: it fell to 12% on average in the period 2004-2006 from 59% in 1997-99 (see chart 8). At the same time, the figures should probably be taken with a grain of salt, since they have been quite volatile. In 2004, Uzbekistan received 85% of total investment to the CIS, while Armenia accounted for 78% in 2005. In 2006, FDI flows seem to have been more equally distributed, with Tajikistan accounting for 39%, Kazakhstan for 33% and Ukraine for 26% of total CIS investment. In general, strong economic growth in the CIS should make them an attractive market for Russian direct investment in the future.

Under Putin the Russian state is taking a leading role in virtually all sectors of the economy. In oil and gas the state owns over 60% of the industry and the big players Gazprom and Rosneft are majority state owned. That in itself is not decisive, however most oil and gas projects are JVs where Russian firms have the controlling interest and the lion’s share of surplus value and foreign operators are minority shareholders providing new technology. Also Russian oil majors have swapped shares or merged with foreign firms to gain shares in downstream markets and get access to new resources abroad. Today Russia has a GDP of over $2 trillion and is rates 6th largest economy in the world. Its foreign reserves are around $60 billion, 3rd ranked in the world. But more important its outward DFI is around $200 billion and greater than the $200 inward DFI. However, 2/3rds of inward DFI is ‘round-tripping’ Russian capital returning via Cyprus and Luxembourg, which by definition is returing to Russia to earn higher profits than can be earned abroad. (Kari Hiuhto ‘Russian Tycoons largest DFIs.’ BBC 26/2/08.)

Conclusions

It is important to see that Lenin’s analysis in Imperialism extends Marx analysis of capitalism in Capital. The production of value and surplus value remains the basis of capitalist development. The laws of motion that Marx sketched on in the General Law of Capitalist Accumulation in Capital 1 and argued in Capital 1,2,3, were applied by Lenin to the concrete, complex level of reality that had been Marx’s intention in his unfinished volumes on the state, world market and international relations.

In Capital 3 Marx argued that the expansion of capitalism into the colonies would create opportunities for unequal exchange but would before long give rise to the equalization of capital and see the ‘normal’ operation of the law of value apply, and hence the ‘normal’ development of capitalism. Marx argues this in Capital 3 where the level of analysis is of many capitals, but where there is as yet no application of the role of competition to the actual functioning world market. Thus for Marx colonialism/imperialism cannot bypass the laws of motion and rescue capitalism from its fate as a transient mode of production, that is transitional to socialism. Extending his analysis to the concrete complex reality would not and could not alter these historical laws.

Lenin taking this analysis as his starting point and proves its conclusions at the level of the world market. Imperialism is an empirical test of Marx’s theory and comes up with the finding that it is the highest stage of capitalism transitional to socialism. It is so because the assumption of competition that Marx had made and held constant in Capital, once freed up and observed in concrete reality was now being superseded by monopoly. The market as the mechanism of the allocation of capital was now dominated by the locus of power concentrated in the hands of the institutions of centralized value – state monopoly capitalism. This meant that competition had been shifted from the market to the political sphere of international relations between rival states. What Marx saw as a feature of capitalism’s infancy, and an aberration in its maturity, monopoly, was now the terminal condition of capitalism in its dotage.

The world market then becomes subordinated to international relations among states of varying powers. The big imperialist powers are oppressor states dominating oppressed countries politically and economically. It is the political domination of oppressed countries that determines whether or not the surplus value generated in that country is accumulated internally or exported as “surplus profits”. In most cases the character of a particular country can be readily determined.

In the case of Russia as I have argued above, the answer is more difficult because of its ‘unique’ status prior to the revolution, and complicated due to its isolation from the capitalist world market during the period from the revolution to the restoration of capitalism in 1992. Nevertheless, Russia today has not only restored capitalism but has been able to retain the most resource rich former Socialist Republics within its sphere if interest. In that sense it has carved out a sphere of interest for its renewed imperialist expansion on the basis of its close ties formed within the USSR, without having to compete directly to re-divide the sphere of interests of its rival imperialist powers. It has used this empire on its borders to build an economic base for an aggressive expansion into the spheres of interest of the EU and the US and further into those imperialist heartlands. Russian imperialism is back with a vengeance.

Written by raved

October 6, 2008 at 12:17 am