Lenin and nationalisation

144px-Lenin_perfilIn an earlier post I outlined the founders of Marxism opposition to confusing socialism, or the road to socialism, with capitalist state ownership.  I wanted to follow that up with a look at the views of Lenin.  When I did it would appear that the argument of opposition to state ownership is not advanced, in fact it is contradicted, and at best it might have to be modified.

This is because in the middle of the Russian Revolution, in fact in the weeks before the October revolution, Lenin wrote ‘The Impending Catastrophe and how to Combat it’ which sets out what appears a completely different approach.

The first thing that struck me about this short document is the title.  It does not promise a solution.  It does not declare ‘The Impending Catastrophe and how to Solve it’.  In fact the first sentence states ‘unavoidable catastrophe is threatening Russia’.  With all due regard to the much less severe crisis currently affecting Ireland there is something to be learnt from accepting that the job of socialists is not always to promise pain-free solutions to workers but to persuade them that they have to fight.

The problem is stated concretely and what’s more it is stated that everyone knows and says what the solution is.  This is “control, supervision, accounting, regulation by the state, introduction of a proper distribution of labour-power in the production and distribution of goods, husbanding of the people’s forces, the elimination of all wasteful effort, economy of effort.  Control, supervision and accounting are the prime requisites for combating catastrophe and famine. This is indisputable and universally recognised.”

Lenin proposes nationalisation of the banks but makes no claim that this is any sort of confiscation of private property.  In fact he is keen to emphasise how little difference it makes in this respect:

“If nationalisation of the banks is so often confused with the confiscation of private property, it is the bourgeois press, which has an interest in deceiving the public, that is to blame for this widespread confusion.”

“The ownership of the capital wielded by and concentrated in the banks is certified by printed and written certificates called shares, bonds, bills, receipts, etc. Not a single one of these certificates would be invalidated or altered if the banks were nationalised, i.e., if all the banks were amalgamated into a single state bank. Whoever owned fifteen rubles on a savings account would continue to be the owner of fifteen rubles after the nationalisation of the banks; and whoever had fifteen million rubles would continue after the nationalisation of the banks to have fifteen million rubles in the form of shares, bonds, bills, commercial certificates and so on.”

However he states that having done so “it is impossible to nationalise the banks alone, without proceeding to create a state monopoly of commercial and industrial syndicates (sugar, coal, iron, oil, etc.), and without nationalising them.”  Again the limitations of what is involved is stated – “All that remains to be done here is to transform reactionary-bureaucratic regulation into revolutionary-democratic regulation by simple decrees providing for the summoning of a congress of employees, engineers, directors and shareholders, for the introduction of uniform accountancy, for control by the workers’ unions, etc. This is an exceedingly simple thing, yet it has not been done! . . . and this could and should be done in a few days, at a single stroke.”

Where, as in the oil industry, the owners sabotage these plans and production generally Lenin proposed that they may have their property confiscated.  While all this was to be the task of the revolutionary-democratic state “the initiative of the workers and other employees must be drawn on; they must be immediately summoned to conferences and congresses; a certain proportion of the profits must be assigned to them, provided they institute overall control and increase production.”

The purpose was to increase production and stave off complete economic collapse and consequent famine, which was made all the more probable by the mismanagement and sabotage of the capitalist owners.  This required workers control, which meant workers supervision of existing management – not workers sole management and control never mind capitalist expropriation and workers ownership.  Abolition of commercial secrecy was proposed in order to make this control effective and democratic.  Under workers ownership the question of commercial secrecy would not arise as the owners with the secrets would be the workers.

Lenin was at pains to point out that what he was proposing was not socialism. “This is why I have already stated in Pravda that people who counter us with the argument that socialism cannot be introduced are liars, and barefaced liars at that, because it is not a question of introducing socialism now, directly, overnight, but of exposing plunder of the state .”

What he was proposing was not new.  “It might be thought that the Bolsheviks were proposing something unknown to history, something that has never been tried before, some thing “utopian”, while, as a matter of fact, even 125 years ago, in France, people who were real “revolutionary democrats”, who were really convinced of the just and defensive character of the war they were waging, who really had popular support and were sincerely convinced of this, were able to establish revolutionary control over the rich and to achieve results which earned the admiration of the world. And in the century and a quarter that have since elapsed, the development of capitalism, which resulted in the creation of banks, syndicates, railways and so forth, has greatly facilitated and simplified the adoption of measures of really democratic control by the workers and peasants over the exploiters, the landowners and capitalists.”

The exploiters, landowners and capitalists were not being abolished.  Indeed far from it.  They were to be organised!  Capitalism was to be developed!

“Compulsory syndication, i.e., compulsory association, of the industrialists, for example, is already being practised in Germany. Nor is there anything new in it.” The political opponents of the Bolsheviks were blamed for not carrying this out.  “Compulsory syndication is, on the one hand, a means whereby the state, as it were, expedites capitalist development . . . The German law, for instance, binds the leather manufacturers of a given locality or of the whole country to form an association, on the board of which there is a representative of the state for the purpose of control. A law of this kind does not directly, i.e., in itself, affect property relations in any way; it does not deprive any owner of a single kopek and does not predetermine whether the control is to be exercised in a reactionary-bureaucratic or a revolutionary-democratic form, direction or spirit. Such laws can and should be passed in our country immediately, without wasting a single week of precious time.”

The primary responsibility for implementation of this was to belong to the capitalists themselves.  “And it must be repeated that this unionisation will not in itself alter property relations one iota and will not deprive any owner of a single kopek. This circumstance must be strongly stressed, for the bourgeois press constantly “frightens” small and medium proprietors by asserting that socialists in general, and the Bolsheviks in particular, want to “expropriate” them—a deliberately false assertion, as socialists do not intend to, cannot and will not expropriate the small peasant even if there is a fully socialist revolution. All the time we are speaking only of the immediate and urgent measures, which have already been introduced in Western Europe and which a democracy that is at all consistent ought to introduce immediately in our country to combat the impending and inevitable catastrophe.”

So what are the political conceptions behind Lenin’s demands which he is clear do not amount to socialism?

“And what is the state? It is an organisation of the ruling class — in Germany, for instance, of the Junkers and capitalists. And therefore what the German Plekhanovs (Scheidemann, Lensch, and others) call “war-time socialism” is in fact war-time state-monopoly capitalism, or, to put it more simply and clearly, war-time penal servitude for the workers and war-time protection for capitalist profits.”

“Now try to substitute for the Junker-capitalist state, for the landowner-capitalist state, a revolutionary-democratic state, i.e., a state which in a revolutionary way abolishes all privileges and does not fear to introduce the fullest democracy in a revolutionary way. You will find that, given a really revolutionary-democratic state, state- monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism!”

“For if a huge capitalist undertaking becomes a monopoly, it means that it serves the whole nation. If it has become a state monopoly, it means that the state (i.e., the armed organisation of the population, the workers and peasants above all, provided there is revolutionary democracy) directs the whole undertaking. In whose interest?”

“Either in the interest of the landowners and capitalists, in which case we have not a revolutionary-democratic, but a reactionary-bureaucratic state, an imperialist republic.”

“Or in the interest of revolutionary democracy—and then it is a step towards socialism.”

“For socialism is merely the next step forward from state-capitalist monopoly. Or, in other words, socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly.”

What Lenin is therefore saying is that the measures he proposes go no further in many cases than what exists in Western Europe but while implemented by a revolutionary-democratic state, i.e. not a workers’ state, they are a step towards socialism.  What is then decisive is the character of the state.

These measures gain their democratic and revolutionary character from the state – remember this is a state that has already resulted from a revolution, one that had overthrown a centuries-old monarchical regime, was headed by avowed Marxists and was subject to a situation of dual power where workers, soldiers and peasants organisations were vying for effective and official power with the institutions of this state.  How different is this from the idea that these measures, such as nationalisation, in themselves are socialist even when implemented by a right-wing government at the head of an established capitalist state implementing the diktats of the combined powers of European imperialism!

For the purposes of this very limited argument all this should be clear and its relevance and application to the political programme of today’s left also clear.

What concrete purpose does nationalisation of the banks serve in Ireland today?  Their nationalisation was the practical means to saddle the working class with the debts of large sections of the capitalist class.  This is obvious to everyone.  Is there any sign that the usefulness and correctness of this policy has been questioned?  Unfortunately not, instead the United Left Alliance demands “full nationalisation with direct public control of the banks”.  The same, but more so.  As was said of the Bourbon dynasty in France, ‘they had learned nothing and forgotten nothing’.

Related, but much wider, issues arise from this booklet by Lenin and the quotations cited that we shall not go into.  For example Lenin states: “that capitalism in Russia has also become monopoly capitalism is sufficiently attested by the examples of the Produgol, the Prodamet, the Sugar Syndicate, etc. This Sugar Syndicate is an object-lesson in the way monopoly capitalism develops into state-monopoly capitalism” and that “given a really revolutionary-democratic state, state-monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism!”  This may gloss the undeveloped character of Russian economy and society as a whole.

Secondly the view that “if a huge capitalist undertaking becomes a monopoly, it means that it serves the whole nation. If it has become a state monopoly, it means that the state . . . directs the whole undertaking. In whose interest?  Either in the interest of the landowners and capitalists, in which case we have not a revolutionary-democratic, but a reactionary-bureaucratic state, an imperialist republic.  Or in the interest of revolutionary democracy—and then it is a step towards socialism.”  This takes a view that the state, even if “revolutionary-democratic”, can effectively act as the vehicle for working class emancipation without workers ownership of the means of production.  While Lenin calls for workers control we have seen how limited this is.  We have also to consider of course the long debate about the ambiguity of the formula of “revolutionary-democratic”.

It is not our purpose to debate these other issues here and regard must be had to the limited purposes of Lenin’s own booklet, the rather telescoped and formulaic end to it and his qualification that the revolutionary-democratic state tasks in relation to the economic crisis are “a step towards socialism” and not socialism itself.

The purpose of this post has rather been to set out that even where Lenin puts forward the demand for nationalisation it is not as a socialist programme but as one that is a precursor to it. In addition it assumes a state of a very different form and in a very different position from the one that many on the Left today call on to carry out tasks that should be those of the working class itself.

4 thoughts on “Lenin and nationalisation

  1. One explanation is that you write on all matters as an independent Marxist and I don’t hence my pen name Plebeian. In ancient Rome plebeians were excluded from political office on the basis that they were incapable of understanding the reasons for the law. This is the case today for the non union non voting section of the working class who have no sway in politics. Your disputes are primarily with the party political socialists who have a little sway because they address all of their propaganda and concern at the unionized and political party voting section of the working class, in Ireland this typically means public sector workers.

    The term socialism is the property of political parties so in a real sense it can mean what any given political party wants it to mean, the German right wing lead by Hitler called their party socialist. If one wants to carry on using the term then some differentiating is no doubt required. A marxist differentiation would have to refer socialism to the Commune/ Soviet type. As Arendt pointed out in her easy about Rosa Luxemburg the Council/ Soviet is the only social institution invented by the workers and she argued that it was not intended as something political: a State. All other modern political and economic forms were originated by the bourgeoisie especially the parliament and its political parties. Political parties and parliaments were literally made for each other. So a socialism that was the genuine labour of the working class would be called soviet or council socialism.

    For my part I refer to socialism only as it is more commonly understood. By commonly understood I don’t mean what the Marx influenced party political left in Ireland mean . I think in a very context specific meaning, that is what people I commonly meet understand by the term. The people I meet known something of the drastic inequality existing in society, so the term has something to do with changing that . And they also know that socialism as got something to do with non profit things like their local credit union. They know that capitalism has got to do with the selfish pursuit of profits. They have also heard of the phrase ‘socialism for the rich’ so they know that the socialist term is sometimes ambiguous. This may be a very limited understanding but it is good enough for me to carry on a conversation. I rather prefer the not for profit meaning of the term socialism for its ethical connotation.

    • You say that my disputes are primarily with party political socialists. In fact it only appears like this and in a more important way they are not – for the reason you yourself explain.

      The socialism which you describe ‘as commonly understood’ is, as I have made clear in many posts, the socialism which is shared in fact and deed, if not in professed doctrine, by these party political socialists. That is, they see socialism as reduced inequality and state ownership and it is the latter which the post above takes up.

      That this is at very best inadequate and more often wrong is primarily important in relation to these party political socialists in so far as they confirm erroneous views in the wider working class and confirm the latter’s identification of socialism with the actions of the capitalist state. Expenditure by this state that is not directly related to immediate profit creation is labelled socialist even when it is socialisation of costs, paid for by the working class as a whole in taxes, and used to subsidise capital. This common misunderstanding is carried most obviously by unionised public sector workers, who become the bearers of this socialism, but it is much more widely held.

      When Marx wrote the Communist Manifesto he preferred the appellation communist because it reflected the working class character of the movement rather than the term socialist which had become ‘respectable’. The former has now been dropped because of its identification with Stalinism, which produced an even greater conflation of socialism with state ownership and power. Perhaps we need to find a new term.

  2. I think the historical dispute over what is socialism should make clear the distinction between socialist measures and a socialist economy. Socialist measures are always used by capitalist governments to maintain and preserve class relationships of ownership and management. Socialist measures are a permanent yet subordinated part of capitalism. A socialist measurement is one that is based on the socialist principle of the negation of the profit system that can be temporary or long standing. The first principle of socialist economics it is easy to understand , all that it means is the non profit making imperative. Therefore firms such as cooperatives and credit unions that are founded to adhere to the non profit routine are in principle socialist. The difficulty is that they have to operate in an economic environment that is in generally capitalist. The capitalist economic environment requires an ownership and management schema sometimes called the rule of law to realize the profit system, this rule of law is not class neutral. If the socialist firm or sector tries to expand the reach and scope of the non profit making imperative they are emphatically attacked and undermined by the capitalist rule of law over the longer term. What this means is that a socialist rule of law must be added to the first principle of socialist economics, one that negates the capitalist rule of law based on private ownership and management. The non profit imperative can therefore only expand fully into a socialist economy by conscious political effort or rest precariously as a socialist measure subordinated to the capitalist imperative of making profit The crucial point is that socialist measures to not make a socialist economy. If there is an inherent flaw in the capitalist profit system then socialist measures, decisions that contradict the profit routine are a necessary part of the system. What we need to account for is how a non profit making economy is more efficient than a profit making one for hardly anyone disputes that the low down capitalist profit making ethic is what Leo Strauss commenting on the political thought of John Locke once called a
    ” joyless quest for joy.”

    • The theme you have touched upon, the transition from one social system to another, is one that I have referred to already and intend to take up in future posts. At the moment I would only like to make one comment on the terminology used. I think it is mistaken to refer to socialist measures when what we are talking about is non-capitalist measures in the sense, for example, that money and other assets are not distributed and invested by the state solely or even mainly for direct profit. The non-profit imperative is not confined to socialism but has characterised most of the social systems and activity in human history. (The distinction between ‘measures’ and ‘economy’ when the former are often economic also seems problematic as does the disjunction between the means and end involved here.)

      This is precisely the mistake made by most of the left. To anticipate a future post – it is what facilitates them supporting ‘anti-capitalism’ when this anti-capitalism is not actually socialist. I think it is better, wherever we can, to use terms like working class power rather than socialism because when we do we often see that so-called socialist measures that are put forward might be non-capitalist in the above sense but not socialist. It avoids presentations as in your comment, which on the face of it might seem contradictory, that ‘socialist measures do not make a socialist economy’, (why not it might be asked?).

      In fact of course most of these measures are non-capitalist only at the extreme and are mainly Keynesian, that is capitalist.

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