Karl Marx’s alternative to capitalism part 44
In the previous post we noted that state ownership appeared an inevitable progression of the capitalist mode of production and could be read as a tendency to complete its development, with ‘the partial recognition of the social character of the productive forces forced upon the capitalists themselves. Taking over of the great institutions for production and communication, first by joint-stock companies, later in by trusts, then by the State. (All quotations from Engels’ Socialism Utopian and Scientific)
Such an outcome would not be socialism as some political tendencies might suggest with their programmes for widespread nationalisation: ‘the transformation, either into joint-stock companies, or into state ownership, does not do away with the capitalistic nature of the productive forces.’
The state guarantees (including ownership in many cases) of the financial system after the financial crash in 2008 illustrated almost perfectly the growing role of the state in supporting the whole constitution of the existing mode of production. The world-wide assumption of guarantees of employment and business survival during the Covid-19 pandemic has confirmed this. It is unfortunate that rather than highlight this, much of the left has called for even greater state intervention, further sowing illusions in its potentially progressive role.
So, if Engels made it clear that capitalist state ownership is not socialism, a second question was nevertheless raised: is ownership by a workers’ state socialist even if ownership by the capitalist state is not?
Engels says: ‘Whilst the capitalist mode of production more and more completely transforms the great majority of the population into proletarians, it creates the power which, under penalty of its own destruction, is forced to accomplish this revolution. Whilst it forces on more and more of the transformation of the vast means of production, already socialized, into State property, it shows itself the way to accomplishing this revolution. The proletariat seizes political power and turns the means of production into State property.’
So, it would appear that the seizure of the means of production by the workers’ state constitutes the decisive opening of the road to socialism, and some form of state socialism may indeed be the genuine article. (Although the wording here is rather peculiar, for while capitalism more and more transforms the ‘vast means of production . . . into state property’ the proletariat through its revolution is to turn it ‘into state property’–to complete the transformation?)
Except Engels immediately goes on to say this:
‘But, in doing this, it abolishes itself as proletariat, abolishes all class distinction and class antagonisms, abolishes also the State as State. Society, thus far, based upon class antagonisms, had need of the State. That is, of an organization of the particular class which was, pro tempore, the exploiting class, an organization for the purpose of preventing any interference from without with the existing conditions of production, and, therefore, especially, for the purpose of forcibly keeping the exploited classes in the condition of oppression corresponding with the given mode of production (slavery, serfdom, wage-labour).’
‘The State was the official representative of society as a whole; the gathering of it together into a visible embodiment. But, it was this only in so far as it was the State of that class which itself represented, for the time being, society as a whole: in ancient times, the State of slave-owning citizens; in the Middle Ages, the feudal lords; in our own times, the bourgeoisie.’
‘When, at last, it becomes the real representative of the whole of society, it renders itself unnecessary. As soon as there is no longer any social class to be held in subjection; as soon as class rule, and the individual struggle for existence based upon our present anarchy in production, with the collisions and excesses arising from these, are removed, nothing more remains to be repressed, and a special repressive force, a State, is no longer necessary. The first act by virtue of which the State really constitutes itself the representative of the whole of society — the taking possession of the means of production in the name of society — this is, at the same time, its last independent act as a State.’
‘State interference in social relations becomes, in one domain after another, superfluous, and then dies out of itself; the government of persons is replaced by the administration of things, and by the conduct of processes of production. The State is not “abolished”. It dies out. This gives the measure of the value of the phrase: “a free State”, both as to its justifiable use at times by agitators, and as to its ultimate scientific inefficiency; and also of the demands of the so-called anarchists for the abolition of the State out of hand.’
How do we avoid the conclusion that what is being proposed is that upon the socialist political revolution the new workers’ state that has gained ownership and control of the means of production through that revolution begins to disappear? Does this mean workers should struggle to enormously expand the power and scope of the state only in order for it to then more or less rapidly shrink and disappear?
To jump straight to a conclusion–the alternative is not to demand state ownership under capitalism, or to seek it under a workers’ state, but to struggle for workers’ ownership, that is for cooperative production by the working class and this ownership and control to encompass the whole economy.
It is the workers organised as producers that represents ‘society as a whole’, as required by Engels, and which can ‘openly and directly take possession’ of the productive forces and manage them, not any sort of state. Even a democratic workers’ state is an organised body of repression separate from the working class; any other definition simply mistakes what a state is. Whatever legal and administrative arrangements required to maintain the collective ownership of individual productive forces will either require a minimal role for the state or none at all, e.g. to prevent the alienation of particular productive forces owned by the class as a whole.
Capitalism has so developed the intellectual and social powers of the working class that it can direct the economy without capitalists; provided we do not stupidly restrict definition of the working class in such a way that it excludes its most educated layers, for example because they are normally significantly better off in terms of income than many other workers.
If we read Engels he speaks of ‘the State of that class which itself represented, for the time being, society as a whole: in ancient times, the State of slave-owning citizens; in the Middle Ages, the feudal lords; in our own times, the bourgeoisie.’
In each case the state represented those classes that owned and controlled the means of production (at least of the social surplus), so that the capitalist state defends the ownership of the means of production by the capitalist class. The analogous role of the workers’ state is not to direct and manage its own ownership of the means of production but to defend the ownership by the working class of the means of production.
Only upon these grounds can the class nature of society be radically changed such that, as Engels argued, the working class abolishes itself and all classes and in so doing abolishes the state. It makes no sense to believe that the state through its ownership of the forces of production will employ its political power to abolish itself, including its direction of society’s productive powers.
Socialism is not the granting of the productive powers of society to the working class by any sort of benevolent state. In Engels terms, the workers’ state can more and more be the representative of society under socialism to the extent that it disappears, reflecting the disappearance of classes themselves.
The socialist political revolution is the capture of political power by the working class in order to defend, and to extend, its social gains as the rising class in society, with its own ownership and control of society’s productive powers central to this. The struggle for workers’ cooperatives is the most direct way to make this a reality under capitalism, as both ideological and practical example of the power of the working class to create a new society.
Such a view is consistent with the other expressed views of Marx and Engels, including ‘seizing the means of production by society’, which we shall review in the next post.
Back to part 43
Forward to part 45
Sráid Marx 
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I think its necessary to understand the following.
1) Marx and Engels certainly argued for the development of cooperatives, and saw the use of credit as a means of doing so “on a national scale”, as Marx puts it in Capital III, Ch.27. But, they recognised the restricted nature of any such development, given the resources available to workers, and the opposition from the bourgeoisie and its state.
2) They argued that the joint stock companies were just as much forms of socialised capital as were the cooperatives, and similarly existed on the basis of credit. They were also transitional forms of property, but were by far the predominant form of such property as against the cooperatives. The difference between them is that although both are owned by the “associated producers” within them, the workers – at least in a producer cooperative rather than consumer cooperative – exercise control in a cooperative, but not in a joint stock company, nationalised industry, or indeed a consumer cooperative. In these others control is exercised by shareholders, be it private shareholders, the state, or the consumer members.
3) That issue of control is a political question, the form of the “Property Question” as now posed. On the basis that even within the context of bourgeois property law, control over property should be a function of ownership, then its clear that the existing laws giving control to non-owners do not conform to the underlying reality, and social relations. The political/juridical relations are out of alignment with the productive and social relations. The law need to be changed to remove the control currently exercised by non-owners of capital, and to vest it in the hands of the owners of that socialised capital, i.e. the workers.
4) The capitalist state, and capitalist governments will not do that, because the state operates in the interest of the ruling-class, and now the ruling class is comprised of that class of money-lending capitalists, non-functioning-capitalists, the coupon clippers who exercise control not via their ownership of capital, but of fictitious capital, of shares in particular. The argument of Marx in the Inaugural Address, and of Engels in various places, is based upon the idea that a socially dominant working-class, because of its size and homogeneity could win governmental power and in so doing, not only prevent the continued resistance of the ruling class to the extension of cooperatives, but would also be able to remove the existing class legislation that hands control to shareholders over capital they do not own.
5) In essence, such a government would be what Trotsky and Lenin define as a Workers Government, as against the Stalinised, bowdlerised version of that term, in which it has come to be understood simply as some kind of left reformist government.
6) Engels in his letter to Babel, makes clear what they saw as the relation between the individual capitals, and any Workers State. It is that the role of the state was to act only as a sort of holding company, preventing the owners/associated producers of any individual cooperative from converting it back into being privately owned capital. The day to day functions of ownership and control would be exercised by the workers and managers in each enterprise. As Hal Draper has set out, this also indicates how little the role of centralised state planning was seen as vital by M & E, as against the natural, organic development of such planning out of the increasing integration of the plans of each enterprise with its suppliers, and customers and so on.
7) The role of such a Workers Government, in a revolutionary period is set out by Trotsky in Permanent revolution, and by Lenin in his Letters on Tactics in support of the April Theses. It is that, as workers come into conflict with the existing factory owners, and so on, the government acts in support of the workers, and that increasingly means that it is used to guarantee ownership and control of capital by those workers. That is quite different from the concept of a capitalist state, even with a left social-democratic government simply nationalising property, which simply turns it from socialised capital in one form to another, often with even less chance of the workers being able to exercise control over it, as Kautsky describes in The Erfurt Programme.
8) Lenin and Trotsky – and as Trotsky sets out in his Appendix to The revolution Betrayed, even Stalin adhered to this concept prior to his adoption of Socialism In One Country, in 1924 – the existence of a Workers State, is not equivalent to Socialism or of a Socialist State. It represents merely the first stage on the ladder of the transition to Socialism. As Lenin set out in Left-Wing Childishness, in backward Russia, the existence of a Workers State most certainly did not equate to Socialism, and given the preponderance of peasant agriculture, small scale private production, as he said, even state capitalism would be a major step forward. The existence of a Workers State simply represents a potential for further development of such productive forces towards Socialism, but in the case of Russia, and other such undeveloped economies, even that was conditional upon the spread of the revolution to more developed economies.
I find it hard to avoid the conclusion that the proposal as stated in point seven would transform employed workers into self-employed workers. Instead of being exploited by capitalists workers would have to agree among themselves how to exploit themselves. This may be an improvement for some because they can set better terms for the use of their labour power than before. Yet the self employed under capitalism do have to compete not just with the corporates but within their own class.
If it is true to say that workers should become self employed owners would they also not have to compete with each other for what is commonly called market share?
In short, does a change in ownership also remove market competition or does retain it in a disguised form?
You are quite right that it does imply that. As Marx says, in Capital III, Chapter 27,
“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour. They show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage.”
But, the same is true of a Workers State itself. The competition between workers within the state, might be increasingly mitigated and reduced, but those workers in total would remain in competition with workers in capitalist states, as part of global market competition. Its why socialism itself is not achievable over night, an certainly not within one country, let alone one cooperative. It is a long drawn out process, as Marx sets out in The Grundrisse.
“As the system of bourgeois economy has developed for us only by degrees so too its negation, which is its ultimate result.” p 712.